Growing Smart

James Sims

President and CEO
Cambridge Technology Partners Inc.
Cambridge, Massachusetts

At every stage of growth, you'll face different challenges. The glue that has held us together through our fast and sustained growth spree has been our core value system. We could not have succeeded without it.

Two years ago, our main challenge was hiring. Top-quality people were coming through our door, but we couldn't hire them fast enough. We solved that problem by decentralizing the process. All of a sudden, we had no problem hiring the kind of people we wanted. I felt confident about this decentralization because I knew we had a core value system in place. To make sure that system continues, we've started something called Reboot, in which experienced employees return to our main office in Cambridge and we revisit our core values. If we can train people in a common set of beliefs, then clients will receive service of a consistent quality, regardless of where our people are working.

We faced another challenge in 1994, when we hit the $100 million revenue mark. We knew that growth was going to slow down in our bigger units. So we decided to break ourselves up every 18 months or so. By 1996, we had split into four units in 31 offices -- each with the ability to grow into a $30 million business. Our aim is to face these challenges of growth in advance, before they become obstacles.

James Sims has been with Cambridge Technology Partners, a strategic consulting and application-development company, since it was formed in 1991. Under Sims's leadership, CTP has enjoyed an annual growth rate of more than 50%, with net revenues growing from $56 million in 1993 to $406 million in 1997. The company now has more than 3,300 employees in 47 offices worldwide.

Andy Law

Chairman
St. Luke's Communications Ltd.
London, England

The question is not "to grow or not to grow" but "how fast to grow." If you grow too fast, you recruit too fast, and you're more likely to make mistakes down the road. Our strategy has been to grow very slowly. We do this by learning how to say no. We worked out our recruitment rate--the speed at which we could recruit good people and still be able to absorb new clients. We realized that we could take on a maximum of three pieces of new business per year. A while ago, we turned down a $90 million client--a large telecommunications company--because we had already reached our maximum. It's not a tough decision to make if you put a belief in human capital, and in the importance of human interraction, ahead of the pursuit of profit.

There's always the risk that as you get bigger, you'll also become less inventive. We've confronted that risk by instituting what we call the "35 rule." We work in groups. When any one group becomes larger than 35 people, it has to split apart, as an amoeba would. It doesn't matter exactly how the group splits up: For example, a few people might break off and form a new group. But when you let groups in your company get bigger than 35 people, you cease to care about those people--about what they're up to, whether they're being trained properly, and whether they're happy.

Andy Law alaw@stlukes.co.uk helped set up the London office of Chiat/Day in 1990 and became the office's CEO in 1993. Two years later, he masterminded the breakaway of the London office, winning over both staff and clients and forming St. Luke's -- the only advertising agency committed to equal employee ownership. The firm's clients include Midland Bank, Eurostar, and Ikea. Last year, it increased its revenues by 75%.

Christos Cotsakos

President and CEO
E*Trade Group Inc.
Palo Alto, California

Some people manage growth by emphasizing a corporate culture. Our culture is simple: We don't have one. Instead, we follow a simple procedure. We swarm all over a challenge until it gets addressed. When we're finished, we swarm all over the next challenge. Sure, it's tough sometimes. You'll often hear four-letter words being tossed around. But you'll never hear that infamous four-word sentence: "That's not my job."

It might seem strange, but I've learned a lot about growth strategy from Doom, the highly popular computer game. Doom is an incredibly powerful graphics engine that draws pictures so quickly that the action seems instantaneous. The engineering behind Doom will be the basis for virtual reality on the Internet. The creators of Doom were once asked which of their competitors they feared most. They didn't point to Microsoft or any of the other big guys. Instead, they said they worried about two people working in a garage, creating stuff that will blow them out of the water.

We embrace this "spirit of the garage" mentality. That's the attitude we use to face our unbridled growth. Without it, we'd be just another company.

Christos Cotsakos christos@etrade.com became president and CEO of E*Trade, one of the leading online discount brokerages, in 1996. Last year, E*Trade increased its revenues by roughly 250% and expanded its customer base from 91,000 to more than 400,000. Assets held in its consumer accounts top $10 billion.