Ten years ago, if you’d asked William G. “Bill” Tomko III his No. 1 business priority, he’d have said growth.
He was an executive vice president and part of the third generation to work in the family business, W.G. Tomko Inc., a full-service mechanical contractor that started as a plumbing business in his grandfather’s garage.
Tomko would become president and CEO a few years later, when he turned 30. And his perspective has changed after eight years leading the company.
Today, the most important goal is to make the business as profitable as it can be and as good as it can be. W.G. Tomko focuses on being safe and keeping its customers happy, first and foremost.
“Our profitability and our professionalism — the level of product that we can bring in under budget, on time and with good workmanship — is what we’re striving to do,” Tomko says. “And if we can do that, and keep those same goals in mind, then we’ll grow.”
That’s not to say it was doing a bad job before, but Tomko says now they are more proactive than reactive about their quality of work.
“We don’t focus on what we’ve done well on a job. We focus on what we can do better,” he says. “It’s great that we get compliments on jobs, but we want to know, ‘What could we have done better?’ We’re always focused on what we can do better, not basking in what we did great.”
The sales team also makes sure the current customers are happy, rather than just getting new work.
By focusing on its professionalism and profitability, which in turn means more repeat business and better long-term relationships, growth has followed. W.G. Tomko hasn’t had to chase it.
This formula has led to a major expansion — a 40,000 square foot addition that is being constructed to meet the demand of the fabrication and oil and gas divisions — and it has the company and its 400 employees nearing the $100 million mark for annual revenue.
Avoid the chasing game
The business environment today means that companies need to work smarter.
The credit crunch that began seven years ago continues to reverberate within the construction industry, stopping owners from having the ability to fund their projects.
Tomko says that you have the same amount of contractors fighting for half of the work. Companies also bid on projects that just sit for months at a time, or even stay on the shelf indefinitely.
“It’s getting a little better but it’s not what it was,” he says. “I don’t think it will ever be what it was.”
Some contractors then fall into the trap of lowering their prices to try to get the work that is available. They spend too much of their time worrying about the competition, Tomko says.
“These numbers that are out there; they are just not achievable. And the people that are taking them for these low prices — I call them pigs, they try to be pigs and pig up all of the work — they are going to eventually crumble,” he says.
W.G. Tomko doesn’t want to play the chasing game, figuring that if someone else can do it for that price, then it must be possible for your organization as well.
“You can’t be one of those guys. You have to pick a number — what you want to do in sales and try to achieve that number at the margins you’re comfortable with,” Tomko says. “Because when you start taking (jobs) too cheap, you start doing things the wrong way, trying to skimp on stuff and cut corners.”
Instead of being a low-bid contractor, W.G. Tomko is a contractor that gives a fair price and provides a job well done.
Lowering the risk
In order to account for these challenges in the business climate, W.G. Tomko has diversified into new lines of business and started working more outside of the Allegheny Country area.
Tomko says if the company is doing more than 20 percent of its business in Pittsburgh, even with being able to take advantage of the multiunit construction boom, that’s a problem.
W.G. Tomko is focusing on growing its Baltimore/Washington, D.C. office by hiring the right people who can help with projects like a $20 million mechanical package for a new MGM Grand hotel and casino in the Washington, D.C. area.
It’s not always easy, however, to move into new capabilities like oil and gas prefabrication, or even expand the scale of existing services such as design build.
W.G. Tomko has had to hire different people, train its existing employees, work on increasing communication, set up better internal controls and add sales staff who can sell into those areas.
“We’ve made mistakes, as you do when you get into different things,” Tomko says. “We lost money the first two years of the cash crunch. So we took our lumps and then we learned from the mistakes we made, and we grew with it.
