It was a dark period for construction and trade jobs in 2011 — the same year that entrepreneur Michael B. Kennedy started the UP Companies.
“There were a lot of people on the streets, and you had to get really creative with ‘how are we going to create a construction company for the future of construction?’ versus what’s historically been done,” Kennedy said. “Everybody was looking for something positive.”
Since 2008, Kennedy had already been the president of nearly 40-year-old firm KAI Build, which was founded by his father Michael Kennedy Sr. The UP Companies was a chance to add the boots-on-the-ground arm.
It’s since become one of the region’s largest full-service MBE-certified contractors, comprised of Square UP Builders, Power UP Electrical Contractors and Keep UP Services. Founded through several acquisitions, the company has grown from 34 employees to well over 300 office staff and workers in the field.
But, most importantly, forming the UP Companies forced his entire team do some soul searching, Kennedy said. While KAI has always focused on transforming historically disinvested areas of the city, the UP Companies gave their team a chance to hone in on that mission. Now in the lobby that connects KAI and the UP Companies in their Westport office, their mission statement is prominently displayed: to transform communities through integrated design and construction excellence.
“The only way to do that for me was not just to transform the physical environment but to transform the fabric of our community on the social side,” Kennedy said. “How can we focus on the areas that need us the most? How can we hire from those communities to work on these projects? How can I give opportunities to people who never had sponsorship into the unions? That was the most satisfying part of this whole thing.”
When it became less about the buildings and more about the community, the community wanted to be a part of this movement as well, he said.
The numbers clearly back this up. Since its founding, Kennedy has grown the UP Company’s revenue from $3.7 million in its first year to more than $40 million. He’s also grown KAI’s revenue from $8 million in his first year as president to more than $35 million.
Because their in-house workforce is about 30 percent minority, they are able to exceed the goals for minority boots on the ground at every job site, while also being a low bidder and performing at the highest level of safely, he said.
The UP Companies’ name helps the company’s leaders and employees remember their mission.
“Everything came together because God led us this way, and we wanted to always recognize and not forget where those blessings came from,” Kennedy said.
At a young age, Kennedy became fascinated with the construction process, having accompanied his architect father on numerous trips to building sites around the St. Louis area. Kennedy earned a business management degree from Hampton University, where he also participated in a four-year internship at GE Capital through St. Louis-based INROADS organization.
Following graduation, he worked in business development at KAI Design & Build, now located in the Westport area. At 30, Kennedy was named president of the firm, which provides architecture; mechanical, electrical, plumbing and fire protection engineering; interior design; and program/construction management services.
One of Kennedy’s best business decisions came out of “chaos” and one of the most stressful times of his life, Kennedy said. It started when he was completing a few projects in North St. Louis, and he found that KAI was facing more scrutiny for minority participation than its white-owned counterparts.
“They expected me to come in with 100 percent participation,” Kennedy said. “There was a lot of political pressure, and it was a slow economy. That’s when everyone is making the most noise.”
When Kennedy tried to serve as the bank for some of the smaller businesses who didn’t have a line of credit, it became too much stressful for his company. Regional leaders were unclear about how to improve the climate for minority participation.
“I was on one diversity committee to another diversity committee, and it wasn’t getting anywhere,” he said. “I’d go to one, and they talked about a lot. And I’d go to another one, and we’re starting over from scratch.”
Kennedy decided it would be cheaper for him to sponsor and pay for an educational video to move the diversity conversation forward. In late 2012, Kennedy produced a documentary about the state of St. Louis’ minority construction industry, titled “Building a Better St. Louis for the Future.” It includes perspectives from St. Louis leaders, activists, historians, bonding companies, banks, and companies big and small.
“The video did help move the conversation to a point where we could make more progress faster because we were starting from the same page,” Kennedy said.
The effort earned him a Diversity Champion Award from the St. Louis Council of Construction Consumers in 2013. The video also helped him focus on forming his “why” statement for the company and the idea for the UP Companies.
“You never know what you’re really facing when you’re in the middle of the storm,” he said. “Uncertainty was where innovation was born. Whenever you’re down, you have to ask God, ‘Where do you want me to go with this?’ It turns out He was leading me to my best blessing.”
The 20th annual Salute to Excellence in Business Awards & Networking Luncheon will be held Thursday, November 21 at the Hilton St. Louis Frontenac, with a networking reception at 11 a.m. and luncheon program at noon. Tickets are $100 for Preferred/VIP seating and $75 for general admission. Call 314-533-8000 or visit www.stlamerican.com for more information or to purchase tickets.