Top 500 Profile: Next Generation

No. 305 Leff Design Build embraces employee ownership culture as the company transitions away from its distinguished founder.

by Kyle Clapham

In 1978 Dave Leff adopted a better way to build that aligns every voice in a home remodeling project—client, architect, engineer, interior designer and builder. He organized this typically complicated process into a singular, holistic approach called the design-build philosophy, which led to hundreds of improved lives and happy homeowners across Sonoma County in California.

That history of crafting enduring homes carries on through the next generation of leaders at Leff Design Build. In 2018 the firm began the process of evolving into an employee-owned company and—two years later—became 100 percent owned by employees. Dave officially retired on Dec. 31, 2022, so Leff Design Build is both an employee-owned and employee-operated organization.

“As a condition of the ESOP [employee stock ownership plan], and also because Dave has really invested in our success moving forward, he is now the chairman of our board of directors,” says Candice Rania, general manager. “It doesn’t mean he just sold the company and walked away.”

For the first time in its history Leff is run by women, who hold leadership positions of production manager, controller and design manager, she adds. About five years ago Dave built out an internal leadership team when he knew that he would moving forward with retirement and selling the business. He needed to put middle management in place, so it could operate independently.

“It’s been an amazing transition and taken a lot of boldness and bravery on all our parts because we have always enjoyed Dave’s insight,” Rania says. “He’s been so integral to this company for such a long time that it’s tempting to run things by him. He’s still local and lives 10 minutes away. It’s very easy to reach out and get ahold of him outside of regularly scheduled board meetings.”

Many people in Sonoma County live there full-time, although a number of homeowners purchase a second or third house in wine country, she notes. The company has experienced a fluctuation in projects this year—specifically a slowdown in volume—as the area continues to rebuild from devastating wildfires in 2018. Leff targeted $8.6 million for 2022, but it fell short at $7.7 million.

“We definitely had it sold in the backlog, so we could have produced it,” Rania explains. “After the fires and through COVID, our permitting department really had a high turnover of staffing, and we could not get permits approved on a fast-enough timeline. It went from being a 4- to 8-week process to a 6- to 8-month process, so we just could not push the backlog of jobs through.”

Like many other remodelers the company also dealt with manufacturing supply chain issues, which extended its project timelines even further. “We used that time wisely to make sure that longtime items were ordered and available for when we were ready to start the work,” she adds.

Leff projects $10.5 million this year and anticipates reaching that threshold since much of the work has already been sold and permitted. “Over the last year we have built out a strong production team, so we’re feeling confident where we are with labor. Subcontractors, though, everyone’s competing for that talent in the community. We’re communicating early and often with our trade partners, and they’re able to accommodate us because they have advance notice.”

To find potential employees the company has posted jobs online and worked with recruiters who specialize in construction trades. “We’re looking for people who we like to work with, and we’re looking for people who want to be here and create some longevity in the position,” Rania says. “We started a recruitment and retention program internally, and so far, the referrals we’ve gotten from our preexisting teammates [and] employees have been the most valuable resource for us.”

A particularly attractive benefit for prospective workers has been the ESOP, even if the program takes some initial explanation, she notes. “I don’t think everyone is quite sure what it means. But when they sit down, and we’re able to talk through the program and how it works, they’re really excited about the opportunity. Again, it’s not costing them anything out of pocket to participate; it’s just [a way for them to build more wealth] by having them participate here at the company.”

With the transition to a full employee ownership culture, Rania has made a point to reach out to past clients. “[It’s] just rebuilding some old connections who don’t have to feel like they’re lost because Dave left is no longer with us,” she says. “Also, at the end of the spring we’re starting what we’re calling a home service division. It’ll be about managing punch list and warranty—and estate care and property maintenance—so we can continue to serve our clients’ path to build.” QR

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