Build up your capabilities
As Salontai narrowed the number of vertical markets supported
by the firm, he began increasing the firm’s technical capabilities
offered under each major market segment. The consolidation and
expansion decisions were reached by reviewing client expectations, the needs imposed by the increasingly global economy and
recommendations from a previous peer review.
“In 2003, we went through a peer review and one of their suggestions was that we restructure vertically to accommodate our
clients,” Salontai says. “We took their recommendations and then
began a phase of organic growth by developing our existing staff
and hiring additional employees. Both moves have allowed us to
increase our technical offerings for each market. As a result, we’ve
opened more offices and have made only two small acquisitions in
recent years.”
Another belief of the firm’s previous leaders was that the firm
could function like a basketball team, because employees were
capable of playing above their heads in meeting client demands.
But the technical requirements in the expanded client contracts
couldn’t be achieved solely through a stretch environment, so
Salontai began building the firm’s technical expertise. However, he
soon discovered that the firm’s senior leadership team was
stretched too thin to support an aggressive organic growth strategy.
“We only had four or five senior leaders, and they were all wearing
multiple hats,” Salontai says. “We had one person functioning as
both the CEO and COO, and some people were running several
states as well as handling training and development. They couldn’t
do anything well, so they were really bogging down the company.”
Salontai hired two new senior leaders and reorganized the responsibilities of the senior leadership team, so that each manager could
focus on specific tasks. Now, a firm chief operating officer focuses
strictly on operations and that move has doubled the firm’s profitability. Salontai also appointed a chief marketing officer, a chief
administrative officer and a chief technical officer, who expanded
the firm’s technical capabilities by providing clarity and clout to the
firm’s narrowed vertical market focus. Many of the key strategies
designed to enhance the firm’s technical capabilities were developed through the strategic planning process.
“Now more than 40 future company leaders are learning from
their more experienced peers, and we’ve organized formal mentoring programs, which support each practice group,” Salontai
says.
He also notes there wasn’t a single indicator that pointed to the
need to reorganize the firm’s senior leadership team, rather he
observed managerial stress and missed milestones, which influenced him to make the change. He says leaders often make observations in a number of areas before making critical decisions and
refer to it as their gut instinct. Salontai says that bringing people
through such a radical change process was a difficult and challenging task.
“Not everyone saw the value in these structural changes,” he
says. “Some people questioned why we needed the additional
overhead and worried about how adding additional management
would reduce their access to Gerry. They saw that the firm was
moving from being a family organization to more of a corporation,
like General Electric, and not everyone was comfortable with so
much change.”
