How construction firm Gillam Group became Canada’s Fastest Growing Company

In an industry not known for innovation, Gillam Group used a good reputation and creative problem-solving to stand apart

 
PROFIT 500: Canada’s Fastest-Growing Companies
Marcus Gillam

CEO Marcus Gillam grew up in a family construction business, but Gillam Group is forged on a unique foundation. (Jennifer Roberts)

One morning last summer, Gillam Group construction manager Paul Smith, a balding man built like a fire hydrant, was subjecting a hapless subcontractor to a verbal tirade that was both big-dog friendly and wolfishly threatening. The subject of his irritation: a late flooring job on a warehouse conversion project in downtown Toronto.

“I don’t know what the hell that is,” Smith barked as he traced a stubby finger across a set of working drawings for the building, a development for WeWork, a U.S. firm that specializes in collaborative workspaces. “The plywood is supposed to be cut here. You didn’t read this?”

A moment later, the storm passed: “How is everything else? You got no issues?”

Smith, a veteran construction manager, and the subcontractor, a lanky, stoop-shouldered man with a local flooring firm, were standing in the site office—the chaotic first-floor corner of a six-storey brick-and-beam warehouse. The project is a typically finicky downtown venture: the early-20th-century structure occupies almost the entire property it sits on, so the materials and heavy equipment have to be shoehorned in via a narrow alleyway or, in the case of massive new roof joists and pipes, through the roof. That task required Smith to get the city to close the adjacent streets for two days so he could bring in a giant crane—which he did without hesitation, as he drove his team to finish the project on time and on budget. In fact, the company has staged the construction so WeWork can start leasing out the upper floors well before the lower floors are done. It’s all in service of building Gillam’s reputation as a focused and efficient general contractor that can manage tough jobs that typically go to much larger firms. “This is how you build in Toronto,” said Smith, who joined six-year-old Gillam almost two years ago. “You’ve got to think outside the box.”

Gillam, though still a young firm, is constructing a solid reputation for itself in the roiling Greater Golden Horseshoe development game, long ruled by engineering and construction giants. It’s carved out a niche in the market between local firms that do smaller residential or commercial projects and the highly integrated companies like PCL, Eastern, EllisDon and Hatch. Many of these enormous firms employ thousands of people and are set up to handle the formidable complexities of erecting towering high-rises or public-sector projects like schools, hospitals and utilities.

With an abundance of nine-digit megaprojects, these large players have become less interested in tricky, mid-sized jobs that require finesse and a measure of creativity, like the WeWork conversion. “The middle space wasn’t serviced well,” says Gillam’s founder and CEO, Marcus Gillam, a 43-year-old civil engineer, talking about projects that run into the tens of millions of dollars. In an era of super-tall buildings and massive infrastructure projects, construction jobs can now routinely cost hundreds of millions of dollars or more. Toronto’s CIBC Square, for instance, is a $2-billion project that includes two soaring office towers, an elevated park and a new $102-million bus terminal near Union Station.

Gillam’s insight about the opportunities in construction’s mid-market has produced remarkable results, placing Gillam Group at No. 1 on the PROFIT 500 ranking of Canada’s Fastest-Growing Companies. Since 2011, the firm has clocked revenue growth of more than 29,000%—revenues doubled in each of its first three years. In 2016, its employee roster grew from 60 to 85, and the firm now has 30 active projects. While it’s not yet a household name in development circles, the company generated sales in the $50-to-$100-million range last year.

Gillam acknowledges that those kinds of numbers raise questions about whether he’s truly in control of the firm’s surging growth. But he insists that the company isn’t sacrificing service or quality for growth. Even so, Gillam now aims to grow in a managed way rather than going all out. “I look at the business not as a sprint but a marathon.”

A trim long-distance runner and father of three, Marcus Gillam comes by his building ways honestly: his father, Keith, founded Vanbots, which was a construction powerhouse in the Greater Toronto Area from the 1970s to the late 2000s. While the company took on all sorts of public-sector projects, Vanbots’ highest-profile job was as the lead construction firm on the Royal Ontario Museum’s crystalline addition in the early 2000s. Designed by German architect Daniel Liebeskind, the Crystal—a highly irregular structure wedged into a tight space and grafted onto the ROM’s century-old structure—was an exceptionally complicated project that took a consortium of construction firms to build. (Even the project’s many critics grudgingly acknowledged that just finishing the thing was a bit of a miracle.) By the time the Crystal opened, Vanbots was on the GTA’s 50 top employers list—a powerhouse with a staff of 350. In the fall of 2008, Carillion, a U.K. construction giant, bought Vanbots for US$25 million.

Marcus grew up in the business, doing construction jobs during high school and university, and talking shop with his father over the dinner table, “to my mother’s dismay,” he jokes. “It was tough work but it was a good indoctrination,” he says. After Gillam completed his engineering degree in 1997, he went to work full-time at Vanbots, moving through the estimating and business development teams. But two years later, he decamped for Europe, obtaining an MBA at the Rotterdam School of Management and later working on construction projects for Barclays Capital in London before returning to Vanbots in 2005.

Vanbots continued to function as an operating division of Carillion. Keith stayed on for a while as a consultant, while Marcus became a vice-president, managing the company’s bids on giant public-private partnership projects, such as the first phase of the reconstruction of the Centre for Addiction and Mental Health, a $300-million gig. But the transition “wasn’t smooth,” and he felt increasingly limited working on megaprojects where there was little contact with the client, which had once been a hallmark of Vanbots’ corporate culture. “After a few years, I grew tired of simply doing larger projects. They weren’t meaningful for me. I felt like a cog in the wheel.”

Gillam realized it was time to strike out on his own. “The only way to do that was to leave and start my own company.” Because he had no equity-based compensation with Carillion, he didn’t have a non-compete clause. After casting about for names, Gillam settled on one that would resonate in the construction world. “A long-term friend from the industry suggested the name ‘Gillam Group,’ and I realized there was a lot to be gained from using my family name.” (His father has served as a close adviser to the company since Marcus founded it, although the elder Gillam is retired.)

As it happened, Branksome Hall, an elite Toronto girls’ academy, was at the time preparing to begin an ambitious venture—a $40-million, 75,000-sq.-ft athletic and wellness centre. The school straddles a busy arterial road and backs onto both a ravine and a prosperous residential area.

Vanbots had done work for Branksome in the past, and Gillam’s sister attended the school as a student; the school asked whether he wanted to bid on the project. For a nascent firm, Gillam realized, the Branksome fitness centre would be a company-defining undertaking, and one closely scrutinized by the school’s influential parent body. “I immersed myself in the management of this project to ensure the outcome was consistent with my expectations,” he says. “This approach was time-consuming and it certainly came at the expense of short-term growth.”

Gillam delivered the complex project, which featured an open-concept design and multiple fitness facilities, on time and on budget. He also acquitted himself well with the influential directors and philanthropists on Branksome’s board, and took care to ensure that the construction site itself wasn’t a noisy nightmare for the students and neighbours. “There was a sense of professionalism that Marcus brought to every property committee meeting,” says Karen Jurjevich, Branksome’s principal. “You really want to work with a construction company that is sensitive to the community.”

The project has been a point of pride ever since it opened, and Gillam believes it established the company’s brand. “The investment of my time has become a major promotional benefit for my company.”

Since then, the Gillam Group has grown briskly, largely through word of mouth or through the extended network of contacts Marcus has developed in the GTA and its vicinity. The company has tapped its networks to hire seasoned construction pros like Smith. And Gillam notes that he’s mostly avoided chasing after large-scale public-sector or tendered projects, although the company is part of a consortium that’s signed on to build a $90-million central campus for Barrie, Ont.’s fire, police and paramedic departments.

The company’s clients are varied: retailers, a community college and developers, plus a few other clients that come through the family’s well-heeled social networks, including Osler Bluff Ski Club and Bishop Strachan, another elite girls’ school. The firm has also tapped into the burgeoning condo market in booming downtown Hamilton, where it is working on three high-rise projects.

Besides targeting mid-sized projects, Gillam says he’s positioning the firm as a contractor that can manage finicky or complicated projects that have demanding timelines or budgets. These include a handful of prestige jobs (like York University’s 180,000-sq.-ft Bergeron Centre for Engineering Excellence) as well as more mainstream gigs (like refurbishing Toronto’s Sheraton Centre hotel). What he’s not interested in is chasing after low-margin jobs or huge public-sector projects where he has to compete on price with huge global players.

Gillam and Smith, the gruff construction manager, say they try to avoid some of the practices that have made construction a notoriously adversarial and litigation-prone business. Contractors routinely go back to their clients with demands for more money to cover unexpected complexities in the building process; Gillam has set up rigorous risk-management systems to provide more accurate cost estimates. And he takes pains to make sure his people are constantly in touch with the clients. “Maintaining good communication is vital so that when disagreements arise, we can have productive and honest dialogue to reach effective solutions,” says Gillam. It’s worth noting that in six years of operation, the company has only found itself named in a single lawsuit, and it was a short-lived dispute with a construction union, not a client.

Gillam says he employs a “partnership model” that allows his team to become what he describes as a “virtual extension” of the client organization, with head office staff on-site to make things move along smoothly. “It is important to me that my clients view Gillam Group as a trusted adviser,” he says. “On some projects, we occupy common offices, with our people and client people working together in an integrated way. We have also worn common uniforms with our clients. Our accounting and operational practices are tailored to suit our clients’ preferences, which vary significantly from project to project.” The upshot is that Gillam now gets a lot of repeat business—a vindication of its partnership model.

Back at the WeWork job site, Gillam and Smith ride an elevator up to the top floor, discussing what makes their company different. The two men are something of an odd couple: Gillam, in a crisp suit, is reserved and solicitous, while Smith, wearing a pale-blue golf shirt and worn jeans, is loquacious and salty.

“When the team has access to all the information [about a project], it allows us to make better decisions,” Smith says.

“I’ve noticed that,” responds Gillam. “We all know what the challenges are.”

As the elevator door opens, the two of them wander into what appears to be a mostly completed foyer space. There are half-unwrapped office chairs all over the place, but Smith’s attention drifts over to a lattice of pipes dangling from the ceiling—an incomplete high-tech lighting system that uses something called “visual magnetics.” “The installer is coming up from Boston,” Smith tells Gillam in a low growl. The plans, he adds, lacked detail. “Now I gotta design the thing for him.”

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