How Gary DeJidas has turned the economic downturn into opportunity at GAI Consultants Inc. Featured

3:53pm EDT January 2, 2013
How Gary DeJidas has turned the economic downturn into opportunity at GAI Consultants Inc.

In the 40 years that Gary DeJidas has worked for GAI Consultants Inc., he hasn’t faced challenges quite like what he faced four years ago when the economic downturn dealt a hand of stagnancy, cutbacks or shutdowns. However, in those years, the GAI chairman, president and CEO hasn’t been as excited as he is today for what lies ahead for the $90 million engineering and environmental consulting firm.

“I’ve taken the position that yes, this is a downtime, but it is a great time to strategize and position for future growth,” DeJidas says. “We’ve grown to more than 800 employees now with 26 offices in 11 states. A lot of that growth has occurred in the last three to four years.”

The economic impact GAI experienced forced DeJidas and the business to buckle down and find ways to diversify offerings to rebound from hard times.

“The biggest parts of our business — our energy component, our transportation component, municipal services and real estate development — were greatly impacted by the economy,” DeJidas says. “As work either seemed to be delayed or actually shut down, we really had to adjust to the available work that was in the marketplace. It had a ripple effect through a number of our lines of business.”

Real estate development almost went to zero, municipalities were forced to cut their capital projects and states sidelined their department of transportation work. In the company’s Orlando office, nearly half of its 100 employees had to be let go due to the slowdown in work. DeJidas made adjustments and turned his focus on strategic acquisitions and growth initiatives.

“Because of the situation with the economy, most of us have had to right-size with the available amount of work that was out there,” he says. “We’ve managed to do a reasonably good job navigating through all of that.”

Here’s how DeJidas has adjusted to today’s business reality through acquisitions and smart growth at GAI Consultants.

Strategize

When your company goes through a shock like GAI experienced because of the impact the economy had on its business four years ago, you can’t afford to hesitate when moving forward.

“No. 1, you have to make up your mind whether or not you’re going to be a risk-taker,” DeJidas says. “If you’re not a risk-taker, then you’re probably going to crawl in your shell and just hope it gets better. When I say a risk-taker, I mean a calculated risk.”

During the economic downturn, no one knew what to expect next. You could say the same about what’s in store for 2013. You just can’t be afraid to take chances.

“I don’t think any of us knows what the year is going to bring, but you have to stay optimistic that it’s going to be better than this year and not be afraid to take opportunities when they present themselves,” DeJidas says. “That separates a lot of CEOs in this world — those that are willing to take chances versus those that will be more conservative in what they do.”

He has taken the position that you have to jump at opportunities rather than sit and wait for an opportunity to gift-wrap itself.

“I’ve taken an optimistic view that we’re going to be successful, and when things start getting back to where they were in terms of economic vitality, we’ll be positioned to go a long way,” he says.

Strategically, GAI has been trying to grow its business in both new markets and new services. The company has expanded its markets in the Northeast, Southeast and Midwest, stretching as far as Wisconsin, which has been aided by new service areas.

“In the service areas, we’ve added things like airport-related services, nuclear support services, real-estate-related services and our objective is no matter what a client needs, they can find it here at GAI,” DeJidas says.

To make these additions successful in a time of economic downturn, GAI made the decision not to cut vital parts of the company.

“One of the things that a lot of companies do when things get tight is they cut things that will help them grow and develop,” he says. “Over these last three or four years, we have maintained all our training programs. If you want your staff to respond, you have to continue, even through tough times, to feed their career development objectives and look in those types of directions.”

Much like maintaining training initiatives in the company, DeJidas decided to turn his focus on areas that would benefit the business versus stressing over areas that weren’t adding value.

“The first thing to look at is what markets are responding right now,” he says. “If you have services that could be offered to that industry, you should strategically position yourself to do that. It’s really about finding areas that look like they are going to be strong financially in the coming years and trying to strategically move yourself in that direction.”

To achieve success in different areas that you haven’t been in before, you have to be nimble.

“You have to be able to say, ‘I’m heading in the right direction, or I’m heading in the wrong direction,’” DeJidas says. “You have to be able to see what’s working and what’s not working, whether it’s in a market area or a service area and make some adjustments.”

Make good on acquisitions

To take advantage of new opportunities in areas that GAI saw potential, DeJidas looked for acquisitions that could help give the company a foot in the door.

“It’s always better to go into a new market with an established reputation,” DeJidas says. “We’ve tried to go into markets and just position a person there and start from scratch. That’s a very hard way to go. That’s why the acquisition way, even if it’s a small firm with a good reputation that has been in that market for a period of time, is a much better way. That applies to services, too.”

If you attempt to break into a new market or service with no prior experience or history, you will have a long journey ahead of you to establish your business. DeJidas and GAI have used the economic downturn as an aid to make acquisitions that will benefit both parties.

“There are a number of really good firms that have had to struggle the same way everybody struggled, and some of these firms don’t have the types of resources that we have,” he says. “What that has resulted in is the number of firms looking for partners — someone to come in and acquire the firm and provide the resources for the firm to grow and develop.

“That’s where we’ve been very successful in identifying those opportunities with firms that I feel are very good firms but are casualties from the economic situation that we’ve been faced with for the last several years.”

GAI has been doing acquisitions for nearly seven years now. In 2012 alone, the company went through four acquisitions and saw revenue improve 15 percent over 2011.

“The biggest thing with acquisitions is finding a firm that has a similar culture even before you start talking about money or anything like that,” he says. “People in general have a very difficult time with change. So if you acquire somebody whose culture is dramatically different than yours, then they’re going to struggle and you’re going to struggle. You have to make sure culture is very similar.”

Sometimes it’s easy to ignore how cultures will match up because the opportunity at hand is so great. You have to strike a balance or success will be very difficult.

“I always lean toward the culture because if you’re acquiring good people and the firm has a good reputation, the odds are in your favor that you’ll be successful,” he says. “Is there a balance? Sure there’s a balance. A lot of times companies focus on the practice versus the business.

“What you really need is a blend of the two. You’re trying to obtain a balance between the quality in the services you provide and the ability to run it as a successful business.”

On top of finding a business that will improve your company and that is a cultural fit, you must also be able to identify strong leaders who can help your business grow.

“Make sure you have key individuals who are familiar with the business that you can really put trust and faith into once the acquisition occurs,” he says. “They are the ones that hold the key to the business and have all the client relationships.”

Ultimately, the key to a successful acquisition is doing your due diligence throughout the process.

“You have to go through an extensive due diligence examination,” DeJidas says. “Sometimes it’s hard to uncover all the rocks and see what’s under all those rocks.” ?

How to Reach: GAI Consultants Inc., (412) 476-2000 or www.gaiconsultants.com

Takeaways

-          Don’t be afraid to take risks.

-          Find new areas to grow your products or services.

-          Make strategic acquisitions to grow your company.

The DeJidas File

 

Gary DeJidas

chairman, president and CEO

GAI Consultants Inc.

 

Born: Pittsburgh

Education: Went to Point Park University and graduated with a B.S. in engineering and also received an MBA

What was your first job and what did you learn from that experience?

I worked at a gas station years ago when gas was 25 cents a gallon and you would get your oil checked and you tire pressure checked and your windshield and back window all clean. The thing I learned from that was service. It was all about servicing the customer.

What is the best business advice you’ve ever received?

Never ask people to do something you wouldn’t do yourself. Lead by example.

What excites you about GAI’s future?

I think we are very well positioned to move forward dramatically. In 10 years that I’ve been CEO we’ve more than doubled our size. I’m excited to start thinking about the next 10 years.

If you weren’t a CEO, what is a job you have always wanted to do?

I’d like to be a professional golfer, but I’d probably starve. I would like to be a teacher and someday I may teach. I enjoy speaking in front of people and I enjoy teaching. With what I know, having the chance to share that with others would be very satisfying to me.