Each time Wayne Whitener wants to expand TGC Industries Inc., it comes with a $7 million price tag.
The company does subsurface mapping for oil and fuel companies and grows by adding crews of new equipment and about 45 people. With such a hefty price tag for each expansion, this president and CEO has to keep his finances in check and cultivate his 468 employees so they’re ready to step into new positions when clients require more crews.
His leadership skills are paying off. The company added three to four crews in the last year and a half and grew its revenue to $30.9 million last year, a 53.7 percent increase over 2004.
Smart Business spoke with Whitener about how he keeps his employees and finances in check to lead growth.
What most inhibits a company from growing?
When you look at the real problems out there, it’s market conditions and having qualified personnel.
When the market’s good, it’s much easier to be on a growth or a steady pattern. When demand is down, there’s not a lot we can do about it.
Your hope is to keep the very best that you have of the personnel. You have to call on your more experienced and better people to carry more of the load to keep costs down through difficult times.
How do you maintain morale during hard times?
We just buck up and work our way through it and still keep some of the rewards for the personnel that are doing the job, even though it is tough times. You still have to let the employees know that you appreciate what they are doing.
Even though you’re not in a very high money-making mode, what they’re doing is keeping the company going for the time in the future when we have the opportunity to make a good return on the revenue.
How do you financially prepare for growth?
You have to really balance your debt. Hopefully your business is at such a level that internally you’re generating cash and you’re not overextending yourself in the growth mode that shadows either one of these, whether it be the borrowing or using up all your cash to generate the growth.
There’s a fine line there balancing all three of those in order to keep the growth going and keep enough cash to make sure you don’t have any cash problems and do just enough debt if things turn, you can manage that debt.
How do you maintain that balance?
Every time an opportunity becomes available to us, we weigh all three of those. We have to review where we are cashwise, where we are debtwise and whether we want to take on additional debt or if we have enough cash being generated internally to at some point go out and say, ‘OK, six months from now, we anticipate this cash expenditure putting out this new operation and we feel we can do that without taking on additional debt.’
How do you make decisions regarding growth?
Take advantage of the opportunities when they become available. If the business is there, you need to make the decision quickly and take advantage of it.
You want to look at the positive side of it on what opportunities are there for the company? What opportunities are there for the personnel? And what opportunities are there for the investors?
On the other hand, you have to look at if there’s a downturn eight months from now, where will we be? Can we service this debt? What will we do with the personnel? What will we do with the equipment? You have to weigh the pluses and minuses.
How do you get employees to buy into your decisions?
That’s the simpler part. You have your plan laid out, and you present it to them. ‘This is what we’re doing. This is what’s happening. This is when we’re going to do it.’ People have enough faith that they’ve seen it in the past that this is what’s going to happen, so everybody just moves forward.
If you went in there and started asking employees, ‘Well what do you think? What should we do?’ not a lot would get done. As a CEO, you have to formulate the plan for the company, take responsibility for that plan, and go in and get the employees to execute that plan for you.
How does that leadership style help the company grow?
Being able to lead the company in the right direction is critical. A lot of times, even in our market right now where demand is very high, people get complacent and say, ‘I’ve got all that I can handle right now. We’re doing great.’
It takes the CEO to step up and say, ‘Well look, we need to do more. We need to step out here. We need to put another crew out. We’re going to do it by such and such a date, and this is how we’re going to do it.’
Get everybody in the frame of mind that this is what we’re doing and we’re moving forward and keep the company moving.
HOW TO REACH: TGC Industries Inc., www.tgcseismic.com
