Jan. 13, 2020

This paid piece is sponsored by Journey Group.

From health care to higher education and a historic hotel, 2019 brought a range of unique work for Sioux Falls-based Journey Group – and 2020 is looking like it will too.

“2018 was our biggest and best year in the history of the company, which set the bar high for 2019,” CEO Randy Knecht said. “The year ultimately turned out well. We overcame some challenges, and our team learned a lot and grew stronger because of it.”

Solid year 

After about two years, Journey in 2019 wrapped up the largest construction project in the city’s history. The Avera Specialty Hospital on the Avera on Louise campus was completed on time, on budget and already is exceeding expectations operationally, Knecht said.

“It was a very successful project for us and for Avera. We were proud to be a part of it and glad to learn they’re already ahead of where they expected in terms of patients using the facilities,” he said.

Another multiyear project – the expansion and renovation of Dow Rummel Retirement Village – also concluded in 2019, with expanded living options and lots of new resident amenities.

“The project included five phases over about two years in its entirety, and it also was a very successful and impactful project,” Knecht said.

Work also concluded on the SDSU Performing Arts Center and the Madison Cyber Labs building – a first-of-its-kind project for Journey.

“It was very interesting working on that project in terms of the high level of security required, but it went really well, and that was exciting for our team,” Knecht said. “As we grow and expand, we’re looking at the technology and cybersecurity industry as a potential growth area for us, so to have our first cyberlab go so well was very promising.”

Journey also transformed a historic downtown Sioux Falls building into a boutique hotel in 2019, finishing work on Hotel on Phillips.

“I thought it turned out great,” Knecht said. “Historic buildings can be challenging projects, but in the end, it turned out really nice. The comments we’re getting from people who have been there is that it is a very unique enhancement to the city and provides that boutique experience you don’t get anywhere else.”

Journey Construction also absorbed a major challenge when plans to build the downtown mixed-use Village on the River project fell through. While the team still built the parking ramp associated with the development, the change in scope affected about 10 percent of revenue expectations, Knecht said.

“You can try to pick up other projects, but with the timing, that was challenging as plans and teams were set. And it affects not only 2019 but 2020 as well,” he said. “It not only impacts our teams, but we had trade contractors expecting to have work associated with us on this project, so it had a ripple effect through the construction market.”

Journey’s Black-Top Paving and SFC Civil Constructors divisions “had really nice years despite many challenges with the weather,” Knecht said. “Their projects did well, and I give a lot of credit to our leadership and their teams for that. They exceeded our expectations and have some carry-over work into 2020 because of the weather.”

The Ainsworth-Benning Construction division, which is based in Spearfish, continues to be integrated with Journey culturally as well as through standardizing systems and processes.

“We’re looking forward to opportunities with that market and that business unit,” Knecht said, noting the expected boom in growth that’s anticipated from Ellsworth Air Force Base being selected as the first B-21 strategic bomber base.

“Even though we might not do work on the base, it’s everything that comes with it – commercial development – and I think that will ripple through the Black Hills market.”

Looking ahead 

The steel has started to rise from Journey’s largest project for 2020: the new Jefferson High School in northwest Sioux Falls.

“From a budget and scheduling standpoint, it’s going well,” Knecht said. “We’ll continue through 2020 and into 2021 in preparation for opening for the 2021-2022 school year.

“We are fortunate to have more research facility projects starting soon, including two buildings at the USD Discovery District that will support lab work, office space and manufacturing.”

Journey has several Avera-related projects in its 2020 plan, including wrapping up work on the Human Performance Center on the Avera on Louise campus, improvements on the main Avera McKennan campus and several upcoming projects in communities outside Sioux Falls.

Downtown Sioux Falls also will bring more activity for Journey with Railyard Flats – a new mixed-use building on the former rail yard site – and continued work to restore the State Theatre, which is scheduled to reopen midyear.

“We’re really proud to be involved in that historic renovation,” Knecht said. “It’s very much like when we did the restoration of St. Joseph Cathedral in that it’s a big art project and uncovering aged beauty is very rewarding. Everyone has been waiting so long for it, and we’re really proud to be part of that.”

Other upcoming projects include an office building for Interstates and an expansion at Spirit of Joy Lutheran Church.

“We’ll have a lot of spring starts,” Knecht said. “Ultimately, interest rates are low, corporate earnings are strong, the stock market is at an all-time high, so lots to look forward to for the rest of the year as well. It might slow down a little, but locally it seems much more moderate. We’re really trying to pay attention and keep our eyes and ears open for opportunities later in 2020.”

Inside Journey 

Along with robust building activity outside its walls, Journey continues building its team and best practices internally.

The team’s evolution to lean construction approaches has been transformational, Knecht said.

“We now have a full-time lean manager, and our lean journey is really getting legs,” he said. “We’re developing a team of lean coaches who can work with project managers and superintendents on implementing lean practices, and our goal is to start implementing it into our Black-Top and Civil divisions. The team leaders are asking for it as they see the great results we’ve experienced in the Journey Construction division.”

Journey Construction was restructured in 2019, creating a level of senior project managers, a director of field operations and a director of project development, reporting to vice president Darin Hage.

“We’ve been very fortunate to bring some really talented people into our organization, and we were pretty flat in our structure,” Knecht said. “This allows key positions to focus on strategy and helps us continue to develop our people. We’ve invested heavily in leadership development, and we’re really starting to see it pay dividends.”

Journey also will spend part of 2020 deliberately focused on its future, updating its strategic plan with help from a Denver-based firm that specializes in working with the construction industry.

“The last major strategic planning effort we did was in 2011, and when I went back and reread it, I was amazed at what we have accomplished,” Knecht said.

“We identified we needed a rebranding, so we changed our company name. We knew our facilities needed to be updated, so we built a new office building and relocated our shop and yard. We wanted to make a strategic acquisition and focus on leadership development, and we did both. A lot of what we accomplished you can point back to that plan, so I’m excited about doing this again in 2020.”

Expect a focus on integrating data analytics into decision-making as part of the long-term strategy, he said.

“This is going to help lay the foundation for the next five years for us – our growth strategies, which markets we’re going to pursue and how we can continue to build up and improve our culture.”