As Sequent approached its 10-year anniversary, CEO and founder William Hutter and President Joe Cole were faced with a tough question where did they see Sequent going in the next 10 years?
Although the consulting and outsourcing firm was doing perfectly fine, they wanted it to do better.
Hutter’s original vision in 1995 was to create a company with services focused on helping small business owners take care of their employees. Ten years ago, that meant helping with human resources, but today, those needs have changed.
Hutter and Cole knew that Sequent needed to change as well, and they began formulating a plan to transition Sequent to meet the needs of a changing marketplace and position it for growth.
The pair recognized an opportunity to add more service offerings, such as information technology, customer care, and accounting and finance to their human resource services, and saw that the middle market was underserved and targeted it to fuel growth.
They put together a plan to position Sequent to profit from changes in the market. That plan is a continuously evolving process, but Sequent has already begun to reap the benefits as its revenue grew from $136 million in 2003 to $197 million in 2005.
To continue this growth, Hutter and Cole are focusing on three key elements: people, new services and acquisitions.
With growth and new services comes a need for new employees. But finding those employees can be a challenge when you don’t want to change the corporate culture you have worked so hard to create.
“I think that one of the things that set us apart is the fact that everybody in the organization realizes that what we do affects people’s lives,” says Cole. “And they take that very seriously. They also take a great deal of pride in what they do as a result of that. I think our compassion as an organization is really critical to our overall success.”
Cole realizes that Sequent can’t have that compassion without the right employees, but finding those with the talent you need and the values you want is difficult. Finding employees who fit into a specific position adds an extra challenge one that Cole decided he could do without.
“One of the things that we do as an organization is we don’t try to hire a person to fit a position. Rather, we try to identify a person who has certain talents, skills, experiences and expertise,” he says. “If we feel that they have certain talent, skills, experiences and expertise, and that they are a good fit with the organization, then we try to bring them into the organization and put them into a position to really play to those strengths.”
However, finding those employees is only half the battle.
“We have a quote down in our solutions center on the wall from Fred Smith (CEO of FedEx),” says Cole. “The quote says, ‘Alignment is the essence of management.’”
That quote is a reminder to employees that their values and goals should be aligned with the company’s vision and mission. And it is a reminder to management that employees’ compensation and the support they receive should be aligned with their performance.
“Making sure that you attracted the right people and that you aligned them with your overall company goals and objectives is a great opportunity for marketplace differentiation,” says Cole. “That is one of the things that is really driving our vision and creating an opportunity for Sequent.”
So how does Cole align his employees with Sequent’s mission and vision?
“First of all, you have to clearly define your mission,” he says. “And ... you have to have it defined from all perspectives in the organization.”
In Sequent’s case, the mission of the organization is to help clients improve their corporate performance through the integration of people strategies, process management and technology.
From that mission come Sequent’s goals and objectives.
“The main goal of the organization is to really serve our client companies and their people,” says Cole, who then ties people’s positions at the company in with the mission.
“If we have our mission and we have input from throughout the organization, we can identify goals and objectives that support that mission, and then we provide our people compensation that reinforces the behavior to support those goals and objectives, give them the proper training and give them the proper tools to be effective.”
Once Cole aligned his employees with the company’s mission, he focused on Sequent’s clients and their needs.
The next step to grow Sequent was to research which services would be of use to clients and potential clients.
“We always try to be on the cutting edge of understanding marketplace opportunities,” says Cole. “We’ve done both qualitative and quantitative research with existing customers, general businesses out there and also our former clients, and we try to access marketplace opportunity and things that were driving their organization. Those are the kinds of things we were seeking to know on an intimate level.”
Sequent looked at both the small and mid-sized business markets before deciding which services to add to its core offerings.
“We started out offering a bundle package of services that we call our professional employer services,” says Cole. “Out of that came other human consulting opportunities. That has really broadened and grown from there, and we say (to clients), ‘Gee, we have helped you out with this, maybe we can help you out with some other things.’
“We have broadened our offerings into information technology, customer care, and we’re moving into accounting and finance.”
Offering multiple services within one organization opens the door for cross-selling between departments. And Cole says it is every employee’s obligation to identify these cross-selling opportunities and help make the sale.
“We don’t want to leave it to chance,” says Cole. “What we want to do is be purposeful about making sure that anyone who is outwardly facing understands the breadth and depth of our entire organization and has the ability to, at least on the surface, identify an opportunity and then get the (appropriate people involved).”
According to Cole, education of both employees and clients is the key to making cross-selling work. Cole educates his employees through a business development forum in which employees learn about different areas of the organization and are educated on what kinds of opportunities Sequent is looking with cross-selling and how to recognize those opportunities.
It is the employees’ job to educate clients and potential clients about the benefits of Sequent’s offerings.
“Part of our approach to everything we do is education,” says Cole. “We don’t think we can really sell anybody anything. Rather, all we can do is educate them about what we do, other issues in the marketplace, our past experiences and things like that. It’s through that education that we are able to identify opportunities in the marketplace.”
Cole has acted on opportunities for Sequent to expand externally, as well. In the past year, the company has made key acquisitions that have added to the services it can offer clients.
It recently acquired technology firm 180° Strategies; the Human Resource Information System, a consulting practice; and insurance consulting firm Beacon Management Group. Cole believes there are more acquisitions in Sequent’s future, but he plans to approach these opportunities cautiously.
“If the ’80s and ’90s taught us anything, it is that mergers are not necessarily the easiest things and don’t necessarily culminate to equal something that is greater than the two parts,” says Cole. “In other words, two plus two does not always equal four, but if you can make two plus two equal five, then you really have something.”
That was the case when Sequent acquired Beacon Management Group and then joined forces with law firm of Squire, Sanders & Dempsey. Together, the three entities created Sequent Insurance Group, which offers organizations within the insurance industry opportunities to improve their corporate performance with specific offerings catered to them.
“By bringing the three entities together, there seemed to be a real synergy created,” says Cole. “It really was just trying to identify at a strategic level different skills, expertise and marketplace potential.”
For Cole, one of the biggest challenges when it comes to acquisitions is effectively evaluating whether bringing two entities together really will create something of greater value.
“It’s kind of like a marriage in many respects,” says Cole. “In a marriage, there are a lot of things to contemplate and a lot of things you need to discuss before you decide to make that commitment. It’s the same thing (with acquisitions). These are pretty big commitments in coming together, so you are going to want to make sure that all of those fundamental philosophies are in alignment.”
Cole aligns potential acquisitions with Sequent’s mission the same way he aligns his employees with it.
“We look for a philosophical match,” he says. “We spent a lot of time and energy in getting to know the principals of those organizations and validating the fact that we are like-minded in those key areas.”
Whether he realizes it or not, Cole has used Fred Smith’s quote to guide him through the expansion of Sequent. Not only is alignment the essence of management, it is also the key to growth and expansion.
Cole aligned his employees with Sequent’s mission, new services with clients’ needs and acquisitions with Sequent’s values to create a larger, more profitable company with services to improve the culture of small and mid-sized companies.
“There’s convergence from every perspective, yet the foundation, the 10 year heritage that we have, has positioned us well to take advantage of marketplace opportunities.”
HOW TO REACH: Sequent, (888) 456-3627 or www.sequent.biz