TZL 1456 (web)

The PDF edition of The Zweig Letter.

September 12, 2022, Issue 1456 WWW.ZWEIGGROUP.COM


M&A transactions

Some of the best practices that the most experienced buyers in our industry employ to get deals across the finish line. A polished M&A team

T oday’s M&A landscape in the AEC industry is as competitive as it has ever been. With 346 transactions closed within the industry in 2019, 377 in 2020, and 577 in 2021, acquisitions are now being seen as one of the main levers that executives can pull to grow their firm or enhance its competitive position. An increasing number of leadership teams are considering pulling said lever. This means there are more buyers competing for a finite number of acquisition candidates, and it is becoming more important that firms find ways to make themselves stand out from the competition if they intend to be seriously considered as a potential suitor of a target firm. If a buyer feels that a target firm has a promising outlook or would be a strong addition to the company’s culture and operations, odds are they’re not the only one who is interested. Having worked on more than a dozen buy- and sell-side deals specific to the AEC industry, I’ve noticed the proper execution of the following items is what differentiates successful buyers in the industry from those who struggle to get a deal across the finish line: 1. Lean and mean deal team. The smaller your internal deal team is, the better. Personally, I have worked on deals in which the buy-side of the table has far too many “cooks in the kitchen,” and this often greatly inhibits their ability to make quick go/no-go decisions. Again, the buyer needs to assume that it is not the only firm trying to court its acquisition target. If the firm is unable to quickly assess and express interest in moving forward with a target, this indicates a lack of serious interest on your part and increases the chance that they will want to move forward with another buyer that was able to quickly give the green light. Ideally, the buyer should have one or two decision-makers that can field introduction calls and initially assess whether an opportunity is worth exploring further. Buyers can always invite additional team members to the discussion as they conduct due diligence and verify assumptions that were made previously but should not bog down the initial decision-making process more than is absolutely essential. 2. Key external deal team members are on standby. If you need to hire external support to supplement the internal deal-team (legal, accounting, M&A advisors), it is important that these parties are on standby and ready to go before reaching out to any acquisition candidates. Firms need to come to the table prepared and, at the

According to data gathered from Zweig Group’s M&A survey, the AEC industry saw fairly consistent M&A activity from 2014-2020, before experiencing a surge in transactions in 2021, both in the U.S. and internationally. Participate in a survey and save 50 percent on the final or pre- publication price of any Zweig Group research publication.

Andy Chavez, CM&AA

FIRM INDEX Balfour Beatty..........................................................4

Bowman Consulting Group Ltd...............12

McMahon Associates, Inc.............................12

Orcutt | Winslow....................................................6

PK Electrical, Inc....................................................4

MORE ARTICLES n LINDA SCHULTE: Are you a manager or a leader? Page 3 n Matchmaker: Neil Terry Page 6 n MARK HODGES: 2032 looks back at 2022 Page 9 n MARK ZWEIG: Persistence pays off Page 11

See ANDY CHAVEZ, page 2



Chad Clinehens | Publisher Sara Parkman | Senior Editor & Designer Shirley Che | Contributing Editor

Liisa Andreassen | Correspondent Tel: 800-466-6275 Fax: 800-842-1560 Email: Online: Twitter: Facebook: Group-1030428053722402

Published continuously since 1992 by Zweig Group, Fayetteville, Arkansas, USA. ISSN 1068-1310. Issued weekly (48 issues/year). Free electronic subscription at zweiggroup. com © Copyright 2022, Zweig Group. All rights reserved.

PO Box 1528 Fayetteville, AR 72702

differentiate themselves and come to the table with one or all the following: † † Information on previous closings and tangible results. They will often provide revenue figures of their previous acquisition partners before and after the merger to display tangible results that come from partnering with them. They will also invite founders and executives from their previous acquisitions to the conversation to discuss any considerations that should be addressed when exploring the opportunity. If your firm doesn’t have acquisition experience, you can show revenue figures that display the promising trajectory your firm is currently on. † † An understanding of how both firms can make “1+1=3.” How can the personnel, disciplines, finances, operations, etc., of the buyer complement those of the seller in a way that allows both firms to be more competitive together than they were individually. Can your firm offer certain services in-house that the target is currently subbing out? Do you have established recruiting channels or refined onboarding processes that can help them acquire talent that would have been unavailable to them otherwise? † † The right tone. Often, less experienced buyers will find themselves spitting off questions to their target as if it is an interview. Remember you’re the one who reached out and asked to have this discussion, and this means that it’s on you to sell the opportunity to the target. Absolutely do what probing you need to do in order to determine whether or not this is the right fit for your firm’s goals, but make sure that a fair amount of time is spent pitching your firm and the opportunity at hand. The target should leave the conversation excited for the next, and a potential next chapter for their firm, not wondering whether or not their answers satisfied you. This list is certainly not all-encompassing, but these are some of the main habits and characteristics I’ve picked up on while working with some of our industry’s more experienced buyers. Click here to learn more about Zweig Group’s M&A advisory services. Andy Chavez, CM&AA is an advisor within Zweig Group’s M&A advisory services team. Contact him at achavez@zweiggroup. com .

ANDY CHAVEZ, from page 1

very least, give the illusion of experience. Time is of the essence in M&A deals, and if the buyer must slow down a conversation or put it on hold for several weeks while finding legal support or any form of outside counsel, this is only inviting the potential for cold feet and putting a potential lack of experience on display. If intending to seriously pursue acquisitions as a growth strategy, make sure to have your roster set before hitting the field. 3. General responsiveness and networking capabilities. Everyone is busy and feels like they hardly have time to respond to M&A opportunities. If a firm is serious about acquiring, they should be responding to every M&A sell- side opportunity received. Even if many opportunities are not a viable option for the firm’s strategy, they should take the time to refine the M&A advisor’s understanding of what they are looking for, so they are able to vet for better suited opportunities moving forward. Eventually, the buyer will have a network of professionals who know what they’re looking for and will happily send strong candidates for consideration. Take the time to network and allow these people to work for you. 4. Clear growth strategy and acquisition criteria. I have had the opportunity to work with many of the AEC industry’s most experienced buyers, and they always come to the table knowing exactly what they are looking for in an acquisition partner. They know what fits their strategy in terms of margin, geographic location, client type, and disciplines offered. These firms often leave an introductory call knowing whether there is a strategic fit that is worth exploring further. Less experienced buyers will often find themselves trying to rationalize how they can make an acquisition work, while experienced buyers are able to determine whether a candidate fits within their established strategy. 5. Unique value proposition. Experienced and successful buyers know how to entice the leadership teams of acquisition candidates with a value proposition that piques the target’s interest. If the target is entertaining the idea of merging with your firm, there is a strong chance they’re fielding interest from several other buyers. You can bet these other buyers also “prioritize company culture” and “offer competitive multiples and a flexible work-life balance post-close.” Experienced buyers know how to

PROJECT MANAGEMENT FOR AEC PROFESSIONALS Attendees will learn how to identify and track key project data, learn how to structure key project interactions to get the right information to the right people at the right time, and will learn the key interpersonal behaviors that build successful teams, and will leave armed with a process framework that can be quickly and easily adapted to their individual firms so that they can immediately begin driving greater project value. Click here to learn more!

© Copyright 2022. Zweig Group. All rights reserved.




Are you a manager or a leader?

T he textbook definition of a project manager is “a professional in the field of project management whose responsibility is to lead the work of a team to achieve project goals and execute a project successfully by monitoring given constraints such as defined scope, schedule, and budget.” When your team views you as a leader and not just a manager, they will work much harder and be willing to go the extra mile when necessary.

Linda Schulte, PMP

Project management is a technical role that requires a project manager to have industry competency as well as strong organizational, planning, and leadership skills. An effective project manager must be focused on deadlines and prioritizing tasks while simultaneously managing team members both individually and as a collective group. Project management is also a role that requires soft skills including emotional intelligence, self-confidence, adaptability, decision making, problem solving, collaboration, communication, empathy, time management, assertiveness, and creativity. In the AEC industry, engineers are stereotypically known to possess type-A personalities. They are methodical in their work, strong problem solvers, and reliant on facts. Data driven analysis and calculations are very important for an engineer to be successful.

Project managers must remain involved in the technical “nuts and bolts” of the project alongside the engineers while concurrently focusing on the bigger picture. It is imperative to understand how engineers gather and process information and to develop strategies that play to their strengths to move the project forward and deliver a successful outcome. Engineers value accuracy and specific details, so pretending to know what you don’t know and being unable to admit weakness is a quick way to lose respect and trust amongst the team. Tough, awkward, or sensitive conversations with clients or coworkers are also typically not a strong suit of an engineer, meaning that they may prefer to rely on the soft skills of a project manager in such situations. Taking on the nontechnical duties of the project can also be a




ON THE MOVE BALFOUR BEATTY’S US OPERATIONS HIRES MARLA STORM AS SENIOR VICE PRESIDENT & CHIEF HUMAN RESOURCES OFFICER Balfour Beatty has announce the hiring of Marla Storm as the company’s new senior vice president and chief human resources officer for its Buildings, Civils and Investments operations in the U.S. This role will oversee the development and execution of the company’s people strategy and practice, including compensation, benefits, recruiting, training, talent development, and DEI efforts. Based out of the company’s headquarters in Dallas, Texas, Storm will work in close coordination with senior leadership with an emphasis on ensuring policies and initiatives are aligned within its three U.S. business lines. Marla will also be a member of Balfour Beatty’s U.S. executive leadership team where she will join the growing list of

women in the highest levels of leadership who manage companywide functions. “We are excited to welcome Marla to the Balfour Beatty team,” said Eric Stenman, Balfour Beatty U.S. president. “The newly consolidated chief human resources officer role emphasizes Balfour Beatty’s people-first commitment to our teammates across our organization and advances our company’s responsibilities in managing human resources at a shared service level. Marla will continue to build upon our strong human resources structure and policies that supports the connection between the field and the office employees, and elevate our recruiting, talent management and diversity, equity and inclusion initiatives in each of our business lines. We look forward to her leadership and passion for building and developing teams of Relentless Allies as we strive to be an employer of choice and trusted project partner in our communities.”

Storm has more than 20 years of experience in human resources with expertise in aligning human resource strategic direction and long-term goals with overall business strategy. Prior to joining Balfour Beatty, Storm led human resources for Boeing’s Parts and Distribution Services and Global Services Supply Chain segments with operations in more than 300 locations spanning 70 countries. She managed a team of global human resource professionals in developing and implementing workforce initiatives to support employees and help deliver business objectives. In addition to her tenure at Boeing, she has held various human resources leadership roles for nine years at McKesson Corporation. Storm has a bachelor’s degree in business administration from Drury University in Springfield, Missouri, and an MBA from Baylor University.

a proper hand-off and setting each other up for success. Our goal is to help our clients achieve their visions by delivering a project that is on schedule and budget, but we also place a high priority on growing and mentoring our team members. Our firm practices servant leadership, which involves project managers putting the needs of the team before their own. By fostering working relationships with each team member and understanding specific goals, it not only benefits the individual, but the firm and project outcome as well. In addition to internal relationships, external relationships are vital to our success in the AEC industry. The PK Electrical team is known not only for our high-quality designs and excellent client service, but also our culture based on teamwork and fun. The ultimate goal as the project manager to is ensure we maintain a positive relationship with clients and protect our reputation of being a responsive, professional, and trusted partner. We all know that one project and even one employee can make or break a partnership and have lasting effects, reaffirming the importance of the project manager remaining engaged and motivated from project start to finish. One of the most rewarding aspects of leading an engineering team is the opportunity to influence the growth and efficacy of the firm while helping clients achieve their visions. Project managers need to be dynamic and well-equipped with both soft and hard skills to function effectively and cultivate the support of their team. Leading a team of engineers is a continual learning process. You should celebrate the wins of your team and also be agile enough to pivot when things are out of alignment. Using these tips can help transform you from a manager to a leader and help to foster a thriving team of engineers. Linda Schulte, PMP, is a project manager at PK Electrical, Inc. Connect with her on LinkedIn .

LINDA SCHULTE, from page 3

great way to build rapport and prove your commitment to the team. Lastly, providing feedback in a safe and discrete manner is often desired by engineers as they generally take great pride in being an expert in their field. Avoid micromanaging for that same reason. Asking for regular feedback from your team is another method to improve your management skills and show humility. We can all agree that the best managers aren’t managers, they are leaders. Managers exercise power and authority to control a group of people to accomplish a certain goal. Leaders influence, inspire, and empower others to contribute to the team’s success. When the team views you as a leader and not just a manager, they will work much harder and be willing to go the extra mile when necessary. “Leading a team of engineers is a continual learning process. You should celebrate the wins of your team and also be agile enough to pivot when things are out of alignment.” As much as the role of “project management” implies that the responsibilities of a project manager are solely project related, it could be argued that a more accurate title would be “people management.” At PK Electrical, we recognize that a project team can only be effective and cohesive when all members are actively contributing and communicating. To ensure that each person is properly supported and empowered to perform their role, we strive to focus on the needs and strengths of each individual team member and avoid using a blanket management style. Our management team also routinely trains and coaches employees on the importance of

© Copyright 2022. Zweig Group. All rights reserved.




Matchmaker: Neil Terry Partner at Orcutt | Winslow (Phoenix, AZ), a design firm that aspires to positively disrupt architecture through innovation, experimentation, and invention.


A s partner at Orcutt | Winslow, Terry has helped to develop a strong customer-focused environment with an emphasis on developing trends in design. He found his pathway to architecture through his love of general and technical design work. He takes a hands-on approach with his team to deliver personalized service to clients and works to build relationships with people in the communities they serve. “Hire the right people and give them the tools they need and get out of their way,” Terry says. “Being a good matchmaker helps too. Pair the right people with the right position. I really enjoy doing what I do.” A CONVERSATION WITH NEIL TERRY. The Zweig Letter: Your bio says that “as partner at Orcutt | Winslow , you’ve helped to develop a strong customer- focused environment with an emphasis on developing trends in design.” Tell me about a recent design trend. How did it evolve? What is it? Neil Terry: There’s been funding from the federal VA for a

new type of VA community. As a result, we’re doing a lot with veteran homes with the small house/greenhouse concept at the core of the design. It’s a concept that combines households and community areas. It reduces operational cost and increases efficiency. With a centralized community center, veterans live within neighborhoods that are subdivided into household wings. Residents have private bedrooms and bathrooms and each household has dedicated dining, kitchen, den, sitting lounges, living and outdoor patio areas so people can build community and join in activity at every level. Building materials complement existing area architecture and gardens are designed throughout to form a connection to nature and purpose with shaded seating areas, gathering areas, paths for walking, gardens, benches, and café tables. We also recently won a project in southern Utah for a planned community for a manufacturing company. Since rent has gone crazy, companies are having trouble finding staff who can afford to live near where they work. The community is designed for the company’s workers and includes things like a town square where staff can live, work, and play. We’ve also



been approached by schools to do similar housing plans for their teachers. TZL: Your firm has experienced fast growth. What’s been the greatest challenge here and how have you met it? NT: Acquisition integration. It’s a challenge in all areas from processes and cultures to geographic locations. We don’t want to turn into a large corporation. When we acquire a new office, we try to get someone who has been with the company for some time to relocate to that office in order to help speed integration. “Hire the right people and give them the tools they need and get out of their way. Being a good matchmaker helps too. Pair the right people with the right position. I really enjoy doing what I do.” TZL: Trust is essential. How do you earn the trust of your clients? NT: Being authentic and interested are the most important. You also need to make it about the client – not about yourself. Be up- front and work to solve problems together. TZL: What role does your family play in your career? Are work and family separate, or is there overlap? NT: We are a firm that focuses on family events at work. We also send packets out to staff spouses on Valentine’s Day thanking them for their patience, etc. On Father’s Day we send out six-packs of beer, in addition to other small tokens of appreciation throughout the year. TZL: Your professional focus is on thought leadership in healthcare, senior living, and working in Native American communities. How do you think these sectors will change over say the next 10 years? I know you don’t have a crystal ball, but in your opinion, what’s going to be different compared to how these communities function today? NT: There are more and more casinos being added to support Native American communities. When thinking about senior living, COVID was not kind to these communities. People started wondering if these settings were actually safe and healthy due to the spread of COVID and isolation. Are these good places to be during a pandemic? We’re working on ways to mitigate that

and coming up with ways for residents to communicate and be safe without having to be so isolated. COVID was a wake-up call that we have to do better. TZL: What skills are required to run a successful practice? What do you wish you knew starting out that you know now? NT: People skills and a willingness to do whatever it takes to get the job done. You have to be willing to step forward and not wait for an assignment. “It’s not my job” has no place. I picked up many of these skills as I grew in my career. When the other managing partner and I took over in 2008, I thought, “OK. What now?” I worked on my business development skills and set expectations to a reasonable level. You’re likely not going to close a deal over one lunch. TZL: Your sustainability action plan is a work in progress. What updates have been made recently? Why? NT: A sustainability action plan should be an overarching goal for all. We’re constantly updating it with new programs and systems being offered in living buildings, working with the Green Building Council, and blending it all together into one healthy living concept with the end goal being a “well community.” The challenge has always been cost and then finding ways to convince companies/people that the cost outweighs the life cycle benefit. TZL: What type of leader do you consider yourself to be? NT: A gung-ho one! Hire the right people and give them the tools they need and get out of their way. Being a good matchmaker helps too. Pair the right people with the right position. I really enjoy doing what I do. “We’ve been very fortunate to have founding partners from 50 years ago who came up with a clear path forward to ensure longevity through a performance bonus system. A buy-in to ownership started in 1995.” TZL: As managing partner, take me through a “typical” day. Do you focus more on firm management or specific projects? NT: It really depends on the day. Business development is my top priority. I also follow-up See MATCHMAKER, page 8


Phoenix, AZ






■ ■ Education

■ ■ Healthcare

■ ■ Senior living

■ ■ Hospitality and


■ ■ Forensic architecture


■ ■ Architecture

■ ■ Design planning

■ ■ Interiors

■ ■ Creative services

© Copyright 2022. Zweig Group. All rights reserved.

EMBER 12, 2022, ISSUE 1456


Orcutt | Winslow’s Vi at Cavasson project, an upscale residential health care facility in Scottsdale, Arizona.

ownership started in 1995. Be careful about buying ownership when someone leaves as it changes structure. Having a vested interest helps. TZL: A firm’s longevity is valuable. What are you doing to encourage your staff to stick around? NT: Employee engagement. We stress that this is more than just a place to work. We have things like Good News Thursdays and Taco Tuesdays. We’ve had some people leave the firm, but they’ve come back because they miss the culture and camaraderie. We also have competitive salaries and benefits. programs and systems being offered in living buildings, working with the Green Building Council, and blending it all together into one healthy living concept with the end goal being a ‘well community.’” “A sustainability action plan should be an overarching goal for all. We’re constantly updating it with new

MATCHMAKER, from page 7

with teams to make sure all is running smoothly and check in with my partners to ensure our strategic goals are being met. Business management is not what I went to school for, so I continue to learn and really enjoy the project planning aspect. From time to time, I may layout some designs and ideas that help to drive a design forward. TZL: How are you balancing investment in the next generation – which is at an all-time high – with rewards for tenured staff? This has always been a challenge, but seems heightened as investments in development have increased. NT: When I first joined the firm there were still certain levels. You got paid more as you put in your time and rose through the ranks. The younger generation wants to know how to advance quickly. We follow the AIA’s system pretty closely where they identify different roles and levels. It holds their feet to the fire. 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? NT: We’ve been very fortunate to have founding partners from 50 years ago who came up with a clear path forward to ensure longevity through a performance bonus system. A buy-in to

© Copyright 2022. Zweig Group. All rights reserved.




2032 looks back at 2022

If you’re not taking a proactive approach to your firm’s cybersecurity, this could be the year you decide to go out of business without realizing it.

L et’s time travel for a bit. Assume for a while that time travel is commercially available. Now let’s jump ahead and see what the roadkill in the next 10 years will be in the AEC industry.

As we look back and compare firms that are still in business now (2032) versus back then (2022), we will find that most of the decisions that caused those firms to go out of business were not made in grand fashion. Few will be able to point to a seminal moment and say, “If they had just chosen ‘a’ instead of ‘b,’ they would still be around.” The failures we see in 2032 are not the result of a singular bad decision. Looking back, we will find that most of the failures were the result of a mindset rooted five to eight years prior to 2022. 2022 was a year where most businesses in the Midwest were still trying to live with their “doors unlocked” because “that’s just how we do business.” It was a year when most leaders walked around with an intentional de-emphasis on any type of cybersecurity threat. It was a year when IT spend was still viewed

as an expense and not an investment. It was a year when most leaders or founders of any given firm were convinced they had a shield around them that protected them from cyber criminals because “they don’t even know we exist.” Boy were they wrong. Looking back, we see that 2022 was the year things changed. It was the year that business leaders and firm owners learned at least three important lessons the hard way: 1. Being unknown or small does not equal safe. Most businesses that went out of business between 2022 and 2032 did so as the result of the flawed thinking that being unknown provided

Mark Hodges

See MARK HODGES, page 10



2. The “IT person” you hired may be great at networking, but are they great at cybersecurity? IT as a function has grown a lot of different disciplines – so saying “we’ll hire an IT person to handle it” sounds about as silly as building a hospital and saying “we’ll hire a doctor.” 3. Cybercrime is exponential not incremental. This is where most long-time business leaders have trouble computing the reality of today’s world. We often think of crime as linear: one person can break into one thing at a time. Cybercrime is exponential: one person can break into thousands of places at one time, drain all their data or funds, and have it all routed to places you cannot find within milliseconds. “When your people click the wrong link, or wire money to what looks like a perfectly legitimate bank account, your asset becomes your liability.” 4. The greatest threat is your greatest asset – your people. We all know people make the difference. Finding and keeping good employees is a strategic advantage – but few if any AEC companies are asking questions during interviews to uncover if a candidate has any type of security mindset. When your people click the wrong link, or wire money to what looks like a perfectly legitimate bank account, your asset becomes your liability. Remember – people do not become more secure just because they come to work. 5. The price to secure your business is based on expertise, not your budget. Addressing the threat is all about mindset and accepting that you can no longer view IT and cybersecurity as an expense to be controlled and diminished over time. Smart firms will accept that this will be a long-term investment that will grow each year and be designed to protect strategic assets. Is your head spinning yet? You are not alone. Nobody wants running a business to be this way. It is digital Darwinism at its finest and it is something you will have to address with a plan. How will you start? Perhaps the best place to start is with a conversation. Edafio Technologies will be facilitating an educational breakout session at Zweig Group’s ElevateAEC Conference called “Naked and Afraid: That point when you realize your business really is a target for cybercrime.” This is a session designed to equip AEC business leaders with the start of a cybersecurity playbook you can build-out for your own business. We hope you will join us, because now is the time to make sure you are not one of the epitaphs we read in 2032. Mark Hodges is chief growth officer at Edafio Technology Partners. Contact him at

MARK HODGES, from page 9

a heat shield from cybercrime. Some firms went out of business early (2022-2024) because they were introduced to ransomware. They were locked out of all their files, and in some cases, client files were posted on the dark web (violating their nondisclosure agreements with their clients – who subsequently sued). For the early departures, the deaths were quick and painful. For those who were able to get some form of their files back, there was always the threat of the ransomware exploding again. (Incidentally, if you read the substance of No. 1 and are not quite sure what we’re talking about, you are at risk of being one of those early departures.) 2. Data is oil and has value. Those who went out of business over that 10-year period had another common misperception – they did not understand the value of data. As early as 2004, data was becoming the new “oil” of the economy. It had inherent value and increased in value the more it was refined. It became a bargaining chip of sorts. For the cyber criminals who were able to get into a firm’s systems, they were able to hold all the cards. They either took the data hostage, or in some cases they committed industrial theft and shared designs and intellectual property. Over time, some firms realized that they had been compromised for years with bad actors sifting through files and stealing valuable client data. Some cybercriminals even made money selling one firm’s designs and intellectual property to competing firms. 3. Underspending helped many firms save their way to the ash heap of history. Business leaders often get angry about any sort of IT spend. We are not sure why, but 2020-2022 were interesting years. Those were the years when business leaders gravitated toward a mindset borne from a false premise: If I can buy technology at BestBuy or Sam’s or Costco, why should I pay so much to have someone manage it? Looking back 10 years at 2022 and the years in-between, we have learned that saving money on hardware or software packages does nothing to develop strategy. It was during those years when most were happy if IT just worked. What they didn’t see is what eventually killed them. WELCOME BACK. Now, let’s travel back to present-day. What do you do? The stars are aligned for a lot of good AEC firms to go out of business in the next 10 years all because of an erroneous mindset. Will you do anything differently? Here is what you face in one quick list: 1. If you can afford your cybersecurity policy renewal this year, you will not be able to afford it next year (and it won’t be worth the money – your coverage will drop to a paltry amount). With that backstop gone, how will you operate? “The stars are aligned for a lot of good AEC firms to go out of business in the next 10 years all because of an erroneous mindset. Will you do anything differently?”

© Copyright 2022. Zweig Group. All rights reserved.




Persistence pays off

H iring key people still seems to be top of mind for everyone I talk to in the AEC business. But like anything else worth doing, it often takes time and a real commitment to get the people you want. Persistence pays off. Hiring often takes a lot of time and a real commitment to get the key people you want.

I experienced that firsthand early in my professional career. When I joined Carter & Burgess in their headquarters in Fort Worth back in 1985, it was the result of a recruitment process that had started 10 months earlier. Russell Laird, who had joined Carter & Burgess in their Houston office in 1983 or 1984, formerly worked for an AEC firm called 3D International. 3D International was a consulting client of mine going back to late 1980. They were best known for their high rise design work for clients in the Middle East. Russell was a senior vice president there in charge of engineering. That’s where he and I became acquainted with each other and became friends. I had left the firm I worked for in St. Louis and moved to Memphis in 1983, when I went to work for a company that at that time was called, Pickering Wooten Smith & Weiss (today it’s known just as the Pickering Firm after a name change in 1984). They,

too, were a client of mine at my former firm, and I had been recruited to work there as director of project development and human resources for Memphis and Little Rock by one of their named partners, Irving Weiss, who was at that time their COO. About four months after I landed at the Pickering Firm, I was promoted to director of project development and human resources for the entire company. Things were going well. Shortly after my promotion, I, along with a half dozen other younger and middle aged people, had a chance to buy stock in the firm because they had lost so much money due to their purchase of Intergraph CADD a few years earlier. I will never forget how we used it to design aluminum siding renovations of brick buildings for the Huntsville Division Corps of Engineers ($100 hammers, anyone?). I jumped at the chance, even though I had no idea about whether it would be a

Mark Zweig

See MARK ZWEIG, page 12



TRANSACTIONS BOWMAN EXPANDS TRANSPORTATION INFRASTRUCTURE SERVICES THROUGH ACQUISITION OF EAST COAST FIRM MCMAHON ASSOCIATES, INC. Bowman Consulting Group Ltd. announced that it closed on the acquisition of McMahon Associates, Inc., a company specializing in delivering a full range of innovative transportation planning and engineering services to private and public sector clients. Founded in 1976 and headquartered in Fort Washington, Pennsylvania, McMahon focuses on projects oriented to roads and bridges; traffic and parking; signals and ITS (intelligent transportation systems); community transportation; and public transit. The firm is comprised of over 200 dedicated professionals working out of fifteen offices located throughout New England, the Mid- Atlantic, and Florida. “McMahon is well respected throughout the transportation field and will be an outstanding addition to our firm,” said Gary Bowman, CEO of Bowman. “Their leadership and team of consummate professionals bring tremendous value to our staff, our clients, and our shareholders. As we have gotten to know McMahon’s business, we have become highly confident that this complementary

combination will have a long-term positive impact that will be much greater than the sum of the parts.” “The array of transportation services we can collectively provide our clients will continue to grow as client needs dictate, while we continue to deliver on our commitment to personalized attention on every project,” added Bowman. “The addition of McMahon will provide a broad platform from which to continue growing our share of the transportation market throughout the nation. We are just getting started on our 2022 acquisition program and I am pleased that we continue to deliver on our commitment to strategic growth in such a meaningful way. Everyone at Bowman joins me in welcoming the employees, clients, and business partners of McMahon.” “For over 45 years, McMahon has specialized in delivering forward-looking transportation, planning, engineering and technology solutions to our clients”, said Joseph DeSantis, president and CEO of McMahon. “By joining up with Bowman, we gain access to new resources and technologies that allow for an even greater investment in the delivery of innovative transportation solutions to our clients, while continuing

to offer the same personal attention and trusted relationships our clients have come to expect from us.” The acquisition is Bowman’s second of 2022 following the acquisition of Perry Engineering earlier this year. “This is a significant step toward our stated goal of acquiring $75 million of annualized net revenue this year,” said Bruce Labovitz, Bowman’s CFO. “The addition of McMahon nearly triples our transportation infrastructure business which will, over time, meaningfully impact our composition of revenue by market. While the acquisition is within our target multiple range, we believe McMahon’s operating margins will benefit from being part of Bowman and ultimately reduce the effective multiple. As is our practice, we will provide more detailed information on our M&A activities and communicate updates to guidance in connection with our upcoming earnings call.” Headquartered in Reston, Virginia, Bowman is an engineering services firm delivering infrastructure solutions to customers who own, develop, and maintain the built environment.

My point of this story is this: Had Russell Laird not decided in his mind that I was the guy they needed to hire and then kept at me over months and months, there is no way I would’ve even talked to Carter & Burgess, much less accepted an offer from them and moved to a new city. I was an owner in the company I worked for. We had a newer, five-bedroom, two- story colonial in a nice neighborhood with a community pool. My company car was a new Nissan Maxima. My then-wife had a good job working as a psychologist for the University of Tennessee Health Science Center. There was no reason to make a change. Yet I did. This was a lesson I never forgot. Later in my career, there were people I wanted to hire who I talked to for as long as five years before convincing them to come to work with me. Persistence pays off. Mark Zweig is Zweig Group’s chairman and founder. Contact him at “Later in my career, there were people I wanted to hire who I talked to for as long as five years before convincing them to come to work with me. Persistence pays off.”

MARK ZWEIG, from page 11

good investment or not. I was only 26, and if I were an owner, I would not only get a better company car, but my typing would get done a lot faster by the typing pool. That’s about the time I started getting calls from my old client and friend, Russell. Carter & Burgess was experiencing tremendous staff turnover. In 1983-1984, their turnover rate was a staggering 43.8 percent! While they had a personnel manager there by the name of Ken Pusey, he was overwhelmed. According to an ACEC peer review that they had gone through, they needed someone in charge of what was starting to be called “human resources management.” Every month or so I would get a call from Russell. He kept saying they really needed someone like me and they wanted to fly me to Fort Worth to talk to me. And every month, I told him things were going well, and that while I appreciated their interest, I just couldn’t do it. Needless to say, at some point, after one of Russell’s calls, I finally said “yes.” I don’t know if I had had a bad day or what prompted me to acquiesce, but I did. They sent me a plane ticket and I flew to Fort Worth and met with their board of directors. Some time after, they made me an offer I couldn’t refuse and I said “yes.” I took the job and we moved to Fort Worth.

© Copyright 2022. Zweig Group. All rights reserved.


Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12

Made with FlippingBook Annual report