TZL 1314

Compensation structure – employee perspective T R E N D L I N E S W W W . T H E Z W E I G L E T T E R . C O M S e p t emb e r 3 0 , 2 0 1 9 , I s s u e 1 3 1 4

A nefarious organization or your next best idea? Dig into your org chart to find your firm’s hidden gems. Shadow board

I f you take a cross section of the firms in this industry, you’ll inevitably see a couple of things – they describe themselves as innovative, and say they truly care for their people. That’s one reason that so many of the strategic planning clients we work with want to win the Zweig Group Best Firms To Work For Award. That said, when we interview the leadership, employees, and clients of these firms, a number of issues arise that make it seem like those are just buzzwords that sound good in marketing material. Many firms struggle with the challenges of having a disengaged younger staff and battling “the way we’ve always done things.” The constrained labor pool, the looming economic recession, and a perception that we are not doing what’s needed to elevate our professions in the increasingly evolving technological landscape, also leads to a weak response to changing market conditions. I’m sure if you took an honest look in the mirror at how you and your firm operate, these shortcomings wouldn’t seem like someone else’s problem. Well, here is your next great idea that may help tackle some of those seemingly unrelated challenges. Consider implementing a shadow board of directors. This is a group of non-principal/ executive level staff members who work with the principal or executive level leadership on strategic initiatives. What function does this “shadow board” serve? It solicits the younger staff’s insights and diversifies the perspectives the leadership of the firm is normally exposed to. Consider the staff development, employee engagement, mentoring opportunities, and ability to innovate if you have younger staff not only vying for a position on this board, but consistently thinking like a business leader with a real stake in the leadership and direction of the firm. It will help develop two of the most important skill sets – effective communication and strategic thinking – someone will need if they are ever going to make it to the principal level, according to a recent survey of Fortune 500 CEOs. Better yet, this system seems to work. It’s not just a feel-good measure; it’s real action you can use to exemplify your firm’s values. It takes the words off of the website and drives them into the culture. This shadow board should meet regularly with the senior team and be composed of people from various functions throughout the firm. Research suggests that millennials crave more visibility and access. That is exactly what a shadow board delivers. It sets you apart in your recruiting and retention efforts. This often becomes your pool of second-tier leaders that end up being identified for future ownership opportunities. So, what are a few of the “next” practices in implementing a shadow board in your firm?

With Zweig Group’s Elevate AEC Conference this week, let’s analyze more data from the 2019 Best Firms To Work For survey! Firm employees were asked how satisfied they were with their frequency of raises on a scale of 1 to 5 (5 being the most satisfied). The biggest disparity was seen between the hierarchy of job levels within technical departments. Additionally, the same trajectory among job levels was seen when asked how confident they were in their firm’s efforts to remain competitive in compensation structure . Whether it’s a lack of communication to lower levels regarding this subject or the absence of a clear plan/structure for pay raises for non-managerial positions, make sure your firm is doing its part in providing paths to pay raises or promotions. F I R M I N D E X BSA LifeStructures................................10 CHA Architecture..................................10 J2 Engineers...........................................6 OHM Advisors.........................................2 PDT Architects......................................10 Renzo Piano Building Workshop.............8 Waldrop Engineering, P.A........................4 Ware Malcomb........................................8 Woodard & Curran................................12 MO R E A R T I C L E S xz MARK ZWEIG: What leads to business failure? Page 3 xz Improve and grow: Jeff Gilliland Page 6 xz JEFF BISCHOFF: The innovation continuum Page 9 xz JULIE BENEZET: The perils of over- functioning Page 11

Phil Keil

See PHIL KEIL, 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

ON THE MOVE OHM ADVISORS APPOINTS JON KRAMER AS NEW CHIEF OPERATING OFFICER OHM Advisors , an architectural, engineering, and planning firm that provides a comprehensive range of award-winning services designed to advance communities, has named Jon Kramer, P.E., to the newly created role of chief operating officer. The announcement was made by John Hiltz, president, OHM Advisors. In his new role, effective immediately, Kramer will oversee OHM Advisors’ multi-state operations across Michigan, Ohio, and Tennessee, and will serve as vice chair of the board of directors. He will provide vision, leadership, and overall direction to both the operations and business sides of the firm, and will directly supervise all OHM Advisors’ vice presidents. “Jon has been with OHM Advisors for 25 years and his experience and oversight of numerous projects made him the ideal candidate for the chief operating officer position,” said Hiltz. “His exceptional leadership and understanding of the market have led to tremendous growth for the company and it is an honor to announce Jon’s promotion.” As COO, Kramer: ❚ ❚ Oversees corporate strategies ❚ ❚ Develops and implements strategic and operational goals ❚ ❚ Oversees yearly business planning, development of annual budgets ❚ ❚ Analyzes and tracks operational revenue and sales projections ❚ ❚ Tracks economic conditions and business trends

❚ ❚ Collaborates with leadership team to analyze new markets and acquisition opportunities Kramer’s career trajectory has long been on the fast track. Graduating from high school at 16 and obtaining an undergraduate degree in civil and environmental engineering at 20, Kramer joined OHM as an intern at 19 and worked his way up through the leadership ranks. He was appointed to the OHM Advisors board of directors in 2009, making him the youngest board member in the firm’s 57-year history. He also was previously recognized by Crain’s Detroit Business in its distinguished 40 under 40 selection of the most influential young people in business. In his previous role as vice president of engineering, Kramer developed a financial plan for the OHM Advisors engineering discipline and worked to ensure cross- organizational integration. Previously, he served as vice president of operations, overseeing five departments with more than 100 employees. Kramer is also a member of the American Council of Engineering Companies of Michigan board of directors. He earned a bachelor’s degree in civil and environmental engineering from the University of Michigan, and is a resident of Brighton, Michigan, where he and his wife, Jennifer, raise their two children. Headquartered in Livonia, Michigan, OHM Advisors is the community advancement firm providing award-winning architectural, engineering, and planning services. Founded in 1962, OHM Advisors provides multidisciplinary services to clients in both the public and private sector including infrastructure, stormwater, and municipal water systems.

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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

PHIL KEIL, from page 1

❚ ❚ Look beyond the “high-potential” group. As with mentoring, this isn’t simply an exercise for those you’ve already identified as high performers. Allow anyone who meets your pre-defined criteria, and who has a passion to do so, apply for a seat on the board. This will lead to a more diverse set of individuals and the possible discovery of someone within your organization who you hadn’t recognized up until that point. Often, only choosing high performers means you miss out on those with the highest performance in skill sets such as data analytics, complex or strategic thinking (how do the pieces fit together), and teamwork. ❚ ❚ Be sure it is vigorously supported by firm leadership and directly by the CEO. In order for this to work, as with many strategic initiatives, support needs to come from the top. The majority of the execution happens elsewhere, but the firm needs to know that this is important to the managing principals for it to have real impact. Principals should be interacting, interviewing, and playing an active role with potential members. ❚ ❚ Evaluate, iterate, and figure out what works. You may not get it right the first time. There will be a learning curve as you seek to implement this into the existing culture of your organization. How long are appointments, who is included, is the group the right size, and is it diverse enough? These are questions that will need answers. We suggest reviewing the program on a semi-annual basis for the first two years and then annually to ensure that it is meeting the goals for which it was established. If you are interested in forming a shadow board, we’d like to hear from you. PHIL KEIL is Zweig Group’s director of strategic services. Contact him at pkeil@zweiggroup.com.

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

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 September 30, 2019, ISSUE 1314

O P I N I O N

M ost businesses in this country don’t make it to their fifth birthday. Even fewer make it to 10, 20, or even 30 or more years. “What causes AEC firms to fail? I have been a student of this business for 39 years now. Here’s what I have seen.” What leads to business failure?

What causes AEC firms to fail? I have been a student of this business for 39 years now. Here’s what I have seen (in no particular order of importance): ❚ ❚ Owners who have lost interest in their business. Let’s be honest – it happens. Some people get tired and burnt out. Especially when they have completely poured their hearts and souls into something for a long time. And not everyone is addicted to the game or the money. They may feel they have enough or have accomplished what they set out to do. If these are the people in charge, the business is headed for eventual disaster. ❚ ❚ Owners taking too much money out. I have seen this time and time again. One of the best examples I will never forget was a firm owner who was taking $380K annually out of his less than $3 million an- nual revenue company. When I ran some numbers and told him the most he could afford to pay himself was $180K a year, he told me he needed $380K be-

cause his cattle farm was losing $200K a year. They eventually went out of business. ❚ ❚ Employees are taken for granted. We had some friends over this weekend and the husband and I discovered we both had worked with a particular architecture firm – he was their client and I was their consultant. I remembered back to a time when their managing partner came to see me in our Natick, Massachusetts, headquarters after we had helped them with a financial turnaround some years earlier. He told me that the prior year was a record year for them and that they made a $2.6 million profit. But the bad news was they lost 70 percent of their staff and virtually all their second tier quit. After asking some questions do you know what I learned? They paid the entire $2.6 million in profit out to their owners and gave ZERO to anyone else! This type of selfishness can kill a company.

Mark Zweig

See MARK ZWEIG, page 4

THE ZWEIG LETTER September 30, 2019, ISSUE 1314

ON THE MOVE WALDROP ENGINEERING KEVIN DEARDORFF CHIEF FINANCIAL OFFICER Waldrop Engineering, P.A. has announced the addition of Kevin Deardorff, CPA, MBA as chief financial officer to the team. NAMES Deardorff will be based at Waldrop Engineering headquarters in Bonita Springs, Florida. Deardorff has more than 17 years of professional experience working with developers, contractors, and professional consultants throughout the state of Florida.

Deardorff is very involved in the community, serving on the Collier Building Industry Association Board of Directors and various other organizations and committees. “Kevin’s addition to the group will assist in providing our clients and team members continued comprehensive land development services, and continue to build on our diversity of development services,” said Ryan Binkowski, senior vice president and chief operating officer.

Waldrop Engineering, P.A. is a full-service development consulting firm specializing in civil engineering, landscape architecture, and planning. Headquartered in Bonita Springs with branch offices in Fort Myers, Sarasota, Tampa, and Orlando, the Waldrop Team offers interdisciplinary expertise founded on exceptional customer service, quality design, and a solid commitment to their clients’ success.

MARK ZWEIG, from page 3

❚ ❚ Unwillingness to confront unproductive principals. Dead- weight partners are a cancer. They sit around the office and set a horrible example for everyone else, and consume more than they produce. Get too many of these people and let the problem go on too long, and the business may never be able to recover. I have seen the downside of not dealing with this problem as well as the upside resulting from confronting it in MANY AEC firms. ❚ ❚ Protection of other “pet” employees. Some companies de- velop a “family” culture that makes it very difficult for them to let anyone go, even the worst of employees. Sometimes this person has been with the firm a long time and served one or more of the owners well in the past but is now not doing their job, or worse, has a bad attitude that they are willing to share with anyone who will listen. They have to go because they are a cancer that, allowed to spread, can kill the com- pany. Sometimes the pet employee is a newer hire, too. Man- agement can’t admit they made a hiring mistake, so they wait years to deal with the situation and destroy the morale and productivity of the rest of the people working in the business in the meantime. “Not everyone is addicted to the game or the money. They may feel they have enough or have accomplished what they set out to do. If these are the people in charge, the business is headed for eventual disaster.” ❚ ❚ Unwillingness to cut unnecessary overhead costs. Too much office space. Too many company vehicles. Vacation con- dos running through the firm. Expensive lunches for partners only. Season tickets. Private secretaries or administrative as- sistants (someone please tell me what the difference is?). All of these things, if allowed to get out of hand, are like an anvil around your neck while you are trying to swim away from sharks. ❚ ❚ Not valuing long term client relationships. You see compa- nies that do this regularly. They put their best people on new clients and give their old reliable repeat clients all of their new and inexperienced people to do their projects. It isn’t right, and I have seen it kill companies. I’m sure if I had more room we could come up with more contributors to a firm’s demise. But I don’t! MARK ZWEIG is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.

❚ ❚ No attention to, or budget for, marketing. Marketing is what I like to call an “off balance sheet” investment. You have to spend money on it consistently and you have to keep do- ing new (and old) things. So many companies view it as an overhead cost to be minimized. My own textbook for the small business management class I teach at the University of Arkansas recommends setting the marketing budget as a percentage of sales. So if sales go down you spend less. The unfortunate thing is this is exactly what some AEC firms ac- tually do! ❚ ❚ Not monitoring working capital and not collecting AR. This has been the death of more companies than you know. Working capital – cash plus AR, less accrued short term li- abilities, accounts payable, and line of credit balance – is a number management HAS to see on a consistent basis in order to stave off problems and stay alive. And, of course, col- lections for most firms in this business are the biggest factor in what this number is. When you see AEC firms with 90-day average collection periods when others have 45 days or less, you know they are heading for trouble that greatly increases the risk of the business. And yes, companies have been shut down when the credit lines don’t ever get paid down to zero, if that is a covenant. ❚ ❚ Bad accounting. Having bad numbers – not knowing what is profitable and what is losing money – and not having an accurate balance sheet – can sink a firm in this business. This is why having a competent CFO is so crucial to your survival. And many firms in this business don’t have such a person. ❚ ❚ Failed ownership and leadership transition. Many firms never make it through their second generation. Sometimes the cause is that the owners didn’t do a good job of picking and developing their successors. In other cases, the succes- sors were so hell-bent on doing everything differently that they “threw the baby out with the bath water” and got away from the basic strategies that made the firm successful in the first place. On top of that, many firms never even model their ownership buyback programs to see if they can actually afford to pay for them. This problem is exacerbated when the major- ity of owners are the same age and retiring at the same time. ❚ ❚ Ignoring banking relationships. Your bank is your part- ner. And keep in mind banks cannot afford to take a lot of risk. They have very thin operating margins and are heavily regulated. You have to not only know and abide by your LOC covenants, but also keep these people informed about what is happening in your business, both good and bad, so if things do start getting a little dicey they won’t drop you like a hot potato.

THE ZWEIG LETTER September 30, 2019, ISSUE 1314

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THE ZWEIG LETTER September 30, 2019, ISSUE 1314

P R O F I L E

Improve and grow: Jeff Gilliland Founding principal of J2 Engineers, a multi-discipline firm looking to double its 2018 net service revenue by 2023.

By LIISA ANDREASSEN Correspondent

J eff Gilliland was into his 20th year as a professional civil engineer when, in 2007, he decided to join forces with Jim Bishoff to found J2 Engineers. Today, Gilliland describes his role as a navigator – one who’s focused on the end game. “Family is an important part of our culture,” Gilliland says. “We want our employees to be focused while they are in the office so they can have time to dedicate to their family, friends, and their personal health outside of work.” A CONVERSATION WITH JEFF GILLILAND. The Zweig Letter: How much time do you spend working “in the business” rather than “on the business?” Jeff Gilliland: Currently, I’d say it’s about a 50/50 split. I’m an engineer first and foremost, but I also enjoy the business side. Due to our recent growth and the diversity of the needs in our business, my role changes daily. In 2011, we had five employees and now we’re up to 50. I enjoy my role as a leader and a mentor to our young

engineers. My involvement in their training is how I assure that my vision for this company passes on to the next generation of engineers. I also enjoy working with clients through the planning and preliminary design phases. This is where my expertise can have the biggest impact on a project. “Learn from the mistakes and move on. You’ll get better with each lesson learned. It’s important to know how to cope with failure and to bounce back.” TZL: What role does your family play in your career? Are work and family separate, or is there overlap? JG: My family has played a huge role in my career. Their love and support have been instrumental. I have always worked long hours, so I have been committed to making the most of my time spent with family. I use my 30-minute

THE ZWEIG LETTER Septe

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? JG: It’s part of our strategic plan to be a Best Firm To Work For every year. We take on a variety of interesting projects, and training and mentorships are paramount to our culture. We have a good ratio between senior staff and down through the chain. Our mentors help new employees work through real issues and encourage development. We recently signed up for an on-site project management class with Zweig Group. Our goal is to make everybody better along the way. “I enjoy my role as a leader and a mentor to our young engineers. My involvement in their training is how I assure that my vision for this company passes on to the next generation of engineers.” TZL: Does your firm work closely with any higher education institutions to gain access to the latest technology, experience, and innovation and/or recruiting to find qualified resources? JG: For about 12 years, we’ve worked closely with Virginia Tech’s Land Development Design Initiative. The program focuses on educating students about our industry and exposing them specifically to land development design. Our involvement has led to recruiting success. Last year we hired six graduates – they’re fantastic people! TZL: How often do you valuate your firm and what key metrics do you use in the process? Do you valuate using in- house staff or is it outsourced? JG: We outsourced our first valuation in 2017. We have also purchased Zweig’s Valuation Survey and use the Z-Formulas in the publication. Moving forward, we will use the Z-Formulas to update the valuation each year and outsource a valuation every three to five years. TZL: What financial metrics do you monitor to gauge the health of your firm?

drive home to decompress and transition my energy so I can focus on being a husband and dad when I get home. My family, in turn, has been very involved with J2 from the start. My wife initially handled human resources items as well as any client and employee social events. Our three children, now 29, 27, and 21, have all worked in some capacity at J2. Our son, Joey, currently works as an administrative assistant. There’s overlap between work and family, but it’s all good. It’s balanced. Family is an important part of our culture. We want our employees to be focused while they are in the office so they can have time to dedicate to their family, friends, and their personal health outside of work. Again, it’s about balance. TZL: Artificial intelligence and machine learning are potential disruptors across all industries. Is your firm exploring how to incorporate these technologies into providing improved services for clients? JG: When I started working in this industry, firms hired very talented hand-drafters to put ink on Mylar and calculations were performed using calculators and nomographs. Today, we rely on computers and work to get the most out of our design software. As a small start-up firm, CADD gave us the ability to do more with less, to be more productive. We host lunch and learns and encourage mentoring so our engineers are properly trained to maximize the benefits of the software in our workflow. I was fortunate to get exposed to “old school” methods that help me understand what the computer is doing. I think the real disrupter is not understanding the basic principles that are the foundation of our field. TZL: What, if anything, are you doing to protect your firm from a potential economic slowdown in the future? JG: We started 12 years ago at the start of the economic downturn. We were nimble and focused on client relationships. We worked hard and made sure to foster a positive environment for our employees. We are a better firm today because of our perseverance through those tough times. In our efforts to always improve and grow, we’re hitting new market sectors (we just added landscape architecture) and are placing a real emphasis on marketing and business development. We’re strong believers in the doer-seller model and are launching a business development training series this May.

HEADQUARTERS: Chantilly, VA

NUMBER OF EMPLOYEES: 50

YEAR FOUNDED: 2007

NUMBER OF OFFICE LOCATIONS: Three offices in Virginia:

❚ ❚ Chantilly

❚ ❚ Leesburg

❚ ❚ Dumfries

SERVICES:

❚ ❚ Engineering

❚ ❚ Landscape architecture

❚ ❚ Surveying

❚ ❚ Transportation

❚ ❚ Construction services

DIFFERENT BY DESIGN: J2 Engineers makes a difference. Its work in the communities it serves is innovative, impactful, and site-sensitive. Combining the best of big firm technology and resources with a small firm environment (where collaboration and learning flourish), J2’s motto is “Different by design.”

See IMPROVE AND GROW, page 8

ember 30, 2019, ISSUE 1314

BUSINESS NEWS WARE MALCOMB OPENS NEW OFFICE IN WASHINGTON, D.C. Ware Malcomb , an award- winning international design firm, announced the opening of a new office in Washington, D.C., bringing the total number of Ware Malcomb offices across the U.S., Canada, Mexico, and Panama to 24. Founded in 1972, the firm provides planning, architecture, interior design, branding, and civil engineering services for commercial real estate and corporate clients. The newest Ware Malcomb office is located at 1301 K Street NW in Washington, D.C. The firm has completed more than 100 projects in the greater Washington, D.C. metropolitan area including Virginia and Maryland, for clients including Medline, Xfinity, and Alston Construction, among many others. “We are pleased to announce the opening of Ware Malcomb’s 24th office in North America, located in our nation’s capital,” said Lawrence Armstrong, CEO of Ware Malcomb. “We look forward to leveraging existing Ware Malcomb relationships as well as building new ones in this vibrant and important market.” Ware Malcomb also announced Michael Christensen joined the firm as regional director to lead the new Washington, D.C. office. In this role, Christensen will be responsible for the overall growth and management of the firm’s operations in the region. “We are excited to welcome Mike to the Ware Malcomb team,” said Kenneth Wink, executive vice president of Ware Malcomb. “With tremendous talent in both business

development and design, he is the ideal choice to build and lead our Washington, D.C. team and oversee projects in the region.” Christensen brings more than 17 years of interior design experience to his new role at Ware Malcomb. His unique background ranges from serving as in-house design manager for large retailers to designing interiors for multi-family projects. He has worked on projects across the United States, as well as internationally. Ware Malcomb is an international design firm providing planning, architecture, interior design, branding, and civil engineering services to commercial real estate and corporate clients. The firm specializes in the design of commercial office, corporate, industrial, science and technology, healthcare, retail, auto, public/educational facilities, and renovation projects. CONSTRUCTION COMPLETED ON WHITTLE SCHOOL & STUDIOS SHENZHEN CAMPUS MAIN BUILDING In June, a ceremony took place to mark the end of construction on the main building at Whittle School & Studios Shenzhen Campus in Qianhai. Over the coming months, the building’s interior will be decorated, furnished, and prepared to welcome the first cohort of Whittle students this fall. Chairman and CEO of the school Chris Whittle, Vice-Chairman and President Ian Thomas, Vice-Chairman and Chancellor Nick Dirks, and all the members of the Shenzhen Campus preparatory team attended the ceremony. In a speech given at the ceremony, Whittle

highlighted the strategic positioning of the campus: “Qianhai is situated in the core of the Greater Bay Area of Guangdong, Hong Kong, and Macau. Our school will therefore be surrounded by the best institutions in the world,” he said. “This school will, in turn, inject further vitality into the region, by building the Qianhai International Science and Education Center, internationalizing the environment, and contributing to improved quality of life here.” The Shenzhen campus was designed by the renowned architecture firm Renzo Piano Building Workshop . Piano, whose work includes the Whitney Museum of American Art in New York, the Shard in London, and the Centre George Pompidou in Paris, is a recipient of the Pritzker Architecture Prize. The structure of the Shenzhen campus is based on the core concept of design for learning, focusing on students’ actual educational needs and experiences. With an emphasis on good ventilation, abundant natural light, and generous public spaces, the campus is aligned with Whittle School & Studios’ modern approach to education. Whittle School & Studios is committed to providing the highest-quality education for students and their families, and to creating an inclusive, motivated, accomplished community. Whittle School & Studios Shenzhen Campus opens its doors to students in September, at the same time as the Washington, D.C. Campus, an existing structure that is in the final phases of renovation, also being supervised by the Renzo Piano Building Workshop.

IMPROVE AND GROW, from page 7

the ownership model, put J2 on the path to a prosperous future. Biggest pitfall? Postponing OT planning. Start working on it now and give yourself time to work through it. TZL: You want high utilization for profitability, but that means employees are fully loaded with assignments. How do you balance growth, utilization, new clients, and new hires? JG: We focus more on profitability rather than utilization. We emphasize working smarter and efficiently to provide our clients with an excellent product. Having adequate staffing is critical to handle the workload and supports our efficient practice. TZL: They say failure is a great teacher. What’s the biggest lesson you’ve had to learn the hard way? JG: Learn from the mistakes and move on. You’ll get better with each lesson learned. It’s important to know how to cope with failure and to bounce back. TZL: In one word or phrase, what do you describe as your number one job responsibility as CEO? JG: Facilitator – create an environment where people can be successful.

JG: We follow net service revenue closely, and we’re looking to double our 2018 NSR by 2023. I recently attended Zweig Group’s financial management seminar, Learn the Language of Business, and it gave me valuable insight that will help us implement open-book management. We’ve set up widgets in our accounting software to provide our managers with information to track the financial performance of their projects and the overall company. The next step is to implement the open- book management approach for the entire company. “We are working to foster an environment where staff will want to become owners. We believe a clear path to ownership puts J2 on the path to a prosperous future.” TZL: Ownership transition can be tricky, to say the least. What’s the key to ensuring a smooth passing of the baton? What’s the biggest pitfall to avoid? JG: We are working to foster an environment where staff will want to become owners. We believe a clear path to ownership, along with implementing the second phase of

THE ZWEIG LETTER September 30, 2019, ISSUE 1314

O P I N I O N

The innovation continuum

Embrace change, take chances, and continually innovate to make sure your firm stays ahead on the innovation continuum.

I n 1975, Kodak, the world’s largest manufacturer of photographic film, shelved a digital camera invention because it feared it would hurt the company’s dominant market for camera film. By the mid-1990s, digital photography started to overtake the film market. That left Kodak, after having a 100-year near monopoly in the camera film market, filing for bankruptcy by 2012, all because it failed to embrace innovative ideas its own employees created.

Jeff Bischoff

yet, the fact that a large company like Google was willing to invest heavily in that technology says something important about Google: It will take chances and continually innovate. It embraces change. It has created an environment where “We have to accept that we won’t all be on the cutting edge, but we also have to recognize that we need that cutting edge if we plan to stay ahead of the competition.”

Kodak eventually made attempts to enter the digital market, but it was too little too late. As a result, during bankruptcy re-organization, Kodak had to sell hundreds of early patents for digital imaging technology to companies like Google, Apple, Microsoft, and Adobe Systems. On the other end of the spectrum, Google – which started out as an internet search engine firm – started a self-driving car project in 2009. In 2016, it spun off that project into a new company, Waymo. In 2017, Waymo started testing vehicles on roads. Soon, small scale production of these vehicles will start in a factory near Detroit. While self-driving cars have not become the norm

See JEFF BISCHOFF, page 10

THE ZWEIG LETTER September 30, 2019, ISSUE 1314

BUSINESS NEWS PDT ARCHITECTS IS NOW CHA ARCHITECTURE, P.C. CHA Consulting, Inc. , a highly diversified, full- service consulting engineering firm, announces its affiliate, PDT Architects , has rebranded as CHA Architecture . CHA’s award-winning, full- service architecture arm has also launched a new website at chaarchitecture.com. PDT Architects was acquired by CHA Consulting, Inc. in 2017. The name change and rebranding is intended to further reinforce to the market the full-service capabilities CHA can now offer to its clients. This branding change completes the full integration of the companies and aligns the architecture studio with the CHA brand. CHA Architecture’s highly creative staff will continue to serve its clients with excellent design services, and will also offer the resources of a large, full-service engineering firm to meet its clients’ many needs. “Our team is inspired by our new name and redesigned website,” said Brian Curley, CHA Architecture’s lead. “This branding and alignment with CHA will support our team’s approach to serving clients with extensive resources from across all of CHA and throughout CHA’s entire geographic footprint.”

“Branding our outstanding architecture team under CHA reaffirms our aspiration to elate our clients by offering them a truly one-stop-shop for all their design needs,” said Michael Carroll, CHA president and CEO. “Under our stronger, united brand and integrated service portfolio, we will continue to responsibly improve the world we live in.” “The rebrandingof our architecture organization to fully integrate with CHA provides clarity to the market that we are one team united in our commitment to providing quality services that aim to exceed our clients’ expectations,” said Chief Strategy Officer Jim Stephenson. CHA Architecture’s new website was redesigned to showcase CHA’s focus on architecture and its talented staff and their passion for great design that improves the built environment. The new website includes resources for clients and potential clients, including photos of many of the buildings and spaces the team has designed. The website also provides information about career opportunities available at CHA Architecture and throughout all of CHA. CHA Architecture specializes in the design

of sustainable, high performance buildings in the education, health care, multi-family housing, office/corporate, state/municipal, and historic preservation sectors. Founded in Portland, Maine in 1977 as Portland Design Team and later known as PDT Architects, CHA Architecture has built its core practice around the idea of creative discovery and continuous learning blended with the science and technology of the built environment. CHA Consulting, Inc. is a highly diversified, full- service engineeringconsulting firmwhich, along with its subsidiaries, provides a wide range of technology-enhanced planning and design services to public, private and institutional clients. CHA was ranked the 37th largest pure design firm in the United States in 2019 by Engineering News Record. With technical personnel and offices throughout the United States and Canada, CHA offers engineering, architectural, survey, construction, and other services necessary to complete projects on time and within budget. The CHA Companies include: CHA Consulting, Inc., CHA Tech Services, CHA Canada, Novara GeoSolutions, American Fire, CHA Architecture, Wolverton & Associates, and Daedalus Projects, Inc.

edge if we plan to stay ahead of the competition. So, if we can’t all be innovators and early adopters, how do we support those of us who do fit those descriptions? We give them a platform, protect them, listen, and, above all, give their ideas a chance. We accept that trying something new is risky, and therefore we don’t demote or cast aside these people when an idea doesn’t work out. We encourage them to try again and again, and we foster a safe environment that encourages the innovators – and attracts more innovators. We recognize that some of these innovative ideas can take us to the next level – ideas like a vivarium inside a high rise, lighting that helps mental health patients by mirroring circadian rhythms, lab spaces that can be reconfigured as research needs change, data- based design choices, and more. It is important for leadership of companies to protect and nurture their innovators and early adopters. So, the big question is this: Where do you think you are on the innovation continuum – are you more like Kodak or Google? JEFF BISCHOFF is chief operating officer at BSA LifeStructures. He can be reached at jbischoff@bsalifestructures.com. “While many people eventually will adopt something new, only 16 percent of us will be innovators and early adopters. This has been proven relevant again and again in areas ranging from consumer products and fashion to design and technology.”

JEFF BISCHOFF, from page 9

innovators and early adopters are protected, encouraged, and given a voice. And they aren’t limited by the company’s early identity as “just” a web search firm. Let’s look at the terms “innovators” and “early adopters.” Definitions of those terms come from research done by Everett Rogers in the early 1960s. Here is a chart that summarizes his research.

This research shows that, while many people eventually will adopt something new, only 16 percent of us will be innovators and early adopters. This has been proven relevant again and again in areas ranging from consumer products and fashion to design and technology. We have to accept that we won’t all be on the cutting edge, but we also have to recognize that we need that cutting

THE ZWEIG LETTER September 30, 2019, ISSUE 1314

O P I N I O N

The perils of over-functioning

When executives do too much, they might be avoiding a problem, and they can damage the firm in the process.

A well-meaning executive zooms around the office taking care of everything, and I mean, everything: announcing the new company health plan rather than the finance director who negotiated it; revising a business forecast prepared by the department’s financial analyst; rearranging the marketing boards late at night after that department has gone home; testing the video links for a speech another executive plans to give. Sometimes, they even make coffee.

Julie Benezet

❚ ❚ Letting others off the hook. The over-functioner’s willingness to assume a task assigned to others frees those employees of unpleasant job responsibilities. The finance director might welcome not having to announce new health plan benefits and fielding the ensuing complaints, but it does not advance their career. ❚ ❚ Mediocre work. Taking over the work of oth- ers could result in doing work outside the leader’s expertise. For example, executives often dive into marketing, underestimating the depth of customer analysis required. In fact, marketing is not just pret- ty pictures and the executive meddling could yield a suboptimal result.

Have you met this person? They exist everywhere and at all levels of leadership. While their intentions may be pure, over-functioners create more problems than they solve. Their drive to get things done can eclipse organizational issues and, if not addressed, impair company growth and morale. ORGANIZATIONAL CONSEQUENCES. Below are some of the many possible organizational consequences: ❚ ❚ Avoidance of responsibilities. The over-functioner might invade the turf of others because they don’t like their home turf or want to avoid something. The leader who reorders marketing department photo displays might be seeking a diversion from thinking about whether they have developed a winning pitch.

See JULIE BENEZET, page 12

THE ZWEIG LETTER September 30, 2019, ISSUE 1314

ON THE MOVE SERGIO BAZAREVITSCH JOINS WOODARD & CURRAN AS NATIONAL PRACTICE LEADER IN DESIGN-BUILD Woodard & Curran announced that Sergio Bazarevitsch has joined the firm as design-build national practice leader. His experience spans small to large-scale design- build and construction management work in private, municipal and federal sectors. Woodard & Curran is an integrated engineering, science, construction, and operations company, offering a full suite of services to address its clients’ infrastructure, environmental, water resources, energy, and manufacturing challenges. Privately held and steadily growing, the firm serves public and private clients locally and nationwide. “Our design-build business is a critical growth area for our firm, which allows us to deliver turnkey solutions from planning and permitting to design, construction and operations,” says Doug McKeown, CEO and chair of Woodard & Curran. “Sergio’s expertise and perspective are invaluable in creating opportunities to expand

our business and deliver total solutions for our clients. It’s great to have him here.” Based in the firm’s Lakewood, Colorado, office, Bazarevitsch will oversee Woodard & Curran’s design-build practice collaborating with the other practices in serving clients. “Successful design-build projects are executed by integrated teams working together with a common goal,” he explains. “For us, that’s our clients, our design teams, and our construction partners.” Woodard & Curran Constructors is fully embedded within the firm, providing quality and peace of mind for existing and new clients through fully integrated project delivery. Successfully partnered with Woodard & Curran’s diverse water and environmental consultant core business, the design-build team offers the business opportunities to successfully compete in a range of contract roles as prime contractor, joint venture partner, participatory subconsultant, or design subconsultant.

Bazarevitsch has hit the ground running since he joined Woodard & Curran in April. By opening lines of communication with colleagues, clients, and strategic partners throughout the U.S., he is building strong relationships and best practices that will position the firm for growth in the design-build sphere. Woodard & Curran company was founded in 1979 on a simple business concept: provide a safe and enjoyable place to work with opportunity, integrity, and commitment. Woodard & Curran’s strength is in those people, who are experts in their field and passionate about what they do, showing a level of commitment and integrity that drive results for our clients. Woodard & Curran takes a multidisciplinary approach to solving its clients’ technical and business problems. By considering them from different perspectives, Woodard & Curran often uncovers new answers and overcomes challenges where others have failed.

OVER-FUNCTIONERS INTERVENTION PLAN. With so many negative consequences, it behooves an organization to address over- functioning behavior directly. Here are three steps: 1)Recognize it. People usually know when their turf has been invaded. The challenge is to call it out. This is hard, particu- larly when the over-functioner is a senior executive. No one wants to say the emperor has no clothes. If several executives are implicated, conduct an evaluation of firm culture and the optimization of its roles and responsibilities. Then address individual executive needs. If the issue lies with the chief executive, the board must address it as part of that person’s performance evaluation. 2)Determine root causes. Once the over-functioning behavior is identified, create a process to investigate the underlying cause. It could include any or all of the following: The execu- tive is interfering because of an underperforming employee. The role of the employee is ill-defined, leaving it open as to who does what. The executive has trouble trusting the work of others on properly delegable items. 3)Make a plan. After determining the root causes, make a plan to rectify them. An underperforming employee will require feedback and training. Role confusion points to a need for developing explicit roles and responsibilities. Coaching will help a fearful executive with trust issues, their relationship with risk, and motivating employees. While an executive fussing with marketing boards late at night might be amusing, widening the view to the larger firm picture will benefit both the company and the executive. JULIE BENEZET spent 25 years in law and business, and for the past 18 years has coached and consulted with executives from virtually every industry. She earned her stripes for leading in the discomfort of the new as Amazon’s first global real estate executive. She is author of the award-winning The Journey of Not Knowing: How 21st Century Leaders Can Chart a Course Where There Is None . Her new workbook, The Journal of Not Knowing , a self-guided discovery mission to learn how to navigate the discomfort of the new to pursue one’s dreams, was released in fall 2018. She can be reached at juliebenezet.com.

JULIE BENEZET, from page 11

❚ ❚ Role and responsibilities confusion. Roles and responsibili- ties are hard to establish and maintain at the best of times. When someone invades the territory of others, things get confused. Over-functioning might slap a Band-Aid on an is- sue of a neglected function, but Band-Aids wear out and fall off. ❚ ❚ It masks a performance issue. There are times when shouldering the responsibilities of an employee signals an employee performance issue. The executive who announced the new health plan wanted to dodge confronting the finance director’s refusal to do their job. The executive’s failure to ad- dress it perpetuated the issue and wasted valuable time and energy that the executive could have directed toward business development. “While their intentions may be pure, over- functioners create more problems than they solve. Their drive to get things done can eclipse organizational issues and if not addressed, impair company growth and morale.” ❚ ❚ It does not cure the underlying fear issue. Over-function- ing and its first cousins – micromanagement and perfection- ism – pull from a place of fear. The feeling might be warranted because of a true emergency, such as a client threatening to fire you. More likely, it represents that person’s approach to risk. Rather than live with the scariness of others producing work upon which the executive must rely, they try to control the outcome by doing the work themselves. This defensive behavior leads to disempowerment and disengagement of employees who will ratchet down their efforts and vote with their feet.

THE ZWEIG LETTER September 30, 2019, ISSUE 1314

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