Left to Right: Stephen Brooks, Joseph Pusateri, Ralph Cataldo
Josh Ritchie Left to Right: Stephen Brooks, Joseph Pusateri, Ralph Cataldo

A common thread connecting the three builders selected as America’s Best Builders in 2011 is that each company’s success can be linked to its genuine concern for the well-being of its employees and how that concern translates into consistently high levels of customer service and financial performance.

Cataldo Custom Builders, Grand Homes, and Elite Homes are also distinguished by aggressive, hands-on owners, and detail-oriented construction and operational processes that give these builders the flexibility to adjust to changing market conditions.

But each builder is also best because it is unique in ways that reflect not only its owner but also the market it serves. Cataldo Custom Builders, which builds on Cape Cod in Massachusetts, hasn’t deviated much from the principles on which Ralph Cataldo founded the company in the mid-1980s. Conversely, Dallas-based Grand Homes was saved a few years ago by a full-blown transformation that started with the management style of its CEO Stephen Brooks. And Elite Homes’ Joe Pusateri has set up his Louisville, Ky.–based company to allow him to balance his passion for building homes with his equally strong commitment to civic duty.

A Simple Plan

Cataldo Custom Builders stays true to its basic operating principles.

Ralph Cataldo, Cataldo Custom Builders, East Falmouth, Mass.
Josh Ritchie Ralph Cataldo, Cataldo Custom Builders, East Falmouth, Mass.

Ralph Cataldo’s life has been a series of lessons learned, which he’s applied adeptly over the past 25 years to his business, on-your-lot Cataldo Custom Builders on Massachusetts’ Cape Cod.

When he was 18, Cataldo’s father got him a job on an assembly line at Polaroid, putting together cameras. Those three months taught Cataldo to respect “the little guy,” an attitude that he’s carried over to his dealings with subcontractors. “You wouldn’t believe the commitment level of our trade partners,” he says about his subs, whom he pays every Friday like clockwork.

His early career, with Wang Laboratories and Digital Computer, not only gave Cataldo a taste for construction management—the biggest project he’s supervised to date was a 750,000-square-foot manufacturing plant for Wang—but also an acute awareness of the importance of exceeding the expectations of successful clients.

Cataldo remembers encountering his first market decline in 1987, shortly after he started building homes. He got stuck with spec houses he couldn’t sell, and ever since he’s been “more conservative and less of a risk taker.”

As one of America’s Best Builders, the 53-year-old Cataldo is still learning during the current recession, which has altered buyers’ notions about home prices and values. But what has made Cataldo successful as a builder is also how little he’s deviated from the basic principles he used to launch his enterprise: Walk the talk, never miss a deadline, and motivate your employees to keep your customers satisfied.

“Loyalty, relationships, and trust; these are keys that we constantly build and capitalize on,” he states.

Cataldo’s 16 “Tools For Success,” a manifesto that outlines how he expects his company and associates to perform, provide the ingredients to his formula. Perhaps the most important is finding a niche—this builder specializes in second and vacation homes that range from 2,000 to 13,000 square feet—and sticking to it without succumbing to expansion urges. Cataldo limits the jobs his company accepts so it can always complete them on or before schedule.

“Ralph is very business minded and has an extremely good staff,” observes Michael Wood, who owns Providence Homes in Arlington, Texas, and has known Cataldo for more than a decade from their Builder 20 group. Over those years, Wood has marveled at how efficiently Cataldo builds houses and his skill at managing work in progress. Where other builders delegate, Cataldo is resolutely hands on, and by visiting his jobsites every day he finds, “daily opportunities for teaching moments.”

Back to Square One

When the housing market on the Cape sputtered in the summer of 2007, Cataldo wasted little time “going on the offense to minimize the damage.” He initiated Saturday morning planning meetings with his staff, where he hammered home the need to be “brilliant at the basics”—in everything from budgeting and scheduling to product quality, communications, and customer service.

His company diversified into maintenance, remodeling, project management, and consulting. His team also went back to past customers to solicit renovation business. (It recently completed a $500,000 gut-and-renovation job on a home it built nine years ago.)

Throughout the downturn, the builder has paid special attention to buyer satisfaction. Cataldo says there are three variables that go into planning a custom house: the budget, the size of the house, and the design specifications. He lets the buyer control two factors, while his company and the architect control the third. Cataldo also gives the buyer as much information as possible to keep costs down and reduce uncertainties during the construction.

Its methods must be striking a chord with buyers because Cataldo Custom Builders wins 60 percent of its jobs without bidding. The builder also engenders fierce loyalty from past customers such as Bobby Byrne, a restaurant owner who took out a newspaper ad praising Cataldo’s work on a $270,000 renovation of his riverfront home, which the builder completed in 33 days. “What distinguishes Ralph are character and virtue,” Byrne tells Builder. “He’s unbelievably competent when it comes to planning; he could have organized the Normandy invasion.”

Knowing the Score

Cataldo says his company’s biggest challenge is “convincing clients who don’t know us that we’re their best choice.” And its future prosperity will determine how generous its employees’ retirement benefits will be. This year, at least, Cataldo Custom Builders is booked through most of 2011. “You have to understand what your break-even point is, or you’ll be out of business without even knowing it.”

Learn more about markets featured in this article: Dallas, TX.