Preparing Future Leaders at McCarthy

Summer 2014

Perhaps nothing tests the talents of a top executive more than an emergency. For example, the president of a construction company’s Jacksonville, Fla., office was awakened at his hotel at 3 a.m. and told that one of his buildings was on fire and that, tragically, three people had already died. He was needed in a meeting room near the hotel lobby in five minutes, where his senior management team was already assembled and awaiting his direction.

When he walked into the room, the firm’s legal, insurance, public relations and safety people also were there — and all of them quickly began shouting questions at him. Meanwhile, he was continually receiving text messages and hand-written notes updating him on the fire. Outside the meeting room, clamoring for answers, were members of the media and television cameras. How could this have happened?

Fortunately, it didn’t happen. This was a simulation, a training exercise and a module in McCarthy Building Companies Inc.’s leadership development program. A total of 20 executives went through the exercise between 3 and 9 a.m. that morning.

head shot of Derek Glanvill

Derek Glanvill

“All the training that the executive has received must be applied to this simulated situation,” said McCarthy President and COO Derek Glanvill. “It is incredibly enlightening to see how people perform under pressure in a simulated crisis that is as close to a live situation as we can make it.”

Companywide Training

According to Glanvill, every employee at McCarthy is involved in its training program and must achieve certain training goals each year. McCarthy Build U, the firm’s personalized approach to employee development, empowers employees to take control of their personal and professional development through a comprehensive array of in-person, online and self-directed training opportunities.

One important focus for the company is the top 10 percent of performers, those with high potential who eventually will be in line for senior leadership positions in the company. McCarthy feels a special urgency to bring along the best and the brightest early on. The company is 100 percent employee owned, which means all profits stay within the firm. Many key staffers opt to retire at a considerably younger age than do those at most other construction companies, and they must be replaced with new leaders.

In addition to training for the next generation of leaders, McCarthy also requires all employees to identify two other people within the company who could replace them in their current position. Glanvill explained that he cannot promote someone to a more senior position if there is no one to replace that person in his or her current position.

Entering the Funnel

The company uses specific metrics and performance criteria to identify its top 10 percent of talent. Once selected, these individuals enter a training program that can last for more than a decade. About 200 people currently are in various stages of leadership development at McCarthy. Glanvill looks at the leadership program as a “funnel,” with many young potential leaders entering the top and a few future executive vice presidents and presidents emerging at the bottom. Along the way, these employees experience three levels of the funnel, as they move from being “emerging leaders” to “operating leaders” to “strategic leaders.”

The leadership program begins for these employees when they are in their late 20s or early 30s and continues throughout their 30s. Most enter the final phase of training in their 40s. That’s when things get really serious, because the only trainers for the final phase are Glanvill, McCarthy Chairman and CEO Michael Bolen and a number of other senior leaders. This final phase of training lasts about a year and includes financial training, client development, business development and how to build a group’s talent management system. In the final phase of training, Glanvill and others meet with these executives every six to eight weeks. When these individuals finally emerge from the bottom of the funnel, they are ready for all of the challenges that they will face when they take on the company’s top positions.

Performing a ‘Pre-Mortem’

One example of the innovative thinking that goes into the McCarthy Building Companies training program is the “pre-mortem.” While most senior real estate executives are probably competent at performing a post-mortem — that is, at looking at something that has gone wrong and figuring out why — McCarthy wants to do better than that. The company wants its executives to be proficient at avoiding problems by anticipating them and doing everything necessary to keep them from happening. Derek Glanvill explains:

“We teach people to conduct pre-mortem thinking. We tell a leader that the worst that could happen has happened. That person’s first response is usually that such a thing could never happen, because we at McCarthy do this and that; however, you must drum it into their head that it did happen. I stop them right there and say, ‘I’m not asking if it could happen, I am saying it did happen.’ I want them to look at the project we are about to start and do a pre-mortem on it.

“You can apply pre-mortem thinking to anything — even to driving home from work. For example, [imagine that] an accident occurred. Why? What caused it? Inattention? Texting? Talking on the cellphone? In doing a pre-mortem, you work backwards from there. It is a way to mitigate risk. Most of us are naturally optimists and we block out a lot of things or say, ‘this would never happen.’ At McCarthy, we are not trying to create fear in our leaders; we still want them to use their entrepreneurial, innovative thinking skills. But in construction, it is important to have that pre-mortem mindset. If you are wired that way, it will give you an acute sense of attention to risk mitigation and improving the resulting outcome, which will produce successful results for our clients, industry partners and employee owners.”