Journey Group CEO previews strong year ahead as company focuses on multiple growth areas

This article was originally published by Jodi Schwan of SiouxFalls.Business.

Construction will be going strong throughout this winter for Journey Group, thanks to a number of large projects underway.

For Avera Health, there’s the system’s largest project in history – a six-story women’s and children’s tower and a new main entrance lobby on the Avera McKennan campus – along with a new three-story gastroenterology building at Avera on Louise.

In northwest Sioux Falls, there’s the sophisticated Dakota State University Applied Research Lab.

Additionally, Journey Construction is working on major expansions for Showplace Cabinetry and Silencer Central.

“Our backlog is strong. We’re diversified in what we do, and we intentionally built the company to be in different market segments,” CEO Randy Knecht said.

“We’re seeing customers doing expansions and new projects, so our pipeline of work is much stronger going into 2025 than it was going into 2024.”

Overall, a year that started slower than planned – especially with a wet spring and early summer – “turned into a nice year for us,” Knecht said. “We were really happy with the results of the year and how it turned out.”

SFC Civil Constructors had an especially big year, finishing up the Sixth Street bridge in downtown Sioux Falls plus major projects along Interstate 29 between Sioux Falls and Sioux City, along with other projects throughout South Dakota. A pump station project for the city of Sioux Falls will start in February.

“That part of our business has done really well, and there’s a lot of local work, which has been nice, so we haven’t had to travel much, and a majority of our team has been home at night,” Knecht said.

“They’ve got a significant bridge renovation coming in 2025, and there are major interchange projects being bid in the Sioux Falls area, so those are of interest to us, and then we’ll fill in with other projects in the region.”

Black-Top Paving continues to build its concrete services and has worked on several concrete parking lot projects in addition to the growth it has seen in asphalt paving.

“They’ve done a great job building relationships with commercial and multifamily property owners and are able to work with them to maximize the useful life of their pavement,” Knecht said.

“As a company, the growth of Black-Top Paving and SFC Civil has diversified us from being so heavily concentrated in vertical construction and really added to our overall business activity.”

Plus, the company’s special projects division has focused on smaller projects for a range of clients, from startups to small offices.

“Sometimes, people look at Journey and think we only do big projects, so this team has helped them understand you can work with us on smaller projects and get the same experience as any other client,” Knecht said.

“It’s been gratifying to hear from people who say they couldn’t even get a phone call back from contractors to consider their project but much less the service and professionalism that our team delivers. We know that just because you have a small project today doesn’t mean you won’t grow into a larger facility, and we want you to call us then too.”

Journey also has grown its self-performed work through Journey Structural, which offers precast and steel erection for other clients in addition to Journey’s own projects.

“We’re building capacity, both to service our own customers in Journey Construction as well as others, but it’s going well and growing,” Knecht said.

Journey also launched a similar division focused on carpentry, “and those efforts are going well too,” he added.

In Spearfish, Ainsworth-Benning Construction finished a new location for Security First Bank in Rapid City and is broadening its presence in the western half of the state.

“There’s such a shortage of contractors taking on residential work there that they’ve done some of that this year, including a luxury home in Spearfish, and they see opportunities to do more custom residential work,” Knecht said.

The strategy is similar in Sioux Falls for 1J Homes, which focuses on custom-built homes, including in the Sioux City market.

“There’s more need in Sioux Falls than you might expect, so we’ve focused on building that brand and reputation, and we’re getting more opportunities to look at new custom homes,” Knecht said.

“We do have some inventory of spec homes still available that shows our work, but, of course, that entire market is impacted by interest rates.”

MBW Construction, which specializes in food processing, industrial manufacturing, cold storage and warehousing, came off a record year in 2023 driven by a large poultry rendering plant in Georgia and a production floor expansion in Texas.

“Our focus is on diversifying their operation into other food and beverage sectors, especially as meat prices rise and it’s been harder for packers to invest,” Knecht said. “We see 2025 as more of a transition year here as we look at pivoting into some of these related sectors.”

People form pillar

The strong year ahead companywide means Journey Group will be in hiring mode.

“The Sioux Falls area’s unemployment is the lowest in the country, so we’ve worked very hard on workforce development, especially in recent years,” Knecht said.

“We know we have significant hiring needs, and we’ve invested in training, very competitive benefits and opportunities for career growth to make sure we’re top of mind for talent in this field.”

Journey Group spent much of 2024 working on its new three-year strategic growth plan, and the first pillar of it involves “uniting our people,” Knecht said.

“We want our differentiator to be our people. We’ve invested in growing our human resources team, led by our chief people officer Heather Zweifel, and we’re focused on the entire employee journey from onboarding through training and development.”

Another key area of focus includes understanding customer needs both through close communication and through a data-driven approach drawing on specific research and market data.

“All of this we feel is going to help optimize our business model,” Knecht said.

“Right now, we have six divisions, and we want to ensure we focus on a ‘one firm’ approach where we avoid multiple cultures and systems and missed opportunities. If we built this business from scratch today, how would we do it? It’s been a fun process and allowed us to be creative and head into the new year energized.”

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