Passing on a business from one generation to the next can be a challenge. So what makes a successful family business? Eric Anderton introduces George Cullen, a 5th generation family business owner and the Co-President of JP Cullen, a construction company out of Wisconsin that has been in business since 1892. What’s their secret? Tune in to find out. You will also hear about the importance of gaining outside experience with different companies before coming into the business itself, the challenges and opportunities of siblings working together, managing time, and separating family from business.
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How To Run A Successful Family Business With George Cullen
Family business and transition are tremendous challenges for every company that wants to pass their business on from one generation to the next. My guest is George Cullen. He is a fifth-generation owner of JP Cullen, a construction company out of Wisconsin. They have been in business since 1892. What has enabled them to pass the business on from one generation of family members to the next is an approach to family business transition that is both thoughtful and practical.
In this discussion, we talk about the timeline that you need to be embracing if you are going to successfully transition a business, the difference between owning a business and managing a business as it relates to the next generation, the importance of the next generation of leaders gaining outside experience with different companies before coming into the business itself, and a family transition plan, which includes an educational process either in college or the vocational fields that will qualify the family member coming into the business for the position and leadership opportunities that present themselves.
We also talk about different leadership structures between one generation and the next, the challenges and opportunities of siblings working together, and how to pick, evaluate and utilize outside advisors to help you with this process. Our talk is wide-ranging. There are some very important details that you want to pay close attention to, including George’s tips for managing time and separating family from business. As I always say, enjoy my conversation with George.
He is incredibly generous with his time. Make sure that you are taking close notes mentally or physically, if you are not driving around, about the aspects of our conversation that are applicable to you and your business. If you have any questions about family transitions or business transitions of any kind, always feel free to reach out to me at ConstructionGenius.com. I chat with my clients about that all the time. You can contact me via my website. Thanks to George for his generosity. Enjoy my interview. Let’s dive right into the episode.
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George, welcome to the show.
Eric, thank you for having me.
It is my pleasure. I have wanted to get you on the show because of the unique aspect of JP Cullen being a fifth-generation family business. I want to kick off right away by asking you this. Why do you think family businesses struggle with transitioning the business from one generation to another?
One of the primary things that make it difficult is it’s their baby, whether it is the founder or in our case, the fourth-generation owners. It can be very difficult for them to let it go and also think about what that transition period needs to look like. Fortunately for myself, our fourth-generation owners who transitioned it to our fifth-generation ownership started planning that at least fifteen years before their transition date was going to happen. I would assume other businesses do not take that thoughtful amount of time to understand what it takes to successfully transition a business because they are holding on to it too tight. It is their baby and they want to protect it because it has meant so much to them.
Before we go into more details on that, can you give us a quick overview of the history of your company?
We are JP Cullen. We are a construction manager here in Wisconsin but we do work throughout the country. We were founded in 1892 by my great-great-grandfather who was a son of an Irish immigrant. He was a carpenter. His first job was building a house. I often say my job as the leader of the company is to carry on his spirit of entrepreneurship. I am a steward of that to ensure that I can pass it to my children as a sixth-generation business. He started in 1892. His name was JP, hence the name.
His son Mark took over the business and guided the business through World War I and the Great Depression. He then transitioned it to his son, another JP who was a World War II combat veteran. He came back after graduating from Nebraska and took the company through technological advancement. He was one of the first guys to invest in a computer system. He owned the first tower crane in Wisconsin. He did a great job of advancing the business. He then transitioned this business to his three sons who were in the company, my dad and two uncles, who took over ownership in the early ’80s.
They have shepherded explosive growth and positioned us. We are now roughly a $400 million a year self-performing contractor. We feel very strongly about performing the work in the field. We employ between 400 to 500 skilled tradespeople. We are into our fifth generation. My sister Jeannie and I lead the business as co-presidents. We have three fellow chief owners as well as our uncle who is our Vice President of Field Operations and is still in ownership representing the fourth generation.
What is it about your family that drives this desire to pass the business on from one generation to another?
What is great about construction is there is such a physical representation of that transition. We got multiple buildings where multiple generations have worked on it. It truly is something that is across generations. There is so much pride in our family and within the employees of our company, even more importantly. We have been talking about our family but we are only as successful as the non-Cullens who have carried this business forward.
Always go out and ask skilled people how to learn more. Click To TweetAll of us, whether it is a Cullen or a non-Cullen, take a ton of pride in going to the University of Wisconsin’s campus, pointing at Bascom Hall that we built and the addition in 1922, and going to 1 West Wilson in Madison where three generations of Cullens, including myself, have worked on. There is that part of construction that our projects stay there. It is something that is our legacy. We like to say, “When you hire JP Cullen, you are going to get a Cullen.” It is our name on the line. We and our people take a ton of pride in it. That type of industry helps you in transitioning because it is such a physical product that we take a ton of pride in.
When you were young, you were watching your dad, and you knew what he did for a living. At the house, was there an expectation that you are coming into the business? Was it an option? How did he handle that?
I will give our fourth generation a ton of credit. They set up a family employment policy. It was years ago when none of their children was even close to the point where they would be able to enter into the business. That family employment policy required that you would have to get a degree in a related field and an apprenticeship. It also dictated that you had to work elsewhere before coming back into the business and to get that experience outside of our family business.
For my direct path, I knew it was an opportunity for me. I had a lot of passion for going around where I live and seeing the buildings that we are able to accomplish. I took a ton of pride in all the jobs and the people who have been able to make a great living for our business. I did feel a strong sense of responsibility to carry it forward but there was never any pressure. I went to school out in DC and interned for our congressman. I was able to get that exposure to a different industry.
I went to school and graduated with a degree in Finance. Most of my classmates went onto Wall Street. There were different opportunities and ideas but I always get drawn back to our family legacy. What I love about construction is you can get into finance, people leadership, marketing, business development, and estimating physical construction. Every day, something is different. I was so drawn to this industry and I am so happy that I did it.
We are hitting the 50th anniversary of The Godfather movie in 2022. One of the themes of the first movie is you have Michael Corleone on the edges of the business and over time, he gets drawn into the business. Was that ever the case with you when you went off to college and you were getting involved in the DC world? Was there a point of crisis at any point where you said, “I have tasted this and seen that but I am going to choose to come back to the family business?” Did that ever happen for you?
It did. What happened was I moved out to Southern California to work for a mechanical contractor. I was in San Diego. As much as I love Wisconsin, Southern California feels a little bit more of an attractive place to live. More importantly, my wife is from California. She had great relationships there. The thing that got me to the crisis was the company that I worked for, Comfort Systems USA. I had built my career in the time that I was there. I had conversations with them about what my future growth could be within their business. It was extremely emotional when I came to them and let them know.
They knew I had a family business. They would joke with me, “Our goal is to tell you that we are going to convince you to stay.” It was extremely emotional when I went to the then-president and let them know that my time has come to come back to the family business. My grandpa was getting up there in age. It was important for me to join the business so that I could interact with him because he came into the office every day up until he passed at 91 or 92. That was one of the things that drew me back. My wife and I had gotten married. I’m getting there so I could interact with my grandpa while he was still here. Thankfully, they were very understanding of it but it was still extremely difficult.
Going back to the family employment policy, I noticed three things here. There is a degree in a related field and apprenticeship. Tell me about that apprenticeship piece.
It is a dual path. Since we are a very intentional builder, we want tradespeople. My uncle was our Vice President of Field Operations. He went through a Union apprenticeship and was a Union carpenter. We did not want to dictate that if you are going to join Cullen, you have to get a college degree. We are conscious that the backbone of our business is skilled tradespeople. If a Cullen wants to join the business, they can either go get their degree or apprenticeship.
It is one or the other. Is it in the industry or any industry? Tell me about that.
It is in the industry but it can be related. My sister is our Training and Development Manager. I have two sisters in the business. One is my fellow co-president. My other sister, Laura, worked in the Bay Area for an architecture firm in marketing. It is related. Why is it important? We are blessed that JP Cullen is a pretty good-sized company in Wisconsin. I was able to go out to California where my last name did not mean anything. I could go out there and stand on my two feet, achieve and get the work done. It was so important to go somewhere else and get the perspective of how another business was run.
That business is publicly traded. It is very different from a closely-held family business, which each has pluses and minuses. The last thing I will say on why it is so important is I worked for a mechanical contractor. Prior to that, I was an intern and electrical contractor. As a GC or CM, a lot of our success is built on how successful our subcontractors are. Getting that perspective of working as a sub and understanding what it takes for a sub to be successful has been invaluable for me now that I lead a general contracting business. We want our subs to be successful because it helps make us successful.
You have got the family employment policy. When you came back to the business, what position did you start in?
Our process requires that you have to apply for an open position. I went through the interview process that anybody else would go through. In California, I started in estimating and budgeting. I got into project management and then I was also challenged with leading one of our profit centers. It was a new one. It was a special projects group doing a lot of tenant improvements and the like. When I came back to Cullen, I interviewed for a project manager position in our industrial division. Our interview process includes meeting with an industrial psychologist and then also going in front of a panel interview. I interviewed two of our division managers and our then-president.
Importantly, none of them was Cullens. I went through the normal interview process and got asked tough questions. We have a set of fairly difficult interview processes where there are questions that you got to think about on your feet. They are testing for what drives you. You have to give examples. I went through it. The thing that I chuckle about is President Ron, who I succeeded, said, “We would like to offer you a job.” We started to negotiate salary. I took a pretty good pay cut. He was quick to point out that it is more expensive in Southern California than in Wisconsin. I went through the process as anybody else would. That is crucial.
As you got into the business, how did you avoid doing end runs around your immediate supervisor to go to your dad, uncles or something like that?
My dad would say, “Why are you bringing this to me?” if I would ever do that, and I never did. We are a pretty good-sized organization. There are aspects of the business that are impossible for our ownership to be involved with. We can have some oversight but it would have been inappropriate. It wouldn’t have been at the level at which our ownership has focused on.
The other real practical matter is I came back to Cullen and looked around the room. I am like, “There are people in here that are a lot smarter than me and people that I can learn from,” including Chad Schakelman, who I reported to. He is our Industrial Vice President. I wouldn’t have done that because I knew he was the right guy to get the answer and learn from. That was never a problem because there are such talented people here. I knew that if I listened to them and took coaching, I was going to be successful.
When you first got back in, how did you handle going out into the field, with the guys knowing your last name and all that stuff? How did you handle that dynamic?
Thankfully, I had exposure to it because I did work summers while I was in college at Cullen. I worked in our process improvement department. My dad recognized for me to get a good grasp of leading this company and if I was capable of it. I needed to understand how the parts and pieces came together in the field, specifically with the work that we self-perform. My job as a process improvement analyst is I would go out, film the crews, and then provide them feedback about how to get better, be more efficient, and make their jobs easier.
When leading in a crisis, you have to make quick decisions and keep moving. Click To TweetI am a college kid and I quickly recognized that the guy who has been doing that for twenty years knows that way better than me and knows exactly the ways to get better. He just needs that open communication with management so that we can get the tools, equipment and materials to them. I would set my camera up, make sure it is filming the operation, talk to the foreman, and humbly ask them questions about what they are doing and why they do it that way.
I quickly recognized that I am out here to be filming as a production analyst, but the real way I can add some value too is if they have forgotten a hammer back there, go get it, put your hand in and help them. It was driven by my grandpa who always told me, “The most important person in the company is the person swinging the hammer. Everything we do is to support that person.” A deep respect for the field has been instilled in me and I am very thankful for that. It was never a problem.
I would always be going out and asking them how to learn more. I always have a deep appreciation for the work that our skilled craftspeople are doing. Thankfully, those guys did not treat me as the boss’s kid. I got a colorful story about an ironworker foreman who still works here. He had a pretty interesting name for me when he wasn’t too happy that I was there as the process improvement analyst. They did not hold back. I give them a lot of credit too. They knew it was important for me to develop and grow even when I was working here as a college student during summers.
I would imagine that the reason why they were comfortable in treating you as one of the guys is because that has been the culture over the different generations of family ownership.
I did not cover that. One of the successes of our business is that the Cullens are actively in the day-to-day of the business to make sure it is being driven forward. We are in value-added positions. We are helping the business to meet its goals. We are not sitting down in Florida collecting checks. We are there day-to-day. My dad who led the business from the early ‘80s to the mid-2000s is one of the hardest workers I have ever seen. He instilled into me as the leader of the organization with my sister that it is a heavyweight and it is so crucial that we are successful. Our headcount is 600 people.
That takes a well-operated business to ensure we can have these great-paying jobs and make an impact in the community. That work ethic is so instilled and the non-Cullens recognize it. It is part of the culture. We have got great and unbelievable non-Cullen workers. I want to also convey we have got multigenerational families. We have a grandfather, son and grandson. The grandfather is retired but the son is the ironworkers’ general superintendent, and the grandson is an excellent project manager for us. That speaks to the culture. There are a lot of them like that and it fills me with a lot of pride.
I got a hard hat on my shelf. Teichert is a company out here in California. They are multigenerational. They have the same thing where they have multi-generations of field employees working with their company. It is tremendous. You made the transition from PM to Vice President. How did you feel about that transition? Were you ready? Was it a little early or late? What did you think?
In retrospect, it was very crucial because with our then-president, Ron, we were not doing successfully what we wanted to do with business development and marketing. We have a strategic planning process that very year and we set strategic initiatives. One of our strategic initiatives was to get back to what made us successful in capturing negotiated work. We have a process that we follow called Whale Hunting. Tom Searcy is one of our outside consultants. He has been a tremendous asset of ours to help instill that sales process to us, but we had fallen off.
I was loving project management. I love being out in the field, the profit and less responsibility. Ron asked me, “It is important that you lead this. We are not getting the results that we want. You can help us.” My initial reaction was, “I do not want to do business development and marketing. I want to be in operations.” I thought that was a critical area of the business but I quickly saw that applying operational techniques to business development and marketing helped us get to be following our process. There were so many parallels.
I am very thankful for it because I would not have thought that it would have been the next step in my career before I got to the position that I am in now. In the position I am in, a lot of my time is spent strategically thinking about how we are going to capture the revenue that we need to get to sustain our growth. If I had that operations background and did not spend that time leading our business development and marketing, being hands-on and working in procurement, I would have been doing myself a disservice. I am fortunate to get that experience.
Let’s talk about that a little bit more because it is often a great challenge for people to go from a project-based approach into that sales and business development role. What was the biggest challenge for you as you stepped into that role?
It is cold calling. While I was leading the team, I did have an expectation to go out and get work. It quickly became apparent to me that if I could leverage my strength of being a good project manager, and show the prospective customer that I knew what was important to deliver what they needed to have happened, and make their facilities more operationally effective or whatever they needed it for, that was a value that I could bring that was different than somebody else. There was a little bit of that uncomfortable nature of I do not want to be a sales guy and be viewed as somebody that is peddling something. I started to think about, “What value can I bring? How is that value unique? How does that solve the problems of our current customer or prospective customer?”
It is bringing that unique value and then solving problems. It is the technical understanding that you have so that when you are in front of the client, you can perhaps hear things that other people who aren’t as technical will pass right over. You were in that position for a number of years. Were there conversations going on about the transition? How is the fourth generation? Was it close to the vest like, “We do not want to quite tell you yet,” or “This is the plan if these things get done?” Tell us about that.
“This is the plan if these things get done.” There was a very distinct difference between ownership transition and management transition. The ownership transition was something that all of it was well-planned out. It had a ten-year horizon and different steps needed to be achieved for a person to be a qualified shareholder. It can be meeting our family policy and being an active participant in the business. That ownership transition finished in December 2021.
You’ve got to be in the business and working in the business to be an owner. Am I hearing that right?
That is right.
Do the portions of ownership change relative to the contribution of the owners?
No, because it goes into the management distinction. Our shares were based on the portion of the family that is in the business. It was held by the family members that are in the business based upon how it transitioned from the 4th generation to the 5th. The shares were completely based upon our three collective families and what their shares in the business were going into it. What is so crucial for a family business in my mind is that in the positions that we are in the day-to-day, we get compensated at the market for the position that we are filling.
We all do not make the same amount. We have different bonus structures. The day-to-day pay that we earn is in line with the position that we hold. While the shares are based upon the math and how it works out, the actual day-to-day compensation is based upon the contribution you are making to the business in the role that you are in. All of us are in varying roles within the company.
Let’s say your dad has a chunk of shares. That is passed onto you and your sister, whereas your uncle has a chunk of shares and that is passed on to your cousins. Did I hear that right?
Having a strategic plan forces you to think about things you need to work on now to help you get to your goals. Click To TweetThat is correct. It stays within the family.
How does that relate then? It is interesting because, on the one hand, you got the management structure with you and your sister as co-presidents. How does the percentage of ownership weigh in with the structure of management when it comes to making decisions that impact the business?
I am very proud of our fifth generation. We were working for a couple of years with our family business consultant ourselves about how we want to lead the business as owners and then if we are in those positions as managers. The advice that our family business consultant gave us is, “You got to stair-step the way decisions are made and make it clear what is an ownership decision and a management decision.” I am proud that we come together in November as owners with our hats on and talk about things that should be at the ownership level.
That direction is given to my sister and me as co-presidents that we then have to execute to meet our owners’ requirements. There is a pretty clear line. Once they give us that direction and what they want to see, we are now in executing mode. We report to them as owners monthly. I get it. We are owners and leaders at the same time. At the same point, we know what the owners’ objectives are. It is up to my sister and me with our executive team, our strategic planning team, and all of our great people to then meet the objectives of our ownership.
I give us credit to keep those lines as clear as we can. We talk and meet quarterly as owners. We meet monthly as presidents reporting owners. In those owners’ meetings, we talk about the difference between wearing your owner hat and your day-to-day employee hat, and how it is so important to keep them separate. I give my cousins, my other sister and my uncle a ton of credit. They recognize that it is important that Jeannie and I are enabled to lead the business and make the decisions to meet their objectives.
Can you give us one example of an ownership decision versus a management decision?
An ownership decision would be a strategic investment. It is something that would make a modification to our balance sheet. A management decision is, “What is the size of the bonus pool? How will those bonuses be given out? How do we set the bonus level?” Those are two areas but the biggest thing from a management thing that Jeannie and I are charged with is we need to meet our strategic plan. We set a strategic plan and every month, we evaluate how we are doing against that plan. Everything that we have to do to achieve that plan falls into a management decision.
You have been co-president since October 2020.
It has been a little bit longer. Our president, Ron Becher, an incredibly sharp man and engineer, tragically passed away from leukemia. He was going to retire on 2/22 of ’22. We celebrated his memory on that day. His wife came in for lunch and we got everybody together. When he fell ill with leukemia, it was in March of 2020, which was when COVID was pretty rampant and its impacts on the economy. My sister and I took over leadership in March of 2020, which was a blessing in disguise in a lot of ways. As I am sure other leaders have experienced, when you are leading in a crisis, you do not have a lot of time to think. You got to act, make quick decisions and keep moving.
In some ways, as much as I would never have wanted Ron to have to exit the business earlier than the plan was, having to do that transition during COVID allowed Jeannie and me to get into our own faster and give us the confidence. If we can get through this successfully, there are going to be other challenges but we can look back at getting through that. It is something I take a lot of pride in. My sister Jeannie is an awesome leader. We work well together. Thankfully, the company is doing well. We have great people. We have been leading since March of 2020.
At that time, you are two years into the seat. What has been the biggest challenge as co-president?
One of the hallmarks of the success of our business has been we are always open to experts outside of the company. We never want to think that everything we are doing is right and we can’t learn from others. We are in a very great peer group that I am able to bounce ideas off often. We have a number of outside consultants. One of those consultants who sat on our selection committee when Jeannie and I went through the evaluation process to see if we could lead the business asked me to go out for coffee and was talking to me about how things were going.
Things were going well but I won’t forget what he said. He said, “If you are only working in the business, nobody else will be working outside of the business and seeing around corners.” As much as I love going out to a job site, rolling up my sleeves with the PM, and getting into the details of how we got to accomplish this, I always need to remind myself, “George, there is a time and place, but the company needs you to be working outside of the business and finding that right balance.” I know I am always going to have to be cognizant about where I am spending my time and where I can make the biggest value impact on the company.
How do you discipline yourself to be working on the business and not getting stuck in the weeds?
The thing that helps is by having a strategic plan and thoughtfully thinking about what are the things we need to do this year, next year or three years out to get this business to where we want it to be. We have a vision statement that includes the financial goals and impact that we want to be making. That strategic plan forces you to think about what are the things that you are going to work on to help us get there. An example is we do a lot of great things with technology. Our IT manager did a tremendous job getting us Office 365.
As the leader of the business, I see an opportunity to make technology a differentiator and be something that truly allows our people in the field to be more efficient, and makes our customers’ experience with us even better. That is one of those strategic things that I am going to be working on with our team to make sure three years from now, we can look back and say, “We made some changes that got us to where we needed to be.” It is focusing on what that plan is and being conscious of what am I doing to get us to where that plan gets us those results that we are looking for.
How does that affect the way you structure your calendar on a weekly and monthly basis? Please help people because I promise you, everybody struggles with what we are talking about here.
I am a big believer as I am sure a lot of people are on lists. Our IT manager did a tremendous job getting us Office 365. I was on a quest to not use paper at all. I have thrown myself into the Microsoft environment with OneNote, To Do, Outlook, Excel and others. This is getting pretty granular but I am a big fan of Microsoft To-Do. I set my weekly list in three good details and say, “This is something that is a strategic initiative, something that I need to get done, and something that is a day-to-day thing.” I am thoughtful about my week and what am I going to work on.
The other thing that took me a little bit but then I got to where I am pretty adamant about is I color code my calendar. I color code it based upon external, work procurement, execution or people development. It is a very nice visual way to look at where I am spending my time. It has been a useful tool for me within Outlook. I am using those colors to look at my calendar and say, “Am I doing what I said I was going to do as far as time committed to developing people and time to work on strategic initiatives?” Those would be the two things.
I want to go to the sibling dynamic here. I got five kids. I can imagine it being extremely entertaining if they ran a business together. Tell me what it is like to have your older sister as co-president.
When evaluating who to bring in to assist you, they must want to understand your business. Click To TweetFirst off, I am extremely blessed because my sister is a dynamic and talented leader. I come from a place of recognizing that if she is shoulder to shoulder with me, I am going to be better and we are going to be more successful because of her talent level. I look at it as I am blessed to have her as a partner that will help lead this business because we are a pretty large organization.
It is large enough that it needs more than one person leading. That is not to say we do not have disagreements. We went through a two-year evaluation process with our industrial psychologists. Our outside consultants interviewed the people that we work with. We had to present individually a pretty thorough business plan about our vision for the company.
What was the difference between your vision and her vision?
We identified where we thought we were very similar. We had a lot of differences. The ideas she had to propel us towards the vision that we said collectively were different from some of my ideas. Her background is in healthcare. She led our healthcare division and she was focused on doubling down on how do we get more healthcare opportunities. I came up through our industrial division and I am extremely bullish on that market. We have great people executing those projects.
We brought into this process our experiences. We both had slightly different focuses on where the resources should be put towards the experiences but we are able to hash those out. We are aligned before we are trying to take the business but from time to time, we do have good disagreements. We learned again that we have some good differences that our people could rattle off because they know if she is in a meeting, she may handle something differently than how I will. We complement each other well.
Do you take care of different parts of the business? When I think about a transition, I got to get someone who gets the work, builds the work and gets paid, and the people who can oversee all of those aspects. Tell me about that division of labor.
We got through our two-year evaluation process and the end. The committee included our three owners, my dad who abstained but facilitated, two uncles, our then-president, and three outside advisors, our family business consultant, our very talented private equity leader, and our executive from Travelers who have oversight of our business and knows us well. We got to the end of that and they told us, “We would be doing a disservice to the business if we would make one of you CEO and one of you COO, or one of you president and one of you executive vice president.”
Their reasoning was, “You complement each other so well that we think you could make a team that would propel the business faster into even better results.” What I am getting at is they said, “We would like you to be co-presidents.” I will be the first to admit. I went through a two-year process and I was pretty disappointed. I was like, “There is nothing like tying with your sister.” We are both competitive. Thankfully, the family business consultant put us in touch with a couple of other businesses that had co-presidents.
Now that we have this term, I see it more often when I am reading the Wall Street Journal or something else. They connected us with two brothers who owned Torcon. They had been co-presidents for years. It is an impressive business. To directly answer your question, they advised us against splitting it up by work procurement and work execution because they wouldn’t want a customer to be like, “George sold me this job. He then throws it over to Jeannie and Jeannie is going to go execute it.” We ended up splitting it up by profit centers and support functions.
Jeannie has our two divisions under her. I have our other two divisions. We have executive leaders of those divisions. We did split up the support functions, operation side and procurement side. We always run the customer and make it very clear that Jeannie is going to be the one that will be their executive contact. We were thoughtful about how we split it up. Thankfully, the size of our business allows us to split it up. We can be pretty separated from what we are getting done. We come together corporately but it is a big enough business where we do not step on each other’s toes.
When I look at your previous generation, it looks like there was more of the division of labor. Your uncle is the VP of Field Ops and your dad was the President. How did that work?
My dad was the president and my Uncle David was always very talented. He worked the procurement and headed up our work procurement efforts. My Uncle Rich was the field ops. They did have a different setup. You are right in that.
Another interesting aspect of managing a transition is that what the company looks like today isn’t necessarily what it has to look like tomorrow. That can often be a challenge for someone who has been doing it this way for the past 20, 30 years, “It has worked so far. Why would I want to change it?”
That was some of the advice we got from those businesses that have co-presidents. They ensured that people are not going to be used to it. People are going to find it to be strange because it is not what they are used to. They stressed how important it was to communicate the why, not only internally but externally. We are very focused on why we are making these org chart changes and why does this org chart allow for future growth and allow us to do different things. As Cullens and family owners, we are focused on how do we propel this business forward, and how do we pass on our business to our children that are different from the business that we took over. That why is so important to communicate why those org chart changes are happening and the reason behind them.
I have one of my kids come and ask me for something. He has already gone and asked his mom for it. Mom said no but he comes to dad and dad says yes. There is that communication confusion. How do you and your sister avoid that? Do you have personal one-on-one meetings? How do you do that?
We meet once a week and we are intentional about it. We keep some of those bigger decisions on doc for those once-a-week discussions, but also recognize we may need to find a time. During the pandemic, we would walk together all the time and talk through some of these things. Specifically, how that is viewed among our business is very clear. This type of decision goes to Jeannie. This type of decision goes to me.
If a decision gets to my desk that belongs to Jeannie, I will politely say, “You got to take that to Jeannie,” because that was the advice we got from the two brothers who led Torcon. They never wanted to send out confusion about who makes what decision. You got to watch that because that is where this could get messy. Thankfully, we are not experiencing that because we have been pretty disciplined about it.
There is family and business. How do you separate the two?
I would like to tell you that they are separated but I am proud to say that they are not.
It is like, “How are you going to do that?”
Provide an environment where your people can grow. Click To TweetIt is pretty common for us when we are outside of the business to be talking about it. I am very blessed that my wife is an impressive businesswoman who is another person that I go to for advice. She understands this is a family-owned business. It is in our blood. It is what I love. Thankfully, she is always okay either with her or when my sister and I with our families get together. There are some times when I will say, “Jeannie, we got to go talk about something.” We would be fooling ourselves to think that it wouldn’t be how things are. Rather, we are upfront about it. We all love the business so much that it is not like it is a challenge to talk about it because it is so precious to us. It is not unpleasant.
You have mentioned this throughout the interview. I want to explore it as we are wrapping up here. Tell me something about the value of outside advisors, how you go about picking them, and why you found them to be so beneficial over time.
An example of this technology initiative is through our CFO’s CFMA group. One of the outside speakers they brought in was a technology expert. We keep a running list of those types of experts that are out there, so when a problem arises, we know who to go to. Specifically for this technology initiative, I am the first to admit that I cannot program a computer. I do not know how the cloud works. While we have a great IT manager, he is the only one that knows all that. It helps him to have another resource. We brought in this technology expert to help shepherd our technology initiative.
I rely on that person to bring that expertise. It is so crucial when you are evaluating who to bring in to assist you. They got to want to understand your business and take the time to not try to just bring a one-size-fits-all solution. We are very fortunate that we have a number of outside advisors. We still work with Tom Searcy from Hunt Big Sales. It is an important part of our process to understand and recognize what we do not know, find those experts to help us with what we do not know, and not be too prideful about it.
How do you avoid the magic pill consultants? It is the guys or the gals who come in and say, “Do this and it is going to change your life.”
Some of our consultants may be reading this. They need to recognize that there is a shelf life. There has to be an exit period. If you bring somebody in to get you to where you need to be and continue to have them there, they are not getting you to where you need to be. If you are cognizant of what is the time horizon to get us to where you need to be and you are not getting there, that would tell you there is this magic pill that is not getting accomplished what you need as a business.
What I am taking away here is that you have got to have that transition period of 10 to 15 years. You’ve got to be able to have a clear structure in place of what it looks like to come into the business. What would you say are your 2 or 3 golden nuggets that someone who is going through a transition can take away from your experience that they should be thinking about?
To me, it is hard to boil it down to 2 to 3 because I constantly am reminded of things that our fourth generation did to set us up for success. You mentioned a couple of them. It is being thoughtful that this is going to take time. It is not a snap of the fingers. It is not something that is going to get accomplished without very thoughtful planning. Number two is you need to have the buy-in of the people who are outside of the ownership transition. Those are your key leaders.
At Cullen, we are blessed to have extremely strong leaders. I am very proud that five members of our executive team are graduates of our Young Leaders program. They have been with us for a long amount of time. Two of those graduates include my sister and me. We graduated from the Young Leaders program. It is those great non-owner leaders that you can rely on, and get those people bought in. Number three, recognize that the people who are being transitioned need to have thoughtful development programs.
We were so blessed that Ron Becher took personal pride and ownership to say, “As the first non-Cullen president of this organization, my job is to ensure that when it goes from the 4th to the 5th, those 5th generation leaders are going to be ready.” He took a personal interest to make sure that when my sister and I were going to have that transition, we were going to be successful. I am sure others will come to mind but those are the top three things for me.
I’m sorry but I have to ask you one more question.
No problem. I am a big fan of the show. I shared one of yours about incremental development with all of our PMs and suites. I am having a lot of fun being here.
I am grateful for you doing that. How do you retain top talent who are looking at their opportunity at Cullen and the doorway to ownership perhaps isn’t there?
First, we need to provide an environment where they know they can grow. I love to summarize to our new people that when our fourth-generation owners took over, we did not have a Milwaukee office, we did not self-perform steel and masonry, and we did not have a Madison office. I could go on and on. There are all things that were leadership opportunities that allowed for them to have growth for their people.
You also need to compensate, be thoughtful about your compensation plan, and have your people feel like they have a stake in the business. We are fortunate to have a robust bonus program and a profit-sharing program. I do feel like our people understand that the Cullens want to reward and pay for awesome performance. Thankfully, we are able to do that.
George, I have enjoyed this interview. I would love to get your sister on the show and do a three-way discussion at some point. That would be tremendously interesting.
We would enjoy that.
I appreciate your time. Thank you so much for joining us here on the show.
Thank you, Eric. I appreciate being on.
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Thank you for reading. I hope you enjoyed my interview with George Cullen. If you are going through a business transition and you would like an outside voice to help you with the structure of that transition, particularly on the leadership development side of the equation, feel free to reach out to me on my website, ConstructionGenius.com/contact. Fill in your information there and I will reach out to you. We can chat about if or how I might be able to be of some assistance to your company.
Here is one final request. Feel free to share this interview with other people that you may think will benefit from it. I also would appreciate it if you could give us a rating or a review wherever you get your podcasts so that the show can blow up throughout the interwebs and benefit as many construction professionals as possible. As always, thanks again for reading.
Important Links
- JP Cullen
- ConstructionGenius.com
- Teichert
- Tom Searcy
- Torcon
- CFMA
- Young Leaders
- ConstructionGenius.com/contact
- George Cullen
About George Cullen
