Q&A With … Ramin Cherafat

Q: What has impressed you most about the leadership you’ve seen from various companies in Kansas City in responding to the current health crisis and its economic impact? 

A. I’m impressed but not surprised with how Kansas City has come together. You have so many great companies here, and everybody’s taking it seriously and being respectful of the guidelines, and no one is thinking they are above the rules. The city is coming together, and I couldn’t be prouder of how our team has responded. Our leadership team and key managers are doing an excellent job. We talked just this morning about whether  we were this focused and zeroed in every day. It’s brought our leadership team that was already strong and cohesive back closer and it has kept our focus on being really good at what we do.

Q. How does that apply in your sector?

A.  For us, that is building buildings. We’re a construction company. You can have all of these distractions out there, but at the end of the day, the companies that are going to come out of this situation stronger are the ones that are better managed and stick to their expertise. This is happening to everybody, so this is not just one industry or one company. Now, we have a chance to see what companies and communities are the best-run and managed and are going to respond to this the best.  

 Q. Does this experience suggest to you that, as a community, the right organizational structures are in place for public-sector leadership to summon to the cause? 

A. I have been very impressed with Mayor Quinton Lucas and his proactiveness. He has done a great job. Each community is taking this seriously. We are fortunate that in our metro area that the elected officials and the government have taken this seriously.  

Q. Coming out of the Great Recession, did you ever expect you’d have to see another down cycle of that magnitude, especially after such a great run in the growth cycle? 

A. When I look back at the Great Recession and what we’re going through right now, no one company caused those things to happen, but they happened, and you have to respond. How you respond as leaders and companies is more important than worrying about why it happened to you. In the 20 years I’ve been at McCownGordon, this will be our fourth market disruption. And every time, we have emerged out of this situation stronger. 

Q. How were you able to apply the lessons of that experience to your current leadership duties?  

A. The approach I am taking now is that this is happening to everybody, and we are good as long as we stay on top of it and don’t lose our focus on what we do really well, which is taking great care of our associates and customers. Right now we are really focused on our team, making sure they are safe, and taking care of the customers through this time. We can’t control the size of the market that we are in. We’re in a demand-driven industry. It’s not like we can drop our price and people are going to build 10 more buildings. We have to just respond what is happening to us and position ourselves for when this recovers. A month into it so far, we’re doing a pretty good job. 

Q. What are the particular challenges for the construction sector to keep employees safe during this outbreak? You are already such a safety-based industry to begin with… 

A. We have put into place all kinds of new safety guidelines that fall under the CDC, and in some cases we have hired third-party partners to monitor our projects and take temperatures and be there if people have any concerns or symptoms, so we can be proactive. We’ve got people on the job sites making sure we are keeping social distancing. And there are some activities you just can’t do right now, so we just aren’t doing them. But we are doing above and beyond what your typical construction safeties are.

Q. How does the concept of social distancing impact that effort for those in your field? Is it tough for your workers and your business? 

A. It depends on the project. If it’s an outdoor project, such as a greenfield site coming out of the ground, that’s different from a renovation. We have a lot of projects in rural areas, such as South Dakota, Oklahoma and western Kansas, where it is pretty easy to follow those guidelines. It’s the ones that are in urban settings or under renovation where you have to be really careful of. 

Q. Do you consider construction an essential business right now, and are you worried that it will be deemed otherwise by the various municipalities or states? 

A. As long as we follow the guidelines in the communities where we work, and continue to work to flatten this curve, I am confident that things will ride themselves out, and we will be deemed essential. We’re monitoring the situation where in the country it has become non-essential, but right now we don’t feel like it’s something that’s going to happen in the Midwest. 

 Q. How do you compare the COVID-19 crisis to the Great Recession, especially with the impact on commercial real estate? 

 A. It all depends on how long this goes on. If it’s another two or three months, I think the bounce-back will be easier than if it stretches on for six months. Specific to the real estate industry and corporations that are looking to do projects, you’re going to see prices come down. Things have gone to a standstill. We’ve had material and labor process going up, and the market was really hot, so there is no doubt that the market is going to soften up, and we are going to see prices come down, which will be good for the customer and our industry. They were getting to the point where some pricing was making the projects prohibitive. 

Even though we are only three weeks into this, you are going to see companies re-evaluate how much real estate they need. For us, we just moved into a new corporate headquarters, and we feel that with the current work-from-home situation, we could probably be there for a long time as we continue to grow. I’ve been surprised how impressive and efficient we can be with so many of our team members working from home. You’re going to see companies start to challenge the status quo of how much square footage they might need.  

Q. Many of your employees, and much of the population, are under duress. What can an executive, in any sector, do during these times to help combat that problem? 

A.  First and foremost, you have to communicate, communicate, communicate. When people aren’t given information, or don’t know what’s happening, human nature is to fear the worst. We have put into place a pretty intense communication plan that includes both written communication, with e-mail messages, and also small group gatherings and meetings and open forums for people to ask questions. It’s normal for people to have anxiety and concern during times like this. It’s our job as leaders in the organization, and also in the community, to ensure that we are listening to people and supporting them at this time. So, we have a big focus on that right now.  

 Q. What can business leaders learn from times such as this, and what lessons do you think we will have learned moving forward? 

A. The No. 1 thing is to always know your core business and expertise. From what I’ve seen in our industry is that things have gone so well for so long that some construction companies and others in our industry started doing things that they typically wouldn’t do. I’m a big believer in the “hedgehog concept,” meaning you do what you do, and you do it well. For us, that’s building great buildings, taking care of the customers and being creative and innovative and doing that really well. And what you’ve seen happen in our industry in the last 10 years is construction companies trying to branch out and get into other lines of business. That can be risky, whether it’s investment or development. Be really good at what you do, and have those strategic partnerships when you want to do other things, but as a company you have to be careful that you’re not spreading yourself too thin and taking on things that you’re not an expert in. 

 Q. So, the right partnerships are more important than ever right now in business? 

 A. Absolutely. One of my favorite sayings in business is “birds of a feather flock together.” You want to have partnerships and business relationships with the best-in-class companies. It’s those relationships that are going to carry you through the tough times. It’s easy to do well when everyone is doing well in the marketplace. But it’s during the tough times that those relationships that you’ve built and forged with other great companies and partners are going to carry you through. Sticking to what you know and what you do really well can go a long way. During times like this, it’s a time for the well-run and -managed companies to further separate themselves from the pack and come out of this in a stronger position in the marketplace. That’s our goal.