Last updated on July 2nd, 2019 at 10:57 am
When Richard “Ricky” Smith Jr. graduated from Northwestern University, he had his mind set on going into investment banking, not on joining his dad’s civil engineering firm, R.A. Smith Inc.
The problem was Ricky graduated in 2001, and the tech bubble-induced economic downturn made finding a job in his chosen field difficult. Rick Smith, the founder of Brookfield-based R.A. Smith, had worried investment banking might prove to be a volatile field and encouraged Ricky to major in engineering in addition to economics.
Ricky followed his father’s advice, but even as the job search stretched on for months, he was reluctant to join the firm. Hoping to lure Ricky in to the company, Rick made his son a job offer – only to have him turn it down.
It wasn’t until 15 years later, after Ricky had become president and a minority owner of R.A. Smith, that Rick found out why his son rejected the offer.
R.A. Smith’s business serves a variety of different markets, broadly divided by whether they serve public- or private-sector clients. The job offer was to work in municipal services on the public-sector side of the business, but Ricky wanted to return to the land development work he did during the summers while he was in school.
A few weeks after Ricky turned down the offer, Rick was walking through the offices when he saw his son being interviewed in a conference room.
“I went over to HR and I said, ‘What the heck is he doing here?’” Rick recounted.
It turned out the land development side of the business was looking for help and gave Ricky a call. He took them up on the offer, but never told his father why he turned down the first offer.
Richard A. Smith Jr. (Ricky)
School: Northwestern University
Major: Bachelor’s degree in civil engineering and economics
Interesting fact: Ricky loves to travel and has visited 23 countries, including Iceland, Democratic People’s Republic of Korea (North Korea), Iran, Myanmar, Oman and Sri Lanka.
“I never knew until today that he didn’t want to work in municipal services,” Rick said, adding Ricky could have told him he’d join the company but wanted to work in another division. “He never did.
Instead, he just turned me down and I’m thinking, ‘Why would he do that?’”
Even after Ricky joined the company, he still had his eye on investment banking. His plan was to spend two years at R.A. Smith and then return to graduate school to pursue an MBA. But when he started working on a large mall development in Pittsburgh, he took a liking to the magnitude of the work and the ability to interact with clients.
“I really started to enjoy what I was doing,” Ricky said. “I enjoyed the people I worked with. I enjoyed the environment here.”
Rick assumed his son would still follow through with his graduate school plans, but every time he brought it up, Ricky said he was too tied up in his work to leave.
“I’m thinking, ‘Well, he’s stubborn enough that he’s going to go back,’” Rick said. “He just became so engulfed in work that it became his passion, which is what you want when you see somebody working in a firm. You want to see them that passionate.”
Fifteen years later, Ricky’s passion for R.A. Smith’s work is evident as he talks about the future. He took over as company president on Jan. 1. The company is projecting $26 million in revenue this year, an 11 percent increase over 2017. It has grown to have eight offices in four states and 200 employees, with plans to add 20 to 40 more this year. Ricky has visions of the company growing even larger, and talks about the number of employees growing into the thousands.
“There’s nothing stopping us from continuing to expand both nationally and hopefully, eventually, internationally,” he said.
International offices and thousands of employees is a long way from the 10-person company Rick took over in 1978. He was working at an engineering firm, Robinson & Associates. When the owner decided to dissolve the company, Rick and a co-worker, Richard Kohler, planned to buy it and go into business together.
Richard A. Smith
School: Marquette University
Major: Bachelor’s and master’s degrees in civil engineering
Interesting fact: Rick personally writes a card for each employee when he or she has a life event (getting married, having a child, death in the immediate family). They are heartfelt, personalized messages, not just a signature.
Rick was 28 at the time and still paying off school debts. Kohler was in his 50s and had previously run his own consulting firm. The plan was for Rick to focus on the technical aspects while Kohler handled the business side. When Kohler backed out, Rick figured he would drop out, too, but Kohler convinced Rick to go through with the deal and soon after, R.A. Smith was created.
“At the time, I really had no concept of what I was getting into. I was very naïve,” Rick said.
He wanted to build the company around finding new ways of solving problems and on the tenets of quality, stability and innovation. The idea was that everyone would value quality and as a smaller firm, R.A. Smith could push the envelope while seeking to reduce employee turnover.
“My goal was not to earn money, it was to do engineering,” Rick said. “I felt that if you maintained those three principles in life, the financial end of it is going to take care of itself.”
He credited his education at Marquette University for helping him develop his principles and said that’s why he remains committed to the university today. He may be best known as the “Jump Around Guy” at MU men’s basketball games, but he and the company are also involved in academics on campus and a Marquette Warriors flag flies outside the R.A. Smith headquarters.
Chad Fedler, executive vice president of Sun Prairie-based retail developer Prairie Development Ltd., said R.A. Smith’s quality work is one reason he’s continued to work with the firm on the Prairie Lakes development in Sun Prairie since 2005.
“That’s saying something. If they were not good at what they do and not good people, I would not still be doing business with them,” Fedler said. “They do damn good work.”
Jeff Chase, Brookfield city engineer, said he has worked with many of the same people from R.A. Smith over the years and the firm often comes up in the city’s qualifications-based selection.
“You don’t exist in the municipal engineering world if you’re not doing quality work,” Chase said. “If you screwed something up for the City of Brookfield, you probably wouldn’t have a second chance.”
R.A. Smith’s initial work focused on the public sector, including wastewater treatment plants that took advantage of federal funding to upgrade to secondary treatment levels. Rick’s wife Joan served as the bookkeeper and the family put off vacations for years as Rick poured himself into the business.
He marketed the company to municipalities based on his three principles, but also realized he needed to develop the right talent within the organization.
“Our product, our resource, is intellectual property and in the professional service industry, intellectual property is provided by people,” Rick said.
He sought to hire people who were not only qualified, but also shared his passion for pushing the envelope and finding creative solutions.
“Engineers love that. Give them a problem and they’ll work 24 hours a day to resolve it; you just can’t let it go,” he said.
Kim Egan, West Milwaukee village administrator, said the village has had a long relationship with R.A. Smith and the company’s creativity has been on display as the municipality works to develop smaller parcels that, in some cases, have environmental challenges.
“They’ve always figured out a way to get these developments on the parcel,” she said.
Fedler said that creativity comes from having people with experience.
While he couldn’t pay top dollar, Rick pitched the company as a place where employees could have a stable career and grow with the firm. He set a target of adding one or two people per year, but also grew with five acquisitions over the years. Recruiting became easier as the company developed a reputation and the firm added services as they became more vital to the business.
“I never wanted to reduce staff and that was a big factor for engineers,” Rick said. “They had been used to corporate America, where firms would hire up and then reduce and then hire up and then reduce depending on the economy.”
“I was able to maintain that philosophy until the Great Recession of 2009 and that was probably my lowest point in my life, where I then had to do the same with the business here,” he said.
The company had grown to have more than 200 employees and Rick had to cut the staff by more than 30 percent. But that low point did have a silver lining, as it reinforced to Rick the importance of the firm staying independent.
“I was willing to do more in the recession than I think most businesses would have been willing to do to hang on, regardless of what it cost the firm,” he said. “If we hadn’t been in this situation where we were in control of our own destiny, what could have happened?”
As R.A. Smith has grown, the idea of the company losing its independence became more of a possibility. Rick said over the past decade, he’s been approached one or two times each year by people interested in acquiring the firm or merging.
Those meetings and the lessons from the Great Recession prompted Rick, when R.A. Smith started its last strategic planning process about three years ago, to announce he would keep the company independent. One result of the process, which involved around 20 of the company’s top executives, was that Rick announced he would step aside as president within the next one to three years and Ricky would likely be his successor.
By the time the decision was made, Ricky had become head of R.A. Smith’s land development services division and it had grown from the smallest division in the company to the largest. The division’s projects have included the Green Bay Packers’ Titletown District and the $800 million redevelopment of the Westfield Century City mall in California.
Ricky’s two-year plan to return to graduate school after joining the company turned into a desire to become a project manager, instead. He went to California to take the professional engineer exam because he could do it sooner there than he could in Wisconsin. After passing, he continued to become more and more involved in projects before being named a project manager in 2007.
At the time, Ricky was the youngest project manager in the company and was working on Fedler’s Prairie Lakes development.
Rick wasn’t sure how Ricky would react when he first approached him about becoming president, but he was excited about the idea.
“I was always interested in management and I think I always knew that at the end of the day, I wanted to run the business,” Ricky said.
The strategic planning process had set the course, but the Smiths still had to execute on the transition. Rick and Ricky both went through counseling and hired an industrial psychologist and other consultants to talk with them about the transition. Starting early in 2017, the two began meeting regularly to discuss the move and introduce Ricky to other elements of the business management, like insurance, benefits and banking.
The change was publicly announced in August and become official at the start of the year, but Rick said internal communication kept staff apprised throughout the process.
“I’ve stepped over my boundaries a couple of times,” said Rick, who is staying on as chief executive officer. “He’s let me know it, but it’s working out well.”
There were a couple of signs over the past few years that Rick said made him feel like he made the right decision. It started with management embracing it, but the real test came when it was announced to the entire company.
“Nobody left. We didn’t lose anybody,” Rick said. “I thought there was going to be fallout. I thought there was going to be some management and some other mid-level people who would say ‘We’re not sure about this.’”
Some senior members of the team have even sought to console Rick, acknowledging it might be difficult to let go of something he spent decades building, but also encouraging him not to interfere.
“Not only are they happy with the decision, but they’re encouraging me to spend less time in the office,” Rick said with a laugh. “I don’t know how to take that.”
The process actually brought the two generations closer together, although Rick said he has never really separated his home and work life.
Joan continues to remain involved, signing checks and reviewing payable and expense accounts after division and department heads approve them. Rick often comes home to a dining room table filled with stacks of paper and questions from his wife about the business.
Ricky also comes over for dinner often, so even when Rick tries to change the subject away from the firm, he’s outnumbered.
“Part of it is I lost credibility,” Rick said, explaining that after putting long hours in during the early years, he promised to retire at 55, and then at 59, 62 and 65. Now at 67, he’s stepped aside as president, but Rick thinks his wife and son are skeptical he’ll actually retire.
Ricky agreed with his father; there are no boundaries between personal and business for the Smiths.
“It’s one and the same,” Ricky said. “It’s just part of being involved in a family business and it’s something I’ve learned to deal with and I’m happy to accept.”
As the leadership transition grew closer, Rick could see his son was getting more energized by the idea instead of apprehensive or concerned. Ricky was also becoming more vocal about his views on the business, reminding his father not to interfere with him, pledging to grow the company and suggesting to Rick that he might have grown more conservative as the years went on.
Ricky’s plans for growth are ambitious — more offices around the country, employee counts measured in the thousands — but he’s also well aware of how Rick built the business into what it is today.
“My father has built this amazing foundation,” Ricky said. “Founding a company based on innovation, stability, quality, the system is in place … there’s no need to change any of those principles.”
As Rick built the company, his principles and actions were at times a response to shortcomings he saw from larger firms. He felt they had a tendency to go with standard solutions instead of looking for a more cost-effective, creative approach. Their focus on process and profitability could get in the way of letting engineers do their best work and feel fulfilled in what they’re doing.
Now, as Ricky takes over with an eye toward growth, he’s faced with navigating the tension between what’s made R.A. Smith successful and the steps needed to take things to another level.
“The challenge is that it takes a different skillset and a different mentality to take a company from 200 people to let’s say 2,000 people or 20,000 people,” Ricky said.
The private sector side of the business can more easily grow anywhere around the country, so the strategy is to look for opportunities where clients want to go and where there is talent available, Ricky said.
Fedler said it is a “a great move” for the younger Smith to take over as president, noting that while Rick built a strong business with a focus on public sector work, Ricky has an opportunity to develop even more on the private side.
“It’s nice having that perspective,” Fedler said. “He can see it not only from the engineering side, but from the business side.”
On the public sector side, proximity is everything and the strategy is to radiate out from Brookfield, Ricky said.
That explains why R.A. Smith just opened an office in Mount Pleasant to help a handful of Racine and Kenosha county clients deal with Foxconn Technology Group-related growth. The company has also added staff to its Appleton office and hired a project engineer to start a municipal practice in Madison.
To maintain the principles and culture that have built the company, Ricky said it will remain important to hire the right people and then give them the independence to do good work. At the same time, the company will have to build “incredibly strong communication channels” to keep everyone informed and on the same page.
“There are a lot of large engineering firms out there in the marketplace who get a lot of work simply because they’re big,” Ricky said. “It’s sort of like being big breeds success, and a lot of their work product is not great and a lot of their communication is not great, because they have become so corporate and process-oriented and so profit-oriented. Like my father was saying, I believe that if we take care of our clients and we solve people’s problems and make their life easier that success will follow.”
As he begins a new chapter for himself and the company, Ricky falls back on his experiences as a world traveler who has been to two dozen countries, including Iceland, the Democratic People’s Republic of Korea (North Korea), Iran, Myanmar, Oman and Sri Lanka.
“I love to experience the world because for me, it takes away, one, the fear of the unknown and it gives me the courage to say, ‘Wow, I can do that,’” he said.
It’s a message he’s also sending to the rest of the company. Ricky said one young engineer in the firm has a dream of opening an office in Singapore and his message to her is that “anything is possible as long as you stay focused and you work towards it.”
Traveling has also taught Ricky to appreciate the differences between people and cultures, which is also serving him well in his new role.
“Just as you have differences between cultures, you have differences here. Transportation engineers are a totally different person than the land development engineers,” said Ricky, who has worked in land development. “We think the transportation engineers are very rigid and inflexible and the transportation engineers think that we’re all crazy, that we don’t abide by any kind of rules, but it’s learning to appreciate those differences and learning to understand the perspectives that we bring to the table.”
Ricky said he’s able to appreciate his father’s background and outlook, and why certain processes were put in place to grow the company from 10 to 200 people.
“At the same time as I’m able to appreciate that, I recognize that some of those things need to be changed in order to take the company from 200 to 2,000 or 4,000 or beyond,” he said.