Mississippi-based Yates Construction Grows Nationally, Internationally

Coffee arrives in a ceramic cup, not styrofoam, at Yates Construction’s headquarters in Philadelphia, Mississippi. Lights in the LEED Gold-certified building (a rating system for Leadership in Energy and Environmental Design) are powered by solar panels on the roof. The company sets annual targets for reducing its carbon footprint, and incentivizes staff to earn LEED accreditation to support an increasing number of sustainable construction projects.

What’s interesting is that William G. Yates, Jr., embraced sustainability in its most fundamental form (defined by Merriam-Webster as “able to last or continue for a long time”) early on for his own company, which celebrates its 50th anniversary in 2014.
“‘The company has to be bigger than me’ was an initial goal,” said Yates who, with strong encouragement from his father, built the family business to outlast himself. Now the refrain is “the company has to be bigger than us” with buy-in from William G. Yates, III, president and CEO of W.G. Yates & Sons Construction Company, the flagship of The Yates Companies, Inc., the holding company that Bill Yates, Jr., serves as chairman.
The company’s projects easily dazzle the eye—from casinos like the Beau Rivage on the Mississippi Gulf Coast to the $1.6 billion Borgata Hotel Casino & Spa and Water Club in Atlantic City. From the $930 million Nissan auto manufacturing plant in Canton, Miss., to towering condominium developments, hospitals, schools, college sports facilities, military installations, churches, shopping centers, civic buildings, roads and more.
But when Bill and William Yates talk about milestones in building a company that lasts, metrics related to size are not what immediately come to mind, though they are impressive: 10,000 employees. Twenty-five offices in nine states. Projects in Russia, China, Mexico and Canada in addition to 40-plus states. Annual revenues, driven by the economy, that run between $1 billion and $2 billion with a peak of $2.3 billion in 2007.
The milestone in the 1970’s was Bill’s decision to make Yates Construction a self-performing company. His catalyst for acquiring and starting companies with the capacity to perform jobs often subcontracted out came when “an electrical contractor got cold feet on a project and said, ‘Why don’t you just buy us?’“ Bill promptly acquired the company.
The hallmark of the 1980’s was diversification of both projects and subsidiary companies. Today over 30 business entities providing services that range from asphalt paving to steel fabrication comprise The Yates Companies, formed in 1999 after acquiring JESCO, Inc., and Blaine Construction. “We brought more value to our clients by controlling all phases of our projects, including scheduling, cost and quality, through self- performance,” said Bill, “and that gave us a competitive advantage.”
The 1990’s milestone for Yates Construction was its transformation from a contractor doing excellent work on Mississippi projects to a nationally-recognized construction company named for two decades to the U.S. list of Top 400 Contractors (#35 in 2013) by Engineering News-Record, the industry’s insider trade publication. Yates Construction’s growth was powered by Mississippi’s casino construction boom, including the Beau Rivage project.
Multiple projects highlighted Yates Construction’s portfolio in the 21st century, and being “as diversified a construction company as you will find” enabled it to respond to Hurricane Katrina and the BP oil spill.
“We rebuilt the Beau Rivage and several other properties,” said William, “and helped with the hurricane clean-up. We designed a semi-automatic system for BP to clean the (oil containment) boom as they brought it out of the ocean.”
Also essential to building Yates Construction to last is the father and son’s approach to the generational transfer of leadership. “William and I developed a 10-year plan,” said Bill. “Our goal was to share information and figure out how I could learn in 10 years everything Dad learned in his entire career,” said William. By 2003 when William took the reins of W.G. Yates & Sons Construction Company at age 30 he had been on the Beau Rivage job site for two-and-a-half years, started a division in Biloxi, had weekly “Monday morning quarterbacking” calls with Bill, and worked to “earn the respect of the people I work with.”
Do you self-perform all phases for each project?
W: We still have great subcontractor partners, including 90 different electrical companies over the last three years, but it’s like a safety net to be able to go in-house and get the job done.
What role does risk play?
B: There’s risk in self-performance because more people are on the payroll. Casino projects were risky with out-of-state owners, tough schedules and building on floating barges.
W: Every project we build is a prototype, the first one that’s been built on that site. Credit is, of course, a risk, too.
What were the start-up days like?
B: Gully Yates, my dad, was a second-generation contractor in Philadelphia. When I was a sophomore at Ole Miss he bid on renovating a three-story dormitory on campus and said, “I thought you might look after it.” In 1964 he sold his interest in the little construction company he owned with my uncle, and we started W.G. Yates & Sons Construction Company while I was still in law school, studying, writing paychecks and competing for jobs in the Oxford area.
When did you start running the company?
B: When I returned in 1967 from two years in the Army—managing construction fora NATO training center in Europe — Dad said, “I’ll worry about what we’re doing here locally, and you build this company like you want. The first year we don’t make money, you and I will talk.” But we never had to sit down and talk. The company was profitable year after year.
How do you communicate with managers?
B: William leads our Monday morning conference call with around 200 people.
W: We hear personal concerns, often about sick relatives, then have a prayer about the concerns, a general prayer about the week ahead, and a business discussion. It’s good for everybody to check in and touch base.
How did your education prepare you to run the company?
B: Getting an engineering degree and a law degree and doing construction at the same time was significant for the company in its infant years. Now we have engineers and lawyers on staff.
W: A business degree and a master’s in construction management have been helpful to me. You need some technical knowledge of your business.
“10 x 15” is your vision of accomplishing 10 goals by 2015. How does community involvement figure?
W: Entrepreneurs who get in a position to be good community stewards have an obligation to do so. I’m lucky enough to be involved with United Way of South Mississippi. Yates also has scholarships for African American students in construction management at the University of Southern Mississippi with an offer to work for Yates Construction.
B: Thirty scholarships for employees’ children are based on merit, need and change of direction. The selection committee, which my daughter leads, will award a scholarship to a weak C-student if it thinks it could change that person’s life. We support efforts in communities where we work and encourage Yates employees to be engaged as well.
What advice do you have for aspiring entrepreneurs—in addition to much that’s part of your story?
W: Entrepreneurs are often action-oriented and don’t want to wait. I would suggest that you stop and plan the work, understand the risks, and then charge hard. Know the difference between the most urgent and the most important.
B: Understand the business and run it like a business. Set your goals, make sure they are attainable, commit and be passionate.
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An excerpt from Polly Dement’s book, Mississippi Entrepreneurs. Published by Cat Island Books LLC and distributed by University Press of Mississippi. Mississippi Entrepreneurs, which includes profiles of over 80 of the state’s diverse and visionary enterprise creators, can be ordered online at www.upress.state.ms.us/books/1642 or purchased from independent book stores.