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T R E N D L I N E S

Effective remote work

Optimism among AEC firms is high as we look ahead to 2022 and beyond. Best time to be in AEC

F I R M I N D E X Atwell Group.......................................................... 12 Braun Intertec Corporation............................4 Edwards-Pitman Environmental, Inc......4 Raba Kistner, Inc.................................................... 6 RVi Planning + Landscape Architecture............................................................ 12 Strategic Construction Solutions............ 12 Waldrop Engineering...................................... 12 MO R E A R T I C L E S n CHRISTINA ZWEIG NIEHUES: New Zweig Group website Page 3 n Opportunity to succeed: Chris Schultz Page 6 n KEVIN JOHNS: Financial considerations for AEC firms Page 9 n MARK ZWEIG: Change for the sake of change Page 11 Zweig Group combined responses from this year’s AEC Workplace of the Future Survey and last year’s AEC Industry Outlook and Response to COVID-19 Survey to analyze remote work trends and policies in the industry. When asked what percentage of their workforce could effectively work from home, the industry average was 71 percent. When analyzing this question by firm type and condensing the groups to our three main areas, the expected gap between the percentage reported by architecture firms (76 percent) and engineering firms (72 percent) relative to construction firms (38 percent) is clearly displayed. Participate in a survey and save 50 percent on the final or pre- publication price of any Zweig Group research publication.

A s we wrap up our ElevateAEC conference season, one thing really stood out: We are operating in a historic climate in the AEC industry. With industry performance metrics breaking records, we continue to defy expectations. Our in-person ElevateAEC conference in Denver provided an environment where you could feel the buzz around beating those expectations. The elements of networking, learning, and celebration were charged with an energy many had been saving for two years. But beyond the excitement of the return to the red carpet, there was so much more to feel good about. We serve in a great and stable industry, one rich with purpose and sizzling performance. To put a cherry on top of the event, the House approved the infrastructure bill late on the last day of the event, further fueling optimism for 2022 and beyond. Here are some Zweig Group data takeaways from this year’s ElevateAEC conference: ■ ■ The industry is hot. Last year, we started by presenting a key industry metric that shattered previous records. In 2021, we’ve broken that record again, posting the best industry performance since data has been collected. That metric, which is a critical measure of industry performance, is profit. Industry-wide median profit is now at 15.6 percent from our most recent Financial Performance Report . For much of the industry, revenues remained strong with increasing backlog, but a drop in general and administrative overhead also helped push profit into the stratosphere. ■ ■ The recruiting and retention problem grows. The past year does not paint an improving picture of the industry’s top challenge. In fact, things have taken a turn for the worse. Staff growth took a nosedive during the pandemic, even turning negative in 2021, from nearly 10 percent growth pre-pandemic down to -1.7 percent at the beginning of this year. This is why some in the industry are describing this phase as “the great resignation.” Although the financial metrics look good, the other side of the equation raises the alarm for the current and future state of employee burnout, mental health, quality, and a whole host of other side effects of an industry hotter than ever, but struggling to maintain a workforce. ■ ■ Backlog is strong. There is no relief in sight. Backlog in the industry – work that is under contract, not yet performed – took the sharpest climb in a decade, going from 7.7 months in 2020 to

Chad Clinehens

See CHAD CLINEHENS , 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

CHAD CLINEHENS , from page 1

IMPORTANCE OF GROWTH

9.3 months in 2021. Good news for many, but also another indicator we’ve got a lot of work to do and must have the people to do it, without burning them out. ■ ■ Growth matters. For those unsure how to sell a growth plan in their firm when they are busy, these two metrics make a strong case. Voluntary turnover is more than three times higher in average performing firms compared to fast growth firms. Fast growth firms, defined as firms that have grown 20 percent or more per year for the past three years, are better at retaining people and also better at recruiting as the days to fill a job is significantly lower in fast growth firms (30 days versus 43 days respectively). People want growth because growth provides opportunity and solves problems. So when trying to sell “why grow” to the overworked project manager, make sure they know that growth doesn’t mean they have to sell more and do more, it means they get to keep people and find new people, which helps with the workload issues. Change the conversation and arm people with real data and the right message that drives performance. LOOKING AHEAD. We have much to be optimistic about as we head into 2022. We live in a time where community spaces and experiences are important to everyone. Investment in infrastructure will fuel design and construction. We are getting better at running our businesses and producing financial metrics that continue to elevate our idea of what is possible in this industry. ■ ■ ElevateHER 2022. Jamie Claire Kiser kicked off the 2022 ElevateHER program on our final day in Denver. In 2020 and 2021, cohort members worked in smaller project groups on self-chosen focused topics, creating a deliverable to be shared with the rest of the industry. Project topics ran the gamut including methods to support individuals in the industry at all stages and phases of their life, addressing conflict and implicit biases, designing career paths, awarding and incentivizing diverse projects and firms, and much more. The focus of the 2022 cohort will be to continue furthering the existing projects, and on implementation and advancement of the ideas initiated by the last two cohorts. 2022 cohort members will meet in-person at the program kickoff in Spring 2022, and will receive resources such as presentation coaching, training, Zweig Group research, networking opportunities, and more, and will present to the first-ever in-person ElevateHER Symposium in Las Vegas on September 14, 2022. Applications for the 2022 cohort are due by December 17, 2021. Click here to download the application form. ■ ■ Zweig Group’s newwebsite. We are completing our fully

redesigned newwebsite and we are excited. Connecting zweiggroup.com and thezweigletter.com will have extra benefits for The Zweig Letter ’s readers. Christina Zweig Niehues talks more about this process in this issue, and why you should make sure you aren’t just putting a new skin on an increasingly corrupt skeleton when you are doing your website updates. ■ ■ Zweig Leadership Institute. Speaking of training and development, I am really excited to share that we are also working on a concept that does not exist yet in the AEC industry: A platform we are going to call Zweig Leadership Institute, which will be an amazing online learning portal with its own independent certification board as a way to train and accredit your people to take increasing responsibility in your firm and to be equipped to drive return on investment greater than ever. Stay tuned for more about this exciting announcement. ■ ■ M&A Next. Mergers and acquisitions is big business in AEC and the Zweig Group team has closed a record number of deals in 2021. As such, we are bringing back our M&A Next in-person summit in 2022. Join us in Charleston, South Carolina where the food and drinks are amazing, but the networking and learning around M&A will be even better. It’s not about what’s happened, but what’s next. Come learn about the future of M&A in AEC in Charleston April 28-29. This year was definitely an elevated experience for many. Fueled by great people, a great program, and positive energy about the future, attendees really made this conference the best ever. I hope you’ll join us in Las Vegas from September 14-16, 2022 for the 2022 ElevateAEC Conference, ElevateHer Symposium, and Awards Gala. Cheers to a great 2021 and to an even better 2022! There’s never been a better time to tell the world how great a career in AEC is and how successful you can be! CHAD CLINEHENS is Zweig Group’s president and CEO. Contact him at cclinehens@zweiggroup.com.

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

Liisa Andreassen | Correspondent landreassen@zweiggroup.com

Published continuously since 1992 by Zweig Group, Fayetteville, Arkansas, USA. ISSN 1068-1310. Issued weekly (48 issues/year). Free electronic subscription at thezweigletter.com/subscribe © Copyright 2021, Zweig Group. All rights reserved.

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THE ZWEIG LETTER DECEMBER 13, 2021, ISSUE 1420

O P I N I O N

New Zweig Group website

B y the time you read this article, Zweig Group will have a brand newwebsite, one that combines our three previous websites ( zweiggroup.com; thezweigletter.com; and our online store at shop.zweiggroup.com) into one, for a completely seamless user experience. Zweig Group’s newwebsite combines three old websites into one for a seamless user experience.

Have you checked out zweiggroup.com lately? If so, you are in for a treat! For the first time in almost a decade we have a completely newwebsite. We’ve taken some of the traditional elements of the Zweig Group brand and modernized them, along with new graphics and layout. We wanted to make sure the site stood as being very “Zweig” but also showed that we’ve grown and changed. Although we’ve re-skinned our website before, this only hid some longstanding problems and issues behind fancy new clothes, but didn’t solve some of the fundamental issues and challenges we’ve had. This new site is not just a new look and feel – it’s also new on the back end! Zweig Group does a lot of things – learning, advisory, awards, research-based products, and so much more. This is a lot to encompass in one platform. As we’ve evolved over time, we’ve gradually added new

services and delivery methods, which meant more websites and more programs, software, and tools that have to work with these sites. What we ended up with before this project was a very complex technology spider web that was difficult to use, and also fragile on the back end. On the front end, we spent a lot of time updating things in multiple locations and also answering customer service questions that should have been easy to find on the site. We found that clients often didn’t knowwhere to find research reports in our online store, or weren’t aware of our range of learning options. These problems and many more are solved by our new site! Some fresh fonts, navigation, and updated copy and content better showcase the mission and

Christina Zweig Niehues

See CHRISTINA ZWEIG NIEHUES , page 4

THE ZWEIG LETTER DECEMBER 13, 2021, ISSUE 1420

TRANSACTIONS EDWARDS-PITMAN ENVIRONMENTAL JOINS FORCESWITH BRAUN INTERTEC CORPORATION Zweig Group, a full- service AEC management advisory firm, announced its client Edwards-Pitman Environmental, Inc. was acquired by Braun Intertec Corporation . Jamie Claire Kiser, Zweig Group’s managing principal, served as Edwards-Pitman’s lead advisor on the engagement, with support from advisor Johnathon Postell and senior analyst Drake Hamilton. “I’m very excited for the Edwards-Pitman team, and was privileged to advise such an outstanding group,” Hamilton said. “I believe alongside Braun Intertec, the Edwards-Pitman leadership team will go on to achieve incredible feats throughout the rest of their careers, and wish them the best.” Edwards-Pitman, a Georgia-based environmental compliance consulting firm, will continue as a wholly owned

subsidiary of Braun Intertec. Braun Intertec is an employee-owned geotechnical engineering, environmental consulting, and testing firm that employs more than 1,000 people in 35 locations in the Midwest and South-Central United States. “This is an exciting opportunity for our team to join a highly respected, employee-owned company with similar values for building long-term client relationships and high-quality work. Together, we can offer a variety of services to meet the needs of our clients in the Southeast and nationally,” said Linda Edwards, president and CEO of Edwards-Pitman Environmental. The Edwards-Pitman team has served Georgia and the surrounding states since 1994 and will continue to support its clients and partners in the Southeast and across the U.S. With Braun Intertec, the Edwards-Pitman team now has additional resources and expertise to

expand regionally and to solve complex environmental compliance issues for clients with its traditional focus on the transportation and infrastructure sectors. The deal, effective September 30, 2021, added more than 86 team members skilled in environmental compliance consulting to Braun Intertec. Zweig Group, three times on the Inc. 500/5000 list, 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 also provides a comprehensive suite of products including industry reports and surveys, executive training, and business conferences covering virtually every aspect of AEC firm management.

CHRISTINA ZWEIG NIEHUES , from page 3

easiest – in large part due to the help of Concord Adams, our partner on this project, and the great team we have here at Zweig Group. Although “too many cooks can spoil the pot,” when you have a good project management technique, careful tracking, and excellent communication, “many hands make light work.” Our work over this past year with Concord Adams underscored the importance of getting the right partner on these kinds of projects. Although we have some talented individuals on staff, it would not have been possible to pull off a project of this magnitude without the dedicated help of professionals who not only had more technical skills, but also were not likely to get distracted by their daily job functions and clients (sometimes it’s nice to be the client for a change). Working with a good web developer doesn’t necessarily mean hiring the biggest, fanciest company, but rather one that understands what your firm does, who your clients are, and will work tirelessly to ensure a good user experience on both sides of the screen – that means both the staff who will ultimately have to work with and update the website, and also the clients and future clients who will be viewing it. Concord Adams worked hand in hand with Zweig Group’s marketing team and set us up with a great project structure and just the right number of check-in meetings to keep the project on track. If you’ve been delaying a newwebsite for your firm, there’s never been a better time to get started. I hope you’ll take a few minutes to look around our newwebsite at zweiggroup.com, and discover more about who Zweig Group is today! CHRISTINA ZWEIG NIEHUES is Zweig Group’s director of research and e-commerce. She can be reached at czweig@zweiggroup.com.

capabilities of our firm. Most importantly, this new site helps our clients and potential clients learn about everything we do without having to leapfrog around to different websites. In the past, if someone read an article in The Zweig Letter then wanted to learn more about the Zweig Group staff member who wrote the article, they’d be taken to a completely different site. It was also hard to go from these articles to view the most current research report and learning options available on similar topics. Check out some new articles from The Zweig Letter at zweiggroup.com/blogs/news and see how much easier it is to find related information. “We’ve taken some of the traditional elements of the Zweig Group brand and modernized them, along with new graphics and layout. We wanted to make sure the site stood as being very ‘Zweig’ but also showed that we’ve grown and changed.” Behind what users can see when visiting the site are some important structural changes. A brand new site means we had the opportunity to make sure our website is fully integrated with our social media channels, marketing software, and various other programs we use to run the business. Getting to this new site has been a journey, but of all the web projects we’ve undertaken over the years, it’s been one of the

THE ZWEIG LETTER DECEMBER 13, 2021, ISSUE 1420

2022 Learning Opportunities

Learning is your competitive advantage. Zweig Group is your life-long learning provider of choice.

IN-PERSON SEMINARS FEB 17-18 Leadership Skills for AEC Professionals New Orleans, LA MAR 10-11 Project Management & Advanced PM for AEC Professionals Tampa, FL

VIRTUAL SEMINARS JAN 18, 20, 25, 27

Project Management Time TBD

FEB 1, 8, 15, 22

Elevating Doer-Sellers 11am-1pmCT

FEB 22, 24, + MAR 1, 3, 8, 10

MAR 30-31 Elevating Doer-Sellers Scottsdale, AZ

The Principals Academy Time TBD

APR 7-8

ElevateHER Kickoff Dallas, TX

JUL 12, 19, 26 + AUG 2

Leadership Skills for AEC Professionals 11am-12:30pmCT

APR 21-22 CEO Roundtable Napa Valley, CA

APPROX. ONCE A MONTH

APR 28-29 M&A Next

Charleston, SC

Survey Report Webinar Time TBD

MAY 19-20 CFO Roundtable TBD

JUN 23-24 The Principals Academy Miami, FL SEP 14-16 ElevateAEC Conference & ElevateHER Symposium Las Vegas, NV

Have questions? Want more information? Interested in a discounted group rate? Interested in In-House Training? Contact events@zweiggroup.com

*All events subject to change

Zweig Group is an approved provider by the AIA & SHRM

P R O F I L E

Opportunity to succeed: Chris Schultz President of Raba Kistner, Inc., a firm that is committed to empowering employees to continually improve and deliver services right the first time, on time, every time.

By LIISA ANDREASSEN Correspondent

A t Raba Kistner (San Antonio, Texas), Schultz provides strategic leadership and is responsible for the overall operations and resources of the company. During his 32 years with the company, he’s been responsible for scope development, contracting, financial management, and implementation of Raba Kistner’s geotechnical engineering projects across many industries. “Provide an environment for everybody to have the opportunity to succeed,” Schultz says. A CONVERSATIONWITH CHRIS SCHULTZ. The Zweig Letter: Since assuming the role of president in 2021, what do you consider to be one of your most significant accomplishments and why? Chris Schultz: Maintaining the company culture through massive changes and a pandemic – or at least I hope I have. Through any leadership transition, it’s critical for employees to remain top of mind. This was magnified during the pandemic. There was much planning and preparation that went into

ensuring my assumption of the role would be seamless, both internally for our team and externally for clients. Through a year of several key leadership changes, pandemics, and immense company growth, which included two acquisitions, I have and will continue to prioritize our employees and company culture. TZL: Trust is essential. How do you earn the trust of your clients? CS: It all starts with integrity, which is one of our core values. It starts by admitting when you make mistakes, being accountable, and doing the right thing, even when it’s unpopular. You have to do what you say you’re going to do. I always liked the Lou Holtz quote, “When all is said and done, a lot more is said than done.” For more than 50 years now, much of what Raba Kistner does is associated with compliance with laws, plans, specifications, and regulations. But earning the trust of our clients is the second part of the process. It begins with earning the trust of your employees and their trust of each other. Once you have that internally, it naturally makes its way to clients.

THE ZWEIG LETTER DECE

TZL: What role does your family play in your career? Are work and family separate, or is there overlap? CS: Being here for more than 32 years, I consider Raba Kistner and its employees to be part of my family. I am just fortunate to have a great family at home and at the office. I married my wife just five weeks before I started at Raba Kistner, so to say the lines between the two are blurry would be an understatement. My family at home, as well as our employees’ families, are the motivation for what I do and guide many of the professional decisions I make. I still remember being at a company picnic one summer and was watching our founder, Carl Raba, looking out over the crowd. I asked him what he was thinking about and he said, “Chris, we have a tremendous responsibility. We have to do our jobs really well so our employees can take care of all these people.” That mindset is the main reason I have been with Raba Kistner for 32 years. It is not a coincidence that our Purpose Statement is, “To provide professional consulting services with passion and integrity, to help build a better world for our employees, their families, our clients, and the communities we serve.” Our families are one of our stakeholders and they factor into the equation with every business decision we make. “Right now, I’m admiring our industry as a whole for how we reacted during the pan- demic to take care of our clients, our employees, and our families. I think our in- dustry was better positioned than most because we solve problems.” TZL: Diversity and inclusion are lacking. What steps are you taking to address the issue? CS: I think the current thinking is that equity is part of the diversity and inclusion conversation, and I agree that it’s an important part. The first step for Raba Kistner and for any company is acknowledging that it’s a problem in our industry, and some of the excuses we have relied upon for years such as the makeup of college graduates in our industry are no longer valid. As I recently commented on a Raba Kistner LinkedIn post regarding it being “Construction Inclusion Week,” I’m a firm believer that diversity in all of its forms makes

us better – better thinkers, better problem solvers, better people, and a far better company. I also think diversity in thinking is another important part of the equation. Our former CEO, Gary Raba, commonly quoted Winston Churchill: “If two people agree on everything, one of them is unnecessary.” Being in Texas, we’re very fortunate to have a diverse workforce, but we need to make sure the “E” and the “I” become a part of our culture. At Raba Kistner, we’re starting this process with the formation of a Diversity, Equity, and Inclusion committee, but the key is that we have identified it as one of our major culture initiatives moving forward. TZL: What type of leader do you consider yourself to be? CS: A servant leader. I’m fortunate to have that luxury because of the state of the company when I took over. Many times, when you step into the CEO role, it’s because things are not working well, and a transformational leader is what’s required. I think I could be transformational if required, but it’s not my natural space. We have a wonderful senior leadership team that runs our operations well and know how to run their businesses in a sustainable manner. Inheriting such a strong leadership team allows me to serve in the role that I love as a servant leader. The ACEC Senior Executive Institute training program taught me a lot about leadership styles and being able to self-identify where you belong. It was a long time ago that Booker Washington said, “If you want to lift yourself up, lift up somebody else.” That is what motivates me. TZL: The firm recently acquired Drake Environmental. What was the impetus for the acquisition and howwill it affect the dynamics of the firm moving forward? CS: Drake Environmental is a key player in the environmental and compliance field and well respected for its exceptional client service and relationships, innovative stormwater solutions, and commitment to the communities they serve. The partnership will allow us to expand our industry reach and build upon our extensive environmental sector expertise. As part of Raba Kistner, Drake Environmental will help to expand the firm’s environmental services in the Southeast, Central, and North Texas marketplaces and bolster construction phase services by bringing additional expertise in erosion control and stormwater management during the construction phase of projects. I love adding new services that can help our existing

HEADQUARTERS: San Antonio, TX NUMBER OF EMPLOYEES: 600

YEAR FOUNDED: 1968

NUMBER OF OFFICE LOCATIONS: 12

MARKET SECTORS:

❚ ❚ Civil infrastructure

❚ ❚ Commercial

❚ ❚ Education/K-12

❚ ❚ Energy

❚ ❚ Federal

❚ ❚ Healthcare

❚ ❚ Industrial

❚ ❚ Multi-family housing

❚ ❚ Sports/public facilities

❚ ❚ State and local governments

❚ ❚ Transportation

❚ ❚ Utilities

PURPOSE: To provide professional consulting services with passion and integrity, to help build a better world for our employees, their families, our clients, and the communities we serve.

See OPPORTUNITY TO SUCCEED , page 8

EMBER 13, 2021, ISSUE 1420

Company leaders gather with Chris Schultz, CEO, at the Raba Kistner corporate office in San Antonio, Texas, wearing pink to raise awareness for breast cancer prevention.

there was one individual that I would credit as being the most influential, it would be the other half of our company name, Dick Kistner. He’s the person I reported to the longest in my various roles with the company. He was the epitome of servant leadership, and instilled in me to always do the right thing no matter what the consequences. He was a servant leader when servant leaders weren’t cool. One of the great things he used to say: “It’s nice to be important, but it’s far more important to be nice.” TZL: They say failure is a great teacher. What’s the biggest lesson you’ve had to learn the hard way? CS: Early in my management career, I didn’t have enough faith in the people who worked and reported directly to me; they were incredible people. Likely out of my own arrogance, I thought I could often do it better and failed to delegate tasks that I should have. This meant I was limiting not only their growth, but also my own. This became very apparent to me when I went through a program that included a 360-degree review, and the common theme on input from my direct reports was my lack of delegation skills. The good news is I listened. TZL: In one word or phrase, what do you describe as your number one job responsibility? CS: Provide an environment for everybody to have the opportunity to succeed.

OPPORTUNITY TO SUCCEED , from page 7

clients. We also more recently acquired Rice & Gardner, a project management firm with an incredible reputation working predominately in the K-12 space that aligns well with our Project Control division and the success they have in the higher education market. We’ve never felt more confident about this being a one plus one equals something greater than two scenario. TZL: Who are you admiring right now in the AEC industry? Where do you see thought leadership and excellence? CS: Right now, I’m admiring our industry as a whole for how we reacted during the pandemic to take care of our clients, our employees, and our families. I think our industry was better positioned than most because we solve problems. Our backgrounds and experience naturally allowed us to adapt and develop solutions quicker than those in other industries. That said, the firms that I’m admiring most are those that are much further down the road on the DE&I journey than our own. The firms that jumped out ahead of the curve are to be admired. TZL: Have you had a particular mentor who has guided you – in school, in your career, or in general? Who were they and how did they help? CS: I’ve had the good fortune of having several great mentors in my career, and Carl and Gary Raba top the list. However, if

THE ZWEIG LETTER DECEMBER 13, 2021, ISSUE 1420

S P O N S O R

W orking with walls, light, shadow, and the properties of a nearly endless array of building materials, architects and engineers create the spaces in which we live and work. Some are dazzling, some are utilitarian, but all demand years of training, experience, and professional discipline to create. These five financial considerations are just a few of the measures that successful AEC firms put in place to build long-term organizational health. Financial considerations for AEC firms

Kevin Johns

In running your business, you may find yourself spending as much time working on the business as you spend working in it. Here are five financial considerations that will help you build an enterprise that lasts for you and for your employees: 1. R&D tax credits. Economists like Nobel Prize winner Joseph E. Stiglitz say investment in knowledge, more than just in plans and equipment, is what enables businesses to improve quality of life for everyone. Governments experiment with various incentives to reward companies that set aside resources for research and development and one of them is the tax credit. Established to reward investment in innovation leading to jobs, the Research and

Experimentation Tax Credit (known as the R&D credit) is often misunderstood. A common myth is that only big organizations with big budgets and lab facilities can use it. In fact, many companies, regardless of size, can qualify for an R&D tax credit with the right documentation, and it may apply to past tax years. Credits are in part based on wages paid to employees engaged in research and development work. The list of eligible activities is surprisingly broad and inclusive. In the architecture and engineering arena, these might include innovations in construction products or methods, new software applications, or enhancements to existing processes. The R&D

See KEVIN JOHNS, page 10

THE ZWEIG LETTER DECEMBER 13, 2021, ISSUE 1420

These include but may not be limited to your long- term growth potential, the valuation of the business, tax exposure, and owner retirement prospects. Succession planning helps you objectively assess the talent in your firm and understand where you stand against your competition. The most obvious and serious point of a succession plan is to protect the business should you become unable to fulfill your ownership duties. A succession plan may also provide for continuity of the top discipline leaders you depend on to attract new business. Beyond that, succession planning provides a secure and structured way out when you’re ready to retire or take a new direction in life. 5. Key employee retention. Employees are engaged when they’re willing to invest discretionary effort in the success of the firm. Creating this kind of engagement goes far beyond mere job satisfaction. Top performers want to know that their work has meaning and that they’ll be rewarded proportionately for their contribution. Building a team that can earn client trust and win jobs takes long-term investment. In addition to their professional skills, your people have institutional knowledge and relationships that are very costly to replace. It’s vital to your financial success to monitor and prevent key employee turnover. Architecture and engineering firms have a number of tools available to help with employee retention. Employee Stock Ownership Plans can incentivize key leaders to stay with you, while helping to balance concentration of ownership and support succession planning. Compensation plans and bonus structures can be enhanced to reward long- term service milestones. Cultural factors like support for employee philanthropic interests, continuing education, and professional development can also boost retention. The important thing is to get started. These five financial considerations are just a few of the measures that successful architecture and engineering firms put in place to build long- term organizational health. You don’t have to implement all of them at once but based on what we’ve observed with our most successful clients, it’s important to start where you are with what you have and try the most impactful one first.

KEVIN JOHNS, from page 9

tax credit is an often-overlooked opportunity to make substantial reductions in your firm’s tax burden. 2. Financial dashboards and scorecards. In any architecture or engineering firm, what gets measured is what gets done. This is especially true when it comes to your organization’s financial and operational goals. The dashboard and the scorecard are two successful measurement tools to put in place. They serve two different but complementary functions. Dashboards dynamically reduce multiple sources of live data to an at-a-glance overview of vital metrics. Scorecards provide a static snapshot of your firm’s performance in any given period against an agreed set of key performance indicators or KPIs. The metrics you choose to monitor on your dashboard or scorecard will be unique to your firm. These are developed in partnership between you and trusted individuals like a controller, CFO, and in many cases an outside tax attorney or CPA. Firms that get the best results from these tools usually combine a thoughtful mix of both financial and operational measures . The financial metrics show you the results of past actions. The operational metrics show you your current performance against chosen standards. 3. Profitability enhancement. One of the biggest enemies of profitability is hidden margin erosion. Buyers of architecture and engineering services have become increasingly sophisticated, so most firms have solid protections in place to address obvious profit threats like scope creep. Margin erosion can be tougher to catch. It can show up in things like mid-project pay increases, deviation from resource loading plans, travel or cost of living uplift, site conditions, or a variety of unforeseen vendor or sub-contractor issues. To run a successful (and consistently profitable) architecture or engineering firm, it’s vital to know exactly what’s in your multiplier. This includes not only your detailed fixed costs of doing business, but also your best forecast on variables like staff compensation and turnover, productivity fluctuations, external contingencies, supply disruptions, and potential lean process opportunities. A best practice to prevent margin erosion is to prepare a “margin profile” model that takes these factors into account each time you price out a project. A margin profile shows you how your effective multiplier can change when you test your assumptions against expected revenue over the life of a job. It also gives your project controls team a clear baseline against which they can monitor adverse trends in time for you to take early corrective action. 4. Business succession planning. The National Association of Corporate Directors reports that barely one in four privately held organizations have a documented succession plan. Building an architecture or engineering firm demands years of discipline, and the costs of not having a succession plan in place can be devastating. A business succession plan helps you address contingencies that can impact the health of your firm.

KEVIN JOHNS is shareholder, Architecture & Engineering with Clayton & McKervey. Contact him here.

If you need support with these financial considerations for your architecture or engineering firm, Clayton & McKervey can help. For additional information, call 248.208.8860 or reach out today. We look forward to speaking with you soon. The Clayton & McKervey team is always ready to help.

THE ZWEIG LETTER DECEMBER 13, 2021, ISSUE 1420

F R OM T H E F O U N D E R

Change for the sake of change

A s I write this, my wife and I are currently in the process of moving from a beautiful, large, well-designed mid-century modernesque house in suburban Fayetteville into a more than 150-year-old Victorian on a busy street downtown. How can you use change in your AEC firm to awaken your creativity and that of your people? Maybe it’s time to really think about that.

On some levels, that may seem crazy. Our current place really doesn’t need anything. It’s the most comfortable and well-laid out, spacious, and light home I have ever owned. It doesn’t need anything, there’s a place for everything, and we love our neighbors. Why move into a place that is fairly crusty and needs considerable work to bring it up to our standards? Sure – economically, it is a great deal. It’s cheaper than our house and has a couple extra lots facing a side street that are really valuable (even though we have no intentions of selling them). It will be beautiful with its 12-foot ceilings and we have a lot that will allow us to easily build a new super garage and office. It will be great once done, but what a lot of work and hassle to get there. It’s stressful for my wife. I’m tired and I don’t always like change. But THAT is precisely WHY we needed to do this.

Change – that is change for the SAKE of change – is good. It’s good for us to go through this even though we had no need to do it. This move has done something for me – besides helping me close my activity rings on my Apple Watch every day because of the work involved. Sure, it will be healthy to go through all of our stuff and thin that down some. But more than that, the change has energized me. I have found myself thinking about what we will do with this new house and site every day. We have attacked the project. We planned all of our changes and have 10-15 people working daily so we can get it in halfway decent shape before moving in next week. We have already transformed the yard by clearing out dead trees and hundreds of feet worth of gigantic,

Mark Zweig

See MARK ZWEIG , page 12

THE ZWEIG LETTER DECEMBER 13, 2021, ISSUE 1420

TRANSACTIONS ATWELL GROUP AND WALDROP ENGI- NEERING JOIN FORCES Atwell Group, a national consulting, design, engineering and construction services firm compro - mised of a family of brands including RVi Planning + Landscape Architecture and Strategic Construction Solutions, recent- ly announced the completion of a merg- er with Florida-basedWaldrop Engineer- ing, an established planning, landscape architecture and civil engineering com- pany, providing professional design and entitlement services throughout Florida and the Southeast. Founded in 2000, Waldrop is a land de- velopment consulting company special- izing in planning, landscape architecture, and civil engineering services. Based in Bonita Springs with additional offices in Fort Myers, Sarasota, Tampa and Orlan- do, Florida along with the newest loca- tion in Asheville, North Carolina, theWal- drop team offers interdisciplinary exper - tise founded on exceptional customer service, quality design, and an unwaver - ing commitment to their clients’ success. Waldrop has delivered hundreds of suc- cessful projects across the Southeast in such areas as master planned residential

communities, golf course and destina- tion resort communities, parks and open space, commercial and industrial devel- opments, and master drainage and infra- structure systems. “We are very excited to join forces with a team that shares the same cultural values, team collaboration and dedica- tion to client service,” said Ron Waldrop, founder and CEO of Waldrop. “After 21 years of significant growth and success, this opportunity provides our over 100 team members with expanded career opportunities and a platform to better serve our growing client base. I’m excited to be a part of Atwell’s employee-centric culture and contribute to their leader- ship, technical expertise and industry diversification.” Ron Waldrop, along with members of his leadership team, will be central to lead- ing Atwell’s growing presence in Florida while being actively involved in expand- ing the business throughout the South- east. Waldrop clients will have access to At- well’s national platform of offices and an expanded portfolio of additional ser- vices and capabilities, allowing for the

full-service delivery of turnkey solutions. Waldrop’s experience and talent will en- hance Atwell’s land development experi- ence and better serve clients in Florida and the greater regional area. “Ron and his talented team have built a best-in-class organization with a strong culture, excellent corporate reputation and solid technical expertise, based on the total commitment to their team members’ and clients’ success,” said Bri- an R. Wenzel, Atwell president and CEO. “I have tremendous respect for what they have accomplished and I am excited about the opportunity to work with them as we leverage our collective strengths to better serve our clients in the rapidly growing Florida market and beyond.” Atwell Group is a national consulting, design, engineering, and construction services firm with over 950 profession - als across the country, compromised of a family of brands including RVi Planning + Landscape Architecture and Strate- gic Construction Solutions. It has been named Best Companies to Work For by multiple industry journals and is ranked among the top 200 design firms in the nation by Engineering News-Record.

of help from my wife, of course, who has fabulous taste and is good with the budgeting). I’m not “done” when it comes to this stuff. Not even close to it. Will this awakening translate to my teaching? I think so. I chair two local Vistage groups now. Will I be a better coach and advisor to my Vistage group members? I think so. Will I be a better mentor to my former students who own businesses because my brain is stirring? I sure hope so. New scenery, new neighbors (I already met one who is an architect and my age who stopped by the new place), new routines, and newwork to be done – all of this stuff keeps our brain cells alive. So the question is, how can you use change – maybe change you don’t need to go through but could if you chose to – in your AEC firm to awaken your creativity and that of your people? Maybe it’s time to really think about that. Keep things fresh. Is it a new organization structure? New space? A complete rebranding? Some new people? New service offerings? What can you do to stir the pot and wake everyone up from their walking slumber? It could be time to make some changes, changes just for the sake of change. And then see what happens afterward! MARK ZWEIG is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.

MARK ZWEIG , from page 11

overgrown shrubs that hid it from the street. We are creating a new master suite out of three bedrooms upstairs. We are planning our new detached garage/office/gym building with 1,000 feet of storage above. “What can you do to stir the pot and wake everyone up from their walk- ing slumber? It could be time to make some changes, changes just for the sake of change. And then see what happens afterward!” Then there are those extra lots. I started thinking about what we could do with them. We COULD build something new there if we wanted to. Something compatible that looks like it has been there for a hundred years. Two stories of brick, huge unobstructed spaces with 12 foot ceilings and an elevator. A roof deck so we could watch the sunsets. Four or five car garage. You get the idea. I think this whole thing has awakened my creativity. Even though we had an Inc. 5000 fastest-growing private company that used to do redevelopment, it’s truly been years since I had a real interest in this stuff. But I’m back! I can still do it (with a lot

THE ZWEIG LETTER DECEMBER 13, 2021, ISSUE 1420

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