At the end of his research stint, Halverson came back convinced that he had seen the future of his industry on a visit to The Haskell Co. in Jacksonville.The company's founder, Preston Haskell, had been a pioneer in the design-build approach to construction -- melding architects, engineers and construction personnel into one firm rather than viewing them as specialties best conducted via independent businesses.
The design-build approach, though efficient, had suffered from a lack of cachet, pooh-poohed by stand-alone architectural firms and engineers as a cookie-cutter method best suited for simple, lower-budget projects.
Meeting Haskell was "a bit of an epiphany,'' says Halverson, who learned how Haskell had taken his company from a puny local construction firm in 1965 to a sprawling $500-million giant that designs and builds everything from elementary schools to warehouses to office buildings to Jacksonville's Alltel Stadium, home of the NFL Jaguars.
Halverson came to believe that design-build is on its way to dominating the entire construction industry -- less expensive, faster and just as able to deliver high levels of quality as traditional building. "That's the trifecta in our industry," he says.
Back at Mortenson, however, Halverson couldn't persuade his bosses to get on the bandwagon. He also knew that his chances of ever taking over leadership of the family-owned company were slim: Several Mortenson family members stood between him and the chairman's job. "By 1999 I came to the conclusion that I had to make a change," Halverson says.
Meanwhile, Haskell had gotten to know Halverson better as both served on the board of the Design-Build Institute of America, of which Haskell was the founding chairman.
Halverson impressed Haskell enough that he was willing to abandon his company's longstanding practice of promoting from within. Last summer, he hired Halverson, now 45, as president of The Haskell Co. In January, Halverson took over day-to-day management with the titles of president and chief executive officer.
Proceed with caution
Haskell's decision put Halverson at the helm of one of Florida's biggest private companies and one of the relatively few Florida-based companies with a national scope. In addition to its Jacksonville headquarters, the company has offices in Miami and Orlando, Chicago, Dallas, Nashville, Tenn., Lynchburg, Va., and Raleigh, N.C.
Quietly stylish in well-starched shirts and cuff links, Halverson instantly became a person-to-watch on the state's business scene. He and Haskell share many of the same interests, including a passion for the fine arts. Halverson, who performed opera as a young man, enjoys attending the symphony. Haskell, also a patron of the performing arts, is an avid collector of modern art. And Halverson clearly enjoys Haskell's unqualified support and even admiration. "He's articulate and has an impeccable character," Haskell says. "And he's got the same energy and drive I had when I was 45."
But the transition from entrepreneurial founder to first successor is one that has tripped up successful companies before. In addition, Halverson's hiring was a startling departure for a company that has been defined since its founding by Haskell's aggressive Southern courtliness -- and a preference to growing its executive talent rather than hiring it.
"I always felt my successor would come from within the company," Haskell says. "There are two or three senior executives who could have succeeded me. But I felt if I could get Steve Halverson, it was worth the risk of going outside."
To sell his transition plan to the jilted executives, Haskell spent a week meeting one-on-one with each of his eight top lieutenants. After each of the meetings, Halverson was brought in to explain his vision for the company and answer any questions or concerns. "By the end of the week, they were 90% supportive," Haskell says.
Not everyone has stayed on the team, however. Ed Vandergriff, one of the executives who had been considered a top contender to succeed Haskell, is leaving the company after 18 years to pursue other opportunities. He had been executive vice president overseeing real estate development. While he says he's sorry to see Vandergriff depart, Halverson says the resignation won't hinder the company's long-range plans.
Playing with the big boys
Beyond internal management issues, Halverson's biggest challenge will be moving The Haskell Co. into a role as a real national player at a time when consolidation in the industry is creating a two-tier structure of big boys and niche players.
As design-build gains momentum and more traditional construction companies structure themselves as such, Haskell will be forced to differentiate itself in a more crowded field, says Victor Sanvido, professor of architectural engineering at Pennsylvania State University.
Design-build is certainly on an upward trajectory. When Haskell, a native of Birmingham, Ala., and a graduate of Princeton University with a Harvard MBA, started his construction business in the mid-1960s, having design and construction under one roof was regarded as an oddity. Haskell, however, always believed it was the best approach. In fact, until the early 1900s, buildings typically had been designed and built by the same company. The birth of more complex buildings created a need for specialty architecture and engineering firms. And, for the most part, it remained that way for decades.
But in recent years, with federal and state governments, as well as corporations, looking for quicker and less expensive construction delivery, the design-build model has gained popularity.
While design-build firms performed only about 8% of all non-residential construction a decade ago, they now account for some 28% of the $300 billion in annual building. By 2007, that share is expected to reach 50%, according to projections from the Design-Build Institute.
Driving the growth in market share is the perception of efficiency. Researchers at Penn State, in a study done for the Construction Industry Institute at the University of Texas, found that of 351 U.S. construction projects from 1991 to 1997, the design-build method was 33% faster, 6.1% cheaper and provided the same quality as the traditional design-bid-build process. "Owners love it," says Jeffrey Beard, the Design-Build Institute's executive director. "They get a guaranteed firm price and only have to deal with a single source."
Also working in design-build's favor is the amount and complexity of litigation that can arise from construction disputes. Many firms choose a design-builder as a form of risk management. The U.S. Postal Service's decision five years ago to use design-build firms to build its facilities has resulted in "negligible" litigation, says Rudy Umscheid, the Postal Service's director of facilities.
But design-build isn't for everybody. Traditionally, architects and engineers are awarded projects based on their perceived qualifications. Some architects and engineers fear the merging of design and construction will lead to a diminishing of their industries -- and of quality.
"We know design-build is here to stay," says Felix Martinez, director of procurement and federal markets at the American Consulting Engineers Council in Washington, D.C. "But we think it's just one of the methods. Design-build is not the be-all and end-all for every project."
An aggressive plan
Halverson believes The Haskell Co. has the resources and experience to compete nationally. He presides over 150 architects, engineers and designers and at least 150 construction specialists. The firm also owns a steel fabrication business, which gives it better control over the delivery of prefab components used in the construction of a building. Haskell employees are divided into teams organized around the different types of customers, such as schools, aviation and manufacturing.
Halverson's goals are aggressive: Boost sales 15% each year for the next five years and double revenues to $1 billion. He plans to push the company into new geographic markets, especially out west, where he has worked but where the Haskell name isn't as well known. As he does, he'll also have to prove himself to existing Haskell customers who've been used to dealing with the company's founder.
Under Halverson, the company will focus on three main construction segments: technology-related facilities, civil infrastructure projects such as water-treatment facilities and roads, and education. The company's Haskell Educational Services has been a leading builder of charter schools in Florida, and Halverson wants to export that expertise throughout the country. "I am passionate about how we address the educational needs of the country," he says. Education, he adds, is the issue on which his generation will be evaluated 50 years from now.
Halverson says he'll also put more emphasis on areas such as real estate advisory and financing services, which owners are demanding. Halverson also will consider buying other firms to help fuel the company's growth. Meanwhile, the company's founder says he's taking an advisory role. "I'll basically do what Steve wants me to do," says Haskell, 61. Halverson, with a nod toward his boss, says the responsibility for the firm is now his: "If you see any mistakes, they're mine."
Halverson: Personnel File
Education: Undergraduate degree from St. Johns University, Collegeville, Minn.
Law degree, American University, Washington, D.C.
Career track: Lobbyist, American Bar Association (during law school).
Helped draft legislation to reform state contracting procurement procedures. Model laws were adopted in Louisiana, Maryland and New Mexico.
Next, joined law firm of Briggs & Morgan in St. Paul, defending big construction firms. Made partner at age 29 at the successor firm of Hart & Bruner in Minneapolis.
In 1984, joined M.A. Mortenson, a law client, as associate general counsel. Moved later into operation roles, became regional vice president of firm's western region.
Big projects: Passenger concourse at the Denver International Airport, the Los Angeles Convention Center, Walt Disney Concert Hall and the Coors Field baseball stadium in Denver.
Motivation: "I was in my late 20s working with CEOs, watching them work and solve problems," Halverson says. "I began wondering if I could do what they do."
Wife: Diane. They met in high school, married 24 years. Plays ice hockey every week in co-ed league. Works with disabled children.
Children: John, 20, sophomore at University of Denver, former competitive freestyle skier. Anne, 13, seventh-grader at The Bolles School in Jacksonville. Plays the flute.
Enjoys: Opera, attending the symphony, skiing at vacation home in Steamboat Springs, Colo. Unlike wife, he's never played hockey. "I just cheer her on," he says.
Favorite opera: Mozart's "The Magic Flute."