The battle of her life Featured

10:02am EDT July 22, 2002

In her 25 years of business, Farah Majidzadeh has been frightened only one time.

It was 1990, five years after she had won a bid for work on what would become a $50 million dollar contract in Saudi Arabia. The 1985 deal was a real coup for her Westerville-based engineering consultant company, Resource International Inc., which at the time had nearly 60 employees and revenues of about $2 million.

She had, after all, partnered with two other American businesses, two Saudi companies and a Greek firm to win the contract over competing bids from at least five other countries and 120 consultants around the world.

Indeed, it was one of the biggest projects she'd ever undertaken. The job-to develop a computerized highway maintenance system for the entire country-would amount to 60 percent of her company's annual revenue. It was more of a diamond in the rough, however, than Majidzadeh, chairman and CEO of her company, ever could have anticipated.

From the years of negotiation before the project launch, to the loss of millions of dollars because of project monitoring, to the start of a war in the Middle East and a recession here, Majidzadeh had a monumental task ahead of her.

In the end, she'd complete the project, recover her losses and develop a good client relationship to continue the business years down the road. In fact, Majidzadeh has since grown her company to almost three times the number of employees and quadruple the revenues-and this year was named an Ernst & Young Master Entrepreneur of the Year finalist.

Still, she worries about being caught in a similar situation again.

"Every business person should never forget the tough times," says Majidzadeh, "because then you won't repeat it."


Yes, it could get worse

Majidzadeh remembers very clearly Aug. 2, 1990, when the newspaper announced that Iraqi troops had invaded Kuwait and overthrown the government.

The fate of neighboring Saudi Arabia, where Majidzadeh had more than $3 million tied up in a massive engineering project, was suddenly in question. She wasn't the only one concerned.

"My accounting department-everyone walked out. They thought the company was going to go down," she says, remembering that she lost eight of her 75 employees in the exodus, not only from accounting, but also the head of her research department and a computer staffer.

The situation was a real blow to Majidzadeh, who had fought so hard to make the contract successful after overcoming obstacles-including her own hesitation-from the get-go.

Impressed with work she had done in Kuwait and on a smaller project in their own country, Saudi Arabia officials asked her in 1983 to bid for the project-a monumental, state-of-the-art task to develop a computer system that would track the maintenance of the country's infrastructure, from bridges, tunnels, culverts and pavement to the minute details of light bulbs, guard rails and landscaping.

No, she said, the task was too large.

They pushed, however, suggesting she join forces with another company to submit a bid. It was an enticing idea, and eventually she rounded up a Greek firm, two other American companies and two Saudi businesses to partner with her company. They collectively won the bid.

Majidzadeh's challenges, it turns out, had only begun. After the bid was accepted, it took three years of negotiating details before work could commence on the project. During that time, one of the American partners decided not to participate. Then she was faced with training Saudi workers who had differing levels of experience, melding cultures with them and her own employees, and losing the remaining American partner, who pulled out of the deal unexpectedly due to financial problems.

She also had to convince the Saudi ministry to stop the work of a monitoring committee that, being paid daily, picked apart every step of her work on the lump-sum project, causing incessant delays and financial losses.

When war broke out, all work in Saudi Arabia halted during the nearly seven-month conflict and couldn't resume until after the cease-fire was announced. Though research on the project continued here during that time, the losses mounted, reaching $5 million due to lost time and penalties enforced by the monitoring committee.

To add salt to the wound, when Ohio's administration changed in January 1991, from Gov. Richard F. Celeste to Gov. George V. Voinovich, Resource lost two local contracts worth $100,000 each because they were rebid-a common occurrence in politics, Majidzadeh has since learned.

Add to that a U.S. economic recession that began in July 1990, and Resource International found itself being pushed to the edge of failure.

In fact, says Resource controller Dominic Maxwell, 1991 was the only year Resource has ever had a loss-$50,000. That's not bad considering it wasn't until 1994 that Resource began receiving payment for the Saudi project.

Despite the tide pulling against her, Majidzadeh refused to give up.


A turning point

Resource International's dire straits also took a personal toll on Majidzadeh.

"I literally was having a stress test done because I just couldn't take it," she says.

She and her husband, Kamran, who is president of the company, put most of their savings-she would not say how much-into the company to save it.

"It was not a bankruptcy situation, but it would have been if I had taken the wrong step," she says.

Maxwell, who was hired in 1991 as a staff accountant to replace some of the accounting staff that had left, vividly remembers the somber day when he sat in the Resource conference room with the Majidzadehs, their son, Todd, who was also involved in the company, and a consultant from then-Price Waterhouse to assess the situation.

Todd Majidzadeh and Maxwell advised them to pull out of the Saudi Arabia project-even though it would mean risking the potential of any success there and taking a hit from the liability and possible lawsuits that could follow.

"They said it's best to take your losses right now than lose the company," Majidzadeh says. She and her husband would not back down.

"Both of us without the slightest bit of hesitation said, 'We're going to stick by this because we know it is going to work out,'" she recalls, noting that their feelings were based more on instinct than evidence.

"⊃ We had given our word to the [Saudi] minister," she adds. "No matter how bad [things get] and how many dollars I lose, I never fail. I deliver. When they come in to give you the project, they trust you."

Majidzadeh's saving grace came from within.

"That was the time that I realized having a family is the biggest thing you can earn, because here they came, every one of them," she says.

Her son Todd already had begun handling the company's finances, hiring people, changing banks and paying off bills.

Her other three children, who still work for the company, also pitched in.

Son Mark was working in the computer department, and daughter Marcia took on human resources responsibilities. Another daughter, Stasia, who is an attorney, took over the company's legal aspects.

This allowed Majidzadeh and her husband to focus on recovering losses.

One critical move was to show the Saudi Arabian ministry the loads of paperwork and changes caused by the monitoring committee on just one task of the project. By doing so, Majidzadeh was able to illustrate the problem of the lost time and the penalties resulting in lost money. The monitoring committee then stopped its efforts, and Majidzadeh agreed to send to Saudi Arabia a representative of her office who could speak the language and who would understand the project and keep tabs on it. Within nine months of loosening that bond, the project was finished.

The ministry reimbursed Majidzadeh for the penalties, she says, because of the honest relationship built with the Saudis during the project. Moreover, the ministry has since given Resource International $2 million worth of additional work.


Looking back

While the project ended in success, Majidzadeh says she and her staff learned lessons they won't forget.

Maxwell, for example, says the makeup of the firm has changed.

"We are more diverse and more broad-based, with many more sources to generate revenue," he says. "So in looking at how we are poised now, even in a downturn in the economy-if and when that inevitably comes-we spread our eggs out among more baskets so when it comes we are ready."

The company also is more lean than before, still running a tight ship even though it can afford greater expenditures now that the firm is more successful.

Majidzadeh also keeps a closer view of her company's finances. For example, it used to take three months to find out how the company performed the previous quarter.

"In that environment you know you're being beat on, but you don't know how you should react because the information you have is 90 days old," Maxwell says.

Now, by the 15th of every month, Majidzadeh's financial staff arrives at her desk with a report of the previous month so they can immediately correct any problems.

She's also turned down other work abroad, choosing to focus instead on her current Saudi projects and jobs being done in the United States.

"There's a saying: 'Don't pick up too many watermelons, or you'll drop them all,'" she explains.

She won't, however, rule out future international undertakings.

"This time I will have a lot more to say and take a very, very cautious attitude toward this kind of project," she says.

She'll also seek the backing of the U.S. government before she ever takes on another such project. Now, for example, she knows that through government or private entities, she can obtain insurance to cover her in case she is not paid for international trade work.

In addition, she'll have a wider view-a more defined "what if" mentality-which she would give as advice to any company considering work abroad.

"You are going to do your very best, but look at what will happen if there is a Russia situation," she says, referring to the ongoing economic crisis there. "What will happen if there is a war situation? Can I take that loss?"