Building a new career as the boss
After spending years climbing the corporate ladder at national credit card issuer MBNA Corp., Craig Lewis decided he wasn’t going to be content unless he could run his own company.
“I got nearly to the top, but I still wasn’t the boss,” said the former senior vice president of marketing at the 25,000-employee operation.
Searching for a more entrepreneurial job and better control of his life -- for years the bank transferred him every 15 months -- Lewis set out to buy his own small business. He settled on a failing Los Angeles fence maker called Artisan Precast Inc. The company’s concrete fences that resembled stone, wood and other materials were unusual, he reasoned, and could be sold profitably if he applied his management and marketing skills.
In late 2006, he bought the assets of the insolvent company and set out to turn it around while learning some hard lessons about what it takes to be in charge -- starting with what he called his own “unconscious incompetence.”
That means, in business school parlance, being so new to a job that you are unaware of how much you don’t know and in danger of making bonehead errors big and small.
“You have to quickly figure out what you don’t know and get on top of it,” Lewis said, and gradually work your way up to “conscious competence.”
One of the things the Wharton School alumnus wasn’t clear on going in was how much less genteel his new industry was than banking.
“Construction can be rough,” Lewis said. “People will take advantage of you, especially when you are smaller.”
For instance, if you mistakenly set your bid for a potential fence-building job too low, some general contractors will warn you that you’re bound to take a loss by working for them -- and some won’t warn you.
“It’s caveat emptor,” Lewis said. “I probably overestimated the skill sets we had on our team. We all had a lot of learning to do.”
Fortunately, Lewis wasn’t a complete neophyte in the real estate business and had already taken on risks. After leaving MBNA he bought and upgraded some distressed apartment buildings before selling them at a profit. In one case, he and his property manager had to work closely with police and tenants to rid his Sun Valley complex of drug dealers and other troublemakers.
The outcome was excellent, he said, because his tenants got a safer place to live and the value of his property rose. “The police need all the help they can get from building owners and civilians,” Lewis said.
He had to learn to draw the line in his fencing business too. When a relationship with a client starts to feel wobbly and tensions arise, Lewis redoubles his efforts to connect with everyone involved so he understands clearly what the problems are and how they might be addressed.
“You’ve got to keep up communication with customers to head off lawsuits,” Lewis said. But to ensure that the people you’re doing business with keep their end of the bargain, litigation may sometimes be necessary. “Don’t be afraid to go there,” he said.
In the process of selecting his business, Lewis looked for a product he thought would have wide appeal and be environmentally friendly. By Lewis’ reckoning, precast concrete fencing is green technology, and he makes that case to potential customers.
“Concrete lasts so long it is considered sustainable,” Lewis said, meaning that it has a minimal negative long-term effect on the environment.
Lewis’ claim has credibility, said architect Dan Heinfeld, whose Irvine firm LPA Inc. specializes in green designs. “Wood will literally disintegrate and splinter,” he said, and needs to be treated with chemicals and often paint. “Concrete could have a very long life.”
That makes concrete the winner in maintenance costs “hands down,” Lewis said, but it has an image problem that presents a challenge to his efforts to build up his business. Concrete has been around practically forever, of course, and many think of gray industrial-looking block walls if they think of concrete fencing at all.
If people have heard of precast concrete, they picture “big, monolithic panels on the freeway” built as sound barriers to protect neighbors from road noise, Lewis said. They haven’t seen the molded concrete simulations of brick, stone and even split rail fencing.
“Stone” is his most popular mold, but Lewis has high hopes for another that looks like stacked slate. “So far the people who have bought it are over the moon. I think it’s going to be really popular.”
It’s one of seven styles of fencing Artisan casts from proprietary molds in its San Diego factory. The pieces -- vertical posts and horizontal beams -- are trucked to job sites where they are assembled by the buyers or by subcontractors working for Artisan. Prices range from $15 a linear foot for a rail-style fence to as much as $50 a foot for a wall 6 feet tall.
Artisan has 10 full-time employees including Lewis and his senior vice president of sales, Christopher Miller. Most of its work has been in California, but Artisan has shipped fences to a dozen states and is negotiating some overseas contracts, including one that would use company molds to build walls for inexpensive houses. Lewis expects the company to gross $6 million in sales this year.
Lewis’ training and business background may help him be efficient in a field that is notoriously disorganized, said Barry LePatner, a New York attorney and construction industry analyst who wrote the book “Broken Buildings, Busted Budgets: How to Fix America’s Trillion-Dollar Construction Industry.”
Construction, LePatner said in an interview, “is essentially a mom-and-pop industry” that has “the worst per-employee efficiency of any nonfarm industry in America.” He estimates that those who hire construction labor are getting only about half the value they paid for. The other half is wasted through such inefficiencies as late deliveries and workers waiting for instructions or engaged in activities such as riding hoists at the job site.
The highly fragmented construction business is slow to change and has been disgracefully slow to embrace new technologies, LePatner said. “It’s the industry that time forgot.”
Lewis acknowledges that development sites with their armies of small subcontractors can be inefficient, especially if someone falls behind, but construction work is not as predictable as, say, making a car. “There are millions of steps in any construction project, and a slight delay affects equilibrium,” he said
Organizing multiple subcontractors is tough, Lewis said, but top job site supervisors “are as good as managers at any service company in America.”
And for smaller companies like his to succeed, “You have to do what you say you are going to do,” Lewis said. “That’s just basic service.”
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Artisan Precast
Business: The Los Angeles company makes concrete fences that look like stone, wood and other materials.
Owner: Craig Lewis
Employees: 10
Revenue: $6 million estimated for 2008
Products: The firm makes seven fence styles that range from $15 to $50 a linear foot.
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