Six way structure builds versatile management team

Two of the three project managers at Merit Electric were trained as civil rather than electrical engineers.

More than a curiosity, the electrical firm's skills with dirt, water and concrete have played a major role in defining its position in the region's construction business.

While the two-year-old firm still is young enough that it takes a close look at the electric portion of about any mid- to large-sized commercial or industrial project on the drawing board, its owners think they can develop a strong niche in jobs that combine electrical work with civil engineering.

Such as? Airport lighting projects.

Pump houses.

Installation of traffic signals.

When it takes on those projects,Merit Electric can reduce the number of subcontractors with whom the general contractor needs to coordinate.And that's landed Merit some business, says Rod Soule, one of the company's three project managers and one of six co-owners.

About 75 percent of the company's work is subcontracts.

It's the prime contractor on the remainder.

Its clients range from major contractors such as Clark & Sullivan and Q&D to private owners such as Tamarack Junction Casino and Garden Shop Nursery.

The firm seeks to develop another competitive edge through extensive prefabrication of electrical components at its shop.

Prefabrication in the shop can be done more efficiently than assembly at job sites and allows better quality control, says Kyle Gardella, another of its project managers and owners.

The shop provides a good way, too, for Merit to try out new workers teaching them basic skills, getting a close look at their work ethic.

That's important because Merit's owners have committed themselves to developing their own workforce whenever possible, and the availability of skilled workers is one of the biggest challenges they face in growing the company.

Merit currently employs about 30 workers.

Soule, Gardella and Ryan Greenhalgh, Merit's third project manager and owner, put their own work ethic to the test building relationships with general contractors "The relationship gets you where they'll accept your bid," says Soule and carefully selecting the work they'll chase.

"For two years,we've done very well," says Gardella."We're ahead of where we thought we would be."

At the same time, however, the company's owners continue to focus on retained earnings.

Merit needs more working capital to take on larger jobs capital carries the firm until the happy day that it's paid for its work and the owners want to purchase more equipment to reduce their reliance on expensive rentals.

But at the same time, the company's owners don't want to grow too large.

They're searching, Gardella says, for that sweet spot where risks remain comfortable and margins are attractive.And that may mean, he says that Merit will need to learn how to turn work away.

Searching for that sweet spot with a sixperson ownership group has its moments.

Along with the three project managers,Merit's owners include three field staff Tom Hill, Jeff Rotsma and Leonard Almarez.

"There have been some noisy meetings," laughs Greenhalgh.

Still, Soule says, the six-way management structure has proven successful because each of the six respects the others.

"We have common goals.We all know what our jobs are, and we all know where our expertise lies," he says.

Greenhalgh and Soule hold degrees in civil engineering; Gardella is the

electrical engineer of the trio.

Soule adds that the six-way ownership has succeeded because the principals in Merit Electric have built trust over years of working together.

They met while working together at a firm that's now one of Merit's competitors.