President of LJA Engineering (Hot Firm #2 for 2016), the largest employee-owned civil engineering firm in Houston (600-plus employees).
By Liisa Andreassen
Ladner has more than 35 years’ experience in civil engineering serving both public and private clients. He’s been involved in projects including design of interstate highways, municipal utility districts, and land development projects. He also has experience in the planning, design, and construction of water supply and wastewater systems, as well as roadways. He has been president of LJA for more than 20 years.
A conversation with Calvin Ladner.
The Zweig Letter: What’s your philosophy on fee/billing and accounts receivable? How do you collect fees from a difficult client?
Calvin Ladner: Unfortunately, one of the ways bad clients reveal themselves is by not paying. We try not to have that type of client. If they have a reputation for being problem payers, we avoid working with them. It’s in the best interest of our business plan to get rid of bad clients.
TZL: What’s the recipe for creating an effective board?
CL: Finding knowledgeable and engaged people. The ESOP program helps get the engagement, and most of the leadership of LJA has been working in the field for 30 years or more – this provides many prospects from which to choose.
TZL: Is there a secret to effective ownership transition?
CL: ESOP! Yes, Mark Zweig. I am a zealot! Whatever the structure, everyone must fully engage and embrace that business model.
TZL: How do you go about winning work?
CL: It varies by sector, but it always comes down to positive client relationships. Whether they are public or private; the client must know and trust the firm and manager.
TZL: What’s the greatest problem to overcome in the proposal process?
CL: A common challenge is having a clear and consistent go/no-go in place, and communication between the proposal team and our project managers. To address this, we have recently revamped our internal proposal quality assurance/quality control, which now includes a rigorous process and collaborative training for marketing and technical staff. Everyone clearly understands the mandate, their roles, and most importantly their accountability to each other.
TZL: Once you’ve won a contract, what are the “marching orders” for your PMs?
CL: Make the clients happy, and also make money. We also follow our QA/QC process and communicate internally and externally.
TZL: How does marketing contribute to your success rate? Are you content with your marketing efforts, or do you think you should increase/decrease marketing?
CL: Marketing is very important and is required to have any success in this business. You can never do too much marketing!
TZL: What has your firm done recently to upgrade its IT system?
CL: We’ve relocated to a co-location facility. Consolidating all of our systems and data to one facility improves our performance and reliability.
TZL: What’s the best way to recruit and retain top talent in a tight labor market?
CL: We treat our employees well. There’s nothing like a happy employee to market and recruit for you. We constantly work at having fun and making money. Our ESOP is our biggest seller, but we also have our Employee Relations Committee that represents each division’s employees’ needs; “LJA Cares,” which provides the opportunity for altruism in the community; the LJA Social Club that promotes team unity through recreational sports; and our annual company picnic, anniversary luncheon, and holiday parties.
TZL: What’s the key benefit you give to your employees? Flex schedule, incentive compensation, 401(k), etc.?
CL: As many as possible – but our ESOP is our key benefit. Being an employee-owner in the firm means every employee is directly connected to LJA’s success.
TZL: How do you raise capital?
TZL: What’s your preferred strategy for growth, M&A or organic? Give us a synopsis of how your firm effected growth in the recent past.
CL: Our strategy for growth is grow or die. It doesn’t matter if it’s organic or by M&A as long as we grow.
TZL: What’s the greatest challenge presented by growth?
CL: Communication. It’s the greatest challenge. When you only have one office, it’s easy to just “holler down the hall,” but when you have 21 offices you need the infrastructure and corporate structure that allows the various groups to communicate.
TZL: What’s your prediction for 2017 and for the next five years?
CL: Moderate growth in the first and second quarters and then it should take off like 1994-2001 or 2002-2008. In 2016, the slowdown in Houston and Texas overall, was due primarily to oil companies pulling back. With the confirmed increase in oil/price per barrel and the Texas economy improving, this should lead to a much stronger economy in the coming years.