TZL 1453 (web)

TRENDLINES Strategic planning as a challenge August 15, 2022, Issue 1453 WWW.ZWEIGGROUP.COM

Strategic planning is an incredibly deep and nuanced practice that every firm needs to consider. Strategy 101

In Zweig Group’s yet to be released 2022 Principals, Partners, & Owners Report , AEC firm principals rated how much of a challenge strategic planning is for their firm, on a scale of 1-5. In the graph above, responses are sorted by firms’ net service revenue range. Participate in a survey and save 50 percent on the final or pre- publication price of any Zweig Group research publication.

S trategic planning is an extraordinarily complex and integrated topic that requires analysis and consideration of individual and organizational psychology, psychographic, and social-technographic information in addition to KPIs and market data. It is a phenomenal effort of data analysis, many branches of study, and wide ranging implications. Perhaps, it is for this reason, or the fact that there are many types of planning – including business plans, marketing plans, business development plans, etc. – that many people find it confusing. In this article, I’ll attempt to give you a bit of strategy 101. Strategy is a set of goal-directed actions a firm can take to gain and maintain a sustainable competitive advantage. The competitive advantage being relative, it defines the differentiated practice/property where a firm can create value for its shareholders and stakeholders. Therefore, strategic planning is meant to provide the roadmap connecting a firm’s mission to its vision. It functions to provide clarity, direction, purpose, alignment, and clear messaging. Fundamentally, regardless of the framework or philosophy you follow, you want your strategic plan and process to accomplish a few things. While it may not be a comprehensive list, you want to drive transparency, ownership, adaptability, and alignment within a system that is consistently practiced and produces results. There are three basic phases or stages of the strategic planning process – research, design, and implementation. When thinking about these three stages, you can fundamentally say that research happens with as broad of a cross-section of stakeholders as possible, design occurs from the top down, and implementation happens from the bottom up. I’ll briefly describe each phase below: 1. Research. During this stage, you are looking for objective and subjective data that relates to the history and state of the firm today. At Zweig Group, we generally like to look through a minimum of four lenses within our analysis: the financial perspective, the employee experience perspective, the client experience perspective, and the operational (organizational structure, project management, HR, IT, marketing, etc.) perspective. Gathering this data may include surveys, benchmarking, modeling, interviews with key stakeholders, competitive research, defining growth vectors, and more. It is then compiled into a fact-based assessment of the firm to provide a common understanding of the

Phil Keil

FIRM INDEX 4Ward Land Surveying ...........................8

EYP..................................................................... 10

GRAEF .................................................................6

HFW Companies .........................................8

MORE ARTICLES n KRAIG KERN: Innovation is about more than technology Page 3 n Visionary: John Kissinger Page 6 n TIM SPENCE: Motivate employees for success Page 9 n MARK ZWEIG: Good to not so great Page 11

See PHIL KEIL, page 2

THE VOICE OF REASON FOR THE AEC INDUSTRY

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Chad Clinehens | Publisher cclinehens@zweiggroup.com Sara Parkman | Senior Editor & Designer sparkman@zweiggroup.com Shirley Che | Contributing Editor sche@zweiggroup.com

Liisa Andreassen | Correspondent landreassen@zweiggroup.com Tel: 800-466-6275 Fax: 800-842-1560 Email: info@zweiggroup.com Online: zweiggroup.com/blogs/news Twitter: twitter.com/zweigletter Facebook: facebook.com/Zweig- Group-1030428053722402

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articulation of a view of the world that your company and your people are working toward (just cause/ purpose), not what they are expected to do now. It is a vivid picture of where you are headed to motivate others to take that journey with you. † † Mission (potentially indefinite). This serves as a filter to determine what is important and communicate an intended sense of direction to the organization. Simply put, this is what the firm is doing to achieve the vision. † † Core values (potentially indefinite). A culture is defined by the values in action through behavior. Values are unwavering principals that infuse culture with purpose. † † Strategic objectives (duration of plan). Statements that indicate what is critical or important in your organizational strategy. † † Strategies (one or more years). The basic philosophies that guide us in critical business areas. † † Initiatives (about one year). What are we going to do? Specific programs, procedures, or policies. † † Actions (about 90 days). The specific steps taken to advance and complete the initiative. 3. Implementation. This is where the rubber meets the road. I’ll save an in-depth review of implementation for another article, but the importance shouldn’t be understated. If strategic plans are to fail, it generally isn’t in the design, but in execution. At a minimum you need to think about the tools, resources, and structure you have available to carry forward your plan. We generally recommend a minimum review cadence of monthly performance reviews, quarterly assessments (what is in the plan and what needs to be adapted), and a yearly strategy refresh. I hope this brief overview of strategic planning was a helpful introduction. It is an incredibly deep and potentially nuanced practice that every firm needs to consider. Zweig Group is here to help . Please reach out to any member of our team with additional questions or for help with your next strategic plan. Phil Keil is a principal and director of strategy services at Zweig Group. Contact him at pkeil@zweiggroup.com. This article originally appeared on The Flamingo Project.

PHIL KEIL , from page 1

firm’s platform for the future to every person who will be involved in the strategic planning design meetings. 2. Design. This stage traditionally consists of an off-site planning session with eight to 12 of the key stakeholders within the firm, although variable and virtual formats have recently been explored. The goal of this stage is to take into consideration the vast amount of data that was compiled in stage 1 and design the roadmap for the firm to achieve its goals/ambitions. The outcome of this stage must be an actionable plan that defines how your firm will drive purpose and performance. The first thing that must be agreed upon is the planning framework/hierarchy. There are tons of frameworks from OKR to EOS, but these are five of the best that I’ve run across: † † The balanced scorecard. Great for midsize to larger organizations that want to ensure their goals cover the main aspects of a successful business. † † The Ansoff matrix. Great for organizations that are about to embark on an aggressive growth strategy and need help defining their plan of attack. † † McKinsey’s strategic horizons. Great for organizations that have decided that innovation is a critical part of their strategy. † † Value disciplines. Great for organizations that are looking to fundamentally reposition themselves in the marketplace. † † The stakeholder model. Great for organizations where stakeholders are the core of what they do, such as non-profits. At Zweig Group, we leave the design stage with the following defined and built into an actionable plan that gives our clients the three- to five-year strategic plan, action items for the firm to progress in the next quarter, a communication plan for rollout, and an implementation plan. At the strategic objective level and below, each component has ownership, measurables, and timelines at a minimum. As you move down, each level is nested within and guided by what comes above it. † † Vision (potentially indefinite). The why. It is an

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THE ZWEIG LETTER AUGUST 15, 2022, ISSUE 1453

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OPINION

T he origin of the phrase “innovate or die” is often disputed. Though others may have shared similar expressions, Peter Drucker, the well-known management consultant, educator, and author, famously declared it. But regardless of who said it first, the sentiment is now widespread – stay ahead of the pace of change, or you could be out of business. Real innovation is about a shift in perspective to progress forward, not the latest gadget or software. Innovation is about more than technology

Kraig Kern, CPSM

The first thing most people think of when they hear the word innovation is technology. But meaningful innovation comes in many forms. Technology is certainly one way, but also marketing creativity, business processes, workflows, modern office spaces, employee engagement, and even mindfulness should all be part of the innovation conversation. Real innovation doesn’t rely on the latest gadget or software application to progress forward. Instead, innovation is a human-centered perspective and mindset. For example, I am always inspired by the story of how Skunk Works came to be and what it represents in terms of game-changing thinking. If you’ve never heard the story, the Skunk Works, conceived in 1943, became a think tank division of Lockheed Martin, where no idea was off the table, regardless of how eye-rolling or impractical

it seemed. They were given the mission to build America’s first fighter jet. German jets had appeared over Europe, and the U.S. and its allies needed a counterpunch. As with virtually all Skunk Works projects that followed, the mission was ultra- secretive, and the deadline was impossibly tight. The Skunk Works director promised the Pentagon they would have their prototype in 150 days. Their engineers turned one out in 143 days, creating the P-80 Shooting Star, a sleek, lightning-fast fighter that went on to win history’s first jet-versus-jet dogfight over Korea in 1950. Over the years, the Skunk Works division in Palmdale, California, was given a more official moniker, Lockheed Martin’s Advanced Development Programs, and went on to develop some of the most

See KRAIG KERN, page 4

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you’re trying to get across into a short narrative that will engage viewers in a way that text can’t. Today’s phones are capable of 4K stabilized video, and there are a plethora of editing tools that make any marketer’s job easier. You don’t need an expensive production studio. Turn those boring narratives into memorable video stories. ■ ■ Automate workflows. People around the office are getting tired of my latest mantra, “Let’s get out of spreadsheets and into the software.” The AEC industry sure does like Excel. It has its place, but there are so many better solutions than storing business development, project management, and human resources information in a spreadsheet. Take, for instance, the resource management module from Deltek’s Vantagepoint system. While not perfect, their resource management system allows our project managers to pre-plan all the hours and tasks for each person on their design team. It seems simple, but many of the PMs I talk with at other firms are still planning everything out on their own spreadsheet, making it impossible to communicate apples to apples when sharing work in another office. Imagine having a system where you can drag and drop personnel resources, and those same people will know exactly what they will be working on in advance each day. That same system also allows upper management to see via a color-coded heatmap where people are overloaded or underutilized and move the teams around where it makes sense. All it takes to develop such a system is buy-in from project managers and tough love for those who resist. ■ ■ Mindfulness at work. As I mentioned, technology is often defined as innovative. But technology is easy, the human part not so much. It is easier to understand technology than human behavior. During our most recent strategic planning retreat in 2021, we decided to spend a good portion of that time focusing internally rather than becoming the usual exercise around growth, sales, and SWOT analysis. One area we explored was mindfulness at work. For example, people who try to multitask are less effective than if they focus on one thing until it is done. This is where “mindfulness” comes in. People trained in mindfulness say they become more aware of how their own mind works. As most of us have experienced firsthand, stress and anxiety can significantly affect the mind and body. A study by the Kaiser Family Foundation found that more than 40 percent of American workers feel that the stress of the pandemic has negatively affected their mental health. Nowadays, staying calm and adapting to ever-changing circumstances with an open mind will be a competitive advantage. Additionally, a mindful workplace can be a powerful tool for recruiting purposes. If given a choice between a company that invests in its employees’ mental well-being and one that doesn’t, which would you choose? Our firm is becoming more intentional about increasing mindfulness at work. We strongly believe changes like these may lead to higher levels of commitment and increased engagement, helping to reduce costly turnover. Kraig Kern, CPSM is vice president and director of marketing at WK Dickson. Contact him at kckern@wkdickson.com.

KRAIG KERN , from page 3

innovative aircraft on the planet, including the U2, the world’s first dedicated spy plane; the SR-71 Blackbird, the world’s fastest and highest-flying crewed aircraft; and the F-117 Nighthawk, the world’s first stealth fighter jet. Today the name is a registered trademark of Lockheed Martin, and the Skunk Works facility has its own logo. The story’s point demonstrates that if you lock people in a room long enough, they can come up with unique ideas and solve impossible problems. Unfortunately, in the AEC industry, there are still a lot of processes and procedures we follow that are the same as they were many decades ago. Do they work? Yes, but do they advance the profession forward? Not really. If there is a silver lining to COVID-19, it’s that our businesses have had to adapt and evolve over the last three years at a faster pace than in the previous 50 years combined. As a result, many examples of AEC innovation have emerged, and we can all learn from them. “Our businesses have had to adapt and evolve over the last three years at a faster pace than in the previous 50 years combined. As a result, many examples of AEC innovation have emerged, and we can all learn from them.” Innovation doesn’t always have to cost money either. Sometimes it just means learning to get outside of one’s comfort zone, a significant change in attitude, or developing new habits. Wearing my marketing hat, I always try to think of the next best thing. I absolutely loathe the status quo and love to be disruptive in how we communicate. Innovation for our firm might be different from what your firm needs, but the goal remains the same: Make decisions that will progress the company forward – if not ahead of everyone else. I am proud to say we have made much innovative progress in recent years, but we should never be satisfied. Finding some challenge to overcome gets me out of bed each day and makes me eager to solve problems. There are dozens of innovative ideas we have implemented, but here are a few examples that have worked for us over the last couple of years: ■ ■ Focus on video. We left printed collateral (brochures) behind 10 years ago, but much of our marketing material was still locked up in text and bulleted list form. If you still rely on pages of text, consider this: According to new research, the average reading attention span in 2022 has shrunk to 8.5 seconds from 12 seconds in 2000. In fact, scientists postulate that humans have a shorter attention span than goldfish. Other studies show that viewers retain 95 percent of a video’s message compared to 10 percent when reading text. Also, according to Hubspot, 80 percent of customers remember a video they viewed in the past month. Videos allow you to package the information

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PROFILE

Visionary: John Kissinger President and CEO of GRAEF (Milwaukee, WI), an international multi-discipline engineering, planning, and design firm that was founded in 1961.

By LIISA ANDREASSEN Correspondent

G RAEF, a structural engineering company, is dedicated to aligning its culture and business practices to be a beacon of diversity, equity, inclusion, and belonging for all people. Dating back to 1961, GRAEF has continually grown its staff and capabilities through acquisitions, projects with a true client- focus, and an invigorating work environment. A STRONG FOCUS ON DEI. DEI is not new to GRAEF. It’s been a focus for the firm for a long time. But, John Kissinger, the company’s president and CEO, says that the murder of George Floyd in 2020 only deepened the firm’s commitment – one that’s active. They hired a consultant to help them create a path forward and to institute firm-wide unconscious bias training. They’re now just at the end of a two-year roadmap that continues to instill energy and change. Focus groups allow GRAEF to gain valuable knowledge by understanding the opinions of employees. The groups provide input on what GRAEF can do to improve and build a culture

of inclusion. Feedback from the focus groups helps shape leadership viewpoints to make firm-wide decisions that align with most employees. Some changes that have emerged include enacting a family leave program for either spouse and for adopted and natural parents alike. There’s also a plan to eliminate discrimination among the technical versus non-technical staff. “We learned that some of our non-technical staff felt they didn’t have access to the same types of growth opportunities that technical staff did,” Kissinger says. “We’re now looking at ways to develop stronger career paths in those tracks.” Other efforts include fireside chats where an informal group of people come together to share personal experiences, juxtaposed to their own. Each chat is hosted by a different person, creating unique and diverse conversation in each session. There are also hack-a-thons – where there’s a problem, a solution must be found. In these hack-a-thons, a

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diverse group of individuals work together to solve a problem and reimagine the way the firm does things. And, the GRAEF Foundation supports STEM-based careers and promotes diversity in a variety of different ways that include involvement with the ACE Mentor Program in Chicago. “I truly believe that if you’re inclusive, diversity and equity will follow,” Kissinger says. “We want people to be proud of where they work. Our core value is loyalty to employees.” SOME KEYS TO SUCCESS. Kissinger is part of the company’s third generation and says that their path toward the future includes not forgetting the humble beginnings from which they came. To meet that end, GRAEF holds immersion events where staff learn about the company’s past which has created a strong foundation and has led to a consensus-based leadership model. After 60 years in business, the company remains on a steady path to growth and is proud to be a national firm with a focus on each of its hometowns. “I attribute some of that success to having somewhat conservative financial management,” he says. “It’s important to not get over your ski tips.” As part of that philosophy, once a year, GRAEF outsources a company valuation that reveals book value and profitability. Knowing the company value serves to add to leadership confidence moving forward. Success also stems from creating a culture that’s flexible – even before it was “a thing.” “We want people to be proud of where they work,” he says. “Our core value is loyalty to employees.” Offices are designed to encourage collaboration and bring joy. They’re modern, open and airy, and there are indoor and outdoor spaces for staff to enjoy and work in while they collaborate on a variety of projects. And when it comes to projects, Kissinger puts them into three categories: 1. Problem/solution (a business needs more parking; add more spaces) 2. Problem/unknown solution (a bridge is structurally deficient or obsolete; how can we improve?) 3. Can’t agree on problem or solution (i.e., climate change)

“We’re most focused on the type two projects,” he says. “They’re the most fun and allow us to be creative and innovative. They also allow us to continue to evolve as an industry and to embrace AI – it’s here and moving fast and furious.” When asked what he personally feels are some of the greatest engineering projects of all time, two classics spring to mind – the Hoover Dam and the Brooklyn Bridge. “The Hoover Dam shows the beauty of a truly- engineered structure and the Brooklyn Bridge had so much groundbreaking technology for its time,” he says. LESSONS LEARNED. Kissinger reflects on the many lessons learned over the years and says he continues to learn, almost daily. One of his top mentors was a man named Bill Shook. As a colleague, Shook taught him how to manage large teams on complex projects and to have fun while doing it. “He taught me the importance of moving everyone forward,” he says. What he wasn’t taught, however, was empathy. “That’s something that can’t be taught,” Kissinger says. “I wish that’s something I knew about earlier on in my career. It’s not just about knowing the facts; it’s about understanding feelings too.” Over the years, he’s also learned not to settle. “Just because it may be the easy way out, doesn’t mean it’s always the best option. In many cases, it’s not. For example, just because a person is next in line for a promotion does not mean he or she is the best choice.” It’s a combination of these lessons learned and creating an open and successful business model that has fostered a culture of trust among clients too. In fact, Kissinger says that “trust is what we’re really selling.” “It’s so important to be honest and own up “We learned that some of our non-technical staff felt they didn’t have access to the same types of growth opportunities that technical staff did. We’re now looking at ways to develop stronger career paths in those tracks.”

HEADQUARTERS: Milwaukee, WI

NUMBER OF EMPLOYEES: 280

YEAR FOUNDED: 1961

OFFICE LOCATIONS: Milwaukee, WI; Madison, WI; Green

Bay, WI; Chicago, IL (2); Minneapolis, MN; Miami, FL; Orlando, FL; Sarasota, FL; Turks and Caicos Island. MARKETS: Aviation, Corporate Office, Cultural, Education, Government, Healthcare, Highway & Bridges, Hospitality, Industrial, Municipal, Ports, Retail, Sports & Recreation, Residential, Water

SERVICES: Site/ Civil Engineering;

Structural Engineering; Mechanical Engineering; Electrical Engineering; Plumbing/Fire Protection Engineering; Commissioning; Parking Structure Planning and Design; Landscape Architecture; Surveying and Field Services; GIS Technology Services; Environmental Services; Planning and Urban Design; Traffic/Transportation Engineering

See VISIONARY, page 8

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TRANSACTIONS THE HFW COMPANIES AND TEXAS- BASED 4WARD LAND SURVEYING CREATE STRATEGIC PARTNERSHIP TO ACCELERATE GROWTH. The HFW Companies, a fast-growing professional services firm with a national focus on the architecture and engineering industry, announcd a strategic partnership with 4Ward Land Surveying, a professional land surveying company providing services for commercial, residential, and public works projects throughout Texas. The new partnership allows 4Ward to accelerate its strategic growth plan and expand its geographic reach beyond Texas with additional services, locations, and people, according to Jason Ward, RPLS, president of 4Ward. “4Ward is experiencing incredible growth,” said Ward. “Our partnership with HFW gives us the boost we need to achieve our plan faster and with greater opportunity for our hard-working team.

We are excited to join forces with HFW and its architecture and engineering brands network.” 4Ward, founded in 2009 as a two-person surveying company, employs 50 people, serving a diverse client base from its office in Austin, Texas. The company’s extensive project experience includes large commercial developments, mixed- use subdivisions, multi-family housing developments, retail centers, and institutional and public works projects. 4Ward joins HFW’s network of growth- oriented AEC firms that share best practices, economies of scale, and unique areas of expertise, according to Michael Hein, AIA, CEO of St. Louis- based HFW. “Jason and the 4Ward team bring expert knowledge and experience, driven by the latest technology found in the survey industry.” HFW’s business model is designed to

retain and leverage each partnering firm’s own brand identity, loyal employee base, and the allegiance of its project partners to build a nationwide “house of brands” network of AEC member firms. “4Ward’s brand and reputation for quality work align well with our growth strategy,” Hein added, “this advances our position as a nationally preeminent network of AE firms focused on the country’s infrastructure.” Based in St. Louis, HFW is an AEC industry professional services company investing in architecture and engineering firms throughout the United States that are positioned for expansive growth in markets with significant infrastructure design opportunities. Our member firms, grounded by technical excellence, solve our built environment’s most challenging problems, making communities better through creative design, engineering, and planning.

VISIONARY , from page 7

when you need to. You can’t just push the easy button. You need to tell clients when things are good and bad. You need to work through the hard times together and celebrate the good times. Maintain transparency at all times,” he advises. Having been with the company for 38 years, Kissinger is nearing retirement and says not to underestimate having a strong ownership transition plan in place. GRAEF has no problems in that area. As it’s moving into its fourth generation of ownership, leadership is constantly updating the plan and there’s no mystery among staff. “Empathy is something that can’t be taught. I wish that’s something I knew about earlier on in my career. It’s not just about knowing the facts; it’s about understanding feelings too.” “Pay close attention here,” he cautions. “Know your expectations. You don’t want surprises in this area.” As a self-described visionary and direction provider, Kissinger is looking forward to what the next five to 10 years hold. GRAEF recently expanded its geographic reach internationally, into Turks and Caicos and it’s well poised for what comes next. “It’s certainly a challenging time in our economy and industry and I’m very curious to see how technology and AI will evolve. For sure, it will be interesting,” he says.

Corporate headquarters located in Milwaukee. This is one of two kitchens and above is its Mezzanine. This is a collaborative space for any employee to use.

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THE ZWEIG LETTER AUGUST 15, 2022, ISSUE 1453

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OPINION

Motivate employees for success

With a clear purpose, empowered professionals, and a drive for ongoing development, design firms can motivate all of their employees to row together.

I am here to sing the praises of PEDs. First, a clarification: Anyone with even a passing awareness of the world of sports likely is familiar with the acronym “PED.” It seems every sport from cycling to curling and from horse racing to dogsledding has been tinged by at least one scandal involving performance enhancing drugs. That’s not the kind of PED I’m talking about – although the kind I’m highlighting could have a performance-enhancing impact on your firm.

Tim Spence

The PED idea I’m talking about emerged from reading the book Drive , in which author Daniel Pink writes about three motivators he sees driving human beings: autonomy, mastery, and purpose. Converting Pink’s concepts into my firm’s lexicon resulted in their being rephrased as empowerment, development, and purpose. Rearranging them to reflect our dedication to always leading with purpose gave me the combination that I was amused to discover can be abbreviated as “PED.” Before I dive into these concepts, I want to talk about motivation, which is the topic at the heart of Pink’s book. As service-based organizations, design firms are driven by people, and their long-term success

depends on their ability to motivate their teams. My guess is that most leaders feel their organizations are pretty good at that. Unfortunately, recent Gallup research suggests that isn’t true: In most organizations, only about 31.5 percent of employees are actively engaged at their jobs. In other words, if your organization were one of those ancient battleships propelled by rowers, only 31.5 percent of the people in your ship would be facing the right direction and actively pulling on their oars. But wait, that’s not all. The Gallup study results

See TIM SPENCE , page 10

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ON THE MOVE EYP PROMOTES EXECUTIVES TO NATIONAL AND OFFICE LEADERSHIP POSITIONS EYP, a leading architecture and engineering firm creating memorable designs that enhance people’s lives and communities, announced that it promoted several executives to new leadership roles to address clients’ needs across design and engineering. “As EYP continues to expand nationally, it’s important for us to promote learning and instill creativity and technical expertise across the firm to support our co-creation process with clients,” stated Kef Mason, interim CEO at EYP. “We have exceptional talent, and we’re thrilled to give our employees leadership opportunities that support our clients and our growth goals.” Delivering proper engineering solutions for clients is a driver for EYP. To help facilitate project management, collaboration, quality control, and mentoring across its engineering team, EYP appointed two new national discipline leads: Carl Claus, PE, LEED AP

BD+C for mechanical engineering, and Patrick Markley, PE, RCDD, NCEES, LEED AP BD+C, CPQ for electrical engineering. Claus joined EYP in January 2020. He has served as lead project engineer for Rutgers University’s Medical Science Building and the U.S. Consulate General in Erbil, Iraq. Leveraging more than 35 years of architectural engineering experience, he will work alongside EYP’s architects, engineers, and clients to bring the best technical and cost-efficient mechanical engineering solutions to projects. In addition, Claus will expand the mechanical engineering discipline as part of EYP’s interdisciplinary approach. With a focus on helping clients solve non- traditional design challenges, Markley joined EYP in September 2021. He brings decades of experience assisting clients in designing challenging electrical systems, like a 40-megawatt campus co-generation plant, a 20-megawatt data center, conditioned power medical imaging solutions, and electrical systems for some of the most remote U.S.

outposts requiring continuous uptime. He will elevate the electrical engineering discipline with clients and colleagues as an integrated offering while ensuring the highest quality standards. EYP also promoted Phuong Nguyen, SEGD, to lead the firm’s experiential graphic design discipline. Nguyen joined EYP in 2020 as a senior experiential graphics designer. In her new role, she will raise EYP’s design profile, promote the value of EGD as part of the firm’s interdisciplinary design team, and develop unified best practices. In addition to national discipline leads, EYP also promoted Michael Collard to be managing principal for the firm’s Boston office. Collard has been with EYP for more than 16 years serving in project-focused roles related to buildings’ systemization and construction, infrastructure planning, and complex building phasing and logistics. As part of his new role, Collard will be responsible for overseeing regional projects, business development, and local visibility for the firm.

traditional dynamic empowers each individual to contribute his or her unique gifts, insights, talents, and creativity in every moment. It encourages even the freshest face to speak up, urges anyone from anywhere in the ranks to lead if he or she has the tools needed at a particular moment, and ensures that new ideas and smart contributions won’t be withheld or neglected because of tenure, hierarchy, or protocol. Few things are as motivating as feeling like you have the power to make a difference. For BSA, it was important to carry this notion of empowerment out into our ownership structure by fully becoming an ESOP in 2017. Finally, the idea that undergirds the whole concept: development. The strongest organizations are those where people see no limits to their potential and are given the tools they need to continue to improve. People must feel that an organization is interested in each individual’s growth, in helping people develop into the best professionals they can be, regardless of whether they choose to stay with that organization or take their skills somewhere else. If people can’t be motivated by their own development and the development of their organization, then they probably won’t be truly motivated by anything. With a clear purpose, empowered professionals and a drive for ongoing development, design firms can motivate all of their employees to become actively engaged, pulling in the right direction and delivering new levels of success and impact. And that’s a “PED” any firm can appreciate. Tim Spence is the president at BSA LifeStructures. He can be reached at tspence@bsalifestructures.com.

TIM SPENCE, from page 9

suggest that another 17.5 percent of your rowers are “actively disengaged.” This means they’re not just failing to pull in the right direction, they’re actually working hard to pull against the direction you want to go. And the rest of your rowers? They’re essentially along for the ride. So, the question is obvious: How do you get 100 percent of your people pulling in the same direction? I think the key lies in understanding what drives them. And that brings us back to purpose, empowerment, and development. My concept begins, as all things should, with purpose. Those of us working in healthcare design, architecture, interiors, and engineering generally find purpose to be pretty obvious: Our purpose is to promote healing. (At BSA, we complement this purpose with two equally inspiring areas of practice, learning and discovery, to operate under the mantra, “We create inspired solutions that improve lives.”) If you want to motivate people, you need to have a purpose that is equally concrete and obvious. For the next performance-enhancing concept, I move from an external focus to an internal one: empowerment. That word gets thrown around a lot in organizations these days, but what does it really mean? What does it look like in practice? I think it should look like this: While, in our field, a lot of professionals work for years to achieve partner status in their firms, I believe the most productive firms make every individual feel like a partner from day one. This shift in the

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FROM THE FOUNDER

Good to not so great

A few of the reasons a great, successful firm can falter and experience a fall from grace.

A t Zweig Group, we love to celebrate the successful companies in the AEC business. Our Hot Firm award that looks at revenue growth over a multi-year period is just one example. But what about the companies in this business that grow and become super successful, and then falter and eventually get swallowed up by another firm in their decimated state, or worse, just close their doors and shut down completely? These are the firms that go from good to not so great.

Mark Zweig

After 42 years working in this business, first as a management consultant, then as an employee, manager, owner, and board member of a variety of AEC firms across the land, I have seen a number of firms go from good to not so great. Here are just some of the reasons WHY this can happen and a great firm can fall from grace: 1. No one has an interest or understanding of the business side of our business. I have always said that architects and engineers go into architecture or engineering because they like it. That doesn’t necessarily mean, however, that they will also love business. Not everyone who forms one of these companies has to love or even like business. But someone has

to, or eventually the whole thing will blow up from a lack of profitability, bad cash flow, poor marketing, ownership transition plans that are unsustainable, or failure to create an environment that other people want to work in. The other problem associated with a lack of business knowledge is when too much cash is taken out of the business by the owners (and I blame the outside accountants in many of these cases!). The working capital gets stripped every year in an attempt to minimize taxes and maximize personal incomes. Or the owners have too much personal overhead, or overhead from other unprofitable businesses or real estate investments they may

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too long ago. But over the years and multiple transitions, and resulting mismanagement, they somehow went from being super successful to a company that was bankrupt and had to be quickly sold. Maintaining financial viability has to be treated by management as a top priority, or a price will be paid. Being in the right market sectors, proper pricing, project management, cash flow forecasting and management, capitalization, credit facilities – all of these and more are crucial for firms that don’t want to go from good to not so great. “What about companies that grow and become super successful, and then falter and eventually get swallowed up by another firm in their decimated state, or worse, just close their doors and shut down completely? These are the firms that go from good to not so great.” 6. There is some sort of a liability or reputational incident that the company cannot recover from. We once had to quickly find a buyer for a company that was a top environmental consulting firm with offices throughout New England because they had a Phase 2 site assessment problem identified during construction precisely at the time their professional liability coverage lapsed for 30 days. As a result of a lawsuit and judgement against them, their financial condition was so weak that their lender not only called their line of credit but also refused to renew their commercial real estate loans they used to finance the purchase of the buildings that their six or seven offices were housed in. They went from good to non-existent (at least non-existent in their original form) in a hurry. We did, fortunately, find a buyer in less than 20 days and the firm was absorbed by a larger European enterprise. If we had failed, all of the principals would have lost their homes that were pledged to the bank as a part of their financing package. This is just one example. In other cases, ethics incidents have taken down companies in this business because they got the reputation for being crooks. It’s hard to recover from and can take a good company to not so great in a hurry. These are just some of the reasons AEC firms go from good to not so great. There are others but I’m out of space. The real question is, are you on one of the paths laid out above? If so, you better make a correction, soon! Mark Zweig is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.

MARK ZWEIG, from page 11

have. Then there is no money left to finance growth or deal with unforeseen future financial difficulties. 2. There is no leadership transition plan or action, or if action is taken, it comes too late. I have seen this more than once and as a result it is one of the first things on this list. You would be shocked how many AEC firm owners in their 70s or older contact us to sell their firms because they don’t have anyone capable enough to turn the reins over to. Leadership transition requires three things – a willingness of the current owners to part with the reins, time for mentoring and to gain acceptance from the rest of the people, and deliberate action versus just talking about it. If any one of these three is shortchanged, the transition may not ever happen. Going from good to a decline is the inevitable result. 3. The firm is passed down to the children of the owner who are not equipped to run it. I’m not saying that all second generation family businesses fail. They don’t. Clearly there have been some great successes with firms such as Nelson, WD Partners, Leo A Daly, and others. But many times the children of founders don’t have the interest in or passion for the business. They may not have the maturity or experience required, either. Then there is the issue of respect from the other employees and managers that they may not have earned over time. These kinds of family- owned business transitions don’t always work out for a number of reasons and can take a good firm down. 4. Petty disputes between owners grow to unmanageable proportions and the firm breaks apart. Sometimes people who get together and form a firm in this business change over time. The individuals find they want different things from the business (or from life), or they want to take it in different directions. Or, they may be a second or third generation company with principals or partners who did not pick each other, and in fact may dislike each other. Any of these kinds of relationship problems or disputes can quickly destroy a good firm. People don’t want to work for firms where the principals don’t get along. It’s like being children in a household where the parents are in a bad marriage and constantly fighting and arguing. It can take a good firm to not so great quickly. 5. The firm becomes financially unviable. Sometimes a good firm can find itself in unexpected financial hot water that it cannot escape. This happened to an old friend of mine when his high growth design company of about 300 people had to be quickly dissolved because his bank, with little notice would not renew his line of credit (few people in our business think this can happen). They went from good, to great, to bust almost overnight. Another example is the recent sale of EYP to Houston-based Page. EYP was, without question, one of the top firms in our business not

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THE ZWEIG LETTER AUGUST 15, 2022, ISSUE 1453

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