I worked with Sid in the hotel business from 1995-2010, until he sold his last hotel. Now I work for the company that purchased one of his hotels and am overseeing several other properties. My time with Sid was generally spent in meetings, oftentimes over lunch. He was already in his sixties when I started working with him, a time when others his age are thinking of retirement. But not Sid, I think he sees going to work as relaxation and stress relief. Our meetings, which stretched over two hours, were more about how to approach our work rather than about details. He also wanted to know how we were doing personally and about our families.
Sid is not a hands-on type of owner. His biggest asset is spotting talent. He’s very good at finding the people who know how to do what he’s not experienced in doing himself. For example at Exxel Pacific he partnered with Kevin DeVries, who’s an amazing talent. Sid saw certain abilities in him and that choice led to the success they’ve had.
In my business relationship with Sid he gave me a lot of freedom to make decisions at the property level and to make mistakes so that I could learn from them. He was always there to help if I needed it. Sid pushed me (even if at times it was uncomfortable) to follow up on my decisions. If I made the wrong decisions I also had to fix them on my own. In doing so he allowed me to learn about the business through the school of hard knocks. Many owners like to micro-manage, which can be very tough on a manager and limits their ability to learn. Sid empowered me to make decisions which, for my career, were very beneficial.
Sid has always been willing to invest in his employees, including myself, through educational opportunities. Any time there was a conference or seminar that could further my education or make me a more valuable asset to the company, he invested in my participation. He took to heart the philosophy of hiring and promoting from within by selecting line staff to become managers.
When there were disputes with customers I always knew that Sid had my back. He understood that fine line between doing one’s best to please people without giving away the farm. On those rare occasions when a guest wanted to speak directly with Sid or someone else at the corporate office, he backed me up. He might have disagreed with my decision, but he supported it with the customer and then would later discuss it with me to determine how I might handle it better the next time.
Sid understands his own limitations and never allows his ego to get in the way. Instead he goes out and finds people who compliment his weaknesses and strengths. Even though Sid never actually managed a hotel, he understood the operations enough to know what type of people he needed. He is very good at doing his research and knows what he’s getting into in terms of risks and rewards. Sid also knows the importance of not taking things too seriously. He believes if one cannot laugh at themselves (or laugh at work) they will not enjoy their job and are instead just putting in time. Not only did he want his employees to enjoy their work, he also wanted them to enjoy their time away from work. He was always encouraging his employees to take vacations. While it was costly in the short run, it made for better and happier employees whose work, in the long run, paid off.
For me, working with Sid was a pleasure I’ll never forget. He has been a great influence on me.
—Loren Terpstra, is a Certified Hotel Administrator with a degree in hospitality management. He currently serves as the operations manager for the various hotels owned by Hollander Investments Inc. He lives in Lynden, Washington with his wife and children.
After closing the store there were no more customer purchases to finance. Yet with over a hundred thousand in receivables, monthly statements needed to go out. Because computers, scanners, copiers and other time-saving office equipment had arrived on the scene, I decided to expand my little financing business to include leasing. I contacted a computer dealer in the area as well as some office equipment retailers and offered my leasing services. Rarely did I see the equipment being leased. It was mostly a matter of approving the dealer’s prospective customer with the collateral being the equipment identified on the lease contract. I incorporated that business under the name Baron Credit Corporation. When the company who supplied the equipment submitted all the lease forms, properly signed with the first and last lease payment checks attached, the vendor was paid the full selling price. The leasing company, Baron Credit Corporation, received the monthly lease payments, including interest over the next thirty-six to sixty months.
“BOYS, THERE AIN’T NO FREE LUNCHES IN THIS COUNTRY. AND DON’T GO SPENDING YOUR WHOLE LIFE COMMISERATING THAT YOU GOT THE RAW DEALS. YOU’VE GOT TO SAY, I THINK THAT IF I KEEP WORKING AT THIS AND WANT IT BAD ENOUGH I CAN HAVE IT. IT’S CALLED PERSEVERANCE.”
LEE IACOCCA
In 1982 I decided to aggressively expand the leasing activities. It was triggered by an awareness of the economics of inflation which, at the time, seemed unstoppable by the Federal Reserve Board. I knew that run-away inflation can only be tamed by increasing interest rates. Prior to that, the administration of President Carter seemed reluctant to slow down the overheated economy. But that began to change when President Ronald Reagan was inaugurated in 1981. During that time, the Federal Reserve increased the prime rate until, in early 1982, it reached a staggering 22 percent! These days an interest rate that high seems unbelievable with current interest rates the lowest in recent history.
Back then it wasn’t possible to get a bank loan at prime. Computers had arrived on the scene and the dealers selling them found few customers with the cash to buy a computer system outright. At that time a computer system, including a printer, was priced in excess of $10,000. Here’s where my planning and calculations went into high gear. I knew banks couldn’t afford to loan money at the prime rate since banks would typically add two to three percentage points to prime. I knew if my lease rates were based on 23 percent it would be lower than the average small business was able to negotiate with their bank. A great opportunity was knocking and I responded. All leases in excess of $7500 were written for a sixty-month term. I knew that as soon as inflation began to decline, the Feds would begin reducing interest rates. The sixty-month lease term never included a variable interest factor. Therefore the lease contracts I wrote at the 23 percent would remain at that rate for the entire five-year term. While the money I needed to borrow from my friendly banker was also costly due to the high interest rates I was paying, my rate was subject to being adjusted monthly. Luckily my “crystal ball” served me well and it wasn’t long before interest rates came down. Needless to say, for a few years Baron Credit Corporation was very profitable.
***
Beyond raising our six children, Margaret also had her own “long-term dreams.” She was frugal and for many years knew that we didn’t have money for any luxuries. For the longest time she dreamed about building a new house. She was always good at interior design and loved the idea of being completely in charge of decorating a new home. By this time we no longer had financial worries so we decided to purchase a lot. Before construction began we were approached by our friend Mike who we had known a few years. Mike explained that he had built a brand new home right next to his own impressive estate complete with swimming pool and tennis court. We decided to inspect it. His new home was a beautiful two story with underground car parking. Mike had studied architectural design and was very good at designing homes with a distinctive New England flair. We decided to purchase the house from Mike and, while not immediately, Margaret eventually did add her own design touches when we later added on. We were neighbors and close friends with Mike, his wife and their children. Our friendship continues to this day.
Mike had told me about an apartment complex he had designed and built in Bellingham which he owned together with a partner. I visited Mike in his office at the apartment complex and he showed me the architectural plans and said he had acted as the general contractor for the project. At the time he was working on the design for another apartment complex to be located not far from the campus of Western Washington State University. He asked if I was interested in joining him as a partner in that project. I was flattered he asked me but explained that I had no idea how something that large, probably costing over two million dollars, could possibly be financed. My previous banking experience was with small loans for short time periods. This was an entirely different endeavor that would require huge loans and extended repayment terms. Mike explained that after a construction site was secured, the architectural plans were finished, pro-forma estimations of rental rates performed and expected occupancy levels met, we would be ready for a professional appraiser.
The professionally licensed MAI (Member of the Appraisal Institute) appraiser would study every aspect of the proposed project and develop a realistic value estimate which the bank would use to determine the amount it could loan. This was in the very early 1980s and nowadays both the economic climate and bank lending criteria are vastly different.
The appraisal for our proposed apartment complex indicated that the value of the completed project was well above our estimated construction costs. This made it possible for us to get 100 percent financing on the entire project. This is referred to as high leverage financing. I would have been comfortable with a more conservative approach because this was new for me—leaving much for me to learn. Approximately one year later I was very pleased to have a 50 percent stake in the ownership of the impressive eighty-unit Cambridge Square apartment complex. It didn’t take long before the occupancy was sufficient to make the monthly mortgage payments and only a few months longer before we were able to earn some monthly income from our investment in the partnership.
As the project progressed, Mike and I would meet for lunch at least once a week. After the apartment project was operating smoothly and profitably, it wasn’t long before we began talking about other opportunities. Soon we became aware of a small motel located near the freeway in Mount Vernon, Washington being for sale. We traveled the forty miles to the location of the twenty-six unit Norwester Motel to meet with the listing realtor agent. We were not impressed with the property. The exterior as well as the rooms and furniture appeared to have been neglected for years. We discussed the pros and cons of a possible acquisition. The seller was very motivated to dispose of the property which included significant additional land that could be sold or developed. The property was located near the freeway between Vancouver, BC and Portland, OR. If we could sell a couple of sites for a restaurant or other use we could possibly get the funds for a complete remodel of the run-down motel. We made an offer below the asking price and soon were the proud owners of a “junky” motel.
My partner Mike was very creative both as a gifted designer and an experienced builder. While I was creative in many other areas of business, I knew nothing about design or construction. Soon the remodeling was underway. It posed some challenges. We needed to keep as many units intact as possible to accommodate guests since the income from occupied rooms was needed to pay the manager and housekeeping staff while helping to make the mortgage payments. Gradually all twenty-six rooms were refurbished and furniture replaced. Soon the motel qualified as franchised property by a large national chain. The name was changed, the occupancy increased and we were soon ready to add more rooms. Eventually it grew to sixty-six rooms. Many times during the summer months we were booked to capacity.
With a contractor friend, Mike and I established an additional partnership to build and own a small office building on a parcel of land we owned immediately adjacent to the motel. Since there were now three partners involved we called the project the “Tri-Dex Office Building.” A year or two later the third partner purchased the building and became its sole owner.
With both the apartment complex in Bellingham and the motel in Mount Vernon operating profitably, Mike and I began to discuss the possibility of building a new hotel in Bellingham. There is always a great deal of due diligence involved before a major decision can be made. That research includes determining the best location for a hotel, the availability of land, the cost of construction, projected income and expense analyses, our borrowing capacity and other feasibility analyses. Once those criteria were met, less than two years later we built a beautiful new eighty-room hotel affiliated with a national franchise. We hired staff including a manager, housekeeping personnel and front desk agents. The hotel was an instant success. We were soon able to pay the salaries and expenses as well as the mortgage payments from its profits.
But Mike was not about to allow us to rest on our accomplishments. It wasn’t long before we acquired some additional land near the new hotel. Mike again put on his architectural design hat and prepared plans for a two-floor commercial office building. Around a year later our Meridian Place office and retail building was nearing completion. This was a totally different area of business activity. To make Meridian Place successful we would have to find tenants to occupy space in its nearly 35,000 square feet of retail and office space. We agreed to hire a young man named Kevin DeVries who had just graduated from Dordt College in Iowa.
While in college, Mike’s son Mark had become a close friend of Kevin. I got to know Kevin during summer vacations when he visited his friend Mark. Initially he was hired to be our leasing agent for Meridian Place. Once that project was nearly finished, Mike turned his attention toward the next expansion plan which involved an IRS-1031 tax deferred sale of our Cambridge Square apartment complex to acquire a struggling Holiday Inn hotel in Texas. By this time I had become uncomfortable with the speed of our expansion plans and regarded the acquisition of a large hotel in Texas as too risky.
Mike, who is ten years younger and less risk averse, had a different outlook. We decided to divide our assets, dissolve the partnership and go our separate ways. Both being Christian, we accomplished the dissolution in a mutually agreeable, peaceful and friendly manner. As I write this, Mike has succeeded in building a sizable hotel empire and we continue to be good friends. In the process of dividing our properties, I became the owner of the nearly fished Meridian Place commercial building and Kevin was now my employee.
“I HAVE FOUND NO GREATER SATISFACTION THAN ACHIEVING SUCCESS THROUGH HONEST DEALING AND STRICT ADHERENCE TO THE VIEW THAT, FOR YOU TO GAIN, THOSE YOU DEAL WITH SHOULD GAIN AS WELL.”
ALAN GREENSPAN
One morning on my way to my office, which was now located in Meridian Place, I was driving along East Bakerview Street when I noticed a sign that read: “This site approved for eighty apartment units.” It included the name and telephone number of the real estate listing agent. That triggered an idea. When I arrived at my office I picked up the telephone book and opened it to the “Apartments” section of the yellow pages to do a little independent research. Pretending to be someone interested in renting an apartment, I called several existing apartment complexes. What I learned excited me. There were virtually no vacancies in Bellingham.
Later on over lunch with Kevin that day I announced that I had an idea. Kevin, who is a young man of few words, nodded and listened attentively. Handing him the name and telephone number of the real estate agent, I asked him to do some research on that property—determine price, suitability for construction of an apartment building, county and city permits required and requirements cost, income and expense projection and anything else we’d want to know before purchasing the building site.
“AS I BEGAN TO READ ABOUT PEOPLE OF ACCOMPLISHMENT, IT DAWNED ON ME THAT THE PERSON WHO HAS THE MOST TO DO WITH WHAT HAPPENS IN YOUR LIFE IS—YOU.”
DR. BEN CARSON
One would normally expect someone to be busy writing notes as I barked my commands. With Kevin it did not surprise me that he took no written notes. I had already learned that when Mike and I had our regular meetings with Kevin to suggest possible potential tenants for Meridian Place, he never took notes. To my amazement he never forgot a single detail. He was simply a brilliant young man. Of course I had prepared spreadsheet projections similar to the sample on page 112.
The projections were based on the cost of construction not to exceed two-and-a-half million dollars and that our bank loan was not to exceed two million. When we met with the officials of our construction company we learned that the cost of constructing the complex using the plans as prepared by our architect would approach three million dollars. This led us to secure the services of another architect who prepared plans that would fit our budget. During this process, Kevin took care of nearly every detail. Then during construction we began receiving applications from prospective tenants. We knew the apartment rental market in Bellingham was good. Even so, we had not expected that within approximately two weeks from construction completion, Bakerview Terrace apartments would be fully occupied. It turned out to be a very successful investment.
1982 Projections
Name: Bakerview Terrace Apartments
Units: 78
Annual Income
Average monthly rent $365.00 per unit and (costs)
Monthly income
“Kevin,” I began, “you have done a great job bringing Bakerview Terrace Apartments to fruition. I want you to know that I’m impressed and, as a result, I’m going to give you a small percentage of ownership in the project.” With that I handed him an envelope with his ownership percentage certificate though, looking back now, I don’t think he thought that his accomplishment was anything special. He was a modest young man and bragging about himself was simply unthinkable. I told him I didn’t know what or when there would be a next project or what it might be, but that I thought we should have a lawyer prepare a partnership agreement. From then on whatever and whenever we planned another project, Kevin and I would be equal partners. That was the birth of the “Exxel Development Group” partnership. Using the word “group” seemed to imply that we might consider the possibility of adding additional partners in the future. That might have crossed my mind, but the word “group” always remained a partnership just between Kevin and myself.
Forming a new partnership meant the bookkeeper, who handled the accounting work for Baron Credit Corporation as well as the sixty-six unit motel in Mount Vernon and newly finished Meridian Place, needed to add the Bakerview Terrace apartments accounting to her responsibilities. Since Baron Credit Corporation specialized in financing leased office electronic equipment we operated primarily under the assumed trade name of Business Equipment Leasing (BEL).
It now became my sincere desire to help Exxel Development Group (EDG) and my new partner succeed. Kevin and I had not known each other for a long time but had already discovered we had much in common. I was born and raised on a small farm in Holland. A generation later, Kevin was born and raised on a small farm in the state of Iowa. His parents were very close to the same age as Margaret and me. Both our parents were devout Christians and were members of the same denomination. We both believed that, as Christians, the conduct of our lives would not be measured by our regular church attendance. Instead our lives were about how we affected and related to others whose lives were touched by ours. Whether customers or competitors were rich or poor, important or of lowly status, everyone deserved to be treated with respect and honesty. Those were the core principles which we both believed should never be compromised.
For many weeks we pondered how we could start a new business. We had available retail space in my Meridian Place building, which Kevin managed. Many ideas were explored and rejected. One day we had arranged a lunch meeting with the man who had been the superintendent employed by the contractor during the construction of Bakerview Terrace. He told us how much he enjoyed working with us and suggested we start a construction company. If we did, he said he’d love to work for us. Kevin and I looked at each other, undoubtedly both thinking it was an idea that required further discussion. We both had the time to think about the feasibility of getting into that business. Other than off-and-on monitoring of the various projects being built during my partnership with Mike, as well as the construction of our apartment building, I knew next to nothing about reading blueprints, much less turn the drawings into a finished building. It all looked complicated to me and I respected those who had the skills to turn a set of drawings into a beautiful building.
Skill was only one ingredient in construction. It also required a lot of energy and hard work. I was deficient in both areas. My MS continued to, very gradually, nibble away at my level of physical energy. Advancing years would also gradually become an inescapable factor. But Kevin was my partner now and I needed to think about him. He was a generation younger, full of energy and ambition. He was also a quick learner. His brother in Iowa had a large and growing electrical contracting business. During Kevin’s high school as well as college years he worked in his brother’s business during summer vacations. The pros and cons of getting into the general contracting business were extensively discussed. We now had a very nice young man with extensive construction experience willing to come and work for us. Unlike other businesses I had started in the past, I knew that starting a general contracting business could not be done on a proverbial “shoestring.” There would soon be bills to pay to subcontractors, along with wages and other costs that were part of operating any business. We needed start-up money and knew we didn’t have a track record that would satisfy any bank wanting to loan us money. I suggested that with all the resources available to Baron Credit Corporation, I would be able to loan the new construction company some initial startup funds. We contacted a lawyer friend and asked him to prepare the documents and incorporate our new business venture under the name Exxel Development Construction Company. Kevin and I were each issued 50 percent of the shares. Now the challenge was landing our first job as general contractor.
“BUILT INTO EVERY PROJECT ARE OPPORTUNITIES NOT TO SUCCEED.”
SUSAN OLASKY
I owned the sixty-six room motel in Mount Vernon, Washington, and visited with the general manager and other staff people there at least once a week. As Kevin and I were contemplating getting the construction company started, we decided that we might be able to duplicate our success in developing Bakerview Terrace by planning another apartment complex in Mount Vernon. The difference would be that the project would be built by our newly established Exxel Development Construction Company. It was a big project that would cost over three million dollars, which was a lot of money in 1989. Fortunately, during my years in business, I had established an excellent credit record with banks. This is an essential ingredient for success. To raise sufficient funds for a down payment or equity on a bank loan we accepted over $500,000 from friends and acquaintances who were eager to share in our new venture. Those were people who had known me for many years and trusted me with their money. That would not have been possible had my reputation been tarnished during my business career.
We were able to complete the Burlington Terrace apartments and operate them successfully. Then, just a few short years later, we sold them and our investor friends were all repaid their original investment along with a respectable percentage of the gains.
The small, run-down motel my previous partner Mike and I had purchased and expanded into a sixty-six room facility, was exceptionally profitable. That led Margaret and I to begin talking about building a nice hotel in Bellingham. Margaret, who has a keen eye for design and interior decorations, was able to participate fully. We purchased the land and spent many months planning and worrying about how to come up with adequate funds for a sizable down payment to Exxel Construction so that work could begin.
I decided to sell our Mount Vernon motel and with the proceeds we had enough money to move ahead with our dream hotel in Bellingham. Exxel Construction built the beautiful eighty-six room Baron Suites hotel. Together with the manager we hired a staff of approximately thirty employees. They included housekeepers, laundry, front desk agents, a night auditor and maintenance person. (In the question and answer chapter I will address my experience with conflict resolution between the housekeeping and front desk staff.) We operated the Baron Suites hotel for many years before selling it in 2011.
Our Exxel Development Construction operation was growing. We built an apartment complex in Bellingham for a client who lived in the Boston area as well as a water view condominium project for clients who resided in the midwest. The construction company was an entity separate from Exxel Development Group (EDG) which was my partnership with Kevin. Initially Kevin and I were the sole owners of the construction company, which we later renamed as Exxel Pacific Construction Inc. (EPC).
EPC was a general contractor firm that specialized in build-only projects for clients. I was the client when they built the Baron Suites hotel. Kevin and I (EDG) were the clients when Exxel Pacific built the Burlington Terrace Apartments. After that apartment complex was sold I suggested to Kevin that we do some research in an attempt to find a promising location for a small hotel in an area other than Bellingham. We looked at markets in Snohomish County north of Seattle which was home to the huge Boeing Aircraft factory in Everett, WA.
The small town of Monroe is located in the foothills of the Cascade Mountain range approximately thirty miles east of Everett. The Monroe Fairgrounds had numerous events throughout the year and only one small motel which was very old and poorly maintained. We succeeded in purchasing a building site near US-2 which is a main highway connecting the western part of the state, through the Cascade mountains, with the eastern part. My experience in the lodging business had been very positive as well as profitable. We believed that a modest hotel in Monroe would be a good investment. At that time the interest rates on commercial bank loans were running at around 8 percent. If we structured it properly, we would be able to sell small ownership portions to a number of investors. If we borrowed the money from a bank we would have to make monthly payments on the principle and pay the interest. We thought, why not make those payments to our friends and investors?
At that time the relatively simple business structure known as Limited Liability Company (LLC) had not yet been developed. As a result, we had no choice other than to spend significant legal fees in forming a Limited Partnership. Being completely legal in every aspect of our business operations was of paramount importance especially when investor money was involved. Playing questionable “games” in any of our business dealings would never be in harmony with our core values.
The Baron Inn hotel was developed, constructed and furnished without any bank financing. We had more than thirty investors who all received returns on their investments in excess of their expectations. EDG was the general partner and we had an annual dinner meeting with all our limited partners. At the dinner we gave them the year-end dividend check as well as financial and operational information. It also gave them an opportunity to ask us any questions.
The time required to drive from Bellingham to Monroe took about ninety minutes by car. Quite often Kevin and I would take my Cessna Skylane airplane instead of driving and land at the airport not far from the hotel. Someone would then pick us up so we could check on the progress of construction. Often we were there weekly during the building and start-up phase. Operating a hotel is different from managing any other business and often presents unique challenges. One major difference is that hotels are open twenty-four hours, seven days a week, fifty-two weeks a year. I hired the first manager for the Monroe property from a competing hotel located adjacent to the Baron Suites hotel. It was still several weeks before our Monroe property would be completed, giving her ample time to give notice to her current employer. Marcy had several years of hotel management experience. Staff also had to be hired prior to the opening of the hotel. Though the building was not yet fully completed, we were able to conduct job interviews with prospective employees in the hotel meeting room. I was present when Marcy conducted the interviews and watched each prospective employee closely, occasionally asking a question.
Every hotel has a minimum of two separate departments: front desk and housekeeping. For the owner or manager, both departments are equally important but the skills and personalities in selecting employees for each varies significantly.
The “nerve center” of a hospitality operation is the front desk. When a guest enters the lobby that’s where they get their first impression. If they are greeted by the front desk agent with a cheery “welcome” and a warm smile, the all-important first impression will be positive. Easy smiles as well as a friendly, polite disposition are essential ingredients required of a successful front desk employee. A number of special skills are also required. Front desk staff must be able to handle reservations, credit card transactions, telephone operations, maintain and update accurate available room statistics and deal diplomatically with any guest complaints.
Lucy had been hired as head of the housekeeping department, and she and I had developed a relationship of mutual trust. She knew what we expected regarding the operation of the Baron Inn hotel. I also knew she would confide in me if, and whenever, she observed activities that were not in our best interest as owners nor in the best interest of guests. I visited the hotel weekly. Approximately one year after opening the hotel Lucy whispered to me, “Sid I’d like to talk to you privately.” We discreetly walked along the hallway to the exit door at the rear of the hotel. When we were outside behind the hotel, and even though there was no one in sight, Lucy talked very softly. “Sid” she began, “I don’t want to be known as a spy. Please don’t let anyone know where you got the information I’m sharing.” I assured Lucy that I’d keep everything strictly confidential. Then she looked around, making sure no one saw us. Satisfied that “the coast was clear” she began. “Sid, about six weeks ago Marcy hired her daughter from Las Vegas. Sometimes she helps with housekeeping and sometimes she works at the front desk. I’ve seen both Marcy and her daughter smoking marijuana.” Glancing around suspiciously she continued in a whisper: “You know, I’m the head housekeeper and get here first in the morning when only the night guy is at the front desk. He told me that Marcy’s daughter would be in a vacant room with a guy, two or three times a week. During the night several guys would come and go. He thinks they are dealing drugs. Marcy’s daughter and a guy would quietly leave early in the morning. Sid, I had to promise him that I would keep everything strictly confidential.” “Don’t worry, Lucy.” I said. “It’s likely going to be a little complicated, but I’ll think of a way to keep you completely out of this. I really appreciate you providing me with this information. Maybe it would be best if you walk around the hotel and enter through the front door. I’ll wait a few minutes before going back inside the way we came. That way no one will know that you talked to me.”
It was late Friday afternoon when I left Monroe for the long drive home. Heading west on US-2 the sun was already sinking in the western sky and I needed to lower the visor to keep the sun from blinding me. Near Everett I turned north on Interstate 5 and headed for Bellingham. My mind was busy assimilating the experiences of the afternoon and how to deal with the problems come Monday. Taking no action and ignoring the situation was not an option. The on-site management of the hotel was not in good hands. As managing owners we knew that our fellow owner-investors, even though they would never know about the operational details and challenges, would expect us to deal swiftly and decisively with the inexcusable behavior of the hotel manager and her daughter.
“DECISION IS THE SPARK THAT IGNITES ACTION. UNTIL A DECISION IS MADE, NOTHING HAPPENS.… DECISION IS THE COURAGEOUS FACING OF ISSUES, KNOWING THAT IF THEY ARE NOT FACED, PROBLEMS WILL REMAIN FOREVER UNANSWERED.”
WILFRED A. PETERSON
Margaret could usually expect me to be home between five and five-thirty, even on the Fridays when I was in Monroe. As a result, it was understandable that she became concerned when I had still not arrived at six-thirty. Worrying about the hazards on the highway, she was very relieved when she saw me drive up and park my car in the garage. During dinner I told her an abbreviated version of the day’s experiences. I have always regarded it as important to keep my wife in the loop on the events of each day. Right after dinner I called Kevin. There was no answer. When I heard the beep of the answering machine I left the following message: “Kevin, we’re having a serious problem at our Monroe hotel. I’d like to pick you up at the office on Monday morning a little after nine. If that works for you, you won’t need to call me. Enjoy the weekend.”
Before picking up Kevin on Monday I stopped at the Baron Suites hotel in Bellingham. Without explaining the reason, I asked the manager if he could arrange to have his front desk manager drive to Monroe and have her be there at approximately 11 o’clock. He checked with her and she agreed, undoubtedly curious what it might all be about.
With Kevin driving to the Monroe hotel, I had plenty of time to brief him on the problems I had learned about the Friday before.
After parking at the hotel we immediately went to the manager’s office. We were both surprised to find Marcy sitting behind the desk in the office. I didn’t have to introduce Kevin since they had met before and she knew we were partners and owners. There were no friendly smiles as we settled into the two desk chairs opposite her. The sober expression on our faces may have given her a clue that “something” was serious.
“Marcy,” I began while looking her sternly in the eyes, “we have enough information about both you and your daughter that had we reported it to the police there’s no doubt in my mind you’d both be arrested. But we did not report it to the police. You and your daughter are both fired. We simply want you to take your belongings, have your daughter do the same, and leave the property immediately. We will go with you when you tell your daughter and we’ll stay with both you and your daughter while you gather your personal items and we’ll watch as you leave the property. In the event either one of you should at any time, or for any reason, return to the hotel, we’ll have you both arrested.” Still looking her squarely in the face I asked, “Is there any part of what I said that you do not understand?”
The blood had drained from Marcy’s face. She was a large middle-aged woman. She looked scared and never said a word. We followed her as she went looking for her daughter and followed both of them as they gathered their personal items and left the property.
Moments later, Karla, the front desk manager of the Bellingham Baron Suites hotel arrived. I introduced her to Julie, the Monroe front desk agent. After some small talk I said, “Julie, I know you’ve seen Marcy and her daughter leave. We would like you to round up all the employees for a meeting in the Olympus room. That’ll give us an opportunity to explain the reason for the departure of Marcy and her daughter.” Julie asked if she should be there. “Yes Julie, Karla will take over for you while you’re in the meeting.”
We went to the Olympus meeting room and within a few minutes the staff members arrived. Head housekeeper Lucy walked in and looked at me nervously. She was undoubtedly worried about me spilling the secrets she had shared, even though I had promised that I would not disclose the source of the information. I told the staff, “I want to thank you all for coming. I know you’re all doing a great job here and we won’t keep you long. You know that Marcy has been the General Manager here since the hotel opened. Very recently we received information that both Marcy and her daughter were both involved in illegal activities. We could have informed the police and, had we done so, I have no doubt that both Marcy and her daughter would have been arrested. While we did not inform the police we had no choice other than terminating Marcy and her daughter effective immediately. We allowed them to gather their belongings and escorted them off the property with the warning that neither would be permitted to return at any time or for any reason. We regret this development but needed to take prompt and decisive action. We have applications for the manager position and believe that her replacement will soon be in place. Now we’ll let you get back to work and enjoy the rest of the day. Thank you all for coming.”
The Baron Inn hotel in Monroe continued to perform well and we were able to distribute good dividends to our investors every year. Because the occupancy at the hotel continued to increase, Kevin and I decided to explore how we might finance building an additional hotel in Monroe. Realtors had approached us on more than one occasion to consider selling our Bakerview Terrace apartment complex where we had significant equity. However, the financial gains would be taxed and the depreciation deductions would be recaptured. An alternative to an outright sale was known as a tax deferred “Starker Exchange” allowable under section 1031 of the then applicable IRS tax code. That type of transaction would allow us to transfer 100 percent of our Bakerview Terrace equity to a new hotel. We then accepted additional funds from investors and were able to purchase some land very close to the Baron Inn hotel where Exxel Pacific Construction built a beautiful Holiday Inn Express hotel. Again we were able to privately fund the entire project.
THE WINNER IS ALWAYS A PART OF THE ANSWER;
THE LOSER IS ALWAYS A PART OF THE PROBLEM
THE WINNER ALWAYS HAS A PLAN
THE LOSER ALWAYS HAS AN EXCUSE
THE WINNER SAYS “LET ME DO IT FOR YOU”
THE LOSER SAYS “THAT’S NOT MY JOB”
THE WINNER SEES AN ANSWER IN EVERY PROBLEM
THE LOSER SEES A PROBLEM IN EVERY ANSWER
THE WINNER SEES A GREEN NEAR EVERY SAND TRAP
THE LOSER SEES A SAND TRAP NEAR EVERY GREEN
THE WINNER SAYS “IT MAY BE DIFFICULT
BUT IT’S POSSIBLE.”
THE LOSER SAYS “IT MAY BE POSSIBLE
BUT IT’S DIFFICULT.”
AUTHOR UNKNOWN
Since the two properties were virtually adjacent, we decided that one general manager would be able to oversee both and reduce overall operational costs. More than doubling the number of available hotel rooms in the small town of Monroe resulted in lowering the occupancy levels for the Baron Inn hotel. The management and operation of a hotel is much different and more complex than an apartment complex. The smooth, successful operation is dependent largely on the qualifications and quality of the general manager. We knew interviews with management applicants were very important and I always stressed the importance of treating all staff members with respect. However, there were some who believed the only way to convey managerial oversight to the staff was by saber-rattling and dictatorial behavior. Of course, this resulted in a high turn-over of employees. It was disappointing to learn that some applicants we hired did not live by the standards of behavior—integrity, honesty and responsibility—that we expected. Perhaps because we lived by those standards, without regarding ourselves as unusual or superior, we easily assumed that others would do likewise. It was painful to learn that my assumption was totally wrong after receiving a call from the Holiday Inn Express hotel one day informing me that nearly all our front desk staff had quit their jobs and would not return unless the manager was terminated. It was the most difficult management situation I had ever experienced. Fortunately I had a very reliable employee in Bellingham whose name was Brant Baron, who just happened to be one of my grandsons. Brant had worked part-time at the Baron Suites hotel from high school through Whatcom Community College. A few years later, after he graduated from the University of Washington with a degree in business administration and accounting, he became a full-time employee.
Brant was and is an exceptional young man. During the crisis situation in Monroe he worked day and night. Within a few days we hired new staff members while Brant continued to temporarily fill the role of general manager. Once a new manager was hired, Brant and I continued to visit our Monroe hotels at least once a week.
During this time, my youngest son Alan was the general manager of the Baron Suites hotel and Loren Terpstra was his assistant. They both did an exceptional job and, as a result, there were never any problems Alan and Loren couldn’t handle. They had a good team of employees and very little turnover.
Brant was interested in expanding his career horizons and we began exploring the possibility of acquiring an additional hotel. Just across the street from Baron Suites was a Days Inn and almost equally close a Comfort Inn hotel. All three hotels were built around the same time. We called the owners of both properties and discovered they were willing to consider selling. I had watched the Days Inn while it was under construction and considered its quality of materials and workmanship as inferior. The Comfort Inn was about the same size as the Quality Suites. The Days Inn was the smaller of the two properties and the owner’s asking price was approximately one million less than the asking price for the larger and more superior Comfort Inn. Brant did a great deal of spread sheet analyses and we concluded that the Comfort Inn offered the best likelihood of increasing in value over time. We purchased the Comfort Inn and Brant’s father, my son Alan, became the manager of the new hotel as well as Baron Suites. Brant became the assistant manager of the new acquisition. A few years later I sold the Comfort Inn to Alan and Brant. With those changes, Loren Terpstra became the general manager of the Baron Suites hotel. In 2007 we sold both Monroe hotels and our investors received reasonable returns on the money they had entrusted to us. In 2011, the Baron Suites hotel was sold and I was completely out of the hotel business. Alan and Brant continued to operate the Comfort Inn very successfully.
In 1993, Kevin and I were invited to meet with three gentlemen who were planning to develop a retirement community in Lynden. The meeting was in the home of one of the interested parties who owned some land just south of town that he believed would make a good location for a retirement community project. He had already commissioned an architectural firm from Minnesota to prepare the architectural plans. Since we did not know the reason for the meeting we mostly listened quietly while they showed us the plans and proposed the building site. From our seats in the living room of the man’s home we were able to see the proposed building site right through his window. I mentioned that the land we were looking at was in a wetlands area near the Nooksack River and that the county government would not likely provide the permits required for construction on that site. At the same time we left no doubt that we believed having a retirement community in Lynden was very desirable. Before leaving we were asked if we were interested in becoming partners. We assured them we would give it some serious thought.
“LEADERSHIP MEANS GETTING PEOPLE TO THINK, SEE AND DO WHAT THEY MIGHT NOT HAVE DONE WITHOUT YOU. IT MEANS POSSESSING THE VISION TO SET THE RIGHT GOAL. IT MEANS BEING AWARE OF THE FEARS AND ANXIETIES FELT BY THOSE YOU LEAD EVEN AS YOU URGE THEM TO OVERCOME THOSE FEARS.”
BILL BRADLEY
Kevin and I discussed the idea and continued meeting with the group. It was during one of the preliminary meetings that we expressed our interest in becoming partners provided the proposed building site, comprised of mostly unbuildable wetlands would no longer be considered and that a more desirable building site be acquired. The parties agreed. A partnership was formed where Kevin and I, under the Exxel Development Group, became a partner. Soon after that, a beautiful site near the rolling greens of a local golf course was purchased.
In April 1995, Exxel Pacific Construction completed the building of Meadow Greens Retirement Community and Exxel Development Group became the managing partner. We had no previous experience managing a retirement community but thought it couldn’t be much different than managing an apartment complex or a hotel. We quickly learned how different it was. The residents, who were mostly retired, were very much invested in Meadow Greens because it was where they planned to stay for the rest of their lives. Unlike hotel guests or apartment dwellers, the retirement community was their home. The facility included a beautiful dining room where residents would eat three meals a day. Preparing and serving the meals required us to hire a good chef who, in turn, would hire the kitchen and dining room staff. In addition to good food the residents could enjoy the exercise room, the library, watch movies on a big screen TV or play a variety of games.
A few years later we added an additional wing to accommodate assisted-living patients. This made the management and operation of Meadow Greens more complicated. The assisted-living wing required us to employ a qualified licensed nursing staff and be able to provide assisted care services twenty-four hours a day. Needless to say, finding and employing a qualified administrator proved challenging. It made my responsibility, as one of the managing partners, more demanding since the facility also needed to comply with numerous state regulations pertaining to the care of assisted-living residents. There were times when, as managing partners, Kevin and I were involved in dealing with management problems, something the residents never knew about.
I always appreciated visiting with residents, especially those I had known for many years. Some had been my customers since the days of our retail business in Lynden.
One afternoon, as I entered the spacious lobby, I heard someone say, “Hi Sid.” I recognized the man, whose name was John. He was sitting on the lobby couch visiting with two other elderly men. John had been a customer at my store for many years. Shaking his hand warmly I asked how he was doing. “Well Sid, it’s been quite a few years since I bought that TV set from you. It’s still working. But now that I’m in my seventies things aren’t getting any better.” I acknowledged that problems are common with advancing years and said, “But John, you’re not that old yet.” “I know, Sid, but I’ve never had this problem before.” I asked about his problem. “Well Sid, I’ll tell you,” he began, “I don’t care if my two friends hear it too. I know they’re older but they don’t have serious problems like I have. I wake up in the middle of the night cause I need to go empty my bladder. When I stand by the toilet it won’t come. Instead it just drips a little. My goodness I could stand there all night. Drip, drip, drip. Sid it’s plain awful.” Then Bill, who was sitting next to John pipes up. “John you think that’s bad, I’m in my eighties and my problem is worse than yours. I go sit on the toilet for a bowel movement. I push. I grunt and groan, grunt and groan. Nothing comes. It’s just terrible.” Immediately Ken, who is sitting on the right next to Bill, chimed in. “Yes, you guys have problems but mine is a lot worse. I just turned ninety and I’m in good shape. The problem is that my wife Hazel won’t let me sleep with her anymore. That’s because at six o’clock I have no trouble emptying my bladder. At seven o’clock I have a healthy bowel movement.” Almost in unison, John and Bill ask: “Ken what in the world are you bellyaching about?” Putting his head down Ken said, “I don’t wake up until seven-thirty.”
As of the time of this writing, Kevin and I are still the managing partners of Meadow Greens Retirement Community.
***
Those interested in successfully starting and/or operating a business have hopefully found some ideas or inspiration from this book. Others may be wondering if starting a small business can still lead to the level of achievement you’ve been reading about. Let me assure you that during my many years of struggling to succeed, I never expected the achievements I’ve been blessed to enjoy. Through my entire career I never quit dreaming. I still believe that America is the land of unlimited opportunity. While I understand some government regulations are absolutely necessary, many are no longer required. If excessive and unnecessary regulations begin to choke the entrepreneurial spirit and diminish opportunity, it could lead to the end of the free enterprise system; the foundation of the greatness in America.
It was in the 1980s when Kevin DeVries and I formed a partnership which has stood the test of time. Statistically 80 percent of business partnerships fail within a few years. Over 70 percent of those failed partnerships end up in court. Most have painful outcomes. Those statistics are worse than the percentages of failed marriages and divorces. Often I have asked myself: What are the ingredients that made our partnership last for thirty years and counting?
When Kevin and I first started Exxel Pacific Construction we could not have known that thirty years later our company would be among the largest private companies in Washington state. Nor could we have known that the company would directly employ over 100 professionals in the construction industry (and vendors whose employment runs into the thousands). When we started we could not have dreamed that the company would have a fleet of aircraft making it possible for project managers and others to visit their various job sites at least once a week and still be home to spend evenings with their families. Nor could we have known that the company would gain the expertise to build huge skyscrapers.
During its first years our company grew slowly. Experienced employees were added. Costly mistakes were made. An ongoing challenge always was (and still is) to convey to our leadership team members the importance of never forgetting the values and principles upon which the company was founded.
In September 1998 we decided to take our Exxel Pacific employees and their families on the second annual retreat at the beautiful ski resort in Whistler, B.C. During the time of both fun and fellowship we also held meetings that company employees were required to attend. As the then President of the company I addressed the assembled group with the following speech:
“A year ago, during our first annual Whistler retreat, I talked about Exxel Pacific; its strengths, but also its weaknesses. Since then Exxel Pacific has become a stronger company. Today I want to talk about the future of Exxel. Where will Exxel be five, ten, twenty or fifty years from now? Will it make transitions from one generation, from one administration to the next without upheaval? For some time now, I have busied myself in a quest to learn what the ingredients are that cause some companies to thrive, flourish and prosper from one generation to the next while others fail.
“Most Whatcom County general contractors will not last beyond the current generation. Why do some survive while most do not? Not only did I examine companies within the realm of my own experience, I also studied some of the great corporations within some of the world’s giant industries. What I found is that it is not WHAT a company does. It’s NOT that they never change. It’s NOT that they had lofty goals and a strategic plan. In fact, some didn’t know exactly what they wanted to do when they started in business. Like Bill and Dave. When they opened a little shop in Dave’s garage over fifty years ago all they had was $538.00 in cash. They didn’t know what they were going to make or how they were going to sell it. But they had strong principles and they knew HOW they wanted to conduct their business. Not only were they committed to providing their customers the best in quality and value, they were equally committed to providing their employees the opportunity to build pleasant rewarding careers. That was their vision. Did they succeed? Bill and Dave’s vision, over the past five decades created a company valued at 31 billion dollars with more than 100,000 employees! I’ll bet most people are using at least one of this company’s products. Yes, it’s Hewlett-Packard.
“To survive that long, a company must constantly protect its health. Can you imagine the enormous changes in the life of an organization that has survived for 100 years or longer? Imagine the enormous changes it has encountered. To live that long a company must have a ‘soul’ in the form of a set of central, core values that transcend generations of personnel, administrations and constant change. To live that long a company must have a noble reason for existence. The ‘soul’ of a company is one of those concepts that, like beauty, evaporates when you try to define it. But, like beauty, it is instantly recognizable. It is an ingredient that is easily picked up by others including personnel, clients, suppliers and, yes, even competitors. It manifests in the form of Energy, Enthusiasm, Excitement, Effort and Excellence. There is a sense that the business, and all those associated with it, fulfills a meaningful role in society. A business that aims for something larger than just making money. A company that is enriched by the commitment, the skills, the contribution and values of every individual that is associated with it. A company that would never ask a marketing specialist or consultant to write its mission or vision statement because that would be like asking a stranger to identify them. But there are companies and organizations who do exactly that. These are places where humans are viewed as machines, dedicated only to productivity and efficiency. They are, in my opinion, companies without a soul.
“Some are aware that I’m not a great advocate of conventional, ‘in the box’ forms of strategic planning like that taught in business schools and presented by banks and investors as an absolutely essential ingredient for a growing company. I believe conventional strategic planning is usually implemented by aspiring entrepreneurs who have no experience, possess little vision and zero creativity.
“I’m not the only who believes this. Here is what business research specialists Collins and Porras found in their research of the largest and most successful companies:
“‘In examining the history of successful companies, we were struck by how often they make their best moves not by detailed strategic planning, but rather by experimentation, trial and error, sometimes accident, but more often, jumping on opportunities when they present themselves. In hindsight, they often look like the result of a brilliant company strategy. If top management lacks the vision to recognize meritorious or promising opportunities when they present themselves, no amount of strategic planning will cover such deficiencies.’
“In my talk last year I spoke briefly about the values our company embraces and holds dear. I used words such as honesty, integrity, and quality.
“But they are only words. What they really mean has been my credo in every business I’ve started. They are the guiding principles that can lead Exxel Pacific to greatness. If they become the fundamental essence of the people that make up the company (YOU!) then Exxel Pacific will truly have a long bright prosperous future where the torch of its core values is passed from one generation, and from one management team, to the next.
“A company CEO once asked a few new prospective employees what they thought was the purpose of the company.
“One said: ‘To make money.’
“Another said: ‘To make our customers happy.’
“Still another responded: ‘To make our owners happy.’
“The last one said: ‘To produce top quality work.’
“The CEO responded saying, ‘The purpose of this company is to enable all of us to have wonderfully fulfilling lives. In order to do that we have to work our guts out for the customer, keep our suppliers and fellow team members happy, and do wonderful high-quality work. In that order.
“Exxel Pacific is a company comprised of men and women who are dedicated to serve the best interest of the client at all times. Men and women who care about the well-being of their families, who respect their fellow employees and regard them as members of their extended families.
“We are men and women who understand that each has a responsibility in life to be a contributing, productive citizen in our society and a positive influence in the life of others.
“Men and women who:
• Embrace the highest aspirations for personal achievement and fulfillment.
• Understand that the company could not offer meaningful employment to anyone, or provide services for any clients, if it is not operated successfully and profitably.
• Individually share a measure of responsibility for the success and profitability of the company and embrace our company mission to deliver exceptional value to our customers.
• Are able to assume a measure of responsibility for the integrity and reputation of the company.
“Subscribing to our core values are essential for employment in Exxel Pacific. It is also an inflexible requirement for anyone in management, or aspiring to be in management, at Exxel. Those violating or compromising our core values will not have long term tenure at this company.
“Let’s look at some specific scenarios in the workplace that are not acceptable:
• Negative attitudes.
“Negative attitudes are like a contagious virus, capable of destroying not only the individual who harbors them, they can also infect others in the workplace.
“Sharing negative attitudes with fellow team members is like spreading a hideous poison. A person unable to control a predisposition to negative attitudes will not be a long term Exxel team member.
• Taking advantage of customers, subcontractors or suppliers is no more acceptable than allowing customers, suppliers or subcontractors to take advantage of Exxel.
• Those who repeatedly, in their area of responsibility, fail to do the right thing, or those who repeatedly demonstrate their inability to do their job right, cannot long be members of this company’s team member family. No company can be the best, unless its people are the best.
“Remember, doing the right thing also demands that we’re doing things right.
“A few years ago we had a reputation of enormous kindness and generosity among employees and subcontractors. At the time we were on the threshold of bankruptcy. Without intervention we would not exist today. It may have seemed that we were doing the right thing, but we were clearly not doing it right. Let me give you four reasons why Exxel Pacific could fail to be a long lasting visionary company:
1. If the leadership fails to subscribe to a company core ideology, is not committed to the long haul and is simply wanting to make a lot of money, cash out and retire.
2. If the leadership does not have a drive for progress with a constant urge to continue improving and moving forward.
3. If the leadership isn’t interested in a values-driven company with a sense of purpose beyond just making money.
4. If the leadership doesn’t care about building a lasting company that will be strong only both during their tenure and for decades beyond.
“Other than for those four reasons you can expect Exxel to be a dynamic, growing company far into the unforeseeable future.
“I’ve started a number of small businesses. I believe that all are in existence today, providing employment to many, while growing and thriving. All came to be successful because the core values I’ve discussed are an integral part of me and of the companies I founded. Long ago I learned that for a company to succeed in the long run, the company must be guided by something that is larger and nobler than any of us. Each succeeding year of learning and experience re-enforces that. So, my friends, when you reach the mature age of sixty-eight, remind yourself that learning never stops.
“Why should I, at a mature age, still be so excited about Exxel Pacific Construction? I’ve never been particularly motivated by money or wealth because they only determine one measure of success. Feeding a huge ego has never been a driving force, either. The fact that I’m excited about this company is the very reason why you should be excited about it.
“I have a vision of what this company, with people like you and others like you, can be.
“It is company with unlimited opportunities. Where every team member enjoys having a part in building the biggest and most reputable construction company in the state. A company where every team member has appropriated, with his or her own principles, the core values of the company.
“A company where someday your children may like to work because they heard from Mom or Dad that Exxel Pacific is a company that does the right thing. A company that does it right!
“To continue our growth we must answer this question: How can we continue to attract the caliber of top notch people that can help Exxel Pacific grow? Within the next few months I will, for exploration and discussion purposes, present to the management committee a proposed program that would make it possible for qualified Exxel team members to purchase shares of ownership in the company. I believe it is going to be a key ingredient in attracting additional highly-skilled, qualified entrepreneurial professionals. Especially as this company continues to grow and the demand for skilled construction professionals remains high, it could give us a recruiting edge. It will appeal to those who are ambitious, are eager to assume full responsibility for their own success and be instrumental in the success of the company. That is the caliber of people who will help Exxel Pacific achieve greatness.
“What is the future of Exxel Pacific? Where will the company be five or ten years from now? What do I see in the ‘crystal ball?’ You would hardly recognize it! You might look at a huge high-rise structure and proudly say ‘Exxel Pacific Construction built it.’ What will be the total volume of business? Provided, this company succeeds in attracting additional competent quality people and never loses track of or compromises the core values we’ve talked about, then there is virtually no limit to its growth. In addition, all of you who have helped make the present exciting will likely be a part of our exciting future.
“I’ve long understood that one will never be able to achieve that which one’s dreams cannot conceive. The first steps to extraordinary achievement are visualization and dreaming. Already, at the age of fifteen I was a ‘dreamer.’ That is how I have been able to build several successful companies. Now let’s dream together. Let us constantly rekindle the fire of our imagination. Then, for you and your family, the greatest material fulfillment will be that you have played a part in building a company that competitors will attempt to imitate. But they will never be able to duplicate what we’ve done because they don’t have YOU! That’s how we will together build Exxel Pacific.
“I have long pondered the question: What are the ingredients that have made our partnership successful and, in fact, are essential for any partnership to be successful?
“Lasting partnerships are built on a strong foundation of core principles which the partners must agree on both personally and professionally. Kevin and I had a common bond of faith and values. Sharing a common bond is key to any partnership. It’s what will keep you and your partner(s) in it for the long-run. In our partnership we believe in treating our employees like family and in treating our customers with the utmost respect, honesty and integrity. Often entrepreneurs enter into a partnership with unrealistic and unspoken expectations that can later sabotage the relationship.
“IF YOU DON’T GO AFTER WHAT YOU WANT, YOU’LL NEVER HAVE IT. IF YOU DON’T ASK, THE ANSWER IS ALWAYS NO. IF YOU DON’T STEP FORWARD, YOU’LL ALWAYS BE IN THE SAME PLACE.”
NORA ROBERTS
“You have undoubtedly read a number of books and publications dealing with starting, operating, and organizing a business along with the various ingredients that will help your business thrive. Nearly all business books deal with the importance of setting goals. One article I read recently was the story of an active entrepreneur. His goal was being one of the world’s billionaires before he reached the age of thirty. Reading the background of the entrepreneur I was certain that he was setting himself up for massive disappointments. I’m not opposed to setting goals that are realistic and achievable. That said, it is important to understand that by making your goals achievable, and after preparing a list of steps that you and your partner agree on, you then take the various little steps to achieve until you reach your goal. You should also envision possible ‘setbacks’ and what you might need to do to survive should you be assaulted by the worst of ‘Murphy’s Laws.’ Though I’m not opposed to setting goals, neither am I a strong advocate either. After Exxel Pacific had become reasonably successful, I remember a board meeting where the merit of setting goals was brought up. One of the board members suggested setting a goal of growing the company to a maximum of $25 million in annual revenue. That set off my belief in unlimited opportunity and prompted me to ask: “Why would we want to set a ceiling? What would we do if we had opportunities to exceed that lofty achievement? Now, several years later, the company has broken through the ceiling several times simply by adhering to its mission statement:
“We are committed to proactively satisfy our customers by providing the most cost-efficient and high-quality projects in our area of service. This is achieved by building a team of people who will develop and maintain a quality, service and solution-oriented attitude that will lead the industry and create a sustainable competitive advantage for Exxel Pacific, Inc.
“We all pledge the highest level of integrity and accountability to the pursuit of excellence in everything we do and that our subcontractors and suppliers do for us.”
It was at the occasion of Exxel Pacific’s annual Christmas party in 2011 years after responsibilities of being the president of the company had been turned over to my friend and partner, Kevin DeVries. I was simply the Chairman of the Board and a minority shareholder. But my pride in the company that Kevin and I founded never diminished. Again I had the privilege of addressing the company’s employees and their spouses. Before speaking I looked out at the large group of people. Nearly all were professionals comprised of project managers, project superintendents, project engineers, and other specialists and executives. The company had grown at least ten-fold since my earlier speech.
“Ladies and gentlemen, because there are so many new faces here I would like tell you just a little about the early beginnings of your company.
“It was after my friend and partner Kevin DeVries successfully completed all the details involved in overseeing a construction company building our Bakerview Terrace Apartment complex that we began dreaming about starting our own construction company. While all accomplishments in life begin with an idea, we could never have imagined what Exxel Pacific would be like so many years later. Yes, there are serious risks in starting any new business. We experienced near failure more than once. Each in our own way, Kevin and I prayed. There are times in everyone’s life where we deal with problems that are bigger and more powerful than any one of us. Psychology Today said that those who don’t believe in a higher power may need to invent one. Survival and success in a company is accomplished by teamwork. There are many of you I do not personally know and many of you do not personally know me. But as I look over the crowd gathered here tonight, I am grateful and appreciative that you are all members of the Exxel team. I especially appreciate that you all know the values which formed the foundation of Exxel Pacific Construction from its beginning. Those values are based on the Christian principles of honesty and integrity. Of treating employees, customers, competitors and subcontractors with respect, with caring and with dignity. As members of our company team, all of you have your areas of responsibility. Many of you have positions of leadership. Leaders become great. Not because of their power, but because of their ability to motivate and empower others. I read a letter a few days ago that made me proud of the Exxel team. Let me share with you an abbreviated version of that letter.
“I’m a homeowner in Seattle where Exxel Pacific is building a project. I have been around construction projects for many years in various roles. I would like to commend your project management team for having the absolutely, hands down, best and safest construction site I have ever seen. I can safely assume that every aspect of the building is ‘top-notch.’ As I drive by every evening after work I’m always impressed with the attention to safety, signage, traffic control and cleanliness of the site. It is amazing.”
“If you continue to succeed with those leadership qualities, Exxel Pacific will continue to grow and flourish and be the pride of you and every member of the Exxel team.
“We can influence others more by the conduct of our lives than by the messages of our words.”