Michael McClintock’s
company looked great
on paper.
McClintock Electric Inc. was
showing tremendous profits
and had more work than the
staff knew what to do with. But
the electrical contracting company was spinning out of control.
The second-generation owner
and president had to make the
decision to flatline the company’s growth while it developed
the processes needed to control
its finances — from every nut
and bolt to the digital telecom
systems his employees install.
“I said, ‘Stop, we need to get
our house in order,’” he says.
Since McClintock bought the
company from his father in
1995, the 50-employee firm has
experienced a 1,200 percent
increase in revenue.
Smart Business spoke with
McClintock about how to grow
your company wisely and why
you have to hold yourself
accountable.
Q. What are the keys to
effective leadership?
The primary key is to have the
respect of your employees. The
best way to achieve that respect
is to lead by example.
For example, if you want your
employees to be honest and ethical, you have to be honest and
ethical. If you want your employees to maintain the highest standard of craftsmanship, then you
need to do the same in all that
you do. If you expect employees from top to bottom to be
accountable for their responsibilities, then you have to keep
yourself accountable, as well.
If a leader follows the adage,
‘Do as I say, not as I do,’ then
you’ll be labeled as a hypocrite.
Hypocrisy has no place in leadership.
Q. How do you handle
people who don’t follow
that example?
When you do encounter the
inevitable — that inevitable
being someone who doesn’t
adhere to the standards you
define for the company — then
you need to deal with that situation swiftly and decisively.
Anything less is going to send
the wrong message to the
troops. Like, ‘I guess it’s
OK to cut corners because he sacrificed quality
for the sake of speed, and
management never said a
word.’ That’s a primary
key — set an example,
and then adhere to those
standards that you set.
Q. How does your
management style
change as the company
gets larger?
As the company grows,
it’s critical to realize the
president or CEO can’t do
it all. The leader of the
company needs to determine what his or her best
fit is within the company.
Be brutally honest with yourself.
There may be something that
you really loved to do when the
company was smaller, but as
you grow, you realize that it isn’t
an effective use of your time.
For instance, when I purchased the company from my
father in 1995, we had six electricians and one full-time office
person. … I still strapped on the
tools, you know?
But since that time, we’ve
experienced a 1,200 percent
increase in revenue. We now
average 40 electricians and 10 data/telecom technicians.
Our most controlled growth
and our best bottom-line numbers only happened after I removed myself from a lot of the
more mundane day-to-day operations, and instead, I started to
focus on things like what the
construction market was doing,
where the tendencies were.
Q. How do you control growth?
One of the most significant
changes that helped with our
growth was insisting that my office manager give me timely
financial reports and cash-flow
projections. Prior to that, I was
making a lot of financial decisions in the blind, based mostly
on historical data, which is typical of many smaller businesses.
But when you have that information, even if you don’t have
an accountant’s knowledge of
finance, at the bare minimum,
you should at least understand
if you’re meeting or exceeding
your projected revenue and if
you’re on track with your budget. That knowledge is going to
allow you to make more informed business decisions, and
it will facilitate your growth in a
more structured manner.
For example, if I’m halfway
through the year and I know
that I’ve already met 70 percent
of my G&A [general and administrative expenses], I know that
I can bid a product much leaner
because I don’t need to make
the same margins. That gives
me a competitive edge.
Q. How do you ensure your
company continues to grow?
Guard your investments. By
that I mean, guard your investment in your customers. It takes
time and money to establish a
level of trust with the people and
the companies they represent.
Some of the very best accounts I
have came about because my
competition became complacent
with their established accounts.
Perhaps the quality of their
work or the timeliness of their
service started to slip, or even
worse, they started to assume
that nothing that they quote
would be shopped, and their
services became too expensive.
The other investment is guard
your investment in your employees. The loss of any employee …
can have far-reaching effects,
both in the accounts he or she
may take with them, coupled
with the cost of finding and training a replacement for that person.
Never become complacent,
and never assume anything.
HOW TO REACH: McClintock Electric Inc., (330) 264-6380 or www.mcclintockelectric.com