Lasting Partners

Professional Remodeler Interview Transcript

After meeting at a church picnic in 1986, John Lafian and Jeff Fredrickson complemented one another from the very start. Lafian's company was doing siding, windows and roofing; Fredrickson remodeled kitchens and baths, and built additions. Lafian excelled at sales, and leadership came easily to Fredrickson. It seemed only natural then, for the pair to combine their talents and launch Crown Construction. In the early stages, two additional partners joined the company, but today, Crown Construction, based in Dryden, NY, is back to the original team: Lafian and Fredrickson. They explain their strategy for a successful 13-year partnership to managing director Alicia Garceau.

PR: Despite the initial compatibility, you didn't plunge headfirst into a joint venture. What were you considering between the first meeting and the decision to form a partnership?

FREDRICKSON: In a partnership, you're giving up autonomy. I was at the point where I had put five years into [my Syracuse remodeling business], and things were popping. I could have stayed there and doubled [profits], so I had to consider, did I want to relocate to Cortland? The other thing is the cost. I guess we were counting the costs and looking at the benefits. It's kind of like a marriage. You're picking somebody, and it's very critical who you pick.

PR: Before launching Crown Construction, you did a yearlong trial run in 1986. How did it work?

LAFIAN: We both kept our separate businesses and our separate identities. We moved them into the same office complex and ran the two businesses [under] two names. I had Heritage Siding and Windows. Jeff had JF Construction. We also, at that time, started working on Crown Construction and formulating what we wanted in the name and the corporation. We had a year of history [before launching Crown Construction in 1987].

PR: How did you originally structure the company?

FREDRICKSON: We actually had three partners. We doubled our volume, and we doubled our size for the first three years. The second or third year we picked up a fourth partner and our growth was actually too fast. We were losing some of our quality, so we decided to slow down and work backwards. Through a series of circumstances, we bought out [a partner] and then the other partner decided it was best for him to have his own business. So it boiled down to the partnership that worked out for us was John and I. We had the best personality mix.

PR: How did you determine who would take what role?

FREDRICKSON: We got our heads together and got some advice from friends and advisors and based it on giftings. John was an outstanding salesman. He also brought to the table high standards. I was a production-type guy. I'm people-oriented, and I have some leadership skills. At that point, [I was] elected president, and John was the [vice president and] sales manager. But since then, we've changed roles.

PR: Originally, Jeff was president and John was vice president. Now John is president. How has exchanging roles changed the business?

LAFIAN: I happened to be very happy being vice president, we just did it as a point of growth. It's interesting that Jeff has learned a lot of the natural giftings and qualities that I brought into the business, and he's taught me a lot of what he's brought into the business. Now we're a lot more well rounded than we were back in 1987.

PR: You are both self-described leaders. How do you make that work in a partnership?

FREDRICKSON: You have to have humility. You have to be willing to say, "Hey, I'm wrong. I'm sorry." And respect; now respect is earned. When we first started out, we had a lot less respect for each other than we do today. Because I've seen John in the office at midnight, I've seen his effort and I know he's after my best interest and the interest of the company. Honesty. Communication is also key.

LAFIAN: Throughout all the years, we've always had our distinctive responsibilities as well as goals. We've kept them clear and decisive, so as leaders we are able to perform. I don't look over Jeff's shoulder, and he doesn't look over my shoulder. The only time we're together is for prayer only a week and for our lunch meeting where we're communicating on decisions.

PR: As partners, how do you make major business decisions?

FREDRICKSON: We have an [employee] advisory board. That's been critical in our success, too, and that's a key. We're all strong personalities. If we have a situation where John and I can't make up our minds about something- and we disagree about a lot of things- then we would go to our advisory board and get their input. For our business, the key thing is we will not make a decision unless the two of us are in unison. And if we're not, we'll get other input until one of us convinces the other.

PR: When do you take an issue to the advisory board?

FREDRICKSON: I'm convinced [all decisions] are emotional no matter how objective I think I'm going to be. If I'm upset at somebody and I want, for instance, to let somebody go, it's great to have a partner who will say, "No, let's put him somewhere else or try this." We'll go to the advisory board and get some plurality on any major decision. We did it when we relocated. Employment is another issue: if we want to hire somebody or if we want to terminate someone's employment.

PR: Why did you enter into a partnership and what are the benefits?

FREDRICKSON: Three words: strength, stability and security. When I was on my own, if I was to make a mistake or I was to go off the wall or whatever, that's it. Obviously, my family would help to pick me up. In a partnership you have two people, so No 1, you share the stress. Running a business can be very stressful at times. It's wonderful to have a peer, and equal person that you can share that stress with. So if I'm having a bad day, chances are he's having a good day and he can pick me up and vice versa. So we're giving each other strength.

PR: What were your individual goals for your business before you became partners?

LAFIAN: I don't think my individual goal was any different than it is now, and that is to serve the Lord with all my heart. I want to be faithful to God's calling and plan for my life.

FREDRICKSON: When I had my business, it was to provide for my family. My vision was a lot smaller. I did about $250,000 volume. It was how to survive and it was difficult because it was just me. I was making money, but the hours were really an issue. One of my desires was to get my hours down, so I could live more balanced of a life. I have a lot of things that I like to do outside of work.

PR: How do you successfully merge two separate sets of goals?

LAFIAN: We've always tried to treat each other with the utmost respect, honesty and integrity.

FREDRICKSON: We have to respect each other's personal goals. If I want to make a [business] decision because of a personal goal, I need to really communicate with my partner to see how that'd going to affect him and then consider all the ramifications, and then we'll work out a compromise. Just because we're a partnership doesn't mean that we have to be alike. But, in the context of the partnership, we have to have similar [business] goals.

PR: How have you handled the legal aspect of the partnership?

LAFIAN: We're a little loose there, and we're trying to pull it together. That's actually something we're currently working on. We've talked a lot about [a new buy-sell agreement], and we're going to set it up in such a way that would be equitable to both parties as best we can.

FREDRICKSON: We had a buy-sell from when we first started, but it's very loose. We've met with our accountant, and we're looking at a three-year or five-year buyout period. We want to tie it in with a covenant not to compete for either a five-year or ten-year agreement. You need to have a good buy-sell agreement because that's a point of conflict in the future. Certainly, if you can, get it done on the front end so that if you end up wanting to buy out a partner, you have a vehicle to do that. And we have key man life insurance, which we highly recommend. If I were to pass away, we have a policy that says the company would get "X" amount to help cover the transition period. Part of that goes to company to help in the buyout [and pay the family] upon death. We're well protected if one of us should pass away.

PR: What advice would you give you other remodelers thinking about forming a partnership?

LAFIAN: Partnerships are a wonderful thing, but it's not something to be considered lightly. A whole lot more of them fail than work. Back to that marriage [comparison], don't enter into this thing with a lighthearted commitment.