The bar for Mortenson Construction can never be set too high nor set by others working in the industry, as far as Dan Johnson, company president, is concerned. “We don’t really try to compare ourselves too many times to our competition,” he says. “We try to compare ourselves to what’s possible.”
What’s possible is a Minneapolis-based contractor working on exceedingly challenging, innovative projects right across the continent, and notably in the Midwest, where it has jumped to 11th in regional revenue from 17th and 25th the previous two years. Its current ranking is based on 2015 Wisconsin, Illinois, Indiana, Missouri, Ohio and Michigan revenue of $594.3 million; the firm also ranks among the top 10 in the commercial, health care and education sectors. These ranking and revenue figures don’t take into account results from Mortenson’s home state of Minnesota, which will officially join the ENR Midwest region in the new year.
While a constant eye on outside industries can and does teach Mortenson’s professionals what’s possible for the construction industry, says Johnson, the strive for excellence definitely starts from within.
“Our business is successful based on our people,” concurs Scott Heberlein, vice president and general manager of Mortenson’s Milwaukee office. “We invest in our team members, and we make sure that our teams that are doing such great work day in and day out with our customers are the ones that are really the shining examples for the company. Our ability to be successful as a professional services firm really relies on having the best talent in the industry.”
That lends itself well to what is an increasingly challenging workforce market, says Greg Werner, senior vice president and general manager of the firm’s Chicago office. “The recession took its toll, and we actually lost some of the subcontractors in the area. But I think, more than anything, there’s just much more of a hesitation or maybe a conservatism to subcontractors scaling their businesses up and then all of a sudden having the market change and having to scale their businesses back down,” he says. “Quite frankly, we’re looking at continuing to grow and expand the capabilities we have to self-perform work. We like to, as a company, have our boots on the ground into the project and beyond some of the traditional general contractor roles.” As an example, expanding cast-in-place concrete work internally allows Mortenson to better control labor and cost factors, says Werner.
In the mid-1990s, the company placed three senior officers into what it dubbed the Mortenson Center for Construction Innovation. This put into motion new company processes, including integrated project delivery, lean construction, prefabrication and preassembly, says Johnson. A big change occurred when Mortenson worked on the Walt Disney Concert Hall in Los Angeles for famed designer Frank Gehry. “It forced us to do things differently,” he says, noting the firm used 3D and BIM modeling for the first time on the project.
“We’re always looking for what that next new thing is,” says Johnson, “and how it can be applied and how it can add value to our customers.” Construction’s productivity is pretty much at the same pace as it was a couple of decades ago, he points out. “It’s time for this industry to improve. Some of the needs such as craft worker shortage are going to force our industry to do new things, to innovate and provide faster, better quality solutions for our projects.”
While the firm does not specialize in one particular market, health care holds a special place for Mortenson in Wisconsin—where Heberlein’s office celebrated its 25th year open for business in Milwaukee in 2015—as well as in Illinois, where it was the catalyst for the opening of a Chicago office in 2000.
The company’s largest regional project to finish in 2015 was the $128-million Froedtert Hospital and The Medical College of Wisconsin Center for Advanced Care in Milwaukee. “We’ve been doing work with Froedtert basically constantly since we opened an office here,” says Heberlein. “Our business is built on relationships and partnerships, so we’re much more about finding the right customer fit for our organization than we are trying to find the right project fit for us.”
The Center for Advanced Care is a good example of partnerships, says Heberlein, noting the implementation of an integrated project approach between the owner, general contractor and CannonDesign, a firm recognized last year as the ENR Midwest Design Firm of the Year. Without the formality of an integrated product delivery (IPD) triparty agreement but with some similar attributes, the approach delivered a lean, integrated project on time and under budget, “with significant scope added along the way.”
Down in Chicago, “we’ve been working on what I would consider to be one of the most complicated health care projects that we as a company have ever executed,” says Werner, referring to the Advocate Good Shepherd Hospital. “We’ve had to execute the project in 26 separate phases,” says Werner, who coincidentally has been with Mortenson for 26 years. “During what is a complete modernization and expansion, we touch every square foot of the hospital that stayed fully functioning ... for the care of patients in the community they serve.” Mortenson, on this job for the past three years, recently turned over the new patient tower and south addition. Right from the start, “you’ve got to have a good team, good team chemistry and good communication,” says Werner, whose crew worked with HOK Architects and the Advocate ownership team to develop very specific protocols to prevent contamination, vibration and noise issues. “It’s just a very complex puzzle putting all the various pieces together and allowing the hospital to move into various swing spaces so that they can keep functioning while we build the new space.”
Health care was most certainly an entry point to the Chicago market for Mortenson. Key local projects have included the Elmhurst Center for Health, the Silver Cross Hospital replacement in New Lenox and, as lead partner, the Ann & Robert H. Lurie Children’s Hospital downtown. Just last month, a groundbreaking ceremony was held in Rockford, Ill., for a new $485-million hospital for Mercy Health, scheduled for completion in January 2019. The facility will be the only Level 1 trauma center in the Rockford area and will have a focus on treatment for women and children.
In Milwaukee, a key project was the Sojourner Family Peace Center. A public-private partnership, the downtown facility provides education, advocacy and shelter resources to keep families safe from domestic violence; the 24-hour crisis center includes space for assorted support services, such as the Children’s Hospital of Wisconsin, Child Protective Services and the district attorney’s office.
“This initiative that the city, the county and the state partnered with Sojourner on allowed all of those services to be brought into a central location, so that those who are in the shelter don’t have to leave to get the help they need,” says Heberlein. “It’s the first of its kind in the country.”
Good Times Ahead
Among contractors doing work in the Midwest in 2015, Mortenson had the fifth-highest revenue in Wisconsin at $262.3 million and the 12th highest in Illinois at $286.23 million. Looking ahead, both Heberlein and Werner are keen on future opportunities. “There’s definitely a lot of excitement in and around Milwaukee for the next five to 10 years,” says Heberlein, noting in particular Mortenson’s work on the new Milwaukee Bucks arena and, up the road in Green Bay’s “Titletown District,” the new Lodge Kohler hotel.
“We gravitate toward the more complex, more challenging types of projects,” says Werner, highlighting the new data center being completed for Atlanta-based QTS in the old Chicago Sun-Times printing plant.
“One of the things we pride ourselves on is, ‘Done means done.’ When we finish your project, it means it’s done and it’s going to be ready for you to use,” says Johnson, who presides over a family business formed in 1954 and today has about 5,000 team members split almost evenly between craft and professional/non-craft personnel. The day prior, he had celebrated 30 years with the company, including early days in Milwaukee and then, along with Werner, launching the Chicago office. “I can honestly say I’ve never once thought about leaving Mortenson or joining another organization,” says Johnson. “It’s just been a great place to work. I am a better person because of the people I get to work with every day.”
It starts at the top, says Werner. David Mortenson, company chairman, “has, in my 26 years with the company, always been one to push the organization and challenge team members to be innovative … and do things better than we are doing them today.”
What drew Heberlein to Mortenson 19 years ago is what, he says, still draws people to the company. “For us, it’s real,” he says. “It is a Midwest, family-based organization. We’re a sizable organization, but it definitely does not feel that way.”