This week, we’re continuing our “40 for 40” series with eight insights from Tom Wallace on the subject of entrepreneurship. Find out more about Tom’s experiences as an engineer-entrepreneur: the fun, the not-so-fun, and how he has approached business vs. engineering and risk vs. reward.
9) What has been your favorite part of starting your own company?
“I’ve really enjoyed being able to have freedom to choose the direction of the business. That is what it boils down to. Choosing the type of work and the type of clients I want, choosing the employees to hire and watching them mature.”
As much as he has relished the freedoms of entrepreneurship, Tom always appreciated when a colleague, especially a quality employee he had hired, grew into someone that could provide checks and balances.
“One of the things I’ve said often - and I really mean it - is one of my very favorite things to occur is having a technical argument with an employee and having them convince me that they’re right and I’m wrong. That is just marvelous.”
Tom recounted an exchange in the very early days of the firm with now-structural engineer and Principal Brian Walker, PE, SE. At that time, Brian was a draftsman. As they neared a deadline for a difficult project that they had already poured many hours into, Tom was requesting Brian make minor changes to the drawing style and text.
“[Brian] said, ‘Will this make any difference in how this is built, if I do what you’re saying? Or will we just lose money?’ I said, ‘We’ll just lose money, Brian, you’re right,’” Tom recalled, chuckling. “I’ll never forget that conversation.
“This is the kind of help I really wanted. Someone who would point out my flaws in judgement, or just come up with a better way of doing things.”
10) What have you enjoyed the least, or found most challenging?
“I really don’t like conflict and disagreements with clients or staff, and I’ve hated to let people go because we were out of work.”
During his time as CEO, Tom strongly disliked having to be the chief moderator on office disagreements or behavior, especially when issues were non-work related. But his biggest hang-up with being the boss was having to lay off employees during slow times.
“We’ve had to do that a couple of times over 40 years. We’ve had to let people go who were good people and good employees, and I had to choose between them. And that was awful.”
11) How do you approach difficult business decisions?
“I liked to have a discussion with my partners, or before I had partners, with my wife Susie, or other people whose opinion I respect. If the consensus was to go one way or the other, we would go that way, if there was no consensus, we would usually delay a decision until there was an obvious choice, or we would never make a decision regarding that item.”
Tom noted that his tendency to indefinitely table split decisions could sometimes be frustrating to his business partners. However, he found those issues generally resolved themselves.
“Sometimes this approach was a problem, but it usually worked out.”
12) Outside of starting Wallace Engineering, what is the biggest business risk you have ever taken that paid off?
According to Tom, without a doubt, it was choosing to buy and renovate the old grocery warehouse in the Tulsa Arts District that is now the company’s headquarters.
“That was a really big risk. I was standing in what was a dirt field with rubble in it that’s our parking lot now….and just thinking ‘Wow, you’ve got your own building here. This is great.’ Then I got to thinking ‘You’re about to spend $4 million and you have to borrow that money. How are you going to do this if we have trouble with the company?’”
The Tulsa Arts District was not always the thriving area of shops, restaurants, and green space it is today. Back in the mid 2000s, it was a rough section of town filled with old, dilapidated buildings and warehouses. However, Tom saw a lot of potential for renovating the historic structures. He was also confident others would eventually see his vision.
“I was hoping people would start recognizing the potential of this area in about 20 years. Fortunately, it started happening in about two or three years. I’m pretty happy with where we are down here.”
13) What’s a big risk you took that didn’t pay off, and what did you learn from it?
“It’s not pleasant when you know you’re working on a job that you’re losing money on, and furthermore, the architectural design is not going to be what you thought it was. Unfortunately, that has happened more times than I would have liked.”
It’s not necessarily one big risk, but more of a series of risky workflow decisions that sometimes didn’t pay financial dividends - but still may have resulted in other benefits and opportunities. Tom admitted that he has usually been inclined to take on jobs for prestige or exposure with a new client, with the knowledge that it may initially be a financial burden, but may work out in the long run.
“I tend to take that risk more than the other partners. More often than not, it has paid off, but it’s hard to lose thousands of dollars on a job and keep working on it. Nevertheless, you have to finish the race!”
14) At the end of the day, you’re an engineer. How did you balance business and engineering?
“I had a pretty lean approach to the business and marketing side because we seemed to get work as fast as we finished it for about ten years.”
As a Tulsa native and Oklahoma State University grad, Tom was fortunate to have a number of local architectural connections who were willing to give him a shot.
“I went out and marketed right when I started Wallace Engineering, and then I went out about five years later and then about five years after that. And we had all the work that we could handle, doing it that way….So that was good. I’d rather be doing engineering, as you’ve probably guessed by now.
“Sometimes in the 1990s, the other owners said ‘You’re President and CEO, you need to act like it and be a President and CEO instead of a project engineer.’ And so I kind of switched….I sort of did that and tried to remain a project engineer at the same time.”
“It almost worked….but not completely,” Tom said with a laugh.
15) What qualities do entrepreneurs need?
“They need the ability to take reasonable risks.”
In his years of hiring, Tom said he has seen engineers break down their decision to take or decline a job based solely on numbers.
“Someone who is that sort of number savvy but also can’t see the forest for the trees is someone who should not be an entrepreneur. They need to recognize the big picture.
“Numbers are important, don’t get me wrong...but to be able to see opportunities and take risks and capitalize on them, that’s what I think makes an entrepreneur successful, personally.”
16) What other tips do you have for budding entrepreneurs?
“I know people who have gone out on their own and been unsuccessful, and I know people who have gone out on their own and been wildly successful. A lot of it has to do with your luck and ability to capitalize on it.”
Tom will be the first one to tell you entrepreneurship is not a hard and fast formula. It can sometimes just come down to intangibles.
“It’s not something you have or don’t have, it’s a matter of having all the stars align the right way and having the connections...It’s luck, but then capitalizing on that luck with skill.”
Check back next week as we continue to celebrate Wallace’s 40th Anniversary with eight more insights from Tom Wallace on the topics of structural engineering and technology!
All this month, we’re celebrating 40 years of Wallace Engineering with 40 insights from our fearless founder, Tom Wallace. Each week, we’re tackling a different topic – from the founding and development of Wallace Engineering to entrepreneurship to technology to success. Click on the links below for more insights:
Part 1: Evolution of Wallace Engineering
Part 3: Structural Engineering and Technology
Part 4: Success
Part 5: Architecture, Hobbies, and Travel
Do you have a question for Tom? Let us know! Comment below or email me at firstname.lastname@example.org.