- Sustainable finance
- Sustainability Perspectives - ESG Podcast by Refinitiv
- Episode 2: The 230 Year Journey
Guest speaker: Cheryl McKissack, President & CEO of McKissack & McKissack .
The 230 Year Journey: Sustainability, Diversity & Innovation
Episode 2 | Duration: 26 minutes
Get inspired by the story of Cheryl McKissack, CEO of McKissack & McKissack, the oldest African-American owned construction firm in the US tracing its roots back to the 17th century. From sustainability and governance in family-run businesses to diversity, inclusion, and technological advancements in the construction industry, she explores a broad range of trending topics.
Keesa Schreane: Hello everyone, and welcome to the Refinitv Sustainability Perspectives podcast. This is Keesa Schreane and today's guest is Cheryl McKissack Daniel. Cheryl is CEO of McKissack and McKissack, the nation's oldest minority-owned, female-run construction firm. McKissack specializes in construction management, program management, consulting and compliance services.
Some of the firm's projects include the LaGuardia Airport redevelopment, Barclays Center and JFK Airport project, just to name a few. Cheryl, welcome to the podcast.
We want to talk about governance and what your firm is seeing in that space, as well as a bit about sustainable construction. But before we get to that, I want to talk about your company's legacy. You know, just in talking about the theme of governance, how your company and your family has managed to build and govern a firm that can trace itself back to the 1790s.
Cheryl McKissack Daniel: You are absolutely right. It is almost 230 years, which is quite incredible in this country. As you can imagine, as a black family, the first descendant of our family came to this country in 1790 as a slave. And his slave master was William McKissack. That's why I have an Irish name. Irish, maybe Scottish name. And he was given the name Moses McKissack the first and taught the trade of making bricks.
So Moses made bricks extremely well -- to the point that we believe that he was allowed to be set free by his slave master and pretty much make bricks for sale. We know for a fact that he gave 365,000 bricks to the Cheers family in Spring Hill, Tenn., because they built their mansion and it is still standing, currently owned by the Saturn Corporation. Now his son was Moses McKissack the second. Now the second was a master carpenter known for his spiral staircases and gingerbread finishes.
I can just imagine. “Man, how was your week?” “I was perfecting gingerbread, finishing homes.” I mean, incredible. But that's what he did.
Now he had seven girls and seven boys. He had to have those boys. And so my grandfather was the first born son. And because they had a name every time they had a girl, his name is Moses Edward John Henry Lewis the third.
His brother Calvin incorporated our firm in 1905 in the state of Tennessee. And that was before there were architectural licensing laws. They were considered master builders. They would design their buildings and construct them. But laws came into effect in 1920. So in 1920 they were forced to get an architectural license or lose their business.
So if you can imagine two black men walking up to take their license in Nashville, Tennessee, in the 20s, they were denied and denied and denied and they lobbied the board.
They were able to get one board member to say, OK, we can not prevent these guys from taking this exam just because they're black. And so they were allowed to take the exam.
You would think that was over then, but it wasn't. They were denied their license. Eventually, though, they were awarded their license and became the first black licensed architects in the country with license 117 and 118 in the state of Tennessee. And both of those original licenses are hanging in my office. I'm extremely proud of that.
Because they were the first black licensed architects, they gained a lot of notoriety across the country. Then the board takes credit for it and helps them get certified in 22 other states.
It's an amazing American story about how, you know, fortitude and perseverance and prayer can really come to light. These men worked for Papa Doc. They travel to Africa. They worked throughout the south and northeast. If you can imagine having crews in Little Rock, Arkansas, or, you know, Tuskegee, Alabama, living in Nashville and having to travel during Jim Crow and segregation. So it's a very interesting story.
The company was then passed down to my father, who was the youngest of six boys, and he, too, was an architect. And he expanded our business into health care. He did a lot of higher ed. He worked probably at 19 historically black colleges and universities, including Meharry Medical School, where there are 10 buildings and he designed nine of those. When he became ill, he had a massive stroke four days before my twin sister and I graduated from college and my mother had to step in and run the business.
She has a master’s degree in psychiatry, which is great for the phobias she had to deal with, with people who now had to deal with a woman at the helm. She expanded our business because she is very much a salesperson and a leader. But most of all, she was able to get myself and my three sisters back into the business. And now my twin sister has a separate company out of Washington, D.C., Chicago and L.A., and I continued on to family business. Of course, my mother made me buy it. And we are in New York and Philadelphia.
Schreane: That's such an incredible story. We're talking about governance and how a firm can build succession plans and how a firm can really build out its own infrastructure. I'd love to hear your story about, you know, taking the firm from generation to generation and in the context of succession. Where do you all go from here? What kind of plans are you making?
Daniel: Early on, I'm sure they were not thinking succession to the degree that we think it today. I think then it was a struggle that brought a family close together. And so they worked through that struggle together. If you think about bigotry from slavery and Jim Crow and segregation, you know how our families sustained through all of those crazy days.
I think that was very much part of our ability to sustain ourselves over the years. Now it's a different day. And so sustainability for us in the future could go a lot of different ways. There are a couple of factors that I look at. Number one, you know, when do I want to hang up my running shoes? What is that going to look like for me to sustain the rest of my life?
What's that going to look like? You have to plan because ultimately it's coming whether you want it or not. And, you know, to have a family business that's fifth generation, you know, I really would like to see it continue.
However, it doesn't have to continue with family. My kids, I don't know where they're going. They're 24, 25.
And I have seen, especially when I have studied this area, the desire for the next generation to take over to the point that the company goes under because that generation is not ready. They're not the best leaders. They weren't indoctrinated the right way. They don't have the support of staff. A whole lot of reasons why the next generation may not make it. So I resolved to myself early on, it may not be my kids. It may be my grandkids. It may be a niece or nephew. But it may not be that either. So what do I need to do in case it's not that? So then that takes you to I think the very next important factor and that is preparing staff for the future. You have to have a tremendous leadership team. And it's something that is strategic. It's not something that just evolves.
Because I have seen also where family businesses have gone out and hired a president or they've promoted the wrong person. And usually that's a result of culture; that person does not understand the culture of the company, the vision of the company. And if they do, they don't, they haven't bought into it. And so at McKissick, I am very conscious and with a watchful eye of who in our company understands what we represent. And I mean to the core. And are they a leader for us in the future? And fortunately, we have a good group.
I have a board and we are in the process of training a young man right now to progress as a leader for McKissack. We have him and we have a couple of others who could fit that bill. And so that is very exciting to me, especially that he happens to be black. But it takes buy-in from staff, number one. Buy-in from clients. Buy-in from all your partners, your banks, your accountants, everyone who has helped you get where you are. They have to understand this vision. And so the transition takes a while. So that's just leadership transition.
Now, what do you do with ownership? That's a whole ‘nother story. OK, now that's when the family comes into play. What percentage do they get? What percentage does the staff get? For them to perform and feel like they're a part or something? And that's our model. You are a part of something bigger than yourself. We give everyone the freedom to be creative and innovative in our company. But within our framework, which is a loose framework. No, we don't tell everybody, you do step one, two, three, four. No. Here is the idea around what you're supposed to be doing. Now it's up to you to figure out how to get there. And I really like this culture in our in our company because it brings out of people their creativity and their innovation. Also, it allows them to grow as a manager, to make decisions, to make mistakes and to understand why something worked well, why something didn't work so well. As a result, we're creating our leaders for the future. So we're looking at leadership on management, organizational structure and then ownership. How does that work? We don't have it all figured out. But of course, I'm not hanging up my heels anytime soon.
See, you raise a couple of issues. So one is the succession planning and looking, having a watchful eye for who can step into roles as well as engaging the board. And you talk about culture and mission. What sort of resources -- if I'm thinking about this, it’s a step by step process. I have a business. I'm designing a governance plan for the first time. I need to think through succession. I need to think through my company's culture and mission. I need to think through how I'm engaging the board. What sort of resources do I need? Is this an issue of talk about money? So how can we reward our people and really get them to buy into what we're doing here? Do I need external consultation? What resources do I need to take those steps to really build a good governance plan?
What's so interesting is as a business owner, you are so busy working in the business that you forget about working on the business. So as I've decided to expand my national brand and there's a reason behind that, too, I've been drawn into a lot of panel discussions and this year one actually was on succession planning. I begin to examine where I was with my business. But at the same time, of course, the Internet is the first place you go. And that's where I found this great article. Actually, it was a guide, 100-page guide from Deloitte. But from there, I have now engaged consultants. I'm doing an RFP right now because now I have a framework of what I want to do. I know that before I meet with them that I need to understand what I want. I need to understand the leadership role. I need to have the basis for them to start work. And so, yes, it's going to require some money, because you get what you pay for. And I'm fine with that because you cannot put your head in the sand and act like this is not going to happen because there is a succession coming, whether you plan for it or not. And you know, that's the bottom line, right? You have to be ready. You have to be ready. If you know, a lot of people aren't. So there goes the business. Exactly.
Schreane: So moving from the governance piece to more of a sustainable design, sustainable construction conversation, just what you're seeing there. We know that sustainability and construction has been a part of the overall sustainability conversation for years. In fact, according to the Environmental Protection Agency, across the U.S., commercial buildings account for 38 percent of carbon dioxide emissions and 39 percent of total energy, mostly because of the energy required to heat and cool and power building. What shifts are you seeing in terms of sustainable building, sustainable construction, LEED and green building? Are you seeing some things now happening that you didn't see in a few years ago? And what do you expect to see coming down the road there?
Daniel: Thirty years ago, there were no MWBE programs. There was no LEED. Minority/Women Owned Business Enterprises, exactly. There was no designation for the state of New York. And so I remember when LEED first came out. And everybody saying green, what is that? And then you have the different levels, the silver, the gold, the bronze.
What I've seen now is that that is a way of life for designers and in construction. And it's been driven, I think, by the consumers, because the owners are saying, we want to make a difference on the green footprint of the United States, the developers. So the individuals who are renting apartments, buying condos, they gravitate to buildings that are designed green. The highest level is what they want. So this has been driven by consumers and now is sort of a way of life.
There was a period of time where safety, which is huge in New York because of the size buildings that we construct, wasn't the conversation as soon as you walk on a construction site. Now, every meeting starts with safety first. And so now it's a way of life
So sustainability for our industry, I believe, is excellent and it's just going to get better. We're getting more efficient with the use of technology. So there is a whole lot less waste. There's clash detection techniques that take place with BIM [Building Information Modeling]. So before structures go up, we're able to model them on computers. And looking at those computers, we can determine how much actual material we really need instead of going out to the site, constructing and realizing there's a tremendous amount of waste.
And what do you do with the waste? A lot of it we can reuse now, and the green has now moved over to the construction industry, how we dispose of materials. So it's huge. Being part of the Berkeley Arena, as you can see now, we have that beautiful green roof, which is spectacular, which has increased the green footprint. So I am very excited and hopeful and inspired by the advances we're making in our industry to help this cause.
Schreane: You talked a bit about the minority women business enterprise, those initiatives that you've seen over the last several years. I know that you consult your clients in the area of compliance regulation as well as D and I. So what sorts of concerns do you see clients and just the overall population in the marketplace is having and what is generally your advice. How do you consult them in terms of that sort of area as it relates to D and I diversity and inclusion?
Daniel: You know, it is very interesting. I was in a panel yesterday and people are accepting the fact that diversity makes money. Our country is built on entrepreneurship, capitalism. And the minute that capitalists understand that they are going to increase their profits by diversity, they jump on it. And the reason this is happening is because now you're getting more creative ideas from people that have a different perspective, whether they're women. We're seeing women in the construction industry tearing it up because they are so attentive to detail and they are finding faster, better ways to progress things in the construction industry.
Schreane: Do you see a lot of women in the construction industry?
Daniel: It’s getting a lot better. Absolutely. Absolutely. Now, do we need more? Yes. And we need more of the minority within the minority. Black women [owned] businesses are two percent in the construction industry in this city of New York City and state of New York. And so that is why I'm expanding my personal brand. I am going out trying to reach and connect with the young women, especially black and Hispanic women, to let them know that they can build wealth in the design and construction industry and that the industry is huge. There are a ton of different areas that they can go in.
Not only that, we're not boring, we can be glamorous, we can wear our heels in hard hats to work and we can have fun. We can have a brand. We can be just like any other celebrity. And so I am very excited about that mission. We need more blacks and Hispanics in our business, especially the women.
And so when I speak, I focus on that. And so advising my clients. You know, it's wonderful that we have grown several minority and women owned business firms. So now we need to concentrate on the minority within the minority and not continue to just go back to the same firms we've been using over and over again. Firms have to progress to a prime role where they're competing dead-on with majority firms. And we need to bring up the next level of firms to make sure that we expand the pool and that creates competition. But the best thing is it makes money.
Schreane: So, Cheryl, tell us, what is the big idea? So what do you see happening in the construction space in this sustainable construction space or even in the governance space that you think will take us by surprise, that you see coming down the pipeline that maybe the rest of the marketplace doesn't see? What's the big idea for the future?
Daniel: I think the big idea is going to be around technology. Construction is a big data issue. For years, however, the IT platform for the various disciplines who have to make a construction project work -- the architect, the engineer, the construction staff -- all of our IT platforms have are not connected. And so as they get connected, it will streamline these mega projects.
In New York 15 years ago, $100 million project or 10 years ago, a $100 million project was a big project. Today, it's not. Today, if it’s not $1 billion, it’s not considered large. And so the mega projects are just increasing.
We have LaGuardia that's $4.5 billion. LaGuardia Central Terminal. The Delta terminal is almost $5 billion right there at LaGuardia. JFK, with all its reconstruction, is $13 billion. We have the Port Authority bus terminal. What's that for? Four billion. And then we have the tunnel that should be built already. It was going to be $10 billion. That's now going to be $25 billion.
So in MTA capital program, you know, it's we're finishing up a $32 billion dollar capital program that McKissack actually oversees. And, you know, the next one could be $50 billion. So these projects are bigger and we need better technology. When you go out to the field, you need to have a handheld. I mean, we have that but is not starting at design and then finishing out in the field.
So it needs to be one platform that can handle the big data that we need to extract information that we need. And I think that's what's coming.
Schreane: Technology changing the game, construction changing the game and sustainable design. Thank you so much, Cheryl McKissack Daniel, it's so great to see you. Thank you for coming.