You could write the book on business growth from the strategies of the companies that have made the INC. 500 five years running.
IN THIS FIFTH YEAR OF THE INC. 500, WE HONOR six privately owned companies that have earned a place on the list every year so far. These are astonishing companies, growing 60% or more every year for the last nine without stumbling even once. Although each started out modestly, they are all profitable and thriving today, run by the same people who set them on their present courses.
Taken together, the stories of these six companies represent something of a textbook on business growth. While one has leaped ahead by constantly expanding the range of services it offers, two others have grown on the strength of a basic product and a relentless quest for market share. Growth by acquisition has been the single-minded strategy of a miniconglomerate on our honor roll; growth by cloning was the trick of a temporary-help service specializing in computer work. There's even a company that's done well by doing good: a vocational school catering to welfare mothers, high-school dropouts, and the hard-core unemployed.
What is the secret of these six INC. 500 veterans?Perhaps only this: they started with a simple concept and never allowed themselves to lose sight of it.
5 YEARS ON THE INC. 500
HILL INTERNATIONAL INC. WILLINGBORO, N.J. CONSTRUCTION MANAGEMENT
Irvin Richter thinks there are three reasons why Hill International (#467) became the largest construction-claims consulting firm in the country, maybe even in the world: (1) he had a new idea; (2) the times were right; and (3) he never stopped selling.
Back in 1976, it was called claims management, risk protection for the construction industry. Whenever a delayed building project became mired in cost overruns, with charges and countercharges flying among owner, architect, contractor, and subcontractors, Hill put together a team of outside experts to visit the site and determine why the project had been derailed and who was to blame. They'd assess all the potential claims, estimate the legitimate damages, and even testify in court if their recommendation did not result in a settlement.
"The construction industry was going to hell in a handbasket at the time," Richter remembers. As the pace of construction slowed, contractors were forced to lower their bids and work on smaller margins, which quickly disappeared if a project began to go sour. "Suddenly, it was a service everybody needed."
Although initially Richter was the only full-time employee of his company, he took the title of vice-president. "That way," he says, "it would look like I was just one of a lot of vice-presidents." It was, to say the least, a modest beginning, working out of his son's bedroom with a $60,000 line of credit from a friend's consulting firm, a post-office box, and a subscription to The Wall Street Journal -- "so something would be in the mailbox for me every day."
Hill, you might say, is a business built on the foundations of hustle, momentum, and leverage. No sooner had Richter completed his first assignment, a claim against the city of Niagara Falls, N.Y., than he began selling his newfound reputation at a professional seminar he helped to organize, attracting 400 participants to a series of lectures on construction claims. Among those at the conference were the director of New Jersey's state construction office and the chairman of the Armed Services Board of Contract Appeals, as well as many of the country's top construction lawyers, architects, contractors, engineers, and insurance executives. The only consultant on the program, Richter spoke on "Preparing the Claim and Calculating the Damages" and signed up several clients on the spot.
Seminars led to journal articles, and journal articles to books (in fact, two books), and all of them to such clients as Bechtel Group Inc. and the U.S. General Services Administration -- whose names were immediately dropped in Richter's sales pitch and glossy brochures. He earned a law degree at night from Rutgers -- The State University of New Jersey. And within a decade, Hill International has become a leader in a brand-new industry. When there were problems at the Midland, Mich., nuclear-plant site, Consumers Power Co. called Hill. When the Tropicana Hotel and Casino, in Atlantic City, N.J., was in danger of losing its temporary license if it didn't complete construction according to schedule, Hill sorted out the claims and helped ensure that the project was completed precisely on time.
But Hill International didn't get to be a $42-million, 385-person operation simply by arbitrating construction claims. At first, Richter's idea was to get involved with bigger and more complex projects that afforded him higher fees, better margins, and higher visibility within the industry. But soon, he saw that there was still greater potential if he could sell his clients on using his services earlier and earlier in the construction cycle. In 1980, he began offering project management, "sitting with a job" from start to finish, which is now 25% of his business. And in 1984, after helping several hospitals with their construction, he bought the first of two hospital-management consulting firms to help them operate their new facilities once they were finished. These days, he's looking to get into commercial real estate development, in part as a way of offering his employees some form of equity participation without diluting control of Hill International itself. Just last summer, Hill was even named a finalist for the state contract to operate commuter rail service out of Boston.
"I still see everything in terms of marketing," explains Richter, who didn't give up the title of vice-president until 1980. His five years on the INC. 500, he says, is a confirmation of the old wisdom that "the doing of business begins with the getting of business."
5 YEARS ON THE INC. 500
