Jim Donaghy

Jim Donaghy

Structure Tone

October 22, 2018

Jim Donaghy

Executive Chairman

Structure Tone

Jim Donaghy is the Executive Chairman of Structure Tone, a $4 billion construction services firm headquartered in New York City. In 2018, the company was ranked no.16 worldwide on Engineering News Record’s Top 400 Contractors List. Jim learned the business from the bottom up, holding various positions in operations, estimating, and management.

Jim is a graduate of Hofstra University with a Bachelor’s Degree in Business Administration, and has completed the Columbia Business School Senior Executive Program. Jim lives in Old Tappan, NJ, with his wife and son. In our conversation we talk about building for the Olympics, strategic planning, and the best way to waste a million dollars. We hope you enjoy the conversation.

Text of Conversation

Matt: Jim, welcome to the show and thank you for coming on.

Jim: Happy to be here, guys.

Eric: So, are you a Yankees fan, Jim, you're gonna watch the game tonight?

Jim: I am. And I'm really excited to watch this young team, hopefully, start to show us that they've got what it takes to go on another New York Yankees streak for about five or six championships in a row.

Eric: Yeah, we're in Chicago so we had a lot of people call in sick this morning after that game last night.

Matt: I read today that the A's are gonna...they're gonna pitch like their whole relief staff starting in the first inning. That's the crazy thing about these like one-game play-ins, you know. It's like you don't have a starter. They're not throwing their ace. It just gonna seem kind of weird.

Jim: Yup. It's gonna be like an entire World Series all wrapped up into one game because the whole season, you know, 162 games no longer matters. Everything is rolled up, you know, in one game. And it's different than the playoffs and the World Series, right, where there's three of seven games or five games.

Matt: You're hanging on every single pitch. It feels like a game seven. These wild-card games are kind of funny.

Jim: Yeah. Well, you're gonna see them pull out every stop. And people are gonna play injured tonight too, by the way. So that's gonna be another factor. We'll see.

Eric: Yeah, that's a good format. It makes it a little bit more exciting. How about golf? Are you a golfer at all?

Jim: Yeah, actually just started taking the game more serious.

Eric: Did you? Okay. Did you watch the Ryder Cup last weekend?

Jim: I wasn't able to break away to watch it. I did try to watch it and then I realized I was jumping on the TV in the wrong time zone. So I was looking for it in the afternoon on Sunday. I forgot it was in France.

Eric: Yeah, right.

Jim: But I was tracking it in advance. I was at St. Andrews two weekends ago.

Eric: Oh, you were? Did you get a chance to play it?

Jim: I played the course right next to it. One of our three groups got out on the old course and we got out on the course that literally plays right adjacent to it, but we did play a course that I would say just as far as pure golf goes, it was probably a more exciting course called Kingsbarns, which was great.

Matt: Yeah, that one comes very highly-rated. I've read that before.

Jim: Yeah, it's a fun one. It's just got a great layout. And then I'm going to Pinehurst in a few weeks, so that's gonna be another legendary spot. So, excellent.

Eric: So you said you're just now starting to take the game more seriously. I mean, those are some pretty big courses to just now be starting to take the game more seriously.

Jim: It's a game that you have to play a lot to get any good at. And once you do get a little better at it, you start to get the bug and when you get the bug, you wanna...It's like touring around to see, you know, the next baseball park you haven't been to before. You wanna see what, you know, the Green Monster's all about or you wanna go to one of the oldest parks like, you know, Chicago or Baltimore, or the Yankee Stadium, of course. It's the same thing, you know, going to see a...part of the fun is just to see a different course. My son got me interested.

Eric: Yeah. That's great. How old's your son?

Jim: My son was my inspiration to get started after 25 years of playing golf where I probably played 5 or 7 or 8 rounds a year. Now I'm going for, you know, 20 rounds if I'm lucky this year, but my son's 16 and he decided he was gonna take it serious and I said, "Hey, I gotta try to keep up with this kid." So, he and I now have something fun to do together on Sunday afternoons.

Eric: Yeah, definitely.

Matt: That's great.

Eric: So were you guys over there for work or did you happen to just be over there by St. Andrews for fun?

Jim: That was fun with my colleagues from work.

Eric: Okay.

Jim: In advance of our quarterly meeting and our 30th anniversary party for our clients in London, we decided to do a 3-day excursion with one of our board members who lives at St. Andrews and take in St. Andrews, and it was a really great city. I didn't realize it was such a historic and beautiful city. I just understood there was this legendary golf course, but it's so much more than that.

Eric: Yeah. I've never been there myself. That's kind of on my bucket list, though, is to go play St. Andrews.

Jim: Yeah, it's a bucket list place. Even if you're not a big golfer, it's like when you go to the Super Bowl, very few people talk about the actual game. They talk about all the other experiential things going on. And that's kind of what St. Andrews was to me for the weekend. There was castle ruins, there was old historical buildings, you know, of all sorts and kings and Prince William, where he went to colleges there and things like you just didn't expect.

Eric: Yeah. That's neat.

Jim: And the whole town is built around the sport of golf, which is kinda cool in itself. It's the only course I've ever heard of that literally the 18th hole on the old course plays up right into the center of town. It's the coolest thing.

Matt: And I hear there are a bunch of people there watching you at the end.

Jim: Yup. So when you put out, if you get the birdie, you get about 50 people cheering you on and if you, you know, roll off into the bunker and then you chip out and go into another bunker, they let you know they're not too thrilled.

It makes it fun. And, you know, there's people watching from the buildings around it. So it's not just people on the sidewalk. There's people that are sitting there in the windows having lunch watching you play. It's pretty neat.

Matt: That's great. That's awesome. It reads kinda like the American dream. The company started by your father who was a recent immigrant and it grew into a successful, big organization. Can you speak a little bit to how it mirrors the American dream in that way?

Jim: Yeah. My father went to technical school in Ireland on a scholarship to learn to be a professional carpenter, and for personal reasons and economic circumstances in Northern Ireland, so not much of a choice, he decided he was gonna come to America and take a crack at, you know, making a living here. About 15 years afterwards, he ended up in a situation where he wanted to become a part owner of a business that he was running. It was a small construction management firm, and he was probably in his late 20s at that point, and he had a friend that was also like him, a carpenter by background, but was also a lead executive, a young upcoming executive of another construction company that decided to both leave their companies and take a crack at starting their own firm. And they started Structure Tone together. His name was Lou Marino who has since passed away.

And my father and Lou started Structured Tone in 1971 when New York City was really close to bankruptcy. And they felt that they could bring something different to the market, which really was the idea that client service was underappreciated. The two of them really always viewed the industry from a very technical standpoint. These were two people that understood exactly how to build everything on site. They weren't just, you know, smart business people or, you know, really great salespeople or marketing people. In fact, I would tell you that wasn't really their main, you know, strength as businessmen, although I think the industry may have ended up viewing them that way. The fact is they were really, really good at building and very smart and they were able to convince a lot of people to follow them. And that ultimately became the recipe for success for them. They were client-facing, relationship-based and, you know, made sure that their clients were really happy, but they also treated their people really well. And I think that they were admired because of, you know, their personal stories coming from nowhere and building successful firms. So they had a lot of people join them and they ended up ultimately breaking through the New York market and rising to the top.

Eric: How long did it take to break through that New York market?

Jim: You know, it was really the late '80s where they started becoming pretty well known as an up and coming pop firm, although there was two or three larger firms that were just more established. And it was the early '90s. You know, they really blossomed. We had expanded internationally by then. We had grown in the late '80s into London by way of the Canary Wharf project. We had gone national by way of acquiring a company in Texas, which was a personal relationship of my father's new partner who came on in the late '70s, John White. And we, you know, had a nice from down there. We've been down there for 35 years now. And, you know, I think the clients started to view us as being really different, you know, very focused on client relationships, but also willing to go to wherever their work was. We were willing to do the small work, the big work, the medium work, the hard work, you know, meeting the job, you know, in the middle of the night that nobody else wants. So no matter how big or small the job was, we were equally as interested because, to us, it was more of an account. It was an account view, not a project by project view.

Eric: Okay. So, what was it like growing up when he was building this business and growing this business and it sounds like it was kind of exploding during your childhood?

Jim: You know, I wouldn't describe it as exploding during childhood, but when I got out of college, the company was about a $200 million business and it reached a billion dollars in 1996. So, in six short years, six or seven short years, they went from a couple of hundred million to a billion. And then by 2000, we had hit $2 billion. And then the market collapsed after the dot-com bust. You know, we ended up at $3 billion in 2007. The next billion dollars became far more difficult. It was the '90s where we really shot up. You know, in the '80s, we became a player, so to speak, in the New York market. And it was the '90s where we took the front, you know, I would say, number one market position as the top interior firm in New York City. And it was later in that decade, I would think it was pretty arguably we were the top interior contractor in the United States.

Matt: Wow. Going back to more your childhood, were there rough times with your dad starting a business like that?

Jim: You know, my father was a disciplinarian, so as far as rough, I had it as rough as anyone else in town, as far as a father who, you know, didn't accept bad behavior and wanted you to get your homework done. But, you know, rough as far as he wasn't able to be home for a lot of the family activities. But, you know, I never felt that there was anything missing from my life. You know, we had a pretty good life. My mom was home full time. We had six kids. We were never looking for anything. We never needed anything. We were given everything you would need as a kid. You know, the one thing I wish, and I think he probably would say he wishes, was that he could have been home more often, but I don't think anybody questioned why he was busy. And I think everybody's pretty proud of what he was able to do in spite of, you know...if he could have had his cake and eat it too, he would have been able to make all the ball games and all the plays, right? And then also be able to build a business, but nobody's able to do both.

Matt: Right. Right. You were growing up in New York City proper, and in what neighborhood?

Jim: I was born in Baldwin, Long Island. And then I consider Rockland County is the area where I grew up because we moved there when I was in third grade. And once I went to college at Hofstra University back on Long Island, about 10 minutes from where I grew up as a young kid, I then moved into Manhattan and really from there I got married and moved into Bergen County. Once I started working full time, I was in Manhattan for about 15 years before I went to Jersey with my wife and moved near her hometown.

Eric: Growing up with your dad, what do you think some of the fondest memories are of him growing up?

Jim: We did simple things like every other family. We would take, you know, a camping trip, you know, probably the best memory I have would be taking a trip with him. It was just he and I, we went on a Boy Scout camping trip, which was pretty neat, but we did several family camping trips. We did a lot of ski trips. That was probably the most fun thing. During the winter, I don't know why it stands out to me as the most fun was we would always find a place to go skiing as a family. Most of the family would always be skiing and if it wasn't skiing, it was sleigh riding. If it wasn't sleigh riding, it was ice skating. And during the summer we did have some favorite spots growing up, Jones beach and Fire Island. My aunt would always take us to Fire Island once a year and then, you know, a lot of days in the summer just sitting in the backyard and running around with a whole bunch of kids on our block. And that was a pretty, pretty standard fun time as a kid. It was pretty normalized.

Eric: Did you go skiing in upstate New York or did you go all the way up to like Vermont or...?

Eric: As young kids, we were in Stony Point, New York. There was a little ski slope in our town. We all learned how to ski and then as we got older and more adventurous, we would, you know, go a little further away and further away. By high school, a couple of us joined the high school ski team kind of as like a part-time gig just for fun to get access to Sterling Forest after school, you know, three nights a week. And then from there I probably...you know, in my 20s we ended up with a family house up in Vermont and I think all of us always made the time to get to Vermont and now I think a lot of us also are, you know, making the effort to go out to Colorado and really get some serious skiing in. And so we all still ski. The family is still...I think that's the one thing we've done for our whole lives. It's been our one thing that pulls us together still.

Matt: It's a great tradition in that way because, you know, you can do it when you're young and then as you get older and more able, you can kind of increase the difficulty or increase the types of skiing you do. And then, yeah, the same thing. The whole family can be on the mountain, which is pretty amazing.

Jim: Yeah, that's a good point because unlike almost any other sport, there's a wide variety of things. You can be extreme or you can be as simple as a bunny hill or, you know, you can just go snowshoeing. You know, you could take a hike up the side of a mountain with the snow. But I'm actually going to do a heliskiing trip in British Columbia this coming spring with a couple of college friends. So that's my most extreme trip I've ever done, and I'll be 52. So I don't know how smart this is...

Matt: Oh, that will be awesome.

Jim: But it's a reminder that skiing could be anything you want it to be.

Eric: Yeah, right.

Matt: Will you do it out of Whistler there?

Jim: There's a place called Reverie that's a little beyond Whistler and that whole area is centered around heliskiing, so there's really professional touring groups there, so I'm not afraid, but I definitely am between now and then gonna be getting myself in shape.

Eric: The closest thing I ever did to that is I did some snowcat skiing where we weren't doing the helicopter drop, but they were taken us up in the back country and a snowcat and then dropping us off. And there's just nothing like skiing in powder that goes up past your knees as soon as you stop moving down the hill. It's incredible. It's a different type of skiing experience.

Jim: Yeah. It's got a little danger, but I think if you're managing everything correctly, I don't think there's really so much danger. It's much more of, you know, the untouched terrain, and there's no crowd and, and the beauty of just being in a wide open hill that has got no other tracks on it. So I'm looking forward to that.

Eric: Yeah, it's a little unnerving when they give you the quick tutorial on how to use the avalanche beacon that strapped to your chest and how to find somebody when they get buried. But once you get over that, it's all fun after that. I just remember them putting that on us going, "All right, this is your avalanche beacon." And everybody's looking at each other like, "What in the world are we doing?"

Jim: Yeah. There's that aha moment of, you know, there's gonna be no looking back once we go forward here. We did a hike to the top of a mountain, me and the same couple of friends a couple of years ago, we did a 14er as they call them. It was a glacier and we had to do the self-arrest training with an ice pick and we were on granpons [SP] and, you know, traversing at a very high altitude. It was pretty neat. You know, once you manage it, it's like managing a project. There's a lot of danger in managing a construction project if you're thinking about financial risks and things like that, but you eliminate the risks if you plan and you organize and you have the right people involved. And I think that's probably where we're going. I think we're not really that afraid because I think these people are all pretty serious.

Matt: So did you know from a young age that you wanted to go into the construction business or what was the process that you started to learn that?

Jim: The process was pretty natural. I didn't know I would end up in the construction business per se. You know, my father, I knew, had this great company. We always knew his colleagues because there was the annual picnic and everybody got to know each other from that. And, you know, his partners and, you know, his staff were almost like an extended family when I was a kid. So from that standpoint, I always imagined that would be a great place to have a career. But, you know, when you're a kid, you don't really know what even really what a career is. Right. So for quite a few years, I thought I was gonna be playing baseball my whole life. Nobody could talk you out of those dreams at least until you get to the college level. But, you know, I was always drawn to the trades in some way or another.

So I spent a few summers either as a laborer or I was a carpenter's assistant, meaning that I didn't know much about carpentry, but I was cutting wood and carrying wood and, you know, organizing a lot of the gear needed for the day's work. We were basically building decks on the back of homes in Rockland County. I did some landscaping work one year, so I was always kind of around that work. I wasn't afraid of hard work. It's one thing I kind of learned at that age was, you know, the laboring work I did, I remember me and it was always one or two friends that I would bring with me to the city to do laboring work at Structure Tone. And I remember at the end of the day, to think that we would actually sit there and laugh at who had the most blood and dirt on our clothes and who got beat up the most was kind of like this little competition between us. And I think about that today and I realize it was kind of fun.

You know, we weren't afraid of hard work and we didn't get paid well. I'm not sure we made money because it costs about $10 to get in and out of the city. I think we only made about $20-something a day. You gotta pay for food, so I'm not sure we even netted any money at the end of the week. But we loved what we were doing. We kind of knew we were doing something cool because no one else that we knew in Rockland County was traveling all the way to the city to work on these major construction projects as a laborer. But let me tell you, after four or five weeks of getting up early and spending the whole day swinging sledgehammers and packing containers and, you know, vacuuming out the inside of conductor covers and being on your knees and scrubbing and sweeping and shoveling and all kinds of stuff, it gets old quick, especially when you're a teenager.

Matt: What age was that you were doing that?

Jim: I was between the ages of 13 and 18.

Matt: Yeah. Was Your dad on the job sites then or were these remote job sites?

Jim: No, these were job sites in and around Manhattan and he would be in the office at that point. He was running a fairly large company, you know. I don't remember the volume of the business at that time, but, you know, it was certainly 50 or 100 employees I would think at that time.

Matt: Would he ever drop in on you just to like, you know, make sure you weren't screwing off?

Jim: He did. He did. He would check in, you know, not often. I remember specifically he would not drop in often, but I do remember him popping in on occasion or he would drop me off at the job site and come up or he would pick up one of us, me or one of my siblings that might've been working that day as well, at the end of the day. It was, you know, kind of random. But I think he got a kick out of that and I think he liked seeing his kids work.

Matt: So did all your siblings work like that?

Jim: At one point or another, they all did, yeah.

Matt: Okay. So did your dad have that expectation that as kids you guys were gonna work during the summers?

Jim: You know, I think he expected that, but he wasn't demanding it. I think he had a funny way of making you feel like, you know, you're either missing out or you're not really doing what, you know, he would appreciate you to do. I think he wanted us to stay busy with something. So he kind of lets you choose. He was never demanding that we specifically did any particular job, but you know, he made that opportunity available to us. So he certainly pushed us along but didn't drag us, that's for sure. I think he was happy that we took an interest but, like I said, looking back, he never pushed it, but he certainly was not going to allow any of his kids sit at home on the couch all day. That was not on the list of options.

Eric: So did your son work construction jobs when he was a teenager?

Jim: My son, just this year, he did his first internship. He spent a couple of weeks...he was here at Structure Tone for, you know, several different projects. He spent the day, as a ninth-grade kid, which was kind of cool for him, but you know, he did it in a buttoned-up shirt with work boots, out in the field, and he did learn a little estimating. He did spend a day at some of the big banks in town, spend a couple of days at some of the bigger banks. He spent a day down at New York Stock Exchange. He spent a half a day roaming around one of the big banks in town on their trading floor because he loves trading stocks. He's got a small trading account that he invests some of his own money. So he's got a wide variety of interests. I'm not really steering him. I'm supporting and creating opportunities for him, you know, not so different than one of our charities here at Structure Tone is the Boy Scout Explorer program where we introduce the various industries in Manhattan to the high school age group, you know, these inner-city kids that don't get the chance quite often even know what a career is like in, say, healthcare or hospitality or finance. They don't quite know what that is. So we introduce them to these companies. And it's just an eye-opener. So I'm kind of in that stage with him and I'm gonna see where he goes, you know, from there on his own. It would be nice to see him choose his own path.

Matt: Yeah. That's great. So you went to college at Hofstra. How did you decide to go there?

Jim: You know, it wasn't my first choice. I thought I was gonna go to Syracuse. I had a short list of schools. I wasn't interested in traveling far. I did get offered a partial scholarship to play baseball at a division two school. It was a top-five school. I think they were fourth place the year that I was offered to go down there and meet the coach and formally get this offer of a partial scholarship. And I decided not to even go to the meeting because when I found that the school was in South Carolina, it was like telling me it was in the Dominican Republic. It's just, to me, like another country to go that far away from home. And when I knew that, you know, there's plenty of schools in the New York area, I just didn't realize Syracuse didn't have a baseball team. They had a baseball club I guess is what the confusion was. So it turned out Hofstra had a pretty good baseball team and I spoke to the coach and ended up playing there and it was a pretty good experience.

Matt: Baseball was a big part of the college experience?

Jim: For me, it was, yeah. It was. It was something I was drawn to. I figured, you know, academics could be pretty much the same. I wasn't that, you know, worried about what type of campus or, you know, things of that...I wasn't overly focused on, you know, striving to be in the best college possible. I guess, you know, looking back, I wish I focused a little more on a higher GPA and higher SAT score. But, you know, I think in my family, being a first-generation Irish American, the fact that I was going to a university was big news in itself. And, you know, I don't have a memory of my parents pushing me whatsoever in high school or, you know, determining with me what college would be best for me. It was just, they were happy that I was successfully graduating from high school and successfully getting into really the colleges of my choice. I did wanna go to Boston College. I didn't get into Boston College, I didn't have the GPA, and I kind of regret that. If I knew what I knew today, I would have worked a little harder and got the grids and at least knew what I was working towards to work up to whatever grade was needed for a school like Boston College.

Matt: Did academics become a bigger part of your life at college or was it kind of just get through college, play baseball, get working?

Jim: It was a little bit just get through college. You know, again, I got the sense that I knew I was going to get a job, you know, in the construction industry. It was kind of there for me at that point because I was interning in the summers and I did have a knack for. I felt I had a good connection with the business. I enjoyed it. I really liked the people. And again, you know, I think I probably took the pedal off the metal a little bit, took my foot off the gas a little bit as far as pushing for the high grade. You know, in retrospect, if I knew what I knew today, I might've gone for maybe a different type of degree than just a business degree, maybe an engineering degree, or would have went for a master's program. And I did later on go to Columbia for their executive education program because I always had that academic bug in me. I felt like I cruised through school, which is probably a bad thing to say, but you know, I never failed a class in my life. I remember some pretty difficult classes, you know, not really giving it a lot of effort but still getting that B. So I kind of felt I cheated a little bit by not working that hard but still managed to get decent grades. So again, I was never really closely monitored by my parents or pushed and didn't have any kind of counselor that was...you know, I kind of got through in my own.

Matt: So if you were to go back and teach a class, like as an assistant professor, what class would you teach and what would you use for the curriculum?

Jim: I would definitely teach strategic planning. I just feel like that's something I enjoy the most and that's to take any business and lay out the roadmap for several years out and decide how to get there. And, you know, there's just so many ways to build a business and I think a lot of people are shortsighted. You get caught up in all the reasons why something can't happen. And I think the biggest reason for that is that you just don't look out far enough and realize that, you know, if a lot of other little pieces were put in place, you can almost do anything with any company. I think the sky's the limit. And strategic planning to me is that little missing piece of the puzzle. The best businesses have somebody that's figured out the strategic planning piece, and of course, you have to have those values as well for a great company, values like what we have, people and integrity and client-facing and excellence and things like that. Those are important.

But the strategic planning piece gives you the opportunity to really steer the company in a direction that, you know, keeps it in a position where you can be a market leader. And once you're a market leader, I think a lot of other things fall into place fairly easily, you know, attracting the best talent, you know, being able to secure accounts that kind of gives you the recognition as being a market leader. You can't just be a great builder when you become a market leader. There's a lot of other pieces that are needed and you can't get those pieces by just, you know, willing them or investing. You can't write a check and get a lot of things like a great training program, right? You can't get a great recruiting program or a compliance program by just writing a check. It takes a lot of pieces to come together. You know, it's a culture thing for starters. It's gotta be behavior driven. There's a lot of the expertise needed outside, advice needed. There's programs, there's technology, there's training that goes along with all of that. There's monitoring, there's auditing, there's all these little pieces. And that's all outside of the day job of building, but you know, they're not that hard if you do the strategic planning and think far out. So if I can go back to school as a professor, I'd love to teach that.

Matt: Someone tells you, "Hey, we don't have enough time to do all those things. I'm out there building buildings. I'm working. I don't have time to develop culture, develop a training program." What do you say to them?

Jim: Well, I usually have a conversation with them about, you know, "What's the future going to be for you?" I try to get them to just stop and check in on what they just said and kind of make them hear back what I think I just heard them say, which is, "I can't do anything about it." It's kind of what they're saying. And I just, you know, firmly disagree with that idea that you can't do anything about it because I lived through that myself. I was in that moment where, you know, "Do I just run the day-to-day business? Because that's the thing that feels like I should do the most. Everyone's asking me to be involved in today's issues and I gotta really work on tomorrow morning's issues and these issues this afternoon, I better focus on too." If you get so caught up in that you'll be exhausted from...you know, it's like drinking out of a fire hydrant, the amount of issues you could get wrapped up in. So what you've gotta do is step back and look at the resources involved in, you know, all these issues that might be going on in your company and then just get your arms around that and maybe delegate a lot of things that you don't need to be putting your time in on all the time on every issue.

And once you know, you have an organization that's handling the day-to-day business a little better, a little less ebbs and flows and, you know, more steady and less red flags, and less emergencies going on, then you can stop and get a little more strategic and take the time to write out a strategic business plan. And, you know, think about if I was to increase my budget, my spending to strengthen my company by, say, 20%, will I need to have a like amount or more? I'd like to have twice as much increased income as I'm going to have an increased spend as a starting point for a strategic discussion. So I'm gonna spend another million dollars, I wanna see where is there two more million dollars of income gonna come from? And once you start playing around with that, you start to realize, you know, some of this is possible.

You know, let me get out of the box here a second. Why can't I do that? Why can't I hire this person? Why can't I market myself differently? Why can't I also say that I can build that type of project? The competitors that are doing it are not that great at it or that different than I am. You know, what are the pieces I would have in place if I was the market leader in a different line of business that I'm not in yet? Or if the line of business I'm in where I'm in the top 10 to become number 1, what does it take? You know, what are the other things these other companies have that the clients are looking for that I don't have yet? You just start asking lots of other questions. And once you start just having a strategic discussion with yourself and with your colleagues, you start to realize, why isn't this achievable? You know, you start asking the question, why not? It's not why. It's why not.

Matt: Right. And was there a moment in your career or life where you made a mental shift to that type of thinking?

Jim: Yeah. I can give you a lot of examples in the '90s when I learned by fire from my construction experience, you know, how to build a job and how to not be overwhelmed by, you know, tasks that looked like they were insurmountable. Like when I was sent to Spain to work in this hotel project and we just literally were not given enough time to build the amount of space they wanted to build, but they gave us an unlimited budget and we figured it out and it literally was an experience where I can say I realized that almost anything is possible, but what you need is the right set of resources. So my moment where I said when you apply that concept of anything's possible to a business and not just the project was in 9/11 where we had this terrible tragedy take place for many, many, many thousands of people, and once the dust settled we realized we still had a business to run. And my biggest business problem at the moment, you know, it was morale like everybody else.

You wanted people to feel okay and safe, but it was also, "Wait a second. I think the only major client type we can really count on," which at the time was New York-based financial firms, was our number one client type by a long shot and they had literally stopped spending because they were trying to now reevaluate logistics. Where should we be locating all of our offices? You know, because some of them had their offices all piled into one small neighborhood and they realize what if we have a 9/11? We better spread out. So they were reevaluating the real estate portfolios. They were reevaluating their data center structures and layouts. Because the internet, as you know, was in its infancy and people were building data centers mostly close to their headquarters or right inside their headquarters. They were now changing that strategy and that was another major part of our business at the time was data center building.

So all this work turned off. And by force at the young age of about 33 or 34 years old, I was only an executive for a couple of years. I mean our executive meeting, I was the executive chairman of the company. In essence, I was running the business at that time, with a team of course, but you know, I was the person that people were looking to, what do we do, what are we going to do next? And, you know, I just had an aha moment of, "Well, we're gonna diversify and we're going to diversify by starting to sit down around a table and start laying out the plans for it. You know, what are the top priorities and what are the markets we love the most that we wish we were in? Which of the competitors we admire and, you know, maybe don't wanna copy or be just like but we certainly admire their workload and their market position? Or which clients do we wish...you know, we love the client reputation and brand and we wish we were working for them?"

We started, you know, asking a lot of questions about which sectors might be the most sustainable or match up well with our expertise, which happened to be at the time, mostly, I'm gonna say 90% of our work at the time was interiors and renovation, which happens to have a very big MEP component, mechanical electrical plumbing component in it, which is one of the reasons why we became the largest data center builder in the world in the late '90s. So we were able to, you know, right away came up with healthcare as the place we really mostly wanted to be in. We felt like that was going to be a very easy transition for us.

We had started a core and shell division in New York City. We thought we had all the pieces to be successful in healthcare. Today, I will tell you we're an up and comer in that market, in the New York City market. Now, in Philadelphia, we have been the...we did do an acquisition in 2009 and the largest contractor in Philadelphia, LF Driscoll, became part of the Structure Tone family. We are the leader in healthcare and healthcare construction in Philadelphia. You know, I got plenty of examples today I can give you a where the company has diversified itself and has become a market leader outside of that original one-client type. And geographically, we've really become a market leader and you know, quite a few other cities, not just New York City. Geographic, you know, market segment, project type, we've really diversified from that interior, financial firm, New York City client base.

Matt: 9/11 led you to diversify away from financial firms, which then...you know, how different would your business have been in 2008 when the financial crisis hit and you still had the old portfolio?

Jim: That's a great question. You know, not knowing what was going to happen in '08, '09, and '10 as the market fell, took a couple years for it to really flow the whole way. You know, we, we did get a big drop like every other contractor, but the drop would have been, you know, very severe because we had grown pretty dramatically from 9/11. We were probably just under $2 billion. Went down to $1.4 billion, $1.5 billion, and then by, you know, the top of the market, in a way we were probably $3 billion. So we had grown by a billion from our prior high point and I'm gonna tell you that half of that was not just that same New York financial client. So it could've been much worse. But then again, I don't know if the number would have been $3 billion if we were only focused on that same client. I think the number became larger. It was just a win, win, win situation for us.

And, you know, that kind of positive planning and diversification, thinking about being a more sustainable company, feeds on itself because the employees actually enjoy that. You hire smart employees, they know what's happening. They can feel it. They can sense the company is well positioned and is doing smart things to be diversified and therefore be more sustainable and when the market recession, next market turns that they're gonna be in a safer place. You know, they're smart and they know it. So we end up with, I think, a very smart...our best and brightest employees, you know, retention numbers are gonna be better. I think, you know, we did a better job recruiting as the company became more diverse. There's a lot of other advantages.

Matt: Let's go back to the hotel for the Olympics story. You're out of college. You've been working in the business for a couple of years and they tell you, "We want you to build this hotel," in a crazy timeline. You fly with the team to Barcelona, and what was the first moment you realized there's big problems here?

Jim: I remember it like it was yesterday or even like it was an hour ago because it was an amazing moment to me. I was the youngest of the seven Structure Tone staff that were sent there. And we were all operations people. The senior project executive was a gentleman named Phil Bertram and Phil, if you asked anybody that knew Phil, he would be a master builder in anybody's eyes and he had accomplished quite a bit in his career, including he was one of the project managers that was on the team that built the Sears Tower in Chicago.

Together: Wow.

Jim: You know, we all have our bags with us. We came off the airplane, we went to the site and we were about a half a block, couple hundred feet away from the entrance gate and he said, "Leave your bags here. I'm gonna walk up and just look around. Before we walk in, I wanna take a look." And the site was fully fenced in, and inside the fence there was barbed wire at the top of the fence, wrapped around the outside. It was about a 50-story hotel building with an exoskeleton structure. So it was a different type looking building, it was pretty cool structure. It was right on the beach. The beach had yet to be built, but it was on a dirt beach. The job site was, I mean, you could tell logistically it was a mess. There was no staging area. There was mud everywhere. You know, they didn't put rock down to make the vehicles driving in and out a safe. So you have a lot of a giant potholes and it was an unsafe place just to be a construction worker. But they had guards, must have been, you know, a couple of dozen guards on the site, including, you know, they had heavy artillery machine guns. They had dogs. They had a whole area to stage their dogs that they had. So they were afraid of...there was revolutionary situations going on in Barcelona at the time. There was a government type of situation that, to be honest, I can't even explain it to you. It was just, they were afraid of the site being raided by locals that wanted to shut it down. They weren't in total agreement that this site should be built.

Phil could tell from his experience of the site was a complete mess, that the staging was terrible, and the project, it was not flowing well. And he told us to wait. He went inside and met with one of the senior executives that had invited us, the developer invited us, and they were kicking the other contractor off the interior part of the building. They were leaving that contractor on the exterior part of the building. They wanted them to finish all the roof work, the MEP riser work, the shaftways, the elevators had to be finished. The porte cochere in the lobby areas had to be finished. The exterior landscape and stonework had to be finished. Fountains and statues and a lot of other outside exterior work had to be finished. So they stayed on site. Phil met with the senior developer and had a discussion about the project and we realized we were being brought in purely in an emergency basis. You know, we only were given a week's notice to get there because the Olympics were gonna go live. Guests were gonna arrive at the end of July. It was the who's who list. So, you know, the most famous superstar athletes were gonna stay at this building. All the dignitaries from around the world were gonna stay at this building. If you're a governor or, you know, the president of a country and you were gonna stay anywhere in Barcelona for the Olympics, that was the building you were staying in.

The pressure was enormous. They were way behind schedule. We probably needed literally three times as much time. They gave us 20 weeks. We needed a whole year to do what we're asked to do. So we worked two to three shifts, seven days a week, fired every single tradesman that was on the job, every subcontractor that was working on those interior floors were asked to...you know, we terminated their contracts and we brought in our own workforces. We did keep a couple of the contractors but we asked for new staff, for new tradesmen so we can get a fresh start. And our mindset with the team was on site was once we decided we were going to give it a shot because we got over the first hurdle, which was Phil telling us, "Hey, we're not ready to say we're gonna do this yet. Let me make that decision." Because he said we were better off leaving and not saying we couldn't do it. We would rather say, you know, we never went. We didn't say we couldn't do it. He'd rather, you know, say we never even showed up before he would say we showed up and decided we couldn't do it.

But we did decide to go forward and take a crack at it. The developer did understand that we weren't miracle workers and, you know, the budget had to be unlimited. We have to be able to spend whatever we thought was necessary. They had to agree to pay us every Friday at the risk of us leaving the moment we weren't paid because we didn't wanna be at risk financially for all the problems created by the prior contractor. Long story short, we succeeded and exceeded their expectations because we delivered I believe it was 20 floors instead of just 18. It was just a walk away experience to me just to realize that you can really do far beyond what you thought was possible if you can get good at, you know, organizing resources and planning and budgeting. And I was very impressed by what we were able to accomplish.

Matt: Yeah. That's awesome. Did you stick around and enjoy the Olympics?

Jim: Yeah, me and one of the other members of the team were given a corner room for two weeks, all paid, and you know, we were able to get her hands on some games. So we did see the 1992 Dream Team, the basketball team. It was a lot of fun to see that that team play. And it was a nice way to end that experience. You know, it was exhausting. And then, you know, we had this great opportunity to just settle down and relax for a couple of weeks, explore the area. I hadn't had a chance to see anything in Spain for the four months I was there. I didn't even know what was down the block. All I knew was my bed and the walkway to get to the job site and the walkway to get back because we didn't have a chance to do anything else for, you know, seven days a week. We got off every other Sunday and, trust me, we slept.

Eric: Wow, that's crazy. So you were replacing a contractor that was being kicked off, but he was still staying on the job site. Did that create any tension there?

Jim: Yeah, there was some tension, but I was too young to really care about it or notice it. You know, we were like soldiers. We were told to do something and it was, "Get out of our way." You know, we're not here to even have a conversation. You know, we were asked to do something impossible. So were not negotiating with anybody. You know, it was probably something I excelled at the time. You know, I think I learned a lot of my people and social skills later in my career, because at that time, I was told to do something, I believe that was my job to just get it done. And so I think the other seven felt the same way. So we didn't pay attention to, you know, some of the pushback we were getting. And when we couldn't get an elevator because they were controlling the elevators, well, we just took over the elevators. We'd get there earlier in the morning, we would hijack the elevator, and just not give up, literally physically not give up the elevator. We would physically stand there and just take the elevator and say, "Sorry, we work for the same developer you do and I know it's your contract, but they're gonna pay us for whatever we're gonna be doing in this elevator. And, you know, you can go see them if you have an issue with it." We just took over the spaces and things we needed and we just, you know, commandeered the site, the areas that we needed, not their areas.

You know, there was one example where on my floor, they had used my floor for a staging area for a lot of the base building equipment that they had yet to install that was months behind schedule. And the directive I got one morning was, "Get all the laborers to clear out the stairwell," and I was on the 18th, the top 4 floors. And I was told, you know, "Protect off the areas, get the doors closed, tell the laborers to keep everybody out of the stairwell and dump their stuff down the stairwell." And I did that. And if I was a little older I might not have done it, but I was young enough and they knew I would just follow orders. And, you know, we cleared out the floor. And I think the message was loud and clear. We were going to do whatever we could to make our dates. And that was definitely not...It was one of the safety things. I think I walked away saying, "That's not something I should've done." I should've paid more attention to the safety aspect of what I was being asked to do, but you know, you live and you learn. And the objective at the time was to commandeer the areas we needed to take over and hit dates and deliver on something that...well, we weren't sure we were gonna make that schedule until at least halfway through the time we were there. So we were really working on nervous energy for quite a bit.

Matt: Yeah. In your organization, how aware are you when you have employees in a similar kind of situation as that, but today? Do you try to alleviate the pressure, not put them in those situations, or do you believe like that's part of the job and part for them to learn?

Jim: Yeah, that's a great question. I think one of the reasons why my experiences starting at the ground level as a laborer and working up through all the different positions in our company is, you know, it's very hard to become a manager and direct people when you don't know exactly what they do. And that's something I don't have an issue with because I've really been through virtually every position, from all the rank and file roles that we have. So I'm very aware of confusing people when you send out an order or direct somebody or send out, you know, a goal or discuss goals, you've gotta be really cognizant of who else is directing this person or what other prior direction were they given and what's realistic? You know, this SMART concept. We had a consultant spend some time with us 20 years ago and, you know, taught us this concept of specific, measurable, achievable, realistic and timely goals.

And that was a nice way of crystallizing how to make sure that employees are hearing, you know, the directive on what's expected and, you know, keeping things real for them and not making them feel like they're being asked to do the impossible. Because the goal is not to have people constantly be in fear of failure. You know, you want people to feel stretched, you know, some stretch assignments, you want them to be challenged, but not feel like they're being set up to fail because that's not fun. Maybe on occasion, you get asked to go do a hotel in 20 weeks that you really should take a year to do, but you know, you're better off working on assignments that are challenging and not impossible. So, you know, if you have an organization that's dysfunctional, you can have multiple people, you know, sending down directives that are confusing to people down below. It's not just a problem of, you know, now you don't know quite what the goal is and where the goal posts are, but you know, it's morale. It's demoralizing for those folks. They're not feeling like they're aligned, and nobody wants to feel like they're not aligned.

Matt: So that was one of your first big experiences at Structure Tone. What did you do when you got back from that?

Jim: I was sent to Florida for two years. I was sent down for a short term to support the estimating effort and ended up...by the end of that two years, I had to become the person running the office. I was running two or three jobs at a time as a project manager. That type of project at the time was not a project I had ever worked on before, which was out of the ground new buildings. There were a new elementary, middle school, and high schools. I learned by fire on that, working with steel shop drawings and grading a site. You know, working on a 10-acre site from raw land to a finished building with parking lots and fields and commissioning, you know, a full building, it was a new thing for me. And, you know, it was a learn by fire thing. And I was able to come back. We called the Florida experience Vietnam. It was just our joke between me and a few of the fellows I was working with because it just felt like we were really out on her own and we were asked to do something again that was difficult, very difficult.

But I gotta tell you, I wouldn't trade that experience for anything. I think I learned more in that two years than I ever could have. Nobody would've said, "Let's just keep you working on assignments that are over your head for two straight years," but that's kinda what I was asked to do. And I learned that we were able to get...you know, we weren't, I wouldn't say successful. I would say we accomplished the mission, which was to get us out of those sites, get those sites finished because we were only there because of a situation that was really a high risk that went bad. It was a bad situation financially and from a business risk standpoint, it was not what we were counting on. We ended up down there to get us out of those projects. It was a bonding situation where our bonding was put in place to back up the contracts that our partner down there signed. And we ended up, unfortunately, having to go down and finish the work for them. We had to fire him and take over his office and take over the operations. And, you know, I was in my mid-20s so I was a little ahead of my time with that.

Matt: At this point in time, your dad's still in the business, is there a moment where you're in this horrible job situation and you're just like, "Hey, man, this is crazy."

Jim: Yeah. I had a lot of moments like that, but I tell you this, he never left us hanging. You know, there was a senior executive from our New York office that was down on a steady diet that was handling the big business decisions, you know, we would not work in a vacuum, but the day-to-day operations and the day-to-day running of the business was left completely to us. There was nobody down there to help us make those bigger, tougher decisions on day-to-day stuff. You know, it was kind of a privilege and an honor to be left that way and, you know, we felt we were chosen to do something because the belief was that we were capable. Nobody thought we were over our head, but you know, we knew we were definitely swimming upstream as far as the situation we were in. But he was aware. He kept himself close. He knew what we were doing. He was monitoring the progress and, you know, he certainly spoke up when he felt things weren't going the way he wanted or he wanted to see something different. He kept himself close enough. We knew we weren't gonna get annihilated. We weren't by ourselves. So we had a pretty good group that was staying in touch with us, him and my father and his partner.

Eric: Do you have any stories about working with your dad? And I mean, being in a family business and sometimes when it went really, really well and maybe others when it was a little bit more difficult being in a family business?

Jim: Oh, I've got more stories than I care to share with your program, because there are family business dynamics that, you know, I can't imagine there's any family business out there that just runs harmoniously. I think every family business has a lot of dynamics and ours was no different. You know, I had some highs and lows with my father. And there were sometimes I loved it and sometimes I didn't like it at all. So, you know, we worked through those issues and I think, you know, we were always committed to making sure the company ran well. And, you know, my father was a visionary and very strategic in his own right. We just worked very differently. You know, I had a different approach than he did. So we bumped heads constantly. But there was enough moments where he showed me he was supportive, that I knew that, you know, this can work. We just gotta keep our heads down and, you know, stick to the job. It's like a stick-to-it-ness you needed to have.

And didn't always like what he said, but always took it with a grain of salt. Definitely never ignored his advice because his advice was always pretty good. His advice always came from experience. He was definitely a seasoned pro and to ignore his advice would be pretty foolish. So, you know, we had a good team here. You know, it was never Jim Donaghy, it was a team. I was part of a team always. And I think he always was part of a team, although he was very much a dominant leader, that's not really been my style because I didn't have to be. He had a different situation building the business. My situation was to not screw it up, maybe make it a little more seamless, a little more refined, and a little more strategically planned. So I was able to do it with a team. And the team has been great. Our team for 20 years has been really a good group and very well balanced, cohesive type of team.

Eric: What are the types of characteristics and types of skillsets that are part of a good, balanced team? Like you've talked about Phil, who's a master builder, somebody who's technically superior and that's his strength, but then what other characteristics does the team need?

Jim: The main ingredient of a team is trust. You know, you have to have trust. There's gotta be this common ground that you all know you're walking on. And a sense of, "I have your back." You know, you don't have to be identical. I think Mark Twain said, "If two people are always thinking alike, one of the two people are not necessary." So being different is good and, you know, you can argue that one plus one equals three more often on a team where everybody's different. So I've always kind of subscribed to that. If I went back over the names, it was Tony Covetti [SP], myself, and John White when I first started. When my father retired, you know, behind him was certainly a strong group of business unit leaders. A gentleman that runs our New York office for the past 20 years. Mike Neary, has been one of the strongest cornerstones of our management team and Bob Mullen joined us in 2004 as our CEO, and Bob and I have been partners...you know, I always thought of it as a partnership. And when Bob started, I personally thought of his position as kind of a chief operating officer to my CEO type of role but, you know, very quickly gave up any CEO type of activities because he was really strong in his own right. And today, you know, clearly is in every way the CEO of the firm.

But we still work as a partnership. You know, he checks in with me on just about every aspect of the business that he knows I am personally very attached to it, which is mostly our people and our clients. And of course, you know, I oversee our boards and now we have a lot of activities at the board level where Bob and I, again, as partners have figured out a pretty good system of keeping each other informed and supporting each other like a two-way street. But over the years, it's always been, you know, Jim, Tony, and John, and then Jim, Tony, and Bob, and then it was Jim and Bob, and now it's Jim, Bob, and Brett. Brett's our CFO. You know, we've always thought of it as a team. It's not a one-man operation. And Bob's about 10 years older than I am. Tony's 10 years older than Bob. You know, so there's always been that nice transition between generational, you know, ranges, if you will, and different backgrounds, Bob's got an engineering background. I like to think of myself as just an old-school builder, you know, from a family that was in construction as a family. And I got a different style and approach. Tony was a client at one point and more of a CFO. He was CFO as a client at one point in his career. You know, when you put us together here at Structure Tone, we really covered the bases very well. And that matches us up very well with clients as well. You know, not everybody is for everybody, so you can, I think, have a better shot at managing an account better when it's not just one person at the top that is the person to be involved and interface with all the clients. You need to have a good team, a diverse team.

Matt: Do you remember early in your career an expensive mistake that you made where you could quantify the amount of money and say, "Man, that cost a lot?"

Jim: Early in my career, no, because I was pretty frugal. I was afraid to spend money. My father was very much a micromanager when it came to what's being spent. So you're in fear of spending money and I think that wasn't very strategic, you know, over the years later. That might've been one of the reasons why he decided that spending money is not the problem. Not managing the return on the money is the problem. You know, spending a million dollars and not knowing how you're gonna increase the overall income as a result of that million-dollar spend is the problem, not just spending the money. So, you know, he and I have always had a different opinion on certain things like that. But then again, in the years that he was running the business, the business was run like a machine. I mean, nobody was wasting money anywhere. It was run really tight. So I didn't really have a chance to get in a situation like that.

But when I started running the business more strategically and was willing to write bigger checks and make investments in things like an IT infrastructure, as the internet grew and became more important, I do remember investing in a product that we developed. It was a homegrown product called ST Construct, ST standing for Structure Tone. And it was my way of...you know, I said, "Hey, there's a lot of systems being built out there to create more workflow in all the documents needed to run a construction project. Why don't we just create our own?" Those products being made for the general industry, and I didn't think any of them are reflected what our needs were as what I would call more of an interior contracting company with a lot of fast-track projects. And as a fast -track contractor, meaning that a lot of our projects were less than four or five months, we need a different type of, you know, system, a different type of workflow. So we built this product, it was homegrown. We spent over a million dollars on it, and today, it doesn't even exist. It's gone. And it never really created a lot of value for us. And, you know, it got spent over three or four years. So it wasn't spent all in one year. It wasn't like we wrote a million-dollar check and it was gone all of a sudden. We spent quite a bit of time building it and it did get used on, you know, a handful of projects, a couple of accounts.

But, you know, you always got to be strategic and ask yourself, "Did you gain anything?" And I think what we gained from it was the experience of be careful when you're building your own products. You know, sometimes it's better to go to the outside and have professionals that build IT systems be your partner. I also think that we became very good at using IT systems to run our construction projects. So there's a lot of products out there, an old system called ConstructWare, which is still out there today, but at the time it was revolutionary. You know, sometimes it's better to just partner with those folks and let them keep developing the software because, you know, ultimately we don't wanna be a software company. So it was a lesson learned. I think that when there's a lesson I learned like that, as long as you don't repeat that mistake and you apply what you learned from it, you know, you can get your money back as an investment. It's an educational investment.

Matt: Yeah. I always say a college education costs a lot of money too. You know, first business mistake teaches you a lot.

Jim: Yeah, I mean, I spent $50,000 on the Columbia Executive Education program in 2011, and I gotta tell you, I spend a couple of years worried about the opinion of few of the executives wondering, "Why the heck are you going back to college here? What is this all about? What are you up to?" And, you know, I said to them what it was about. It wasn't just personal development, which is what I thought, you know, was important and we should all look for an opportunity to develop ourselves personally no matter what age you're at. I was probably, you know, at that time, I was, you know, in my early 40s. But to me, I wanted to get a good look at how, you know, a 40-year-old executive can get trained by a university like Columbia and apply what I learned to our Structure Tone University program.

Well, guess what? Ten years later I would tell you we have one of the best university type curriculums for a construction company anywhere on the planet. And a lot of the principles that we use today are from that Columbia education program, which I paid $50,000 for. So that $50,000 has paid itself over and in multiples because, you know, all the people we bring into this program, the ST University program and our Emerging Leader program here at Structure Tone, they love it. They just feel like it's an honor to be, you know, selected from hundreds and hundreds of employees to be one of the few that gets to sit, you know, in these extra training programs and develop their career. And the principles from Columbia, to me, were the best I've ever seen as far as training and education goes. I loved my time there and the company is now benefiting for many, many years afterwards. So some of these investments that look like they might have been a loss, sometimes they're not just a loss. Sometimes it's an education.

Matt: Let's go back and talk about that program at Columbia. What was the format of it and, you know, what were the concrete takeaways that you were like, "Oh, I have to implement this?"

Jim: Well, the format was there was 40 executives from 20 different countries. It was 7 days a week, 14 hours a day, very rigorous from morning to night. And they really wanted you to socialize and literally move in together. They did not want you going home. The thing I got attracted to was that, for the first time ever after 20 something years of doing the program, they agreed that they would do a two-week and then another two-week instead of four straight weeks. And I said, you know, I can tolerate that. I just couldn't imagine leaving my family and my company for four straight weeks. I could imagine possibly doing it for two weeks in the spring and then they let you do two weeks in August. And I said, you know, August is kind of an easy two weeks compared to any other time of the year.

So they really did consider the needs of top executives. The classroom was only, you know, CEO level participants. So you really got a chance to hear from folks that are just like you with similar problems from around the world in multiple different types of industries. You know, there was no other construction firm there. There was one other real estate executive, but there was government officials, there was oil executives, there was automobile executives, there was a couple of Navy SEALs, commanders in the Navy SEALs were there. And in fact, it happened to be during the time that Osama Bin Laden was found and killed. I was with a couple of Navy SEALs that morning in the gym. It was pretty cool to have, you know, kind of that type of relationship with these folks because we had already been working together as students, so to speak, for several weeks. And I was pretty impressed that I was, you know, with this whole program that people like that were in the room with us.

So we were able to hear from world-class authors and, you know, business thinking experts, people that have developed some of the best, you know, management concepts that are being taught at the business schools but also used by the most successful firms in the world. And one of the things I took away was simply journaling. You know, at the end of every day, we would sit for 45 minutes and write out the biggest ideas learned from the day, the idea is that impacted you the most. And today, we now use that at Structure Tone for all of our Emerging Leader programs and our ST University program where we expect them to do the same, is write down the big ideas that are affecting, you know, impacting you in a positive way that you wanna copy and remember and not forget.

I have my book. It's filled from front to end. It's a Moleskine book. It's sitting behind my desk. So, you know, things like what is it like to be, you know, in the ready mode for being a leader and teaching you that concept? You know, what are the things you would be doing if you were in ready mode as a leader, you know, being outward thinking and focused on others, you know, things like that.? And, you know, instead of just what do I need? It's like getting set for a golf swing. You know, what is the setup for it? And little things like that, it creates a discussion. So they give you basically a walkthrough of what they believe you should be thinking when you're in your leadership mode.

But what was more important was then, you know, the teachers stopped teaching and the author stopped talking and the 40 executives ended up in a conversation around the room, you know, "How do you do it? What does that mean to you? What do you like the most about that? What do you disagree with?" And we covered all aspects of motivating staff and, you know, we had a lot of great discussions about highlights of being a leader and lowlights of being a leader. And, you know, the common ground we all walked away with was, you know, none of us are really that different, and even though we're in different industries in different countries, you know, building a business or, you know, creating a more sustainable bottom line, a steady bottom line, and strategic planning, you know, we all have the same challenges.

So I walked away feeling much more normalized that I had grown up my whole career in one company and it was like I was in a bubble. So maybe that was another reason why I really wanted to go because I wanted to hear from the whole outside world in a very intimate setting, you know, what else is out there that I don't know about? And I walked away saying, "Oh, I'm already very well exposed to strategies that are needed, you know, for growing our business." And I did walk away with a lot of risk aversion strategies, things I wasn't really appreciating. And I did learn from some of the other...you know, safety was a big thing talked about and I walked away saying, "You know, I'm not appreciating this enough." You know, the way it represents a value. It's not just the value. It's a behavior. And your behavior is the way people would...you know, people model behaviors and people are attracted to leadership that make them feel safe and motivated. And I think safety is one of these things that you have to just understand, you know, it's not something for a checklist to say, "Good, you know, I checked that box." We teach safety and safety's important to us. You have to literally...it's everyday, everywhere, everybody, safety. And that's kind of our mantra at Structure Tone is now much more formalized and, I gotta say, it's a whole team effort here. I wouldn't say that I had a lot to do with building that, but my appreciation grew exponentially at the end of that training program for safety listening to the other executives.

Matt: You said journaling was a big part of what you took away from that. Do you still journal today or was that just for the class?

Jim: I do. I do. You know, the habit of hearing something that's impactful. So I've got two journals now. One is the one that I kept from Columbia from 2011. So if I find an article in a paper and there's like a phrase that's hidden, I'll literally physically scissor it out. I'll cut it out and tape it into the book because that's part of journaling is, you know, you don't have to write nice and neat like you're writing a story. You could use markers and crayons if you wanted to. You could, you know, tape things in there. So I put things in this book or I write things down in this book that are in line with that concept of, you know, if anybody ever came in here, if I was going tomorrow, bus hits me, I'd love that book to be found.

You know, somebody read that book, my son would read that book and he would say, "Wow, this is pretty cool. This is really interesting stuff that I could see where some of these ideas he lives by come from." And I'd love to think that that book was a good representation of my style. There are also things I wanna remember that I don't think I'm great at yet that I wanna work on. But the other book is that I keep now is the book that I wanna give my son. You know, I envisioned that when he goes to college in a few years that I can put together this scrapbook of, you know, 25, 35, 45 different little statements or things are nuances that he can take as a starting point for him to maybe live by some of those ideas and sayings.

Matt: Do you remember a recent entry?

Jim: A recent entry? Well, you know, there is one, now that you gave me a couple of seconds. Like, there's one that is really important to me and, you know, I think I've been saying this to people recently, and I don't know why that is except for that I think there's some people with some personal situations that made me wanna say this to them, and that's, "Live life by addition, not by subtraction." And I think the concept is basically just a reminder to yourself, you know, it's this grass is greener thing in life where you say, "Hey, maybe I should leave this good thing I have because there's something even better." And I've seen people make big mistakes in their career where they're constantly leaping for the brass ring and they're not realizing their own potential by just sitting tight and keeping on the path they on, that there's more potential in front of them where they're at. And, you know, it's like when I went to Columbia, I wasn't quite sure what's out there in the world. So I wanna be exposed to this other stuff. And I walked away saying, "You know, I'm kind of happy where I'm at." I'm exposed just as much as anybody else is. We have similar problems and issues. And, you know, the saying is, "Live life by addition." So add up the things you have, appreciate the things you have, and don't live life by subtraction. You know, don't be adding up the things you lost and the things you don't have.

Matt: That's great.

Jim: And, you know, if you read that, you know, I think if 100 people read it, you know, 80 people might just not even notice it and 20 people might say, "That's kinda cool," and 10 people might say, "I'm gonna remember that one," 2 people might take it out and put it in their journal. I'm one of those people.

Matt: So it sounds like passing on wisdom and life experience is something that's important to you. Did you have anybody other than your dad at Structure Tone that you kind of looked at as a mentor that was really important to your career?

Jim: Yeah, there was a couple of people along the way. My father retired. You know, sitting right next door to me was his partner John White. And John didn't try to be a mentor to me and I wasn't looking for him to be a mentor, but he just was by his presence and I just liked his style. He was a very calm guy. He was very much engaged in whatever it was he decided he was gonna be committed to. You know, I loved his old-school building, you know, his skill set as a builder. He was really widely recognized as one of the top builders in New York City. And it wasn't just his knowledge of how to build a project, it was his leadership skills. You know, he was a motivator and he can go to a job site and really change the course and the outcome of a job just by his involvement. And, you know, it was the way he spoke to people. He was resecting everybody, but certainly, you know, made it clear to people what was expected and just had a very nice style, very nice way about him. And I try to model that. I have my own style and, you know, sometimes I would like to try to be like John White, but you know, you gotta be yourself and you gotta be good at being you. But he really impacted me for the years I got to work right next door to him, you know, about a decade worth of time.

And then, you know, Bob Mullen today is...you know, I call Bob my partner and I think Bob feels the same way. Bob's got a style too that's very different than me. He's a listener. He's a great communicator. Not Likely gonna say as much in a room full of people as I might, but man, when he talks, you wanna listen because he's thought about what he's gonna say and he's really smart and he's got an engineering background. So a little different than my background. I might be a little bit more vocalized and I put things out there a little bit, willing to explore a little more, experiment a little more, maybe envision the future a little more, you know, to his steady, organized...he's a very well structured guy and I think he and I make a great team. So I've been lucky to have Bob in my life here at Structure Tone for a while.

And you know, my early days was I was very much impacted by a guy named Jim Hurley. Jim passed away a couple years ago, just as he should have been retiring. When I came out of college, he was definitely the biggest impact on me for several years and he had this "get it done" attitude that I've never seen before. I've never seen since. He can get really just about anything done. And he did it with a smile. He can get hot-tempered, not in a very negative way, just in an aggressive way when it came to getting something done. You know, it was kind of, "Get out of my way. I'm gonna get whatever the assignment was done." And he would roll his own sleeves up. He was not a make other people do the work and he's gonna stand by and watch. He would get right in the middle and nobody was as good at numbers as Jim was.

Matt: You've talked a lot about Structure Tone University and developing, you know, young talent. What are the things that you look for that somebody would be a good candidate for that program?

Jim: Well, leadership potential. So, you know, somebody that really has shown us at a young age that they realized that the world is not revolving around them, that they're willing to, you know, have a do whatever it takes attitude, but they're also willing to be part of a team. So it's one thing to get your job done that day, but it's another thing to, you know, check in on your teammates that are part of a project, you know, it could be a client project, it could be an internal project. And when somebody is, you know, standing out from the group, this person just seems to have a nice way about them and the other folks that they're working with are kind of drawn to that person, they're showing us, you know, very early leadership skills. And it's those types of people we, let's say, thorough grading system for year-end reviews. Now we do reviews four times a year at Structured Tone, but our system tracks people's upcoming potential. Their volatility, meaning likelihood that they're happy and loyal and committed to, you know, where we're going as a company or maybe have expressed or shown some reasons why they're more volatile and could consider other opportunities in their career outside of Structure Tone. And we measure, you know, just generally their performance amongst, you know, a few of the key ingredients on the score chart.

So we look for high potential, the stars, the people that are really performing well, and we want them to know we're gonna invest in them. So they're the ones we look for first. And, you know, they've committed to us, they've shown us a lot and created a lot of value. We wanna give them back as much as we can and develop their career. And we offer a lot of outside the company training opportunities. So we've actually shipped teams of people to Denver. We've shipped people to hotels where we've taken outside, very well-recognized speakers and trainers to spend multiple days with our people, and given them certificates, and it's documented in their personnel file here, which is an application we have. It's an automated Internet cloud-based system. So it's pretty cool. They can access from remote, you know, how their career is developing. We've invested just recently in West Point, they're leadership program. We've invested in Columbia University education programs and NYU real estate and construction programs for our staff.

Eric: Yeah. Have you had to change that program at all in the last 10, 15 years as millennials hitting the workforce more? Has that changed any of your university?

Jim: Yeah, I would say that we...First of all, it's not just millennials, it's just overall inclusion as a general umbrella. You know, the fact that we can go into a lot of our meetings today and, you know, I can certainly be the first to complain that there's not enough diversity in the room. You know, when you have six male white folks sitting there talking about a construction problem, you can probably go back 30 years and there's another six white male folks talking about the same problem will probably come up with the same ideas and the same solutions with nothing new. I'm not criticizing. I'm just saying that if you had six different people with different backgrounds, you could end up with some really great ideas and really challenge the current status quo. You know, we wanna be a company that's gonna be much more diverse and not like, you know, that stale, same ideas, stuck in our way. And again, it sounds critical. I'm not trying to be critical, but you know, we just know that the better approach is to be diverse. So we're really working on diversity, and millennials are very much in that category of, you know, let's be aware of that.

There's a couple of things with millennials. One is that they're a third of the workforce. They're a third of our company today. In fact, now the number is probably more than a third. It's probably high 30% and there is a donut hole, is the term used by our HR folks, in the Gen X group where 20 years ago, a lot of the Gen Xers made a left turn or a right turn and left the construction industry to go to technology. And that hole has never been filled. So the millennials, we really do need to get them better prepared sooner and realize that as the baby boomers are gonna graduate, we're gonna end up having a little bit of a gap in our management if we don't do something about it. So we've been working on that. We've been giving the...There's a junior level training program in ST University. There's a management or middle level and then this is a senior leadership level.

So the other thing with the millennials is we have to upskill some of our senior folks to, you know, make sure that they're okay and ready to work with these millennials. So there's, you know, the technology stuff, for example, the millennials are light years ahead of some of our baby boomers, just as an example. So if we end up with millennials working directly under a baby boomer, we got a little issue going on there, where a millennial wants to work one way and the baby boomer is not really sure what he's doing. So, you know, there's an example, just one of many, where we've got to not only do training but just take a good look at, you know, matching up people well and make sure we're uptraining, upskilling some of the more senior staff.

Eric: Do you find it hard to attract people into the construction industry? Do you feel like there's still a draw to technology or financial industries over construction?

Jim: Yeah, I think, you know, the idea of being a craftsman is old school. I don't think kids are coming out of college and thinking that they wanna, you know, have a tool belt. And I think that's the basic issue. And when you say construction, you know, they're not completely aware that construction management is, you know, typically somebody with a buttoned-up shirt and you know, shoes. You know, you think there's a pair of boots and, you know, some kind of tools involved and certainly a hard hat. So, you know, the idea of being in an air-conditioned office wearing flip-flops is certainly more appealing to a college grad. So, you know, we've got that basic issue to contend with. So what is going on in construction...two things. One is our company is investing in the outreach into, you know, the college age and high school age.

When I mentioned the Boy Scout Explorer program, that's high school age stuff. Also the Ace Mentoring program as high school. We've got quite a few colleges we work with on recruiting and training. So we've got...some of our staff are adjunct professors. We are doing a co-op program with several colleges, you know, we're involved in minority and women programs where we're doing some outreach and setting up some job fairs and things like that to display a career in construction. And yeah, some of it is self-serving to get people to join Structure Tone. But it's just as much, you know, if you wanna increase the number of opportunities to have not only just the millennials and then I don't know what they're calling the next generation after that, you guys probably know better than I do with the phrase.

Matt: Gen Zs.

Jim: Gen Zs. We wanna get them to, you know, get the numbers back up a bit and to increase the number of diversity opportunities. We need to do outreach. We need to let people know this is a great career. We have started an apprenticeship program where we're reaching out to the trades and letting them know that we know with 5, 10, 20 years of trade experience, they're a great candidate to come in as a superintendent, project manager and, you know, make a transition. You know, when you get into your 60s, you know, you gotta ask yourself, if you're a tradesman, do you wanna still be working in an environment that can be somewhat less safe and less comfortable and, you know, is your body gonna let you do that kind of work until you retire? Do you wanna make a transition and be in a different environment?

Eric: That was a question I had. How often do you have people from the outside come in and be part of that program?

Jim: You mean actually have a success with the people joining the company as a result of those programs?

Eric: Or, no, like, a tradesman, outdoor worker to come in inside being part of the program and being part of, you know, management.

Jim: You know, I don't know the stats off the top of my head, but I'm gonna tell you it's on a steady diet. And I'm gonna say not a month goes by where we don't have somebody joining us from the outside transitioning in the way I just described. We do have quite a few tradesmen that do make that change or our own laborers, you know, that are Structure Tone employees that decide that they're ready for a change and to become a superintendent and put on not a suit and tie but a button-up shirt, be involved in the management of the whole project and not just be involved with the cleanup and the organizing onsite. We just view that as, you know, we love to be a technical company, you know, to have more tradesmen in our rank and file is only better for us, that we're just that much smarter as a building company because that's what our core service is, it's construction.

Eric: So going back to maybe the CEO/chairman job position a little bit, what would you say makes you different from other executives at that level?

Jim: Well first is I've been at Structure Tone for 30 years and that's my full-time number of years here. That's different. Very few companies are gonna have somebody at the top that's able to say that they have been at the top of the executive team for 20 years and in the company for 30, but I think coming, you know, from a family of builders and it's not just my father from 47 years ago when he started Structure Tone, his brothers and sisters, my cousins, I mean, there's probably 15 or 20 construction companies of some type within the Donaghy extended family. You know, there's a real comfort level in our family with me in particular, you know, in the position I'm in with being in this business and having a real passion for it.

You know, one of the things I've just had a knack for has always been not just the building piece, which I really have a passion for, the operation side, it's also the development, the staff development piece and the IT side. So going back when I came out of project management for the first time, first job I was given in the corporate side of the company was to build our IT system. And I can tell you with certainty my father didn't even know what he was asking me to do when he asked me to do it. He just knew that something had to be done, which is what his visionary thing was always about. He couldn't exactly always tell you exactly what had to be done, but he knew something had to be done and he would follow it through to make sure something was getting done. And he knew IT was something that could be strengthened and that systems were important for clients to know that they can count on the information that we're getting to be accurate and thorough and detailed and transparent.

So I got involved and we built our first network. We, you know, started deploying laptops and increased our training and started investing in software systems and started developing our own software. You know, we developed a sales program that, you know, was better than anything the Salesforce company had. Up until several years ago, I would put it up against that company. Today, we are now a Salesforce user. So we have adopted the best and brightest for that particular type of software, but we were really ahead of our time at that time. And I've always had a knack for IT and I think that also helped us with the data centers, the data center industry as a whole. We were always a leader in that, we were the largest in the world in the late '90s and the early 2000s. And today, I think, you know, the geographic footprint of that industry just has evolved so much. You know, we lost our top position there but not our passion to be at the top and we're working hard to get back to the top of that market. And I think that had a little bit to do with my passion in being, you know, an IT-oriented executive.

Matt: That's great. We have a couple of kind of what we call like rapid-fire questions and we ask you some simple questions that are yes/no or short answers. You know, I've heard it described that if you live in New York area, you either summer up north and upstate, you go down the shore, or you go out to Long Island. Which one do you prefer?

Jim: I'm a Hamptons guy.

Matt: Okay. All right. What do you like about the Hamptons?

Jim: Well, I met my wife there 22 years ago and we love to go boating and fishing and, you know, occasionally some golf, but barbecuing in the backyard is probably still the top thing we love to do.

Matt: You ever played some of the classic courses out there like Shinnecock or national golf links.

Jim: I've been able to play every one of them and I think there's terrific courses out there, but my favorite is National and I love the Atlantic Golf Course. You know, it's a personal feel.

Matt: Okay, that's real cool. We grew up right next to Charles B. Macdonald's first golf course in America, Chicago Golf. So he is the guy who also then went out and made a National Golf Links. So we're right in that area. So I'm very familiar with his story and the whole beginning of the golf in America.

Jim: Terrific.

Matt: How many hours do you sleep at night?

Jim: I go for seven. It's a range of between five and on the weekends I try to get eight to catch up a little bit.

Matt: When do you wake up?

Jim: 5:30.

Matt: Take the train in?

Jim: I have a car. Typically, either I get picked up or I drive and I'm out of the house by 6:30, 6:45. And, you know, I get to wherever I'm going by between 7:30 and 8:00

Matt: First website you check every day?

Jim: It's "The Post." About 4:30 to 5:00, between 4:30 and 5:00 I'm up. I do tend to get back to bed after I read "The Post" for about a half hour. I can't explain that one, but that's just what happens over a lot of years of, you know, waking up early. But then I go for "The Wall Street" on the way in. And I usually get through about half of what I wanted to read in "The Wall Street" in the morning, and then at the end, you know, on the way home, I catch a little more of it.

Matt: What's your favorite New York City restaurant?

Jim: My favorite is gonna have to be...depends on the situation, but Keens Steakhouse is still number one and it has to do with, you know, family tradition. We'd go there for my father's birthday dinner each year and there's something about that place. It's the history and the classic steakhouse experience.

Matt: So it's been around a long time.

Jim: Yep. Early 1900s. Yeah.

Matt: What's something that you believe that few others do?

Jim: I believe trust and honesty is simply and easily the most important part of everything in your life. And you've got to always work at that because, you know, you can sometimes take things for granted and you gotta make sure you keep trust and honesty in your relationships. And I think that's the basis for a lot of things that I do well at Structure Tone.

Matt: That's great. What's your favorite book you've ever read?

Jim: My favorite book is gonna have to be "Good to Great." I mean, I've read a lot of books, but I just seem to always go back to, you know, the concepts in that book. I read Jim Collins prior book, the "Built to Last." And I love the research he did and that's what led me to read the "Good to Great." You know, there's quite a few other books I read that I like, but that's still my favorite.

Eric: Have you ever seen the movie, it came out in 2015, called "Brooklyn?"

Jim: Yep.

Matt: It's about an Irish...

Jim: Irish girl. Yeah.

Matt: Yeah. 1950s Irish immigrants. I thought about that when thinking about your dad's story,

Jim: My mom came over at 16, so she actually reminded me a lot of that girl in the movie, yeah.

Matt: Do you have a favorite quote other than the, "Live life by addition not by subtraction?"

Jim: My more recent favorite quote is to "Live in the moment." Try to be in the moment. And that's not from a fun, you know, have a great time. Although sometimes it's that too, you know, to really enjoy life when you get the chance to enjoy the life, but to appreciate the things you have. You know, you don't know what tomorrow's gonna bring. And, you know, you got to also respect that in other people. I think that's maybe even more important is, you know, live life each day, you know, like it's your last and it's more to do with appreciation for what you have, but also respect that in others to let people also have that opportunity.