UNC Kenan-Flagler Business School

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UNC Kenan-Flagler Business School

UNC KENAN-FLAGLER NEWS


Thriving in Tumultuous Times: WorkSmart adds new customers, boosts revenue in faltering economy

2/27/2009

When Ron Unger (MBA ’01) started WorkSmart, he paid his staff, all student interns, in pizza and foosball. Eight years later, the best IT professionals in the business want to call him “boss” for basically the same reasons that appealed to the early student interns: They are attracted to the compensation, and they have fun at work. 

“Our line of work is defined by the long-term relationship,” Unger said. “Having full-time, permanent employees is important, even in the IT industry, where there is more turnover than other industries. Happy people in an invigorating work place benefits our clients.” 

That’s one component in the success of WorkSmart, an IT management and outsourcing firm that caters to businesses needing IT outsourcing in North Carolina. While the economy as a whole lost its footing in the fourth quarter of 2008, WorkSmart logged one of its best quarters ever, in terms of revenue and bringing in new customers.

“We’re losing some small clients that paid us a couple hundred dollars a month and now, to cut costs, they must use a friend or volunteer to handle their IT,” Unger said. “We’re replacing those clients with established organizations that still do well in this economy and can pay us a thousand dollars or more per month. Even if they have a hiring freeze, they have to get the work done.” 

Unger, president and CEO of WorkSmart, chose three colleagues in 2001 as his partners, Daniel Martin (MBA ’02), Clay Harris (BA ’01) and Richard Ayers, a Harvard MBA. Before they even had the technical talent to do the work, they began lining up small and midsize businesses in the Triangle willing to pay for an IT department on demand. Today their client roster numbers 220 businesses that have IT outsourcing needs, mainly in the Triangle and the greater Greensboro and Charlotte areas. Unger accrued some startup capital from outside investors, but most came from aggressively pursuing sales and scrutinizing costs. 

As the company grew – now to 23 full-time employees and two part-timers – he continued to keep a sharp eye on cash flow. At the end of 2007, he produced a 2008 business plan that demanded the company do more with less. 

“We had a lot of internal grumbling,” Unger admitted. “But when the economy turned downward, folks were thankful for the discipline we showed. When the economy really started hitting the rocks, we were well-positioned to deliver our services without adding staff.”

Early on, WorkSmart cultivated subcontractors to help with technical service, gradually elevating its own employees to include advisory capabilities. In 2008, he put an incentive on the table, a monetary bonus to employees if the company met its stretch goals. Though not every goal was met at year’s end, WorkSmart paid out some of the bonus anyway. “Frankly, everyone did a fantastic job last year,” Unger said.

Here are some of Unger’s reasons why WorkSmart continues to thrive:

  • Spend to save. The company asked its staff to make sacrifices to be more efficient; in exchange, the firm invested in the tools to help them succeed.
  • Timing matters. WorkSmart has focused on its industry’s change cycle and times launches for when its client are ready. “Make changes too early, and your clients aren’t ready to adopt them; too late, and you’re behind the competition in the market,” Unger added.
  • Look beyond your industry benchmarks. Rather than see what the competition is doing, the company studied mature service industries geared toward consumers. Though it is a small company with fewer resources, WorkSmart tries to adopt at its level the practices of award-winning companies, to the extent that it can afford to.
  • Become less expendable. Unger said the company goes beyond fixing computer problems to advising and strategizing about IT solutions. “Our clients are less likely to cut us out if they realize the value we bring to every part of their business.”
  • “Good enough” isn’t. The company adheres to the core values that made its business successful in the beginning. “The skills, policies and business practices that companies need to implement to survive in a tight economy are the same ones that allow businesses to be the best in a growing market,” Unger said.