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STRATEGY

Navigating the Complexities of Business

Darrell Smith's Milestone Group helps firms face the challenges of an ever-changing business environment.
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Darrell Smith is no stranger to growth. As an executive at ARISTA Corporation, a government consultancy, Smith helped shepherd 12 employees and under $1 million in revenue to 230 people generating $22 million in nine years.

Today, Smith is strapped to another rocket, the Milestone Group, which has made the Inc. 500 list twice, ranking 120 th on the 2003 list and 229 th on the 2004 list.

Since Smith founded Milestone Group in 1998, the consultancy has helped formulate the Missile Defense Agency's budget, upgrade Air Express International's computer systems, train highway workers in safety, and counsel America's armed forces suffering from substance abuse problems.

Smith attributes Milestone Group's success to one the thing: the quality of his people. And judging by revenue, which he projects to grow over 60% to $30 million this year, Smith has 200 very qualified people. But the Milestones Groups success also is a result of a changing environment.

Everything from technology and trade laws to government regulations and consumers' tastes are becoming more and more complicated. Complexity alone is manageable. But when complexity, competition, and the cost of labor grow in tandem, firms need outside help.

"The need for specialized expertise--and the need to go outside for that expertise--to handle some shorter-term projects, is the biggest driver in the industry," says Smith, while en route to his largest client, the Missile Defense Agency, where 75 Milestone consultants are doing everything from designing a build-out to securing computer systems.

While the $100-plus billion consulting industry is projected to grow by almost half by 2012, in terms of employees, Smith is concerned that the size of the federal deficit could harm those consulting Uncle Sam. "Anytime you run a deficit that puts pressure on the budget, in terms of spending, it is a concern," he warns.

Smith's concerns could seep into the private sector as well. "In the commercial market, the driver is the economy," he says. The concern, therefore, is that if the deficits aren't reduced, interest rates will rise and the economy will slow, thus easing the demand for consultants.

Last updated: Apr 18, 2005

JONATHAN STEIMAN

Jonathan was an early hire at TalkTo, a Matrix Partners portfolio company acquired by Path. Jonathan is currently Path's Director of Operations. You can find additional writings at www.jonathansteiman.com.




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