HERMAN J. RUSSELL, CEO H.J. RUSSELL & CO.
Headquarters: Atlanta, GA
Business interests: Management and development of real estate, construction and airport concessions
Key executives: R.K. Sehgal, CEO and vice chairman; H. Jerome Russell, president and COO; Michael Russell, vice presiden
t, construction division; Joia Johnson, vice president and general counsel
Herman Russell says he started on the entrepreneurial path as an eight- year-old shining shoes. He had his own paper route by 10 and bought his first piece of real estate for $125 at 16. That real estate deal became the base of the H.J. Russell Construction Co., buying and developing real estate and working as a major minority contractor on most projects built south of the Mason-Dixon line. Post-’60s and after the hotbeds of the riots, there were 10 construction firms on the original BE 100s list. Forty years later, Russell’s company is the only one left from the original list, one of the few black-owned construction firms on the current list, and the largest minority-owned general contractor in the U.S.
“You must make a decision early about what you want in life,” says Russell, whose dad taught him to save something out of everything he made. “The competition is keener now and you have more qualified people competing for the jobs,” he explains.
Russell says the biggest hurdle to staying in his line of business, ironically, has not been capital. but training and developing the people he needed for the jobs, and then getting them to stick around. “Most people are not willing to wait or to pay the price as an individual to develop. When you do, you have more to bring to the table,” he explains.
Russell has spent the time developing both his company and his craft. But even when the first list was launched, Russell Construction was a seasoned business. Many of Atlanta’s neighborhoods have residential homes and commercial buildings that Herman Russell has worked on. And when it came time to build a new municipal airport under then first black mayor, Maynard Jackson, Russell, a neighbor, was poised and primed for the roughly $19 million job. He was also a primary subcontractor on projects during last summer’s Olympics in Atlanta.
It’s these blue-collar jobs that proved to be the foundation of black middle-class America and the early source of black economic progress. Russell says that emphasis is now missing–to African Americans’ detriment. “There’s a generation now that when they were coming along, we didn’t emphasize the trades, only white-collar jobs, and we missed the boat. You don’t have to have a white-collar job to be successful in life,” he adds. “When I walk out on a construction job and it’s 25% Latin American working all phases of the job, I’m concerned. I remember when I was serving my apprenticeship, most were black Americans, but we don’t see that today.”
Going forward, Russell has tried to prepare his children, H. Jerome Russell, president/chief operating officer and head of he housing and property management division, and Michael Russell, vice president and manager of the construction division, to take over the company’s reigns. But he says they’re not quite ready to take on the challenges of a firm with international projects and consulting on many more. To wit he’s brought in an outsider to get the firm over his progeny’s learning curve. In November 1996, Russell appointed R.K. Sehgal chief executive officer and vice chairman to report to him as chairman of the board.
“They’re working me harder, and there’s more to do now with the new CEO getting lots of my input, but as the months go by, I’m hoping to go from 14- to eight-hour days and have more time for myself,” Russell says.
Like his CEO/chairman counterparts, Russell says he wouldn’t sell his company outright, but confesses that one day, it will go public, probably soon. “I’m almost sure the family will keep the majority share of it, but we’ll probably go public within five years.” With its diversified holdings, including construction and management, property and real estate management and development, and airport concessions, it would make an attractive IPO. But whatever happens, Russell says “whoever becomes the next CEO must be prepared to take on and carry on the business.”