The CEO hired the most experienced and talented people he could find, kept project turnover to a minimum and set ambitious growth goals.
He also makes sure the company, a consulting firm specializing in finance and accounting issues, doesn’t bite off more than it can chew.
“In our business model, we operate at about 90 percent utilization,” says Lewis. “That means that 10 percent of our consulting team typically is on the bench at any one time, ready to be deployed. And as strong as our desire to deploy those people is, if a client needs something and one of those people can’t do it, we don’t attempt to deploy them anyway. ... It’s a lot easier to grow if you don’t lose your customers.”
Lewis’ model vaulted his company to $24 million in revenue last fiscal year, a 70 percent increase over the previous year.
Smart Business spoke with Lewis about how he’s planning for the future and how he positions his company ahead of the competition.
How have you grown your company?
One of our basic tenets is we keep our consultants on projects until the original project scope is complete. We don’t roll them on and off to meet our own utilization objectives.
If there are 10 or 15 people sitting in a conference room and one or two of them change out, I can assure you, in many cases, the client won’t even know the difference. But that doesn’t mean that knowledge and experience aren’t walking out the door and there’s not a learning curve for the new person, because there is.
Keeping project turnover [to a minimum] is critical because the longer somebody works at a company on a project, the more they’re learning about the organization, their systems, the personalities, etc., and in a way, the more value they may bring.
How do you set goals for the future?
We’ve been very disciplined historically about setting three- to five-year goals, working them back to one-year goals and working those back to one-week goals. We’re good at managing against those and taking corrective action steps when we’re at variance with our objectives.
In most companies, when they’re smaller, there’s a very strong focus on the top line or on product develop, and sometimes there’s not a very strong emphasis on infrastructure development. So as companies grow, they reach a point where the size of the organization has outstripped the infrastructure needed to support it.
We’ve been very conscientious about investing ahead of needs. We’ve done two major systems implementations in the last year, not because our then-current systems couldn’t support our business today but because, based on where we want to be in three years, they wouldn’t have been adequate. We think it’s better to do a systems implementation before you need to than waiting until the company is about to implode, which is frankly what most companies do.
How do you condition your employees to react positively to change?
You can either lead change or have change imposed on you. In our company, when you set really ambitious growth goals, you condition your organization to change. So instead of changing in a reactive and chaos-inducing way ... if we’re going to double, triple the organization, everybody in the organization knows that it’s going to have to change radically almost on an ongoing basis not change the business we’re in or our values or our goals, but just you have to transform the organization all the time.
If you set modest goals, you’re going to get modest growth. If you set really ambitious goals, No. 1, even if you short those objectives, you’re still going to end up outgrowing most companies. And No. 2, then you create a culture which is conditioned to expect and anticipate change.
The people in our company are a very uncomplacent group of individuals. We know that whatever we’re doing right now, it isn’t good enough. We know it’s going to have to change, and we know we’re going to have to tune it to accommodate growth.
How do you position yourself as a great place to work versus your competitors?
[At most firms], you have two-, three- and four-year people, the staff and seniors who do most of the work. And the distribution of economic benefit is actually skewed in the opposite direction of who’s actually doing the work.
Staff are doing most of it, working a lot and getting paid the least. We think that’s of questionable economic value.
In our model, 60 cents of every revenue dollar goes directly to the field and the people who are executing the work. So our bill-to-wage ratios are very different and much lower than what you’d find in a very large consulting firm. The work is being done by very experienced people, and so our clients can get more done with less because the billing rates for comparably experienced people in very large consulting firms would probably be double.
HOW TO REACH: The David Lewis Co. Inc., http://www.dlcinc.com