I Was the Problem: My Leadership Wake-up Call with Denver Whetten
Okay, Denver. I'd love to start by just hearing what were you doing for work prior to starting Dagen construction?
Denver Whetten:So right exactly prior to starting Dagen, I worked for a big home building company here in the Valley. In 2005, we built 4,000 houses just here in Phoenix, and and it was a huge challenge with the labor market to do that quantity. It it was really, really tough. And at the end of o five, they said, we're gonna build 6,000 houses next year.
Alex Judd:Level up.
Denver Whetten:Which which seemed impossible. What we didn't know was that, they were planning on buying their subcontractors, the biggest subcontractors here in the valley and bringing them in
Alex Judd:house. And
Denver Whetten:by doing that, they were able to control a huge portion of the labor pool where they would only be able to work for us. And so, at the beginning of, 2006, I got moved over to help integrate their new concrete division in house. And, I didn't really know much about concrete, but, but I I learned quick.
Alex Judd:Just on the job learned?
Denver Whetten:On on the job, learning learning to trust, you know,
Alex Judd:our at that time in o five?
Denver Whetten:I was 28.
Alex Judd:Okay. Very good. And were you like, man, this is a blast right now. We're working so hard. We're growing.
Alex Judd:We're expanding. Where was your headspace?
Denver Whetten:It was a lot of fun. Okay. It was a lot of fun because, I love to learn. I grew up in Mexico, so I grew up speaking Spanish. That was one of the that's what qualified me for the job was I spoke Spanish.
Alex Judd:Yeah. There you go. I love that.
Denver Whetten:And so to be able to work with really talented people that that were willing to share and and help me learn was was a lot of fun.
Alex Judd:Okay. And so how did things go in o six?
Denver Whetten:And and in o six, you know, got my bearings. They they put me in charge of a third of the valley on on their concrete division. We had about 250 guys working on our team. We we poured 15 house slabs every single day. It was Oh my gosh.
Denver Whetten:Was like a production line. Yeah. It was a a fine tuned machine, pretty dialed in. Our team killed it. We we we hit our we hit our quality.
Denver Whetten:We hit our budgets. We hit our schedules, and and we got we got all that work done in in in 2006. And You
Alex Judd:did 6,000 houses?
Denver Whetten:Yeah. The the in Valley Wide, we did 6,000 houses.
Alex Judd:Wow. When you think back to, like, 28 year old you, what are the lessons that you learned that year that you say, man, I'm still grateful that I learned those lessons that year?
Denver Whetten:If you have a good team that you can trust and we all work together, we can accomplish amazing things.
Alex Judd:And you had that in o six.
Denver Whetten:Yeah. Yeah. Yeah. So that's what I learned because when they first told us that that's what we were gonna do and me going into that industry without really having a huge, you know, foundation or background, not even a lot of leadership really, you know, but but just understanding that if we work together and we trust each other and everybody does their job, we can do great things. And and and that was kind of my role was was to get everybody to get along, to to take out obstacles out ahead of us, to to make sure that that everything was clear for them to be able to do their jobs well.
Alex Judd:So, I mean, you know, you hear the story now. It's like, how does this transpire in such a way that he ends up starting his own company? So what what happened in the following years?
Denver Whetten:Yeah. So so at the end of o six, we got big bonuses and got patted on the back, and we were super happy and excited. And and then 2007 started, and the winds had changed. There wasn't any there wasn't as much work. And I I went
Alex Judd:like early onset of 2008?
Denver Whetten:No. No. Early onset of 2007. Okay. So so in January 2007, we'd worked so hard to get all our houses done in in o six.
Denver Whetten:That was our goal. And and and and so we had been working, you know, long hours, weekends, getting everything done and then all of a sudden, January, we didn't have enough work for everybody. I went to my boss and he said, yeah, things are changing. Markets are changing, The the demand signal's different. What they're telling us from corporate is is it's we're not gonna have the same numbers this year as as we did last year.
Denver Whetten:So you you need to, start thinking about layoffs. Wow.
Alex Judd:How did you receive that? Because were they literally saying you need you need to think about who you are going to lay off on your team Yeah. Which is the team that just helped you accomplish everything that you accomplished in o six.
Denver Whetten:Right. Yeah. They've done everything we'd ask them to and even more, sacrificed and worked hard. And it was pretty frustrating because I felt my team had outperformed the other teams, but the other teams had seniority to our team. And so he was saying we were gonna have to lay off our team before the other teams got laid off, which just because of seniority.
Alex Judd:Yeah. Didn't like would you describe your emotional state in response to that reality? How would you describe it?
Denver Whetten:Like a like a sudden loss of trust. Like a sudden loss of trust in in in our leadership because I I'd always valued results over seniority in in in my own, you know, mental model. So so I'd you know, that was kind of the first step of me kinda losing trust in my leadership, there at that company.
Alex Judd:Yeah. So what transpired out of that?
Denver Whetten:So I went back. I was officing off-site in one of the big communities that we were building. And and one of the guys that that, office next to me was the, manager of, land development up there on that site. And so I went to him because he's supposed to be way ahead of us, because he's building all the streets and the infrastructure. And I went to him and I said, hey, what do you know about, you know, these changes and what's happening?
Denver Whetten:And he said, yeah, it's definitely slowing down and the stuff that we've got out at way ahead of us, we're kind of putting on hold. But he said, man, I have a ton of work on all the all the punch list, all the turning over infrastructure to the municipality because we've been so forward looking that we haven't dropped back to to close things out. He said, I have a ton of work. And I was like, well, looks like I have some availability. We're the same company.
Denver Whetten:My guys are a bunch of house slab guys, but I'm sure that we can learn how to how to do, site work and work in the streets. And so I went back to my boss right after having that conversation and said, hey, think I got a solution. Our land division says they have a ton of work that they need to get done. And instead of laying guys off, what if what if we start, helping them out? And and then I can we can keep some some of our good guys busy and and and not have to lay them off.
Alex Judd:Yeah. And were they down for that?
Denver Whetten:And and yeah. So to to start out with, he said, yeah. Let's do it. And I ended up hiring a superintendent that from that field that that knew what he was doing so he could help train us on on curb and gutters and sidewalks and catch basins and head walls and and all the all the concrete, stuff that goes in in streets. We bought some equipment, and we got we got crews, designated and trained up, and and we started out doing that work.
Denver Whetten:And and it was going real well for a few months. And then and then, one day, my boss called me into his office and he said, hey, this isn't gonna work. You you need to just lay those guys off. The land development division isn't compensating our division for the cost of doing that work and you're making my books look bad. I got pretty upset because for me that was just In in
Alex Judd:the meeting you got upset or just like yeah.
Denver Whetten:In the meeting I got upset because for me, we were doing a great job and our internal customer was loving the work we were doing. And for me it was just a, that was bureaucracy. That was that was just a that was an accounting thing that needed to happen internally within the company. We were providing the value and if they couldn't make it work out to where we could continue doing that work and and we could continue taking care of our good people, you know, who who had done everything we had asked them to even even changing the type of work that they knew how to do in order to be able to provide value for our company. And for him to just be like, nope, you gotta go lay those guys off.
Denver Whetten:I didn't really have a plan, but I took out my wallet, put my credit card on the desk, gave them my cell phone, keys to my truck, and I said, you lay them off. I'm not gonna work here anymore.
Alex Judd:In that meeting, you did that. Right?
Denver Whetten:And then
Alex Judd:Did you know walking into that meeting, you might do that?
Denver Whetten:I had no idea what the meeting was gonna be about.
Alex Judd:Okay. So you leave the office. What is going through your head as you leave the is it like, what on earth did I just do? Or is it like, I just stuck it to the man. How are you feeling in that moment?
Denver Whetten:No. I was it was definitely an emotional response, but but I was it just didn't seem it didn't seem fair. It didn't seem fair to me. And I just didn't wanna work for him anymore at that point. If that's if that was his his mentality and if that was the person, you know, if that was the the the leadership that we were supposed to follow.
Alex Judd:Seems like it's almost like there was this internal value that you had or sense of justice that you had that the minute that was violated, it was like, I'm not I can't do this anymore.
Denver Whetten:Yeah. I mean, I loved my guys. I love my guys, and they had done so much for us. And and for me just to give up like that just didn't seem right. The market had continued to get worse and worse.
Denver Whetten:I was getting hit up, from guys wanting work every single day. Mhmm. So I knew that when when those guys got laid off, they were gonna have a hard time finding another job. Yeah. Because, there was way more labor than than than jobs at that point.
Alex Judd:So did you call Amy, or did you wait to get home to tell her? What did that look like?
Denver Whetten:No. So I called one of my guys and said, hey, come pick me up.
Alex Judd:Oh, you gave your truck away. Yeah. Gave my
Denver Whetten:truck away. So he came he came and picked me up and, I went back up to the office where I was officing to kinda tell everybody what was going on. And and, and I went in and told, you know, the land development guy that we'd been working for what was going on and said, hey, you know, apparently your department doesn't wanna pay my department and so we're not gonna be working for you anymore, just to let you know. And it was right then when he said, well, I still gotta get that work done. Looks like you're available.
Denver Whetten:And he was he was trying to get me to to start my own company to go ahead and and and keep doing that work. And and and it wasn't until that moment, that was probably the first moment when I'd even considered ever owning a construction company or starting a construction company. And even then, was, you know, a month from turning 30, I didn't have any financial backing. I'm so blessed, with Amy that, she's a saver. She's very frugal and she had a savings account with some money in it.
Denver Whetten:So leaving that day, I said, hey, well, let me go talk to my wife, let me think about this. Started talking to some of my guys, you know, what do you guys think about this opportunity? I went home, we talked. She said, well, if you feel good about it, let's see if it's something that we could do. I called up an insurance, broker who's still my broker today.
Denver Whetten:Wow. And said, hey, what's it gonna cost to get insurance? He ran the numbers, came back to me and said, well, we can assure you, the bad news is is that, you're gonna pay $10 down to get the policy. And, I looked into to how much it was gonna cost to get a contractor's license and the bond and all that to be able to be, licensed, and and that was about a thousand bucks. And so when I went and sat down with Amy and said, hey, well, it's about $11 just to open the door to to be able to be legal to to to work.
Denver Whetten:And she said, well, we got exactly $11 in our savings account. Woah.
Alex Judd:But you could look at me like, praise God or be like, oh, so you mean that's everything?
Denver Whetten:That's everything. That's everything. We prayed a lot.
Alex Judd:Yeah.
Denver Whetten:We prayed a lot. It felt like jumping off a cliff without a parachute because
Alex Judd:Because it was. We had
Denver Whetten:two little kids at home, a mortgage, And then it was, well, how do we how do we pay for materials? How do we pay for labor? How do we how do we pay for what it's gonna cost to start a company?
Alex Judd:Yeah. How do you answer those questions? And so and so I went back
Denver Whetten:up to the my my friend, the land land development guy, and I said, hey, I'm gonna need I'm gonna need some help because I don't have any money. Mhmm. And and But he wants you to do this work. He wants me to do the work. Yeah.
Alex Judd:And so and so and so he came back and
Denver Whetten:he said, look, you work for me Monday through Friday, invoice me on Friday, and I'll have a check cut to you the next Friday so you can go cash it and then pay your guys. Which is kind of unheard of, like you don't get those kind of terms, but because of my relationship with him and and him wanting me to to to to do it, the the track record we had already developed with him over the previous months, he knew that we could. And so he offered us those terms and it was it was with that. And then, you know, I had American Express with a really high limit.
Alex Judd:Don't listen, Dave Ramsey. Don't listen to me.
Denver Whetten:My god.
Alex Judd:Okay. So how long from you quitting your job to you being in business?
Denver Whetten:A month.
Alex Judd:Oh my gosh, Denver.
Denver Whetten:A month.
Alex Judd:Okay. And I wanna give people the scope now because not everyone knows what Dagen does now. Can you give people, you know, how many team members does Dagen have nowadays? Where are y'all doing work? What does annual revenue look like?
Alex Judd:Just ballpark. Give us visibility into the scope of work now.
Denver Whetten:We've got about 240 team members now. We we do concrete work. We do underground wet utilities, and we do concrete coatings work. We'll do, a little over 60,000,000, revenue this year. And it and it's been it's been a slow a slow steady growth, you know, ever since then.
Alex Judd:This is just wild to me that literally a guy that had never thought about owning a business before quits his job, a month later starts a business, and here we are today. The next question I kinda wanna ask is, like, how do you explain that? And I know we're gonna get into more of the story, but how do you explain that journey that you've been on to where you're at today and where the company's at today?
Denver Whetten:I think it's it's just grit, the hard work, consistency, and teamwork. It's teamwork. And and I and I think it also comes down to, I love my guys. And and every time we got to one of those points where it was like, well, we could quit or we could keep going. The motivation to keep going was, I don't wanna let my guys down.
Alex Judd:Which was very much in the motivation for starting as well, sounds
Denver Whetten:like. Right. Yeah. I mean, that was the that was the motivation for starting. I grew up on a cattle ranch.
Denver Whetten:I still wanna be a cowboy someday.
Alex Judd:That's still on your goal. That's still on your dream board is what you're saying.
Denver Whetten:Right. I
Alex Judd:love that. Man. Okay. So you started the company a month later. How many of your guys from the existing business came over with you to start the company?
Denver Whetten:So we started day one with 10 guys. Okay. Out of those tens, we still got one of them.
Alex Judd:He still works for the
Denver Whetten:company today. Still with us today.
Alex Judd:That is unreal.
Denver Whetten:And out of, those original two fifty that that were working for me at that at that company, we've got about 18 of those 250 that are still with me that, have been with us for a long time. As they got let go from that other company, I'd hire them on, and and they've been our core our core team ever since.
Alex Judd:Wow. Because how long ago was that that you left?
Denver Whetten:Nineteen years.
Alex Judd:Nineteen years ago. Unreal. Okay. So then just give us kinda big picture. Like, first handful of years, if we were to divide kind of the story of Dagan up into stages, what, like, what were those first years like in terms of running the business, leading the business?
Alex Judd:Give us just a description of what it was like.
Denver Whetten:Yeah. So the first period was survival. Yeah. It was 2007, the economy got worse and worse. Yeah.
Denver Whetten:2008 was way worse. Yeah. And then 2009 was like really bad as far as the economy goes.
Alex Judd:O seven was bad. O eight was really bad. O nine was really, really bad.
Denver Whetten:Right. Yeah. I don't know what the exact number is, but but I've heard, sixty percent of construction companies went out of business. And
Alex Judd:that's when you started.
Denver Whetten:And that's when we started.
Alex Judd:How much do you think it affects the DNA of your company today that you started in, like, the bleakest of winters?
Denver Whetten:That's a a key part of our identity. I think that that's where we developed our values and then who we are and and and our relationship with our customers. And what those times created was we were in survival mode where we were we were as a team, we were a 100% aligned, and we were aligned behind surviving. Like we gotta do whatever to survive, to make it through.
Alex Judd:It's an incredible unifier.
Denver Whetten:It is, it is. And it was fun when everyone else is going out of business and we're actually growing or adding people, we're taking on bigger and bigger projects. We weren't making any money. It was until the fifth year that I didn't have to go sit in one of my customer's office on Thursday afternoon to to to find payroll for the next day. I had to do that every Thursday for the first four and a half years of Degen's existence.
Alex Judd:My gosh. And so if we're thinking about that survival stage, is that how you think about it? It lasted about four and a half to five years?
Denver Whetten:Right.
Alex Judd:Yeah. Okay. And then what what would the next stage have been?
Denver Whetten:And so then the the next stage at that point, it was it was it was growth, but a lot of chaos.
Alex Judd:Organizational chaos? Organizational
Denver Whetten:chaos.
Alex Judd:Yeah.
Denver Whetten:And so as we started making money, then then we started buying equipment, we started getting better and better jobs.
Alex Judd:How many team members five years in?
Denver Whetten:About 50. Okay. Yeah. About 50. And it was about that 50 employee mark where I didn't really have the leadership capacity to to lead well.
Alex Judd:What were the symptoms of that? Like, how did you start to realize that?
Denver Whetten:Misalignment everywhere. Misalignment everywhere. Where where those people who had pulled us through that survival mode started to gain a sense of entitlement because they had gone through all of that. And then when we started making a bunch of money, then then it was really hard to be unified. It was really hard to divide up the responsibilities the right way.
Denver Whetten:It was really hard to bring new people to the team and and and then be respected.
Alex Judd:And did that start to show up in terms of, like, quality of work, in terms of retention rate, in like, how did that actually manifest into the company's performance?
Denver Whetten:We continued to perform well. A lot was on the retention rate. A lot was on just the internal conflict within within the team.
Alex Judd:Probably pretty stressful for you too.
Denver Whetten:Pretty stressful. Started to not be fun. I didn't have the answers. I mean, I I thought I knew everything. That was one of one of our big problems was that.
Denver Whetten:Right? It was I thought I knew everything. I thought I was the smartest guy in the room, but I didn't understand why we couldn't just get along and why we couldn't get back to everybody on the same page working together.
Alex Judd:Was there a moment or, like, a specific situation that you think back as, like, that was the tipping point? That was like what opened my eyes like something has to change?
Denver Whetten:I went to a mentor of mine to ask him. He had he had started a framing company and grown it very big and then sold it before the downfall of the market.
Alex Judd:Okay.
Denver Whetten:He was smart.
Alex Judd:Yeah.
Denver Whetten:I came to him with this problem of like, man, I just don't know what to do. You know, my guys are fighting all the time. And and he said, you know, you gotta realize that it takes a certain type of an employee to to get a company off the ground. And he and he called them cowboys. It takes it takes that cowboy that doesn't like rules, that's willing to cut corners, that just does whatever it takes to to get things done.
Denver Whetten:And it kinda takes those type of, you know, people that were willing to take big risks to to to get a company up off the ground and going. And he said, and then and then it comes then comes the time when those people no longer serve you, and and they end up causing you to not be able to get organized. And you gotta let those guys go and hire guys that come from bigger companies that are used to SOPs and they're used to org charts and they're used to roles and responsibilities, and they're used to safety and and and, a good way to track quality and and and and all of those important things that it takes for a company to be sustainable. He said, you just gotta you gotta let those old guys go and and hire the new guys that are already trained, and that's what's gonna help you gain stability and not have the problems that you're having.
Alex Judd:How'd you respond to that advice?
Denver Whetten:I was devastated because the whole reason I started the company was for
Alex Judd:The Cowboys.
Denver Whetten:For the Cowboys. Yeah. I mean, I was like, man, these are the guy these are my guys. Yeah. I love these guys.
Denver Whetten:Yeah. They're little terrorists, you know, out there. Out in the field, you
Alex Judd:know? Yeah. But It's funny that the thing he's saying too is, like, you need to find guys that actually value things like safety and things like that. Yeah.
Denver Whetten:And, and it was that point where I was like, man, something something's there's gotta be a solution to this. I don't know what it is, but there's gotta be a solution to this, because that's not the answer. I'm not gonna let these guys go. I'd rather just stop doing work. I'd rather just shut the company down than than just let these guys go because that's the whole reason I started the company.
Alex Judd:Man. So in some ways, it's that same internal value of people are the point that, like, it it I mean, they caused you to leave the company in the first place to start your own thing, shows up again in this situation, and you're like, I understand that that might even be practical business advice, but I'm not doing that. Right. Was it even a dis like, did it even feel like a decision for you, or were you just like, I'm not doing that?
Denver Whetten:I'm not doing Wow. I'm not doing that. There's gotta be a different solution.
Alex Judd:Okay. So what what did you do?
Denver Whetten:So that was the point where I was like, man, I just gotta figure out how to become a better leader. I still didn't think it was my fault. I still thought, you know, I gotta figure out how to change these guys and get them to see things my way better. And so I I started looking into options and I I decided to go back to school. And and I signed up to, take the executive MBA program at Arizona State University.
Alex Judd:Was that like you did a ton of research and you said like, this is the exact next thing I need to do? Or was it just like, I don't know. I need to do something. How about this?
Denver Whetten:Yeah. It it was probably that. I just I just gotta do something. Yeah. I'd always I'd always had in the back of my mind ever since I I graduated with my bachelor's that someday I would like to get a master's degree.
Denver Whetten:Yeah. The solution I came up with was, man, maybe I just need to go back and I can learn how to run a business better. I can I can I can learn some leadership? I can learn some better accounting. I can I can learn something?
Alex Judd:But then still the motive being, I I need to get these guys to figure it out in some ways.
Denver Whetten:Right.
Alex Judd:Okay. So what was that program like? I mean, you were working hard during that season.
Denver Whetten:Yeah. Yeah. It was crazy because it was a big commitment.
Alex Judd:How many kids did y'all have too at that time?
Denver Whetten:When I'd made the decision I was gonna go back to school, we had four. And then about six months before the program started, we were done. And Amy said, hey, I know our youngest is five and we were done, but, we're expecting. Holy Denver. We thought about it more.
Denver Whetten:You know, is this really the right thing right now? Being the NBA program. The NBA program with a new kid on the way trying to run a business and and keep the wheels on everything.
Alex Judd:And you were probably very much playing like, you were running the business that time. Like you were playing the operator role at that time, I assume.
Denver Whetten:Right. So one of the first classes that we took was organizational behavior. And one of our, objectives in that class was was, we had to create an org chart of our business. And and the org chart that I drew, I had 32 direct reports.
Alex Judd:True. Golly. And your thirty third in the form of a child is coming any day now. It's it's what you're gonna say. Jeez.
Alex Judd:Okay. So, I mean, honestly, we could do six more follow-up episodes, and maybe we will to to talk more about this story. But I wanna know if we zoom in on this inflection point, that season of the NBA program, but also just season of starting to gain awareness of like, oh, man. I need to grow my leadership if we're gonna grow this company. What was the biggest what was the biggest, like, light bulb moment or switch that occurred internally for you that changed your approach to Dagan?
Denver Whetten:It happened while I was in the executive MBA program, but but it was actually came from one of my friends that I'd gained in my cohort there was an ex Navy SEAL. His name is Chris Withrow. He he was a captain of the Mesa SWAT team at the time. Wow. We started doing all our projects together and and he brought a book to to our team called Extreme Ownership by Jocko Willink and Leif Babin.
Denver Whetten:There you go. And I'd heard about it, I'd never read it. And through our conversations there, I started studying it and reading it. And it was the concept of extreme ownership of every problem that I have is actually my fault and I have to take ownership of that. And that was the first time that I'd realized that the bad behaviors that I was seeing in my guys was actually my fault.
Denver Whetten:And I had to take ownership of that. And the real person that needed to change was me. And that was the biggest thing that I got from that whole experience was that realization.
Alex Judd:So that's five five to six years in. Does that feel right into starting the company?
Denver Whetten:So by that time by that time, we were 10, eleven years in.
Alex Judd:Oh, okay. Okay. Gotcha. So so and you're now on year 19? Right.
Alex Judd:Okay. What practically, if we were to look at, man, Denver's leadership now versus Denver's leadership those first ten years, what are the biggest differences that we would notice?
Denver Whetten:That that I know that I'm not the smartest guy in the room. I've built a team around me, and the more that I empower them and trust them and let them do their jobs the way that they see best, the more successful we're gonna be. My role as the owner of the company is is to provide the vision and the mission, leadership guidance, and and that's the most valuable thing that I can do as the owner of the company. Even though what I wanna do is just go be a superintendent on a job and and run work. You know?
Denver Whetten:Man,
Alex Judd:well, we always say, like, our company and and particularly this podcast as well exists for impact driven leaders to help them step into who they were created to be so that others benefit and God is glorified. And it's just like, man, you are an impact driven leader through and through. Just seeing like, we've spent time around your company now. Like, seeing the overflow of your decision to get on a growth trajectory to say, like, man, I'm the problem. That's a problem, but that does also, like, means I'm part of the solution.
Alex Judd:Praise god for that. And, like, I just see so I mean, yeah, there's there's hundreds of people around the city of Phoenix that have jobs and are benefiting because of your decision to say, man, I'm gonna step into who I'm created to be. And then I just think God is glorified through that. So thanks for just sharing a snapshot of the story today, and we'll do more of this, man.
Denver Whetten:Thank you. Awesome. Thank you.
Alex Judd:Well, there you have it. Thanks so much for joining us for this episode. If you want any of the information or resources that we mentioned, that's all in the show notes. Hey. Before you go, could I ask you for one quick favor?
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