Balance of power Featured

7:00pm EDT January 29, 2008

Bruce Geier has achieved a milestone reached by few other founders in the technology industry — his company has turned a profit every year for 26 consecutive years. In an industry that has been through more cycles than a dishwasher, Geier, president and CEO of Technology Integration Group, has outperformed and outlasted most of his competitors.

Although the company is classified as a minority-owned, small, disadvantaged business, it’s Geier’s opponents who may be at a disadvantage when they compete against him, mostly because of his balanced decision-making.

“I credit much of our success to our diversified business model,” Geier says. “It hasn’t always been easy. In the beginning, I was developing software, but people wanted hardware more than software, so I had to learn about hardware. When hardware margins fell, having revenue from services got us through. Over the years, we’ve offered a multitude of different technologies, and we’ve continued to evolve because we constantly have to find a way to get our solutions in front of the right audience.”

In 1981, Geier left a budding career as a tax and litigation consultant for a big eight accounting firm to risk it all in the burgeoning computer industry. As a computer science major, Geier could-n’t resist the urge to develop software in his garage when things were slow in the consulting business. He decided to pursue his strong premonition that computers would change the business world and launched the company. Since that time, TIG, which primarily provides IT solutions to the government as well as small and mid-size businesses, has grown to 19 branch offices, 325 employees and 2006 revenue of $281 million.

Here’s how Geier has conquered some of the biggest challenges facing his company to take it to new levels of success.

Create a winning plan

Success starts with a winning plan. “I think we’ve had a better business plan than our competitors,” Geier says. “It’s like an investment portfolio: You have to diversify and have a balanced approach — that’s what I’ve learned.”

Geier began offering a portfolio of technology services to clients long before most of the technology industry realized that margins on traditional hardware and software products were slipping. Consulting, programming and integration services not only offered value to customers, the services provided a way to improve margins and stabilize revenue during down cycles.

“Our goal is to sell multiple solutions to one customer,” Geier says. “I don’t favor jumping on the bandwagon too early because if the technology doesn’t catch on or becomes obsolete too quickly, you will alienate your customers. I say that I prefer to be on the leading edge not the bleeding edge of technology.”

To decide what new products and services the company should offer to clients and to support his middle-ground business offering philosophy, Geier regularly devotes time to evaluating emerging technology. He meets with the company’s practice leaders each month to review new offerings. One of the outcomes from the meeting is the development of a list of new products that might interest customers, while still meeting Geier’s criteria of providing staying power for the customer’s investment in the ever-changing technology marketplace.

“I think it’s important to have interplay between all of the team members when you make your decisions about what you want to offer customers because as the CEO, you have to get the opinions of the smart people around you,” Geier says. “You can’t be an expert on everything so you must rely on others.

“If we reach consensus as a group, then we move forward; if there’s disagreement, I like to handle those discussions through one-off conversations with the dissenting practice leader. Having a lot of conflict out in the open doesn’t do anyone any good because when people are upset, they can’t focus on work. As the CEO, you can set that tone by handling issues that arise off the record.”

Next Geier validates his team’s recommendations via direct customer input. TIG hosts vendor-led seminars for customers throughout the year that feature emerging technology. Geier uses seminar enrollment as a gauge of market interest in any new technology. Taking the additional step of validating the company’s offerings through clients keeps the new technology selections on target with customer appetites, and it reinforces Geier’s main value proposition for customers — he won’t recommend an unproven technology solution.

Encourage staff participation

Geier authors an annual budget and a business plan that establishes revenue goals for each type of product and service the company sells. Because of wide variances in the margins for each product and service, this type of detailed revenue planning maintains the firm’s profitability by achieving a blended margin that avoids the industry’s extremes. In addition, his plan projects a reasonable revenue growth percentage for the company each year.

Geier says that he favors measured growth as a way of keeping debt under control and reducing risk.

“I start with the VP of sales and I define the desired mix of business for the year, which gives us a blended margin for the total business portfolio,” Geier says. “From there, we transfer the desired mix of business down through the sales organization, which includes the branch managers, and then finally, we roll revenue targets down to each sales rep. This ensures that each person on the team has personal responsibility for achieving the corporate goal, and it makes it very clear what services we need to sell to be profitable.”

As reinforcement, Geier offers bonuses to managers and additional perks to the sales staff for hitting the targeted revenue goals that are specified in the business plan. For example, sales reps earn the opportunity to stay in a suite at the company’s annual president’s club achievement trip to Hawaii as an incentive for selling the right mix of business.

As a final step in reinforcing his revenue goals, Geier holds meetings each year for the firm’s sales, engineering and branch management groups, using the venue to roll out the company’s annual initiatives around business mix. The employee events actually serve dual purposes. Geier expresses his appreciation for the efforts of his team while connecting with the staff in person, and he also uses the time to get everyone behind the company business plan and the revenue goals for the year.

“As the leader, you have to achieve buy-in for your plan, and the key is that everyone has to understand their part and why you’ve made your decisions,” Geier says. “Our people can articulate our value proposition very clearly to customers, and we achieve our business plan because the staff understands it. They know that their performance is vital because they get a chance to hear the plan in person and ask questions. In addition, they are highly motivated by the incentives, which provide just one more step in assuring the results.”

Focus on retention

Geier’s success is also a result of another technology industry anomaly: His employees don’t often leave the company.

“We’ve changed our sales compensation plan only once in 26 years,” Geier says. “We haven’t lost a top sales rep in 15 years. To keep people, you’ve got to create a sense of pride within the staff, and to do that, you have to have a comfortable work environment. In some companies, people just get comfortable, and then management changes the rules by changing the comp plan. To me that’s just not a smart business decision.”

Geier says that 70 to 80 percent of the company’s total work force receives incentives through bonus plans, including the engineers and the collections staff. Allowing employees to have skin in the game also contributes to a sense of ownership throughout the company.

“I think it’s important to offer financial incentives to employees because it encourages the staff to take ownership and have some personal pride in the results,” Geier says. “You want to create a company culture that has an element of pride, and that culture will help you attract the kind of people who take pride in their work.”

Employees are invited to fun activities, like a bowling night, because it contributes toward a family atmosphere and helps people feel like owners.

“If I truly knew the secret to hiring great people, I would have retired long ago,” Geier says. “Anyone who tells you that they always make great hires is not being truthful, but I have always favored hiring a more experienced person who can step right into the position and hit the ground running. Even though we pay a premium for experience, I think the clients prefer working with someone with experience, and more experienced staff are definitely more productive when they work on projects.”

Geier also tries to find the seam between being overstaffed or understaffed when it comes to hiring decisions. That management-middle-ground hiring philosophy allows Geier to hire proactively while avoiding the burden of taking on overhead too quickly.

“I’m generally not of the mentality of ‘build it and they will come’ when it comes to hiring,” Geier says. “My mentality is more of a just-in-time approach to hiring.”

To achieve his goal, Geier establishes hiring priorities by position allowing a green light to new staff additions that can generate revenue and more careful scrutiny for additional head count in areas that represents overhead.

“I would hire any qualified sales executive at any location at any time provided they fit within our pay structure and don’t have any noncompete restrictions,” Geier says. “The same is true for certain types of engineers. That need is established by the senior management of the engineering group, and it’s often predicated by the needs of manufacturer partners or customers.

“I believe that if you make your underlings cost-substantiate any new hire, much of the decision to hire or not is pretty obvious. So what you really need is a good internal structure to evaluate their needs and justify those needs. I balance the decision by position and based upon the current utilization review by branch, especially as it relates to engineers.”

No matter what the challenge, it’s always a matter of spreading the risk whenever possible.

“Over the years, I’ve seen a lot of talented people leave the business because they didn’t spread out their risk but spread out their business,” Geier says. “When the technology bubble burst in 2001 and the hardware and software business went away, the services business pulled us through. I truly believe in a balanced portfolio, measured growth and that you have to be in the right place at the right time to achieve success.” <<

HOW TO REACH: Technology Integration Group, www.tig.com