This small business based in Colorado saved itself from a lawsuit that would have put them out of business– all with their strong company culture.
David Shigekane, whose last name is so hard to pronounce that people shorten it to “Sugar,” knows what qualifies for bold leadership. He’s lived it.
David was appointed the president of The Neenan Company in 2014 after scaling internal ranks for 18 years and weathering what would be a near collapse of the $165-million-revenue company. This is his story.
The Neenan Company, a Colorado-based design-build firm that houses architecture, construction and real estate development services all under one roof to reduce middlemen costs, was hitting its stride in 2011.
They had $165 million in revenue and 250 employees. Things were looking good, until one day a school in the town of Meeker, Colo. called. They were closing their brand new $18.9 million school that The Neenan Company built due to structural concerns around a gymnasium wall that had apparently moved by inches.
The Neenan Company, considered a leader in progressive real estate solutions, shook with concern.
Had they made other mistakes? Were there other structural concerns on different job sites?
They sought to find the answer, and quickly.
But so, too, did a Pulitzer Prize seeking journalist who started to dig to discover if there were business ethics concerns underpinning the structural mishaps.
Nearly 50 newspaper headlines scathed the business, several on the front page, many of which questioned The Neenan Company’s moral compass.
“There’s a motto out there any PR is good PR,” David says. “Don’t believe it.”
They were facing what David calls “a black swan event.” Or, in David’s words, “an unpredictable incident that has dire consequences to your company. You can’t run from it, you can’t hide from it, all you can do is prepare for it in order to survive.”
“We were given a death sentence with one percent chance of survival,” David says.
The company could have gone bankrupt. They could have taken the $9 million they had in the bank and closed.
Instead, the founders of the company met in a boardroom and reinforced their values: responsibility, accountability, transparency, and effective relationships – all in a manner to serve the client. This is what they built a business model on and affirmed to their clients for decades.
David remembers Neenan founder David Neenan saying, “We’ve asked our employees to embody a culture of responsibility and integrity. How can I look them in the eye, if when they think something goes wrong, all that goes away?”
They were going to endure this storm, integrity intact, profits in peril.
Media headlines flew. Neenan employees were asked by clients to hide their work trucks from job sites. But the company kept their pistons firing away, pointed squarely towards their values. The company paid for the complete reviews of nearly 100 projects. Neenan executives and Randy Myers, who served as president at the time, met personally with many clients. They discovered that one of their engineers had lapsed in his certifications, righted the situation, and kept to the grindstone. They committed to revamping its internal quality assurance process and management team, including teaming up with an insurance broker and provider to create a task force that would meet monthly.
In the end, zero lawsuits were filed against The Neenan Company. A result considered unfathomable in their industry with this kind of media hype. David says the culture at Neenan and its commitment to company values made the comeback possible, with half of its employees investing a combined $2 million back into the company.
They say “come hell or high water.” That was hell. You’d presume, then, high seas ahead.
And indeed, today, The Neenan Company not only repaired it’s excellent brand reputation, it’s continued to generate $150 million in revenue and employ 145 team members. In addition, the company earned the American Business Ethics Award in 2013.
Neenan’s story of grit, passion, commitment, integrity, business sense, emotional quotient, and human sensibility is imitable.
This article was written with the permission of The Neenan Company, as the Zenefits’ staff continues to find and publish stories from real small businesses across America. Follow us with more stories on Instagram.