PARIC CORPORATION QUICK AND NIMBLE TO SURVIVE THE RECESSION
It would have been easy to hold off on salary raises just a little longer and wait for a clearer sign that the economy had turned a corner.
JOE MCKEE AND KEITH WOLKOFF
But Joe McKee and Keith Wolkoff were unwilling to wait. They believed that their employees had worked hard to help Paric Corp. through the recession, and they deserved to be recognized for it.
“The questions do get asked,” says Wolkoff, president at the 234-employee design-build firm. “Is it prudent? Or should we continue to invest in the business? We asked a lot of our people during the very difficult times. It’s just as important to reward those people when you’re starting to see a little more fluidity in the marketplace. It’s the right thing to do.”
The decision was based on the leadership team’s commitment over the past two years to a long-term view and a belief that you can’t let fear guide your decisions, says McKee, Paric’s CEO.
“When you have a crisis, you can circle the wagons or you can choose to move forward,” McKee says. “Most of the times I know when people have circled the wagons; it hasn’t really worked out well for them. Our attitude was to keep moving and be nimble and quick.”
Both leaders wanted to focus on the core things that Paric did well, believing that those skills would be desired by customers even in a tough economy. As they developed a strategy to maximize those qualities and began to see the potential become reality, it became an easy decision to reward the team.
“It was a very painful period in the industry,” Wolkoff says. “But as odd as it is to say, we’re a lot stronger for having gone through it.”
The numbers reflect that assessment. Paric’s revenue grew from $200 million in 2010 to $240 million in 2012. Here’s a look at how the company bounced back so strongly from the recession.
Recalibrate your position
The path to Paric’s better future began with a blunt assessment of what the recession had done to the economy.
“What many people try to do in that environment is to get up and ignore the reality of what’s happening around them, and they don’t speak frankly,” McKee says. “It’s a little bit like what happens when a dog senses your fear. You lose all credibility and bad things happen. So it starts by being brutally honest and by making tough decisions.”
McKee and Wolkoff didn’t hold back in talking about the difficulties the company was facing. They also talked about those opportunities that they believed they could take advantage of. The key is they talked and kept talking to their teams whether the news was good or bad.
“In the absence of us communicating what actions we were taking and how we were addressing the economy, people were going to come to their own conclusions,” Wolkoff says. “We just refused to allow that. We were meeting if not every six weeks, then every eight weeks to give everybody a debrief on, ‘Here’s where we’re headed, here’s what we see and here’s what we’re doing about it.’
“Maybe all the information wasn’t pleasant. But at least everybody knew what was going on. There wasn’t all that chatter that can just be counterproductive.”
The crux of the new plan was to focus on the strengths and stop doing the things that weren’t making the company any money.
“When you have limited resources, there are some things you’ve always done because that’s the way you did it,” McKee says. “You need to figure out what those things are and quit doing them. What do we need to work on to move the organization forward?”
Preconstruction services were going to be a big part of Paric’s offerings to customers. Another was going to be the core markets that the company worked in, such as historic renovation, urban development, senior living and interior construction.
“We don’t service everybody,” Wolkoff says. “We go where we can bring value to our customers. Even in bad times, that’s going to prevail.
“It took a little bit of reinforcing from leadership to say, ‘Let’s hunker down, let’s pick our spots, let’s be smart, and let’s continue to invest, and we’ll be fine when we come out the other end.’ Are you going to cover 10 opportunities with your limited resources or are you going to cover three opportunities and increase your hit rate?”
McKee says you go with the three.
“You get two out of those three versus focusing on 10 and you only get two,” McKee says.
Know who you are
In working through the plan and defining what set Paric apart from the competition, Wolkoff says the company’s leadership unearthed a problem that they felt needed to be addressed.
“We started to ask ourselves, how do we define our business as it looked at that point in time,” Wolkoff says. “While we all had great things to say about ourselves, none of us were telling the story exactly the same way. And it really caused us to question, ‘Well, if we’re having that much trouble defining who we are, what are our customers saying?’”
It was with that thought in mind that Paric’s leadership team set out to interview customers, vendors and employees. The goal was to hit on a theme that would accurately and clearly define what the company is all about.
“In everything we do, every opportunity we have to touch each other, at a meeting, even if it’s an outside social event, there needs to be a consistent theme in how we talk to each other,” Wolkoff says. “Every company meeting we have, it has to be the central talking point over and over again.”
After talking to people at all these levels, the theme they arrived at was “Experience Excellence.”
“It doesn’t mean we’re perfect, but we strive for perfection, and that’s the piece we hit on,” Wolkoff says. “At every station we touch, whether it’s a client, vendor or internal employee, we have to strive for that perfection and that excellence.”
When money is tight with customers, the key to making a sale can be the perceived extra value that the customers believe they are getting with your business.
“You could say on the one hand that a building project is a very daunting task,” Wolkoff says. “But it shouldn’t be. If you have the right partner, it should be something that is exciting. It’s changing your organization. So we have to make sure that everybody who touches it from our end makes it the most satisfying experience it can be.”
The goal was to take these words that could easily become a cliché or something that is forgotten soon after it is brought up and embed it into the company’s culture.
McKee compares it to a quote he remembers from retired Denver Broncos quarterback and NFL Hall of Famer John Elway.
“He said on a Super Bowl winning team, they hold each other accountable,” McKee says. “If the guy next to you wasn’t doing his job, the guy to the right of him would say, ‘You better get with it and do your job.’ The coaches weren’t telling him. The players were doing that. We work really hard to try to create that kind of culture with people to where it’s a real team environment.”
When you’re just trying to get a motto or slogan like that to sink in, you can just ask the question.
“With a younger person, you might say, ‘What have you done today to create experience excellence?’” McKee says. “They’ll look at you the first couple of times like you have two heads. But after a while, they’ll begin to understand what you’re getting at. It’s about that discipline to do it right every day.”
One of the things that Paric began during its battle through the recession and has continued to this day is a weekly senior leadership team meeting. It consists of five people: Wolkoff, McKee, the company’s CFO and the senior vice presidents of sales and operations.
“That’s the one meeting that doesn’t get moved off people’s calendars,” Wolkoff says. “It’s the most important meeting we have in a given week.”
The challenging of opinions and belief is not only accepted, it’s encouraged, says Wolkoff.
“There are five people sitting in that room and if one of the five is not voicing an opinion and challenging something, you need to consider, ‘Do they need to be in the room?’” he says. “We’ve been fortunate that there are five very strong leaders in the room.”
The idea isn’t to create tension but to make sure every angle is being explored so the company can make an informed decision. Once the meeting is over, the conflict, if there is any left, must stay in the room.
“Once we leave the room, we’re unified,” Wolkoff says.
McKee says the elimination of secrets and unspoken concerns is one of the keys to success in any business.
“If you’re going to lose, lose doing the things you think you need to do rather than getting to the end and thinking, ‘I wish I would have done that,’” McKee says.