TZL 1340 (web)

T R E N D L I N E S A p r i l 1 3 , 2 0 2 0 , I s s u e 1 3 4 0 W W W . T H E Z W E I G L E T T E R . C O M

Architect principals

What differentiates us now as leaders is our ability to roll with the punches and make sharp, sober decisions. The next five minutes

O ver the last month, our inboxes and news feeds have been flooded with extreme reactions, the least flattering among them from my fellow management consultants across the internet, who claim to hold various secrets to thriving in the face of this disaster, if you’ll just join them for a webinar or sign up for free information alerts. Scrolling one post down from a bold claim that COVID-19 is “the best thing to happen for our industry” was another consultant’s prescient guidance to prepare for “the greatest economic depression our country has ever faced.” Beware those who try to sell you solutions to a situation that we – as a society – have never faced. There was a five-day gap between the close of our 2020 Principals, Partners, & Owners Report of AEC Firms and the launch of our AEC Industry Outlook & Response to COVID-19 Pandemic survey. On March 7, participation closed for our 2020 Principals, Partners & Owners Report of AEC Firms . A selection of data points that aged like milk regarding AEC industry outlook from a simpler time: ❚ ❚ 38 percent of principals felt that the AEC business would outperform the U.S. economy. ❚ ❚ Second-to-last in the list of challenges for firm principals: financial issues or cash flow. ❚ ❚ 50 percent of principals felt that the likelihood of layoffs or pay cuts in 2020 was “all but impossible;” only 1 percent believed this was “highly likely” or “likely.” ❚ ❚ 0 percent of AEC firm principals felt that the 2020 business environment will be much worse than the prior year. On March 12, just five days after closing participation in our Principals, Partners, and Owners Report for 2020, we launched an urgent study of how AEC firms are responding to COVID-19 with “live” participation to allow new information to be incorporated into our reporting. A selection of data points from participants: ❚ ❚ Collection period/accounts receivable scored in the upper half in a list of negative impacts of the pandemic. ❚ ❚ 67 percent of firms believe the impacts of COVID-19 will likely cause a decrease in their 2020 revenue compared to 2019. So, is coronavirus the best thing that’s happened for the AEC industry? Absolutely not. Will it inevitably lead to catastrophic disaster for the AEC industry? Not likely. It is beyond question, though, that coronavirus has required some degree of change.

In Zweig Group’s 2020 Principals, Partners & Owners Report of AEC Firms , we asked principals how their actual time breaks down relative to their ideal time. Among architect principals, we found that about half of their actual time is spent on firm and project management while just over a quarter of their time is spent on design work and mentoring. Ideally, these principals would want to spend the most time on design and technical work.

Jamie Claire Kiser

Participate in a survey and save 50 percent on any Zweig Group research publication.

F I R M I N D E X Fitzemeyer & Tocci................................12 Jones|Carter. ..........................................4 JQ.........................................................10 KPS Group, Inc.....................................12 Ramey Kemp & Assoc............................6 Ware Malcomb........................................4 MO R E A R T I C L E S xz MARK ZWEIG: Get on the phone now! Page 3 xz Ownership: Montell Irvin Page 6 xz STEPHEN LUCY: Don’t forget the forest for the trees Page 9 xz SCOTT LECLAIR: The brand as a leader Page 11

See JAMIE CLAIRE KISER, page 2

T H E V O I C E O F R E A S O N F O R T H E A E C I N D U S T R Y

4/2/2020 I'm not planning on traveling outside of my state I'm not planning on leaving my home My firm has asked me to refrain from personal travel Other I've stopped all personal travel but am traveling for business

9% 7% 4% 4% 3%

COVID-19 IMPACT AEC INDUSTRY OUTLOOK & RESPONSE TO COVID-19 PANDEMIC

This document contains data gathered by voluntary respondents to a survey administered by Zweig Group on 3/12/20. Updates to these results will be provided as necessary to account for the fluidity of this situation. Please contact research@zweiggroup.com for further information.

IMPACT ON TRAVEL POLICIES RATE THE FOLLOWING IN TERMS OF IMPACT ON A 1 TO 5 SCALE WITH 5 BEING A HIGHLY NEGATIVE IMPACT

RATING

% 

Business travel is to be conducted on a case-by-case basis All business travel has been suspended No impact Voluntary business travel has been suspended Business travel is limited to or prohibited from certain locations Other 

41% 30% 13%

IMPACT ON BUDGET Ability to collaborate internally on projects Ability to finish current projects on time Ability to finish current projects within budget Ability to provide high quality service and response to clients 2.6 2.3 2.3 2.3 2.1 2.1 2.0 1.9 1.8 HOW DO YOU ANTICIPATE SPENDING WILL BE IMPACTED BY THE THREAT OF COVID-19? Category Si nificant increase over 2019 Slight decrease over 2019 Significant decrease over 2019 No change Slight increase over 2019 Bonuses %  My firm is considering changes to the 2020 budget No changes have been made to my firm's 2020 budget and none are currently planned My firm has altered the 2020 budget due to COVID-19 55% 34% 11% BUDGET DECREASE PERCENTAGE 0% 20% 13% 24% 6% 5% 5% Ability to obtain new work Ability to collaborate with subcontractors / consultants on proje ts Ability to train staff Collection period / Accounts receivable Ability to find qualified staff

Median Mean

33% 32% 5% 41% 2% 20% 27% 4%

16% 5% 3% 20%

42% 36% 49% 31% 67% 47% 48% 41%

9% 18% 35% 7% 22% 16% 16% 42%

REVENUE DECREASE PERCENTAGE

IMPACT ON REVENUE Business development Computers & equipment Discretionary spending Health care Marketing / Promotion Recruitment / Hiring Software / IT Systems / Online Storage Travel

% 

8% 7% 7% 9%

20%

Median Mean

17%

The impacts of COVID-19 will likely cause a decrease in my firm's revenue by this percentage compared to the previous year COVID-19 will not likely impact my firm's revenue in any way COVID-19 will likely cause my firm's revenue to increase

70%

1% 8% 9% 4%

10%

29% 2%

1/1

42%

35%

18%

IMPACT ON EDUCATIONAL EVENTS & TRAINING

% 

Employees at my firm are not allowed to attend business conferences and trainings My firm supports employees individual decisions to not attend events or trainings but has not issued a change to formal policy Data is from the April 3, 2020 rep rt with 175 respondents.

38% 27%

JAMIE CLAIRE KISER, from page 1 Even if you were able to replicate your exact workstation from your office into your home, you are still approaching the workday in a way you have not done before, even if, like me, you have long been an adherent of social distancing. While change itself can be neutral in that it is neither inherently good or bad, applying intentional thought into how to approach something mundane, like going to work in the morning, can be a spark. I believe that diversity of perspective is a catalyst for innovation. Do you get your best ideas sitting at your desk after 10 hours? I don’t. Changing the scenery, tearing myself out of the spreadsheet and taking a walk or closing my laptop during a flight and pulling out my notebook and opening up a blank page has been the spark behind some of my best creative contributions to the challenges that confounded me for hours at the office. It is those small shake-ups in routine and in business as usual that create the space for shaking loose new ideas. IMPACT ON CLIENT ENTERTAINMENT & NETWORKING As an advisor, we rely on experience, analysis, lessons learned, case studies, and precedent to guide our clients. This is an interesting time in that none of those resources squarely fit the current situation; the “experience advantage” no longer applies, and the “new normal” is a thing we continue to constantly chase as the situation evolves. With a somewhat leveled “experience advantage,” what we have left as a differentiator is the ability to make sharp, sober decisions. To roll with the punches. To incorporate new information that doesn’t compute with traditional perspectives on work, productivity, professionalism, and communication. We will keep on collecting the data here at Zweig Group and staying as informed as we possibly can. In the meantime, the words of Tom Peters are the best advice I can impart: “Excellence is the next five minutes.” JAMIE CLAIRE KISER is Zweig Group’s managing principal, director of advisory services, and CFO. Contact her at jkiser@zweiggroup.com. Business conferences and trainings are approved on a case-by-case basis No changes have occurred to my firm's poli y on educational events and trainings Other IMPACT ON TELECOMMUTING & WORKING REMOTELY COVID-19 has changed my firm's policy on telecommuting to allow any employee to telecommute at any time. COVID-19 has changed my firm's policy on telecommuting to allow only certain employees to telecommute currently. My firm allows for telecommuting for certain employees and has not chang d its p licies in response to COVID-19. My firm allows for a y employees to telecommute at any time and has not changed its policies in response to COVID-19. My firm does not allo for teleco muting and has not changed its policies in r sponse t COVID-19. %  42% 17% 16% 15% 10% 0% 20% 40% 60% 80% 100%

15% 13% 7%

1200 North College Ave. Fayetteville, AR 72703 Chad Clinehens | Publisher cclinehens@zweiggroup.com Sara Parkman | Senior Editor & Designer sparkman@zweiggroup.com Christina Zweig | Contributing Editor czweig@zweiggroup.com Liisa Andreassen | Correspondent landreassen@zweiggroup.com 44% 35% 14% 5% 2%

%  My firm supports the decision of employees to refrain from public networking but has not issued a formal policy My firm has mandated that employees refrain from entertaining clients in social public settings (restaurants/bars/events) No change Other My firm is considering asking employees to refrain from entertaining clients in social public settings (restaurants/bars/events)

Tel: 800-466-6275 Fax: 800-842-1560

WHAT PERCENTAGE OF YOUR FIRM's WORKFORCE CAN EFFECTIVELY WORK FROM HOME?

Email: info@zweiggroup.com Online: thezweigletter.com Twitter: twitter.com/zweigletter Facebook: facebook.com/thezweigletter Published continuously since 1992 by Zweig Group, Fayetteville, Arkansas, USA. ISSN 1068-1310. Issued weekly (48 issues/year) $250 for one-year print subscription; free electronic subscription at thezweigletter.com/subscribe © Copyright 2020, Zweig Group. All rights reserved. 80% 69% 100% Lower Quartile Median Mean Upper Quartile 1/1

50%

THE ZWEIG LETTER April 13, 2020, ISSUE 1340

O P I N I O N

Get on the phone now!

O .K. The virus is in full bloom and the economy as well as our way of life is completely screwed up. We can all agree on that, I’m sure. But in spite of these facts, you have to keep your business going. Lamenting the past won’t do you any good. “Getting on the phone and staying on the phone for a few days every week for the next couple months will be good for you.”

Mark Zweig

I read an article the other day on Twitter from a fellow who billed himself as a “soldier/ entrepreneur/TEDx speaker” who advised business owners to not act on ideas they had in the night, and instead involve all employees in a plan to be implemented in 90-120 days. I have to say I am disgusted by such drivel. Most small businesses will be gone in 90-120 days if they don’t act quickly! And while many A/E firms are a little better able to withstand the hit they are taking in terms of revenue declines, there’s no time like the present for some quick action. So the question at hand is what are you really doing to get more work and get new clients right now? NOW is the time to get out both of your six- guns and start shooting! Here are my thoughts: 1)Call your clients. Get on the phone and stay on

it. Talk to every client and potential client you can. The best part about calling now is you will be able to reach a lot more people than you ever could pre-virus. Find out what their real needs are. And I’m not talking about their needs for what YOU do necessarily. I’m just talking about their NEEDS . What are their problems? How are they responding to the situation? Is there anything you can do to help? Ask, ask, ask, and ask more questions. I have to believe if you and your other top people would commit to staying on the phone eight to 10 hours a day for a couple days a week and then caucus about it, you will find new work and you will come up with new ideas for services that you can provide to clients. 2)Share information with the people you speak with. Tell them what you are hearing and what you

See MARK ZWEIG, page 4

THE ZWEIG LETTER April 13, 2020, ISSUE 1340

BUSINESS NEWS JONES|CARTER HIRES FORMER PROGRAM MANAGER FOR THE PANAMA CANAL EXPANSION PROGRAM TO LEAD CONSTRUCTION ENGINEERING AND INSPECTION DIVISION Rick Volk, P.E., has joined Jones|Carter as the new senior vice president of construction engineering and inspection. Volk brings more than 23 years of extensive involvement with multi-million dollar projects and programs in civil engineering, heavy civil construction, design-build, public-private partnership, toll, and transportation project development. “Rick brings incredible project experience we can leverage to build a CE&I presence in the marketplace,” said Bob Aylward, president and CEO of Jones|Carter. “He is a very thoughtful leader with tremendous experience and insights and I think he is going to be a great addition to our team.” Volk has worked on various notable construction projects in his career. In his previous role, he acted as program manager on the $5.25 billion Panama Canal Expansion Program where he provided executive oversight of program management services to the Panama Canal Authority. Volk also led the four-mile extension of the Los Angeles subway and turned around the over- budget Mopac improvement project in Austin, Texas. “It was refreshing to hear the strategic thinking behind the approach of Jones|Carter,” Volk said. “The position of where the business is now and what that prepares this company for in the future is exciting. It’s a very exciting time to be a part of this company.” Volk has a proven track record with project awards. He was successful in negotiating a $7.9 billion contract to widen Interstate 81 in Virginia, which consisted of planning, finance, public relations, permitting, right-of-

way, utility coordination, design, construction, maintenance, and toll operations. In addition to project awards, Volk has experience with P&L management, organic growth strategies, and delivery of P3 projects. For the past 40 years, Jones|Carter has provided engineering and surveying services to the public and private sectors. The Texas- based civil engineering firm was established in Houston in 1976. Since then, Jones|Carter has grown to nine locations throughout Texas. WARE MALCOMB ANNOUNCES MARY CHEVAL PROMOTED TO PRINCIPAL IN IRVINE OFFICE Ware Malcomb , an award-winning international design firm, announced Mary Grbic Cheval has been promoted to principal, interior architecture and design in the firm’s Irvine, California-based headquarters office. In this role, Cheval is responsible for leading the growth and management of the Interior Architecture and Design Studio and overseeing all interiors projects for the Irvine office. Cheval joined Ware Malcomb in 2015 as director, interior architecture and design in Irvine. Since then she has successfully led the development and expansion of the interiors studio while establishing a strong leadership team. In addition, Cheval’s expertise and leadership in the area of Workplace Strategy helped to facilitate Ware Malcomb’s formal launch of this service as a core firm offering in 2018. “Mary’s top-notch design ability, combined with her excellent management and client relationship skills, have resulted in the continuous growth of the interior architecture and design team and its portfolio of projects,” said Kenneth Wink, CEO of Ware Malcomb. “We thank Mary for her numerous contributions to Ware Malcomb and look forward to her continued impact as principal.” Cheval brings more than 30 years of industry

experience and a wealth of interior architectural knowledge and management expertise to the Ware Malcomb team. She is well-versed in all facets of interior design, including workplace strategy, project management, space planning, consultant coordination, schematic design, design development, agency processing, contract documents and contract administration. Her project leadership spans the commercial and corporate office, healthcare, science & technology, institutional, education, hospitality, retail and science and technology sectors. Cheval earned a bachelor’s degree in interior architecture and design at the University of Texas at Austin. She is a professional member of the International Interior Design Association and is a Certified Interior Designer. Cheval was one of three people elevated to the position of Principal within Ware Malcomb’s offices across North America. Ware Malcomb also announced the promotion of Edward Mayer to principal, architecture, in the firm’s Newark, New Jersey, office and Jason Dooley to principal in the Atlanta, Georgia, office. Established in 1972, Ware Malcomb is an international design firm providing planning, architecture, interior design, branding, civil engineering and building measurement services to commercial real estate and corporate clients. With office locations throughout the United States, Canada, and Mexico, the firm specializes in the design of commercial office, corporate, industrial, science & technology, healthcare, retail, auto, public/educational facilities and renovation projects. Ware Malcomb is recognized as an Inc. 5000 fastest-growing private company and a Hot Firm and Best Firm To Work For by Zweig Group.

MARK ZWEIG, from page 3

violating anyone’s confidences, of course) on every social media channel there is. The more helpful information you share the more of a resource you will become. I have been and will continue to be critical of much of what I see A/E firms posting today on social media. It’s either boring, pictures of employee workspaces or virtual meetings, has nothing to do with clients, or is the same braggardly project stuff they were posting pre-crisis as if everything is just the same. Share new information. Helpful information. Information not available from everyone else. Information YOU have gathered on clients in your specific target markets. There’s a lot you can do. Getting on the phone and staying on the phone for a few days every week for the next couple months will be good for you. You will learn a lot, get some new clients, and develop a skill and discipline that will pay dividends for years to come. Do it! MARK ZWEIG is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.

are learning. The more people in your clients’ and potential clients’ organizations you talk to, the more intelligence you will gather. And that’s valuable information for everyone else you speak with. And it is going to do nothing but show everyone you are tuned in to what is going on and it’s worth spending their time to talk to you in the future. “While many A/E firms are a little better able to withstand the hit they are taking in terms of revenue declines, there’s no time like the present for some quick action.” 3)Make better use of social media. Be relentless in terms of sharing all of the information you are learning on how various organizations are faring and responding to the crisis (without

THE ZWEIG LETTER April 13, 2020, ISSUE 1340

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THE ZWEIG LETTER April 13, 2020, ISSUE 1340

P R O F I L E

Ownership: Montell Irvin President and CEO of Ramey Kemp & Assoc. (Raleigh, NC), a transportation engineering, planning, and design firm founded in 1992.

By LIISA ANDREASSEN Correspondent

I n addition to being president and CEO of Ramey Kemp & Assoc., Irvin is also active in a number of organizations and was appointed to serve on the Hurricane Matthew Recovery Committee. He believes the firm’s culture of ownership is what continues to drive it forward to success. “Everything changed when we figured out the ESOP,” Irvin says. “It has been a wonderful way for us not only to spread a culture of ownership throughout the firm, but it is allowing the original owners to transition ownership in an orderly way that is beneficial to everyone, which if not

their supervisors, to determine the best work situation for them and their team. This has generally been done on a case-by-case basis with no company-wide policy in place. We went on a company-wide lockdown Tuesday, March 17th and had all staff working remotely the next day. We had a company-wide (all hands-on deck) “TEAMS” meeting the morning of March 19th. I’m not saying all firms can operate without hard policies in place for everything imaginable, but we do. We have policies in place to follow the law and to limit our risk, but we operate on the premise that we are all adults, professionals, and owners (we’re an ESOP), and if you are someone who needs to be told what and how to do everything or someone who “games the system,” then you will not fit in well with our firm. TZL: What are the three to four key business performance indicators that you watch most carefully?

done properly can lead to major pitfalls.” A CONVERSATION WITH MONTELL (MONTY) IRVIN.

The Zweig Letter: How has COVID-19 impacted your firm’s policy on telecommuting/working remotely? Montell (Monty) Irvin: We’ve always had a fairly flexible work environment and allow team members, along with

THE ZWEIG LETTER Ap

Do you share that information with your staff? MI: We developed a report a number of years ago that we call the “Summary by Discipline/Office” report. This monthly report includes previous months as well as YTD totals and presents numerous metrics that everyone from a group manager and above receives. We’re a pretty open-book company. Metrics in this report include total revenue, expenses, OH allocation, P/L, headcount, direct labor hours, utilization rate, effective multiplier, and revenue factor. We also share proposal hit rate, but not on that report. TZL: How far into the future are you able to reliably predict your workload and cashflow? MI: Prior to the Great Recession, it was approximately four to six weeks because we were primarily doing private sector traffic studies/design work. We now have a 50/50 mix of public/private work and everyone now understands how cashflow impacts us; we have a fairly clear picture six to 12 months ahead, but one truly never knows what’s around the corner. “I think growth opportunities plus personal wealth building that can occur by staying in our firm and making sure it’s profitable are clear differentiators between us and the grass on the other side of the fence.” TZL: How has COVID-19 affected your business on a daily basis? MI: It’s too early to really tell. Obviously, we aren’t in our offices and everyone is having to get used to working remotely, but we are adapting very quickly. You know, there are some inefficiencies with working in an office – getting ready/ commuting, chit-chat, unnecessary meetings, etc. that is minimized with working remotely. However, there are some folks with kids in the house, connectivity issues, etc. that could add some challenges, so I’m not exactly sure how much it’s impacting us at this point – it may be a wash. TZL: Is change management a topic regularly addressed by the leadership at your firm? If so, elaborate.

MI: I’m definitely not running around with a solution looking for a problem, but I am constantly looking to be better in everything we do. I set a goal in 2014 to cut paper use by 50 percent within two to three years and be as close to paperless as possible by 2020. I did this not to save trees (which I’m not opposed to doing), but because I know it will drive efficiencies in our firm. We still have a ways to go to reach this goal, but I can see it’s working because our people are changing their behavior and looking for ways to be more efficient. TZL: How often do you valuate your firm and what key metrics do you use in the process? Do you valuate using in-house staff or is it outsourced? MI: Before starting our ESOP in 2004, we calculated our value internally using a big ole spreadsheet. Since 2004, we’ve been using an outside firm to handle our annual valuations. We provide them the normal financial documents (balance sheet, income statement, tax returns, etc.), but they also look at backlog, WIP, A/R, staff size/experience, market conditions, overall U.S. economy, and they interview folks within the firm to get a feel for how things are going – it’s a pretty intensive effort. TZL: What measures are you taking to protect your employees during the COVID-19 crisis? MI: Healthwise, I sent everyone home and I’m highly recommending they stay home. They are supposed to get approval from me to visit any of our offices, which I generally allow on a very limited basis. They know I will not be happy if I learn someone is in an office without my approval. Other than reminding them to follow CDC prevention guidelines, I’m not sure what else I should be doing. TZL: What financial metrics do you monitor to gauge the health of your firm? MI: We look at the normal industry metrics – revenue growth, revenue factor, etc., but cash is king in our house. TZL: Ownership transition can be tricky, to say the least. What’s the key to ensuring a smooth passing of the baton? What’s the biggest pitfall to avoid? MI: When our founder, Ramey Kemp (who founded our firm in 1992), and I were having conversations about me joining

HEADQUARTERS: Raleigh, NC NUMNBER OF EMPLOYEES: 82 YEAR FOUNDED: 1992 OFFICE LOCATIONS:

❚ ❚ Raleigh, NC

❚ ❚ Charlotte, NC

❚ ❚ Winston-Salem, NC

❚ ❚ Richmond, VA

❚ ❚ Charleston, SC

❚ ❚ Columbia, SC

SERVICES:

❚ ❚ Traffic engineering

❚ ❚ Roadway design

❚ ❚ Traffic operations design

❚ ❚ Transportation planning

CULTURE: Ownership: Ownership in the company, ownership in the profession, ownership in personal lives. CERTIFICATIONS: RKA is a certified SPSF with the North Carolina Department of Transportation and is a federally certified small business. RKA is also SWaM certified in the Commonwealth of Virginia. CORE VALUES: Friendly, brave, loyal, helpful, trustworthy, courteous, clean, cheerful, kind, reverent, thrifty, and obedient.

See OWNERSHIP, page 8

pril 13, 2020, ISSUE 1340

OWNERSHIP, from page 7

all of our teammates to contact our clients, teaming partners, etc. to first see how they are doing; then discuss their project; and then let them know we are coming up with creative ways to get their projects completed on time during this unprecedented situation. TZL: How many years of experience – or large enough book of business – is enough to become a principal in your firm? Are you naming principals in their 20s or 30s? MI: I tell people all the time that “longevity doesn’t equal leadership” in our company. I’m promoting the best person for the job, no matter what – if they happen to be in their 30s then so be it. TZL: In one word or phrase, what do you describe as your number one job responsibility as CEO? MI: Creating a sound and sustainable company for our employee-owners’ existing and future well-being. TZL: What happens to the firm if you leave tomorrow? MI: You mean after the big party celebrating I’m gone? Although I’m hoping for a more orderly transition, if something were to happen to me then my leadership team, advisory board, and our board of directors would be tasked with finding us a new CEO. They know it is in the best interest of our employee-owners to look internally as well as externally to find the best person for the job and I’m confident they will select someone who will continue to successfully move our company forward. A couple years ago, I announced I would be out of the company when I’m 65 years old or we are 200 people, whichever comes first. Since we are still several years away from that, a more orderly transition will be for us to do an internal/external search for a CEO starting about a year before that time. I’m hoping to have someone in place that will be a strong servant-leader who is a visionary, and someone who understands a culture of ownership and can get up to speed quickly. I don’t plan on being around much unless it’s absolutely necessary. I’ve not met a hobby I didn’t enjoy and I’m really looking forward to finishing the Appalachian Trail. I’ve been section-hiking it for years and plan to knock out the remaining miles when I’m retired. TZL: A firm’s longevity is valuable. What are you doing to encourage your staff to stick around? MI: Our turnover rate has been low for many years so we must be on the right track, however, we don’t take anything for granted. We let everyone know, especially when speaking to younger staff, that we are growing and providing a lot of career advancement opportunities. As part of our reorganization, we are implementing a Career Advancement Development planning tool that documents requirements to advance in our firm – with timelines. We also have a fairly robust profit sharing program – ESOP, 6 percent match on 401(k), 100 percent employee-only health care premiums, paid by RKA, etc. I think growth opportunities plus personal wealth building that can occur by staying in our firm and making sure it’s profitable are clear differentiators between us and the grass on the other side of the fence.

the firm in 1994 (he was 53 and I was 31), ownership and ownership/leadership transition were major topics of discussion. I borrowed money to buy some of his stock, however, it was difficult to get others over the years to do so – and it wasn’t for a lack of trying. Everything changed when we figured out the ESOP. It has been a wonderful way for us not only to spread a culture of ownership throughout the firm, but it is allowing the original owners to transition ownership in an orderly way that is beneficial to everyone, which if not done properly can lead to major pitfalls. TZL: Are you seeking some kind of financial assistance during this COVID-19 crisis? If so, what type? MI: I learned a lot of lessons from the Great Recession and one of them is cash is king. I’ve positioned our firm to weather some pretty tough conditions, but we are in uncharted waters, so I’m looking at all my options. We set up a fairly large LOC last year, when we didn’t need it; that’s an option (but I hate debt). I am also looking into the SBA 7a loan. The pros seem to outweigh the cons, but I don’t know all the details at this time. “I’ve positioned our firm to weather some pretty tough conditions, but we are in uncharted waters, so I’m looking at all my options.” TZL: They say failure is a great teacher. What’s the biggest lesson you’ve had to learn the hard way? MI: I’m sure a lot of firms that went through the Great Recession would admit the same thing, but we were not diversified well enough in 2008-2009. I’m not letting that happen again. TZL: Research shows that PMs are overworked, understaffed, and that many firms do not have formal training programs for PMs. What is your firm doing to support its PMs? MI: In addition to sending folks at all levels to external training, we started Ramey Kemp Academy 1.0 and 2.0 a few years ago. RKA 1.0 is mostly for folks in the two to five year experience range to learn soft skills such as how to be a great person and teammate. They focus on communication skills, personal and financial management, etc. RKA 2.0 is mostly for folks in the five to 10 year experience range (rookie and veteran PMs) to learn how to be great leaders and managers, but they also focus on being a great person as well, which includes making sure they have a good work/life balance. TZL: How are you staying in touch with your clients during the COVID-19 pandemic? MI: We sent out a communication-blast like just about every other firm on the planet letting our clients know we had their back during this crisis, but I had to overcome my reluctance to do this. We have our clients’ backs anyway so why is this situation any different? Since proactive communication is critical during this time, we’re asking

THE ZWEIG LETTER April 13, 2020, ISSUE 1340

O P I N I O N

In these uncharted times, we run the risk of only thinking about the immediate and not about where we are going to be three months, six months, or a year from now. Don’t forget the forest for the trees

F or the last several weeks we have been attempting to chart our course through some very rough seas for which there is limited prior experience and data to inform our decisions. As we are continually bombarded with ever increasing dire news, we run the risk of only thinking about the immediate and not where we are going to be three months, six months, or a year from now. In no way am I diminishing the harsh work-life environment in which we now operate, but we must also acknowledge that the world is not stopping, and, as the adage goes, this too shall pass.

Stephen Lucy

In early March, we decided to begin working remotely, closing our six offices in Texas well before stay-at-home orders. The decision was based on our preparedness to serve our clients and our focus on keeping our employees and their families safe and healthy. In the process, as CEO, I have reflected on numerous actions that are vital to keeping business running smoothly, among these: ❚ ❚ Be a leader. Many of the greatest leaders in history were molded through the challenges that they faced and overcame. There is no denying the challenges we have and are facing, but we must step into those challenges as we cannot abdicate our role in leading

our firms. The challenges are not going away, so unless you step aside and let someone else fill the void, be a leader and take responsibility. ❚ ❚ Communicate often. Our industry is not known for being populated by great communicators, but now is the time to actively engage with our staff. They are looking for information and for leadership to provide that information. Be it good or bad, they deserve to be informed as they depend on firm leadership just as much as firm leadership depends on them. The simple act of caring enough to engage and be empathetic to their issues speaks volumes about the value you place on your most

See STEPHEN LUCY, page 10

THE ZWEIG LETTER April 13, 2020, ISSUE 1340

4/2/2020 TREND: RESPONSE TO COVID-19 PANDEMIC WEEK-TO-WEEK

As participation increases, each question will be analyzed on a week-to-week basis to reflect the fluidity of the situation.

IMPACT ON TRAVEL POLICIES

Week 1 Week 2/3 Week 4/5

54% 7% 23%

32% 46%

25% 50%

7% 4% 7% 4%

8% 1% 7%

6% 13% 6%

IMPACT ON BUDGET

Week 1 Week 2/3 Week 4/5

My firm is considering changes to the 2020 budget No changes have been made to my firm's 2020 budget and none are currently planned My firm has altered the 2020 budget due to COVID-19

46% 50%

64% 23%

44% 25%

13%

31%

IMPACT ON REVENUE

Week 1 Week 2/3 Week 4/5

59%

75%

88%

41%

21% 4%

13%

STEPHEN LUCY, from page 9 IMPACT ON CLIENT ENTERTAINMENT & NETWORKING Data is from the April 3, 2020 report with 175 respondents.

Week 1 Week 2/3 Week 4/5

for a pandemic was not a realistic expectation, but planning for remote work was very realistic for a variety of reasons. ❚ ❚ Don’t slash your overhead. No matter how tempting it may be, do not decimate your overhead positions. You still have to invoice, you still have to provide human resources, and you still have to market the firm. Some can be outsourced, but hopefully you were already doing that if warranted. You cannot afford to cripple your ability to be in business, and, if your team members have any “down time,” suggest ways that you can improve processes, identify new business strategies, and “bank” future marketing plans that will raise your firm’s visibility post-pandemic. ❚ ❚ Never forget history. I thought I had faced some of the hardest challenges in my career: the S&L debacle, 9/11, the Great Recession, and a contentious ownership transition. Tackling those business events with persistence and a fair and steady hand may pale in comparison to the invisible challenge we are currently facing. The COVID-19 pandemic has roared through our world in a way not seen before as we are far more interdependent regionally, nationally, and globally. We have much to improve to better serve our communities in a crisis of this magnitude. The strength of our collective human will and our ability to invent and innovate will undoubtedly help us forge ahead. This is the part of the “this too shall pass” that so many of us forget. As we emerge from this daunting experience, we need to remember that those who do not learn from history are doomed to repeat it. We cannot afford to go through another catastrophic event or anything similar again. Nor can we forget the lessons learned that have been paid for at such a tremendous human price. STEPHEN LUCY is CEO of JQ with offices in Austin, Dallas, Fort Worth, Houston, Lubbock, and San Antonio, Texas. Contact him at slucy@ jqeng.com. 1/1 3% 1% 13% 61% 9% 27% 1% 1% 30% 54% 6% 7% 4% 38% 56% 6% Week 1 Week 2/3 Week 4/5 59% 18% 8% 8% 6% 81% 6% 6% 6% Week 1 Week 2/3 Week 4/5 54% 28% 8% 7% 35% 33% 20% 11% 13% 38% 13% 25%

important and irreplaceable asset, your staff. Odds are staff will reciprocate and their input will also help guide the firm. Encourage conversation and feedback. ❚ ❚ Change how you work. Mandated working remotely will forever change our industry. For all those who dismissed flex time and work from home, you have now had to face the cold hard facts that it is possible, and, in fact, seamless if you provide the correct infrastructure, set the right policies, create My firm supports the decision of employees to refrain from public networking but h s not issued a formal policy My firm has mandated th t employees refrain from entertaining clients in social public settings (restaurants/bars/events) No change Other My firm is considering asking employees to refrain from entertaining clients in social public settings (restaurants/bars/event )

the right metrics for oversight, and trust in your staff to conscientiously do their jobs. Now that we have been forced to incorporate this into our work process, there is no turning back. So, get out in front of it and determine how you are going to do this going forward. “For the last several weeks we have been attempting to chart our course through some very rough seas for which there is limited prior experience and data to inform our decisions.” IMPACT ON DISCRETIONARY SPENDING IMPACT ON TELECOMMUTING

COVID-19 has changed my firm's policy on telecommuting to allow any employee to telecommute at any time. COVID-19 has changed my firm's policy on telecommuting to allow only certain employees to telecommute currently. My firm allows for t lecommuting for certain employees a d has not changed its policies in response to COVID-19. My firm allows for any employees to telecommute at any time and has not changed its policies in response to COVID-19. My firm does not allow for telecommuting and has not changed its policies in response to COVID-19. 15% 18% 28% 24% 15%

❚ ❚ Invest in your firm. For those who gave up near term profit to invest in their firms and, especially, the IT systems of their firms, my hat is off to you for doing the right thing. The data backs up that investing in a growing and thriving AEC firm will pay long-term dividends, but so many want the immediacy of the reward at the cost of their long-term fortune. Hearing from peer and client firms how they were hindered because of lack of investment in IT infrastructure was shocking. And trying to adjust during a crisis is almost impossible to do. I understand that anticipating and planning N changes have been mad to my firm's 2020 discretionary spending and none are currently planned My firm is considering devoting discretionary spending to challenges created by COVID-19 My firm has suspended all discretionary spending My firm has devoted discretionary spending to challenges created by COVID-19 Other

THE ZWEIG LETTER April 13, 2020, ISSUE 1340

O P I N I O N

The brand as a leader

Exceptional brand leadership is a must for a firm to be exceptional in today’s challenging business environment.

T hose who lead and manage service firms recognize there are key individual leadership competencies required to support a firm’s overall success. These skills are well documented in business literature and successful leaders possess a solid understanding of what they are and how to implement them. Knowing this … what about a firm’s brand? Can a brand itself help lead? The short answer is yes: Exceptional brand leadership is a must for a firm to be exceptional in today’s challenging business environment.

Scott LeClair

Let’s start with a review of some top, well accepted, classic leadership principles that are core to a leader’s success: 1) A leader brings people together to strive for a common goal/purpose. 2) Leaders facilitate the concept of a “whole” being larger than the sum of its parts. 3) Top leaders model excellence and inspire excellence in those around them. 4) A solid leader is persistent and passionate. 5) Good leaders draw out the strengths of their team members.

6) Successful leaders listen closely to understand ultimate meaning. 7)The best leaders provide clarity within complex, cloudy, environments. 8) A lasting leader has unwavering integrity and can be fully trusted. In today’s world, application of these leadership competencies is unquestionably demanding. Leaders face several factors, often working in unison, that complicate and challenge

See SCOTT LECLAIR, page 12

THE ZWEIG LETTER April 13, 2020, ISSUE 1340

ON THE MOVE KPS GROUP, INC. ANNOUNCES LEADERSHIP CHANGES Birmingham-based KPS Group, Inc. , one of Alabama’s largest architecture and design firms, has announced leadership changes. Donald Simpson, AIA has been elected president of the firm and Hugh Thornton, AIA has been named chairman of the board. Graduates of the Auburn University School of Architecture, both have spent their careers at KPS and have long been principals of the firm. This transition to the firm’s third generation of leadership since its founding in 1965

represents continuity and stability across all practice areas of the firm and is a continuing commitment to its clients, its employees, and the values that have contributed to its success. Other key leaders of the firm are board members Donna Dowling, IIDA, director of interiors and Kristine Harding, FAIA, managing principal of the Huntsville office. Gray Plosser, FAIA, has stepped down from the role of president and CEO that he has held since 1984, and continues his professional practice at KPS in a new role as senior principal.

Headquartered in Birmingham, Alabama, with offices in Huntsville and Atlanta, KPS Group provides architecture, interior design, and planning services across the southeast region. KPS Group continues to evolve practice specialties in the design of corporate and commercial, education, housing and hospitality, healthcare, aviation, cultural, and institutional facilities as well as community and urban planning. KPS is a leader in the design of environmentally sustainable buildings.

SCOTT LECLAIR, from page 11

all to take on the responsibility of developing solutions to challenges we and our clients face. 4)A solid leader is persistent and passionate. In addition to the core value of being resourceful and continually improving our knowledge base and processes, our strategic vision includes passionate language focusing our teams to be nimble and high-performing – always learning and growing. 5)Good leaders draw out the strengths of their team members. The F&T “Respectful” brand core value requires embracing all team members’ (internal and external) unique talents and a focus on the success of others – our employees, clients, vendors, and the public. 6)Successful leaders listen closely to understand ultimate meaning. The F&T brand explains the real meaning behind our service to our clients. We engineer facilities and infrastructure that promote wellness and keep patients, students, and staff safe. Our service is ultimately in support of what our clients tell us their real mission is. 7)The best leaders provide clarity within complex, cloudy, environments. The F&T brand simplifies our internal and external strategies into five easy to understand pillars: Learning & Growth, Clients, Operations, Marketing & Branding, and Financial. All service strategies are evaluated and measured against the five pillars to ensure clear alignment with the overall brand strategy. 8)A lasting leader has unwavering integrity and can be fully trusted. The F&T “Respectful” brand core value demands honest and ethical behavior while interacting with an open mind, focused on the success of others. Our “Reliable” brand core value also directs us to make clear requests of each other, be dependable in our commitments, and be a trusted resource to our client and peers. After reviewing our brand against the leadership principles presented above, I was pleased to discover we have some strong leadership fundamentals. There are surely many more classical and contemporary leadership principles that could be further synergized into our brand and strengthen it further – this will be my next step. I encourage all firm leaders to review their brand components through a leadership lens and see where you too can strengthen your brand’s leadership potential. SCOTT LECLAIR, P.E., is a principal and executive vice president at Fitzemeyer & Tocci, a full service MEP firm specializing in healthcare, higher education, and commissioning. F&T provides leadership in engineering consulting through our focus on sustainability, systems integration, and our principal-led, multi-disciplinary project teams. Contact him at sleclair@f-t.com.

their efforts. For example, strong polarization from contemporary political and economic forces produces competing interests and works directly against efforts to drive toward a common goal/purpose. The typically wide generational constituency of people in today’s service firms, increasing focus on work-life balance, and complexity rising from global information access, are also common factors today’s leaders must confront. A firm’s brand has many aspects, but at its core a brand creates a perception of what your firm is, both inside the company and to the outside world. To be effective your brand must be grounded in your culture, your leaders exemplify it, and internal and external communication align with it. When properly cultivated a brand effectively distinguishes you from other firms and can be leveraged for firm growth. Just like people in leadership roles, a firm’s brand must exhibit strong principles of leadership for a firm to be truly exceptional. The most successful firms recognize this and work on their brand’s leadership abilities. In building a brand, firms typically first look to their mission, core values, vision, and business strategies for direction. Accordingly, these foundational firm components are the first place to review for your brand’s leadership competencies. As a case study, let’s examine how each of the leadership principles above manifests in Fitzemeyer & Tocci’s brand. 1)A leader brings people together to strive for a common goal/purpose. The F&T mission includes the aspiration to be “The Owner’s Engineer” with a goal of providing thoughtful, practical engineering leadership. This goal is a rallying concept for internal firm members and specifically includes our ultimate client (owners) for a true common purpose. 2)Leaders facilitate the concept of a “whole” being larger than the sum of its parts. The focus of the F&T brand on health and science specialties drives deep understanding and experience with a large body of client work. The depth of this knowledge can then be leveraged to transfer what we have learned to benefit each individual client we work with. 3)Top leaders model excellence and inspire excellence in those around them. Our “Resourceful” brand core value requires working with enthusiasm and intellect, driven by a culture of continuous improvement to surpass what has already been achieved. Our brand specifically inspires

THE ZWEIG LETTER April 13, 2020, ISSUE 1340

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