November 10, 2009

Paladino keeps growing, but work has changed

Paladino

President and founder Tom Paladino said the firm, which provides sustainability and green building consulting, used to have a lot of one-of-a-kind projects — like headquarters, museums or office buildings.

Today, most of its work is for strong “survivor” clients who are either planning for the future or who are growing and must build a lot of locations quickly.

“We've seen the repercussions of the recession in that most of our clients are not building anything new, with the exception of some of the retail-based folks who are gaining market share,” he said.

Development teams don't have much work today, but many clients' operations, maintenance and expansion teams are busy. Because of this, Paladino's work has become more about planning and project management, and less about development.

When capital is tight, Paladino said, clients want to know where money is going now and where it will go in the future. The owner/operators his company works with understand this. “(They think) when the capital begins to flow, we need to know (how to) react and where we need to spend it.”

Clients include PNC Bank, Microsoft, a major telecom company, a hospitality chain in the top Fortune 100, two of the nation's largest banks, and the U.S. government, including the Department of State and the General Services Administration.

Paladino's client base has changed in the past 18 months. Before, Paladino said half the client base was Fortune 500 companies and half was cities or businesses seeking help with a specific project. Now, Fortune 500 companies are buying more of Paladino's capacity. “They've really required us to make a leap from project-based management to key account-based management,” he said. “It's been a growth for us, a challenge.”

The shift occurred because clients are looking for help on a broader scale. For example, Paladino said a bank customer might decide to move into the Cincinnati market, which would take 25 new branches. So it needs a team to run all those projects as a portfolio. “That's where we're growing.”

Paladino has grown about 10 percent during the past year. Growth over the previous four years ranged between 20 and 40 percent a year. The 28-person company's top line revenue will be between $4 million and $6 million this year.

“The recession slowed us down but we didn't actually stop growing,” Paladino said. “We wonder if we're in some alternate universe.”

Philosophically, Paladino is organized around something it calls “abundance,” the idea that every enterprise demands human, natural and resource capital. Companies that balance those three domains are succeeding and are thinking about things like energy demand, resource demand and customer base.

Paladino helps align those needs and retool companies in a sustainable way. It helps a client embed green in its delivery chain in a way that doesn't slow them down and makes them an example. Paladino said his firm has been receiving a lot of business recently through word of mouth.

“There are large organizations that do have capital right now and they're interested in sustainability and they've found us,” he said. “If you want to nibble around the edges, we're probably not your guys.”

Overall, this year has been good for Paladino. The firm issued an 8 percent raise in December of 2008 “to show a vote of confidence in the staff,” and has had no layoffs. It has had no major client losses and gained some new ones this year.

Paladino is in the process of hiring two people and hopes to hire five by the end of the year. Even today, Paladino said it's tough to find the right people: generally younger workers with dual degrees that use both sides of the brain to solve problems.

It recently announced a new initiative called the Global Green Ambassador Program. The program gives employees paid time off for volunteer activities, matching funds for organizations they are involved in, and creates an annual grant for further education. The program will likely cost $40,000 in its first year.

Paladino said the recession has forced the company to “sharpen its pencil” and that's been good because it gets overlooked when a team is busy. The firm also spent time analyzing its business to make sure the continuing growth “wasn't fiction.”

Paladino said the company is still waiting to see whether it really is doing as well as it seems or whether it is simply lagging the market.

A future challenge is figuring out how to manage growth. The company has been growing modestly so going back to a “gang busters” pace would be challenging, Paldino said. The next shift will be moving from hiring and recruiting in a traditional way to a more “sophisticated organizational development model” where people essentially come to the company. This will require development of a platform that has more visibility and is better communicated to the outside world.

To see positions Paladino has open or for more information, visit http://www.paladinoandco.com.