on a tear

Digineer lost one big client, then never looked back

by Andrew Tellijohn   MICHAEL LACEY admits he’s got a bit of East Coast in him. He’s somewhat abrupt and used to have a hard time letting go. But through his own maturing and some work with a mentor, he’s getting past that and the results have been notable.

“Earlier in my career I had the answer to everything,” he says. “And even now, my style is still pretty direct. I think that puts people off sometimes. It’s more just my way of learning.”

Plymouth-based Digineer Inc., a technology consulting firm, has grown from about $1.2 million in revenue in 2001 to $7.7 million in 2005. Projections for this year land between $12 million and $12.5 million.

He attributes that to creating a culture where Digineer hires the right people, coaches them and gets out of the way so they can do their jobs.

“We’re on a tear,” he says. “That pace of growth is certainly a challenge. Growth covers a multitude of sins. It’s easy to get sloppy — not that we are.”

Digineer is the Upsize Business Builder of the Year, selected by judges for its revenue increase from 2003 through 2005 and its business strategy to drive healthy growth.

Digineer is a consulting firm that helps clients perform projects and design more efficient information technology departments themselves. Its roster of about 45 clients ranges from Blue Cross Blue Shield of Minnesota and Allianz Life Insurance Co. to Alexandria-based Tastefully Simple Inc., a maker of gourmet foods.

Digineer has provided developmental and project manager resources to Tastefully Simple on a number of projects, most aimed at improving the company’s Internet site. Bob Seward, data and development senior lead at Tastefully Simple, says Digineer is extremely responsive and has gone out of its way to fit in with the client’s culture.

On its own, Digineer management put together a booklet for training its employees on how to work with Tastefully Simple’s employees. “It really helps them hit the ground running,” Seward says. “We’ve really enjoyed working with them as a partner and we continue to go back to them as we have different needs arise.”

In addition to that customer service strategy, Lacey says Digineer differentiates itself from competitors by the way it sells its services. The company tries to “productize” them so they are easier to purchase in full or piecemeal.

While Digineer is on a roll now, it hasn’t come without some bumps in the road. At the beginning of 2001, a client that comprised nearly 70 percent of the company’s revenue suddenly gave 90 days notice.

“That was a bit of a struggle,” Lacey says.

He gathered his employees and told them the company had enough cash to keep them all through the summer. Then he got them focused on sales and marketing. It was a tough year. Some people left. Most stayed. For those who did, the payoff was obvious. By the time it ended, revenue had increased 10 percent from the previous year.

Never again, Lacey says, will he let the company be so reliant on one customer. “We managed to muster our way,” he says.

Another challenge arose recently when the firm outgrew its office space and began looking for new digs. Lacey says despite receiving advice to the contrary, he waited too long to begin looking. Finding the new Plymouth office took longer than expected. That forced Digineer to temporarily switch floors in its old building, then move to a temporary space in the new one before finally moving to its current space this summer.

“The logistics of it all — it never dawned on me how disruptive it would be to the daily ebb and flow of the business,” he says.

The company has also been frugal, adding people at a slow pace and outsourcing and using consultants for many accounting, human resources and other business functions. The tight pocketbook stretched even as far as taking with it the furniture inherited during three relocations before this summer.

“You just don’t go hog wild and spend a lot of money,” Lacey says.

Culture of fun
While Lacey wants employees that are dedicated and hard-working, he also wants them to have fun. The company has a fun committee called the Ohana Club that sets a budget at the beginning of the year for events and parties held throughout.

One year, employees teamed up and took part in an Iron Chef competition.

“If you can combine collaboration and competition you are always going to win,” he says.

Another time, Lacey took a day and a half away from work to prepare a five-course meal for everyone. This year, Digineer’s holiday party has a 1980s prom theme, so the big topics of discussion around the office these days revolve around the dresses employees are buying on eBay.

To add some drama and a dose of civic cheer, employees are being encouraged to donate money to a local charity — and at six different goals, different managers have agreed to perform certain tasks.

When goal No. 1 was achieved, a top official agreed to attend with a Mohawk. At step two, another agreed to do herself up like Diana Ross. If step three comes to fruition, Michael Lacey himself will get a perm and a moustache in order to channel the spirit of Magnum P.I.

“You really want to enjoy what you are doing and who you are doing it with,” says Lara Rubbelke, information and service line leader. “They’re just plain fun — a way for us to kick back and get to know each other a little better.”

While Rubbelke loves having fun at work, she’s also happy to have a boss that respects her opinions and empowers her to make decisions.

“Michael Lacey is very impressive,” she says. “When you hear his story and understand what he’s been able to achieve in the time he’s been trying … it really is nothing short of amazing.”

Lacey is direct and he is willing to share his thoughts. But he makes a point of hearing out his colleagues and letting them choose their own course. It’s all the more impressive, Rubbelke says, because Lacey often admits that at times he would like to be the one making the decisions.

“A lot of this is based on him surrounding himself with smart people and people that he trusts,” she says. “We don’t have a boss that is dictating down to us. He’s giving us the tools we need.”

Floyd Adelman, president of Inner Circle of the Twin Cities, a peer advisory group, says he and Lacey have worked on that issue and others for a half-dozen years. Lacey is young, energetic and smart, and he has created a company that has been “growing like crazy,” Adelman says.

Part of the reason is that he has greatly improved his ability to find good colleagues and empower them.

“The biggest thing he and I have worked on is working on his business and not always working in it,” Adelman says. “When you grow that fast you can’t do it all yourself.”

Lacey also has an incredible ability to achieve balance. Whether it’s delegating a task at work but still keeping a watchful eye over the project or maintaining a good balance between his company and his family, Adelman says Lacey is better than most.

Family is how he spends the bulk of his free time, Lacey says. At 38, he and wife, Mary, are already empty-nesters. His daughter, Morgan, is 18 and in college. Son Miles, 16, plays soccer and attends Shattuck-St. Mary’s in Faribault.

Lacey also enjoys the opportunity to shut his cell phone off and enjoy the golf course, traveling to different courses around the country a couple times a year. He’s also an amateur photographer and a burgeoning cook.

“From a very early age I’ve always enjoyed doing it,” he says. “You burn enough toast, you eventually learn how to make it right.”

But while he has achieved some balance, he’s not ready to greatly diminish his focus on the workplace. While Lacey thinks many people would be satisfied with where Digineer is at, he and company officials are working on a three-year plan for the future. Existing clients, he says, have talked with him about adding additional services to the current repertoire, and Digineer recently announced that it is adding management consulting to its menu of services.

The company also is considering opening additional offices around the country.

“We want to take this thing wherever we can take it,” he says.

[contact] Floyd Adelman, Inner Circle: 952.935.5801; fl**********@************le.com; www.innercircletwincities.com. Michael Lacey, Digineer: 763.210.2300; in**@******er.com; www.digineer.com. Lara Rubbelke, Digineer: 763.210.2300; in**@******er.com; www.digineer.com. Bob Seward, Tastefully Simple: 320.763.1008; bo********@**************le.com; www.tastefullysimple.com.