Announcer 0:01

Entrepreneur, founder, author and financial advisor, Marc Bernstein helps high-performing business owners turn their visions into reality. At March Forward, Marc and his partners and associates think out of the box to partner with their clients in regards to their visions for their lives, their businesses and their legacies. And through his innovative work with the Forward Focus Forums, Marc connects entrepreneurs to resources that help to fuel their success. Founders’ Forum is a radio show and podcast where entrepreneurs share their journeys, revealing the stories behind their successes, and the lessons they’ve learned. Join Marc and his guests for a mix of inspiration, valuable insights, and a bit of fun! Now, let’s dive in.

Announcer 0:43

Now let's dive in.

Family Roots And Belonging

Marc Bernstein 0:45

Good morning, America. How are you? Welcome to Founders Forum. I hope it's a uh beautiful day in Philadelphia. I can tell you we're broadcasting today from Southwest Florida, and the weather is gorgeous here. It's going to be about 80 degrees and perfect weather today. And uh I have in the studio with me my friend Tony, and we'll talk about that in a second. I'll formally introduce him. And but because there's we're gonna tell the story of a family, but not necessarily a family business, but a business that includes family. And as a result, we also have Pete, Tony's dad, on the line. Um, so in fact, why don't I do this first? I don't usually do this first, but let me introduce Tony, and Tony will introduce Pete. And then our topic for the day is family. So I'm gonna just have you guys comment on that, how it relates to our story today. So Anthony F. Naccarato, P E, S E, is chairman and CEO of O'Donnell and Naccarato Structural Engineers. He is a lifelong resident of Philadelphia, graduate of Villanova University's College of Engineering, like his dad, and as you'll find out, and has spent his entire professional career working as a consulting structural engineer at O'Donnell and Naccarato, holding every position from entry-level mail room, not quite the mail room, to chairman and CEO. Uh he was born and raised in the Taconey section of Philadelphia, for you Philadelphians listening, uh, where he's lived for 50, he lived for 56 years and now lives in Bella Vista section, which is in South Philadelphia, where his wife Kathy was born and raised, and they've been living there since July of 22. They have been together, he and Kathy, for 40 years and married for 35 of them. They have two children, a son Pete, who's married to Maddie, and two sons. Uh they have two sons, Anthony and Declan, and Grace is married to Chris with their daughter Amelia. So welcome, Tony, and welcome Pete. Thanks, Marc. It's great to be here. Uh so on the subject of family, why don't you start and then we'll have your dad chime in on that. Okay.

Anthony (Tony) Naccarato, PE, SE 2:57

Happy to do it. Uh family. Uh family in in our family means everything. Uh as I mentioned, spending all that time growing up in Taconey, the biggest reason I never left is because my family was there. Uh the reason my parents uh met was because their families were there. They met in in uh second uh first grade and uh started dating in seventh grade. And so it was a community, it was a place where our immediate family lived, our cousins, all of our friends, uh again, a lot of immigrants uh and immigrant families from Calabria. Uh and we created this this wonderful community around our our parish, uh church, our Lady of Consolation. And no matter where you were, no matter who you were with, uh the sense of belonging uh was palpable and uh and and really spoke to again wanting to stay there. Um and in terms of the business, uh to join my father, uh the greatest mentor I've ever had in my life, not just prof personally, but of course of course professionally, to follow in his footsteps to help to build the brand that he and uh Bill O'Donnell rest his soul, um uh started from from scratch, basically, and and have built it into one of the the premier engineering firms, structural engineering firms, uh in in the country is uh it's been an honor for me.

Marc Bernstein 4:23

And it is quite a story of of the firm itself. Pete, do you have anything you'd like to add about what family means to you and or the fact that your son is now the CEO and chairman of the company that you built?

Pete Naccarato 4:34

Yeah, sure. I'll t I'll take it back to uh pre Anthony Taconey. He's right. It it was uh a place where you really had roots. The roots went all the way back to Italy, really. And uh family met everything. And as he said, uh I met my wife in first grade. Uh we've been married 60 years, and uh Anthony is the engineer that he is because of me, but he's the man that he is because of his mother. Uh and I was fortunate in finding a partner in business that was similar. It it he had the same background as as I did. We both had wives that understood that if the business was going to succeed, they had to take care of everything else. And I mean everything. Bill and I did uh 12, 14 hour days, six days a week. It doesn't leave a whole lot of time for changing diapers and midnight feedings.

Marc Bernstein 5:39

Right.

Pete Naccarato 5:39

Um so the the the wives gave us the freedom to really concentrate on this business. Uh also in in the neighborhood, I I guess inadvertently is where I picked up my business acumen because my grandfather, my father had a little neighborhood mom and pop store, and they always preached to me that only the family works to cash register, the customer's always right. And if the customer wants something we don't have, we'll go get it. So I had I had that attitude. Uh fast forwarding uh around 1961, I met Bill O'Donnell on the campus of Illinois, and in 1981 we started our business, so we were close personal friends for 20 years. Uh we were in each other's weddings, we're godfathers to each other's children, and so all of that background really made the creation of this great business possible. We had uh infinite trust in each other. We uh we didn't worry about what the other guy was doing. We just knew he was doing the right thing. He would I knew that Bill would do what I would do in a situation, and he knew I would do what he would do in a situation. So we were we were never looking over our shoulder, we were always moving forward.

Founding A Firm On Trust

Marc Bernstein 7:03

That's wonderful. I'm gonna stop you there because that's a great comment on family. And I just want to comment that this show means a lot to me because, first of all, Tony and I met at the Union League of Philadelphia by accident, and we now play in a band together, we play music, and he's become a close friend over a short period of time. And I think one of the reasons why, from my perspective, that that was an easy friendship is because your story resonates so much with me. I grew up in Philadelphia. I grew up um, you know, in a in the suburbs ultimately. We moved out of the city early, but in a parish, you know, and a lot of my friends were Catholic, a lot were Italian. I grew up with a lot of Italians. My wife is Italian and her family story. There's some similarities in that. She actually grew up, I don't think I've told you guys, in construction business. Her extended family were Masons. And so there's a lot of overlap, and it and it it feels like home to me to hear your story. So uh it's a really it's a and it's a really great, and I appreciate Pete that you already talked about how you and Bill met and the beginnings, but let's talk about, let's jump ahead to um you you worked as a structural engineer and you uh you worked on one really great formative project um that advanced you, and then we'll kind of talk about how how you and Bill got together to finally start a business after all those years.

Pete Naccarato 8:30

Uh yeah, when uh Bill and I graduated, we we worked with the same engineering school, uh, engineering company. Uh he got drafted. I moved on to other uh firms, uh always in Philly. Uh worked on um things like children's hospital out at Civic Center Boulevard, Oxford Valley Mall, King of Pressure Mall, a lot of big jobs in Philly. And uh when Bill uh returned from the service, we got together with an older engineer and uh worked with him for a few years, then Bill and I moved out on our own, as I said, in 1981. And we we actually started with three people. Uh Bill, me, and my wife's cousin, who had just graduated from high school. She was 18 years old, and she uh she she was our staff. And coincidentally, just a year or so ago, she retired from ON as the longest serving employee. So Teresa had one one job her entire life.

Marc Bernstein 9:40

After how many years was that? How many years was she there?

Anthony (Tony) Naccarato, PE, SE 9:44

Uh let's think about it. She started in 81, she graduated in uh graduated, she retired in 24. Oh, there you go. So you know do that math like 44 years, right?

Marc Bernstein 9:53

44 years.

Anthony (Tony) Naccarato, PE, SE 9:54

44 years, 43, 44 years.

Marc Bernstein 9:56

Wow. Amazing.

Pete Naccarato 9:57

Yep. Yep. She did, she did just you know, uh, she was kind of a backbone of the company. She she knew every job, every client's job number by heart, things like that. She made it run. And uh I'm jumping ahead, but uh because of the way we uh left the company, Bill Bill and I, uh we created an eSOP, and and that enabled Theresa to retire with quite an estate, a lot of money in addition to her 401k. So things were things worked out good. That's amazing. So that's how we got started. Three three of us in the in the Borsch building, which was also one of our projects. We worked on the renovation of the Borse. And that was our first office location.

Marc Bernstein 10:40

For the for those outside of Philadelphia, these are like all iconic children's hospitals, iconic, bourse buildings, iconic. These are King of Pressure Mall is one of the biggest shopping centers in the USA. These are pr major projects that you worked on.

Pete Naccarato 10:54

Yeah. St. St. Christopher's Hospital. And then all the major innovations in the city, the Wanamaker building, the Lip Brothers building, your Philadelphia was good to us. It was a lot of work there at one time. Uh but uh fortunately that that that laid the foundation so that you could could move out to to where other work, you know, what Anthony's doing now out of the country. I mean, out of the city.

Anthony (Tony) Naccarato, PE, SE 11:21

Uh, now you're in ten cities, isn't it? Yeah, we just uh expanded into our tenth city into uh the Dorham, Raleigh Durham area just a couple of weeks ago.

Winning Clients Through New Tech

Marc Bernstein 11:31

Yeah, it's amazing. So we'll jump ahead, but yeah, it's a national firm now. So tell me about uh like uh you know what the joke on the show is I always say to people, so you start a business and it's smooth sailing from there, which of course it's not, right? So what kind of challenges did you have you and Bill have starting out the business? What kind of things did you have to overcome to gain success in the in the uh in the enterprise?

Pete Naccarato 11:57

Well, well, we were the new guys on the block. We generationally uh we followed all of the World War II vets who had come back and started businesses. They were the old respected uh guys. Uh but just like every generation, they they were kind of stuck in in a technology that they were comfortable with, and uh we we were breaking in with the uh computer, which was which was unheard of. The slide rule was the only calculating tool anyone had ever had. Um the drafting, the the making of drawings was was entering the computer era. So we had to convince uh the our major clients were our architects. And the relationship between an architect and a structural engineer is kind of like the Lone Ranger in Tonto. The you you stick together. You have to you have to be able to as as one arc Alec Ewing told me one time, I like my structural engineer because it permits me to sleep at night, because um structural engineering is an incredibly serious business. The uh buildings fall down, people get killed, kind of a thing. And uh so you establish these bonds, these trusts. So for Bill and I to break into that, I mean the time was right, that the these other guys were reaching retirement age, but still to convince an architect uh who's been using one structural engineer for 20 years, 30 years, that these two kids uh are going to do it bigger and better and cheaper and all those things. Took a lot of smoozing, a lot of uh uh stick to it. You had to we had to understand that no didn't really mean no, that we could we could go back and take a second bite and uh uh and it would happen. We would get slowly we start getting the phone calls that my old reliable engineer really is not comfortable with this new technique or this new system or whatever. And and little by little we broke in, and uh but we um we created that reliability and then allowing them to sleep at night, knowing that uh our buildings were were going to stay up.

Sponsor Break And Return

Marc Bernstein 14:17

So it was change in technology were major major challenges. We've got to take a quick break, and we will be right back on Founders Forum.

Announcer 14:24

Every great building starts with a strong foundation. O’Donnell & Naccarato is a national, employee-owned structural engineering firm partnering with architects, owners, and developers across every major market sector. Their work spans structural engineering, repair and restoration assessments and design, parking and functional planning. From early concept through construction, O&N is known for practical problem-solving, clear communication, and a collaborative approach that keeps projects efficient and well-coordinated. Learn how O’Donnell & Naccarato supports the structures that shape our communities at o-n.com.

Starting At The Bottom

Marc Bernstein 14:59

We are back on the Founders Forum with our guests today, Pete and Tony Naccarato. And we've heard about the beginnings of O'Donnell and Naccarato's structural engineers and Pete and Bill O'Donnell's founding of the company. And for the sake of time, um, time goes quickly on the show. We're going to jump ahead to Tony in the late 80s entering the business and talking about the development from there. And we'll include both of you guys in the conversation to see it through. So, Tony, tell us about that.

Anthony (Tony) Naccarato, PE, SE 15:30

Yeah, I uh graduated Villanova 1988, followed my dad there, got a degree in civil engineering, and started in July 5th of uh 1988. I think it was my dad's same starting date when he graduated. And uh I was an entry-level engineer. I mean, yeah, I took uh engineering classes. Yes, I had a degree uh degree in uh engineering, but everything, you know, started that day of learning the craft of designing buildings. And of course you start at the entry level, you check shop drawings, you review calculations, you you you uh you review drafting that was done by the professional drafting folks. But I literally have uh started uh on the bottom and begin, you know, begun to to rise through through the business.

Marc Bernstein 16:17

Um I I just want to comment real quick. It wasn't a given that you were gonna end up running the firm.

Anthony (Tony) Naccarato, PE, SE 16:22

Not in any way, shape, or form. Right. I mean, just because my and I always tell people it's you know, I say, Oh, Donald Acarado, and it's oh it's your your your your name's on the door. And I'm like, well, no, that's my dad's name on the door. Right. You know, I'm just here to to steward it and to shepherd it and to to grow it.

Marc Bernstein 16:37

But that wasn't even part of the plan.

Anthony (Tony) Naccarato, PE, SE 16:39

Back then it was it was I had a uh I was married in 1990, I had a kid in 1992, and you know, I was working, you know, same thing, 50, 60 hours, getting paid overtime to raise my family, right? To to provide for my family. So um, you know, maybe I had goals and aspirations, but that's literally all they were. And there were other engineers, you know, I wasn't the only capable engineer there. There were people that were older than me, that had been there longer, that were certainly people that were my leaders, people who I was learning from. So yeah, in those early years, it was it was get the job done.

Marc Bernstein 17:14

So just to frame it, this is a story of family and business together, not a family business necessarily.

Anthony (Tony) Naccarato, PE, SE 17:19

No, it's not a family. It's not like you know, my dad owned 100% and he was gonna hand me a hundred percent. Wasn't like that. In fact, we changed the you know we'll talk about the East Off and how we how we did it. Um but uh I always had again a special uh connection to this business because my dad was my dad and Bill O'Donnell, believe it or not, was Uncle Bill. Like because Italians don't call older people by their first names. So he was Uncle Bill. Now I stopped calling him Uncle Bill when I started working there, but he was that close to me personally as an individual. And so um you know, and we were much smaller back then, so it it felt like a family firm, but it but it wasn't. And we treated our we used to call ourselves a family firm because we treated our employees uh so so well, you know, because that's when you have a professional services firm, that's about only many of your customers recognize that too. No doubt about it. We treat them like extended family.

Marc Bernstein 18:18

So talk about the progression and how you became into the leadership.

Anthony (Tony) Naccarato, PE, SE 18:22

Yeah, so I checked my you know, look, you have to work four years under uh a professional engineer to become licensed. I became licensed in I think it was 1992 or 93. So when when when that happens, you can take on a lot more responsibility. You can put your seal on a set of drawings for submission to for building permits and whatnot. And you become that you're in responsible charge of that project. So um I started to deal more with clients. I enjoyed dealing more directly with clients. Uh you know, if I got my engineering prowess from my dad, I got my gift of gab uh uh from my mother. Um I always liked to not be the prototypical engineer. Um did you ever hear the one, how do you know, an extroverted engineer? He's looking at your shoes instead of his own. Um I never wore shirts with pockets because I didn't want to have the pocket protector. I I just I wanted to be a businessman who whose craft or whose uh service was engineering. And so I really m uh moved to be an outside person quickly, probably more quickly than a lot of other engineers my age.

Marc Bernstein 19:35

And what in other businesses we call a rainmaker.

Anthony (Tony) Naccarato, PE, SE 19:37

Yeah, because not only was I able to continue winning work from the clients who I was handling, handling them well, making sure all of their needs were met, because m most of our work is repeat work, Marc. I mean, we get a client, we do a good job, there's a very good chance we're gonna get their next job and their next job, and their and I would say ninety percent of our work in any given year is from repeat clients. But I also had the ability to go into a room where I didn't know anyone to try to uh uh convince us someone who wasn't working with us to to use us and to and to give us a shot.

Ownership Transition And The ESOP

Marc Bernstein 20:15

So you're basically sales, marketing, and engineering at this point are your role. Doing it all. Right. So and how did that when did that transition into leadership?

Anthony (Tony) Naccarato, PE, SE 20:24

So 1998 was when we decided to begin when Bill and my dad decided to start ownership transition. And they started it in a very traditional stock bonus five-year plan from 1998 to 2003. Uh so I became a principal of the firm. I became one of the top four people, four people in the firm who were quote unquote running the firm. Uh Bill and Pete obviously were still there, but again, they were now moving up to even higher levels of uh uh uh developing relationships with the clients of our clients, you know, really trying to build our our band brand and reputation uh beyond just our current clients. And the day-to-day business, the day-to-day operation, you know, kind of fell to the four of us. And uh and that was fine. It worked fine, but you know, through your business, when you do uh stock transitions like that, the the entity that makes out the best is the government. Right. Because it's they're all it's taxable and you know, it and and we're not getting the benefits as the the new owners uh really because the cash is going towards tax. And we went through that, and I guess that's where I'll I'll hand it back to Dad if he wants to comment. I believe they sat in a meeting with Chuck Panoni, Chuck Pannoni Engineering, one of the most uh prolific engineering firms again founded by a Philadelphia. And he had just started his uh ESOP employee stock ownership plan ownership transition. And the the the basic premise. Of that is in that deal a dollar stays a dollar instead of turning into like 40 cents because of all the government. And that was enticing.

Marc Bernstein 22:10

And uh in 2003, ESOPs, because I've worked on some of my clients, are great for the owners.

Anthony (Tony) Naccarato, PE, SE 22:18

Great for the founders, no doubt.

Marc Bernstein 22:19

Great for the founders, but also great for the employees.

Anthony (Tony) Naccarato, PE, SE 22:21

I think it's set the employees, set the firm up for success. We didn't get bogged down in all of this cash, having to spend all this cash, raise all this money, make all this money, and send it to the government. We become a tax-free entity. We were able to pay off the loan you know, that we we had to borrow money to pay the founders and then pay that off. That was through 2003 to 2008, right before the you know the financial crisis. So we were able to excellent economy. We were growing um and we were able to, I think by then, kind of before I took over, you know, really have us uh in in good financial status.

Marc Bernstein 22:58

Pete, did you want to comment any more on the transition to the ESOP?

Pete Naccarato 23:01

Uh no, uh generally uh what Anthony said is true. Uh Bill and I got got there the hard way. Years of analyzing all these other methods. And while we were analyzing, we were hearing about other engineering firms that were transitioning that their plans were all failing because the buyers worked hard, came up with a lot of money, and then at the end of the year, the money went to the government and to the seller. And uh occurred a lot of cases where the the buyers just handed the keys back, and our accountant finally convinced us. He said the only way to not turn a dollar into 40 cents is an Esau. We were initially against that. It was like every employee would become our boss. He's so we as Anthony said, we talked to Chuck Panoni, who was already going through it, and it was the best decision we ever made. It just uh the transition was absolutely seamless. He didn't have to worry about keeping the clients, the clients getting word that the firm's changing. As far as the clients were concerned, there was no change at all. Same people, same responsibilities. Bill and I hung in there. I hung in for 10 years. Bill Bill, I think, hung in for five or eight years, um, and just slowly were able to comfortably transition clients who were very comfortable with me and Bill to getting very comfortable with with the young guys.

Anthony (Tony) Naccarato, PE, SE 24:27

One of the things I know about one of the things I know about ESOP.

Pete Naccarato 24:31

Earlier was the Lone Ranger and Tonto thing. We had to uh let the architects be as comfortable with new young people as as they were with us. And it worked.

Marc Bernstein 24:41

Well, what one of the things I know about Aesops is you have to have a strong leadership team for it to work. If you don't, it the whole it blow the whole thing blows apart.

CEO Vision And National Growth

Anthony (Tony) Naccarato, PE, SE 24:50

Look, Marc, I had to personally make the the decision and and and and know that I was now not gonna be the primary owner of this company. Um by that time I had, you know, we were moving in that direction. I was like, oh, okay, I'm gonna own a good chunk of this. Well, I'm I'm you know, today I sit as a minority owner, right the ESOP owns most of the firm, and I'm a trustee of the ESOP. I have to work really every day to make sure that the that the participants uh in the eSop trust are protected and that the stock value of the firm rises so that those eSop participants get what they what they deserve as as the owners of the firm.

Marc Bernstein 25:32

So which is a good which is a good thing ultimately for yourself as well.

Anthony (Tony) Naccarato, PE, SE 25:35

It's been good. I I I again I I wrestled with it a little bit in the beginning. Most, you know, all of us kind of did.

Marc Bernstein 25:42

Sure.

Anthony (Tony) Naccarato, PE, SE 25:42

But I think 23 years later, at 130 people in in nine, ten states now, going on eleven, probably in a little while. I think it served us very, very well.

Marc Bernstein 25:55

Do you so we didn't really talk about your transition to CEO and chairman? So let's do that briefly because we only have a couple minutes.

Stewardship And Five Year Plan

Anthony (Tony) Naccarato, PE, SE 26:02

Yeah, so I'll be quick. 2013 I I assumed the role of president and CEO. Um, and my goal was to grow the firm. My vision was we needed to be because we're structural engineers, we need to work on large but big new construction projects. And every economy has its ups and downs. And Philadelphia in particular is notorious for it goes up, it's it's the last area to go up and it's the first area to go down. And we're kind of in one of those situations right now. So I knew we needed to, and we always did. We always worked in North Jersey. We were South Jersey was a staple. We would grow go into Delaware, we would go up to New York when our clients would take us. But gee geography was a limitation, and I knew we needed to be more places. So we ended up in North Jersey with an office that we got New York, we're in Manhattan. Uh we had an opportunity in 2019 to buy a firm in uh Indianapolis, and now we're in Miami, we're in Orlando, we're in Raleigh Dorham, uh, we're in Columbus, Ohio.

Marc Bernstein 27:07

Real quick, in 30 seconds, tell me your um five-year vision, which is gonna be hard to do.

Anthony (Tony) Naccarato, PE, SE 27:12

We're in we're in at the middle of a five-year strategic plan where growth is primary, and not just growth of the business, but growth of our staff, growth uh uh for them to rise through the firm, to become leaders, uh, to provide opportunity, and to uh just continue to build the brand that again I'm so proud of. Uh I'm a steward of it. My name is not on the door, my dad's name's on the door. And as a family, it's important for me. I don't want to sell our firm to somebody else and lose our brand.

Favorite Song And Sign Off

Marc Bernstein 27:45

And you're a steward, which is which is a wonderful way to wrap it up. I do have one quick fun question we ask at the end. I'm only gonna ask you one because we're musical friends and I don't know the answer to this. What's your favorite song?

Anthony (Tony) Naccarato, PE, SE 27:56

Wow, very hard, as you know, because I love so many bands. But um I I grew up on Led Zeppelin. Led Zeppelin as a guitar player was a firm that you know, uh a band that I just fell in love with, fell in love with James.

Marc Bernstein 28:09

It was a firm, too, but that's it.

Anthony (Tony) Naccarato, PE, SE 28:11

Yeah, later. Um I love the Led Zeppelin song, What Is and What Should Never Be. It's a great blues song and uh plants vocals in it. We're going to listen to that again today. We're gonna think about that.

Marc Bernstein 28:24

This is a great Pete. Thank you so much for being here with us on Zoom today. It was wonderful to hear your story. I love the opportunity to get to know you a little bit. Bony, my friend, great to have you here in Florida with us. And thank you all for listening. And stay tuned next week for Founders Forum and have a great day.

Announcer 28:42

Founders’ Forum was brought to you in part, by March Forward, LLC. We partner with entrepreneurs like you to assist in accomplishing your future vision. Your life. Your business. Your legacy. Comprehensive wealth planning that starts with you -- not a product. We hope you enjoyed your time with Founders’ Forum and that you found something of value to take with you throughout your day. Join us again next week for another episode of Founders’ Forum on WWDB 860 AM Philadelphia, or on your favorite podcast streaming service. Securities offered through DFPG Investments, LLC (“DFPG”) Investment Advisory Services offered through Diversify Advisory Services, LLC (“Diversify”). DAS and DFPG are affiliated entities. March is unaffiliated with DAS and DFPG. Member FINRA/SIPC The information provided in this podcast is for informational and educational purposes only and should not be interpreted as investment advice. The views expressed are those of the host and guests and do not necessarily reflect the views of Diversify or DFPG.