By Mark Buckshon
Triangle/Triad Construction News
How does a management consulting business grow, thrive, and reach nation-wide
stature – and continue to thrive through changing circumstances and generations?
These questions were top of mind when interviewed Hank Harris, President and
Managing Director of FMI Corporation in Raleigh.
Writing in a chapter “Business Trends in the built Environment” in Inside the
Minds, a recently published book, Harris says: “In a nutshell, our company’s strategy is
to grow 10 percent organically. On top of that growth, we have a couple of acquisitions
in the works that should double our business in five years.”
FMI has assumed a leadership role in management consulting and investment
banking for the construction industry, working with general and sub contractors
throughout the U.S., with offices in Raleigh, Tampa, FL, Denver, CO and Phoenix, AZ.
FMI now employs 170 people, and a growing portfolio of clients, services, and business.
I wanted to know from Harris how FMI managed to thrive through the years –
and what he thought the biggest mistakes his clients make.
FMI’s founder, Dr. Emol Fails, an accounting professor at North Carolina State
University, started his business as a moonlighting operation in 1953 providing small
businesses in Raleigh with tax return and accounting services.
Many of his first accounting clients – and former students – were local
The business evolved. Motivational speaker (and former student) Ziz Ziglar was
one of Dr. Fails students and original employees. Fails inspired people to achieve their
best – and his leadership attracted a core of talented young people committed to
excellence (many of whom are still with the company, or have recently retired.)
Harris said he joined the firm in the mid 1980s. He said “we’ve been
conservatively managed for most of our existence.”
Of course, if Fails and the company he developed were too conservative, they
wouldn’t have grown to the stage they are at now. Most consulting businesses, of course,
never get far beyond the one-person-band stage.
The essence of FMI’s growth, then, has been its ability to find and attract young
people – and retain them through their careers. This is proving to be the organization’s
major challenge now; Harris said, noting younger people these days are much less willing
to commit their lives to working in a single organization.
The other side of the equation – careless risk and unplanned growth – is where
FMI clients run into problems.
“We did a study on large contractor failure,” Harris said. “Some things that drive
that are predictable – but most of the time you can trace it (failure) to trying to do too
much, grow too fast, and change the business too fast.
“Contractors get infatuated with the volume of work and it often comes at the
expense of profit,” he said.
Harris said contractors “could do a much better job of researching the markets and
what drives the health of various construction markets, and how they position their
business in the markets.”
“This tends to be a reactive business,” he said. (Contractors) frequently don’t run
their businesses as proactively as they could.”
“The other thing (contractors) could do better is to be very clear throughout their
companies on what drives their profitability and get everyone aligned about how their
business makes its money.”
Harris says he enjoys his clients and the fact that FMI focuses on the construction
industry. “People (in the construction industry) are salt of the earth and great people,” he
said. “We feel very fortunate to have the chance to work with them.”
The knowledge of the business – and deep knowledge of its clients -- allows FMI
to be very effective in investment banking and brokering the acquisition and sale of
construction businesses. FMI, after all, can see below the surface in the different
businesses it represents; understanding the management strengths, core capacities and
potential of the businesses far better than an organization or broker not familiar with the
Harris writes in his chapter: “We have three concentric circles that define our
‘sweet spot.’ One is contacts, or relationships, one is content, or technical knowledge, and
one is context, or industry knowledge. We want to overlap those three circles for our
clients. That is where we add the most value.”