TZL 1530 (web)

March 25, 2024, Issue 1530 WWW.ZWEIGGROUP.COM

TRENDLINES

Value/EBITDA ratio

3.8 3.9 4 4.1 4.2 4.3

You must attach the right structure, systems, and incentives in order to shift employee mindset. Change management

2020 2021 2022 2023 2024

FIRM INDEX Bowman Consulting Group Ltd............... 10 Harper Houf Peterson Righellis, Inc..... 10 O’Dell Engineering............................................... 6 Bowman Consulting Group Ltd............... 10 Westwood Professional Services, Inc... 6 WT Group................................................................... 8 MORE ARTICLES n KRISTIN KAUTZ: Go big or go home Page 3 n MARK ZWEIG: Entrepreneurial marketing Page 5 n STEPHEN DOMINGUEZ: Accounts receivable and collections Page 7 n DAN HOUF: Managing a firm today Page 9 According to Zweig Group’s 2024 Valuation Report of AEC Firms , the value/EBITDA ratio surged to 4.23 in 2024, ascending from 4.04 the year prior. The industry continues to see consolidation at record levels with significant demand from both financially backed and traditional strategic buyers. This phenomenon has prompted many owners to consider their internal calculations and has also pushed up pricing on internal transfers. Participate in a survey and save 50 percent on the final or pre- publication price of any Zweig Group research publication.

I f your firm has previously gone through the strategic planning process, there’s a decent chance the endeavor was commonly viewed as a failure once implementation rolled around. If that sounds familiar, you’re not alone. According to the Harvard Business Review , 48 percent of organizations fail to meet at least half of their strategic planning targets. Part of this is due to a lack of commitment and the other part is down to poor change management. So, what is change management and how does it prevent you from being added as a data point to that statistic? Change management, at its core, are the methods a company uses to guide organizational change from start to finish (plan rollout and successful integration of your initiatives). This could include a significant transformational change, smaller scale adaptive change, or change at the individual level. Examples of these would include changes to the firm’s organizational structure, addition of a new software/changes in company policy, or smaller scale changes such as an individual’s role within a firm. Typically, the greatest challenge of change management involves navigating the complexities of altering the human element within an organization. This encompasses everything from shifting an engrained organizational culture to transforming the mindset of individuals. According to professor Thijs Homan, in organizations characterized by the usual complexities that come with human dynamics, there typically exist two prevailing perspectives on how to manage or implement change. The monocentric view advocates for a top-down approach, where change is driven by management decisions. This perspective assumes that the organization is inherently resistant to change, and it is through the deliberate actions of leaders that change is initiated and managed. Conversely, the polycentric perspective suggests that change is a more organic process, emerging from multiple sources within the organization. This view recognizes the diverse and dynamic nature of organizational life, where change is the cumulative result of actions taken by individuals at all levels. My perspective leans toward the polycentric side of these two views. When leading change within an organization, you’re often

Travis White

See TRAVIS WHITE, page 2

THE VOICE OF REASON FOR THE AEC INDUSTRY

TRAVIS WHITE, from page 1

seeking buy-in from a group with dissimilar opinions and perspectives (as planning consultants, we see this on a frequent basis). Individuals with their own cause or even coalition within the company. This is why change is not only the result of quality guidance from management. Change is influenced by everyone, but totally controlled by no one. In order to herd cats, leaders must apply the right structure, systems, and incentives that encourage everyone within an organization to make decisions that pull in the same direction. In other words, leaders need to make decisions that allow others to make the right decisions. As professor Thijs Homan put it, you must transform these changes you’re hoping to happen, into changes that you are wanting to happen. To put all of this consultant speak into action, let’s use an example. When managing the company in its early years, Jeff Bezos wanted Amazon to become the “earth’s most customer-centric company.” This is a slightly abstract objective – one that in many organizations would take the form of a mission statement, possibly evolve into a checklist, and ultimately be shelved and forgotten due to poor implementation. Although, almost anyone who has ever reached out to Amazon support can testify that he achieved this mission – but how? Bezos didn’t just remind his leadership team, managers, and staff during conference calls of what he wanted from them. He also didn’t make every decision that turned Amazon into what it is today. He implemented guidance and incentives on how to make this a reality. Bezos implemented a data-driven department structure based on customer success metrics, equity compensation, and performance compensation based on customer success metrics, prioritizing product pricing over profitability through negative or low margin guidance, strategic distribution center locality for faster delivery, a lengthy and questionably flexible return policy. He even required managers to attend call center training to understand the needs of Amazon customers. Not to mention his notoriously strange empty chair policy, which featured an empty seat in meetings to represent the customer, “the most important person in the room.” Bezos implemented incentives that motivated his people to make decisions that aligned with the company mission statement. The idea of implementing an effective overarching incentive structure may seem obvious, but it’s commonly forgotten in the details of a strategic plan. Understandably, planning leaders often fail to see the forest for the trees. This can separate a good leader from a great leader. Going back to the 48 percent failure statistic – in many cases, successful implementation comes down to your people not executing the strategies assigned to them due to their existing workload taking priority over those initiatives. After a period of time with no traction, the plan gets left behind. In order to shift employee mindset and manage this period of change effectively, you must attach the right structure, systems, and incentives to make the plan a priority. As the saying goes, tell me the incentives and I’ll tell you the outcome. If you believe your firm could benefit from a plan that garners firmwide buy-in, Zweig Group has a team of strategic advisors here to help. Click here to learn more. Travis White is a strategy and operations advisor at Zweig Group. Contact him at twhite@zweiggroup.com.

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THE ZWEIG LETTER MARCH 25, 2024, ISSUE 1530

OPINION

Go big or go home

In the rapidly evolving universe of AI, firms willing to “go big” will be at the forefront of transformation – with all of the risk and reward that implies.

“T hreads” always find me. I consider them cues from the universe. Sometimes they are the same questions repeated from multiple clients over a few weeks. Sometimes they are the same topics that pop up each day consecutively from random sources. Sometimes they are similar observations from friends and colleagues over a few months. But once I see the “thread,” I can’t unsee it. I start to pay attention. Then I start to act.

Kristin Kautz, CPSM

A thread that has made itself known in the past few weeks is, “Go big or go home.” Are you an innovator? Are you an early investor in AI? And if so, what are the benefits besides the recognition of just being first? Most of my clients say, “We want to be involved with AI, but we don’t want to be bleeding edge.” This is completely understandable. Smart leaders and smart firms want to see themselves as early adopters, but only after the AI is proven and other people have tested it (which comes with significant risk and cost). As an example, it has taken more than two decades for only 53 percent of the AEC firms that should be using BIM to actually use BIM. Two decades to reach 53 percent. AEC firms, as proven by history, want the technological safe bet. I want to ask you, what if? What if you decided to be an innovator? What if you decided to be an early investor? What if you took a risk? And most importantly, what if it paid off?

In the rapidly evolving universe of AI, AEC leaders are increasingly recognizing the necessity of taking bold, innovative moves to capitalize on opportunities in the modern business landscape. From groundbreaking recruitment tactics to all-in on AI, the transition to fixed-rate billing, and the conceptualization of a new employee model, AEC firms willing to “go big” would be at the forefront of transformation, with all of the risk and reward that implies. REFRAMING RECRUITMENT: THE $10,000 REFERRAL REVOLUTION. A standout moment at a 2018 Zweig Group CEO Roundtable highlighted a revolutionary approach to recruitment within the industry. A CEO in attendance revealed their firm offered $10,000 for employee referrals. This sent shockwaves through the room and, at the time, challenged the traditional norms of recruitment rewards. The CEO was willing to bet on the untapped potential of employee networks in

See KRISTIN KAUTZ, page 4

THE ZWEIG LETTER MARCH 25, 2024, ISSUE 1530

represents a very forward-thinking response to the changing dynamics of the industry due to AI and, inevitably, changing contracts and client expectations. TRAINING AI FOR TOMORROW: REVOLUTIONIZING THE FIRM MODEL. The conceptualization of a new operational model, where employees train proprietary AI systems to progressively automate their roles, offers a glimpse into the future of work in the AEC sector. This would create an entire economy of people who – instead of exchanging their time for money – exchange their data for money to their firm. Current employment agreements are built on the basic principle that continuous payment is necessary for continuous work. However, in a world increasingly dominated by AI, this concept may become outdated. A more equitable approach could involve compensating individuals for the ongoing value created by their contributions to data. The aim would be for employees to train AI sufficiently to take over their tasks, and upon achieving this automation, they would still receive their regular salary. This is underpinned by the rationale that the AI, now trained, can serve a broader client base than the individual could have, warranting a share in the resulting benefits for the original human trainers. This model not only redefines the relationship between talent and technology, but also proposes a sustainable approach to professional growth and organizational evolution, in addition to a solution to our current and predicted recruiting challenges. By promising employees continued compensation and profit- sharing following the successful training of the AI knowledge base and/or automation of their roles, this pioneering approach challenges traditional employment contracts by valuing data and educational contributions as ongoing assets and combines the client-facing aspects of a professional services firm with the efficiency and scalability of a software company. Could it be that AEC firms will become tech companies that also build civilization? WHAT IF? There is no one-size-that-fits-all answer. You will have to decide what amount of innovation and risk is right for your firm, employees, and clients. I am just giving you some ideas to think about as our world changes. And there is no doubt, it is changing. Thinking about future challenges and opportunities is just as important as thinking about the challenges and opportunities right now. Our AEC industry stands at the cusp of the AI revolution, and I wonder if our leaders are willing to embrace courageous strategies and explore unproven approaches, to boldly go where no firm has gone before. (I am currently binging Star Trek: Discovery , so I had to!) I cannot wait to see more examples of pioneering leaders and companies that can serve as beacons of inspiration – or lessons learned! – illustrating the profound impact of audacious vision on our industry’s evolution. What if you are the one who paves the way for a future characterized by AI adoption, efficiency, and unparalleled success? What if! Kristin Kautz, CPSM is Zweig Group’s artificial intelligence (AI) consultant and trainer. Learn more about Kristin here.

KRISTIN KAUTZ, from page 3

attracting top-tier talent, prompting a reevaluation of the value placed on internal referrals. Fast forward to today, that $10,000 does not seem as shocking as the challenges in recruiting and retention have increased dramatically. Building on this paradigm, Jeremy Clarke, Zweig Group’s director of executive search and recruitment, offered insights that further illuminate the disparity between the compensation for employee referrals and the hefty fees allocated to external recruiters. Clark argues that employee referrals, statistically the highest quality hires, are undervalued in traditional corporate recruiting programs. He advocates for a radical elevation of referral rewards, suggesting that the lower sums typically offered to employees are incongruent with the significant fees – often upward of $25,000 – paid to external recruiters for the same outcome. This call-to-action challenges AEC firms to rethink their recruitment strategies, emphasizing the importance of adequately rewarding employees who contribute to the firm’s success by leveraging their personal networks. What seems shocking and forward thinking today can be outdated tomorrow. IGNITING CHANGE WITH AI: IGNITETECH’S PIONEERING APPROACH. IgniteTech, under the leadership of CEO Eric Vaughan, exemplifies the transformative power of AI in reshaping company operations and culture. Vaughan has demanded AI integration throughout his entire company. By offering employees $200 each for AI experimentation plus access to ChatGPT+, alongside a color-coded (green, yellow, and red) feedback model to track engagement, his approach not only incentivizes employees to engage with AI but also establishes a clear expectation for participation. Terminating employees in the “red zone” of no engagement starkly illustrates the company’s commitment to AI integration as a cornerstone for future success. Doing this has positioned IgniteTech in a unique way to both clients and employees. This type of leadership also underscores the necessity of embracing AI to remain competitive and possibly provides a blueprint for AEC firms looking to harness the potential of technology in driving industry advancement. TRANSITIONING TO FIXED RATES: A BOLD MOVE FOR THE FUTURE. The transition from hourly to fixed-rate and value- based billing represents a monumental shift within many firms in the AEC industry. As AI and other technologies streamline workflows, the traditional model of billing by the hour becomes increasingly obsolete. We must begin planning for value- based pricing, where compensation reflects our unique worth delivered through expertise, skills, and proprietary data and intelligence in our AI models, rather than the mere time spent on a project. This evolution toward fixed-rate pricing challenges AEC firms to redefine their value propositions and true differentiators, emphasizing outcomes and benefits over cost and speed. The move aligns pricing strategies with perceptions of value, encouraging firms to continually add service offerings and improve human relationships throughout project delivery. It

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THE ZWEIG LETTER MARCH 25, 2024, ISSUE 1530

FROM THE FOUNDER

Entrepreneurial marketing

I have often said that one of the primary distinctions of “small firm thinking” versus “entrepreneurial thinking“ in the AEC business is how one views marketing. Small firm owners see it as an overhead expense to be minimized. Entrepreneurial firm owners see it as an off-balance sheet long-term investment in the firm’s future. Entrepreneurial firm owners understand that marketing is an off-balance sheet long- term investment in the firm’s future.

Mark Zweig

If I was an architect, engineer, planner, surveyor, environmental scientist, accountant, or anyone else considering taking a job in a specific AEC firm, figuring out the firm’s position on marketing would be extremely important for me in determining whether or not I would want to work there. I would only want to work for a firm that is consistently investing in marketing so the business is likely to grow and become more successful over time. “A rising tide lifts all ships,” as they say. Let’s compare how entrepreneurial small firms handle marketing versus the typical small firm: ■ Marketing budget. The entrepreneurial firm is not preoccupied with industry norms on marketing spending other than to know what the “other guys” in the same business they are in are spending so they can double it or more.

They understand if the overall industry is growing by “X” percent annually, their own firm’s odds of exceeding that growth rate go up dramatically if they increase their spending on marketing. And they especially understand that if times get tough, the last thing (not the first thing) to cut is the marketing budget. Small firms are proud of holding marketing spending down because to them, all overhead is the enemy of profit. ■ Marketing people. The entrepreneurial firm realizes that to do everything they want to do marketing-wise, they have to put together a team of experienced and dedicated marketing people. They don’t try to do it only with design or technical professionals and support people who used to be admins because they understand

See MARK ZWEIG, page 6

THE ZWEIG LETTER MARCH 25, 2024, ISSUE 1530

TRANSACTIONS WESTWOOD ACQUIRES CALIFORNIA- BASED O’DELL ENGINEERING Westwood Professional Services, Inc., a nationally renowned design and consulting firm, announced its acquisition of Northern California-based O’Dell Engineering. The acquisition of O’Dell supports Westwood’s strategy to expand into new regions and grow its existing markets and services. O’Dell is Westwood’s inaugural investment in California and brings four new offices. “O’Dell’s culture and people are a strong complement to Westwood’s team. The acquisition expands our geographic reach and the professional services we provide, advancing the capabilities we offer our clients. We look forward to the benefit that this partnership will bring to our clients and employees,” says Chief Executive Officer, Bryan P. Powell, PE.

O’Dell Westwood’s market-leading presence in Public Infrastructure and Land Development and strengthens Westwood’s deep reach of service offerings. complements O’Dell’s President, Dylan Crawford, PLS, reflects on the organization’s focus: “We are excited to partner with the Westwood team and to have expanded capabilities for our clients. This partnership allows us to offer more services to our existing client base and more opportunities for our employees. We are very excited to be a part of Westwood and to help the organization grow in California and the surrounding states together as one team.” O’Dell will operate as O’Dell Engineering, a Westwood company, for a period of time and continue to serve clients from their current locations.

Westwood is a leading, award-winning, full-service, professional engineering firm specializing in wind energy, solar energy, energy storage, power delivery, EV infrastructure, commercial, institutional, residential, and public infrastructure projects. Westwood was established in 1972. Through a focus on its people, culture, and clients, Westwood has quickly expanded to serve clients across the nation from multiple U.S. offices. In 2023, Westwood placed No. 12 and No. 30 respectively on Zweig Group’s national Hot Firms and Best Firms to Work for lists. Westwood also ranked consistently higher for five consecutive years on the Engineering News Record 500 as one of the country’s leading design firms. The firm regularly ranks on industry top 25 lists and receives recognition for its involvement on award-winning projects nationwide.

principals off doing projects and try to get them out selling. And they turn out more proposals and responses to RFPs to try to get more work, but the quality of those responses declines with the more of them they do. They then go through a boom-bust cycle and believe that is normal. ■ Branding/working visibility. Entrepreneurial firms have lots of “swag” they give out to everyone. Stickers, water bottles, coffee cups and more. They exhibit at trade shows and professional meetings. They drive branded company vehicles. They have matching company shirts. They have the largest project signage and more. The typical small firms do few or none of these things because they see it as a waste of money. ■ CRM/data management. Entrepreneurial firms realize how valuable every bit of information on their clients and potential clients is, and they capture it all in a customer relationship management (CRM) system so it doesn’t get lost. The top people and the rank and file all have access to this information and help maintain it. The typical small firm does not maintain a CRM and if they do, it’s only the admins and support people who interact with it and maintain it so the quality suffers. I hope I am making my point here. I could go on but am out of space. Please let me know your thoughts! Mark Zweig is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.

MARK ZWEIG, from page 5

marketing is a discipline just like those the owners of the firm have been schooled in. There is a large body of knowledge on marketing that takes specialized expertise and experience, and to get good people in marketing you have to pay what it takes to get good people into the line functions of the business. In other words, entrepreneurial firms don’t treat their marketing people like second class citizens the way small business-thinking firms often do. ■ Sales. Entrepreneurial firms understand that selling is easy if you set the stage with your other marketing activities. The phone rings, emails come in, and the clients approach you instead of you having to chase after them. This consistent high investment in all of the other marketing activities also results in a lack of geographic boundaries for the firm and higher prices over time as well. Small firms say none of this other stuff is important and the only thing that matters is sales. So hire people who can sell – IF you can find them. ■ Experimentation. Entrepreneurial firms believe in and practice constant experimentation. They know that marketing tactics that work today may not work tomorrow, and you have to keep trying new things to keep the market’s attention and break through. They do lots of new things because they understand how that increases their prospects for success. Small firms do the same things they have always done. If they need work, they pull their

THE ZWEIG LETTER MARCH 25, 2024, ISSUE 1530

OPINION

AEC firms struggle to retrieve all of the revenue they bill out, however there are some solutions firms can use to counteract commonplace issues. Accounts receivable and collections

T he AEC industry is a complex collaboration comprised of architects, engineers, developers, owners, contractors, and sub-contractors, to name a few. With all of the different parties involved, it can be hard to trace where all of the money pertinent to the project is going. It is common to have to wait for the money to trickle down to your company.

Stephen Dominguez

Say your team bills more than $100,000 for the month. You feel like you are doing great and will have plenty of profit left over, but at the end of the year there is no money left over. Where did it all go? The bottom line is that AEC firms struggle to retrieve all of the revenue they bill out. We are seemingly one of the only industries that struggles to be compensated for the work we do; but why? Here are some of the problems with how our industry handles invoicing: ■ Work first, invoice second. Our companies do all of the work and deliver the product before receiving the cost. Our society cannot go to a grocery store and take what we want, just to be billed for it 30 days later, but that is exactly what we are doing with our documents. Our clients are not motivated to make timely payments if they have already received what they need. ■ Late billing. Project managers and principals juggle a lot on their plate, and it is easy for billing to be the task that gets moved to the bottom of the pile, keeping us in a constant state of trying to reconcile debts.

Lack of follow up. We can get in the habit of sending the invoices out, checking the project off of the list, and moving on to the next task at hand. We can forget to follow up with the client and the invoice is out of sight and out of mind.

■

■ Fear of our clients. Revisit once more the analogy of a grocery store; should the cashier feel bad for making you pay for the products you want and the price you were made aware of before you ever made it to the check-out line? If you fear your client will be upset for paying for your services then they may not be the best client to serve. ■ Collection period. Studies show that the average period to collect cash is more than two months from the invoice date. While these issues have become commonplace and seemingly unavoidable in our industry, I’d like to provide some solutions we can use to counteract them. Here are some of the ways we can avoid having a large accounts receivable balance:

See STEPHEN DOMINGUEZ, page 8

THE ZWEIG LETTER MARCH 25, 2024, ISSUE 1530

all at once. Alternatively, we can add a “stamp only after payment” clause that requires all outstanding invoices to be paid before sending stamped drawings. ■ Project hold. When an invoice has not been paid in the time agreed upon in the contract, all work associated with that project can be put on hold until payment is received. It is also important to push the entire schedule back by the amount of time the project was put on hold. ■ Late fees. Many contracts have a fee for late payments, charging a set percentage of the outstanding amount in interest per month. The language in the contract is there for a reason; use it! ■ Be polite. Rather than demanding your money, it is always better to start off by asking when we can expect payment to be processed. ■ Know your client. If the client you are sending a proposal to has a history of being slow paying or even owes your firm money, consider finding another client or requiring a retainer to start the work. ■ Signed agreements. Make sure you have a signed contract that lays out the client’s name, frequency of your firm’s billing, the timeframe for payment to be received, and the consequences for late payment. Implementing these can help your firm build trusting client relationships and keep getting paid for what we do best. Stephen Dominguez is the principal in charge of the structural division of WT Group. Contact him at sdominguez@wtgroup.com.

STEPHEN DOMINGUEZ, from page 7

■ Accounts receivable review. In order to reduce your account receivable, you must first know how much you are owed and by whom. We can get stuck in the mindset that billing the client is all that matters, but without proper cash flow, we cannot run a business. It is important to have an accounting software that can show you which clients have an outstanding balance, for how much, and for how long. We can waste countless hours trying to keep track of accounts receivable if it is not tracked for us. ■ Consistent communication. Let your client know where you are with the project and what you are billing for. If they have an issue that they are withholding payment for, you should be informed and resolve the issue. In addition to your accounting department, the project manager or principal who has a relationship with the client should be reaching out to all of our clients who have exceeded the pay period set in your contracts. Do not surprise your client by suddenly charging them more or withholding documents without first extending proper communication. ■ Consistent billing. Establish a billing schedule with your employees and clients. By invoicing at the same time every month, not only will they establish a rhythm of regular payments, but you will be more aware of when they are exceeding this 30-day timeframe. ■ Pay by phase upfront. It may be that we need an industry change to shift the cost to the owner to be paid upfront per each phase of work being performed. This will ensure you are getting paid for all of your work as well as protect the client from having to pay for the entirety of the project

THE ZWEIG LETTER MARCH 25, 2024, ISSUE 1530

OPINION

Managing a firm today

Nothing prepares you for the challenges of managing a firm like putting your feet to the fire and learning from everyday experiences.

W hen I started in my career, I absolutely loved designing, and I still do. In my excitement to learn the business and see projects built in the field, I would work 60-hour weeks. I craved the opportunity to build my skills so I could work on future exciting projects. And then, after a few years down this path, something happened that changed the course of my career: Two key people left the company I was working at to start their own firm, and they offered me an opportunity to join them as their first employee, along with a chance to invest in the firm.

Dan Houf, P.E.

Since that day, 33 years ago, I have gone from an EIT with a startup civil engineering firm to the president and senior principal of a multidiscipline firm with four offices and 120 employees in two states. I was fortunate to be involved in the management and growth of our firm organically and learn the nuances of building the business along the way. I was also fortunate to work with talented principals and professionals who are driven by client service and who share a mutual respect. As our company grew, I also grew in my profession and in my ability as a leader. Nothing prepares you for the challenges of managing

a firm like putting your feet to the fire and learning from everyday experiences. However, you must also try to connect with others in your industry who share common experiences. You can do this by meeting with other firm leaders to discuss challenges and opportunities for improving your company, and our industry, or perhaps by seeking out printed resources. I have been a huge fan of Mark Zweig and his writings over the years. Reading his work, I would think to myself, “This guy really understands what we are dealing with day-to-day.” I genuinely appreciated his thoughts and wisdom, and I am grateful to have an

See DAN HOUF, page 10

THE ZWEIG LETTER MARCH 25, 2024, ISSUE 1530

ON THE MOVE BOWMAN WELCOMES DAVID KELLY, PE, CFM, AS BRANCH MANAGER FOR ORLANDO, FL EXPANSION Bowman Consulting Group Ltd., a national engineering services firm delivering infrastructure solutions to customers who own, develop, and maintain the built environment, announced the opening of its newest office in Orlando, Florida, marking a strategic move to expand the company’s presence in the region. The new location will initially offer civil engineering and land development services, with plans to expand operations in the future. Leading the Orlando office is industry veteran David Kelly, PE, CFM, who has been appointed

principal, branch manager. With 40 years of experience in a wide variety of land development markets, including a strong presence in the residential, commercial/ industrial, roadways and resort hotels, Kelly will cultivate a dynamic team and establish Bowman as a key player in the local land development market with a focus on residential sectors. “Orlando is a top housing market, and we are excited to leverage this opportunity to contribute to the city’s growth and development,” said Erik Juliano, principal and business unit director, Florida at Bowman. “David’s experience coupled with his deep understanding of the local residential market makes him the ideal

leader to guide our team and capitalize on this opportunity.” Kelly’s robust leadership skills have been demonstrated through a successful history of cultivating productive teams and delivering results to top industry clients. “I am thrilled to be joining Bowman and leading the charge in the greater Orlando area, particularly in such a dynamic residential space,” said David Kelly. “I look forward to leveraging my experience to assemble a skilled team that can help contribute to the growth and development in the region and provide our clients with outstanding service.”

■ Identify bureaucracy creep and don’t “spend a dollar trying to save a dime.” Building a platform that develops staff and serves the client is important. However, I would advise a new manager to see how they can adapt to the current situation and not make too many changes for the sake of change, until they really understand the system they are working with. Guard against bureaucracy creep and ensure that every dollar spent adds value to your business. The revenue side of the business can far outweigh spending time tracking pennies. This means keeping the billable staff billable, and limit administrative tasks that provide no value other than to be part of a system. ■ Encourage and reward the unsung heroes. Look around your firm and see if your staff have advanced in their careers. Have you created opportunities and incentives for those who want it? Have you seen someone extraordinarily talented rise through the ranks, regardless of age and background, because they truly were an unsung hero? Identify those special individuals and reward them for their hard work and commitment. ■ Communicate. People expect you to communicate and respond quickly. We have smart and talented people in our industry who want to know what is going on, and how they can better serve their clients and help achieve individual and company-wide goals. ■ Have fun and enjoy life! With meetings, emails, texting, instant messaging, and cell phones, one can easily feel stretched thin and on the edge of burnout. Don’t forget to laugh and enjoy time with the people you work with. Have some fun! Learn to shut off the stress when you leave for the day and take vacations where you can truly get away, recharge your batteries and spend time with your loved ones. Self-care is essential for maintaining a positive attitude and serving those in the company. Dan Houf, P.E. is senior principal and president at Harper Houf Peterson Righellis, Inc., an Oregon-owned firm that has been recognized locally and nationally as a top engineering and multidiscipline firm. Contact him at dan@hhpr.com.

DAN HOUF, from page 9

opportunity to share some key big-picture recommendations that I have for managing a firm: ■ Do good work and develop relationships with good clients. Building a reputation for quality and developing productive long-term client relationships is the most important element of success. Good clients create opportunities and build stability. ■ Understand what makes a profit, and attend to your receivables. This may seem simple, but you’d be surprised how many in business do not understand their true costs. I could write an entire article on this subject alone. Spreading out indirect costs equally to the employee, and then adding direct costs to determine the appropriate rate to charge is essential in business. Generate your fees using standard rates instead of multiplier rates. Getting caught in the multiplier trap can cause you to lose money. This goes against the conventional wisdom of the multiplier that many public contracts dictate. You also have to be paid for your work. We add value in our business, so don’t hesitate to use all available means to collect from an unpaying client, and do not leave your receivables unattended. ■ Diversify your client base. Build a diverse client base with an array of public and private work. Public agencies, architects, developers, and institutions make up a broad range of clients that provide consistency when sectors of the economy are experiencing a downturn. ■ Trust your judgement and have thick skin. As you step into a leadership role, realize that people may perceive and treat you differently. This was honestly hard for me, but it is human nature. Making tough decisions can also make you feel a bit isolated. However, making tough decisions is your job, and even if you do it with the best overall intentions, you may open yourself to criticism or second guessing by some. Trust your judgement, because you have insight on the big picture. When you make the right decision, stay with it, and when you don’t, adjust it and move forward.

THE ZWEIG LETTER MARCH 25, 2024, ISSUE 1530

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