CEO of Wantman Group, Inc. (#5 Hot Firm and #19 Best Firm Multidiscipline for 2016), a 310-person engineering consulting firm based in West Palm Beach, Florida.
By Liisa Andreassen
“The easiest work is repeat work – they know us, we know them – and the whole process just runs smoother,” Wantman says.
A conversation with David Wantman.
TZL: What’s your philosophy on fee/billing and accounts receivable? How do you collect fees from a difficult client?
DW: Cash flow is the heart of any business, and it’s something we actively monitor at many levels. First, we use an escalation-based process, where the project manager approaches the client when they are behind – typically around the 60-day mark. If that isn’t effective, it escalates to accounting. The next step involves the senior management team, and finally it would end up in our legal department for collections. It’s a bit clichéd, but it’s a situation professional services providers and consultants know will happen – the client never had the money, never had the intention, or has an “I don’t need to pay for it” attitude. We try to be proactive at the lowest level before it becomes contentious.
TZL: What’s the recipe for creating an effective board?
DW: There are a number of factors. We strive for a board that is talent-centric so that we have multiple perspectives; one that is diverse because the workforce is diverse. We want each director to have the ability to provide strategic direction based on his/her past history, so we like to have a board with a diversity in experience as well (i.e. a combination of financial, legal, and insurance experience). And we really like outside directors; we had two people for years and are actively speaking with a third. People who have recently retired from our profession have tremendous value to add.
It’s also important that the loudest voice in the room isn’t necessarily the dominant influence. All of our board members are on equal footing and have equal airtime. There should be no “yes” people, but rather those who will challenge the group. This isn’t a golfing event – they should leave the room mentally exhausted.
TZL: Is there a secret to effective ownership transition?
DW: Start really early. Firms in our industry tend to grow rapidly, not just in size, but in revenue generated. As a result, we tend to outpace the S&P 100 growth pattern over our lifecycles. Internally, it takes a lot of time to prepare to transfer ownership to employees. You have to create value; you have to sell and not give that ownership opportunity in order to build its value. You have to develop a pride of ownership, for the chance at ownership to be coveted, for the opportunity to share in the financial rewards of a company that continues to grow.
TZL: How do you go about winning work?
DW: Outwork the competition. The easiest work is repeat work. Most successful firms know that if you take care of the client on the last job, you can leverage your existing client base with repeat work. However, if you’re going after new clients or public-based procurement, start early and assemble the team the client wants so they see the value in selecting you.
WGI generates the most revenue on repeat business – they know us, we know them, there is a higher level of trust, and the whole process just runs smoother.
TZL: What’s the greatest problem to overcome in the proposal process?
DW: This is something we deal with constantly: Getting the technical leadership and division managers, to find the time, have the energy and appreciation for chasing the next win while they’re at their busiest on current projects. You cannot wait for one project to end before chasing the next one.
TZL: Once you’ve won a contract, what are the “marching orders” for your PMs?
- Deliver a quality project
- Don’t ever sacrifice the quality control process.
- Make the client happy
- Beat delivery milestone dates even if by a single day. Many firms cannot deliver a quality set of plans a day early, so if you can, you’ll stand out over 99 percent of the competition and make money, too
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?
DW: Branding and name recognition are huge in this business, so great marketing is anything you can do to create a positive public image for your firm and its individuals.
The broadest reach and most inclusive way to build an engaged audience is through social media and your website – it puts you in front of the largest possible audience without any of the borders of more traditional media. You have to commit to making this a regular and ongoing effort. We also commit to more leveraged outreach to traditional media for press opportunities in business and trade publications, as there is still prestige there – it represents a higher qualified value than the more casual tone of social media. That said, it’s all part of an integrated strategy, and we’ve leveraged both with a lot of successful parallel and crossover efforts.
We also encourage our associates to publish white papers and case studies, and encourage all staff – not just management – to be active in their respective professional organizations, attend regular meetings and seminars across the country to network with peers, and to join task forces and committees. That word-of-mouth “marketing” builds relationships that tend to foster teaming arrangements on future projects. In short, every marketing decision we make has to also take the long view.
TZL: What has your firm done recently to upgrade its IT system?
DW: Last year we relocated all our critical infrastructure to a co-locate facility that is disaster-proofed. We also upgraded our companywide shared network, significantly increased network data speeds and upgraded to a more robust backup system that records backups on an hourly basis rather than daily.
TZL: What’s the best way to recruit and retain top talent in a tight labor market?
DW: Word-of-mouth is our number one source for recruiting; you get your best associates from existing associates. Even so, the labor market for qualified professionals is almost non-existent. There simply is not a robust pool to go after. We have in-house recruiters, use social media, our website, outside recruitment specialists, offer employees financial incentives, sit on boards and teach at universities to find talented prospects while they’re still in school, have a strong and attractive internship program – and it’s still a constant effort.
TZL: What’s the key benefit you give to your employees? Flex schedule, incentive compensation, 401(k), etc.?
DW: This question really should be, “What do your employees think of the key benefits your company offers?” What we think isn’t really material – to retain talent you have to take care of your team. If you want to know those key benefits they like and those they wish you offered, you should be asking them through surveys what is most important to them.
TZL: How do you raise capital?
DW: WGI uses traditional bank financing most of the time; we do not use leveraged third-party financing. When we do use bank financing, it’s typically short-term and for the purpose of M&A.
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.
DW: Our strategy is a blend of both. There’s a constant need in this business to keep our professionals happy and retain them – and if we don’t consistently grow, the best people leave. In my opinion, you can’t grow at a healthy rate just through organic growth – there is just not enough talent available.
Look at it this way: Say you are a firm with 500 people with a growth target of 10 percent this year. That’s 50 new hires. At the same time, your turnover is 12 percent, or a loss of 60 people. That’s 110 new employees that must come on board to meet your goal – more than two new hires every week. Given that, M&A is a complementary path to growth where we acquire talented people who bring other ideas, new talents, markets, geographic locations, clients, and more – much more efficiently than trying to do so organically.
TZL: What’s the greatest challenge presented by growth?
DW: Maintaining our culture while integrating new people. We have to ensure that we have systems in place for growth at the technical level which leads to growth on the executive level which requires growth on the administrative level, and so on.
TZL: What’s your prediction for 2017 and for the next five years?
DW: I believe that 2017 and the next five years will be rewarding for the infrastructure markets. The new administration has shown an interest in repairing, growing, and bettering the nation’s infrastructure. I’m optimistic that we’ll see some action. Our industry has done a tremendous job of bringing infrastructure to the forefront with the public. They know money must be spent to make the country better. It’s with limited funds, however, and the populace is more aware of the continued reliance on public-private partnerships where private money is used to deliver public projects sooner.