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Built to Scale

By: Chuck SalterWed Dec 19, 2007 at 12:17 AM
The leaders of Netigy are wrestling with a make-or-break question that's been the downfall of many promising startups: How do you get big in a big hurry? The answer: act like you already are.

To keep growing, Netigy must keep improving its solutions and services. That doesn't happen unless employees are getting smarter and learning faster. It's not enough for them to share what they already know with their colleagues -- they need to come up with new ideas. But where does innovation happen? Not only in the research lab, says Mickelson, but in the field and in group discussions. Netigy's knowledge managers mine online discussion areas, where employees post questions about specific technologies. They also work alongside consultants in the field to identify new ideas or best practices, and then they disseminate that information in emails or by adding it to the training curriculum. New knowledge translates into higher billing rates, higher margins, and more revenue. "We can't charge more unless our people know more, and the way to help them know more is to train them and to provide them with access to a world of ever-changing information," says Mickelson. "Knowledge management is the glue."

Infrastructure also steers strategy. Because consultants in the field can update the system with the latest billing information, the company avoids the kinds of financial surprises that turn CFOs into insomniacs. Incoming revenue becomes predictable, which will be critical for Netigy after its IPO, says Duston Williams. Because its sales managers know how many proposals and client projects are in the works, they can compare that information with a company's revenue and profit targets and then adjust accordingly. They can tell which services or sectors are likely to be more profitable than others. Such information transparency helps Netigy avoid staffing problems too. For example, if an account executive is in the final stages of negotiating for 1,000 hours of security work that requires certain skills that are in short supply, recruiters can focus on hiring the people necessary for the job or on moving existing people into that job.

Netigy views its infrastructure as a competitive advantage, which reminds Williams of something that he recalls Warren Buffett saying about successful companies: They build a moat around their market. "I view every dollar that we spend on 'scalability' as us building a bigger and bigger moat," Williams says. "It's a bigger and bigger barrier to entry by our competition."

Employees Wanted: 19,350 or More

Netigy can't scale up with infrastructure alone. It needs people -- specifically, more than 19,350 -- to meet Moore's target. Jack Van Berkel, vice president of human resources, has the unenviable task of finding those people. "The hard part is that we're looking for people who don't exist," says Van Berkel, 40. "That is, consultants who have 10 years of experience in e-infrastructure." So Netigy does the next best thing: It hires the right types of people and trains them.

Keegan, who recently made 36 hires in just 100 days, goes after experienced account executives who can scale the business right away. They have PalmPilots full of prospective clients, and they know how to make a quota. "I look for people who have relationships with chief officers at well-known companies," he says. "Our focus is to be a trust adviser to clients, and that's an ongoing relationship."

The company's aggressive growth strategy, in turn, attracts the very individuals whom Netigy needs in order to execute its plans -- a virtuous circle. Keegan was able to sign top performers from such companies as Hewlett-Packard and Lucent Technologies because Netigy's senior management is high-caliber, because the company's pockets are deep, and because the market opportunity -- not to mention Netigy's upcoming IPO -- is compelling. "I've had people accept less money or stock to come here because they feel as if this will be the place to be seven years from now," Keegan says.

Netigy doesn't have its fast growth figured out completely. Concern about the influx of new employees has led Mickelson, Rushton, and Van Berkel to develop a rich orientation program. They want to create a strong sense of community and of personal connection, even as their number of employees skyrockets into the thousands. They're determined to maintain a hard-charging culture, yet they want to avoid employee burnout. "Anybody who thinks that you can avoid growing pains is crazy," says Clark. "Is everything in place? Not yet. But the materials are there."

Why do Netigy's executives have a fixation with 20,000 employees? "I wanted people to think about being a first-class global leader in service," says Moore. "Think of McKinsey. Think of Bain. Think of companies that demand respect at the boardroom level." The idea, adds Rushton, is to have ambitious goals that employees can rally around. And rally they have.

But Moore is already rethinking his arithmetic. What if Netigy continues to grow? What if his vision comes to pass? What then? "To be honest," he says, "Twenty thousand will probably be low."

From Issue 36 | June 2000

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September 29, 2009 at 4:41pm by Yono Suryadi

Thanks for this valuable information. Regards!

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