Ray Kowalik begins his tenure as Burns & McDonnell’s CEO

Every first working day of the year, employees of Kansas City engineering and construction firm Burns & McDonnell gather at their headquarters for a bowl of chili.

The tradition goes back to the 1980s, when Burns & McDonnell first celebrated becoming an employee-owned firm.

Ray Kowalik has been around for the custom since starting his career at Burns & McDonnell in 1987. This year, for the first time, he welcomed employees to the chili lunch as CEO and chairman of the company.

Kowalik, 52, took the reins of the company on a cold Tuesday in Kansas City as his predecessor, Greg Graves, boarded a plane to sunnier climes in Hawaii to start his retirement after leading Burns & McDonnell since 2004.

The Kansas City-based company is far different today than when Kowalik started working there 30 years ago, when it had 600 employees. When Graves took the helm 13 years ago, it had 1,500 workers.

Today, Burns & McDonnell has 5,700 employees spread across North America and overseas. Sales were $2.8 billion in 2016, according to the private company.

Despite its growth, Burns & McDonnell isn’t among the top five firms of its kind in terms of size, according to Kowalik.

“We have lot of growth opportunities in our business lines,” Kowalik said in an interview with The Star on Tuesday.

While Kowalik said the firm’s presence in Kansas City will continue to expand, he anticipated faster growth in its other far-flung locations. The Pacific Northwest, for example, was one area where Kowalik wanted to see a greater presence.

Canada, a country with more land than the United States but far fewer people and companies to cultivate its resources, has been another growth target.

Companies like Burns & McDonnell get paid by public- and private-sector clients. Thus, their willingness to hire engineering and construction firms is dependent on how the market shapes up.

“We’re really at the mercy of market conditions, and those market conditions can change daily,” Kowalik said.

He’s seen it firsthand.

From 2004 until 2015, Kowalik led Burns & McDonnell’s energy group. The demand for nuclear energy in the United States evaporated quickly after the 2011 Fukushima Daiichi Nuclear Power Plant disaster in Japan and has remained dormant since, in part because of the ongoing supply of cheap natural gas in North America.

Graves said Kowalik takes the helm at Burns & McDonnell during uncertain times with the Trump administration.

President-elect Donald Trump has promoted a wide-ranging overhaul of public infrastructure in the United States, which could benefit a company like Burns & McDonnell. But Trump enters the White House with no political experience and has shown signs of taking an unorthodox approach to governance, a concern among some political observers.

“Our clients wait and see when there’s uncertainty,” Graves said, “and wait and see is not good for us.”

Kowalik acknowledged that uncertainty but added his own sense of optimism about loosening of certain regulations that could make doing business easier.

“I think there’s some optimism that there’s going to be opportunities to bring projects to fruition easier than in the past,” Kowalik said.

Burns & McDonnell’s board of directors chose Kowalik to succeed Graves early in 2016, giving him a year to transition into the role. Kowalik was executive vice president and president of global practices at the time.

“He’s going to be so damn good,” Graves said.

Last year, Kowalik helped guide Burns & McDonnell’s acquisition of AZCO Inc., a 250-employee industrial contracting firm based in Wisconsin. The acquisition filled a gap in Burns & McDonnell’s business model, which has grown the construction side of the business substantially since the late 1990s.

But it represented a departure from the firm’s organic growth pattern. Kowalik said the firm would continue to grow the company primarily from within while also eschewing the possibility of becoming an acquisition target in an industry that frequently grows through consolidation.

Burns & McDonnell’s employee stock ownership plan, a corporate structure that both Graves and Kowalik value, makes it difficult for the firm to attract acquisition interest from larger concerns.

“Greg had the mantra and I’ll continue it: ESOP to the death,” Kowalik said.

Also like Graves, who in 2015 was chosen by the Greater Kansas City Chamber of Commerce as Kansas Citian of the Year, Kowalik plans to have a high-profile role in Kansas City’s civic scene. He’s on the executive committee of the Civic Council of Greater Kansas City, is chairman of the United Way of Greater Kansas City and is on the board of the Kansas City Area Development Council.

Kowalik, born in Blue Springs, currently lives in Lee’s Summit. The University of Missouri graduate is married and has a daughter.