Back to the Basics: Local-Focus Strategy Keeps Tecta America’s National Roofing Footprint Growing
With just a few swipes on his tablet screen, or by punching a few numbers on his phone, Tecta America Corporation’s CEO and President Mark Santacrose can reach thousands of some of the most skilled roofing contractors from coast to coast for almost any situation. That’s the benefit of building one of the nation’s largest and most successful roofing-contractor companies through strategic partnerships.
But when asked to describe the company he’s headed for more than a dozen years, big is not a word he’d use. That’s not the philosophy that helped Tecta America acquire 25 other roofing-contractor companies and grow to about 2,500 employees during peak season. And he said it’s not what’s going to lead to greater success in the future. In fact, it’s the exact opposite.
“Even today, our mindset is that we’re still a small player in the industry with a lot of room to grow,” Santacrose said recently by phone from the company headquarters in Rosemont, Ill. That’s despite reporting growth again in all segments of the commercial roofing business — including service and maintenance — and generating $397 million in revenue from 50 different operating units in 2014. The company ranked second on our 2015 Top 100 Roofing Contractors List (see pages 28-36 for the full feature).
Though the industry has evolved, the recipe for success now isn’t all that different from when the company first started in 2000. The heads of nine roofing-contractor companies considered leaders in their markets joined together with a simple purpose: pull together the best contractors, share and learn best practices from one another, and provide a national footprint that allows the company to offer more services.
Santacrose, who took over as CEO in March 2000, calls it a ‘back to basics’ strategy that built a foundation for a stronger company, ready and fully equipped to handle any roofing problem or business situation that arises. It also really allows the roofing professionals to do what they do best — focus on safely installing, repairing or maintaining quality roof systems that will add value for their customers.
He left the company in 2011 to help lead the Chaifetz Group, a Chicago-based private investment firm, but stayed actively involved on Tecta America’s board of directors. That role, and the company’s commitment to the core principles he helped establish, made for a smoother transition when Santacrose returned as CEO under new ownership. Oaktree Capital Management LLC, a global asset-management firm based in California, purchased the company in 2013 and hired Santacrose back after former COO Mark Gaulin headed the company for an interim period.
“It’s really been exciting for me and everyone here to be back since our change in ownership,” said Santacrose, who celebrated his first full-year back as CEO in May. “Oaktree Capital understands that Tecta does best when we focus on our local operational units and get them to use the great resources we have to offer.”
Building to Scale
Since his return, Santacrose has guided Tecta America through three acquisitions. Though all different transactions, each roofing contractor brought into the fold offered something new and presented good business opportunities that can help better position the larger company as a whole in the future.
That’s how Tecta America became an industry leader in so many areas ranging from new construction and disaster response to solar photovoltaics and green roofing.
One of its most recent acquisitions, Savannah, Ga.-based Metalcrafts Inc., offered both a roofing specialty and a long, successful history of serving commercial clients in significant markets in the Southeast.
The deal, finalized last March after more than a year of courtship, helped solidify Tecta America’s position along the coastline with operations now stretching from South Carolina down to Florida’s southern tip. It could have been the end of a family business started by Allen Lancaster’s father and brothers in 1968. However, that’s what Santacrose and others say they try to avoid when looking to grow in new markets. He said he believes it’s more beneficial to give proven roofing contractors with a rich history in certain regions the autonomy and independence to keep ahead of their competition.
“That’s how they approached us, and it’s held true,” Lancaster said. “They know we’re the experts in our area, and at the same time, they’ve been able to support us when we needed it.”
Lancaster and his brothers and co-owners, Jeffery and Joseph, remain with the company, which also retained its strong name recognition as Metalcrafts, a Tecta America Company LLC. He said it was a difficult decision to sell the family business, but one that made more sense as they learned more about the Tecta America team.
“The things they stood for were what we stood for, and there was never a belief that we weren’t going to be the same company when they took over,” he said. “We built something special in Savannah, and we felt Tecta would be able to care for that legacy into the future.”
Jonathan Wolf had a similar experience when Tecta America acquired his family business, the Zero Company, in 2002. Founded in 1929, the commercial (80 percent) and residential (20 percent) roofing contractor built a strong client base throughout the greater Cincinnati area that expanded into Kentucky and southeastern Indiana.
“It got to the point where I wanted to grow my business and realized we took it as far as we could go,” Wolf said. “Tecta fit because it was a way to upstart the business and take it further, and we got access to tremendous resources that we wouldn’t otherwise be able to get. At the same time, they understood that we were local, that we understand the marketplace better than anyone else, and they trusted us. But we need to show results.”
Wolf, who now serves as president of Tecta America Zero Company LLC, said the company has grown to more than 100 employees and generated $25 million in revenue last year with operations in Louisville and Dayton.
Aside from specialty areas of roofing and reputation, Santacrose said he and the management team also focus heavily on the caliber of people they bring to the company. Most have come up through the ranks of the roofing industry in some capacity, and demonstrate an entrepreneurial spirit and desire for self-improvement.
“There’s no one characteristic or mold we look for, but one thing you’ll find in common in all our leaders is the commitment to people and a sense of urgency to do the job well at a high level,” he said.
There are 35 operating presidents from around the country acting on the same team, which provides a diverse talent pool that has seen almost every situation imaginable in the industry. There’s also a strong emphasis on working with each other to find the best solution to any problem.
“Having a willingness to ask for help and to give it when asked is a really big part of our culture,” Santacrose said.
Among Tecta America’s leadership team are Gaulin, who owned a manufacturing company and served as president of the National Roofing Contractors Association (NRCA); and Senior Vice President of Service Lindy Ryan, who this year became the first female NRCA chairperson.
The benefit of having resources like that available can be invaluable, Wolf said.
“I went from a peer group of business leaders that met and networked through trade groups to having access to my own little trade association within the company,” he explained. “The sharing of information has been incredibly helpful, and I know that if I ask for something I need, I’m going to get 20 responses.”
There’s no area of the business where Tecta America focuses more than on safety, and it shows.
The company boasts 29 ‘A’ ratings with ISNetworld, which connects corporations and contractors that are both dedicated to safe work environments. It also currently has a .54 experience modification rate (EMR), which is roughly half the national average — and is among the industry leaders. Santacrose said he’s extremely proud that they’ve maintained that rating, or lower, since 2000, and that it’s a clear sign that whether in the field or in the boardroom, safety continues to be a top priority.
Companies that don’t have the same commitment won’t likely get any consideration for future partnerships.
“We try to keep it simple,” he said. “All the other people look at the numbers — and you have to in order to put together a financial transaction — but our analysis, our design is all about the leadership. And a commitment to safety. That’s everything to us.”
“There’s no greater priority than safety,” he continued. “It keeps your people safe so they can go home, and keeps them able to come back and stay productive. We think it’s a representation of a high-quality firm.”
Tecta America employees receive more than 2,000 hours of safety training annually, and they’re held accountable through regular internal safety reviews, job safety inspections and reinforced supervision.
“It was clear that they have a strong belief in their employees, in their safety and in their training, which is what we stood for,” Lancaster said when asked about key factors that led to the decision to join Tecta America.
Building for Tomorrow
While the current collection of leaders at Tecta America is impressive, part of the strategy for future success is developing that pipeline of high-quality, talented business professionals within the company. Tecta America annually runs a Building Leaders for Tomorrow program to help foster better leadership in the workplace. Between 20-30 employees considered to be the ‘next generation’ of the roofing industry receive customized instruction on the service aspect of the company, on stronger communication skills and on effective management.
The company also designed a separate program that focuses on building leaders in the field and expanding their knowledge base so they can help others while also improving their own career trajectory.
The key concept behind both is getting quality team members to start building relationships with peers now at their current levels, so that they can more effectively work together in the future as their roles increase within the company.
“From our foremen to lead people in administration, we participate in every level, and our people come back from those seminars just so energized and ready to implement what they learned,” Wolf said. “They enjoy meeting their peers from around the country and can share solutions to common problems that every roofing contractor faces at one point or another.”
Santacrose said he’s confident in the team and encouraged by Tecta America’s position in the marketplace. But don’t call him satisfied.
“Things are constantly changing, and you can never relax today,” he explained. “Sure, you can have a backlog of projects today, but if you’re not looking at the future, you can instead find yourself in a hole and not working soon enough. You’ve got to be looking for those opportunities to improve.”