As GLY Construction, the 13th largest private company in Washington with roots in the Pacific Northwest since 1967 celebrates its 50th anniversary, we spoke with Ted Herb, the company’s president. Herb has worked at the company for 29 years and has held a variety of positions ranging from project engineer to executive vice president operations. Herb told us about the ways the construction world is changing, adapting and evolving, and how his company with nearly 600 employees plans to utilize new technologies for advancement.
At a 1971 AGC Convention in San Diego, one of GLY’s founders Harold Gall met Frank Young while working on the Safety Committee. They eventually joined forces, adding the “Y” to founders Harold Gall and Robert Landau. In the early years of the company, Landau referred to GLY’s first projects in the Puget Sound the “Era of Major Rehabs.” Through this, they restored 11 projects in Pioneer Square. Fast-forward to the 80s and GLY acquired its first in-houe computer, and utilized technology to improve their processes, just like today. And in only five decades, GLY has experienced an intricate history and continues to grow in the region today.
This being your 50th anniversary, what would you say has changed and what has stayed the same during this time in the Puget Sound construction industry?
The fundamental construction process itself – bringing a workforce, materials, and equipment together on a jobsite – and executing the work as efficiently as possible, has not changed. While there have been advancements, such as prefabrication, they are generally slow to adopt in most sectors.
A big change in the last decade relates to speed to market. The design and entitlement process is more complex and demanding, lengthening the time required to complete the design and obtain a permit. This is offset somewhat by improvements in technology; however, clients routinely want to get a shovel in the ground as soon as possible. In the old days, doing so prior to design and permitting completion involved fast-tracking or taking a phased approach, and it was an exception. Today it is the norm on virtually all major private projects.
As you look back at your history, what do you think is the company’s legacy and what are you known for the most?
We are a learning organization thanks to our bedrock value of continuous improvement. We want to be known as a great team member who adds value through innovative problem solving. We also wish to be fully engaged in the community. It is our obligation to give back. One of our founders, Bob Landau, recently passed away at age 93. He was a wonderful, generous man who supported maximizing human potential. Our values spring from his beliefs. That’s our legacy.
How do you carry that throughout the organization, and is it an important aspect of your organization’s identity?
Our culture is defined by our values, and we train to them constantly. We look to our past as evidence but keep moving forward using those values as our guide. When I started at GLY in 1987, the total payroll was less than 100. Today it is a steady 600 folks. We work hard to sustain our culture and family feel. We are fortunate to have a core of long-term employees who actively mentor the next generation. I feel really good about all the young people in our organization. They have lots of energy and they want to make a difference.
The current development cycle has been tremendously rewarding for the construction industry in the region. How has this transformed your organization as you look into the future and try to anticipate what kind of a construction company you would like to be?
Ours is a very cyclical business – a point to always keep in mind. These days we worry about an oversold market and a lack of manpower across the region. At some point the skyline will clear of the 60+ tower cranes. Our strategic planning effort and evolution considers business cycles and thinks long-term. We have many initiatives progressing throughout our organization, and we continuously work on skill development
Are there certain products that GLY likes to do more than others? Are there certain areas that you will enter in the future and others that you would not like to do?
We enjoy a good challenge! We gravitate toward technical projects that test our skills. At the same time, we are determined to take good care of our clients. That means responding to their needs – large or small.
With construction employees still below pre-recession levels on a national level, are you seeing a shortage of employees in the construction industry here in the region and if so, how are you managing it?
The current demand for skilled construction workers is certainly exceeding the supply. Various trades made gains by recruiting workers and growing their apprenticeship base, but it takes time to build up skills. In GLY’s case, over a decade ago we launched an extensive training and career path program that is still going strong. We recognized the impact the departure of the baby boomers would have as they reached retirement so we focused on developing our company from within. We feel good about our up and comers.
Often, one of the other factors to slowing of construction is a hold up on materials needed. What are some of the difficulties you’ve experienced to get the necessary equipment to even begin construction?
We see major project starts slip while our customers obtain permits and procure financing. It simply takes time to get through. In the meantime, we are constantly juggling resources and working with vendors to keep commitments in place for jobs commencing. The industry understands the need to be flexible and the supply chain wants to keep the customer happy.
The permitting process can often take months, even up to a year to get final approval. How does that factor into the process and timeline for each project?
We spend a lot of time as an organization forecasting project timelines against our overall resource base to make sure we can respond appropriately. It can get challenging, but our size allows us to be nimble and flexible. Think about how private developers must juggle permitting, financing and executing tenant leases in order to trigger construction. It’s really tough for them to be predictable, so we have good strategies in place that allow us to roll with the punches as best we can.
At a recent event where you spoke, you mentioned the use of virtual reality and augmented reality to help reduce waste. Talk us through how that has played out, including successes and difficulties.
One of the forms of waste I mentioned was the challenge around communication and the flow of information. If we are trying to resolve what to build, then we are unable to focus on how to build. That reduces efficiency and introduces waste.
Technology tools like Augmented Reality (AR), Mixed Reality (MR), and Virtual Reality (VR) show considerable promise in helping us resolve complex details with our design partners. It also helps our clients understand project scope better, so they’re more comfortable making important decisions. It’s still early, but we’re excited to explore these and other technologies as they evolve and provide opportunities to innovate for our clients’ benefit.
What other technology do you plan to incorporate in the future?
The benefits of Virtual Design and Construction (VDC) are well documented, but the user must understand what they’re looking at and know which actions to take next. We require our project engineers to self-perform technology tasks as a core competency – it’s not siloed in a designated team or department. We’ve been refining this process for over 10 years now, and augmented this thinking by employing licensed professional architects and engineers who further support design translation and coordination. As a result, we find conflicts, resolve dimensions, and develop highly accurate shop drawings so we know exactly what to build.
We also think deeply about how to build it. We engage our superintendents in developing an all-inclusive construction schedule informed by the model. With this level of detail we’re able to optimize task sequences to streamline one comprehensive, coordinated construction effort.
Our Technology Oversite Committee is an internal task force that tests all forms of technology that indicate promise in our business. We have seen our fair share of partially developed technology enter the market place prematurely and fail to deliver. We have learned to test first and prove it adds value. If it works, we invest in training and deploy it company wide. It takes a little longer to implement change but we think a measured, incremental approach works best.
What can using these types of technologies do not only for GLY, but for your clients and future tenants?
Any technology that saves time and helps teams communicate and collaborate gets adopted quickly. Who doesn’t want their work to be fulfilling, and something they accomplish efficiently? We are all being asked to do more with less across the AEC industry so everyone is motivated to uncover ways to get work done quickly and accurately.
Are there any challenges that you foresee in the market in the next 18 to 24 months that give you pause?
Stress in the building market and subcontractor community. A lot of evidence points to an oversold market, which puts stress on meeting construction schedules. Cost escalation also accelerates as supply and demands wrestle, which starts to choke overall project budgets at some point.