For a story in the May/June issue of D CEO magazine, I interviewed Fred Perpall, the 38-year-old CEO of The Beck Group. He’s a fascinating guy, and we had a terrific conversation. Transcribed, the interview came in at 5,000 words. Far fewer made it into the print edition.
Readers didn’t hear, for example, about how Perpall likes to have one-on-one “meetings” by heading outside of the company’s Ross Avenue office in downtown Dallas and walking around the block. (“What’s genius about it is that it’s refreshing, I have better conversations out in the fresh air, we’re stretching our legs, and once we go around the block, we’re done,” he says. “It’s better than waxing philosophical in a conference room for two hours.”)
Here, then, as part of D Real Estate Daily’s ongoing “Bonus” series, are additional perspectives from Perpall, who talks about his life growing up in The Bahamas, his management strategies, and how, in just 14 years, he went from joining The Beck Group as a 24-year-old to becoming its CEO.
Athletics and Architecture
I lived in The Bahamas until I was 17, when I moved to Arlington to attend college. Most of my life until that point was built around athletics; I played basketball and ran track. I had the opportunity to do both at the University of Texas at Arlington, but I ended up doing neither. I quickly found out that architecture and basketball didn’t go hand in hand, particularly because basketball is a two-semester sport, and design studios are both semesters. I transferred to UTA as a junior. As I got serious about architecture, my athletic career came to an end.
I was probably about 6′ 2″ when I was 11 years old. My father had a brother who was about 6′ 5″, Uncle Percy; he was a mason. My dad had me work for Uncle Percy in the summer. That’s when my interest in buildings and the construction industry was piqued. I loved that these guys were hands on, using their hands to build, in our case some retail and hospitality type products. I got into architecture because I had always loved creativity and sketching and all that, and I always wanted to be in the “building buildings” business, but spending a hot summer in the tropics mixing cement? You’d be out there all day, lifting sand and mixing it with water and cement and a little bit of lime, and the architect would pull up in his nice air-conditioned car, look around for 30 minutes, then be on his way.
It has been great for me at Beck because we do both design and construction; it feeds both desires. I particularly enjoy the diversity of people I get to work with to get the job done, not just the creative types or the technical types, but the combination. That diversity for me is very exciting, because I was interested in doing both.
I had my master’s degree by the time I was 22. I started college when I was 15. We have a system in The Bahamas where after finishing grade six, they test you. If you test at an 8th grade competency, they put you in 8th grade. The only thing it doesn’t take into consideration is maturity. It didn’t equalize with me until I was probably 18 or 19, when everyone is equally immature!
People tell me, “You’re so young as a CEO.” Yes, I’ young in age, but in terms of tenure this is the 17th year of my career. I have been blessed to have had a head start and to have wonderful parents who kept moving me along. You don’t do this by yourself. You have good people around you who help you make good decisions.
I remember when I called my father to tell him I was dropping out of architecture to play basketball. That was a good one. That lasted about five minutes. That was the intention, but by five minutes into the call, I was dropping basketball to play architecture.
After I got my master’s degree, I went to Rome for six months. Living in Europe made me really miss the Caribbean. The United States is very different from Europe, and The Bahamas is kind of like a mixture of both. I also thought that, at all of 22, I’d go start my own business. I thought being in a smaller place, I’d have a better shot. This was in 1993. So, I went back to The Bahamas for a year and tried my hand at running my own firm.
My parents were just amazing, God-fearing people. Small-town values, hard-working individuals. My mom ran two cafeterias; she was up every day at 4:30 or 5 a.m.. The job with Uncle Percy was respite from peeling potatoes. My parents were really into keeping their kids busy. If we were not at church, we were at Boy Scouts, if we weren’t at Boy Scouts, we were working in our business—everything from scrubbing the floors in the kitchen to bussing tables to washing macaroni pans, it was always about doing something. For them it was all about work ethic.
My mom ran the business, but it was really like a ministry. If people came in and didn’t have money, they would get fed anyway. When she passed, my sister took over the business, and profitability went up 60 percent. We realized then how much food my mother was giving away. My mom taught me to always be interested in other people—not just be interesting toward people, but being interested in them. She was just a very special person. They say the sins of parents fall on children, but I think the blessings of parents fall on children, too. My four sisters and I are all living off the blessings of our parents.
My dad, though, if you’ve met me, you’ve met him. He was an engineer; he’s retired now and living in The Bahamas. For him, it’s all about discipline, hard work, accountability, doing what you say you’re going to do. And that’s one of the reasons I really love working at Beck. Any number of mentors I’ve had in the firm here, they’re the same way. We’re a very humble company. We try not to brag. In fact, I remember us having a long discussion about whether to put our name on this building. We don’t want to be too showy.
After I went back to The Bahamas to start my own business, my first job was designing a home for a husband and wife; I was more therapist than I was an architect. And I realized that the business I wanted to be in was building. Even when I was an architect, I wanted to be a builder. At Beck, we are in the design and construction business, so it’s like a fulfillment of a personal dream, on a much different scale.
Our values here at Beck are to take care of people—take care of the people we work with us and take care of our clients. We aren’t motivated by the profits of any project, we’re motivated by keeping great relationships, we’re motivated by what’s best for everyone long term. We know we have to perform in the short term, but we think if we keep a long-term perspective, the short-term performance will always take care of itself.
It’s also important to hire great people. Life is too short to work with people you don’t enjoy being around. We’ve hired 150 employees last year and now have more than 500 firm-wide. We expect to create 150 to 175 new jobs this year, and we’re in 11 different markets: Dallas, Houston, Fort Worth, Austin, San Antonio, Atlanta, Tampa, Denver, Washington, D.C., Mexico City, and Los Cabos,
For me, in leading a company, you have to be curious about people. That lesson from my mother, to always look people in the eyes and be interested in them, is very important. If you’re always thinking about how do we help our customers get to their dreams, how do we help them get to their goals, if you’re thinking about that on the one hand, but you’re also thinking about how do I help my people who work with me every day to get to their dreams? If you find away, through your business, to connect those two things, then you’ll always have the success you want as a business.
Collaboration and Competition
How many companies hire a 24-year-old and turn him into a CEO? That’s a statement about the company, more than it is about me. And Beck has done it not once, but four times. I’m not a one-off. We’ve had five CEOs in the company’s 100-year history; I’m the fifth. All four of us, other than the founder, all got to CEO before we were 40, and all were hired into the firm as 20-somethings. Of the five, three of them have been Becks, but every last one of them has had a 20-year run.
It’s easy to try to make the story about Fred. The way pop culture works is they want to make it about you. But the way we have to keep it oriented is this is not about me, it’s really about what the company believes and the investment we make in our people. How that manifests itself is, you end up creating leaders for yourself. We’ve also created a lot of leaders for other companies, too. We’re looking at a big joint venture with another company, and this company’s founder came from our company. It makes it easy for us to come together, because they believe in a lot of the same things we believe in.
Great companies collaborate with their colleagues, best-in-class companies spend time with their competitors.
The world is getting very gray. It used to be that competition was black and white. But some days we may compete, but other days we may be collaborating on a building another architect designed. Today’s business leaders have to be more flexible about looking for ways to collaborate more. We believe that space between collaboration and competition, that “collaboration,” is a big part of the future of all business.
And by the way, it’s fun, too. When you get out there and see what other people are doing, it jazzes you up. When I played basketball, you know who I wanted to play against in the summer? Not my teammates. I wanted to go down the street and play with other teams. Best-in-class athletes do that, too. LeBron James works out in the off season with Kevin Durand. Best-in-class businesses spend time with their competitors, too. I’m a big fan of that, and I think it’s a big opportunity for us.
I began my career straight up as a design architect. I like to make that distinction, being a creative architect, that’s probably the furthest path to CEO, because it’s a creative position. You’re blue sky, always fighting the business in many ways, because you never want a budget or a schedule. When I left The Bahamas I came back to North Texas in 1998, I joined a firm called Urban Architecture. A year later, it merged with Beck.
We were a much younger company. I was 24 at the time, and the average middle manager at Beck was older than our principals. What happened to us, particularly those of us who were younger in the firm, who were curious about a lot of things, we instantly had a pathway to explore more things we were curious about. For me, I was always curious about business, how do you create value, how do you retain customers, how do you have the empathy it takes to put yourselves in a customer’s shoes?
There were also different ideas about what success looks like. Sometimes when you’re in a company that only deals with one part of an industry, you may only be optimizing that particular piece of what that overall industry does. We have a big belief here, borne out out of lean practice principles, that you can’t optimize an industry by optimizing just one piece of it. To optimize the whole, you have to optimize each piece of it.
Moving to Beck at a younger age, it gave those of us who were “children of the merger” the opportunity early on in our career to explore new things. Working with people in different disciplines also made us have to rise to a new standard of proficiency.
About 10 years ago, I began taking more business classes. I started to think about finance and the impact the cost of money has on what we do, about customer service and customer relationships. Sometimes as architects the customer can be the main inhibitor of us getting what we want. It’s different when you have a 100-year old company, and 90 percent of your business comes from the same people over and over again. If you want to do great design and keep your customer happy—they’re not mutually exclusive things, but it does require a lot more work. If you want to have great design and build your building on time and on budget, it requires more collaboration.
That whole notion of “collaboratition” also is internal, because we have competing ideas, different mindsets, and that tension has to play out. it takes great relationships to undergird that tension. When we marry, many of us marry people who have different skill sets than we do. It’s the whole opposites attract. If that’s good in marriage and in your personal life, it’s good in business, too. You just have to have that strong partnership, so when that tension plays out, it doesn’t kill the relationship.
A Different Kind of Diversity
In America, we like to think about diversity only from a gender or ethnic standpoint. But diversity is much broader than that and much deeper than that for us here at Beck. It’s about brain styles, it’s about experience, it’s about age. This is the first time in American history that we have four different generations together in the workplace. At Beck, the CEO before the CEO before me is still here. So how do we leverage the benefit having all of these different generations working together? For us it’s a big opportunity.
Best-in-class companies understand not only their customers, but they seek to understand their customer’s customer. So if we’re building hospitals and universities and high schools, each of these businesses are trying to reach different customers in their own right. So, us having that diversity here under one roof play out in a very rich way, helping us understand our customer’s customer in a way that might prove to be more valuable for them.
We celebrate the tension that comes from diversity. Teams that are homogenous—in other words, teams of all architects, or all builders, or all women, or men, all black guys, all white guys, whatever—teams that are homogenous get along quicker, earlier. But their performance is always going to cap at a certain point. Teams that are diverse, they may take longer to get along, but when they start to perform, they’re going to outperform the teams that are all homogenous in a way that is unbelievable. They have more points of reference, they have more capacity, the range is broader, the perspective is broader, the capacity to perform is broader.
We want to have that kind of diversity of expertise, of background, of experience, of generation, gender—we want to have all that at play in our firm. We believe that when you’re in the services business, the value you create is only as big as the capacity you have, and the capacity you have is only as big as the ideas and people and experiences you have under one roof. We love that.
I always give people the blank stare when they ask about diversity. Because they’re thinking, “Oh, you’re a black guy; let’s talk about diversity.” But that’s not the way we see diversity. When you combine different perspectives, it may take longer to get along—maybe at first I can’t tell all my jokes. But over time, when you can do that, it’s unbelievable.”
The Pathway to CEO
After Urban Architecture merged with Beck in 1999, I began moving up through architecture ranks. About midway through all of this, in 2004, I was sent to Atlanta to establish our design practice. It was an existing office that had construction but not architecture. I focused pretty much on the value we could create for our customers, which, again caused me to go way out of my comfort zone and look at the construction business, which was different. At the time, we didn’t have a lot of architects running construction jobs.
It also put a lot of pressure on my education. I had three degrees at that point, but they were all in architecture. At some point when you’re the business executive, being a designer doesn’t cut it; what about accounting, finance, risk management, marketing and PR … it put pressure on me to go get competencies in those areas. I did that through a number of ways. I joined Vistage, which has been a big part of my career growth. It allowed me to connect with other business leaders and learn how to run a business, not just build buildings. I also went to Harvard and completed the advanced management program, which is an unbelievable program for senior executives.
So again, how does a company take a 24-year-old and create a CEO? It’s only through the persistence of our former CEO and the people in our talent development team, as well as the many mentors and managers, too many to name, that has allowed me to go through this track. By 2009 I was running the business in Atlanta, and at the beginning of January, I became CEO.
Culture and Strategy
People think the CEO is in charge, but in reality, everyone else is in charge. You just have to be a great steward. Those folks have put me in this role, and I feel a tremendous responsibility. It has been unbelievably fun, too. Life is too short not to have fun. If we have to show up here every day, we better be enjoying this. That’s the other part for me, it has been flat-out enjoyable. If your energy isn’t good, the energy of the company won’t be good.
It’s like culture. When people say you have a good culture, what they’re really saying is that you have good people. I want the best and brightest to feel like their dreams can come true here, and that they’re going to enjoy it along the way. I don’t know if anything is more important. You could have the best strategy in the world, but it won’t mean anything if you have the wrong people. The right culture trumps strategy every time.
Outlook at Beck
What I’m most excited about getting back into is getting reengaged into the Dallas community—that’s probably the biggest opportunity for me over the next few years. And it’s great to be with a company that has that track record and priority in place. Like many things it’s hard to measure the direct benefit of that but we know that over time that giving does come back many fold, and that’s something I have a passion for. You don’t take your leadership hat off when you get into the elevator to go home for the night.
It’s great to be back in Texas, great to be back in Dallas. The opportunities here are just amazing, and in terms of a place to raise your family and employ your craft.
We’ve had double-digit growth in revenue. All that is indicative of the markets in which we work: Tampa has rebounded nicely, Texas is going gangbusters, Austin is growing very fast, we’re looking to grow our office in Houston—there’s so much activity there—and North Texas is doing very well.
I’m also fortunate that Peter (Former CEO Peter Beck, who now serves as executive chairman), who has been an amazing leader for us for 22 years, in many ways, he was very gracious to ride out the downturn and get me put in place with a little bit of wind at my back. That’s how you develop credibility with your people and within the community, so that was very gracious. He has been a wonderful mentor—but he’s not going anywhere.
I use sports analogies all the time. In track and field there are two races I love, the 4×4, which is a hard race, you have to sprint the whole thing, it’s a long, long sprint, 400 meters. By the time you get to the end of that 400 meters, you’re going to collapse. You hand that baton off right as you collapse.
The 4×100 is a different race, the Americans are great at this. You get off boom, its a sprint, it’s a fast race, and just as you get to top speed, your partner takes off. Now he’s at top speed, you’re at top speed, you have multiple times to hand that baton before you get out of that zone, it’s like 15 percent of your entire leg. So you both are running top speed and you hand that baton off to him. Then his partner gets up and running and they both get to top speed, then they hand off at top speed; nobody collapses. You’re able to get the baton off much faster than doing it individually.
At Beck, we believe good leadership succession is like running the 4×100. You hand the baton off while you’re both at top speed. I told Peter, you have to be 15 percent in the passing zone—he has to stay here for at least another 10 years, so we have a nice long hand-off.