Kraig Harper and other executives at Service Express Inc. began 2015 by seeking an investor to support a buyout of the company and continue to grow the business.
They hired Ernst & Young’s investment bank and learned about their options. By the end of the year and after deciding to seek a private equity investor rather than a strategic buyer, the executive team at Grand Rapids-based Service Express found the partner in Pamlico Capital of Charlotte, N.C. to engineer a management buyout.
“We learned a lot and really feel like we came up with a great solution and everybody was a winner at the end,” said Harper, a finalist in the 2016 MiBiz CFO of the Year Awards. “We’re really set up to meet our needs and objectives going forward. We were able to find the right private equity firm not only for our executive team but for our employees. It’s just as much about our employees as about us.”
After closing on the investment, Service Express — a provider of hardware maintenance services for data center infrastructure — in January of this year then acquired Compu-Fix in West Mifflin, Pa., giving the company a market presence in the Pittsburgh area.
Harper has been chief financial officer as Service Express grew from $5 million in annual revenue when he started there in 1999 to nearly $60 million last year. The company has enjoyed double-digit annual growth and strong earnings over the years and now seeks to reach $143 million by 2020. The firm targets $278 million by 2025.
As the company grew from four offices to 34 today in 14 states, Harper and other executives who have worked together at Service Express since the late 1990s had to evolve their roles. They had to let go of the day-to-day operations to focus on strategy and direction.
Where Harper once used to prepare the financial statements and handle HR and other administration functions, he now oversees an operations team that consists of billing, payables, receivables and HR, all while focusing on strategic planning and investor and lender relations.
Stepping away from the day-to-day operations came with trepidation, although Harper and other executives said it was needed as the company grew.
“We were very much hands-on back then,” said Harper, who won a CFO of the Year Award in 2013 when the company had less than $50 million in revenue. “We’ve had to be able to step back and say, ‘How are we going to grow?’ What got us here is not going to get us there.
“If we start to understand where we’re going, we’ve also needed at different times to look at it and say, ‘What are the resources we are going to need along the way?’ We needed to be able to pull ourselves out of that day-to-day and start to fill people into those gaps that we were filling, but fill it with people who were better at it than we were.”
Finding and nurturing talent as Service Express grows is a concern for Harper, who takes pride in working with coworkers to help them set down and achieve personal and professional goals.
A system Harper brought to the company uses a trio of tools to promote and measure professional development. In one of the tools, employees on a quarterly basis set five to 10 personal goals and priorities for the next 90 days.
Nurturing talent is a regular part of a senior leader’s job, Harper said. He loves seeing coworkers “figure out where they want to go in their careers and how can I help them accomplish what they’re trying to accomplish, whether that’s personally or professionally.”
“I’ve been able to help a number of people accomplish their goals,” Harper said.
That job is a bit easier in West Michigan, which Harper credits with having a strong work ethic.
As Service Express further grows and plans to open new locations across the country, the company seeks to instill that same value wherever it goes.
“There’s just an integrity, and a solid work ethic, and a focus on doing things right … and helping other people that I don’t know if you get in other areas — or it’s not as high of a focus as it is here,” Harper said. “As we expanded to other areas of the U.S. and we have seen some different priorities on those sorts of things, we have continued to impress upon all of our locations and look for people that have that same focus … work ethic and integrity and doing business the right way. (You need to) check your ego at the door.
“The more people we find like that, the more we’re able to grow more quickly. That is an influence that started in West Michigan.”
Sidebar: Kraig Harper, Service Express Inc.
- Gross revenues for 2015: $59 million
- Total employees: More than 300 across 34 locations in 14 states
- Transformational moment: Harper cites working as controller in the mid-1990s for a company that sold computer equipment as a period that he describes as a “low professional time” as he struggled to understand priorities and get the results ownership wanted. The company brought in a CFO, Dave Nemmers, who taught him a system of how to focus on priorities and “what your results need to be.” The system helps to identify key measures and performance indicators the company needs to focus on, allowing the leadership to set monthly goals, measure results and adjust accordingly. Nemmers also “helped me really see I needed to be more of a leader than a doer. I needed to work through other people, help them be successful, and give them opportunities while at the same time leading and training them. I brought all of that to Service Express,” Harper said.
- Mission critical: “I need to connect with my executive team to make sure we’re on the same page as to what needs to happen, whether it’s within the next day or the next week. We have a huddle once a week where we outline what our priorities are for the next week and make sure we’re coordinated, and then that cascades down. And then it’s touching base with the team that reports to me and seeing what’s going well and seeing what challenges they’re having. If they’re having challenges, I look at it as my role to help them overcome those challenges. If there are some stumbling blocks in their way, (I see) what I can do to help clear that so their jobs are easier.”
- Academic degrees: Bachelor’s degree in accounting, Western Michigan University, 1989
- Community involvement: Former board member and treasurer, Association for Corporate Growth of West Michigan
- Company advisers: BDO (accounting); Mercantile Bank (financial); Mika Meyers Beckett & Jones PLC (legal)