John "Ozzie" Nelson Jr. grew up in Philadelphia and assumed he'd be an East Coast lifer. But he wanted to play college hockey, and his coach suggested the University of St. Thomas. He met his future wife at freshman orientation, and started the commuter life in 2001 when they decided to raise their children in the Twin Cities. He is now chairman and CEO of the design firm that his father started 40 years ago, plus a new holding company formed two months ago and headquartered in Minneapolis to manage the rapid growth of the organization. In the past 12 years, the Nelson company has acquired 30 firms — and in the past 18 months has doubled in size from $40 million to $80 million in annual revenue. As the company has grown, it has morphed from an interior design firm to a big player in project management, offering services from architecture and engineering to design and branding. It also is now a national company, serving cities from Philadelphia to Atlanta and Los Angeles. Projects have included a new Google center in Cambridge, Mass.; innovation centers for Verizon; and Polaris' headquarters in Medina. The company now must deal with the reality of its growth, both in terms of the types of projects it eyes to the culture of the company. Nelson talked about both in this interview, edited for clarity and length.
Q: What drove the decision to expand so much and so quickly?
A: I used to say that it used to be that you had a relationship with the head of real estate, those relationships went on for decades. Today, while relationships are important, it's become very procurement driven, so even if you have ongoing relationships, every three to five years, things are rebid. And they're not necessarily rebid against people in your community, they're bid against people who can deliver in your community who have notable expertise. So that ability to build strong expertise, but deliver locally, was important to us. The other piece of it is the whole idea of embedding subject matter expertise in whatever we do. It's hard to do that as a small organization. That sort of strategic vision and need to respond to the market is what drove this.
Q: What is the philosophy behind integrating the different acquisitions and maintaining a culture throughout the company?
A: It's fair to say that we are in one of those inflection points, where we'll take a deep breath and again look at culture and what's the right culture today compared to what the right culture was at $40 million. I think that moving from a small company to a $40 million company, the change was from what I like to call the dutiful service provider that was heads down and did whatever the client might ask, to an organization that was much more entrepreneurial, much more opportunity seeking, while we still kept a commitment to the client. I think in this new evolution, we have many more resources, so it's not just being entrepreneurial, but it's really creative and being a collaborative organization across boundaries, across service lines.
I envision that there will be overarching culture and values at the holding company level and then when you think on one hand about an engineering company and the other about an environmental branding and graphics company, to some degree at that industry level, very different cultures. So our job is to weave together the commonality that makes sense, while giving them the differences that will make them industry leaders.
Q: What is your philosophy on managing?
A: I'm one of the only CEOs of a company in our industry who has a business background instead of a design background, so I tend to look at things a little differently. But it seems to me if you look at our tagline, "Focused on creation, passion to deliver," it's really saying that we very much see ourselves as a creative organization, and once that big audacious idea is hatched, being able to be just as passionate about delivering the idea. As common sense as that might sound, our industry tends to focus on the creative. When it's time for all the details and all the endless hours sitting on site, making sure the project is done correctly, there can be a gap there. Being there all the way through to the final details is what the industry really sorely needs and what has been our philosophy.
I think that running an organization, managing people, is much more about partnership than what it has been. I think it is about building an environment, a culture that values what the people in your company or the people you're trying to attract to your company really value. I think it's about walking that line and finding the right fit and match between people's skill sets and their passions in the kinds of projects that we do. I would say behind the expansion really is the ability to do a much wider range of work — and to give our teammates a much wider range of work. And as you can imagine, going from 300 people to 600 people, one of the things that we are focused on are building an environment in which people are really engaged, that they feel that they are meaningfully part of the decisions we make.
Q: What's next for Nelson?
A: We are not aggressively looking for more acquisitions. However, there are three markets — the San Francisco Bay Area, Texas and Washington, D.C. — where we think there are significant opportunities. Also, with firms that don't have a succession plan, when they want to move, you have to move, or you miss the opportunity. Short of that, we will take a deep breath over the next year or 18 months, but I would not be surprised if I look at the trajectory out three to four years that we will most likely be double our size again. Key international markets are also becoming increasingly important to us, probably the most logical being the U.K. From the U.K., you can really service a lot of Europe and the Middle East.