How Avinash Rachmale keeps Lakeshore TolTest focused on growth and continuous improvement Featured

8:01pm EDT September 30, 2011
Avinash Rachmale Avinash Rachmale

Avinash Rachmale has been in growth mode for 17 years.

The Mumbai, India, native founded the company that would later become part of Lakeshore TolTest Corp. in 1994. From the construction contractor’s early days with a staff of 30, Rachmale fed and watered his seedling of a company enough for it to sprout as a global outfit with 700 employees and $621 million in revenue last year.

To achieve the results, Rachmale says the term “growth mode” has taken on a more universal meaning for his business. He grows the capabilities of his people. He grows his business base. He grows enthusiasm for where the company is and anticipation about where it’s headed next.

“As a company, you want to have a vision about where you are headed, where you want to head and where you are actually going,” says Rachmale, who is the president and CEO. “Our vision was pretty clear. We wanted to be one of the largest contractors. We rallied people around that vision because people want to grow with a company that is growing.”

For Rachmale, growth means growing the culture in addition to growing new business opportunities. He wants every move made by the people at Lakeshore TolTest to be both a reflection and reinforcement of the company’s core values. It’s a belief that factors heavily into how Rachmale’s team hires new employees and trains them to conduct business.

“Our core values include items like client satisfaction, bringing a positive, can-do attitude to the office and taking responsibility when you take charge of something,” he says. “That is why we don’t hire people who have just the technical skills for the position. They can’t have the technical skills but no sense of our core values. No matter how competent they might be otherwise, if they don’t demonstrate those values, we won’t hire them.”

What follows is some of Rachmale’s lessons on how to grow some of the most important aspects of your company, from your culture to your people, to building a bigger portfolio of customers.

Build better people

To build the type of employees who can promote your culture and help your business grow on all fronts, you need to recruit people who have the right materials to begin with. Your new hires need to be a match for your culture, which is something you need to deduce through the interview process. But even once you’ve hired the best possible candidates, in order to keep them for the long term, they need to find career advancement opportunities at your company.

Rachmale says upward mobility is one of the most sought-after factors that determine whether a company retains its best and brightest players. Star performers want opportunities to move into higher-ranking positions, and the resources available to get the experience necessary to succeed in more demanding positions.

It aids your company, as well, since you will be developing an internal pool of management candidates, allowing you to promote as a first option and hire from outside the organization as a second option.

“People want upward movement in their careers,” Rachmale says. “As the company is growing, you’re looking to hire them and then to train them, so that you can promote them first, then look outside if there are no good options inside the company. If your people have the opportunity to move up as the company is growing, they definitely have an incentive to stick around.”

Training in and of itself can serve as a means of energizing employees. Many companies train employees for compliance on industry standards or as a measure of internal quality control. It’s a critical element of training, but the education of your employees should also come with a certain degree of “school spirit” about the company for which they work.

As the leader, you can begin to foster that level of engagement and enthusiasm by setting the example from the top, with the help of your leadership team.

“As employees learn more, they get more energized,” Rachmale says. “We have various programs to try and keep the energy level high. Monthly, we have what we call our Lakeshore University, where we have a topic of importance that we talk about and analyze. It’s basically like a webinar format. That is a big step in making sure that employees are getting the right training and feel more energized. It also helps if you can go above and beyond in how you take care of your people. If they need a little time off to deal with a personal matter, we accommodate that. Those are some of the things you do, both big and little, to keep employees motivated.”

How employees respond to your motivation efforts will give you a good feel for their potential to grow within your organizational structure. Rachmale informally divides employees into three categories: A, B and C. A players are your top performers, the employees with the best chance to grow into leadership positions within your organization. B players have the potential to grow into A players but might struggle in some areas. C players have significant problems with attitude, motivation or competency. Some can be salvaged and improved, some don’t have a future with your company.

“What I would say is that you will always have those three types of players in your organization,” Rachmale says. “You motivate B players to become A players. You try to motivate C players to become better, but if there are too many C players, you won’t be able to motivate your B players to reach their full potential.”

Rachmale and his leadership team use yearly performance evaluations to get an accurate read on the potential achievement level of each employee.

“The goals that we set are being monitored quarterly and yearly,” he says. “If an employee is coming in ahead of their goals, we know that is an A player, and that person has a chance to excel in a promotion situation.”

Plan for success

Building the best team is a major component of running a successful organization. But even the most talented team still needs rules by which to play. Your team has to know where you want to take the business in the coming years, how their jobs affect the goals of the company and what is expected on them — on a day-to-day basis, and in the longer view.

You give employees that type of structure with a well-constructed business plan. Your plan will aid in leading your company, and it will also become one of the first things that investors and banks will look at if you seek new avenues for financing.

It’s a lesson that Rachmale learned early on in leading his own company.

“Banks will look first at your business plan,” he says. “If you have a solid business plan, a solid vision and a good track record of performance, banks will be open to you, even with the economy as it has been. That is how we did it, one job at a time. We did a good job each time, we made good money on the project and we showed the banks that, yes, we can work with a million-dollar line of credit. The next year, we needed another line of credit for another job, and they said yes. That is really how you need to do it.”

A business plan has to outline what you are selling and provide evidence that you will be able to provide a return on investment. It has to speak to your employees, customers and all of your other stakeholders.

“You need to describe what you are selling and get your management team on the same page with you in order to promote it,” Rachmale says. “All of those things are important. Your product, your management team, the outside people you have contact with, your clientele. All of those groups have to factor into how you construct your business plan.”

A realistic, comprehensive business plan is the product of you and your leadership team knowing what the company can handle as a whole, and what each department is equipped to handle. You have to take a look at what markets you want to attack, the workload coming in the door and the resources available.

“As you put your plan together, you learn what you can chew on,” Rachmale says. “You start to learn what your team can handle, and then you need to answer the market with that. You look at what jobs are coming in and if you’re positioned right for that job. You demonstrate before you take a job that you have the pieces in place, and if you get the job, you’ll be able to do it. Then, once you win the job, you set the team in motion and make sure all the pieces are in place and working. Because clients will not give you a job if they feel you cannot manage the job. You have to demonstrate your abilities beforehand, which goes back to the importance of a good business plan.”

Face change

As you grow your business, opportunities might come along to add on to the company through a merger or an acquisition. Rachmale has recent firsthand experience in growth by acquisition, having been a key figure in the formation of Lakeshore TolTest. In April 2010, Lakeshore Engineering Services Inc. acquired Maumee, Ohio-based TolTest Inc., led by President Ernest Enrique. Both entities continue to operate separately, but under the same corporate umbrella, with Rachmale serving as the head of both Lakeshore Engineering and Lakeshore TolTest.

For Rachmale, the challenges associated with growth by acquisition are often related to culture. From your due diligence, you know if the acquisition makes financial sense. You know if the products or services are a good fit for where you want to take your company. But on cultural matters, it’s often a case of leadership from both entities sitting down together and piecing together a plan.

It requires a willingness on the part of both operating units to grow and change, and accept that their way of doing something might not be the best way.

“It is a challenging process when you have two cultures,” Rachmale says. “Every company has its own culture, so when you are bringing two cultures together, one group feels they have a better way of doing a particular function than what the other group might have been doing. That is why you put together an integration team, make a plan and a schedule and work through it. It’s something we have had to work with for over a year, and we have made progress.

“In our case, the integration team was in charge of finding the best practices from each site where we operated. It took us almost a year to do that, and there were a few fallouts along the way, but I think we’re where we need to be. But that is why you have a transition plan ready from the start. You can’t wait for something to transpire before you react. From the day you declare that you are going to acquire a company, you have to have that transition plan and integration team in place.”

How to reach: Lakeshore TolTest Corp., (313) 875-4115 or www.lakeshoreeng.com

The Rachmale file

Name: Avinash Rachmale

Title: President and CEO

Company: Lakeshore TolTest Corp.

Born: Mumbai, India

Education: Bachelor of science degree in civil engineering, Government Engineering College, Aurangbad, India; master’s degree in environmental engineering, Wayne State University

Rachmale on answering the bell for clients: When you are putting together a proposal for a project, you are telling the client what you can do for them. You might not have all the pieces in place, but you have enough pieces in place that the client feels good about you.

We once put in a proposal that said we were going to have a certified accounting system in our offices. That was one of the requirements of the contract. Then the client looked us over and said that we had demonstrated that you have this, you have some key components, but you don’t have the whole team. But you have enough that we will use you. As soon as we got the job, we put all the remaining pieces in place. That is one example. There are so many others like it.