Successful, Long-Term Growth at Prime Technological Services

Estimated reading time: 19 minutes

Again, that feeds into that support ecosystem for manufacturing. Its cliché I know but you can't build a great company without great people. One of the things that is a consistent topic, not only in this industry but other industries that we're involved in, is workforce development. It's a vitally important topic when building a growing company.

Matties: We just ran a survey of the industry looking at hiring, and indeed there’s a hiring increase going on, and that's like on the average of two to three people over the first half of the year. Then we asked what the greatest challenge is, and the greatest challenge is finding qualified people. The skilled labor force is a big issue.

Chesnutt: Absolutely, and while we’re in this middle ground where, for lack of a better term, our educational system catches up and begins to provide a little bit more of that need or more than it’s been able to provide up to this point, a lot of companies are taking the challenge on internally. You're hiring for characteristics. You're hiring for interest. You're hiring for energy level. You're hiring for work ethic. You’re hiring for adaptability and trainability, and then you’re taking on the responsibility to bring that talent into your organization and develop it according to your specific needs and requirements. That's what we've been trying to do.

Matties: I think that's the only way you can do it these days.

Chesnutt: We are forced to do it, I guess, but it's also a pretty good business strategy.

Matties: What are the primary demands that your customers put on you these days?

Chesnutt: I hate to keep coming back to it, but really it’s an ability to be very nimble and fast. Markets just move so quickly today, literally in everything, and if you have an innovation or you have an idea, or you have a product or even with sustaining engineering of an existing product base, if you don't move quickly, and are first or second to market and grab the end user's mind share of that innovation or that product, it's real hard to win over time. That's probably the number one thing, and what we try to do in our business is build a highly adaptable organization, a nimble organization if you will, that can respond to that need. Then a lot of times it just comes down to being willing to say yes, as long as it fits within the parameters of good business practices.

Matties: You have to stay within your frame, because it's easy to chase business and lose money.

Chesnutt: Yes, which is no fun. There are two things in business today, particularly in products businesses and certainly in EMS: competitiveness and quality are almost a given.

Matties: That’s the ante.

Chesnutt: Nobody says I want just the inexpensive stuff, or worse, the expensive stuff that doesn't work. So, we almost take the need for quality and competitiveness as a given. That's really the jumping off point in terms of trying to build differentiated value to a customer, and that really does then get into things like being able to work quickly, being able to say yes, and being able to position your company as a true accelerant in the commercialization process for a customer. Believe me, they know it when you are, and if you can't do that and you give them enough of a reason to look elsewhere, eventually they will look elsewhere. The incentive systems inside our customers’ businesses, whether it’s Tier 1 OEM or an early-stage company, drive their people are to respond to that market reality and they're expecting it and quite frankly they're demanding it from their supply base.

Matties: What sort of growth do you expect in the coming year?

Chesnutt: We've been on the Inc. 5000 for four years in a row now, so our compound annual growth rate over the last four years has been north of about 20 percent. We're looking for that to slow a little bit, and a little bit of that is deliberate on our part. We've had a wonderful run in our business. However, we are today principally a regional business. Our business is largely in the Southeastern and mid-Atlantic states in the U.S. so we're going to try to break outside of that core geography and we anticipate that that's probably going to slow our growth rate down a little bit. We're not going to say no to market opportunity where we are, but we are actively looking to expand our business.

Matties: How do you expand? What's your strategy for getting out beyond your borders?

Chesnutt: Basically, it's trying to find, within those three tranches of customers I identified, companies that we feel like are targets that can benefit from what we have to offer. We'll fish where the fish are in terms of what geographic markets offer us, but we'll probably go out and try to replicate some things and some verticals that we've been very successful with in the Southeast, and we expect that those market opportunities are available as we expand.

Matties: What advice would you give a buyer of EM or box build services?

Chesnutt: Probably the advice is to make sure that holistically, your partner is a good fit for what your need is. We went through a cycle in this country for a very long time; we touched on it earlier, where once you got outside of engineering in many operations of a business and you got into supply chain, landed unit cost was the metric that everyone lived and died by. It's an important measurement, but whether you're evaluating cost of quality, total cost of ownership, speed to market or your supplier’s ability on the EMS side to support your particular needs throughout the life cycle of a product or range of products, I would just encourage people, and I do encourage on a daily basis when we're engaging with prospects, to look holistically at that relationship. Because as I tell our employees, every one we do business with is strategically outsourcing their revenue stream to us. That's a really, really important decision.

Matties: And their reputation, which may be more important.

Chesnutt: Absolutely. So, I just think fit is very important in that regard.

Matties: Are there any thoughts that we haven’t talked about that you think we should discuss?

Chesnutt: No, I don’t think so. I appreciate you taking time to sit down and visit with me, and learn a little bit more about Prime. We're grateful for the opportunity and appreciate everything that you do.

Matties: It’s been a pleasure talking with you, Greg. Thank you.

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