Michael McClintock’s company looked great on paper.

McClintock Electric Inc. was showing tremendous profits and had more work than the staff knew what to do with. But the electrical contracting company was spinning out of control.

The second-generation owner and president had to make the decision to flatline the company’s growth while it developed the processes needed to control its finances — from every nut and bolt to the digital telecom systems his employees install.

“I said, ‘Stop, we need to get our house in order,’” he says.

Since McClintock bought the company from his father in 1995, the 50-employee firm has experienced a 1,200 percent increase in revenue.

Smart Business spoke with McClintock about how to grow your company wisely and why you have to hold yourself accountable.

Q. What are the keys to effective leadership?

The primary key is to have the respect of your employees. The best way to achieve that respect is to lead by example.

For example, if you want your employees to be honest and ethical, you have to be honest and ethical. If you want your employees to maintain the highest standard of craftsmanship, then you need to do the same in all that you do. If you expect employees from top to bottom to be accountable for their responsibilities, then you have to keep yourself accountable, as well.

If a leader follows the adage, ‘Do as I say, not as I do,’ then you’ll be labeled as a hypocrite.

Hypocrisy has no place in leadership.

Q. How do you handle people who don’t follow that example?

When you do encounter the inevitable — that inevitable being someone who doesn’t adhere to the standards you define for the company — then you need to deal with that situation swiftly and decisively.

Anything less is going to send the wrong message to the troops. Like, ‘I guess it’s OK to cut corners because he sacrificed quality for the sake of speed, and management never said a word.’ That’s a primary key — set an example, and then adhere to those standards that you set.

Q. How does your management style change as the company gets larger?

As the company grows, it’s critical to realize the president or CEO can’t do it all. The leader of the company needs to determine what his or her best fit is within the company. Be brutally honest with yourself. There may be something that you really loved to do when the company was smaller, but as you grow, you realize that it isn’t an effective use of your time.

For instance, when I purchased the company from my father in 1995, we had six electricians and one full-time office person. … I still strapped on the tools, you know?

But since that time, we’ve experienced a 1,200 percent increase in revenue. We now average 40 electricians and 10 data/telecom technicians.

Our most controlled growth and our best bottom-line numbers only happened after I removed myself from a lot of the more mundane day-to-day operations, and instead, I started to focus on things like what the construction market was doing, where the tendencies were.

Q. How do you control growth?

One of the most significant changes that helped with our growth was insisting that my office manager give me timely financial reports and cash-flow projections. Prior to that, I was making a lot of financial decisions in the blind, based mostly on historical data, which is typical of many smaller businesses.

But when you have that information, even if you don’t have an accountant’s knowledge of finance, at the bare minimum, you should at least understand if you’re meeting or exceeding your projected revenue and if you’re on track with your budget. That knowledge is going to allow you to make more informed business decisions, and it will facilitate your growth in a more structured manner.

For example, if I’m halfway through the year and I know that I’ve already met 70 percent of my G&A [general and administrative expenses], I know that I can bid a product much leaner because I don’t need to make the same margins. That gives me a competitive edge.

Q. How do you ensure your company continues to grow?

Guard your investments. By that I mean, guard your investment in your customers. It takes time and money to establish a level of trust with the people and the companies they represent. Some of the very best accounts I have came about because my competition became complacent with their established accounts.

Perhaps the quality of their work or the timeliness of their service started to slip, or even worse, they started to assume that nothing that they quote would be shopped, and their services became too expensive.

The other investment is guard your investment in your employees. The loss of any employee … can have far-reaching effects, both in the accounts he or she may take with them, coupled with the cost of finding and training a replacement for that person.

Never become complacent, and never assume anything.