James Tallman uses the downturn to grow Datacert Inc.

James Tallman, president and CEO, Datacert Inc.

James Tallman, President and CEO, Datacert Inc.

Deciding when or how to transform a small company into a global company can be a tough task, but James Tallman took the reins of Datacert Inc. at the height of the economic downturn in 2008 and made a tough task a reality.

As president and CEO, Tallman took the company from a modest provider of software and services for the legal industry that had 2007 revenue of $21.5 million to a global company with 2009 revenue of $33.7 million.

“Datacert was an entrepreneurial company, 10 years old, and they needed someone to come in and bring the company to the next level,” Tallman says. “The company had done well, but it had reached the point where we needed to take a different approach to the marketplace, and we needed to do things in a more scalable fashion.”

Smart Business spoke with Tallman about how he grew a small company into a global success during one of the toughest economies since the 1930s.

Reassure employees. My first challenge had nothing to do with the company, it really had to do with the people and the economy, and it was getting my team to understand that a downturn in the economy could actually be the greatest opportunity for a company. I was really blessed because over the past two years, I’ve had a really outstanding board and I’m surrounded by an outstanding management team. We really had to rally the troops who, for a lot of them, were going through personal strife, where their husbands and wives were losing jobs in the marketplace. My challenge as a leader was to get them to understand that a downturn in the economy, when other companies and your competitors are struggling, winds up being a tremendous opportunity for you to take the market and grow.

When you transform from an entrepreneurial-based company to a professionally managed company, the key challenge was spending time with the employees and spending time helping to develop the skill sets that they needed to get the company to the next level.

Plan for the long term. Do what you say and say what you do. As you lay out a clear plan and you tell people this is what we’re all going to do, make sure you stay the course. During bad economic times, your tendency sometimes can be to react to a short-term market force and not stay with the long-term strategy. I made a commitment to the employees that I was going to invest in them and I was going to reinvest 30 percent of our revenues, and yes, I didn’t know what the economy was going to do, but we were going to stay the course. If I invested in them and we invested in the new technologies and where we were going, the benefits would come.

As the sales and the revenue of the company started to grow and [employees] saw the reaction from the customers, at first, they were open to the plans that we had, but they were also skeptical. As they started to see the results, they became believers. The reactions I started to get were people coming by my office and thanking me and saying, ‘Everything we said we were going to do, we’re doing and we’re winning and we’re dominating the market now.’

Develop growth. Make sure that the company isn’t entirely dependent upon you. Put your ego in check and recognize that to grow a great company, you need a great team around you. Any company that’s driven by one person or just a couple of people, although you can exhibit short-term growth, you’re never going to achieve a long-term sustainable growth strategy if you don’t surround yourself with people who are better than you are.

As a CEO, the first thing you have to do is look in the mirror and ask yourself, ‘What am I really good at and what am I not good at?’ I have a small company and I want to make it a global company. I need to ask myself, ‘Do I really understand what it takes to go to the next level, do I have the talents within myself, and what kind of people do I need to surround myself with that have talents that I don’t have to be able to do that?’ It’s one of the biggest failings that I’ve seen of CEOs that I’ve worked for. The CEOs who truly understand that they don’t have the answers and they need to hire people who are better than them in a lot of different aspects of the business is a critical thing for a CEO who is trying to transition from a small company to a large company.

How to reach: Datacert Inc., (713) 572-3282, or visit www.datacert.com.