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Annual JCJ ESOP team building event. Each office has the opportunity to design a unique event that gets staff away from their desks and out of their usual context so they can engage in team building.
THE GROWTH GUY, from page 7
growth you need to adapt to new models. What is your program? PS: We are very much a seller-doer organization. I could spend hours on this issue. Given our size, I’m a very strong advocate of this approach. That said, we have created a hy- brid approach that celebrates a “seller/doer-doer/seller” model. Depending on the strengths (BD, design, PM, client relationships) of the individual, the expectations and re- sponsibilities will be placed along this continuum. I agree, that at a certain size a firm will have to move into a more compartmentalized structure where seller/BD roles are dif- ferentiated from the doer/project roles. TZL: A firm’s longevity is valuable. What are you doing to encourage your staff to stick around? PS: As a 100 percent ESOP, our success and the firm’s val- ue is tied directly to what our employees will benefit from through their tenure with the firm. Employees become fully vested in the ESOP after five years. Long-term employees will benefit from this as long as the firm is profitable and the valuation of the ESOP shares remain strong. In addi- tion, we continue to evaluate our overall benefits package and we’ve been able to maintain our position as a leader in our overall benefit offerings. TZL: How have the tax cuts impacted your firm’s valua- tion? Do you plan on doing another valuation due to the tax cuts? PS: The ESOP share valuation for 2017 was significantly im- pacted by the federal level tax cuts. As reported to us in our third party’s (Empire) valuation, our ESOP share value in- creased from $21.33/share (2016) to $41.67/share (2017). Empire’s analysis stated that $12/share (60 percent) was at- tributed to the firm’s financial performance and $8/share (40 percent) was attributed to the Federal Tax Reform. We are required to do an annual evaluation and we will be com- pleting this effort in Q2.
TZL: In one word or phrase, what do you describe as your number one job responsibility as CEO? PS: To place JCJ Architecture in a “most sought after” sta- tus in our industry based on our practice and financial per- formance. TZL: There is no substitute for experience, but there is pressure to give responsibility to younger staff. What are you doing to address the risk while pursuing the oppor- tunity to develop your team? PS: Progressing younger staff is an inherent obligation of our firm. It must be done in a planned and monitored pro- cess. Culturally, we must accept an “it’s alright to make mis- takes/fail” mentality, but under a very controlled basis. Our risk management procedures and firm-wide QA/QC are geared to this process so that such mistakes are discovered/ corrected in-house before going to our clients. This process requires an openness between managers and staff without pre-judgement. TZL: Engineers and architects love being engineers and architects, but what are you doing to instill a business culture in your firm? PS: As a non-architect leader of an architectural/interi- or design firm, I am very cognizant of this issue. Given my background in planning and business and 38 years in the industry, I am aware that architects and interior designers are largely not exposed to the business aspects of running a business. As president of an employee-owned firm, it’s my obligation to make sure that all of our employee-owners are exposed to the financial metrics/KPIs and have the busi- ness acumen that goes hand-in-hand with the success of our firm. We are very transparent in the financial/business as- pects of the firm. TZL: The seller-doer model is very successful, but with
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THE ZWEIG LETTER June 3, 2019, ISSUE 1299
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