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T R E N D L I N E S O c t o b e r 5 , 2 0 2 0 , I s s u e 1 3 6 2 W W W . T H E Z W E I G L E T T E R . C O M

Chargeability goals

Don’t let the concept of treasury stock cloud your transition strategy. Treasure(y) stock

I always enjoy working alongside our clients as we go through the ownership transition planning process. Our clients are high performing professionals who have achieved great success and want to pass that success on to the next generation. Each project and ownership team are different in many regards, yet often times we are asked: What is normal? The truth is there is some level of normalcy in the calculation of value, terms of agreements between parties, and the overall structure of what needs to be done. But in the minutia of developing plans, there are lots of conditions and situations that can complicate the discussion. One of the main pain points for firms contemplating an internal transition is making it affordable for the next generation. This can lead to a lack of willing buyers and stunt the overall transition program. In a scenario where there are no buyers and an outgoing shareholder has to sell stock or liquidate for a number of reasons (including death, disability, etc.), this transfer can be accomplished through a redemption by the firm. In a redemption, the firm acts as the buyer of the equity. This is a common attribute of many buy-sell agreements. In fact, there are really three ways in which this can be written in a buy-sell agreement. There can be a strict redemption by the firm, where the firm is the only avenue for transfers of equity, there can be a cross purchase agreement between the shareholders, and then there are hybrid agreements that provide a mix of the above options. In any instance there should be a clear order of operations indicating who and how they can purchase the outstanding equity being offered up for sale. One caveat here is that a life insurance policy should be put in place to mitigate the business risks associated with an owner passing away. In a recent study, Zweig Group found that 37 percent of owners in AEC firms do not have a life insurance policy securing their equity. When developing a transition plan, you have to determine if you are planning to elevate high performing staff into an ownership role or spread the available stock across existing owners. If you are starting from scratch with all new owners, you probably have more work to do! Either way, if you can’t find willing buyers and have to look at the redemption of equity, this results in something called treasury stock in a corporation. A redemption in a corporation and an LLC or partnership looks a bit different and can have different tax implications based on the situation. But the concept is the same and impacts the balance sheet with a reduction in overall owner equity or book value. It also creates reverse dilution and increases the pro-rata percentage of ownership for existing owners. This is an important component to consider for transition planning, especially in a small, privately held AEC firm.

In Zweig Group’s 2020 Fee & Billing Report of AEC Firms , survey participants gave their chargeability goals for 30 different job titles within their business. Grouping these job titles into three main categories as seen in the chart above, we see that drafting and design staff typically have the highest chargeability goal within firms. Technical staff have chargeability goals that ranged between 75 percent and 85 percent between mid-level and senior-level staff. Management staff, including firm principals and department heads, have the lowest job-chargeable time among these three groups at 67 percent. Participate in a survey and save 50 percent on the final or pre- publication price of any Zweig Group research publication. F I R M I N D E X AK83. .....................................................4 Baird, Hampton and Brown, Inc..............6 JQ...........................................................4 Leeswood Construction..........................4 SME........................................................8 Swinerton. ............................................10 Vertex. ..................................................12 Ware Malcomb..................................4, 10 Xpera Inc.. ............................................12 MO R E A R T I C L E S xz STEPHEN LUCY: The new realities of business Page 3 xz Going beyond: Ken Randall Page 6 xz MARK ZWEIG: What I would be doing if I owned an A/E firm Page 9 xz LEO MACLEOD: Keeping commitments Page 11

Will Swearingen

See WILL SWEARINGEN, 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

NEW FROM ZWEIG GROUP

2020 PRINCIPALS, PARTNERS & OWNERS SURVEY REPORT This is a comprehensive study of owners and top managers of U.S. AEC firms. This report covers ownership, stock appreciation, buy/sell agreements, non-compete agreements, voting rights, roles, responsibilities, perks, compensation, and more. The 2020 Principals, Partners & Owners Survey Report has data on the following: ❚ ❚ Principal compensation, benefits, and perks ❚ ❚ Common issues and challenges related to running an AEC firm ❚ ❚ Qualifications, job requirements, and demographics of principals, partners, and owners in the industry ❚ ❚ Employment agreements, non-competes, and stock buyback provisions ❚ ❚ How principals manage time and break down the work day Key features include: ❚ ❚ Compensation: The report has comparative data on salaries, bonuses, owner distributions, total compensation, and perks by firm type, region, size, growth rate, and firm profit, and by the principal’s title, the percentage of ownership, age, and gender. ❚ ❚ Perks: What’s normal and what’s excessive in the area of “perks” for principals? Get statistics on every kind of perk – including vacations, cellular phones, country club memberships, tax preparation, and auto allowances. ❚ ❚ Roles & responsibilities: Data on how many hours principals typically work per week, their chargeability, time spent on different tasks, vacation, and more. We also asked principals how they felt about their fellow owners and board of directors. Click here to learn more.

WILL SWEARINGEN, from page 1

On Wall Street, stock buybacks are usually met with open arms and signal a positive forward-looking trajectory. It rewards shareholders and gives the company the opportunity to raise capital sometime in the future by reselling those shares. But in a privately held design firm, the buyers are finite. If you have a few owners who are looking to exit over a staggered 10-year period, a redemption of one or more owners’ stock may make it more difficult for other owners to exit in the future. The “stock market” in a privately held firm is not an expansive exchange where you can pick and choose your options from a long list. You have to be very focused on your goals and the initiatives that will get you to those goals. A large redemption by a firm can stunt growth efforts as capital that should be used to expand services, markets, and capabilities now has to be used to pay out exiting shareholders. Zweig Group has found over the years that the most successful companies are ones where new owners have had to contribute some kind of capital of their own. Zweig Group’s 2020 Principals, Partners & Owners Survey Report found that in fast growth firms almost 70 percent of owners contributed their own capital or borrowed money to buy-in. In slow growth firms this number was 44 percent, stable firms 18 percent, and in declining firms just over 15 percent borrowed money to invest. Where outside capital was used to finance a portion or all of the investment, firms were able to grow and provide more opportunity for their staff. This seems to be a pretty clear distinction as it pertains to “what it means to be an owner” in these high growth firms. If you are looking at your potential transition and are not sure how it will unfold, you need to first identify your pool of buyers and begin getting them involved in business planning and overall firm management. Develop trust and the proper skill sets in these individuals. This will help create a more viable transition plan by bringing other motivated professionals into the fold. In other instances, a redemption, with no intent to re-sell the shares, makes sense as an exit strategy. In others, it complicates the exit for other partners and can become an issue. Though there is a lot to think about and properly unpack in a transition planning effort, don’t let the concept of treasury stock cloud your strategy. WILL SWEARINGEN is director of ownership transition advisory services at Zweig Group. He can be reached at wswearingen@zweiggroup.com.

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THE ZWEIG LETTER OCTOBER 5, 2020, ISSUE 1362

O P I N I O N

The new realities of business

Current world events are changing the way we value everything. This pandemic highlights the need for collaborative and equitable decision-making between leadership and staff.

F rom supply chains to Zoom meetings to work-from-home orders – our world has changed in unprecedented ways. This time is historic and lays bare any lack of preparedness imaginable. For AEC firms that have had to adapt to decades of flux or stability, our industry is probably more adept at dealing with change, although not as rapidly as encountered by the threat of an invisible virus. Still, those firms that planned for crisis, with strategies focused on staff and clients, with teams trained to mobilize, and technologies to support business processes, may prove to be the most resilient.

Stephen Lucy

With all of the challenges that we are continuing to work through, we need to memorialize and continue to implement the “lessons learned” as they will prove invaluable to our firms moving forward. ❚ ❚ The team. If only one positive ever comes from working through our current challenges, it is the value of a collaborative and trusting relationship with our staff. Regardless of position, we are all being impacted economically, socially, and mentally. There is no denying the toll that our current health and social environment can and does exact. However, no matter how cliché it may sound, we are all in this together and we will only come out of this successfully if we stay in step with each other.

Active listening to gain input from across your organization is essential to understand and adequately address the needs of your team. If asked to identify our most valuable asset, the universal answer has to be our staff. However, we must actively display and respond to that value if our answer is to be believed. Uppermost is communicating that message to staff on a regular basis as information is what they crave. Think about the questions you want answered as they are probably the exact same questions your staff wants to ask you. ❚ ❚ The process. To all those who long for the old

See STEPHEN LUCY, page 4

THE ZWEIG LETTER OCTOBER 5, 2020, ISSUE 1362

BUSINESS NEWS WARE MALCOMB ANNOUNCES COMPLETION OF DSV CANADA HEAD OFFICE AND LOGISTICS FACILITY Ware Malcomb , an award-winning international design firm, announced construction is substantially complete on the new DSV Canada head office and logistics warehouse facility located at 2200 Yukon Court in Milton, Ontario. In collaboration with the design architect AK83 , a Danish architecture company, Ware Malcomb served as architect of record for the project. The new 102,264 square meter complex – the largest facility of its kind in the DSV – Global Transport and Logistics worldwide network – includes a multi-client warehouse and distribution centre with state-of-the- art logistics capabilities and temperature- controlled compartments and cooler areas. The attached three-storey corporate office is comprised of 4,415 square meters of office space including a large facility for the company’s 800 employees at the mezzanine level. Overall, the project features a unique, modern

façade and interior design with considerable thought given to materiality, sustainability and innovation. “We worked closely with DSV to ensure that this new facility would seamlessly integrate DSV’s three divisions – Air & Sea, Road and Solutions – under one roof,” said Frank Di Roma, principal of Ware Malcomb’s Canada offices. “All aspects of the design focused on innovation and collaboration in order to better serve DSV’s customers and position the company for a limitless future in Canada.” The project is seeking LEED Silver Certification from the Canada Green Building Council. The general contractor for the project was Leeswood Construction . DSV provides and manages supply chain solutions for thousands of companies every day – from the small family run business to the large global corporation. DSV’s reach is global, yet its presence is local and close to its customers. The company

has 60,000 employees in more than 80 countries who work passionately to deliver great customer experiences and high-quality services. Established in 1972, Ware Malcomb is a contemporary and expanding full service design firm providing professional architecture, planning, interior design, civil engineering, branding and building measurement services to corporate, commercial/residential developer and public/institutional clients throughout the world. With office locations throughout the United States, Canada and Mexico, the firm specializes in the design of commercial office, corporate, industrial, science and technology, healthcare, retail, auto, public/ institutional facilities and renovation projects. Ware Malcomb is recognized as an Inc. 5000 fastest-growing private company and a Hot Firm by Zweig Group. The firm is also ranked among the top 15 architecture/engineering firms in Engineering News-Record’s Top 500 Design Firms and the top 25 interior design firms in Interior Design magazine’s Top 100 Giants.

STEPHEN LUCY, from page 3

based systems are needed to provide work flexibility. It also means investment in IT support including potentially creating in-house capacity to address day to day operational needs as you do not want to be entirely at the mercy of outside firms which have multiple clients in front of you. ❚ ❚ The space. Our workspace will be forever changed as a result of the pandemic. Space per individual will increase, but the overall need for space will probably decrease due to remote work. There will also be changes to building systems to provide enhanced air quality. In an April survey of its 11,000-person membership by CoreNet, 69 percent of companies plan to shrink their office footprint by increasing remote work. This may be good news for reducing operating expenses and result in increased short- term work for the AEC industry. However, it may also mean reductions in commercial ground up work and thus represent a long-term adverse industry impact. ❚ ❚ The future. If we have learned anything from this pandemic, it is to develop a plan, follow the plan, do what is right for your team, and lead with compassion and conviction. This pandemic highlights the need for true collaborative and equitable decision-making between leadership and staff. The goodwill that you earn from every step you take forward may have incalculable beneficial consequences. In a recent article from FMI entitled “Looking Beyond the Storm: How to Remain Competitive in the New Era of Construction,” the case for establishing a New Cycle Leader was made with this premise: “Leaders of the new era must question their previous assumptions when it comes to people, methods, and markets … Thinking strategically about this new future requires deep thought and focused, consistent scenario planning.” Are you ready and willing to be this type of leader? 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.

days of having the vast majority of your staff physically in your offices, say goodbye to that dream as it is not going to happen. Based on the reports of increased utilization rates and work efficiencies coupled with meeting or exceeding other financial metrics, there are no longer reasons to demand a continuous physical office presence for the majority of our staff. What has not been fully vetted is the adverse impact on staff and their performance created by the lack of social interaction. There will have to be a compromise reached that addresses the needs of everyone and the difficulty is that there is no one answer to the challenge. Those firms which can effectively address this challenge and partner with staff to create a work environment and firm policies which equitably address the needs of the individual and the firm will have a competitive market advantage. “With all of the challenges that we are continuing to work through, we need to memorialize and continue to implement the “lessons learned” as they will prove invaluable to our firms moving forward.” ❚ ❚ The technology. We talk about technology and how it is a key platform on which our industry is transformed, but did we actually embrace that ideal and invest in differentiating technology or just treat it as a catchphrase? I imagine that you know the answer to that question now that you have had to live with your past decisions for the last few months. The right technology is essential, but we have to continually evaluate and invest in changing technology to stay relevant. It is not as simple as just investing in upgrades to your software platforms as significant investments in hardware and cloud

THE ZWEIG LETTER OCTOBER 5, 2020, ISSUE 1362

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THE ZWEIG LETTER OCTOBER 5, 2020, ISSUE 1362

P R O F I L E

Going beyond: Ken Randall COO at Baird, Hampton and Brown, Inc. (Fort Worth, TX), a firm that is passionate about improving the landscape of its community with the utmost quality and integrity.

By LIISA ANDREASSEN Correspondent

R andall is also a solutions-oriented electrical engineer which has enabled him to evaluate and design some of the most sophisticated commercial and industrial electrical engineering systems in North Texas. His projects range from small remodels to new 1 million-square-foot buildings. As COO, Randall oversees the daily operations of BHB’s three office locations and also serves as the electrical team leader. His approach to projects and client service is to continually strive to meet the owner’s vision and to design with new concepts and technologies with better buildings in mind. “We are fortunate that 25 percent of our staff has been with BHB for 10 years or more,” Randall says. “We attribute this to our mentorship program and to providing paths for growth within the company.” A CONVERSATION WITH KEN RANDALL. The Zweig Letter: I see on your bio that you were a Court

Appointed Special Advocate of Tarrant County, and nominated as Rookie of the Year for the organization in 2014. Please tell me a little about that overall experience, why you got involved and what do you feel led to the nomination? Ken Randall: The Texas Society of Professional Engineers Fort Worth Chapter has a charitable or community involvement presentation annually during our December meeting. I was introduced to CASA of Tarrant County during our meeting in 2013 and the idea of being able to help children in the Child Protective Services system struck a chord with me. These children are displaced from their homes, often through no fault of their own, and then placed in foster care. My first case was a young man, who despite living for many years in the foster care system, maintained a positive attitude. He earned good grades in school and we enjoyed meeting and having lunch together to talk about his future. He was very excited to learn of his eligibility to attend college with tuition paid by the state. Being named one of the 2014 rookies of the

THE ZWEIG LETTER OCTO

year was due to this young man being so receptive to the opportunities the CASA program could offer him. I was simply the messenger. TZL: How far into the future are you able to reliably predict your workload and cashflow? KR: I think we do a good job of predicting our workload reliably for one year and reasonably accurately for two years. We enjoy working on projects where the design period can last nine to 12 months. Cashflow is harder to predict because we don’t get to see our client’s crystal ball. But we are still pretty accurate six to 12 months out. “BHB’s best defense against economic slowdowns is our client diversity. We offer engineering services for a wide range of client types including retail, office buildings, municipal, industrial, healthcare, education, and developer.” TZL: How much time do you spend working “in the business” rather than “on the business?” KR: I still enjoy about one-half of my time each week working on engineering and in quality control of our projects’ design. The other half of my time is spent on administrative tasks, but I must admit the larger we grow the more attention these tasks need. TZL: What was your greatest challenge going from electrical lead to COO? KR: Serving as COO has required learning a different skill set from those I use as an engineering lead. The most difficult of these, and one I am constantly trying to improve, is personal relations. Keeping 100 folks happy is much harder than the 20 in our electrical department. TZL: What role does your family play in your career? Are work and family separate, or is there overlap? KR: My wife and kids have been very supportive of my career. I started as a draftsman in an engineering firm and went back to college to get my electrical engineering degree while continuing to

work full-time. It took several years to complete the degree plan and pass the licensure exams, but it ultimately worked out very well for all of us. I am very proud that our son is studying to be a civil engineer and has worked as an intern for several engineering firms including BHB. TZL: What, if anything, are you doing to protect your firm from a potential economic slowdown in the future? KR: BHB’s best defense against economic slowdowns is our client diversity. We offer engineering services for a wide range of client types including retail, office buildings, municipal, industrial, healthcare, education, and developer. TZL: BHB Goes Beyond – tell me a little about that. Does the company choose a charity? Does staff suggest places to volunteer or give back? What’s been one of your most memorable “giving back” experiences? KR: BHB gives back to our community in several ways. We just completed our toy drive for Cook Children’s Hospital and had a back to school supplies drive earlier this year which benefited students at Fort Worth ISD. Our employees have volunteered to serve meals at Union Gospel and helped to build a house for Habitat for Humanity. One of my passions is theatre arts, so I am very proud that we were able to provide the mechanical, electrical, and plumbing systems design, at no cost, for Casa Mañana’s Reid Cabaret renovation. TZL: Are you using the R&D tax credit? If so, how is it working for your firm? If not, why not? KR: BHB does use the R&D tax credit and it is lowering our tax burden allowing us to explore new technologies. In the past two years we have started to implement power over ethernet lighting solutions and alternate battery solutions as the emergency power standby source in lieu of generators. TZL: Does your firm work closely with any higher education institutions to gain access to the latest technology, experience, and innovation and/or recruiting to find qualified resources? KR: We enjoy close relationships with Texas Christian University and the University of Texas at Arlington. We have participated for years in their career fairs and have employed their engineering See GOING BEYOND, page 8

HEADQUARTERS: Fort Worth, TX NUMBER OF EMPLOYEES: 113 YEAR FOUNDED: 1992 NUMBER OF OFFICE LOCATIONS: ❚ ❚ Fort Worth, TX ❚ ❚ Grapevine, TX ❚ ❚ Weatherford, TX SERVICES: ❚ ❚ Civil engineering ❚ ❚ Mechanical/plumbing engineering ❚ ❚ Electrical engineering ❚ ❚ Land surveying ❚ ❚ Landscape architecture MARKETS:

❚ ❚ Healthcare ❚ ❚ Commercial ❚ ❚ Cultural ❚ ❚ Education ❚ ❚ Faith-based ❚ ❚ Historical ❚ ❚ Municipal ❚ ❚ Industrial ❚ ❚ Retail ❚ ❚ Residential ❚ ❚ Recreational

OBER 5, 2020, ISSUE 1362

ON THE MOVE SME’S INFRASTRUCTURE SERVICES TEAM ADDS DYNAMIC LEADER As infrastructure needs continue to change, whether from aging or the changing needs of a new economy, SME is making strides to enhance the services we office clients facing these challenges. As the firm continue to grow, SME is pleased to welcome Jeff Evans, P.S., to its Infrastructure Services group. He is working with the firm’s civil engineering and surveying teams to develop strong client relationships. SME’s infrastructure services team specializes in the design of infrastructure projects including pavements, utilities and site layout. The firm’s staff of civil engineers, land surveyors, and field technicians evaluate and provide project specific design alternatives that address complex site requirements. Evans is a dynamic leader with more than 25

years of building client relationships based on trust. Evans is known for empowering his team, guiding strategic planning and business development efforts. He has traveled the country speaking about survey technologies and sharing case studies, and is passionate about energy related projects including pipeline, solar wind farms and transmission and distribution. A professional surveyor in 12 states, Evans has served as a project manager, crew chief and group leader for survey in infrastructure improvement projects across the Midwest. Evans has performed a wide range of survey services include ALTA, boundary surveys, route surveys, pipeline surveys, aerial photo control, GPS coordinator, construction layout. In 2009, he started his own consulting company providing land surveying, civil engineering, GIS, land management and

ecological services to energy clients. Jeff holds a bachelor’s degree in business administration from Cleary University. For more than 50 years, SME has provided engineering and scientific services for more than 90,000 projects in the Great Lakes Mega region and beyond. Whether developing a new site or redeveloping an existing brownfield site; constructing or rehabilitating infrastructure including roads and bridges and other utilities; or acquiring, rehabilitating or managing existing facilities, SME can help. SME specializes in geotechnical, environmental, pavement, building and construction materials, building enclosures and metals and coatings consulting and design services. The tougher the challenge, the more SME can help.

GOING BEYOND, from page 7

students as summer interns in our civil, mechanical, and electrical departments. While we are not always able to hire them full-time, we at least get to introduce them to our industry which is good for our profession overall. TZL: In addition to being COO, you’re also known as a “solutions-oriented” electrical engineer. Can you give me a specific example of what that means by illustrating with a scenario? KR: BHB’s “solutions oriented” approach to projects starts with user meetings to completely understand their goal or problem. This often involves working within budget constraints in addition to offering a remedy. For example, a school district client wanted to add new classrooms to an existing building but was told by another engineer the load added would require replacement of their main switchboard at significant cost. I met on-site with the switchboard manufacturer and an electrician to review the existing equipment. We deenergized the equipment and removed all dead front covers to expose the interior components. This allowed us to identify a means to add mounting hardware for a new circuit breaker needed for the proposed addition at a much lower cost and significantly reduced downtime to the school. “Serving as COO has required learning a different skill set from those I use as an engineering lead. The most difficult of these, and one I am constantly trying to improve, is personal relations. Keeping 100 folks happy is much harder than the 20 in our electrical department.” TZL: Research shows that PMs are overworked, understaffed, and that many firms do not have formal

BHB staff enjoying time together in the office before COVID.

training programs for PMs. What is your firm doing to support its PMs? KR: We recognize the need for training our PMs and we encourage them to enroll in the TSPE Professional Engineer Leadership Institute. Our eight graduates from this program have each remarked on how much they learned and the skills they acquired during the four weekend sessions. We are also developing an expanded in-house program offering a wider range of project management and technical skills. Our company leadership maintains active participation in projects and in guiding our younger staff’s career progress. TZL: A firm’s longevity is valuable. What are you doing to encourage your staff to stick around? KR: We are fortunate that 25 percent of our staff has been with BHB for 10 years or more. We attribute this to our mentorship program and to providing paths for growth within the company.

THE ZWEIG LETTER OCTOBER 5, 2020, ISSUE 1362

O P I N I O N

F all of 2020 is an interesting time. It seems to me that the firms in this business are quickly sorting themselves into two categories – those that are doing better than ever post-COVID-19, and those that are doing worse. Firms in this business are quickly sorting themselves into two categories – those that are doing better than ever post-COVID-19, and those that are doing worse. What I would be doing if I owned an A/E firm

a remote workforce. This has to be number one before anything else. This means you have to be able to get the work done without getting everyone together and keep everyone motivated and feeling like they are a part of the company in the meantime. It’s not easy. This takes both the technology and the awareness that people not in an office need a lot more communication and personal attention to keep going productively. 2)Management has a plan of attack. The firm has a business plan that it is following. Everyone has had a chance to give input to it in the best cases but even if not, everyone knows that the plan exists and what the plan is, and is working together to follow it. The business plan is now more crucial than ever! It is not just an academic exercise.

What is separating these companies? They are both in the same business. Shouldn’t external market conditions affect them each in the same way? Not necessarily. How each firm’s management is responding to the crisis is determining the direction they will go – that being up – or down. I’m really most interested in the firms that are going up right now. What are their management teams doing that is making them succeed? There are some marked differences between the firms that are doing well from the others, and I would learn from their example and apply what they are doing to my own A/E firm. And here are my observations about THOSE companies: 1)Management has figured out how to manage

Mark Zweig

See MARK ZWEIG, page 10

THE ZWEIG LETTER OCTOBER 5, 2020, ISSUE 1362

BUSINESS NEWS WARE MALCOMB ANNOUNCES CONSTRUCTION HAS STARTED ON NEWHIGH-RISE OFFICE BUILDING AT 2130 VIOLET STREET IN ARTS DISTRICT OF LOS ANGELES Ware Malcomb , an award- winning international design firm, announced that design is complete and construction has begun on a new high-rise creative office building located at 2130 Violet Street in the Arts District of Los Angeles. Ware Malcomb provided architectural design services for the project, which is expected to be completed in the second quarter of 2021. LA-based national real estate investor, developer and manager Lowe is the developer of the project and the general contractor is Swinerton . The project totals more than 113,000 square feet in size and features a ground-up, nine- story creative office building situated along the Los Angeles River. Located in the LA Arts District, 2130 Violet Street includes 109,100

square feet of office space, 3,400 square feet of ground-floor retail opportunities, parking for 275 vehicles, and outdoor spaces including terraces and a 3,000-square-foot rooftop deck/lounge with stunning views of the city. The design of the building is heavily influenced by the Arts District’s industrial heritage and aesthetic as evidenced by the material selection of exposed concrete and steel detailing. Recessed terraces at the office floors provide indoor/outdoor connectivity while also creating depth to the overall massing. Operable windows provide additional access to fresh air. A roof deck with expansive views of the Downtown Los Angeles skyline will serve as building amenity. Ground floor retail fronting Violet Street protrudes from the office and parking tower with steel and glass to create a modern base. The retail will activate the street plane, becoming part of the urban fabric as an

amenity not only to the office users but also to the immediate community. “This is an exciting ground-up project in the vibrant and ever-evolving Arts District of Los Angeles,” said Radwan Madani, principal of Ware Malcomb’s LA office. “2130 Violet Street offers a unique combination of large creative office suites, ground floor retail opportunities, a variety of outdoor spaces, and the incredible amenities of the surrounding area.” Ware Malcomb has also completed several other projects in the LA Arts District, including: providing architecture and interior design services for 405 Mateo Street, an 83,285-square-foot creative office and retail project, and providing interior architecture and design services for the Soylent corporate headquarters located within the At Mateo campus.

MARK ZWEIG, from page 9

successful companies during this time are going up? Yes, I did! 7)Management is aggressively recruiting new people to diversify their capabilities. Now is the time to upgrade or get new talent to join your firm. People are unsettled and worried about their futures. Some – not all – will be more receptive to appeals from new employers that they think are more solid or doing better than the firms they work in today. You want to find those people and talk to them to see if they (and you) would be better off together than you are apart. This is a unique opportunity for staff upgrading, and the best firms get it. They aren’t waiting on the sidelines. 8)Management is increasing their marketing spending. I sound like a broken record here. But the reason is so many A/E firms are cutting their marketing spending now because their revenues are down, and while they may get you some short-term savings, it is the very worst thing you can do if you want to do well in the future. The most successful firms are spending more and doing more to promote themselves now, perfectly timed because most of their competitors are fearful and cutting back. 9)Management is NOT holding up on ownership transition plans. Again, the firms managed by fearful principals are putting their transition plans on hold because they want to hold on to their precious cash. I get it. But how motivational is that going to be for those newer partners or principals getting into ownership? They could be thinking, “This is a horrible place to invest my money in,” because “you’ll never get it back.” Not the way you want anyone to think – especially your best up-and-comers. Times like these are always interesting to me because they quickly sort out the firms into one of two categories. Those that are fearful and scared and pulling back – limiting their opportunities to do better and setting the stage for future decline (by far and away the larger group). And then those that see the world differently and see opportunities all around them. I don’t know about you, but I would rather be a part of the latter group! MARK ZWEIG is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.

3)Management is optimistic. Some see opportunities in the current situation that weren’t there before. These opportunities exist to upgrade their office space more affordably, hire new people, and/or push into new market sectors they weren’t in previously, or buy other firms with financial/cash flow problems and/or owners who want to get out. These opportunities are all there and they are taking advantage of them. “Times like these are always interesting to me because they quickly sort out the firms into one of two categories. Those that are fearful and scared and pulling back ... And then those that see the world differently and see opportunities all around them.” 4)Management has greatly increased their communication with their employees. More calls, texts, emails, Zoom meetings – also more information in their open-book management reports. And as I already stated, they are doing more sharing and making more references to the firm’s business plan. This communication is not borne from a lack of trust for the people, either. It is because management knows people are isolated and fearful, and they want to alleviate as much of that thinking as they can. 5)Management is in close contact with the firm’s clients. This is SO important!! What are the clients thinking now? What are they going through? What are their plans? What help do they need? How are they doing as individuals? Firms doing well today are NOT taking their clients for granted and assuming they know everything about what their clients are going through, or what those clients are doing to address their problems. 6)Management is investing in their existing people. That means training, training, and more training in all aspects of the business, project management, communications and social awareness skills, and technical and business software use. Did I say that training investments for the most

THE ZWEIG LETTER OCTOBER 5, 2020, ISSUE 1362

O P I N I O N

Keeping commitments

W hatever time management system you follow, whether it’s a fancy app that tracks your minutes or the back of a napkin, it still needs to do one thing: help you keep your commitments. When you don’t meet your commitments, you disappoint people and they remember it. If people can’t count on you, they won’t hire or promote you.

To understand why this is important, think about how you would explain wealth building to a 4-year- old. First you have a piggy bank. Now you put money in, so you make deposits. You don’t take any money out. You don’t make any withdrawals. And over time, you’ll have more money. In all of our relationships we maintain an emotional bank account, based on how we feel about someone and how they feel about us. Whether you’re aware of it or not, you’re either making deposits or withdrawals in your emotional bank accounts. How do you make deposits? With clients, it’s being on time, being reliable, responsive, helpful, personable. What are withdrawals? Just the opposite: being late, unreliable, not following up or being unresponsive, just being difficult, coming up with problems, being negative or combative. Over time, deposits build trust and cooperation. Withdrawals

undermine trust and cooperation. The choices we make have a big impact on how people feel about us. How you manage your time affects your emotional bank accounts. This is the easiest way of thinking about it: Keep your commitments. Maintain your balance. That’s it. Listen to this story to see how Patti, a project manager, keeps her commitments and decide if she’s making deposits or withdrawals. Patti’s day starts at 7 a.m. She forgot to check her calendar the night before and it’s her turn to take the kids to school. She yells at the kids to hurry and get in the car, and during the drive she curses at the slow moving cars in front of her. She’s late to a client meeting, and spends time texting people on her phone during the meeting. She gets back in the office, but waives staff off who have

Leo MacLeod

See LEO MACLEOD, page 12

THE ZWEIG LETTER OCTOBER 5, 2020, ISSUE 1362

TRANSACT IONS THE VERTEX COMPANIES ACQUIRES XPERA INC. The Vertex Companies Inc. has acquired Xpera Inc. , a premier construction forensics, quality assurance, and real estate consultancy firm headquartered in San Diego. Xpera Group’s team is recognized as the West Coast’s most comprehensive team of construction expert witnesses, construction consultants, and strategic advisors for the built environment. Zweig Group, a full-service AEC management advisory firm, represented selling firm Xpera in this transaction. Jamie Claire Kiser, Zweig Group’s managing principal, served as the firm’s lead advisor on the engagement. “We see a great union of brands and thought leadership in the strategic combination of Xpera and Vertex,” Kiser said. “We congratulate both firms on their decision to grow together.” For Xpera Group, Vertex provides the right fit, as it is an employee-owned company that offers the expanded resources of a multi- disciplinary firm throughout its more than 25 office locations. “The cultural fit, energy, and compatibility of our

two companies coming together will certainly enhance our ability to serve our clients, expand our services, provide greater growth potential for our people, and tap resources well beyond what would otherwise have been possible,” said Ted Bumgardner, founder and chairman of Xpera Group. “By joining forces with Vertex, we see an exciting future ahead, as the whole is truly greater than the sum of its parts.” For Vertex, this acquisition augments its West Coast presence and expands its services in construction, forensics, and quality assurance. “We could not be more excited about the acquisition of Xpera Group,” said Bill McConnell, CEO of Vertex. “Since my first meeting with Xpera’s executive team in San Diego, it was abundantly clear that our corporate cultures are in alignment, and Xpera’s various practices will complement and expand Vertex’s core services, particularly on the West Coast. Our mutual dedication to our clients, our teammates, and our commitment to deliver first-class professional services will allow us to continue our growth journey into the future.”

Xpera Group will join Vertex’s expanding team of consultants across North America and Europe, and its clients will now have access to Vertex’s suite of specialized services. “Under the Vertex umbrella, our team will continue to bring the value our clients have come to rely on, while allowing us to expand the breadth of our services to meet additional client needs,” said Steve Grimes, president of Xpera Group. “We look forward to the many opportunities this partnership with Vertex will bring to our employees, our clients, and the AEC industry at large.” Zweig Group is the leading research, publishing, and consulting resource for the built environment. The firm provides strategy, mergers and acquisitions, business valuation, ownership transition, marketing, business development, market research, financial management, project management, recruiting and executive search services nationwide. Zweig Group’s vision is to facilitate action in pursuit of elevating individuals, firms, and thus the industry.

LEO MACLEOD, from page 11

calendar or some other way of keeping track of what you said you were going to do by when. ❚ ❚ Don’t overcommit. Instead of saying yes and then making a withdrawal somewhere else, be honest and polite. Say

legitimate project questions, saying she doesn’t have time now and that she’ll meet later. Patti gets so wrapped up in the rest of the day that she forgets to get back to staff. She chooses not to respond to an impatient client about the status of their project because she doesn’t have the answer yet, instead telling them, “I’m working on it, just wanted you to know.” She misses dinner and her kid’s soccer game, and falls asleep at her computer trying to catch up on her email. Count the withdrawals? Any deposits? Does any of this sound familiar? The universe has a perfect accounting system. We know who’s making deposits in our account and keeping their commitments and maintaining their balances and who’s not. When we don’t meet our commitments, we drop the ball, we disappoint people and they remember it. They can’t count on us, they don’t hire us, they don’t promote us, they don’t include us. Think about this the next time you say yes to any new demand on your time: to whom are you saying no? Everybody that I know is so busy with demands on their time that if something new comes along, something else needs to move off the plate. We’re just swapping out commitments. If you’re saying yes here, to whom are you saying no? Are you saying no to another client? Are you saying no to colleagues? Are you saying no to family? Friends? Or even yourself? Maybe skipping lunch, not taking a walk or exercising. It’s typical for people to burn out because they’ve prioritized other people before themselves. So what do you do about this? Here are some tips: ❚ ❚ Know your current commitments. Be aware of what you already have out there. Get it out of your head and into your

something like: ❚ ❚ I wish I could ❚ ❚ I want to be realistic about my commitments. ❚ ❚ I’m sorry ❚ ❚ Let me look at my calendar Work with folks but don’t just automatically say yes.

❚ ❚ Be realistic. Be realistic about how long something actually takes. It’s easy to plan out your day and be overly ambitious and say, “Yes, I can get all that stuff done.” Realistically, how long does it take to get things done? With interruptions and the inevitable stuff you don’t factor in, things usually take longer than you think. Factor that buffer in. ❚ ❚ Don’t drop the ball. Don’t forget about people. All it takes is a quick email, text, or phone call saying, “I’m working on it, I haven’t forgotten about you.” This is the easiest way to avoid a withdrawal. ❚ ❚ Monitor your balances. Know where you’re at. If you’ve made a withdrawal with someone, find ways to make deposits. If you’re mindful during the day of your commitments and manage how well you’re either making deposits or withdrawals, you’ll not only keep your emotional bank accounts up, but you’ll feel more at ease and get more done. LEO MACLEOD is a leadership coach in Portland, Oregon, and creator of Pocket Tools for Project Managers. Click here to view a 5-minute video on this article. He can be reached at leo@leomacleod.com.

THE ZWEIG LETTER OCTOBER 5, 2020, ISSUE 1362

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