Shop Talk: Q&A With James Madigan, F.W. Madigan Co.
Photo/Christina H. Davis
James Madigan, Treasurer and Vice president of operations.
James Madigan and his brother Francis W. Madigan III are the third generation of their family to run the Worcester-based construction company F.W. Madigan Co. The company was founded by the pair’s grandfather in 1937 and they took over the business from their father about 10 years ago. Today, the company has about 30 people on staff and it’s managed to weather the collapse of the construction industry during the Great Recession relatively well. Here, James Madigan discusses how his company managed to survive as well as his involvement with the Worcester office of the Better Business Bureau.
>> When did you come on board with the family business?
I did a quick stint running a company my dad had purchased in the New Bedford area starting in 1987. I worked there for six years and then in 1993, we decided to close that business down and both my brother and I focused on this business.
>> What’s the division of labor between you and your brother?
In a small business it sometimes blurs because we both wear a lot of hats. I’m responsible for the day-to-day operations of all the projects that we have. I handle all the folks on the jobs sites and the project managers here in the office. My brother handles finance, the estimating department, our bonding and insurance needs. I’m more of the operations guy and he’s more of the business guy.
>> How’s business?
I’d have to say it’s steady. Much like just about everybody else, in September and October 2008, when the market hit the skids, a lot of our customers became skittish or financing totally dried up. Everything in our little microcosm of the world went into panic mode. However, I think we were helped by the fact that our focus was on slow steady growth during the boom years. We didn’t have a lot of fat to trim when the economy slowed. We weren’t too top heavy and we are thanking our lucky stars for that now. As owners, we’ve always stayed involved with our clients as opposed to putting layers of management between us and our clients.
>> Are there particular areas of the economy that you see coming back better than others?
In my little world, it seems the clients that have deep reserves are realizing that their construction dollars aren’t going to go any further than they are today. If they have the money or the wherewithal to get the financing, now is the time to do it. It does look like in general construction is starting to come back.
>> How do you keep quality control when you have projects spread out all over the place?
For us, as it is for just about any construction business, subcontractors account for the majority of the work done. If I take a wild guess, I’d say that 75 or 80 percent of the dollar volume that flows through our company eventually flows out to subs. So we manage the subs very carefully. We prequalify them and we make sure we hire good ones in the first place.
>> Have you seen much competition from bigger national or regional construction firms that might be coming into the markets that you’ve been in?
That’s a dynamic that we’ve been seeing for the past year. It gets back to the fact that we could have been a lot bigger than we are, but then what we would have had to do is find work at all costs during the recession. For larger firms, instead of a $10 or $100 million job, they’ve had to go after a $5 or $8 million job, which is our sweet spot. We’re seeing construction firms that we hadn’t butted heads with in years come back in our market.
>> You were recently named chairman of board for the local Better Business Bureau. Why have you been involved with that organization?
I grew up visiting my dad’s job sites and I remember people saying, “Your dad is about quality… He always says what he’s going to do and you can trust him.” To me, it all gets down to the fact that if you are a trustworthy person you can do well. I was given the opportunity to come on the board, and it really promotes trust in the marketplace, and I thought, “What better way to give back?”
WEB ONLY>> Why was that important to you?
We've both been around long enough and my dad has recounted the tales of cycles that happen in our business. There are a lot of lessons my dad learned in business as far as when you extend yourself too far and how tough it can be when the markets are down. We focused our business to stay at a level that we could mange without getting too big.
WEB ONLY>> Are there particular areas of construction that you focus on?
Not really. We do all commercial, but we're just as comfortable building a school addition as we are a nursing home renovation as we are a new automobile dealership. I think that may have been our salvation. We saw over the years that certain contractors would get heavily involved in the certain types of construction, and then because they were so focused on that one area, they didn't have any fall back niches. We've established an eclectic client base that we do a lot of repeat business for.
WEB ONLY>> You do a lot of projects locally, but how far is your geographic reach?
We just finished up a renovation of a Hilton Garden Inn in Philadelphia, actually. We typically don't go that far out, but we had a client that we built a couple of hotels for in the Waltham area and they wanted us to go to Philadelphia. We also have projects in Laconia, N.H., and Rutland Vt.
WEB ONLY>> What do you think is the best part of being a part of family-owned business?
It is that you are in control of your own destiny. If I put my mind to it, there's nothing blocking me or prohibiting from doing whatever I feel is right. I also have the benefit of working with my brother, who's my partner in this business. In him, I have someone to bounce ideas off of and we work very well together. The older I get, the more I get involved and stay involved in this family business, I appreciate that more.
Watch as James Madigan discusses what he most enjoys about his job:
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