Problem

CH2M HILL is an international engineering, construction and operations firm. In the 1980s it had revenues of $200 million and 2000 employee-owners, some of whom wanted to do everything. But the company could not afford to do everything. It did not have the capital necessary to compete in every business segment where other firms specialized. Growth through acquisition had sometimes succeeded, but it had also left unmet expectations and some unhappy employees. The challenge: To decide where to grow and how to grow, and then implement this plan within a fluid, dynamic business climate.

Solution

As a Corporate Development Analyst, Rusty LaFerney designed and implemented a formal Strategic Market Planning (SMP) process, creating a written development plan against which budgets could be approved and variances measured and addressed. He also evaluated business markets and merger candidates in Texas, New Mexico, and Mexico City, Guadalajara, and Monterrey Mexico. Then, to help organize management thinking and efforts, Rusty drafted a written Merger and Acquisition Policy, published as a working guide for the Board of Directors.

Results

As a result of the efforts of Rusty LaFerney and others, the company decided to focus on waste management and public infrastructure market segments, where its technical strengths excelled, and to expand principally through internal growth, using acquisition selectively. The company decided not to open offices in Mexico, but did move into Texas and Washington D.C. Today, CH2M HILL has 10,000 employees, $2 billion in annual revenues, 165 offices in 30 countries, and can take any infrastructure project from concept to reality.

Lessons Learned

With professional services groups, work hard with the people you have and with what they do best. Let the business evolve; do not control it too much. Anticipate post-merger integration problems. Have a plan to thoroughly integrate all the new people before you complete the merger. Have the mind set that the marriage is a merger, not an acquisition.