Recession Rebound

September 2014 » Feature Articles » Firms in Focus
O’Neal Inc. shares strategies for continued growth and recovery.
Brian Gallagher and Kevin Bean, P.E.
Recruiting new team members with wide-ranging experience in complex systems and coupling them with O’Neal’s existing staff, the company developed a team that has a unique skill set and range of capabilities. Photo: O'Neal, Inc.

Many engineering and construction firms were slow to rebound from the recession, but a few of them made quicker recoveries than might have been expected. What were the secrets and strategies of those firms to “recession-proof” themselves? Our firm, O’Neal, Inc. — an employee-owned company that offers comprehensive engineering, procurement, and construction services — tripled its revenue at a time when other firms were still being hit hard. Several factors account for that success, but all share the common theme of identifying areas in which growth and opportunities continued to occur.

Focus on the client

Prior to the recession, many companies had an inward-looking business model. Traditional sales groups focused on developing business according to their own visions and goals. But, by turning this process around and identifying the immediate needs of existing and potential clients, companies can be more competitive.

Case in point: In 2009, O’Neal, which focuses exclusively on industrial projects, made a shift to organize its business development group along market lines, allowing the company to be more focused on specific markets and better understand client needs. The company formed three Strategic Business Units (SBUs) — Process Chemical, Pharmaceutical, and Industrial Manufacturing. Businesses within those key markets include pulp and paper, food processing, food and beverage distribution, packaging, automotive, clean manufacturing, specialty fibers and nonwovens, and consumer products — all industry segments with specific day-to-day workflows. By organizing our SBUs around clients’ operations, O’Neal was able to offer extremely targeted and effective solutions. Offering clients gains in efficiency and value — especially during times of scarcity — is a winning strategy for growth.

However, reorienting a company to be more responsive to its clients is not necessarily a one-time effort. Viewing it as a process — a long-term strategy — allows ongoing assessment, course correction, and augmentation. For example, O’Neal eventually added more SBUs to further broaden the range of services offered to clients. One of these is the Equipment Relocation and Installation SBU. While O’Neal has historically provided engineering services related to plant and equipment relocations, we realized that a potential area in which to expand offerings was in performing the actual relocation work.

Many of our clients were focusing on optimizing their operations and manufacturing assets, which led to an extensive need for equipment relocation, reconfiguration, consolidation, and new equipment installation. By offering a full spectrum of services, including site assessment and relocation planning, dismantling of equipment and process lines, shipping, storage of equipment, rigging, relocation, reinstallation, startup, and commissioning, O’Neal was able to secure a significant number of new projects.

The lesson learned is that after a company identifies its target markets, it must spend some time becoming familiar with the hierarchy of needs within those markets. Additional services that respond directly to those needs can then be rolled out as the company/client relationship evolves.

After a company identifies its target markets, it must spend some time becoming familiar with the hierarchy of needs within those markets.

Keep in mind that general trends can lead to specific solutions. For example, many client companies are looking to maximize ROI before making a capital investment in upgrading their antiquated distribution systems. With factors such as space, labor constraints, and energy prices driving overhead, manufacturers are constantly searching for new ways to modernize and streamline their supply chains.

Recognizing this, O’Neal launched an Advanced Facilities SBU, established to focus on delivering capital projects for automated manufacturing, logistics, and distribution facilities, while specializing in complex systems that require intricate process design and customization. O’Neal invested in recruiting new team members with wide-ranging experience in complex systems. Coupling them with O’Neal’s existing staff, the company developed a team that has a unique skill set and range of capabilities. This type of strategic hiring investment paid off — O’Neal has been able to leverage its expertise to secure two significant projects for a major consumer products company, and opportunities for other projects.

Industrial owners are requiring the services of integrated design and construction firms that have proven processes, systems, and software to support the project development and delivery process.

Keep the big picture in view

Identifying niche areas to focus on is only part of the story. Larger industry trends often drive a company’s overall organization. For example, corporations are managing smaller and less forgiving capital budgets, so their capital approval processes are becoming more stringent. Therefore, for many industrial owners, the traditional approach of a pure design study that includes a +/-30 percent cost estimate is not sufficient. Industrial owners are requiring the services of integrated design and construction firms that have proven processes, systems, and software to support the project development and delivery process.

Increasingly, owners’ project managers do not have the latitude for design and cost development that the traditional design-bid-build process requires, so they look for a single source of accountability for project delivery. This evolution has led to a more widespread adoption of engineering-led engineer-procure-construct (EPC) for industrial projects. The ability to develop realistic project definitions and go-to-market-based cost estimates are the new norm.

O’Neal responded to this industry trend by structuring its firm to focus on EPC project delivery, integrating planning, design, procurement, and construction. This decision has played a large part in the company’s success because it helps clients quickly and cost effectively establish a thorough project definition with a credible cost of delivery.

There also has been a significant increase in investment in U.S. facilities by foreign-owned companies. O’Neal has secured work on greenfield and plant expansion projects for companies that are based in Japan, India, Germany, France, Italy, and England. In addition, reshoring — bringing production back to the U.S. from Asian, European, and South American countries — is growing. Manufacturers are making investments in the U.S. as a result of a combination of factors, including time-to-market, cost control, and lower labor and energy costs.

O’Neal’s SBU alignment enables it to focus more intentionally on key factors within its markets, including energy, transportation, and labor costs; availability of talent and capital; supply chain concerns; protection of intellectual property; lower-cost production; and a relatively stable business environment. The cumulative effect is a strong foundation for manufacturing growth and increasing exports.

O’Neal also tapped into markets that were in a position to experience strong growth as a result of unique external factors. For example, the shale gas boom drove growth in chemicals, plastics, advanced materials, and fibers, and increased demand in automotive.

To make sure they are optimizing their situation at any given time, companies must commit to ongoing strategic planning efforts.

Going from potential to actual

Identifying opportunities is one thing, harnessing them is another challenge. To make sure they are optimizing their situation at any given time, companies must commit to ongoing strategic planning efforts. For example, after identifying market segments and target firms that meet their criteria, O’Neal’s SBU leaders, business development staff, and marketing team meet several times each year to review and refine their list. On the macro level, they try to identify industries and firms that have capital investment plans and firms that will be a fit with their project delivery model.

O’Neal takes a five-year approach to its business planning process and augments that with annual business and SBU plans. Strategic planning processes are used to outline goals, objectives, and strategies and affirm values and mission. This creates a framework for decision making and operating the business.

Scenario planning exercises can also help a company anticipate changes and provide a guide for how to react to changes in the economy or a given market. It is natural for companies to make quick decisions and dramatic changes in reaction to industry shifts, but it can be unhealthy. Visualizing future outcomes can help a company stay its course while still maintaining flexibility.

In addition to identifying what to prioritize and protect when revenues are stagnant or decreasing, it is also important to know where to scale down to conserve and optimize existing resources. This will be different for each company, but an effort should be made to review every part of the organization on a regular basis to ensure the right people and resources are there to meet the needs of the clients and market. Firms should consistently challenge their leaders to focus on improving the efficiency of their operations without sacrificing safety and quality. If scaling back is required, firms must remember that it is important to preserve the assets and resources that make them valuable to clients.

Leveraging technology

Another area of growth, progressing in spite of the recession, was technology and related developments. Technology has had a big impact on all phases of the EPC process, so O’Neal made a significant investment not only in technologies, but also in employee training related to technology. The company’s total investment included design software, Building Information Modeling software, construction/project management software, field management tools (iPads), sales and marketing software, and estimating and procurement tools.

Continuing to prioritize technology and training was a direct response to helping clients meet their aggressive schedules. O’Neal’s investment in technology is geared toward bringing the true benefits of design-build together at the start of the project, where it pays the greatest dividends to the client.

O’Neal also invested significantly in business development. The firm doubled the size of its sales staff and invested in marketing initiatives such as trade shows, advertising, digital and social media marketing, collateral materials, trade associations, and branding efforts. This allowed the company to build its brand, increase awareness, and get in front of more potential clients.

While the architecture, engineering, and construction industry is recovering from the recession, it is crucial to remember that challenging times can provide opportunities to assess an organization carefully, make adjustments, and invest for future.

Brian Gallagher is director of marketing and Kevin Bean, P.E., is president and CEO of O’Neal, Inc. (, a Greenville, S.C.-based, employee-owned, integrated engineering and construction firm.

Upcoming Events

See All Upcoming Events