Houston is a boomtown when it comes to construction and companies are reaping the benefits of sustained demand even during the pandemic. A fixture in the city’s construction industry since 1984, Bundren Painting & Drywall is well-positioned in its specific niche of high-profile projects throughout the city and surrounding region. Filling in the shoes of COO for this company is Michael Fiorenza. In this conversation with Cameron Herold, he shares what the company does when people in the market look for the lowest bid and how the company differentiates itself from its competitors. He also talks about the work he has done over the years in improving his communication with the CEO and in managing and interacting with his teams.
Michael Fiorenza has a professional background that crosses multiple industries, allowing him the opportunity to consistently draw on technical experiences to guide his decision making. By building high-performance teams and being an advocate for both change and professional development within an organization, Michael has enjoyed success in the commercial construction industry while making a difference in people’s lives and changing city skylines.
Having had the fortune of working alongside and learning from prominent mentors and tradesmen during his career, Michael has been able to develop and run successful construction companies. As both part of a management team consultant and an owner entrepreneur. Michael joined Bundren Painting and Drywall based in Houston, Texas in 2011 and has been COO since 2018. Bundren Painting and Drywall has been a fixture in the Houston construction industry since 1984 and has installed finishes on high profile projects throughout the city and region. Michael is also a member of the COO Alliance. Michael, welcome to the show.
Thank you. It’s a pleasure to be here.
Why don’t you give us a little bit of background and tell us a little bit about what Bundren does and how you are different from what the typical people in the industry are doing.
We’re a commercial painting and framing drywall contractor in Houston. There’s quite a lot of us but we primarily work on large scale projects. A good project as an example is Reliant Stadium in Houston. We’re in bigger projects like hospitals and vertical high rise. We have some competition here in Houston. There are some good tradespeople here in Houston, but it is also a busy city. We’re always looking for someplace and some way to set ourselves apart.
Are you bidding for those contracts? Are companies coming in and hiring you directly? How did those all work?
We have a combination of 2 and 3 ways if you break into it. We do bid for projects and we haven’t been serviced. Since we’ve been around since ‘84, we have a long-standing relationship with most of the prominent contractors here in Houston so we see most of the big projects and bid on them. We have opportunities for sales coming through the door nonstop. In fact, more than we can bid on, then we have our relationships that we capitalize on. If we’re out there with one of our long-time clients or even with a prospective new client, we can walk and help them out deliver some value. We have the off the wall ones that we get a phone call from nobody knows where and we turn that into an opportunity as well.
Someone asked me this on a call. I did a webinar on How to Grow When It’s Slow. Someone asked me, “In this competitive environment, what do you do when people are selecting the lowest bid?” I was like, “I don’t know.” I said, “I want to make some stuff up, but I didn’t want to.” I’ll tell you what I suggested to them as this is what I would try but I’d love to get your thoughts around that whole lowest bid environment. Is that true? Is that a fallacy? Is it something that you have to live with? Talk about that.
It is true. How you manage it and how you approach is how you succeed. A lot of government bond work will go the lowest bid and then they have to qualify it. That’s the way it works. We do not participate in a lot of that work. We participate more in work with general contractors that can negotiate those jobs. While we have a history with a lot of these general contractors, they also know that we may not be the lowest price in the market but we’re going to deliver that value. We have that confidence with them and they have that confidence with us that we’ve got some of the best-trained teams and we’re going to deliver them the value in the project on time they’re looking for.
They don’t always select the lowest bid, do they?
I didn’t think so. I used to be in the house painting industry, a different one. We painted houses in some multi-unit stuff. I landed one bid that I saw in a newspaper and it was an apartment complex. It was a three-story apartment building. I’d say 50 units each. We were painting the interior hallways, stairwells, railings and the outsides of the building. They said, “The lowest bid,” and I was like, “I can’t win on lowest bid. I can never be lower than the pros.” I decided to outmarket and outbrand everybody. I showed up and was polite and happy.
I answered their questions and showed them more. I said, “Can we go for coffee and I’ll walk you through everything?” We went to a coffee shop together. I dedicated maybe an extra 1.5 hours of time that I normally wouldn’t have done on a quote but that’s what won the bid. I don’t think it had anything to do with the price. I’m sure we were more expensive, but the trust was high. Does that work? Is that how you position in building your brand in this industry?
It’s an appearance and it’s an image. While we say we’re delivering value that goes above and beyond the dollar signs. Our project management and our estimating team is there. We’re communicating on a consistent basis with clients and prospective clients as well. We will also get out there and walk. The owner of the company and myself have no problems getting out there shaking hands and walking these jobs ourselves because that’s what it takes to close a deal sometimes.
How many employees do you have?
We have 136 employees.
Are these good, long-term tradesmen as well that are working with you, or is there a turnover?
We do have a turnover. However, we do have quite a few tradesmen that have been with us for many years.
Why did they stay? Is it the job security, they know the guys, and they know there’s consistent work?
It’s a funny industry. When you’re trying to manage an hourly-rate tradesmen, there are issues and concerns. You’re always fluctuating because of the market. Our longer-term employees have been here because this is a family business that has become more professional over the years. We’ve upped the game. In fact, we’ve developed a training program for our field as well, so we’ve classified and trained our guys. We’ve partnered with our vendors to lower the cost of the training. We have a career path for our field. We’ve raised the bar if you would, that allows us to recruit and retain some better employees.
Where do you recruit them from? Where do you find them?
Most of them come from word of mouth. Our employees know other people. The construction industry in Houston is a lot smaller of a market than people think. We have some foremen that know painters from several years ago and they need a job. “Let’s bring them on.”
Word of mouth, as long as they’re strong and your culture is strong. Do you do anything different than the typical construction company might do? Do you adopt some of those like the San Francisco Bay Area technology company, Culture Things? Do you bring any of that into the trades?
All of our foremen are out in the field with iPads. We’ve transitioned a lot of our paperwork into a digital platform that helps streamline in the field as well as the office. In the old days, we’d get blueprints and you print out blueprints and send them to the field. You had to have one set on the field and one set for your supervisor or one set for the office. Nowadays, everything is on the computer in 1 of 6 different programs. It’s easier for us to get information back and forth and have a conversation and information flow between the field and the office. As well as our clients, we can respond a lot faster not having to do it. We’ve adopted a lot of technology. With that comes training a lot of people that have never utilized technology in the field. Our industry is changing where it’s becoming more technologically-driven.
You’re driving on the technology side. How about on the employee engagement side or the employee culture side? Do you do anything there that is different from what might be perceived in the trade?
This may segue way a little bit here, but we’re part of an association. Years ago, Craig and I sat in a conference room and we were trying to determine how do we estimate project management and produce work the same way across the company? If Foreman A has one way of doing things and Foreman B has another way of doing things, the old mantra is, “As long as you get from A to B, I don’t care how you get there.” It’s hard to estimate that because Foreman A is producing at one rate, Foreman B is producing at a different rate, and Foreman C is entirely off the grid. We decided we were going to try to align everything.
C3 here in Houston, Construction Career Collaborative, got involved. It’s about training, culture, developing and investing in your people. We were running parallel with that as we got involved with C3 and we merged the two together. We have an assessment program and a training program. We also are utilizing a mentorship program. In order to move up through the ranks of tradesmen, you have to be mentoring somebody below you and you have to be being mentored by one of the positions above you. There’s a sign off process for that. There’s a timeline. With the sign off process, we’re starting to see some good results. It’s a rollout. This is only about a few years old. We’ve hit all the speed bumps at once.
Are you unionized or just a normal shop?
We are not a union. We are an open shop down here.
How do you avoid the unions? Have you had to avoid them because your culture is strong enough?
Culture’s strong enough but Houston is also not a big union town. I come from the northeast. I was a union carpenter when I started. I came up through the union as well, but Texas is not a union organization down here. It’s hard for them to compete because our margins are good but the cost of construction in Houston is low.
Why is that?
There’s so much going on. They estimated a couple of years ago. We sat in a seminar with a couple of economists. They had told us that if you put a dome over Houston and didn’t let anybody in or out, you would still have to build infrastructure, housing and schools for the next eight years to keep up with population growth. You can’t drive through downtown Houston without seeing a tower crane up either. We’re still booming and we’re still building. Houston is diversified out of all oil and natural gas. After the last couple of crashes, they’ve diversified more into tech and more into other industries.
Were you in the industry in 2009?
Yes, I was. I was working in New Jersey and New York. The economic collapse took us out.
Do you think we’re going to have that similar economic collapse in the construction space? Are we going to be able to avoid that because it’s not tied to housing and construction as much? What’s your glimpse on that?
It’s going to depend on the banks. With the backstops in place, we’re going to be okay because it’s not a financial crisis. It is a fact that everything is shut down. We’re running because we’re essential. We’re still building but we’re taking all the precautions that we can. We’re forecasting this out. We were on a group call and we discussed this. One of the things we did was a thirteen-week rolling cashflow forecast. If we lost 25%, 50%, 75% of our revenue, or if it went to zero, how long can we last?
We’re also hoarding cash. We’re still bidding on projects and we’re still being awarded projects. We have a backlog and we have not heard of any of them being pulled or postponed. We think we’re in a lot better shape because the real estate market hasn’t collapsed and the financial market hasn’t collapsed. I can’t tell you what’s going to happen, but I feel solid and safe that we have enough planning in place that we can navigate through it.
It was interesting when you were on that COO Alliance call when you walked us through the rolling thirteen-week forecast. I love that you did the three different scenarios of the down 25%, 50%, 75%. It’s smart to have that aggressive what-ifs in place so that you can respond versus react. If all of a sudden, the shit hits the fan, you’re like, “We had that plan. Here’s how we execute.” We also did on that call, a quick little survey. Until we said, “Things would be back to normal when planes were flying around the United States and restaurants were open,” that was the bar that I said. The average member seemed to feel that it would be July or August of 2020. When do you think it is? What was your gut?
My gut is in the fourth quarter. I don’t think there’s going to be as sharp of a recovery as we expect because it’s still all new information coming out.
I don’t think it’s going to be a sharp recovery. Restaurants and planes will go back in maybe in July or August but we’re going to be in an economic recession depression for 2 to 3 years. My guess is it’s the end of 2022 until we can start hitting the next bull run up.
That may be the case.
In your scenarios, when you have had these discussions with your leadership team having scenario planning for worse, what kinds of things would you do if your revenue is down by 50%?
I have to process this. I can’t take all the credit for this because some of these ideas came from some of our mentors, board of directors, and some of our associates as well. We’ve hodgepodge our own little plan together. The first thing we did was put a lockdown on discretionary spending already. We’ve locked down our accounts and we are researching everything. We’ve hoarded cash and we’ve protected that cash. One of the things that are prevalent is money’s essentially cheap to finance.
You have to weigh the balance of is it better to pay it in cash or is it better to hoard the cash and incur the debt short term? We still have revenue coming in. We’ve cut discretionary spending and it seems to have stabilized everything that we’ve done. For lack of a better term, we’re waiting for the next shoe to drop. We’ve already capitalized on this opportunity to say, “In discretionary spending, let’s look at our field and look at our operations.”
You can pull discretionary spending out but if you’re still wasting 3% or 2% of your labor every day, you’re still spending a massive amount of money. We went through the assessments and we looked at our bottom 10%. We said, “We’re going to lay off our bottom 10%.” Out of 136 people, you’re talking about 14 people. It didn’t affect us financially immensely, but it did catalyze a couple of other changes. It got some stuff moving again. It shows our management team that you can make those cuts and still be comfortable. There’s also more room to improve other processes.
It sends a signal out to the team. It’s almost like a signal flare going off or a shot across the bow that it sends a signal to the whole team. It’s like, “The week got cut. Strong we keep. This is the real deal.” It gets everyone to step their game up a little bit. You mentioned that you’re from the northeast that I’m sure you grew up in the hockey world then so you’ve watched some hockey. When a hockey team loses a player for a penalty and all of a sudden, they’re playing shorthanded, it’s incredible to watch them score goals.
They got one less guy on the ice and they often score a goal because they’re more focused and there’s no one else getting in the way. They get the thing done. I have often thought that there are a few teams that could play better shorthanded than with full men on the ice. I also like that you’re hoarding cash because there’s that old adage that cash is king in a recessionary market. Warren Buffett, Apple and Google were all sitting on their highest position on cash on their balance sheets in November and December.
They knew we were coming into something. They were starting to prepare for it a year ago in building up cash. You’re doing some smart decisions on using debt to pay for things and continue to build up cash. It’s smart to do that. Go back to when you join, you’ve been with the company for several years. What was it about Bundren that you liked when you joined the company? What was it that drew you in? Did you move to Houston for the role?
I did not move to Houston for the role. In 2008 and 2009, the construction market tanked in the northeast. Being involved in a couple of big projects, as soon as they were done, there was nothing to do. At that point, I had a four-year-old son and my wife is at the house. I got an opportunity to come to take over a failed project down here in Houston and made the move. I was traveling back and forth. Three weeks down here and one week at home, we found out we were pregnant with number two. That is the catalyst for the move because I’m a minimum of 8 to 10 hours away should something go wrong.
We moved down here officially and finished off the projects. I went and started a business in a partnership with the owner of that project. I have three partners besides myself and that has done well for about a year. Partners are dispersing, one is in the northeast and one is in the Southwest, and one is in Florida. It’s like, “I’m running this company. I’m splitting it into four ways. We’ve got to do something better.” The opportunity came up with Craig because he was branching out into a new area of construction for them, a roofing company. He had been chased by Sherwin Williams to do a fluid applied roofing. What drew me to it was the challenge. I get to start from scratch here. It was like, “Let’s go do this. Let’s make it happen.”
How many employees were there?
At that point, it was fluctuating in between seven office employees and probably around 50 or 60 field employees. I started the roofing side and branched out with all subcontractor work. We took it from $35,000 a year to $3.5 million in revenue in two years. We’re on an accelerated growth pattern. Industry change down here and the niche market we were in came apart. When we made an assessment to go back to our bread and butter, which was commercial painting, we hibernated the company, and then we’ve been entirely laser-focused on developing this company and taking it to the next level.
Talk to me about the growth that you went through them. Adding 100 employees over the last several years, what has had to change in the organization as you’ve done that?
We’ve had to get better. We’ve had to train better people. I’m a constant student. I read a lot and I’m listening to audiobooks. I’m constantly learning. The owner, Craig, is the same way. We went through some leadership classes, hired some consultants, and got involved with DISC profiles. You start learning about psychology, people and development. Hiring tradesmen is one thing. If you want to be something besides a tradesman and you want to stand out from the crowd, then you need to be doing something more than just slapping paint on a wall. You need to be investing in your people, developing them and creating smart and genius teams that think outside the box. You need to have almost autonomous people where your management team doesn’t have to micromanage and doesn’t have to get on top of everything because you know that it’s running as a well-oiled machine.
How about yourself? How have you had to change as the organization has grown? You come into the organization while a little younger and a younger family. You’re probably super keen and green. How have you had to adapt and change as you’ve scaled?
I had to learn a lot of patience. My DISC profile, I’m high DC. I’m analytical, but I drive hard and I’ll get it done. One of the hardest things that I have had to learn is I can’t put my fingers in everything. I’ve got to step back and I’ve got to let people experience it. I’ve got to let my teammates and my management team fail. I’ve got to minimize the impact but they’ve got to go through the same process as well. It’s hard saying, “I want to fix it,” but I can’t. I’ve got to develop them and bring them to the next level. That is the hardest thing that I still continuously work on and it’ll always be that way.
How about for you and Craig? How have you had to adapt and work with each other over the last couple of years? Have you had to change your styles at all when working together?
We’ve had to learn how to re-communicate. That’s a good explanation. Stress times get high and things go up, but it’s never personal. We never have a personal issue with each other. It’s always business. We’ve had to learn to re-communicate over a couple of issues, which has made us stronger as a management team.
What do you mean by re-communicate? Give me an example.
I want to say pushing boundaries. Unintentionally, during times of stress or trying to make progress, we both get frustrated about progress not being there or this issue isn’t being handled the way we thought it was going to. There’s private tension. There have been some serious conversations about that but it’s made our relationship better. My simple take on it, the fact that we’ve had to learn to communicate on a deeper level. We both grow personally and we’re both growing professionally through this journey. You hit that spot where it’s tough to get through. You’ve hit that next ceiling that you’ve got to bust through.
What’s your ceiling? What are you trying to bust through now?
My personal ceiling is I’m trying to get through this crisis that we’re dealing with relatively unscathed. I’m trying to be able to sleep at night because we’re having to make some tough decisions that affect a lot of people’s lives but I’m also reaching back and touching base with some of my mentors and my coaches. I have to learn to have a little bit more patience and let something play out longer to see it develop and then see how the management team is working.
I love that you’re reaching out to mentors and coaches. You’ve also been a member of the COO Alliance for a few years. Let’s start with the coaches and mentors first. What are 1 or 2 specific things that they’ve worked with you on that you’ve grown from?
One of my coaches, Linda, has a business in streamlining results and her programs are getting results through others. It’s more of a management and streamlining program that she does through some of the associations here in Houston. After going through that, we brought her in-house to train our whole team. She is probably the bluntest person that I’ve ever dealt with. She will tell me straight to my face if I’m screwing up and if she thinks that I’ve made a mistake. What I’ve learned is there’s a lot of times when I don’t see the mistake I make until somebody calls it.
I’ve had to grow and learn to accept the fact that mistake has been called out. Not that it’s malicious, but it’s, “You didn’t need to come down that hard on that person. You didn’t see the work that was going on behind the scenes and that wasn’t a good communication of it.” Linda has made me grow in that way and expect a lot more frontal communication if you would. I have a Vistage coach as well, Gotti, who is fantastic. He’s a great guy. He asked me some questions that have made me stop, think and change the way I approach talking to people.
Give me one example.
To the point, I’m blunt and I can come off as cold. I can acknowledge that I have an issue with my communicating being able to relay empathy because I’m talking fast. I’m out and I’m blunt. I have a high focus more on the empathy and communication side.
On your DISC profile, what was your number on D? Do you remember?
It’s an eight.
That was 98% D and 74% I. It’s too high. I’m curious about being blunt. Do you think that’s a little bit of the Italian northeast?
It might be. That could be a cultural upbringing thing.
I’m being honest. I grew up in a city that was probably 50% Italian and 30% French laborers. Italian tell you like it is and then they’re not trying to hurt your feelings. They’re like, “You suck at this.”
They don’t mean anything bad by it.
They’re like “You suck at that. Work harder.” Do you feel bad afterward when you’ve heard somebody? Does it hurt you inside that you’ve hurt someone?
Absolutely. I’m introspective about that because the last thing that I want to do is to hurt somebody or create a situation unintentionally. Coming from the northeast as broad, brash, upfront, and then coming down to Houston where things move a little bit slower and people are more thoughtful when they’re talking. That’s a big change that people underestimate and conducting business, your state of mind as well.
What probably is making you such a strong leader is that you are blunt to the point that you do have the human introspection side that you feel bad if you’ve hurt someone and you can connect with them emotionally. You’re self-aware enough to want to work on it as well. The fact that you have a mentor, Linda, have a Vistage Coach. You’re investing $10,000 or $20,000 a year in the COO Alliance, and showing up to group calls, you’re engaged in working on yourself. That’s a huge thing. You don’t find a lot of leaders that are doing that. How have you rationalized when you get the feedback that you suck at something or you need to improve at something? How do you not let that wear you down or beat you down?
I want to say I’ve grown a lot. I will internalize it and when I default back to more of an analytical side, I’ll take it apart. In the past, I’ve let it eat at me. I’ve learned to let that go and relax and then say, “Let’s write it down. Get it on paper and then see it. Once I can see it, I can address it.”
You don’t find a lot of CEOs that are heavy on praising people. Entrepreneurs tend to be focused on the horizon and will be happy when they get there. They’re not trying to be critical, but they point out all of the problems, frustrations, and things that need to be fixed. For humans, we often need some praise. Where do you get your praise from? Where do you feel good to counter out the growth? Ray Kroc from McDonald’s said, “When you’re green, you’re growing. When you’re ripe, you’re rotting.” We always have to get better. You’re clearly good at getting that feedback and working on yourself. Where do you get the praise from to have that partially feed you?
It’s from my coaches. They see improvement. As Craig and I consistently work on our communication to get better at communicating, I see the praise from him.
Do you see the praise from him?
I do. You can see his smile and you can see when he’s like, “I didn’t expect you to have that to this level.” “I didn’t expect you to have your team ready to rock.” You can see it in face-to-face interactions. It’s taken a while to learn to look for it, but now that I have learned to look for subtle clues like that, I feel personally a lot better because I see it more in my daily interactions.
I’d like for you to share that at our next COO Alliance event that you’re at as well. If you can make a note to do that, please. It’s a subtle point that I don’t know if I’ve ever heard a COO mention it before. To look for those cues of where the praise is there because we know that they’re not going to give it. When we can find it, it’s usually there. That’s an interesting point. It’s huge. Did you learn that from somebody who’s a mentor or did you just come on that on your own?
It was one of those realization moments. I can’t pinpoint a single time, but once you start noticing stuff like that, you see it all over the place.
Michael, I’m even going to do a little Facebook Live on that and I’m going to give you credit for it. What would you call that? Is it your praise signals?
You could call it that, but it’s not just there. It’s with all of your interactions. I’ve consciously made a point to also express those expressions where I’ll smile, nod, and give a high five. I make sure to come in and say good morning to everybody and ask them how they’re doing, how their kids are doing, and how’s life. Get involved. If you’re active in portraying the praise, your team is going to be a lot more responsive. We’re going through some tough times and we’ve got one heck of a management team put together that are performing in the remote world as flipping a switch. We’re having Zoom calls and you can still have the same impact on your team or on your employees or with your CEO via webcam.
I like that you said that. It’s something you have to do all the time and it almost made me think of, “You need to fall in love with yourself.” If you’re waiting for someone else to feed you, you’ll never be happy. That’s what you’ve identified as a leader as well. You can’t wait for the CEO to give you praise. You’ve got to notice those signals. You’ve also got to praise yourself. How are you at leading your people? Do you have anything with your direct reports that you do that anybody might want to learn from?
I do a weekly fifteen-minute one-on-one. I block out 30 minutes because it always runs over 15. I learned from Griff Long, one of your previous episodes. I liked his traffic light mentality of red light, yellow light, green light. What I want you to stop doing, what I want you to think about, and what I want you to keep doing. That format in a quick upfront meeting is five minutes, it’s in and it’s out, and then the rest of that meeting becomes powerful. Your team’s like, “I was doing this because of this, but I realized that I can change to this now.” Having trust in them as well is huge. We have multiple meetings a week and we’re formatted with them. We know what we’re doing when we go in and when we go out. We have plenty of communication on the management team through the office.
I’m proud of them because we’re rocking and rolling. They’re not skipping a beat. Nothing is throwing a wrench in their works through this whole process. That fifteen-minute one-on-one gives them a chance to vent and it gives them the chance to say, “I’m having problems with this.” That’s not going to happen in a group meeting. If they need the opportunity to vent out or even bring up suggestions, “I don’t like this and I can make it better.” That fifteen-minute one-on-one with my direct reports is probably the most important fifteen minutes I spend with them.
You’re a solid leader. The fact that you even understand that fifteen-minute meeting is for them to vent, share, talk and ask for help. It’s not for the leader to follow up and project manage everybody. It’s for them. Most leaders don’t get it. They’re trying to manage people and hold them accountable instead of being there to support them, remove obstacles for them, and listen to them. Final question, if you were to go back to the 22-year-old Italian or northeastern United States kid finishing college or getting ready to go off into his career, what word of advice would you give yourself back then that you know to be true now, but you didn’t know when you were 21 or 22?
Breathe a little bit more and don’t rush into everything. There’s always time to introspect and there’s always time to view it from different angles.
Michael Fiorenza, the COO for Bundren Painting and Drywall in Houston. I appreciate you sharing with us. I’m glad that you remember the COO Alliance and some great nuggets in there, too. That was some amazing stuff. I was taking notes for myself that I can pass on to my clients. Thanks for sharing this with us.
Thank you. I had a blast.
I appreciate it.
About Michael Fiorenza
Michael Fiorenza has a professional background that crosses multiple industries, allowing him the opportunity to consistently draw on technical experiences to guide his decision making. By building high performing teams and being an advocate for both change and professional development within an organization, Michael has enjoyed success in the commercial construction industry while making a difference in people’s lives and changing city skylines.
Having had the fortune of working alongside and learning from prominent mentors and tradesmen during his career, Michael has been able to develop and run successful construction companies as both part of a management team, consultant, and an Owner/Entrepreneur.
Michael joined Bundren Painting and Drywall based in Houston, Texas in 2011, and has been the COO since 2018. Bundren Painting and Drywall has been a fixture in the Houston construction industry since 1984 and has installed finishes on high profile projects throughout the city and region.