Most of the staff members of the Cuningham Group agree that the bumps they encountered were pretty much unavoidable. No matter how well you plan or how thoughtfully you approach the process, something unanticipated is always going to happen. And for the staff the benefits certainly have outweighed the pain.
Among the rewards of the merger that the Cuningham Group enjoyed was significant staff growth. Since the summer of 1996 the Phoenix office has grown to 20 people, up from 6; Los Angeles has grown to 50 people, up from 12; and Minneapolis has grown from 100 to 130. Solberg says, "There's no way that could have happened without the merger," even with the recent unprecedented growth in the national economy. "We're landing far more lucrative projects," says Cuningham. "We're seeing bids with nine figures now instead of seven or eight."
What's more, the firm has been able not only to expand into other markets but also to penetrate deeper into the markets it already served, which the company's numbers are starting to reflect. Although in 1999 the Cuningham Group still wasn't able to resume contributions to the employee profit-sharing fund, as of January the firm had already written contracts for $22 million in 2000 and was projecting a minimum profit-sharing contribution of $150,000. "We've never before begun a year with our revenue target already under contract," says Cuningham. "And we usually get 20% to 40% more work if we just sit here and look out the window." Which means revenues of $30 million in 2000 would not be out of reach.
The merger process also forced the company to develop better systems for accounting, design, and knowledge management. And it compelled the company to formalize programs that had been ad hoc, like mentoring and self-directed learning. "We needed that discipline," says partner and vice-president John Hamilton. "I don't think we would have done those things if we hadn't been challenged by the other offices' asking, 'How do you guys do that there?" The downside to that increased rigor has been a certain loss of spontaneity. "Some of the fun is gone," says Cuningham. "Can we have structure and have fun? That's been tricky. The parties are different; there's sometimes this feeling you have to go."
Balancing that loss of spontaneity is the excitement of working on a national scale. Many Cuningham Group employees have taken advantage of the chance to relocate, experience other cities, and work on projects with cool big-name, high-image architects. Sarah Stahl, interior designer in the Minneapolis office, has spent time in Los Angeles and has worked on projects with famed architect Frank Gehry's office, as well as hot visual-effects house Digital Domain. "That was a huge learning opportunity," she says. "Here I am, this kid from the Midwest. I thought that was a pretty big stretch from what I could get in the Twin Cities."
As for Cuningham, he says, "Being on the national stage is heady, a dream come true, but I can't say that it's made life easier. It's certainly more interesting." He says one particularly sobering discovery for him has been the amount of traveling it has taken to oversee three geographically dispersed offices. "I thought I'd be traveling maybe two or three times a year," he says. "But it's been 70,000 miles a year for the past three years." Still, that hasn't put him off thinking about other possible mergers in the future. "We've talked about other areas where we want to be regionally," he says. "And unless people are willing to make the move, that means finding somebody there to acquire."
If that happens, nearly all the folks at the Cuningham Group agree that the one element they'd never enter such a transaction without is totally open communication. "You can't hold anything back," says Solberg. "Chances are, what you're concealing will be the problem." The key to the successful merger of Solberg + Lowe with the Cuningham Group was each party's ability and willingness to open up completely to the other party -- and to the staff. And that means warts and all. "Better to find out today than after you've already completed the transaction," says Solberg. It's a process that Solberg, Cuningham, and company are still working on. "We keep confronting each other, finding out and sharing more," says Solberg. "Ultimately, the more you do to confront possible problems up front, the less you're going to get hurt."
Christopher Caggiano is a senior staff writer at Inc.
Time Line
SUMMER 1995
Partners of the Cuningham Group in Minneapolis and Solberg + Lowe in Los Angeles visit each other's offices.
FALL 1995
The two firms work together on some trial hotel projects.
WINTER 1996
Cuningham Group holds January holiday party in Minneapolis, including Solberg + Lowe staff, spouses, and significant others flown in from Phoenix and Los Angeles.
SPRING 1996
Partners go on a three-day management retreat in Keystone, Colo.
SUMMER 1996
Merger papers signed; company celebrates first annual "Interdependence Day."
FALL 1997
Cuningham Group announces no profit sharing.
YEAR-END 1999
Since the merger, the Cuningham Group has expanded from 118 employees to 200. Still no profit sharing.
JANUARY 2000
Company has already signed $22 million in projects for year 2000 and expects $30 million in annual sales and a contribution of at least $150,000 to profit sharing.
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