“I love what I do. If it were me, designing a dam is like painting a piece of artwork,” he says. “To give you a classic example, I took my wife on my honeymoon, going through five dams in the Tennessee Valley for tours. She probably thought I was nuts.”
Visions from IndiaAfter he formed DLZ, Raj acquired two companies in 1984 and 1987. Then, in the next five years, 1987-1992, he bought five more companies. DLZ went from about 50 people to 350.
That employee increase took a lot to digest, especially since the company had to start marketing for the first time. It had to acquire marketing skills to be able to get the amount of work it needed to support itself.
“We were lucky during that time, because the economy held up and we didn’t go through a major recession. If one had come along in that timeframe, we would have been toast pretty quick,” Raj says. “I was heavily leveraged. We had borrowed money from anybody who would lend us the money.”
More recently, DLZ has acquired a few more companies. But the biggest factor in choosing targets is making sure the acquisitions are in the civil engineering arena.
“We just don’t go around acquiring stuff that we don’t know anything about. Like they say: ‘Stick to the knitting,’” he says.
Raj’s son, Shyram Rajadhyaksha, who is an equity partner and CFO, says government work is bureaucratic and politically driven, but that’s what DLZ specializes in so it — and the companies it acquires — know how to operate in that arena.
It’s important to have diversification, though, because when one state’s economy is slowing down, another’s might be accelerating, Raj says. Indiana and Ohio, for example, are very different in terms of their cultures and spending cycles.
In addition, DLZ has a good reputation of retaining the staffs of the acquired companies.
“People actually want to be acquired by us because they know that it’s not going to be a major transition,” Shyram says.
Raj also adapts some things from the new companies, realizing that DLZ is not the fountain to all knowledge. However, with his 50 years of experience in the engineering and architecture business, he does have a good idea of what works and what doesn’t work.
Digesting companies
Over the past several years, DLZ has run more efficiently as it finishes digesting its acquisitions. That has translated into four of its best years out of the past 40.
“We’re not getting caught up with silly mistakes that we used to make. We have tighter control of our operations, and we have less friction between people in various states and various areas so that people are focused in the same direction,” Raj says. “They are working together a little better. They are cooperating with each other.”
It’s always a challenge to get everyone on the same page when you have multiple egos and fiefdoms, Shyram says.
Time is the biggest healer as the old culture goes away and the employees start seeing the enterprise as one company. Raj says if you lay down a program and people don’t work with the program, they will usually take themselves out, but again, it takes time.
However, it wasn’t just time that helped DLZ clean up its operations and become more profitable. It took training programs and management integration, which let everyone get to know each other, either face-to-face or electronically. The company also uses video conferencing and Yammer, a social networking service, to stay connected.
“We have more social programs and a uniform management policy, which we live by,” Raj says. “It’s not just talk. Everybody has to be treated the same.”
Every couple of years DLZ also invites everyone, including spouses, to a company-wide party, putting them all in one hotel. It costs a lot of money, but he says it’s important.
As employees get to know each other, it opens up the dialog and direct connections, including to Raj. There are very few large companies where you have a one-on-one conversation with the CEO, Shyram says.
