Executive Homes

M ike Otto was in business for 10 years, remodeling homes in the Twin Cities, before he married Miao “Carol” Chen, a native of Beijing. Otto made her a partner in Minneapolis-based Mike Otto Construction and things really started taking off.

Maybe the company’s success can be attributed to Chen’s extensive business background—she did marketing for American and British companies operating in China and earned a bachelor’s degree in management information systems from the University of Minnesota. Or it could be the systems she implemented to formalize the firm’s business processes.

But both Otto and Chen believe a fundamental ingredient in the company’s recent growth is its East-meets-West approach. It comes through both in the way the company conducts its business and in its design capabilities. “Carol brought with her a strong background in the Asian way of doing business, which is basically relationship-based,” Otto explains. “So we create relationships with our clients and spend a lot of time trying to understand what the client wants.”

That is a marked contrast to Otto’s pre-Chen approach. In the past, Otto typically would arrive at a client meeting and spend a lot of time talking, telling the prospect about the firm, its capabilities, and its projects. Otto often would listen to the client’s intentions for their home, and then quickly offer a solution. It usually took about an hour.

After learning from Chen, Otto started taking cues from Chinese business culture. Guan xi, or relationships, are of paramount importance, often guiding business decisions and taking precedence over other priorities such as market conditions. Subsequently, Otto began spending substantially more time with clients—generally four to five two-hour meetings before a project launched.

During these encounters Otto tries to really get to know his clients, learning their style sensibilities, the way they live, and what they envision for their home. Together client and contractor propose and fully consider several options for projects, playing around with different approaches, floor plans, and materials. Otto spends extra time walking clients through the construction process so that they can be as involved as they want to be.

“Before, we would say, ‘Boom—we can do this,’” Otto says. “That’s not necessarily wrong. But I think people like to understand their options and what they might like to do.”

Changing and Growing

As Otto adopted an Eastern style of business, the company began to grow. Previously, projects would range from $10,000 to $50,000, occasionally creeping to $80,000. The firm’s projects are now more likely to be $1 million jobs. Since Chen joined the firm in 2002, company revenue has doubled more than three times and is on track to hit $4 million this year.

It certainly helped that Otto no longer operated a one-man-show, where he met with clients, did the design and construction, ordered materials, and ran all aspects of the company. As the company’s controller, Chen and eleven other employees take care of the business end, freeing Otto to work closely with clients.