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T R E N D L I N E S O c t o b e r 2 8 , 2 0 1 9 , I s s u e 1 3 1 8 W W W . T H E Z W E I G L E T T E R . C O M

Project management

Progress is slow, but the AEC industry is becoming more diverse every year, particularly with the newer generation. A long road

T he recently released 2018 AIA Firm Survey reported that over the past decade, the share of women in architecture has increased from 28 percent to 35 percent and minorities have increased from 22 percent to 27 percent. Other sources state that there are significantly less women represented in engineering firms (11 percent), and even less in construction (1.3 percent). At present, 40 percent of emerging professionals on the path to licensure are women, and it’s expected that by 2025, 41 percent of all architecture firm staff will be women. Firm ownership is rapidly becoming more gender balanced; just 11 percent of principals/ partners were women in 2008, and today that figure is more than 30 percent. Zweig Group surveys found that across all AEC industries, 17 percent of principals are female. Looking at the AEC industry as a whole, Zweig Group surveys found that there’s a significant age correlation with the gender gap. Equity among gender is increasing among young professionals, but drops as age increases. Last year, 10.8 percent of the AEC industry was between 18-25 years old. This age range is 40 percent female. By the 26 to 35 year-old age range, (30 percent of all people employed in the industry), it’s dropped to 33 percent female, for the 36-45 range, the industry is 29 percent female, and the 46-55 range is 26 percent female. So is there a problem with diversity in the AEC industry? We asked principals in the 2019 Principals, Partners & Owners Survey and the majority answered “yes.” Splitting responses by gender, 75 percent of females believe diversity is an issue compared to 58 percent of men. What can be done to promote diversity and equity? Zweig Group’s Best Firms To Work For program found that just 42 percent of firms specifically recruit women, and 41 percent specifically recruit minorities. Just 10 percent of all firms hold diversity seminars/ education; however, 43 percent of firms with 500-plus people participate in this practice. According to the AIA report, smaller architecture firms were most likely to center diversity-related practices around K-12 education activities, community outreach, and alignment with business goals. Larger firms were more likely to engage in specific recruiting and retention strategies. The most popular approach is simply offering “a range of benefits that appeal to different people,” however, this seems to be where firms fall short. Zweig Group’s 2019 Recruitment & Retention Survey found that 41 percent of firms have no maternity leave and 64 percent of firms have no paternity leave. The corresponding gender

Zweig Group’s newly released 2019 Project Management Survey of AEC Firms allows readers to walk a mile in a typical project manager’s shoes. In addition to procedural and compensation data, project managers give their opinions on what works and what doesn’t work in their experience in the role. When asked what the most important thing their firm could do to improve project management, PMs made it clear that leadership training is a vital tool for their success. Hiring more experienced staff, clearly-defined expectations, and a solid internal structure round out the top four options chosen by PMs. Participate in a survey and save $320 on any Zweig Group research publication. Visit bit.ly/TZLsp to learn more. F I R M I N D E X Affinis......................................................2 Bechtel. ................................................12 Caldwell Associates................................6 Dewberry..............................................12 Gateway Engineers...............................12 The Architectural Team, Inc.....................4 MO R E A R T I C L E S xz MARK ZWEIG: Finding and keeping more intrapreneurs Page 3 xz Family business: H. Miller Caldwell, III Page 6 xz JESSICA CREEVY: Research and development Page 9

Christina Zweig Niehues

xz RYAN HAYES: PMs and their business relationships Page 11

See CHRISTINA ZWEIG NIEHUES, page 2

T H E V O I C E O F R E A S O N F O R A E C F I R M S & M A N A G E M E N T C O N S U L TA N T S

IN MEMORIAM AFFINIS LEADER, RICK WORREL, PASSES AT AGE 58 It is with heavy hearts that Affinis shares that its co-founder, colleague, and friend Rick Worrel passed away in August. The thoughts and prayers of the whole Affinis team are with his family, including his wife Susan, their three daughters, three grandchildren, and his mother Betty. Active in the community is an understatement of Rick’s enthusiasm for community service. Rick was a member and leader of numerous local and national organizations. Some of these included the American Council of Engineering Companies, United Community Services, the American Heart Association, Colonial Presbyterian Church, and the Overland Park Chamber of Commerce. He was also an avid KU Basketball fan and former player. He loved a good-natured rivalry and looked forward to basketball season every year. In writing this announcement, Affinis struggled with putting into words what Rick means to everyone there and the kind of person he was. Those who had the privilege of knowing him understand how monumental that task is. Rick was an engineer by degree, and he co-founded Affinis with the mission of creating a firm that was different. In doing so, he thought of every detail. His teammates were always co-workers

– never staff, and Affinis’ mission, vision, and values were displayed not only on the firm’s office wall, but more importantly, in the way he treated everyone every single day. He led by example, and his absence has been deeply felt. While the gap he leaves at Affinis is immeasurable, his leadership has prepared the team for this challenge. He built a strong foundation, choosing co-workers who are leaders and who embody Affinis’s core values. Affinis will carry out his legacy in every relationship with co-workers, clients, and colleagues, continuing to move communities forward, just as he did. In lieu of flowers, gifts in memory of Rick may be made to the American Heart Association c/o Rick’s Legacy, 6800 W. 93rd St, Overland Park, KS, 66212 or online at crowdrise.com/o/en/ campaign/ricks-legacy or to the KU Endowment to support the School of Engineering by sending checks to KU Endowment, PO Box 928, Lawrence, KS 66044; in the memo note “Civil and Environmental Engineering in memory of Richard Worrel.” Affinis offers civil engineering, surveying, and consulting services. Its dedicated team provides constructible designs with outstanding client service.

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1200 North College Ave. Fayetteville, AR 72703 Chad Clinehens | Publisher cclinehens@zweiggroup.com Richard Massey | Managing Editor rmassey@zweiggroup.com Christina Zweig | Contributing Editor christinaz@zweiggroup.com Sara Parkman | Senior Editor & Designer sparkman@zweiggroup.com Liisa Andreassen | Correspondent landreassen@zweiggroup.com

42%

CHRISTINA ZWEIG NIEHUES, from page 1

Tel: 800-466-6275 Fax: 800-842-1560

gap with age also suggests that many women decide to leave the AEC industry when they decide to have a family. Much of the data does point to good news and a positive case for promoting gender equity and diversity. Zweig Group Salary Surveys found that overall, women make about 93.3 percent as much as men in architecture and 94.7 percent in engineering. These figures are much closer to equality than is seen in many other industries, where the pay gap is reportedly 80 percent or more. For firms looking for a case to become more diverse, Zweig Group’s 2019 Valuation Survey found that certified women-owned business enterprises outpaced the field in five out of the six value ratios. Generally, firms with a designation (minority, disadvantaged, women-owned, or small business enterprises) performed better than those with none. CHRISTINA ZWEIG NIEHUES is Zweig Group’s director of research and e-commerce. Contact her at czweig@zweiggroup.com.

Email: info@zweiggroup.com Online: thezweigletter.com Twitter: twitter.com/zweigletter Facebook: facebook.com/thezweigletter Published continuously since 1992 by Zweig Group, Fayetteville, Arkansas, USA. ISSN 1068-1310. Issued weekly (48 issues/year) $250 for one-year print subscription; free electronic subscription at thezweigletter.com/subscribe © Copyright 2019, Zweig Group. All rights reserved.

THE ZWEIG LETTER October 28, 2019, ISSUE 1318

O P I N I O N

“Entrepreneurs are not unique to the ownership group of small, privately-held companies. They can also be found working as employees in larger organizations.” Finding and keeping more intrapreneurs

W hat distinguishes an entrepreneurial venture from just a regular small business? While there are many definitions one could cite, I prefer that of “value creation” (if you can forgive the cliché)! The entrepreneurial business owner can see beyond just making a profit and understands that if you do the right things, you can also create a business that has value that can be realized upon exit.

Mark Zweig

Contrary to conventional wisdom, entrepreneurs are not unique to the ownership group of small, privately-held companies. They can also be found working as employees in larger organizations – even publicly-traded companies. These “intrapreneurs” are very valuable to their organizations because they help make their companies more valuable. Here are some things you should be doing to attract and retain more intrapreneurs to your organization: ❚ ❚ Get their involvement with creation of the business plan. You want your people to feel that your business is THEIR business. One of the best ways to do that is to allow them to fully participate in the business planning process. That means more

than just letting them observe – instead you have to actively listen and respond to them – and hopefully incorporate their ideas. ❚ ❚ Share the numbers – all of them. Open book management works for all companies of all types and sizes. I first witnessed this in action at Federal Express Corporation in 1983. They posted their key performance indicators (KPIs) on the walls of every room and in every hallway so everyone who worked there could see how the company was doing. Doing this helps create psychological ownership in your most motivated employees. ❚ ❚ Share the rewards. Again – if you want your people to act like entrepreneurial firm owners even when they are not actual owners, treat them as such. If

See MARK ZWEIG, page 4

THE ZWEIG LETTER October 28, 2019, ISSUE 1318

BUSINESS NEWS RAFFLES BOSTON BACK BAY HOTEL & RESIDENCES BREAKS GROUND Raffles Boston Back Bay Hotel & Residences broke ground in September, writing a new story for both the Raffles Hotels & Resorts brand and the city of Boston. Projected to open in early 2022, the 33-story, $400 million project will be the first mixed-use property in North America for the world-renowned and iconic hospitality brand. Raffles Boston Back Bay Hotel & Residences will be located at 40 Trinity Place, Boston, MA. The flagship North American property will be a welcoming oasis within the heart of the city, blending Raffles’ sense of adventure, glamour and style, gracious and intuitive hospitality, and thoughtful, locally inspired design with the cosmopolitan charm of the Back Bay. Featuring 147 guestrooms, 146 branded residences and six food and beverage venues, Raffles Boston Back Bay Hotel & Residences joins Raffles’ prestigious collection of 14 individually unique and timeless properties located in the world’s most fascinating cities and vibrant destinations. The project will provide over $22 million in public benefits in total, including street and public realm improvements, seven on-site affordable housing units and a contribution of over $13 million that will support additional affordable housing in Boston. Mayor Martin Walsh applauded the development and pointed to its public benefits, stating, “Raffles Boston Back Bay Hotel & Residences will create job opportunities for our residents, and improved street and pedestrian connections in the Back Bay. In addition to the creation of seven on-site income- restricted units, the project will provide over $13 million to support affordable housing. I am

pleased that Accor chose Boston as its first home in North America for a Raffles Hotel & Residences. I thank all of the partners involved for their vision, hard work and collaboration on this transformational Back Bay project.” Known and loved as an oasis for the well- traveled, the first Raffles opened its doors in 1887 in Singapore. For more than a century, Raffles has set the standard for exceptional hospitality, playing host to remarkable cultural moments, and serving as a haven for royalty, film stars, writers and artists. Catering to the most discerning travelers and residents, Raffles Boston Back Bay Hotel & Residences will offer personal and discreet service, unparalleled charm and extraordinary adventure that are synonymous with the Raffles name. Architecture and design are distinguishing elements of all Raffles properties. Every hotel within the portfolio is unique, with its own sense of place – each carefully designed and tastefully decorated to create a warm, welcoming and cultured ambiance infused with a local essence. To bring the Raffles Boston Back Bay Hotel & Residences vision to life, a team of award-winning architecture and design experts have been appointed to give the new property an inviting personality that is uniquely “of Boston.” Raffles Boston Back Bay Hotel & Residences will reveal a remarkable and dramatic exterior designed by Boston- based architectural firm The Architectural Team, Inc. , as well as stunning hotel interiors fashioned by Stonehill Taylor, and stylish and refined residential interiors created by Rockwell Group. The hotel will feature exciting public spaces, including a two-story sky lobby perched high above Copley Square, six distinct food and

beverage venues, a state-of-the-art Raffles Spa with an indoor pool and fitness club, a magnificent rooftop garden terrace and lounge, and impressive meeting and pre- function space. The hotel will boast grand botanical displays throughout the property, and deliver handcrafted personalized experiences designed for local guests and international visitors to meet, stay, shop, dine and celebrate. The Residences will include a distinctive array of pied-a-terre suites, one- to three- bedroom homes, and striking penthouses with impeccable views. Between the hotel and residences, there will be sixteen separate gathering spaces ranging from quiet and intimate to vibrant and social, including a variety of special venues dedicated solely to building residents. Located on the corner of Stuart Street and Trinity Place, Raffles Boston Back Bay Hotel & Residences is destined to reinforce the Back Bay as a first-class international neighborhood. Situated next to The University Club and conveniently adjacent to the Boston Back Bay train station, it is also within a block of Copley Square, Fairmont Copley Plaza, Trinity Church, and premiere upscale shopping at Copley Place. Many other notable Boston attractions are also within a short walking distance, such as the world-renowned shops and galleries of Newbury Street and the Prudential Center, Fenway Park, the Museum of Fine Arts, Symphony Hall, the Charles River Esplanade, and dozens of award-winning restaurants. The Architectural team, Inc. is a 90-person architecture firm is driven by an entrepreneurial spirit, exceptional design and an unyielding focus on achieving client objectives.

MARK ZWEIG, from page 3

❚ ❚ Dedicate resources for experimentation. As all of us who own entrepreneurial ventures know, you can’t eat all your seed corn or you won’t have a crop next year. You need to earmark some funds for R&D and for experiments with new service or product lines, or business units that could create growth for the company. And some of this money must be made available to your best intrapreneurs if you want to keep them. ❚ ❚ Eliminate needless bureaucracy and draconian policies. Again – if you look at what drives entrepreneurs to do their own thing you will find they too often become frustrated with what they perceive as needless meetings or approval processes for small purchases, or strict rules about when to work or how to dress. Intrapreneurs are wired similarly. Why run them off just because you have always done things a certain way? Entrepreneurs or intrapreneurs – it’s in your interest to acknowledge there isn’t much difference. We all need a certain number of them in our businesses if we want our companies to stay competitive and grow. MARK ZWEIG is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.

the business performs, they should benefit from it just as they would if they were the real owners of the enterprise. That means paying out a certain percentage of your profits to everyone who’s there – and not through the profit sharing or retirement plan, but rather through bonuses. “Entrepreneurs or intrapreneurs – it’s in your interest to acknowledge there isn’t much difference. We all need a certain number of them in our businesses if we want our companies to stay competitive and grow.” ❚ ❚ Give people opportunities to act. One reason people start businesses of their own is they want some independence. Recognize that your intrapreneurs are wired similarly. They, too, want a chance to work independently on something and not be micromanaged. You have to be sure your intrapreneurs have these kinds of opportunities or you will lose them.

THE ZWEIG LETTER October 28, 2019, ISSUE 1318

2019 Zweig Group Seminar Calendar

P R O F I L E

Family business: H. Miller Caldwell, III CEO of Caldwell Associates, a firm that’s not afraid to fail, and that’s strong enough to pick up and keep going.

By LIISA ANDREASSEN Correspondent

A seventh-generation Pensacolian, Caldwell, or Miller 3 as he’s known around the office, is CEO at Caldwell Associates. He enjoys discussions about building business and educating other local businesses on how to create and develop value and the metrics associated with a culture of owner mentality within an organization. “Our priority is our team and culture because that’s what drives the quality of our work,” Caldwell says. “We have never and will never be a firm that hires and fires based on sudden increases in workload. If that means we pass on projects, then we’re OK with that.” A CONVERSATION WITH H. MILLER CALDWELL, III. The Zweig Letter: What are the three to four key business performance indicators that you watch most carefully? Do you share that information with your staff? H. Miller Caldwell, III: It really depends on the type of project and how we’ve negotiated the fee. The metric we use the most is net service revenue or NSR/FTE. We also

keep a close eye on utilization, however you can have great utilization, but not produce anything on a per project basis. To ensure we stay on track and are productive, timewise, we complete monthly project status reports to assess time spent versus the percentage of the job complete. Our younger staff has developed widgets on our accounting/project management dashboards to allow all team members access to real time data – this allows for better decision-making. It’s critical to give project teams access to information that will help them and the organization be successful. TZL: How much time do you spend working “in the business” rather than “on the business?” MC: Since becoming CEO, this has been my greatest challenge. We’re in the process of training members which will allow me to focus more “on the business” rather than “in the business.” There was a time when I really didn’t know what that meant. Being a business owner and growing a firm is not the same as producing and running projects. They’re different skill sets. For example, delegating to team members is now on my to-

THE ZWEIG LETTER Octo

Caldwell Assocatiates at last year’s Pensacola Dragon Boat Festival, an event that raises money for local community service projects.

do list. The industry is changing and so is the way businesses operate, but that doesn’t happen overnight. It’s an evolutionary process. We’re in the process of transitioning our business model to a more holistic and horizontal organization. Right now, I’m at about a 50/50 split, but working toward 70/30 by year end. Eventually, I’ll align more with the 80/20 rule. TZL: What role does your family play in your career? Are work and family separate, or is there overlap? MC: Caldwell’s roots are grounded in being a family business. There’s always been an overlap in the line between family and business and I’m proud of that. At one point, I thought it could hold back growth, but I now realize that family connection has carried throughout our organization. It has made us stronger and more engaged. I grew up in this business and learned about true work ethic. At the age of 10, my first job was with Caldwell running blueprints. I learned what owning a business was about and that, although you can’t ever truly get away from it, you have to make time for your family. My wife and I are a blended family of four kids. We have two boys and two girls ranging in age from 12 to 15. In our community, we’re affectionately known as the “Brady Bunch.” We’re working parents with demanding jobs. It’s easy to lose sight of what’s really important sometimes. I coach my kids’ sports teams and try to attend their events. As they have gotten

older and more spread out, and my job has become more demanding, it’s more difficult but we do our best to balance it all. When there is an overlap, I hope my kids learn from my actions and hope it helps them to appreciate what we have. The bottom line? We always make an effort to be together as a family and put work away. In the office we say, “If things aren’t good culturally and internally, then our external work won’t be good either.” The same goes for family. TZL: What, if anything, are you doing to protect your firm from a potential economic slowdown in the future? MC: I think about this often. I’ve lived through two economic slowdowns, so I think the question is not if, but when. Our priority is our team and culture because that’s what drives the quality of our work. We have never and will never be a firm that hires and fires based on sudden increases in workload. If that means we pass on projects, then we’re OK with that. I believe that big swings in staff lead to a poor culture and that will ultimately lead to higher turnover and inconsistent work quality. In order to manage that, we run incredibly lean as a function of NSR/FTE to ensure that when slowdowns happen we can handle them more effectively. During the interview process we try to be open and honest about how we work and let people know that there are times when overtime is needed. Some people don’t like that, but others thrive on it. We See FAMILY BUSINESS, page 8

HEADQUARTERS: Pensacola, FL NUMBER OF EMPLOYEES: 19 YEAR FOUNDED: 1986 NUMBER OF OFFICE LOCATIONS: 3 MARKET SECTORS: ❚ ❚ Healthcare ❚ ❚ Education ❚ ❚ Government ❚ ❚ Automotive retail ❚ ❚ Commercial THEIR PHILOSOPHY: Good design improves the lives of those it serves. It is embedded in the process of thoughtful problem solving and the creation of architecture representative of its place. Our projects have the greatest impact on the communities they serve, sharing thematically in the transformative role of good design.

ober 28, 2019, ISSUE 1318

FAMILY BUSINESS, from page 7

had two teams that volunteered to look at and present our new structure as well as how that blended with our quality assurance/quality control plans. Team A took research and graphics to define how we work and ultimately how we want to work in this new way. Team B took process, standards, and quality control. TZL: They say failure is a great teacher. What’s the biggest lesson you’ve had to learn the hard way? MC: We have to try new things and sometimes those things fail. I believe in failing, but failing quickly. We need to have the mental fortitude to pick up and keep going. As a coach, I tell the kids that you will always learn and grow more from losing than you ever will from winning. Responding to winning is easy; it’s responding to failure and defeat that’s difficult. If I had to pick one lesson I learned the hard way it would be: Do what you know and do the small things right. Focus on value creation for the clients and not on quick exponential growth. In this day and age, we forget about truly building something with all the overnight tech unicorns. The Jack Welch curve is tried and true, and built something that had value. During the economic expansion in the mid-2000s, it seemed like the growth would never stop. We wanted to grow too. We started a construction company and a development company where we could do our own projects. This took an enormous amount of time and spread us thin. We were focused on growth for the sake of growth and not value creation. Thankfully, we realized it prior to the Great Recession and got back to basics, but not before sacrificing a lot of time and money. TZL: Research shows that PMs are overworked, understaffed, and that many firms do not have formal training programs for PMs. What is your firm doing to support its PMs? MC: We grapple with this daily. We need to be leaner and more agile with better processes. We’ve invested heavily in having all staff attend project management and leadership training. It helps everyone to understand the fundamentals of the business and how it operates. If we do that right, then they will know how better to move through projects and assist each other. TZL: In one word or phrase, what do you describe as your number one job responsibility as CEO? MC: Vision and culture. TZL: What happens to the firm if you leave tomorrow? MC: My team understands the business, the metrics, and how to lead people. We want to make a difference and that difference is not just me. It’s much bigger than me, and we need to work together as a team to ensure that knowledge transfer is occurring and allowing all of us to grow and learn. We continue to invest heavily in training and education, and need to expand our mentorships in cross-functional teams. I know my team would do great things.

have to make sure we are communicating what it’s like to work within our team to ensure we’re making a strong hire. We’ve also implemented a doer-seller model for business development so everyone is engaged in all aspects of the business. TZL: It is often said that people leave managers, not companies. What are you doing to ensure that your line leadership are great people managers? MC: I’ve seen this time and time again. We’re investing a lot in training and employee engagement to ensure that our managers have strong leadership and communication skills. We’ve implemented “Management by Strengths” with a local company where we all take a survey to determine our communication styles. They also assist with employee engagement surveys and training. With all this, we’re working to transition to a more horizontal, multi-team based organization that allows younger team members to speak out when managers or anyone else is not living our culture. This model is a more collaborative one for all our team members and gets away from the PM or principal at the top. In the long run, a well-rounded team of people that includes a variety of strengths is what benefits the client and the business. TZL: How are you balancing investment in the next generation – which is at an all-time high – with rewards for tenured staff? MC: This has always been a challenge, but seems heightened as investments in development have increased and the gap between the older and younger generation widens. The people just aren’t there. In Pensacola, like many other areas, it’s getting more and more difficult to do. We’re very limited in the talent that we can recruit because younger generations are set on larger cities where there’s more potential for high-profile projects. As we continue to feel pricing pressures, the vertical organizations of the past just can’t fit the business model any longer. To stay competitive with younger talent as well as tenured staff, our horizontal organization allows us to do that. There are no clean vertical lines of management and this type of fluid and amorphic structure seems attractive to the next generation. We are lucky to have diversity of age and experience and our tenured staff understands and is supportive of this newer methodology. We also have to balance all this fluidity with structured knowledge transfer and mentorship and that is where rewarding our tenured staff comes in. This new structure also has us rethinking rewards and bonuses and how that occurs. TZL: Is change management a topic regularly addressed by the leadership at your firm? If so, elaborate. MC: Progress can’t happen without change. As I’ve mentioned, we think organizations need a paradigm shift in thinking about how they’re structured and run. Caldwell (or any business for that matter) is a living organism that must respond, evolve, and change with the environment. Our new grassroots effort to rethink the organizations and allow everyone to be a part of it has been critical. In our last biannual retreat, we addressed this very issue. We

THE ZWEIG LETTER October 28, 2019, ISSUE 1318

S P O N S O R

Research and development

E very day, architecture and engineering companies create innovative designs to delight their clients and respond to the every-changing regulatory and efficiency requirements. Being agile and innovative keeps these companies at the forefront of their industry and creates repeat clients. Just by doing what comes naturally for cutting-edge AEC firms, they are likely eligible for a refundable tax credit.

Jessica Creevy

the activities, and must retain the intellectual property rights to the research. As an initial inquiry, activities claimed as part of the credit calculation must qualify as research. The code defines research as a four-part test, specifically: “Capturing your R&D expenses takes know-how and compiling substantiating documentation. It can provide cash and permanent tax savings to your company.”

Just by doing what comes naturally to these cutting-edge companies, they are likely eligible for a refundable tax credit. The R&D tax credit is calculated based on the expenses spent to perform the development and research necessary to create their designs. The credit is activity based, not success based, meaning the research can be unsuccessful and the taxpayer may still claim the credit. The expenses are typically employee wages or contractor costs, and are compared to prior years’ R&D expenses. The credit is roughly the increased spending year over year. Of course, the tax code, regulations, and court cases interpreting the statutes explain the requirements to claim the credit. The activities must qualify as research, the taxpayer claiming the credit must pay for the performance of

See JESSICA CREEVY, page 10

THE ZWEIG LETTER October 28, 2019, ISSUE 1318

JESSICA CREEVY, from page 9

1)The activity must be technological in nature. The activity must be based on principles of the following hard sciences: ❚ ❚ Engineering ❚ ❚ Computer science ❚ ❚ Physical sciences ❚ ❚ Biological science 2)The activity must be for a permitted purpose. The activity must involve the creation of a new or improved level of: ❚ ❚ Function ❚ ❚ Performance ❚ ❚ Reliability ❚ ❚ Quality ❚ ❚ Durability ❚ ❚ Cost reduction 3)The activity must involve the elimination of uncertainty. The activity must explore what was not known at the start of the project: ❚ ❚ Capability uncertainty – Can we develop it? ❚ ❚ Methodology uncertainty – How will we develop it? ❚ ❚ Design uncertainty – What is the appropriate design? 4)The activity must involve a process of experimentation. Substantially all of the activities must include elements of experimentation: ❚ ❚ Evaluating one or more alternatives ❚ ❚ Performing testing or modeling ❚ ❚ Examining and analyzing hypotheses ❚ ❚ Refining or abandoning hypotheses Examples of qualified research activities for architectural and engineering firms can include: ❚ ❚ Determining alternative structural design including analysis of and experimenting with structural components, building materials, occupancy load, building use, environmental pressures, safety, soil, and site considerations “The R&D tax credit is calculated based on the expenses spent to perform the development and research necessary to create their designs. The credit is activity based, not success based, meaning the research can be unsuccessful and the taxpayer may still claim the credit.”

❚ ❚ Assessing design through various forms of modeling and computational analysis ❚ ❚ Determining alternative materials with which to construct a structure or parts of a structure (e.g. pre-stressed concrete, glass) ❚ ❚ Analyzing land, grade, and soil conditions ❚ ❚ Developing alternate utility designs ❚ ❚ Determining alternate means of assembling or fastening component parts of a structure ❚ ❚ Developing alternative water flow or plumbing systems ❚ ❚ Improving or determining appropriate ventilation for a structure ❚ ❚ Designing systems for communications, alarm, lightning protection, grounding, and instrumentation and control ❚ ❚ Developing alternative electricity conduction systems ❚ ❚ Conducting energy modeling for assessing energy efficient designs ❚ ❚ Developing or improving lighting within a structure ❚ ❚ Improving acoustical qualities of a structure ❚ ❚ Analysis of environmental impact ❚ ❚ Integrating toxic waste and other waste disposal processes into the structure ❚ ❚ Designing systems for improving heating, cooling, humidifying/dehumidifying, cleaning, ventilating, and component integration for optimal effectiveness Capturing your R&D expenses takes know-how and compiling substantiating documentation. It can provide cash and permanent tax savings to your company. For example, an architectural firm had revenue of about $3 million and paid $500,000 in qualified wages toward research activities. These qualified expenditures will yield a federal credit of about $50,000. Contact CTA to quickly determine if you are a candidate for the R&D tax credit or for more information. JESSICA CREEVY, director of tax controversy at CTA. Jessica has more than 11 years of experience in tax controversy. She worked as an estate and gift tax attorney at the IRS before moving into private practice representing companies and individuals in front of the IRS and various state taxing authorities. Jessica holds a master’s of law in taxation from the Strum College of Law, University of Denver. Contact her at jessicac@ corporatetaxadvisors.com or 256.262.7230.

WRITE FOR THE ZWEIG LETTER Have some advice for your peers in the AEC industry? Contact Sara Parkman at sparkman@zweiggroup.com for the chance to be featured in The Zweig Letter .

THE ZWEIG LETTER October 28, 2019, ISSUE 1318

O P I N I O N

There’s plenty of things, from the simple to the complex, that project managers can do to engage the important people in their database. PMs and their business relationships

W ith so many duties and requirements, project managers can struggle with spending time cultivating and maintaining relationships with their stakeholders. Gateway Engineers, a full-service civil engineering firm headquartered in Pittsburgh, supports PMs with varied activities they can use to manage business relationships. The activities range from simple, inexpensive, and quick to complex, costly, and time-consuming.

Ryan Hayes

Below is a sampling of some of the activities. Each one is segmented into three categories: activities that take approximately two minutes, twenty minutes, and two-plus hours. 1)Connect. Stay connected to ensure the PM is consistently in a position to receive-and-act- upon timely information that is important to the contact(s). ❚ ❚ Two minutes: Set up alerts on the contact’s organization (company, services, products, or people), their associations, and interests by setting up Google Alerts. ❚ ❚ Twenty minutes: Read an online article in the local business journal or industry publication about the contact’s business and comment publicly (often through traditional or social media) by writing a small, thoughtful caption.

❚ ❚ Two hours: Purchase the contact(s) something fitting like a gift card to their favorite restaurant or an office plant to commemorate good news you heard about them, their organization, or association. 2)Share. Sharing the PM’s network with the contact(s) is an activity that can have a positive impact on multiple contacts simultaneously. Both contacts will likely remember the gesture the PM made by taking the time to share, thus increasing the chance they may return the favor. ❚ ❚ Two minutes: Send an email connecting two contacts within the PM’s network who may be able to help each other. ❚ ❚ Twenty minutes: Make it more personable by the

See RYAN HAYES, page 12

THE ZWEIG LETTER October 28, 2019, ISSUE 1318

ON THE MOVE MELTON JOINS DEWBERRY BOARD OF DIRECTORS; TEMPLE NAMED VICE CHAIR Larry Melton, Jr., PMP, has joined the board of directors of Dewberry , a privately held, national consulting firm. Melton brings decades of experience in engineering and construction to his leadership role, including management of major public infrastructure projects throughout the U.S. and Canada. He spent more than 20 years with Bechtel , where he was a principal vice president and served as design-build project director for the Edmonton Valley Line Light Rail Transit project in Alberta, Canada; and project executive director for the Dulles Corridor Metrorail–Phase 1 in Northern Virginia. Prior to his private-sector career, Melton served as an officer in the U.S. Marine Corps, where he led Marine units in extended deployments throughout Asia, the Middle East, and South America. He holds a MBA in global management (2005) from the University of Phoenix and a bachelor’s degree in civil engineering (1984) from The Citadel, The Military College of South Carolina. Melton is a member of the Project Management Institute, the American Society of Civil Engineers, the Conference of Minority Transportation

Officials, and The Moles, a prestigious fraternal organization of the heavy civil construction industry. In addition to his professional affiliations, Melton works extensively with non- profit organizations that provide support to veterans and children with disabilities. In addition to Melton’s appointment, Dewberry has also announced that Merdith W.B. “Bo” Temple, PE, PMP, has been named vice chair of the board of directors. Temple joined the board in 2013 and has more than 40 years of experience in engineering and construction. He served in the U.S. Army for 37 years, retiring in September 2012 as the deputy chief of the U.S. Army Corps of Engineers after serving as the acting chief from May 2011 through May 2012. During his Army career, Temple oversaw billions in military construction, civil works, and emergency operations programs. His many awards and citations include the Army Engineer Association’s Gold Order of the deFleury Award, the Engineer Regiment’s highest honor; the American Society of Civil Engineers’ OPAL Award for a lifetime achievement in government, and a nominee for ENR’s Newsmaker Award in 2010.

Throughout his tenure as a Dewberry board member, Temple has been instrumental in the firm’s ethics and compliance initiatives. He holds a master’s degree in civil engineering from Texas A&M University (1985) and a bachelor’s degree in civil engineering (1975) from the Virginia Military Institute. Dewberry’s board of directors serves under the leadership of Executive Chairman Barry K. Dewberry. Members also include Chairman Emeritus Sidney O. Dewberry, PE, LS; Chief Executive Officer Donald E. Stone, Jr., PE; Karen S. GrandPre; Terry Boston, PE; Geraldine Knatz, Ph.D.; and Thomas Dewberry. Dewberry is a leading, market-facing firm with a proven history of providing professional services to a wide variety of public- and private-sector clients. Recognized for combining unsurpassed commitment to client service with deep subject matter expertise, Dewberry is dedicated to solving clients’ most complex challenges and transforming their communities. Established in 1956, Dewberry is headquartered in Fairfax, Virginia, with more than 50 locations and more than 2,000 professionals nationwide. To learn more, visit dewberry.com.

RYAN HAYES, from page 11

4)Promote. Promoting the contact(s) professional or personal interests. ❚ ❚ Two minutes: Send an email to other contacts within the PM’s network that the PM thinks may be interested in the contact’s specific services, products, or events. ❚ ❚ Twenty minutes: Use the contact’s products or services. Few things are as sincere as buying and using a contact’s services or products. If the contact(s) owns a carwash, restaurant, or other business, the PM can promote their business by becoming a customer. ❚ ❚ Two hours: Nominate the contact(s) for special recognition and awards within their company, industry, or community. 5)Celebrate. Celebrate professional and personal achievements and dates that are important to the PM’s contact(s). ❚ ❚ Two minutes: Send a quick email congratulating or merely acknowledging a specific milestone or event that is unique and meaningful to the contact(s). Birthdays, work and wedding anniversaries, job promotions, and new certifications could all warrant a quick email from the PM to the contact(s). This would show the contact(s) that the PM noticed or didn’t forget. ❚ ❚ Twenty minutes: Pick up a greeting card that matches the occasion the contact(s) is celebrating. Write in a personalized, hand-written message and send it to the contact(s) before the special date. ❚ ❚ Two hours: Invite the contact(s) to lunch, dinner, or to a special event to celebrate the achievement personally. RYAN HAYES is the Director of Business Development with Gateway Engineers headquartered in Pittsburgh, Pennsylvania. Contact him at rhayes@gatewayengineers.com or 412.409.2292.

PM calling each of the contacts. Here the PM can introduce and provide further explanation on why they should be connected from either a professional or personal nature. ❚ ❚ Two hours: Schedule an introductory meeting, and the PM personally attends with the two contacts to help facilitate discussion. “Gateway Engineers supports PMs with varied activities they can use to manage business relationships. The activities range from simple, inexpensive, and quick to complex, costly, and time-consuming.” 3)Help. Help the PM’s contact(s) through providing potential business opportunities that may be of interest to them. ❚ ❚ Two minutes: Email the contact(s) to share an opportunity they may be interested in pursuing. The opportunity can come from something the PM has read in the paper, overheard someone talking about at an industry event, or even a formal RFP they have received. ❚ ❚ Twenty minutes: Call the contact(s) and discuss with them what the PM knows about the opportunity. Here the PM may consider providing the contact(s) with what the PM may feel would be good next steps. ❚ ❚ Two hours: Invite the contact(s) to the project site of the opportunity or stop by their office to review. The PM can go the extra step and personally spend time with the contact to explain what they know about the opportunity.

THE ZWEIG LETTER October 28, 2019, ISSUE 1318

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