Tom Marano says that if you’ve grown your company to $150 million, the hardest part might be behind you.
Marano is a man who knows a little something about growth as he and his business partner, Frank Argenbright Jr., took AHL Services from $100 million to $1 billion in four years, and now, he has taken Air Serv Corp. from nothing in 2002 to $141 million and 7,000 employees in 2006. But as Marano says, it’s the early growth that’s the toughest.
“I would say that we’re very good at taking a company from $150 [million] to $1 billion, but it’s much harder to go from zero to $150 [million] than it is from $150 [million] to $1 billion because you have limited capital, you don’t have reputation, you don’t have the scale, and you don’t have a management overhead structure in many cases, so you work real hard,” he says.
Marano, Air Serv’s CEO, says that to grow, you have to be a builder.
“Builders are folks who can conceptualize a vision, develop a strategy to execute it, secure the capital after the strategy is designed to sell that to investors, and then recruit the management team that can deliver on that,” he says. “That’s a builder.”
If you spend the time and effort upfront focusing on quality people and systems, then you will have laid the foundation for growth.
“Build it better, and you will get bigger,” Marano says. “Don’t just try to create growth for growth’s sake. Surround yourself with the right people who are committed to the vision, and it becomes a fun thing to do, but it’s a lot of work.”
Here’s how Marano has built his company to handle the rigors of rapid growth.
Create a vision and strategy
Marano says there are two ways to create a vision for your company.
“You can look at market opportunity, sitting back and looking at the structure of the company and the rates of growth where it’s at in its S-curve of development is it a growth-oriented industry or a declining industry, where there may still be opportunity, and you can deal with it strategically,” Marano says. “Or you can start with clients’ requirements and say, ‘What gaps do you have today, and is there a service requirement that you have that’s unfulfilled, and if we were able to develop a solution for you, is that something that would work for you?’”
Marano has primarily grown Air Serv, which provides services ranging from passenger transportation to baggage handling for the airlines, by talking to clients.
“You interview the CEOs and senior operators to see where there are gaps,” he says.
Marano says to look at the core competencies and value proposition of your business and use those to develop a strategy.
“By understanding where you create value and how you build a management team to deliver that value, if you can create client satisfaction, then you have a high level of retention on these contracts, and then your performance creates preference for your solution, and you grow with your clients,” he says.
Marano also looks at the current state, anticipated future state and then the gaps in between the two. He and his team then create a plan to close those gaps. He then takes the management team off-site each year to talk about the initiatives the company wants to accomplish, the changes in the industry and environment, and what they have to do to meet Air Serv’s financial objectives, as well.
“Lay out specific objectives with the strategies to make that work,” he says. “Build a business plan.”
Build a team
A company can’t successfully grow if it doesn’t have the people to get the job done, so it’s important to build a strong management team.
“It’s a combination of looking at what the strategy is of the company at that time, what skills are required and defining development plans to ensure that your best people are grown to those levels,” Marano says.
He spends about 80 percent of his time out of the office, and being in the field allows him to see how well people execute programs. Those results help him identify the best people.
The chief operating officer also gives Marano quarterly results so he can see what people have accomplished against their goals, objectives and budgets.
“We’re able to see and move people around and give them different developmental assignments,” Marano says.
He also has five of the most promising people work with him on strategy committees to help broaden their skills and understanding of the company.
“You have to really learn how to lead and motivate people and give them recognition as employees so that you maintain that work force,” Marano says. “If they’re satisfied, then you retain them, and if you retain them, you retain your clients, and if you retain your clients, you have a great platform for future growth.”
On top of giving performers better opportunities, you also have to look outside sometimes and bring in great talent to complement them.
“You balance between the development of your very best people and the recruitment of outsiders that have additional skills so you have a more balanced team,” Marano says.
Instead of hiring a lot of people for his team, Marano instead subscribes to the theory that less is more. He employs fewer people so he can pay them more, which ensures he can recruit only the best. He relies on his direct reports as well as the 30 other senior managers out in the field to help him get the best.
They first review resumes and profile them against the specific job requirements of the position to see whether or not each applicant has what looks like the experiences and results needed for that position. Then of the ones that look promising, they interview them.
He and his team first look for intelligence and then at leadership capabilities. He says it’s important for people to be able to develop relationships with both their clients as well as with the team that’s underneath them. He also looks for flexibility and a willingness to roll up their sleeves and dig into a task.
“It’s a question of looking at experience and potential,” Marano says. “Some have it because they’ve demonstrated it, and you can, through your interview structure, solicit the kind of questions that allow you to validate those competencies. ... You can deal with questions on, if you were in this type of situation, how would you address this kind of requirement? How would you solve this kind of problem? Give me examples of situations you were in in your past assignment, whether you had to do this kind of activity, so very targeted interviewing where you can identify upfront the competencies you look to recruit for and then you validate.”
After interviewing, the applicants go through a recommendation process, and those that are recommended go to the chief operating officer, who then recommends someone to Marano. He then does a final confirming interview.
“I don’t think you can leave it to the recruiters,” Marano says. “You really have to have an aligned organization that’s not bureaucratic and has a cultural value that one more good person makes an incredible difference in the organization. If you’re not involved in the recruitment and development of your people as a CEO, you’re going to fail because you can’t build a great team.”
Another key to growth is execution, and the only way your people will do that effectively is if they buy in to your vision and strategy.
“In our culture, if you can’t perform and you can’t buy in, then you’re not going to be here very long,” Marano says.
He says you have to include people in the planning process to create buy-in.
“You go out and work with them in preliminary meetings to secure their input to the issues that we’re facing and the strategic framework that we have,” Marano says.
Then management meetings become important to lay out the specifics of what must be executed, and then lastly, you have to measure and review.
“Each month we’re seeing them and seeing how we execute, so there’s a real good dialogue,” Marano says.
Sometimes people are slower to buy in to a growth strategy though, and it’s important to distinguish between those who are slower and those who just outright resist.
“You can see it in their absolute monthly performance,” Marano says.
He also points out that some people may perform well but not buy-in. For example, some people who were part of Air Serv early on believed in an experience-based company, which Marano says works well if you’re a $5 million company. But when you grow to $150 million, you have to rely on processes and a more disciplined approach.
“If they can’t make the journey, they may still produce operating results, but they won’t be able to grow their team into the new world, and there will be gaps,” he says.
When he has situations like that, he sits down with those people and explains to them what their job requirements mean and what the company’s values mean. His main objective is to help people get on the same page with him.
“We’re pretty patient as long as you’re performing,” he says. “We’re not a ‘shoot the wounded’ corporation like some of these out there. We understand the value of good people. We’re not Judge Roy Bean, where they’re guilty until proven innocent.”
By communicating and trying to understand their personal and professional objectives, you can help employees get on the same page with you. He says it’s also important that management be there as support.
“Everybody that we recruit into the organization ... I’m here to help you succeed,” Marano says. “I’m not here to help you fail.”
If performance isn’t there and they’re not able to grow in their roles as the company grows, it’s time to let them go.
“You quickly understand who’s doing it and not doing it, and so you attempt to bring them along, but if you couldn’t, you have to exit them,” Marano says.
When you have an organization full of talented people who buy in to the vision you’ve created, then you’re setting yourself up to successfully grow your business, but it all starts at the top.
“I think it’s an attitude,” Marano says. “It’s the attitude of the people, and it’s the alignment of individual goals with the corporate goals ... but the leaders have to walk the talk and acknowledge that they are a growth company, and then they’ve got to be out making it work.”
HOW TO REACH: Air Serv Corp., (404) 926-4200 or www.airservcorp.com