Russ: Welcome back to The BusinessMakers Show, brought to you by Comcast Business, built for business. I’m very pleased to have as my guest today, Howard Tellepsen, the CEO of Tellepsen. Howard, welcome to The BusinessMakers Show.
Howard: Glad to be here.
Russ: Tell us about Tellepsen.
Howard: Well, we’re a fourth generation, family owned and operated contractor. We are active in commercial, institutional, and industrial markets. We are experiencing as successful a period as we’ve ever had in our history. (Russ: Congratulations. That’s good) Thank you. And that history goes back 106 years, when my grandfather started building in Houston.
Russ: Okay, so it’s not a brand new company then, is it?
Howard: No, it’s not.
Russ: Okay, and so we’re talking about construction; building these massive buildings that we see all over Houston, TX. Is that right?
Russ: And do you venture outside of Houston?
Howard: Seldom. Fortunately, you know, with the prosperity that, generally, Houston has in its size, we’ve been able to get enough work here, but sometimes clients will bring us when they have a job outside, but it’s not very frequently.
Russ: Okay, and so the way this works for you, you don’t, you’re not like a developer that goes out and speculates, and buys a piece of land, and builds a big building in hope that you fill it up. So, it’s developers that find you to build their building for them, right?
Howard: Right. On the commercial side you would have a developer, but we build hospitals, and so that’s, you know, for the hospital owner; churches. So, we’re the contractor. I feel like we take enough risk as it relates to supply of craftsmen, material prices, weather, and so we do not take the risk as it relates to the project itself.
Russ: Okay, but hearing you say that, there’s obviously, some of these projects take a year or two to complete, and in a changing market, you could get caught, right?
Howard: Correct. Yeah, we have to be very careful about that and I’d say the average size–length of our project is anywhere from 18 months to 2 ½ years.
Russ: Okay, wow. Since you’ve been in charge, which started what, 30-35 years ago?
Russ: Okay, how many buildings; do you have track of it? How many have you built, or would you estimate?
Howard: Well, I wouldn’t say me, but (Russ: The company) yeah the company. While I’ve been in a leadership role—yeah no, I have no idea because there’s all kinds of buildings. No, I don’t.
Russ: If you’d guess would it be more than 100?
Howard: Oh yeah. In that time frame we’d be several hundred.
Russ: Okay. And have they all just gone smooth as could be?
Howard: They don’t all go that way, no. But certainly the majority of them do, yeah.
Russ: Okay. What’s the most challenging aspect of running Tellepsen, in your opinion?
Howard: I think our workforce; with the changing demographics, the majority of the work done, as a general contractor, is by subcontractors (Russ: Right.), and so, the workforce now is mainly Hispanic. They’re great family people; they’re hard workers; but they have not been trained like the union of years ago when I came through, when I was young. So, I think that’s making sure that the quality of what’s expected from our owners, that we have the workforce that can deliver that quality.
Russ: Okay. And I would guess, over time, you sort of start partnering up regularly with certain subcontractors that have done a good job for you, or are you always kind of shifting around?
Howard: The size and complexity of our work, there is a number of subcontractors, you know, that follow our business. It’s competitive, so they are selected not only on their price, but also on the teams that are available that they can commit to our work, and so we’ve got a large following because we’ve been real blessed for the caliber of the work we do that subcontractors follow; you know, Tellepsen’s work.
Russ: And it must be about you to you just have been in business for as long as you have.
Howard: It is. We’re real blessed. To have been here this long, and so, I give my grandfather and my father, you know, a lot of that credit before me. And I heard somewhere recently that employees in the construction industry like to work for family owned businesses. And so that is a plus, I think, for us because we fit that category, and then we have the stability of having been here so long that they’re comfortable that their career is going to be maintained by coming to work at Tellepsen, because we’ve been in business for over 100 years.
Russ: Wow, that’s pretty cool. So, if you look at your stint in the leadership position and then after that, I’m going to ask you about your dad’s and your grandfather’s, but what’s kind of a few of your favorite projects that you built?
Howard: Well, I’ll start out by saying, we know in Houston of the original Summit where the Rockets played basketball (Russ: Absolutely.), and then the Compaq Center, because of their naming rights; when they moved downtown to the Toyota Center, and incidentally, we were involved with a national contractor that builds sports arenas on that project; Lakewood.
Russ: Alright. Converting that from The Summit, (Howard: Right.) and so, Compaq Center to Lakewood Center–
Howard: To convert the Compaq Center to a house of worship that seats some 18,000 people, was certainly very challenging, and that was about a 75 million dollar job done in 15 months. So that was a complex and challenging job. We built the Jan and Dan Duncan Neurological Research center for Texas Children’s Hospital in The Medical Center, and I don’t know if you’ve seen it or not, but it has a glass exterior, which is to replicate the DNA, and so it’s a very complicated skinned structure. Then, to be able to know what’s going on in that building in terms of research, you know, for children is just it’s very exciting to us. And then I don’t know if you are familiar with St. Martin’s Episcopal Church on Woodway in the Tanglewood area; and so it was the first Gothic type cathedral that had been built in the United States in 50 years, and so that was a real special job for us and then our family has belonged at St. Martin’s since its beginning in the 50s. So, that was very exciting.
Russ: Well, it just seems that those such diverse projects, I guess though that, you know, you’re working always very close with the architect and designer, and hopefully that relationship goes well. It must be enormously important, I would assume.
Howard: You’re very astute. That’s—it’s very important for your designers, both the architect and the engineers, to come up, and it’s as much for constructability; they have an idea, and it looks great, but is it- (Russ: It might now work.) right, well is it the most effective way, both schedule and cost. So, we have to work very closely together. All of Tellepsen’s projects, that were put on the team early, about the same time as the architect, so we’re working together in order to produce the most construction for the budget that the owner has.
Russ: Okay, that’s interesting. I think you know we have a business audience here that listens to this that—so, you’re having to win the project before the architect has completely designed it, is that right?
Howard: Definitely. Most the time, the architect has been selected shortly before the contractor, and in some cases the architect is involved at least in the interview, where they might not be voting, because it mainly is the owner, but the owner charges the team of the architect. They might have something in their mind conceptually, but before they start designing, it’s the responsibility of the contractor to work with the architect to make sure as the drawing and this idea is being developed, gets done in a way that is the most economical and also the most efficient from the time.
Russ: Okay. I would assume that a deal can fall apart, even at that stage; even if an architect and builder were selected and then they couldn’t necessarily agree or work together?
Howard: Yes, I’m sure it could. That’s never happened to us. Sometimes the dynamic might change in terms of the market, like right know we all know about the change in oil prices, so there are a couple of jobs that we have that the architect and contractor are doing fine together and we have come up with a price for drawings, but just due to the economy right now, the owner has pushed –we call the pause button, and so they are just waiting; wanting to have a little more visibility before they actually break ground. So, nothing has gone awry, other than the project has not started yet.
Russ: Okay, okay. All right, so let’s step back again and look at what’s so unique about Tellepsen, too; that it is a family owned and operated business, has been since the beginning, and has been over 100 years. I mean, you were, I guess, as a young person, I mean you grew up with the name and with understanding the family is in the business, and you must have been told the story of the very beginning from your grandfather. Share; just share some family perspective on Tellepsen.
Howard: Oh gosh, I’d love to. My grandfather was a Norwegian immigrant. His father left Norway, as so many people did in Europe, in order to seek a better life for his family. He had a wife and two sons; one being my grandfather. And he was killed in a construction accident, working as a carpenter building the Williamsburg Bridge in New York, and my grandfather was only three years old. With the consent of his mother, he became a cabin boy on a sailing ship at the age of 14, and he went around the world, and he ended up in Panama, and he worked 1906-1908 as a carpenter building the Panama Canal (Russ: Oh my goodness.), But he remembered in the 7th grade, which was the most schooling he had in Norway, that he wanted to explore the new frontier in Texas. So, he came to Houston in 1909, and he started building.
His first project was a house over in the Montrose area and, interestingly enough, that house still exists today, and it is owned by the University of St. Thomas, and their History department. In the 1920s, when he was only in his 30s, this is what’s amazing to me, he built several projects that are still being used today, and we call them projects of significance; Miller Outdoor Theater at Hermann Park (Russ: Oh yeah); the chemistry building at Rice University; across the street, like at the front door of The Texas Medical Center, he built Palmer Memorial Episcopal Church; The Museum of Fine Arts. So, those were all (Russ: While he was young?) while he was young, and in his 20s and they’re all still being used today. That’s exciting, and then so we then, we were involved; The Texas Medical Center got started, you know, early 50s, and we built the original St. Luke’s Episcopal Hospital and the original Texas Children’s Hospital.
So, we were there, you know, from the beginning of health care. We’ve been really blessed to have been in Houston for 106 years and have built facilities where people live, play, work, learn, heal, worship. It’s very unusual to have that broad scope of work for such a long period of time.
Russ: It is, and it’s unusual for it to be successful all these years; it’s unusual for it to not be bought out by some big company. What do you attribute the success to?
Howard: Our values, quite honestly. We have a very strong culture, and I saw it with my grandfather. I was able to work about six years at the company; retirement came with death, and he was 88, and my father also died at 88. So, I got to see my father, my grandfather first, then my father work. And, we have a very strong culture, and it’s based on our values and one of the things that starts with mutual trust and respect; you know, how we treat each other, how we treat other members of the project team; the architect you mentioned, engineers, the owner, and then, you know, we have never really wanted to be the biggest, we just hoped that we would want to be the best; and certainly, we’ve had some challenges on projects, but we’ve been fortunate to last through a lot of cycles. I have an expression: Don’t mistake genius for timing. And clearly, we have benefitted, as future generations, from my grandfather, in 1909, picking Houston and not Detroit.
There were only 65,000 people in Houston. I mean, look at it today; you could have never imagined, you know, the success of The Texas Medical Center, which is like multiple times larger than any other medical center in the world. Our Houston ship channel; 50 miles from the Gulf and we are an inland city with a port of Houston. We also do industrial construction, you know; petrochemical, refining, and all of the plant work that is up and down the Houston ship channel. We don’t have to go anywhere in order to be able to work here, as far as our industrial company.
Russ: Before I let you go though, it got on my radar that you’re being honored by the SER Organization that you’re apparently involved in quite significantly. Congratulations for that, but tell us about your involvement there and this honor that they’re bestowing upon you.
Howard: Well, thank you, and it’s not me personally, it’s the family. SER is very active over in the East end, and that’s where my grandfather, you know, started. And Tellepsen’s headquarters, on 17 Telephone Road, we had moved—for 40 years, and we had moved out of it and SER has purchased that. So. I think the combination of Tellepsen’s roots coming from immigrant, being able to provide jobs for the clients. Our work force are clients from SER. They provide education, they provide workforce training, they provide employment opportunities. So, they appreciated the history of the Tellepsen family, being in construction, and then our family, one of our legacies that I’ve inherited and tried to do my best, as have my four sons to carry it on, is to be involved with something larger than ourselves.
And SER really is so much larger than us in terms of annually helping about 4,000 people who are out there with their hands, providing labor, that allow the facilities that we’re responsible for building, to get done. And so, I think that’s how the combination came together.
Russ: And you eluded earlier, the changing diversity of Houston, and so you’re in there embracing the change to try to make it work as well.
Howard: Yes, what SER does, it really, it’s very inspiring to the Tellepsen family. And it’s important to Houston and it’s important to our workforce that they continue to bring along and educate and train workers for the future.
Russ: Alright, and you’re their major honoree at the upcoming gala, right?
Howard: The Tellepsen family.
Russ: The Tellepsen family. Well, feel good about it, no matter if it’s the family or you, but that’s really cool and congratulations for that.
Howard: Well, we are honored. We really are.
Russ: Howard, I really appreciate you telling us the story about Tellepsen.
Howard: Well, thank you for giving me the opportunity.
Russ: You bet, absolutely. And that wraps up my discussion with Howard Tellepsen, the CEO of Tellepsen. And this is The BusinessMakers Show, brought to you by Comcast Business, built for business.
brought to you by