We bought out our investors so every decision at Circle Square would come down to one question: is this right for the client?
One of the biggest decisions Ric Wallace and I have made at Circle Square was buying out our outside investors. Ric is my co-founder and our CFO, and we went into that decision with our eyes open. It wasn’t small, and I’d make it again tomorrow.
Why we did it
Our early shareholders were purely investors. I don’t say that as a criticism of them as people. They just didn’t understand managed IT. They didn’t see that this is a service business, where what you sell is the work your people do for someone else every day. And they didn’t see that the client is the only thing that matters.
You could hear it in their questions. Every conversation came back to profitability, and the answer they were looking for usually meant giving up some quality somewhere. A cheaper hire. More clients per engineer. A corner nobody would notice for a while. We weren’t willing to do that.
It was a mismatch more than anything. An investor wants a return on a timeline. A business owner whose office can’t get into its files first thing in the morning wants an engineer who knows the environment and picks up the phone. Most days those two wants line up fine. When they pull apart, somebody has to choose.
Nobody to explain the decision to
I’ve spent some time reading about companies that have held a high standard for a very long time, and one fact stuck with me. Rolex has been owned by the Hans Wilsdorf Foundation since 1960, with no shareholders and no stock price to defend.
Think about what that means on an ordinary Tuesday. Someone decides to keep a process that costs more than it has to, because it makes the work better. Nobody calls from a fund to ask why. Nobody has to defend the choice against a spreadsheet showing what the savings would have been.
Most companies don’t have that freedom. When the owner is an investor, every decision gets two questions: is it right, and does it pay back fast enough. The second one tends to win.
One question
After the buyout, we got to drop the second question. Every decision at Circle Square now gets one: is this right for the client?
That question shapes how we hire, which tools we keep, how many accounts each engineer carries and how long we’ll stay on a problem. It’s why every client has a primary engineer matched by industry experience and capacity. It’s why we’ve written down a standard every client can hold us to, including a short list of things we’ve decided not to do, like promising numbers we don’t control or marking up AI usage. Nobody has to defend those to a board looking for margin.
On the flight line, where I spent six years as a KC-10 crew chief, every aircraft had an owner and every job was signed for. Nothing left until the checklist was done. Nobody asked whether the checklist was efficient for the quarter. It existed because people were counting on that aircraft coming back. Your business isn’t an aircraft, but the idea carries over: the standard exists for the person relying on it.
Built to last
Our industry has seen a lot of consolidation, and plenty of firms are built with a sale in mind. I understand the appeal, and I don’t judge anyone who takes that path. It’s just not the one we chose. When the goal is a sale, decisions naturally tilt toward the next quarter. We’d rather ours tilt toward the next decade.
That has served our clients well so far. Almost six years in, the clients who were with us on day one are still with us, and we’ve never lost one.
The only people we answer to now are the ones who rely on us. If you’d like to hear more about how we work, or you just want to compare notes on running a business this way, I’m happy to talk.
One standard. Every client. The door is always open.
Read how we got here, from the flight line to your front office, on our About page. circlesquareconsulting.com/about-us