'Your reaction time has to be faster than ever'

John “Ozzie” Nelson, Jr., is president and CEO of Nelson, a design firm founded by his father in Philadelphia in 1977. The firm's nearly 600 employees provide strategic planning, interior design, architecture, engineering, workplace services, and information services in 36 locations worldwide. With revenues of $53.5 million in 2006, the firm is ranked 20th among A/E firms on BD+C's 2007 Giants 300 list. Nelson holds a BS in business administration from the University of St. Thomas, St. Paul, Minn.

BD+C: What's your growth strategy?

John Nelson, Jr.: I've been with the firm for 20 years and became president and CEO four years ago. Since then, we've gone from $12 million in revenue to $54 million in '06. By the end of the year, we'll be at $80 million.

A lot of growth has been on the corporate interiors side [including a merger with Chicago-based Griswold, Heckel & Kelly and Space/Management Programs in 2006.] We've built a platform of 36 offices to go into world markets that are strategically important and find good partners. Once that platform is built, we find that it's very easy then to move into different market segments.

The combination of finding merger partners to expand our platform and then finding new sectors and applying what's hot in the different markets is what we've been up to for the last four years. There has been massive consolidation in design and architecture firms. Clients want to deal with fewer partners, to get the buying power that comes with that size.

Still, less than 25% of our growth has been through acquisition or merger. The bulk is from organic growth in the business.

BD+C: How do you break down your firm's activities?

JN: Our six lines of business come out of being able to track space for clients, to take data and convert it into knowledge. For clients like Bank of America, Cisco Systems, and Microsoft, we help them track their space needs down to the workstation, and then put together very large occupancy plans to implement part or all of those projects.

The value to our clients is to help them understand the way business is done today, and how the built environment becomes a manifestation of the business environment. [Design] is not about keeping people out of the rain. So many location decisions are driven by where the customer is or where the employees are, and then you start to figure how your customer does business and how their employees do their work.

We do find that a lot of big companies are embracing the branding of the workplace, to create iconic images of their corporate brands.

BD+C: Where's the greatest activity for you in the U.S.?

JN: New York City has been going gangbusters. We just merged with two 25-person firms there, A/R Environetics Group, whose clients include Totes and Credit Suisse, and Furnstahl & Simon Architects, which does interiors for MTV and Nickelodeon and nonprofit organizations. Now we have 100 people in New York to give us critical mass.

Dallas and Atlanta are strong for us. Now we're seeing markets like Charlotte, and a couple of interesting spots around Columbus, Ohio.

BD+C: You're expanding globally, too.

JN: We opened our Delhi office last July and now have 35 people there. I took my executive team there in October, and I couldn't begin to describe all the buildings that are going up, building after building. For India, our work has been mostly office design. We're also setting up to do work in China in the next 6-8 months.

BD+C: And you just merged with Portola Australasia. [Based in Melbourne with an office in San Francisco, Portola Australasia specializes in consultancy, facility planning, workplace solutions, architectural programming, and project delivery.]

JN: We fell in love with the company, and Melbourne is a great spot for us. The merger gives us reach into Australia and the Pacific Rim, as well as the West Coast.

BD+C: You're expanding your scope, too.

JN: Two years ago, we started moving into the multifamily, mixed-use, and student residential market, via a merger with [Atlanta-based] Geheber Lewis Associates. That's a good example of a different practice group that we're bringing to all our offices in our network, so you can expand relatively quickly. We're also getting into the healthcare market through some of the firms that have merged with us.

BD+C: What scares you about the design business?

JN: The risk. It's like driving a racecar: Your reaction time has to be faster than ever. Diversification is key because you never know when some world event is going to trigger something that you could not have foreseen, something that could put you out of business. There's going to be a need for a lot more sophistication in our business beyond just the design of buildings.