NouvEON was founded in 2003 by two former Big Five consulting firm executives experienced in program and change management, and Internet technology. Now in their eighth year at the helm of the management consulting firm, T.J. Eberle, president and CEO, and Jeff Hobensack, vice president, finance and administration, enjoy annual revenues in excess of $20M with more than 110 employees.
T.J. is the risk taker, Jeff is the conservative, the two agree. They balance each other for the benefit of the company and its employees. They’ve had plenty of time to work it out. Yes, they’ve been partners for eight years, but they’ve been best friends since the fourth grade.
Evidence of their team building and leadership abilities is reflected in the phenomenal growth of their company, registering an astonishing 129 percent in 2010, reporting 42 consecutive months of profitability.
For the third year in a row, NouvEON has been ranked on the prestigious Inc. 5000 list of fastest growing private companies. It has been ranked 16th in the Charlotte Business Journal’s FAST 50 Awards and 9th among its Top 25 largest technology-consulting firms.
“We started as a local and regional consulting firm offering three broad services: strategic management solutions, e-solutions, and contract and placement solutions,” explains Eberle. “Eighty percent of our work was in and around information technology; only 20 percent in business.”
Today that situation is reversed. Over the years, the firm has refined its business model, eventually dropping staff augmentation services altogether. And last August NouvEON acquired InCentric Solutions LLC, an integrated information technology solutions provider based in Raleigh.
“About two years ago, we made a fundamental shift in our business,” says Eberle. “We used to be just one P&L for the overall enterprise. Now we’ve created practices that are individual P&Ls.”
The firm operates five practices now; two that are industry-based (energy and utility and financial services) and national in scope, one that is technology-based (Technology Solutions), and two that are geographically-based, with offices in Charlotte and Raleigh, which are primarily leading the market with the firm’s core services. “Each practice has achieved very high growth,” attests Hobensack.
NouvEON’s strategy in the old days was to go into a new city, and try to build a local consulting practice. Having tried that in Richmond, Va., and Jacksonville, Fla., and not succeeded, “We learned not to go into new geographic markets without some kind of client base,” says Eberle. “I’ve had to promise that I won’t open any more geographies unless the industry practices have brought us there,” says Eberle, as Hobensack chuckles at the ‘risk-taker.’
In the present structure, the national practices that are leading from an industry perspective become the growth arms for new geographies; i.e., the firm follows its clients.
“We’ve got clients and projects in Philadelphia, Baltimore, St. Louis, Washington D.C., Houston and Minneapolis,” shares Eberle. He points out that eight NouvEON professionals are currently working on a project in Philadelphia.
“We’ve already established a presence there and are starting to build a local brand. With a couple more projects,” he says, “we may have enough people—along with some local hires—to open a Philadelphia office. We have to first have some level of revenue being generated and relationships there. Thus, our national, industry-based practices drive our new geographies.”
It also works in reverse. NouvEON has also started to build clusters around certain industries in their geographic offices, including retail, health care, manufacturing, telecommunications and hi-tech. “We’re doing work with several retail clients here in Charlotte. We could develop a retail vertical that we could then take national. In this way, our geographical practices drive our next industries.”
Growth Strategy; the BVO Model
Inspiration for NouvEON’s new growth structure came out of a study presented at a meeting of Vistage, an international CEO group of which Eberle is a member. The study revealed inherent roadblocks having to do with infrastructure at different growth milestones.
More than 90 percent of corporations in the U.S. are generally able to grow to about 10 to 15 people and $1M in revenue, but have a struggle moving beyond that. Another cluster is around the $10M mark with the need to have 50 to 100 people at the next level of management. Smaller companies have difficulty building that management structure. A third cluster is around $50M and another is around the $200M level.
By year two, NouvEON had surpassed the $1M mark, according to Eberle. Between the $1M and $10M, the firm used what they had learned to make changes in their infrastructure in terms of people, process and technology—not only to get to the $10M level, but also to prepare for the next $50M.
“I’m very happy to say that our strategy has worked very well for us,” says Eberle enthusiastically. “We’ve blown through the $10M ‘barrier’ and are flying towards the $50M mark.”
Revenue is not the only measure of success. From the beginning, NouvEON has striven to achieve 100 percent “referenceability” with their clients, which include the major Carolinas’ companies in energy, banking, retail, manufacturing, and healthcare. Eberle says that over 90 percent of their clients are repeat customers.
“We manage and deliver change for large Fortune 1000 companies where we are often using technology to enable that change,” says Eberle. “Our ultimate goal is to optimize business value.”
In developing their Business Value Optimization (BVO) Model, the firm identified five primary dimensions that come into play, called knowledge domains. NouvEON services are broken down across these dimensions: organizational change, process excellence, strategy, systems integration, and delivery management.
The BVO model seeks to strike a balance between strategy and execution. “You’ve got to have a vision and a plan and drivers to where you’re going from a strategy perspective, but you’ve also got to make sure that it’s executable. You can’t just blue-sky something without figuring out how to get from point A to point B,” says Eberle.
Following the model, consultants also look at the relationships between people, process and technology. “In any kind of change effort focused to drive business value, you’re going to have people, process or technology implications. We haven’t found anybody to break Our BVO model yet,” says Eberle with a smile.
“In today’s business environment, it is no longer sufficient to just get ahead of the curve,” Eberle continues adamantly. “The dynamic and global business culture of today implores companies to find the best ways to optimize business value, executing their developed strategies while integrating people, process, and technology effectiveness. It is critical for today’s companies to manage and deliver these changes across these critical domains.”
“In order to break away from the pack,” Hobensack continues, “you have to provide value every day to every client you serve 100 percent of the time. This philosophy is core to our employees. If you don’t, you won’t be able to keep and grow within your clients. As everyone knows, it is much less costly to keep a client than to acquire a new one.”
In The Spotlight
Numerous scenarios are catalysts for change management such as new leadership, regulations or technology; changes in the industry itself; new products or markets; and mergers and acquisitions among other change drivers.
Work last year included completion of two major initiatives for a leading national utility. NouvEON helped the utility achieve compliance with new and complex government work hour regulations impacting nuclear power plants. It also deployed an improved software application to provide an online dashboard for real-time power generation.
As part of this work, NouvEON received the prestigious Silver Anvil Award from the Public Relations Society of America (PRSA) for its campaign, Achieving Fatigue Rule Compliance Right On Time, in the internal communications category. The Silver Anvil recognizes outstanding achievement in strategic public relations planning and implementation.
NouvEON, which is incorporated as an S corporation, is employee-owned through a value incentive plan that represents a shadow stock plan based on title, tenure and performance. The firm’s name, standing for a new era [in consulting], also reflects that it is an “Employee Owned Network.”
The NouvEON environment is very entrepreneurial and its workers very experienced. Eighty-five percent of NouvEON’s consultants have a Big Four background and bring an average of eighteen years of experience. “We have depth of expertise in the service areas as well as industry expertise,” says Eberle.
“We’re in what I call a ‘spotlight culture,’” says Eberle. “The light is shining on our employee owners because what they do makes a difference for us and our clients everyday.” Eberle explains that the spotlight is also used to see if someone is struggling with something and needs help. “We’re very team-focused.”
Eberle likes to use that spotlight to highlight the quality of his leadership team and employee owners. He describes the firm’s employees as a network of qualified business professionals who are highly knowledgeable and respected in their fields of expertise. In addition to Eberle and Hobensack, the leadership team is made up of practice leaders. “We see that quality in the value we are creating for our clients and in turn, see that in our growth.”
Forming an Alliance
Eberle entered into management consulting right after earning his degree in industrial engineering from Virginia Tech. He joined Andersen Consulting and then moved to Charlotte 20 years ago with what became PricewaterhouseCoopers. After a stint in industry, he became the first employee of Ballantyne Consulting Group where he discovered his entrepreneurial spirit. In 2003, he felt the time was right to start his own business. Shortly thereafter, he made a call to Atlanta and his old friend Jeff.
Eberle and Hobensack go back a long way to the days of American Legion baseball in West Chester, Pa., outside of Philadelphia. They remained close friends through the years while pursuing marriage, children and career opportunities.
After graduating with a degree in mechanical engineering from Lehigh University, Jeff’s career began in sales for Westinghouse and then he switched to information technology in Atlanta, where he had been for five years when Eberle called.
“I want to be part of that,” Hobensack remembers replying to Eberle’s entreaty. Eberle laughs. “The first thing I asked was how much money he had.”
Hobensack’s job has changed many times since the formation of the company. At first, finance and recruiting. Then, human resources and sales. He was responsible for the Raleigh office for a period of time, and now is heading up finance and administration.
One might wonder why huge corporations find it necessary to hire consultants; surely they have a powerhouse of talent already on board. Eberle explains: “The biggest use of management consulting comes about because there is certain expertise that they’re missing. They may know their processes very well and their industry’s processes very well, but they may not know, or be aware of, best practices in process excellence, in managing change, or in the newest technology.”
Eberle goes on to say that most companies have an operations management approach versus a project management approach and that different skills are required. Another issue is capacity. Many firms prefer to keep their permanent head count around normal operations and use consulting expertise for capacity to cover peak periods such as when there is a major project underway.
NouvEON is actively involved in community and social organizations such as the Arts and Science Council, United Way of Central Carolinas and NPower, a non-profit consulting firm serving non-profits. Eberle sits on its board. One Friday each month, employees are on hand at Crisis Assistance Ministries to pass out biscuits and orange juice to the folks waiting in line. “A healthy community from a social aspect creates a healthy business environment as well,” says Eberle.
At the end of the day, NouvEON uses its Business Value Optimization model to drive business, stock prices, profits and bonuses. In the not-too-distant future, expect to see NouvEON involved in more industries and established in more geographic places.