Re-focus for Growth

Re-focus for Growth

COMPANIES by Janet Leiser | Senior Writer

The founder of GLE Associates narrows the company's market niche and partners with multibillion-dollar companies to jump-start its growth.

Robert Greene was fly fishing in Wyoming with the Florida vice president of a multibillion-dollar construction corporation when he realized his small company would never build the largest commercial projects, where there was the most potential for profit.

"He was getting better profit margins on his $100 million jobs than I was getting on $2 million jobs," says Greene, 50, founder and CEO of GLE Associates Inc., a Tampa-based engineering/architectural firm that stretches from Florida to California.

Bigger construction companies have less competition because it's next to impossible for smaller firms to obtain the required bonding on large projects.

GLE, however, faced stiff competition on its projects where the risks are high and the rewards low, he says, adding: "With the small- to mid-size projects, $1 million to $5 million, there are a tremendous number of general contractors out there and they're living and dying every day on whether they can get another job."

Greene decided to change the company's strategy.

"I'll never jump up to that level," Greene says of multibillion-dollar construction companies. "Why am I down at this level when I can go team with him as the designer on $100 million projects?"

It was a defining moment for Greene, he says, adding, "We had other services that had much faster growth opportunity that the clients wanted.

"I probably should have made that decision two years ago," he adds. "I just kept saying, 'I want to do design/build. I want to go in the same direction. I'm going to do good.' "

Focus on the client

After Greene decided what his 110-person company did not want to do, it was time to figure out what GLE did well and where it should focus its future growth. The GLE team compiled a list of what it thought the company did best.

The company couldn't claim it was smarter than the competition, he says. How would you show that? And it didn't want to be the cheapest.

"We're selling innovation," Greene says. "We are entrepreneurial. Our branding is now focused around a client's success. We can be incredibly responsive. We can be innovative. Everything we're doing is to make them successful in their business. It just happens that we're providing architecture, engineering and environmental consulting."

In September, Greene hired an outside firm, Rubicom Marketing Group of Portland, Ore., which is familiar with the architectural and engineering industry, to survey clients and help in GLE's re-branding. That cost about $50,000.

The survey confirmed what GLE suspected: customers appreciated the company's responsiveness, says Greene, who has remained the company's sole owner since its 1989 founding.

He then established a marketing department, hiring Karen McKinney, who had more than 20 years experience in the Tampa Bay area, to head it. He realized that despite his best intentions, he couldn't do it all himself.

"Somebody needs to come into the office in the morning with the sole focus of, 'How am I going to increase market penetration for GLE Associates?' " he says. "Whereas I may walk into the office in the morning with that on my mind, but within the next 30 seconds, it has changed to how can I deal with this client issue or management issue or operations issue?"

It was a move he says he had to make to meet his goal of growing the company to 1,000 employees over the next decade.

"You've got to do this with the idea you're not a 100-person company," Greene says. "Our goal certainly is to be a major player and to be in excess of hundreds of millions of dollars in revenue versus in the $20 million range."

Another challenge in the re-branding was identifying GLE's competitors, which vary according to the geographic market.

"In an architectural environment, our competitors could literally be every architectural firm in a geographic location that does education [design]," Greene says. "You really can have a five-person architecture firm in Hillsborough County that competes against our architects for work."

Size does matter when it comes to environmental sciences, such as mold, asbestos or lead paint cleanup and water contamination, and GLE's engineering services. Competitors in those areas are mostly large companies.

National clients, such as shopping mall owners or other commercial property owners, want companies with numerous locations and capabilities, he says, adding, "They don't want two people or three people to do the work."

The company is targeting its marketing efforts on clients that have many locations.

Two of GLE's targeted growth areas are environmental site work and building assessment/construction funds control. The second is a fairly new area that Greene expects to grow quickly because of problems in the reinsurance industry.

Site environmental and building sciences bring in about half of GLE's annual revenue, projected to hit $20 million this year. Most of the company's profit is reinvested in GLE's growth. In the industry, the average profit range is 7% to 9%.

Funds control vs. bonding

More contractors and banks are turning to construction funds control instead of bonding, Greene says. Bonding has become costly and in many instances unobtainable.

"It started with 9/11 where you had so many people that got burned for so much money," Greene says. "Then add all the re-insurers who got hit for all of the claims dealing with all of the hurricanes. They just tightened down and raised their rates dramatically."

When it comes to construction projects, the bond protects the property owner and the bank lending the money. There are performance bonds and labor/material bonds. A performance bond ensures a job is finished if the general contractor stops work, while the other is used the most often and it guarantees a project is finished and all subcontractors are paid if a contractor defaults.

Generally, the issuance of bonds is based on how much cash the contractor has in the bank and the length of the company's experience, he says. It doesn't matter how much a contractor's investments, building or property are worth.

In lieu of a bond, the bank can contract with a company such as GLE to manage the construction funds. As work progresses, GLE pays the contractor and subcontractors directly.

It protects against a contractor taking cash from one job to pay for work on another project that isn't going well. GLE ensures the contractor or subs aren't paid until the work is done.

How to grow

Most of the growth at GLE is expected to occur over the next 10 years at 10 of the company's 11 offices, located in Los Angeles, Houston, Fort Lauderdale, Orlando, Miami, Jacksonville, St. Petersburg, Atlanta and Nashville, as well as Tampa.

Not all growth will be organic. The company has made as many as three acquisitions in a year's time, and Greene says he's always looking for the right acquisition at the right price.

His business is somewhat of an oddity in an industry where about 90% of all A&E firms have 30 employees or less, he says, adding: "I always envisioned it as a corporation."

Greene, who has a bachelor's degree from the University of Florida and a master's degree from Georgia Institute of Technology, worked 10 years as a geological engineer at a national engineering firm before starting GLE in 1989 in response to demand for asbestos cleanup experts, which was then a fairly new niche.

"You've got the engineers who are engineers, which is a large percentage of them, and you have engineers who are entrepreneurs, and I just happen to be an entrepreneur," he says.

Not all of GLE consulting services are offered at each location. But that will soon change.

"Our goal is to increase service lines in every single one of the branches, with the exception of the branch in Gainesville, which is tied to the university there," the CEO says.

The goal: At least 100 employees at each branch.

Within four years, he plans to hire a chief operating officer to handle day-to-day operations. Three previous efforts to do so have failed, he says, adding: "To grow I need more senior level people with experience. But I want to get the right people with exactly the same attitude and the same dedication to client service."

His recruiting advantage is just outside his window: "This is the kind of winter we're getting all kind of resumes."

REVIEW SUMMARY

Company. GLE Associates Inc., founded by Robert Greene

Industry. Architecture/engineering/environmental sciences

Key. Company is narrowing its market niche to focus on more profitable growth.

Creating Destiny

Developer Anthony Pugliese III and partners plan to create a master-planned community on about 41,400 rural acres in Osceola County's Yeehaw Junction that makes Walt Disney World look small.

Pugliese and partner, Subway founder Fred DeLuca, paid $5,000 an acre, or about $137 million, in 2005 for 27,400 acres. They recently added to that another 14,000 adjacent acres owned by the Rohde family.

They've hired land planner/designer R. Quinn Turner, operations director of GLE Associates in Orlando, to oversee Destiny, a city that's expected to one day be home to at least 100,000 people.

Robert Greene, GLE's chief executive officer, has high praise for Turner.

"Quinn has got to be the best land planner/master planner I've ever seen in my entire life," Greene says.

Turner says he doesn't deserve such lavish praise. He's simply the orchestra leader, overseeing about 12 to 14 professionals, from geotechnical engineers to environmental experts, to make sure required approvals are obtained from regulators.

Destiny spokesman Robert Whidden calls Turner the quarterback.

The project is so massive it's expected to take as long as 50 years to complete, Whidden says, adding, "It's unprecedented in the sense it's taking a fresh creative look to something that's being done from scratch."

It's being built under the state's Rural Land Stewardship program, which was used to build Ava Maria in Collier County and Adams Ranch in St. Lucie County. Developers receive higher densities in some areas in exchange for protecting and preserving environmentally sensitive acreage.

About half of the parcel is wetlands or waterfront.

"Most people would turn around and look at that and say, 'Half of my property is not useable,'" Greene says. "On the other hand, what Quinn did, he said, 'No, look at it as we now have unlimited waterfront property.' "

Turner says, "It's an opportunity to live in nature, as I call it."

State Road 60 runs through the middle of the acreage and the Florida Turnpike runs nearby.

As many as 60 groups, including governmental agencies and environmental groups, must sign off on the development for it to proceed.

"We're to the point where we're starting to play seriously with some concepts," Whidden says. "We don't have our arms around it yet. We're getting very, very close to being able to do it."