Civil + Structural Engineer Media publishes a special annual issue celebrating winners from both Zweig Group and Civil + Structural Engineer Media's award programs. This commemorative edition is distributed at the ElevateAEC Conference and Awards Gala, showcasing industry excellence and innovation. Enjoy a glimpse into the achievements shaping the AEC industry!
VOLUME 10 ISSUE 9.5 csengineermag.com
publisher Zweig Group media manager Chad Coldiron | 479.200.3538 | ccoldiron@zweiggroup.com Editor Luke Carothers | lcarothers@zweiggroup.com
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csengineermag.com Elevate AEC 2024
CONTENTS
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THE COVER Special Edition - ElevateAEC 2024 From the Publisher THE ZG-SUITE 4 Tampa, Time, & the Future: Welcome to ElevateAEC 2024 Chad Clinehens LOOKING BACK, MOVING FORWARD 5 The Power Of A Fine Cigar Luke Carothers INDUSTRY INSIGHTS 6 Balancing Compensation & Employee Retention Sara Parkman contents FROM THE ZWEIG LETTER 7 Goodhart’s Law and Utilization Tim Godin 8 Affording a Small Business Acquisition Mark Zweig 10 Your Plan isn’t Strategic Ying Liu 12 Flash Over Substance Jeremy Clarke 13 Benefits of Focusing on Growth Travis White C+S HIGHLIGHTS 14 Spring 2024: Cairo & the Built Environment: Past, Present, and Future Luke Carothers 16 Summer 2024: An Iconic Shoreline from Above Luke Carothers AWARDS 20 2024 Zweig Group Award Winners RISING STARS 22 2024 Rising Stars of AEC Industry YEARBOOK OF ENGINEERING ACHIEVEMENT AWARDS 26 2023 Yearbook of Engineering Achievement ELEVATEHER 40 A Community of Crown-Straighteners 42 The 2024 ElevateHER Cohort
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departments 51 Reader Index
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Welcome to beautiful Tampa , and welcome to ElevateAEC 2024. The AEC industry continues to perform at historic levels in 2024, and, as an event that celebrates industry-wide success, this year’s conference will also take things to another level. For the past decade, we’ve seen AEC industry financial metrics soar beyond previous benchmarks. And, although there are still many challenges for leaders in the AEC industry to overcome, the potential for success that can be achieved for our pro- fession has never been greater. Recognizing the potential of both the challenges and opportunities that stand before the AEC industry, this year’s event is shaped around the theme of “return on investment.” Your schedule for the next few days has been shaped around the concept of ROI, and you will be invited to participate in spaces where you can connect, learn, and celebrate this great industry we’ve all chosen to dedicate our careers to. In the simplest terms, ROI is an easily-defined concept with a concrete equation—net gain (or loss) on an investment compared to its cost. Most of us, myself included, often think of ROI in these terms, having discussions and making decisions based on dollar amounts. However, as we begin the 2024 ElevateAEC conference, I would also like to recognize an often overlooked but crucial component of ROI: time. Over the course of the next two days, you are encouraged to join us in pushing the limits of our business perspectives—probing into what we at Zweig Group see as fundamental shifts in ROI. As we celebrate an- other record year of success within the AEC industry, we must also keep our attention on what our industry will look like in the future. Based on dynamic industry and economic elements, we believe that these fun- damental shifts in ROI have the potential to create industry-defining change, which will force profound changes in how firms operate in the future. Our goal with this vision is to help you envision your firm’s future in an ever-changing industry. Over the next two days, you will hear from an incredible line-up of speakers including Linda Darr, CEO of ACEC, Joe Furey, CEO of Michael Graves Architecture, Kit Miyamoto, CEO of Miyamoto In- ternational, and over twenty other leading voices from across the AEC industry. Our panel of speakers is highly curated to provide insightful information that will provide insights that drive performance today and in the future. The insights from these industry visionaries will be paired with cutting-edge discussions and unparalleled opportunities to connect and collaborate—all set against the beautiful backdrop of Tampa Bay. And, speaking of the beauty of Tampa, be sure to try to set aside a little bit of your time while you’re here to enjoy its beauty and history. Coming back to the relationship between ROI and time, we have used Tampa, Time, & the Future: Welcome to ElevateAEC 2024 By Chad Clinehens, President & CEO, Zweig Group From the ZG-Suite
feedback from previous events to create a schedule that maximizes time for you at the end of the week. Our conference will conclude Thursday night after the Awards Gala, which means your time Friday is free for you to invest. You can spend a few extra hours (or days) exploring the beaches and buildings, or you can make it home to spend some time with your family. How you spend your time reflects what is most valuable to you, and I am immensely grateful and honored that you’ve chosen to invest your time these next two days to help us Elevate the AEC Industry .
CHAD CLINEHENS is the President & CEO of Zweig Group. He can be reached at cclinehens@zweiggroup.com.
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looking back, moving forward
The Power of a Fine Cigar By Luke Carothers
We are honored and energized by your presence at this year’s Elevate- AEC conference in Tampa, Florida. The schedule is set for this year’s conference to take things yet another level higher, pushing the boundar- ies of what a conference can look like. Our goal every year is to match the energy that you bring to this wonderful industry every day and to celebrate with the same passion you display every day in designing and maintaining the built environment. For me, there is no place more fit for such a celebration than Tampa. Much of Tampa’s history has been written in stories of growth and ex- pansion. For almost the entirety of the 20th century and continuing into the 21st, Tampa and the surrounding communities along Tampa Bay have grown to house more residents, tourists, and industries. However, the longer history of Tampa tells a rather different story—one that con- nects historical changes and developments to the built environment with our modern understanding of Tampa. Native Americans were living and thriving along the shores of Tampa Bay as early as 2,000 years ago, but, in its place within the United States, the area that would eventually come to hold the city of Tampa began with a declaration from the federal government to construct a series of forts along their newly-purchased territory. With the flourish of a pen, the history of Tampa’s built environment as we know it began. Fort Brooke was built on the eastern bank of the Hillsborough River in 1824, and a small settlement grew up just outside the isolated fort. Two decades later in 1849, the village of Tampa was established, but the area remained isolated and growth was little to non-existent. Despite housing a military fortification, the area continued as an afterthought be - fore and during the American Civil War, seeing a few small skirmishes during that time. Following the Civil War, the area remained stagnant in terms of growth, supporting little more than a modest ocean-going port and a civilian population well under a thousand people. By 1883, the area was bereft of its main economic and population source when Fort Brooke was decommissioned. However, despite a steep decline in population, the immediate economic downturn that followed the closing of Fort Brooke would be short lived, and the space once occupied by the fort was soon repurposed for shipping when phosphate was discovered nearby. Phosphate was and remains an incredibly valuable resource, and soon after its discovery it was being shipped out of the city via Tampa’s port. Quickly, the valu- able space along the Hillsborough River that had once been occupied by the fort was repurposed into warehouses and other infrastructure to support the export of phosphate with the added benefit of expanding the city’s once-meager commercial fishing industry. Despite years of stagnation and isolation, Tampa was suddenly a tin- derbox waiting to ignite with economic expansion. In 1884, just a year after the closing of Fort Brooke, the railroad came to Tampa, providing an important pathway into the city’s future. The South Florida Railroad provided the city its first reliable overland shipping route. With easy
means of shipping goods via the port and now railroad, Tampa was the perfect destination for entrepreneurs with big plans. One such entrepre- neur was Vincente Martinez-Ybor, who established the area’s first cigar factory just outside what was then the city of Tampa while looking to capitalize on the city’s growing infrastructure and its humid climate. Knowing he would need a specialized workforce to produce cigars, Ybor quickly began to build housing as he brought in workers from Cuba, Spain, and Italy who had worked at various levels of the cigar manufacturing industry. Living in the city constructed by Ybor for this very purpose, these immigrants soon became the economic lifeblood of a rapidly expanding town, rolling and shipping millions of cigars while receiving good wages and housing. This massive wave of immigration had a profound effect on Tampa’s population, which grew to well over 15,000 by the turn of the 20th century. Ybor’s decision to build a cigar business in Tampa proved consequential to the city’s history. This initial wave of immigration kicked off what would become Tampa’s legacy of growth and expansion that continues until this day. Crucial to this legacy, however, is how this mass of newly immigrated workers im- pacted the city’s built environment. Ybor knew he had to make massive changes to the city’s built envi- ronment. He built homes, schools, hospitals, social clubs, roads, and grocery stores to support the working population. The result of this decision proved to be a catalyst for Tampa’s growth. In addition to establishing a legacy of growth and development, Ybor’s decision to establish his cigar enterprise still bears its testament on Tampa’s built environment. As we embark upon our two days of connection and cel- ebration in this wonderful city, we do so in a place that has historically demonstrated a path forward—through a bold and innovative approach to changing the built environment.
LUKE CAROTHERS is the Editor for Civil + Structural Engineer Media. If you want us to cover your project or want to feature your own article, he can be reached at lcarothers@zweiggroup.com.
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• Determining salary raises. Firms employ various methods to determine salary increases. The most common approach is a formal salary/wage review process, used by 70 percent of firms. Other methods include management’s discretion (66 percent) and annual across-the-board increases (32 percent). Among firms using a formal review process, 95 percent conduct these reviews annually, with 78 percent adhering to a pre-set calendar date. This structured approach helps ensure that salary reviews are conducted systematically and fairly. Criteria for evaluating salaries. Firms use multiple criteria to evaluate salaries, with job performance being the most common (92 percent). Other important factors include salary surveys (87 percent), firm growth or profit (74 percent), inflation (63 percent), attitude (43 percent), and the growth or profit of the employee’s office (38 percent). This multifac - eted approach allows firms to make well-rounded salary decisions that reflect both individual and organizational performance. Retirement plans and contributions. Retirement benefits are a crucial component of total compensation. A substantial majority of AEC firms (91 percent) offer a 401(k) plan, with a median waiting period of three months before new employees can participate. A median of 90 percent of eligible employees participate in their employer’s 401(k) plan. Most firms (85 percent) make fixed or matching contributions based on a formula, while 31 percent offer discretionary contributions as manage- ment sees fit. The median matching rate for employee contributions is 75 percent, with a maximum match of 5 percent of an employee’s salary. The median contribution to employees' 401(k) plans in the last fiscal year was $2,500 per full-time equivalent, or 1.7 percent of net service revenue. The greatest single expense for AEC firms is their payroll. In many firms, direct labor alone accounts for 30 percent or more of the firm’s net service revenue. The amount of compensation a firm can afford is limited by factors such as the amount of work it sells and the fees it produces. The challenge for design firms is to strike a balance be - tween profits and payroll to ensure both employee satisfaction and the firm’s financial well-being. By benchmarking salaries, implementing formal compensation programs, conducting regular salary reviews, and engaging in meaningful conversations with employees, AEC firm leaders can address dissatisfaction and improve retention rates. As the industry navigates ongoing recruiting and retention challenges, ensuring that compensation aligns with employee expectations will be vital for long-term success.
Balancing Compensation & Employee Retention By Sara Parkman, Content Manager, Zweig Group & Designer, The Zweig Letter Industry Insights
AEC firms have long faced a recruiting and retention crisis—and our industry isn’t alone. According to recent Gallup polling , one in two US employees is open to leaving their organization. Forty-two percent of employees who voluntarily left their organization in the past year reported their manager or organization could’ve done something to prevent them from leaving. When asked what could have been done to prevent their departure, additional compensation and benefits topped the list at 30 percent. Nearly half (45 percent) of voluntary leavers reported that neither a manager nor another leader proactively discussed their job satisfaction, performance, or future with the organization in the three months before they left. Compensation and benefits are critical employee retention factors, and engaging employees in conversations about their performance and future with the company can be a game-changer. If issues aren’t ad- dressed, and if your company isn’t offering competitive compensation and benefits, employees are likely to look elsewhere. In today's competitive job market, AEC firm leaders need to keep a close eye on their staff salaries through careful budgeting and strategic plan- ning. How does your firm stack up against the rest of the industry? Let’s take a look at some compensation trends: • Budgeting for pay increases. According to Zweig Group’s 2024 Policies, Procedures & Benefits Report, a significant majority (89 percent) of firms budget for staff pay increases. The median raise among these firms was 5 percent last year, and this figure is projected to remain the same for the current year. While a 3 to 5 percent increase has traditionally been a safe benchmark, the current economic climate, increased workload due to backlog, and high turnover have prompted many firms to consider more substantial raises to maintain employee satisfaction. • Formal compensation programs. Implementing a formal compensation program can significantly standardize employee pay rates across a firm. These programs typically outline set pay ranges based on job grade and experience level, providing a clear framework for salary decisions. However, only 52 percent of surveyed firms have such a program in place. While formal compensation programs ensure consistency, they may limit the flexibility needed to reward exceptional performance or adjust salaries for those not meeting expectations.
SARA PARKMAN is a content manager at Zweig Group and senior editor and designer of The Zweig Letter. Contact her at sparkman@zweiggroup.com .
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Goodhart’s Law and Utilization
In 1975, British economist Charles Goodhart wrote: “Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.” Duh… Luckily for the rest of you, his statement has been recast more accessibly as, “When a measure becomes a target, it ceases to be a good measure.” It is known colloquially as Goodhart’s Law. I ran across the reference on X (formerly Twitter). Examples of the law in action abound. For example: • Airlines, setting targets for on time departures (where on time equals good), pushing back from the gate to meet their numbers but idling their passengers for long periods of time on the tarmac. (Full disclosure—I’m not sure if this really happens. I fly too much to make the airlines angry at me.) • Call centers using call duration as a proxy to measure how quickly their reps solve problems. Setting call duration targets indirectly encourages those reps to transfer calls or terminate them early. Short calls became more important than solving problems. Of all the key performance indicators that design firms track and use, utilization (or chargeability) is the one most prone to proving Goodhart right—again. Efficient utilization of people’s time is fundamental to our businesses—there is no way around that—and it’s a core determinant of a firm’s profitability. Utilization, whether measured in hours or dollars or both, measures the appropriateness of a firm’s structure and the successful execution of its work processes. When a firm meets its utilization goals that should mean it is calibrated correctly—it has the right number of the right people doing the right things—and that work is flowing through the system to those right people. When individuals are meeting their utilization goals, generally expressed in hours, it should mean that work is flowing to them correctly and they are executing tasks with the expected level of efficiency. When utilization—the measurement of structure and process— becomes the target, it can produce behavior that stands in the way of leaders understanding what is going on in their firms. Making utilization a target in your firm could result in some undesirable behaviors. By Tom Godin, Sr. Director, Performance Consulting, Zweig Group
• Timesheet hijinks. Light week? I’ll just pile some hours into this project that I know has some fee to work with. • Slow rolling work. Light week? I’ll just make something that should take two hours take four hours. • Holding on to work. Light week? One of my coworkers is the right person for this, but my hours are down so I’ll do it myself. I don’t think the answer is to stop measuring utilization on a firm or individual basis. The metric is too important not too. But I do think the answer is two-fold: • On an individual level, be clear about what should be happening, and then provide direction on what to do if that is not what is happening. For example: “When everything is working well here, you should be spending 32 hours of a 40-hour week on client project work. If it looks like you’re going to honestly come up short, tell me and we’ll try to direct something your way. If we can’t, we’ll figure out together how to best fill your extra time.” • On an organization level, take responsibility as a manager and leader for the measurement and do the work to address structural and/or procedural and process problems in your firm. This year, resolve to measure a lot of things—including utilization— but be judicious about what you choose as targets for your people to hit. For help with this, or with any other business matter that might be vexing you, please give me a call. Our agents are standing by to assist you.
TOM GODIN is Sr. Director of Performance Consulting at Zweig Group. Contact him at tgodin@zweiggroup.com .
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Affording a Small Business Acquisition ZWEIG LETTER TOP ARTICLES
These four components all work in concert to make buying the business more affordable and easier to fund.
By Mark Zweig, Chairman & Founder, Zweig Group
Those four components include a cash down payment for "book value” of the business, an amortizing interest-bearing note, an annual payment based on a percentage of revenue from the selling firm’s clients for two to three years post-sale, and consulting agreements for selling firm principals. These all work in concert to make buying the business more affordable and easier to fund. Here is a specific example of how to buy a $2 million firm: • Book value down payment. The book value down payment is essentially cash for cash and accounts receivable. It’s like moving money from one account to another. In the example above, a $2 million annual revenue firm would probably have a book value in the range of $300K-$500K. So you use $300K-$500K of your cash for a day or two (or draw on your own line of credit) for your down payment. But once you own the business you get $300K-$500K in short-term liquid assets to pay yourself back that money immediately. • Amortizing note. The note in this case could be another $300K-$500K, and let’s say that will be paid out over three years. For this example, it is $400K paid in three annual payments, or $153K a year at 7 percent interest. That money comes from profits this selling business will make. Hopefully a $2 million revenue firm with lower overhead (because you will be reducing professional liability, legal, marketing, accounting, etc. expenses post-acquisition) should be able to generate at least 15 percent margin post acquisition. That’s $300K a year assuming absolutely no growth. That leaves you about another $150K a year left over.
Let’s face it. There are thousands of small architecture, engineering, and allied consulting firms out there with aging owners who are ready to retire. The bigger firm buyers aren’t interested in them. They are too small and it’s not worth their time to find them, buy them, and integrate them into their businesses. But acquiring these companies and giving their owners a way to get out is a big opportunity for you to grow your own AEC firm. That is why buying another firm is included in the strategic plans for many growing AEC firms today. Yet, my experience is that most potential smaller and mid-size firm buyers think they cannot afford to buy another company. A typical $2 million revenue AEC business might be “worth” $1.5 million. The $8 million-$10 million revenue AEC firm buyer doesn’t have that kind of cash sitting in their account. So as far as their principals are concerned, buying another firm is just out of consideration until they can “save up” a bunch of cash. But it shouldn’t be. No one writes a check for the entire purchase price of a company up front. I want to show you just one example of how you could structure a deal that would allow you to buy a firm that you may not have considered before. The way to do it is to get the seller(s) to finance the deal for you. A typical deal structure that has not only worked on dozens of transactions we have helped our clients with but one I have also used myself several times involves four components. And it is critical to understand how your knowledge of these will affect your ability to make an offer and put a deal together that would benefit everyone.
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• Earnout not based on profit, but instead revenue from existing clients. The next component is a percentage of revenue from existing clients at the time of the sale. Let’s say in this case that is $1.6 million a year for three years from these clients (80 percent repeat business). A 5 percent payment based on revenue would be another $80K per year for the sellers. I like percentage of revenue from existing clients versus percentage of profit in earnouts for many reasons. There won’t be any arguments over profit. There won’t be any barriers to moving work and people around. Work could be done by the buyer for the seller’s clients and they would still get their 5 percent. It’s cleaner and encourages integration and cooperation between the two companies versus keeping the sellers out to the side. • Employment agreements for selling firm owners. Many think these employment agreements aren’t part of the sale consideration but they are. Let’s say in our example there are two owners. One wants out immediately and the other wants to work for another three years but phase out over that time. So you agree to pay the one who wants out $100K a year for three years to not show up, and the other one gets $200K a year for three years but really would have averaged $100K a year based on the hours he or she will work. The total is $600K going toward the purchase price. Add all these numbers up: $300K down payment, plus $400K note payment, plus $240K “bonus” payment, plus $600K in employment agreements, and you now have a $1.54 million offer to buy this $2 million revenue company. And you have been able to essentially finance 100 percent of the deal and pay for it over time. And hopefully, you will not only make it more profitable than it was but grow it, too. You could multiply the numbers in my example by 10 for a $20 million deal if you wanted to. The concept remains the same.
You might ask yourself why a seller would take a deal like this? There are many reasons. The sellers can’t just quit and shut down. They want to protect their employees and long-term clients. And they cannot get any money out of their business any other way. Their book value isn’t liquid. They may have personal debts to pay off. They may be ill. There may be any number of reasons they want to exit. By financing the deal they could save money on their taxes because it isn’t all coming at once. The percentage of revenue payments are a bonus. The employment agreements allow them to retire immediately or slow down gradually and still make some money. This deal structure also allows the buyers to expense out most of their acquisition costs. Of course, you always need to consult experienced and specialized accountants and legal advisors to put this all together. It may not be quite as simple as I have portrayed it above. We are lucky there are some really great experts who work with companies in our industry who help engineer deals like this. I plan on sharing more of my experience in buying and selling AEC firms in future columns here. I’m tired of all of the standard advice I read from non-industry specialized financial jockeys. And it’s time for some new creativity to shed some light on this super-important subject for all of us who own these businesses.
MARK ZWEIG is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com .
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ZWEIG LETTER TOP ARTICLES
Your Plan isn’t Strategic
The hidden signs your firm’s plan is neither strategic nor growth- driven.
By Ying Liu, Director, Growth Consulting, Zweig Group
• You have a strategic plan, but “something” is missing. Many CEOs of AEC firms would agree that a growth-driven mindset is a non-negotiable attribute and attitude in defining who should serve on their “first team” to move their companies forward, but not too many top leaders exemplify that same growth mindset when it comes to crafting and executing their external growth strategies for their firms, resulting in a strategic plan being too internally-focused with senior leaders paying less or no attention to external strategic issues. As such, it is almost always too late—especially for growth-driven leaders and firms—to start developing commercial strategies after operational and/or financial goals are established. The lack or absence of focus on external opportunities often turns out to be a pain point for the CEO (as well as some senior leaders) and keeps them awake at night because their gut feeling is telling them “something” is missing from their current plan – and these feelings are certainly diagnostic due to various external factors including market indicators, competitive landscape, client centricity experience, and/ or stakeholder expectations. Quick tip: if you’ve dabbled in strategic planning before, you may immediately think about undertaking
Despite good intentions, one of the most common pitfalls in strategic planning is the lack or absence of growth strategies, let alone being intentional and strategic about them. Growth strategies are like part and parcel of a strategic plan in which the ultimate value and impacts are driven by a firm’s ability to both clearly articulate and robustly execute its growth strategies; however, the growth imperatives could also be hazardous to strategy if they do not result in superior profitability and/or ultimately undermine competitive advantage. Deciding on what/where/how to grow requires making choices and trade-offs in competing—to choose what not to do; strategic choices must be fitting enough to achieve growth goals (quantitative and qualitative), and growth initiatives must preserve and reinforce strategic positioning. That said, what are some hidden, yet telling, signs that your firm’s plan is neither strategic nor growth-driven?
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a SWOT analysis—particularly the “opportunities” and “threats” buckets—as a potential solution to brainstorm and analyze external macro trends; better yet, there is a more helpful and relevant framework called PESTLE analysis to perform such exercises. More likely than not, that “something” includes the missed growth opportunities that could have helped them accelerate/maximize top-line revenues for their firms had they been more intentional and strategic about their commercial strategies (hence, a “growth plan” with external focus that helps refine and shape a firm’s operational and financial strategies, and not the other way around). • Your strategic plan is not really strategic but more of an operating plan. While it is important to ensure that formal mechanisms governing how employees get work done (structure, processes, systems, and incentives) are in place, these internal factors should serve as growth enablers to help fuel external growth opportunities, not just satisfy the core or improve the status quo. Many firms fail to distinguish operational effectiveness from strategy. While both are essential to superior performance, the two agendas are different. The operational agenda entails continuous improvements where there are no tradeoffs; operational leaders must demonstrate relentless efforts to achieve best practices through constant change and flexibility. In an operational review meeting, your team should be asking questions like: • “What are we working on?” • “Are we on target?” • “How do we ensure everyone is on the same page on the status of a project or initiative?” On the other hand, a strategic agenda is about defining a unique position and making clear trade-offs to build or enhance your firm’s sustainable competitive advantage; strategic leaders must demonstrate constant discipline, strategic continuity, and clear communication. In a strategic plan review meeting, your team should be asking questions like: • “Are we working on the right stuff?” • “Why are we working on what we are working on?” • “Are we moving the needle in our success metrics or are we working on it because it’s the status quo?” No doubt improving operational effectiveness is a necessary part of management, but it is not strategy; firms that have been confusing the two have come to realize that operational effectiveness cannot define the overall growth direction or drive strategic decisions. In fact, many firm leaders have been frustrated by their inability to translate operational gains into sustainable profitability or breakthrough results, without a well-defined growth strategy in the first place. Your TOP talent is drifting and feels aimless. Note how the word “TOP” is capitalized to differentiate from an average performer. It is almost a cliché to say that recruiting and retention has been one of the biggest challenges in the AEC industry—allow me to take a second to introduce Zweig Group’s ElevateHER® program, a commitment to help recruit, retain, and engage the best minds in the industry. ElevateHER® brings AEC professionals together, from across the country, disciplines, and org charts, to join forces to develop and disseminate actionable plans
that aim to solve the recruitment and retention crisis in the industry via the lenses of diversity, equity, and inclusion. From a strategic standpoint, securing top talent can be a huge differentiator in positively impacting a firm’s growth trajectory. Top talent is wired to be dissatisfied with a “good enough” approach as they often possess a unique set of skills and perspectives to push the boundaries of conventional ideas to drive unprecedented growth. In a strategic plan, developing a compelling people and culture strategy is a must, but if the plan does not help satiate the needs and wants of your top talent at all levels of the organization to inspire them to go that extra mile, you are running the risk of losing your star performers sooner than expected as they are often the first ones to be the ambassadors of a truly strategic growth plan (or if there is a lack thereof, they are also the first ones to notice it). Overall, strategy is the context of why you are doing what you are doing. What differentiates the best strategic growth plans from the rest really comes down to the firm’s genuine willingness to support, challenge and collaborate with each other in making choices and tradeoffs in investing, competing, and winning—the essential definition of a compelling strategy. The work required to effectively craft and execute a firm’s growth strategy is no simple task; it is no surprise that many firms try to oversimplify it, confuse it with operational efficiency, or dilute it to be reactive to market demands. Undeniably, the challenge of developing or reestablishing a clear growth strategy is often primarily an organizational one and depends on leadership. Reach out to me if you need support or would like to chat further.
YING LIU, MBA, LEED AP BD+C, is Director, Growth Consulting at Zweig Group. Contact her at yliu@zweiggroup.com .
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Here’s a quote to help provoke some mental stimulation: “People want to want more than they want to have, and so the shallow satisfaction of having is always replaced by more wanting.” That provocative sentiment captures a fundamental principle of human behavior at work in all of us known as the “hedonic treadmill,” which states that people continually chase temporary happiness by seeking new things, but once those shallow things are obtained, the satisfaction they provide fades as we adapt to having them—and so we begin seeking and wanting the next thing. That’s because core human needs go much, much deeper than surface-level (dare I say, gimmicky) desires or experiences. Your core needs and my core needs are established around security, well-being, and purpose (among others) and the fulfillment of these things leads to a sense of deep intrinsic satisfaction that is far more enduring than the fleeting happiness that gimmicky “things” offer. Now, I realize you aren’t reading today’s issue of The Zweig Letter with the intent of getting a psychology lesson (nor am I remotely qualified to offer one), so let’s get to work applying this principle to the issue of employee retention. As firms engage in a seemingly unceasing struggle to attract and keep good talent, I don’t mind saying that I think we’ve misguidedly elected to feed this monster. Hell, we’ve not only turned on the hedonic treadmill, we’re filling it with gas! We pander to it, we indulge it. We think getting and keeping top talent means giving people shallow, transient things they want rather than improving our offering of the things they actually need. Here are a few examples of the not-so-uncommon half-baked perks I’m talking about: unlimited snacks and soda, pet-friendly offices, pet insurance, nap pods (seriously?), hammocks, gaming consoles, themed office days, weekly catered lunches, happy hours, smoothie bars, adventure bonuses, onsite yoga classes, RV rental discounts (not kidding), etc. Any of those ring a bell? Who needs a better 401(k) benefit or more affordable healthcare premiums when you can have all the free kale smoothies you want (cue eye roll)? You can’t make this stuff up, folks. Let me offer some hard data to chew on. In a 2023 employee benefits survey released by the Society for Human Resources Management (a Flash Over Substance Focus your firm’s retention strategy on offering meaningful benefits that are in alignment with core human needs. By Jeremy Clarke, COO, Managing Director, Talent Consulting, Zweig Group
national and regarded think-tank on HR structures, trends, strategies, etc.), the top five benefits sought by candidates and employees are as follows: • Healthcare related (89 percent) • Retirement related (81 percent) • Work/life balance, PTO, and leave (80 percent) • Professional development (68 percent) • Catastrophic benefits, i.e., life/disability (67 percent) Did you notice the trend in those statistics? Candidates and employees want three core fundamental human needs met. They want: • Security. In other words, they want to feel assured. They want a sense of financial and physical safety in life through good healthcare, good retirement, and good insurance. • Purpose. Inotherwords,theywantameaningfulandpositivetrajectoryfor their career. They want to feel like they can advance and excel at their firm. • Wellness. In other words, they want better quality of life outcomes through good work/life balance so that instead of just doing and surviving they feel like they’re thriving. As employers, our intentions may be good; but at the end of the day, candidates and employees want greater investment into their security and wellness rather than having catered salads or “bring your pet to work” days. In fact, gimmicky, half-baked perks like these actually increase turnover by attracting the professionals who are seeking transient shallow “perks” over a legitimate long-term career opportunity. If you take one thing away from this article let it be this: Long runway benefits are a premium among long runway employees. Conversely, short runway perks are a premium among short runway employees The downside to the current trend of offering gimmicky, trendy benefits to employees is that, more often than not, the suggestion of it clouds what is truly worthy of human dignity and therefore truly meaningful (and for this reason they’re usually perceived as insincere anyway!). Pet insurance and kale smoothies might make for catchy hooks—they might even work for a time—but the fact is that if priority isn’t given to core issues such as security, wellness, and purpose, then all your imaginative short-term tactics will fail to be a basis for producing long- term commitment. Let me encourage you to get off the vicious treadmill and focus your firm’s strategy on offering meaningful and relevant benefits that are in alignment with core human needs. Benefits that actually bring dignity to your employees, create deep loyalty and effectively retain talent. It has been proven over and over to me that the greatest threat to loyalty is a frivolous and shallow sense of entitlement—and the surest way to enlarge one’s frivolous and shallow sense of entitlement is to appease it.
JEREMY CLARKE is COO, Managing Director, Talent Consulting at Zweig Group. Contact him at jclarke@zweiggroup.com.
Benefits of Focusing on Growth The benefits that come with being a growth-
• Reducing the risk of business failure. Companies that focus on growth are more likely to be diversified, reducing unsystematic risk. Additionally, a growth mindset typically forces a firm to adjust with new market expectations. This ensures the company stays relevant and resilient, reducing the risk of business failure. This merely scratches the surface as to the significance of growth and its role in mitigating risks directed at your company. Within our industry, there’s a large disparity between firms that are growing and firms that are maintaining the status quo. According to Zweig Group data, AEC firms in the upper quartile of gross revenue growth witnessed a substantial 37 percent growth over the past three years. A stark contrast to the mere 4 percent growth seen in firms in the lower quartile. During our work with these firms over those three years, one of the most common issues that was attributed to a lack of growth was an inability to recruit/ maintain quality talent. Many of these clients weren’t able to maintain the workforce needed in order to handle the amount of work coming in the door. Slow growth, attributed to recruiting and retention issues, led to slower growth. By no means is this a self-fulfilling prophecy, but it is something AEC firms need to be cognizant of. The solution to this cycle is an actionable strategic plan, based on a clear set of objectives, that the entire firm buys into—a plan that clearly communicates a path forward and how it will provide better opportunity for everyone involved. Growth doesn’t just enhance value for shareholders; it broadens opportunities for all. For employees, it paves the way for better career progression, increases professional development opportunity, draws in higher-quality talent, creates additional jobs, fosters creativity/ innovation, attracts more interesting projects, and bolsters your firm’s discretion in dealing with difficult clients. Lastly, for those holding back from growth due to an anticipated downturn in the economy, an overly cautious stance more often than not just leads to missed growth opportunities. Based on the S&P 500, good times (bull market conditions) on average last a little over 6.6 years while bad times (bear market conditions) last on average around 1.3 years. The average impact of a bear market (-38 percent) is almost nine times less than the average impact of a bull market (+339 percent). Following the 2008 financial crisis, many analysts continued to call for an economic downturn all the way up until the pandemic in 2020. Assuming capital invested in your business would’ve had similar or equal returns to the S&P 500 index, you would have passed up an ROI of 451 percent. Very few people are able to time these events, and a majority of those who do are like a broken clock—they’re right twice a day. It’s always important to maintain a healthy balance sheet and manage your organization’s risk, but so is prioritizing your organization’s growth. Sit on the sidelines at your own risk. If you’re interested in laying out a plan for growth but don’t know where to start, Zweig Group has a team of experienced professionals here to help. TRAVIS WHITE is Performance Consultant at Zweig Group. Contact him at twhite@ zweiggroup.com .
focused firm far outweigh the risks. By Travis White, Performance Consultant, Zweig Group
In our experience with certain clients , the concept of “growth” is occasionally perceived negatively. Establishing a growth strategy frequently takes a backseat to other tasks that are currently captivating leadership’s attention. When speaking with these clients about why growth isn’t at the top of their priorities list, these are some of the most common reasons we hear as strategic planning consultants: The firm will lose its culture if it grows out of its current size. Staff feel they don’t have time to recruit, onboard, and train new employees and that it is impractical to grow at a faster pace. Increasing revenue or any other monetary metric shouldn’t be the primary focus of a virtuous firm. The most common of these three is the first point. Zweig Group’s strategy team once had a repeat client voice their concern regarding losing their culture in three separate planning sessions—once at approximately 50 employees, then at 150, and finally at 300. While all of these concerns are valid, the benefits that come with being a growth-focused firm far outweigh the risks. Here are just a few of these benefits: • Staying competitive. Being growth-focused allows a company to maintain or expand its market share, positioning it strongly against the rest of the market. Over time, this proactive approach can lead to increased sales and profits which can bolster the company’s market influence and capabilities over its competitors. Simply put, your firm is more likely to provide better services to more clients. • Attracting and retaining talent. A growth-oriented company is an attractive place to work for ambitious and talented individuals. These companies often provide better opportunities for career advancement and development, thereby attracting and retaining high-performing employees. • Greater opportunities. Growth-focused firms tend to explore the boundaries of their current market, leading to a wider array of opportunities. These can include expansion into new markets, the ability to offer additional services, participation in networking events, and access to a broader talent pool, among many others. • Benefiting from economies of scale. Emphasizing growth can help companies lower their overall costs and increase profitability. As a company expands, it can take advantage of economies of scale that wouldn’t be available to it if it remained at its current size. • Financial flexibility. Growth-oriented companies often have more options when it comes to securing financing for future projects or expansions. Lenders and investors typically favor businesses that show strong growth potential.
Cover Story: Spring 2024
Cairo & the Built
Environment: Past, Present, and Future
By Luke Carothers
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A Land In Transition Egypt as a place is no stranger to the change that marches hand- in-hand with the progress of time. It is a unique place in the world. The lands made habitable by the flowing waters of the Nile River and its delta house a civilization amongst the oldest, stretching back thousands of years to leave a mark on the modern world. Throughout this long and rich history, the places where Egyptians lived shifted along the path of a shifting river delta as well as cultural and political tides. Cairo has been populated in various stages for over 1,000 years. In its earliest history, Cairo began as a settlement near a strategic point between two of the Nile’s natural features–its delta and valley. The area grew over time as rich trade routes were established across the north of the African continent. As Cairo expanded and contracted over the centuries, various settlements, forts, and communities rose and fell. The legacy of time and change can still be felt throughout Cairo’s built environment. In many ways, Cairo is a patchwork example of this change–where new and old coexist simultaneously to create the area we see today. What we see today as a beautiful and often chaotic tapestry is the legacy of this coexistence. From the perspective of this legacy and its impact on Cairo’s built environment, there are several projects currently happening in Cairo that are poised to set the framework for this relationship in the future. A Rising Guideway–the Cairo Monorail There are a number of ongoing large-scale infrastructure projects currently underway in Cairo and its surrounding lands–responding to the needs of a shifting population. Of these transportation and infrastructure projects, there are perhaps none bigger than the Cairo Monorail, which runs 96-km across the heart of Cairo. This ambitious project–owned by the Egyptian National Authority of Tunnels (NAT)–is intended to create a direct connection between Cairo, the New Administrative Capital, and 6th of October City via a two-line rapid transit system. When completed, this will be the longest driverless monorail system in the world. The Cairo Monorail system will represent the public transportation links between the New Administrative Capital and the 6th of October City. The monorail’s concrete guideway now rises high through the landscape of Cairo and its surrounding metropolitan area. At either end of this long- spanning system are two depots–one for the East of Nile (EoN) line and one for the West of Nile (WoN) line. Construction began on the Cairo monorail in September 2020, and engineering work is nearly 90 percent complete with work currently ongoing completing formal submissions for systems assurance documentation. The next step in regard to engineering is finishing as-built drawings as the project continues to progress through its construction phases. Additionally, project teams are hard at work completing construction shop drawings for the monorail’s final stages of Civil, MEP, and Architectural work.
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Cover Story: Summer 2024
An Iconic Shoreline from Above
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McLaren Engineering Group Wins the 2024 Engineering Drone Video of the Year Competition By Luke Carothers
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The competition for the Engineering Drone Video of the Year (EDVY) competition was fierce this year with more than 3,000 votes being cast during two weeks of online voting. Over the first four days of the EDVY Competition, there was little to discern between the top five videos, with each receiving between 100 and 200 votes. As the first week closed on day seven, one video from a familiar name began to emerge as a leading contender to finish online voting in the top five. Submitted by last year’s EDVY winners Cody Rogness and Moore Holding Company/Moore Engineering, the video tiled “Cub Creek Development 2nd Addition” highlights a civil engineering project in Horace, North Dakota. Completed by Moore Engineering’s Land and Site Development Group, the project is a new residential development featuring 215 single-family residential lots, 2 multi- family lots, stormwater ponds, 2 park properties, and pedestrian paths. The video visualizes Moore Engineering’s civil, water resources, and environmental engineering services for the Cub Creek project. Using drone footage to provide a comprehensive view of the project, the video pairs visuals with information, tracing the progress of project features such as the collector roadway, which includes 2,100 lineal feet of new concrete roadway, shared-use paths, and sidewalks. This trend continues as various aspects of the project are paired with information about material, development, and community impact. As week two of online voting progressed, the jockeying for position in the top five intensified, and the final four changed no less than three times. As the second week continued, another video that emerged as exceedingly likely to finish in the top five was DRMP’s submission titled “Suncoast Parkway 2 State Road 589 Expansion Project.” The video features a critical project that provides region connectivity and was included in the 2022 Yearbook of Engineering Achievement from Civil+Structural Engineer Media. Using voice-narration paired with video footage, photos, and visualizations captured with drone- flight, DRMP’s submission tells the story of Florida’s infrastructure expansion over the course of the last 10+ years.
The final three positions in the top five remained in hot contention as online voting drew to a close in the second week. During this time, several videos made quick jumps up the leaderboard with perhaps none larger than McLaren Engineering Group’s “Promontory Point” submission. At the conclusion of online voting, four submissions were in direct competition for the final spot. Another submission that made a significant jump in the final days of online voting to secure a spot in the top five was “Lynnwood Link Extension (L300) Light Rail” from Skanska USA Civil. The video uses drone flight to trace an overview of rail project just north of Seattle. Flying overhead the project, the video gives viewers a unique perspective on the project’s 3.8 miles of aerial guideway, two elevated stations, and a five-story parking garage at the Lynnwood Transit Center. The final video to secure a spot in the top five at the conclusion of online voting was Thomas & Hutton’s “HMG Metaplant America EV Facility,” which is situated in Bryan County, just minutes away from Savannah, Georgia. Thomas & Hutton provided comprehensive services for the groundbreaking project, including site selection, general consulting, due diligence assistance, site master planning, project management, and the design and permitting of offsite and onsite infrastructure. The video gives an aerial view of Thomas & Hutton’s work on the project’s roads, water supply, sewer systems, storm drainage infrastructure, and mass grading plans. After the end of the online voting period, our top five videos were compiled and passed along to our prestigious panel of judges to determine the 2024 EDVY Winner. Composed of AEC industry professionals, drone pilots, and experts, our judging panel worked together to determine which submission was worthy of the top spot. And, after adding up all the numbers, one video rose to the top: McLaren Engineering Group’s “Promontory Point”. McLaren Engineering Group’s video features Promontory Point, which is a landmark park in Chicago that features a notable limestone shoreline built in the 1920s for protection against Lake Michigan’s waves. This iconic shoreline faced a proposed demolition due to concerns over its condition, and McLaren’s submission uses textual overlays to outline their comprehensive inspections carried out by drones and divers. The video uses points created through drone imagery to outline various project features, and demonstrate the result of their determination that the park’s revetment could be preserved with proper rehabilitations. McLaren Engineering Group’s winning submission to the 2024 EDVY Competition opens with a sweeping shot of the Chicago shoreline, with the historic Promontory Point —an 18-acre public park and landmark known for its expansive limestone revetment shoreline—surrounded on three sides by the waters of Lake Michigan. The video uses textual overlays to tell the history of the park, describing how the 3,150-ft shoreline was constructed to protect the park from the lake’s intense waves. Using labeled points, the video shows the different structures that make up the park’s iconic shoreline, including its limestone revetment and promenade, steel waler, and concrete coffins. The video continues the story by outlining proposed plans to demolish the iconic structure amid fears of collapse. However, thanks to the McLaren’s
Judging Panel Bree Sikes Marketing Coordinator, Zweig Group
Alexander Lopukhov Co-Founder and Head of Business Development, TOPODRONE SA Will Anderson Transition Consultant, Zweig Group Matt Hassett Product Manager, AGTEK Development Co. Luke Carothers Editor-in-Chief, Civil+Structural Engineer Media
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