“This is the Time to Embrace Minority Companies,” Says CEO

By Vivian Tse

Despite the challenging financial times, Michael Gaines, founder, president and CEO of Computer Resource Solutions (CRS), asserts there are still enough slices in the pie for more diverse entrepreneurs.

“The pie starts to get divvied up a little bit differently,” he said. “Either there might be less opportunity or different opportunities arise. One of the ways that we took a look at combating that problem was to look for new service offerings and added value for our customers.”

Gaines found himself in oft-tread territory when he first started the company 15 years ago. The programmer by trade worked for several different consulting companies before heading to a systems integrator and found he missed consulting and returned, but on his own terms. With seven and a half years under his belt as a consultant at CNA, he went back and solicited it as a customer. CRS is now a major IT staffing supplier to the organization.

One of CRS’ first challenges was funding, for which Gaines went back to basics. “A lot of it came internally. We got an SBA loan initially,” he recalled. “Getting customers was not a huge challenge for us back then because we had a lot of relationships from companies I either used to work at or people that I knew. The relationships seemed to blossom because of the quality of service we were able to deliver.”

In step with the changing customer demands, about five years ago, the company started a new division called CRS Professional, focusing on non-IT positions.

“From that standpoint, we’ve been able to increase our market share just by offering a different set of services and also looking for the value proposition of what our customers are looking for,” Gaines said. “With one particular customer, we were able to focus on their needs and we’ve become their primary number one vendor.” CRS mainly deals deal with Fortune 500 and 1000 firms. “Our customer base is typically a pretty large customer, customers with $1 billion or more in revenue,” said Gaines. “Because they have a lot of opportunity, there are still pieces of the pie left for us to pursue on the IT side, but given the leverage of the additional service offerings, that has enabled us to expand when other companies are contracting.”

Despite its success, it is not immune to the realities of the economic downturn. “We’ve had customers ask us for rate reductions,” said Gaines. “Last year, when the economy wasn’t too bad, we accommodated a request or two. Given where the economy is now, it’s difficult to satisfy those requests and we had to graciously tell our customers that we weren’t able to accommodate their requests. The way you add value is to look at what your customer wants and how you can deliver it value. That’s the only way you’re going to continue to maintain your market share. If you offer value, it always comes at a price. If it’s reasonable, the customer will pay.”

CRS is the master of reinvention and Gaines emphasizes the need to continually reevaluate its processes. “We always ask ourselves, ‘How can we do it better? How can we do it cheaper or more effectively?’” he said. “If you don’t do that process on a continual basis, you’re always looking at self-improvement and ways to be better.” The company operates on a model in which it looks at each customer’s needs and builds specific metrics for it. Some customers have their own metrics that CRS uses.

“For customers who don’t have metrics, we build our own internal metrics and look at key indicators like how many requirements come out, how many submissions were made, how many interviews we’ve got and, ultimately, how many people have been engaged through that process,” said Gaines.

The company benchmarks against itself and its competitors. “If a particular customer has four vendors, we should get 25 percent of the opportunity or better. We look at it from that perspective,” said Gaines.

Gaines is accustomed to delivering on tough assignments. “We’ll get a call on a Thursday afternoon. A customer will say, ‘I need 15 people to start by Monday, have them screened, background checked, drug screened and ready to start on Monday,’” said Gaines. “We’ve been able to fulfill those challenges. We have a team that works hard and is resourceful.”

The company plans ahead on a year-to-year basis primarily because the market is so fickle. The company is currently looking into longer-term expansion with the aim of widening its service offerings and geographic scope. “We staff on a national basis. We have offices in Texas and Arizona and two in Chicago,” said Gaines.

In terms of minority companies working together, Gaines did not mince words. “We don’t trust one another. We don’t embrace one another, but we have to be more like that,” he said. “Half of something beats a whole lot of nothing. We have to start looking at things that way.”

Minority companies must change their mindset, he added. With African Americans, Gaines believes certain patterns of behavior stem back to slavery, when individuals were pitted against one another. “To have that build and drive in a culture, that really breeds not working together,” he said. “For our culture, that was a strategy, pitting light-skinned against dark-skinned. It all stems back to that.”

Gaines believes these attitudes are slowly disappearing with this generation. “I find it phenomenal when I see my kids and who their friends are. It has truly evolved and I think we as a people, as a culture, have evolved and will continue to evolve. It’s all been positive.”

As he put it, the world is changing. “When you take a look at the Internet, media, everything’s faster, we get everything a lot faster,” said Gaines. “The companies that will survive are nimble, quick and continually reinvent themselves or, at a minimum, reevaluate themselves. That’s what we do. We have to go back and look at some things so that we can continue to compete.”

CRS has only been unprofitable its first year. “Our first six months were not profitable, but by the end of the year, we were profitable,” said Gaines. Despite its impressive client list, CRS takes its business model and shapes it to tailor each customer’s specific needs.

“It’s not like, ‘This is who we are and this is all we do.’ We truly shape ourselves after our customers,” said Gaines. “It’s difficult and it’s challenging, but it’s what the customer wants.”

Working with CNA, Gaines said, “I’ve seen managers come and go, departments shift, downsizing, systems that I’ve worked on in previous years be scrapped for new ones. They’re an ever-changing customer and they’ve probably changed five times within the time frame that we’ve worked with them, if not more, but we value them as a customer and appreciate the business they have given us and continue to give us.”

Despite the bad economic times, this is a time to embrace minority companies, said Gaines, “to make sure they make it to the other side of what we’re currently facing.”