A few hints from my interview with Dick DeFazio 
by Will Goetz, Vice President of Corporate Development, Performance Consulting Associates

PCA is celebrating a very big anniversary this year. Forty-five years in business is extraordinary! Consider all the technological progress and economic, political and social swings that PCA has endured since 1976.

Companies do not survive as long as they used to. Today, the average age of companies in the Standard & Poor’s 500 is less than 14 years and has declined steadily from an average of 61 years in 1958. PCA has achieved a milestone that many of today’s elite companies never will.

I caught up recently with PCA’s founder, Dick DeFazio, to learn more about the secrets of his success and hear the story of PCA’s 45 year journey. Dick is very modest. He likes to tell the story of PCA in his understated style but does not like to talk about himself. He’d much rather talk about Italian wines and how his mother made the most amazing Sunday Pasta sauce that he’s never duplicated.

When I asked him to put this anniversary in context Dick said, ”When I started PCA, the first laptop computer was not yet invented. We still used IBM Selectric typewriters. There were no Fax Machines, no Internet, no world wide web; the first mobile phone had not come out yet and there were no text messages. There was no GPS – only paper maps.  Amazon, Facebook and LinkedIn had not yet started. The first CMMS system was still in development. The first Rollaboard suitcase with wheels did not come out until 1987. Lastly, when I started PCA I could still smoke my favorite cigars on airplanes!”

By the time he started PCA, Dick had already completed a tour of duty in the Air Force, including service in Vietnam. He had worked for a large power and utility company and started traveling with a management consulting company. He also talked to a lot of people.

One of his top priorities was to avoid the cash flow crunch that can crush service businesses as staffing and project needs move against each other. Overhead is a killer and letting good people go when times are hard is no better. “I talked to a lot of people and they all warned me about the challenges of managing project cycles. So, I set PCA up with a focus on minimizing overhead costs from the beginning.” When I asked if he could share more details on how he managed to keep overhead low enough to survive all the disruptions he’s faced, including the pandemic, Dick just smiled and said, “Will, I’m going to tell you what my mother told me about her sauce, I’ve known you for years, but I can’t tell you everything!”

With low overhead smoothing the ups and downs of a consulting business, one of Dick’s most important commitments was to build a strong team culture. Since the beginning, he has always shared the profits with his consultants based on their contributions to the company’s success. “This practice builds trust with our team. I have had many members of the team for more than 20 years!”

Not only did Dick’s low overhead model permit him to keep his team together without taking steep losses when business was slow, it enabled him to be very competitive ALL the time. By staffing the company with very talented consultants and not having to support overhead in his rates, Dick was able to deliver great value to his customers. Today, PCA has numerous relationships with senior management in many companies. In most cases, these relationships started early in his customers’ careers. PCA delivered great value at great rates. Why would anyone go anywhere else?

As they rose through their careers, many of PCA’s customers would return for help with their next challenge. “We started working for one of my favorite customers when he was a shift supervisor,” said Dick, ”today he is a senior vice president of operations for a Fortune 500 company.”

What Dick won’t tell you about his relationships with his customers and most everyone for that matter, is that they like him. He is very relatable, with a great sense of humor and an easy laugh. Senior people take his call because they like talking to him. “One time, one of my customers returned my call from vacation because we hadn’t spoken in a while. Having truly personal relationships is still really important!”

While PCA stands out in its ability to deliver great service to its customers, the model would not be possible without attracting great talent. “You know, there are a lot of really good people out there who still want to work but they may not want to work every day of the year. These are usually talented folks who are looking for a second career. We are built for people like this and it has created a really open, collaborative culture where our people can focus on doing quality work. I tell our customers that our people make the difference and it’s really true!”

As anyone who has been around reliability improvement programs will tell you, changing a company’s culture is the most important part. “Having really good, experienced consultants has allowed PCA to successfully lead cultural transformations at our clients with relatively small teams,” said Dick. “We are able to pair individual consultants with client teams and teach them a new way of thinking and behaving.” Being able to deliver with small teams also helps keep PCA’s fees very competitive.

Throughout PCA’s history, Dick has resisted the urge to grow. “A couple times over the years, we’ve taken on a lot of work. It’s a great feeling to know that you’re solidly booked and you need to hire but the other side of that coin is the risk of losing control of quality. I made the conscious decision not to grow too big, to keep the company at a size where we could comfortably manage our delivery commitments. I guess you could say slow and steady wins the race in the long-run,” Dick said with a chuckle.

So anyone out there who is looking to build a business that will last more than a generation should consider Dick’s keys to success: keep costs low, build a strong culture, hire good people, always deliver value and stay close to your customers. Of course, these are the truisms you always hear about good businesses. Everyone starts their business with the intent of adhering to them. Most fail in a year. Very few are successful for 45 years.

Like cooking a great pasta sauce, maybe there’s more to business than just knowing the right ingredients?