Strength in numbers

Harold (Hal) Yoh III, Chairman and CEO, Day & Zimmermann

Acquisitions don’t have to complicate your company. In fact, positively guiding the resulting growth will serve to bolster your business.

With 110 years of experience and an annual revenue exceeding $2 billion, Day & Zimmermann is an expert at this. A provider of a broad range of industrial, defense and work force solutions to commercial and government customers, the third-generation, Philadelphia-based company has made numerous acquisitions over the years to broaden both its reach and scale.

“We are interested in diversification because for us, it provides stability,” says Harold (Hal) Yoh III, chairman and CEO. “We might not have the biggest highs, but we’re also not going to have the low lows. And so for us, to be in many markets and many different services really makes a difference for our company and continues (growth).”

Smart Business sat down with Yoh at the 2011 Ernst & Young Strategic Growth Forum to discuss how Day & Zimmermann approaches the acquisition of companies who will strengthen, not hinder, growth.

Q: What do you look for from an acquisition?

What we’re looking for is what can they add to us? Is it going to be geographic reach, is it going to be a new product line or a new service area, or is it just going to be able to get us scale in certain markets that we end up needing? And how do you integrate it in there? We have a lot of plans … around what exactly is a reason why we’re trying to buy this company and how are we going to be more successful with this company than without this company.

Q: How have you been able to successfully integrate acquisitions to grow your company?

What we’re all about is strategic growth, and that’s what we talk about day in and day out — maintaining profitable, sustainable growth in our markets. So based on that premise, we look at three different ways of growing: one is organic, one is joint venture and a third is acquisition. And we definitely look at acquisitions.

It’s really integrating that and making sure that they have the right access into our company, into our people. We mix our people back and forth. We end up trying to rapidly as possible put our systems in place so that they become a Day & Zimmermann company very quickly and, at the same time, not destroying the value of the company and the reason why you bought that company.

Q: Do you have a specific on boarding system for that acquisition process?

I look at the company at 30, 60, 90 day, six month and then year/year after that. So we do have a review at my level seeing how the integration’s going, how it’s working. And we do have a big, long checklist. You begin integration as you’re going through due diligence. You don’t start integration when you buy; you start well in advance of it. And that way when you have the company, you finally bought it and it’s yours, you have a road map of what you want to do over the next year or 60, 90 days.

Q: How does culture affect your decision about an acquisition?

If we have a culture/value issue, then we’re not going to buy it. And we really do look at bringing on talent that way, too. It’s a great way of being able to buy great talent.

If the culture doesn’t fit with us, why do it? If you end up buying something that ends up changing your culture for the bad, that’s not good. Life is too short without having to pound your head against things and trying to make the company what it isn’t.

Q: How do you maintain your company culture and focus when expanding offerings and locations?

We spend a lot of time on training around (maintaining consistency within our different locations). Our values are very important to us — values of safety, integrity, diversity and success.

We begin at every meeting with a safety topic and diversity topics. So you’re putting your values and your culture up front every day with everybody.

Q: How has your company been able to successfully transition from generation to generation?

I’m the seventh CEO in 110 years. We do have that longevity of leadership.

We’re a privately held company. We work very hard to make sure that we have that right as good stewards and good shareholders of the company.

At the end of the day, CEOs need to reinvent themselves constantly and really (focus) on learning how can you apply new techniques to your company so your company can continue to grow.

Q: How do you as a senior executive lead innovation?

It starts at the top.

We also have three focus areas, and one is talent, one is customer and the third one is innovation. And we really do think that we can compete with great talent but also with innovative products. So we spend a lot of time around innovation. We have innovation plans; they’re baked into our strategic plans. We have a schedule of stuff that we want to do over the next three years. Everybody has a road map of what we’re trying to do from an innovative way, so we stress that day in and day out through me blogging, through just the various conversations.

Q: How do you measure whether an innovation is a success or a no go?

When you begin with any project, you need to say, ‘All right, what do I want to get out of it at the end?’ You need to put down the goals that you’re looking to expect if you go ahead and invest in this product or this service or whatever it is. And so that’s kind of the sniff test. Are you really passing those gates and those hurtles, and are you getting the results that you expect out of it?

How to reach: Day & Zimmermann, (215) 299-8000 or www.dayzim.com

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