TZL 1315

T R E N D L I N E S O c t o b e r 7 , 2 0 1 9 , I s s u e 1 3 1 5 W W W . T H E Z W E I G L E T T E R . C O M

EBITDA margin

Marketing spending has climbed to an all time high, according to Zweig Group’s 2019 Marketing Survey. Slow, but steady change

Zweig Group’s to-be-released 2019 Best Performing Firms Report of AEC Firms combines data from six publications and three surveys filled out by award-winners to compare the best of the best to the AEC industry average. Included in this report is a chapter on financial performance of high performing firms and 2019 Hot Firm award winners. Looking specifically at EBITDA margin on net service revenue (NSR), it’s not shocking that fast growth firms , explosive growth firms , and very high profit firms are outpacing the industry standard by a significant margin. How does your firm stack up against the best in the industry? 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 Burns & McDonnell Engineering Co.......12 JQ.........................................................10 Pennoni. .................................................8 RETTEW.................................................2 Studio Gang............................................4 Taylor Design. .........................................6 MO R E A R T I C L E S xz MARK ZWEIG: Eliminating waste Page 3 xz Role model: Randy Regier Page 6 xz LEO MACLEOD: Start small, end big Page 9 xz WILLIAM QUATMAN: Prevention through design Page 11

T he market is hot and firms are investing in new people, new markets, and new technology. Zweig Group’s just released 2019 Marketing Survey of AEC Firms polled marketing leaders in firms of all types and sizes across the country. The bulk of survey respondents reported “slow growth” or average annual growth between 1 percent and 19 percent, and just 6 percent of the sample reported a decline in size. This steady growth is predominant in the industry and driving an investment in marketing as it relates to both recruiting and the pursuit of new projects. The survey reports the average amount spent on marketing has climbed to an average of 6.8 percent of net service revenue – an all time high. With an average revenue of $11.6 million last year, that’s almost $794,000 spent on marketing. The bulk of marketing spending continues to be comprised of labor, with marketing labor (non-staff) at an average of nearly 50 percent and marketing staff labor comprising another 25 percent. Another area of big spending was proposals (an average of 8.4 percent). The majority of firms (48 percent) reported they expected marketing spending to increase this year, by an average of 11 percent. Some things haven’t changed over the past decade: “direct relationships and referrals” continues to be the most successful marketing technique for AEC firms (33 percent of respondents). Big changes in other areas did occur, with firms reporting a growing influence of social media, website, networking events and public speaking, and marketing department development, all receiving between 11 percent and 14 percent of respondents reporting them as the most successful technique of the past year. Least successful strategies include “advertising” (36 percent) and “email campaigns” (16 percent). While all this industry growth is a good thing, many firms are relying on repeat business. Maximizing relationships from existing clients is a great practice, but overreliance on this can be dangerous territory as the disruption of cash flow from just a few key clients, due to events completely out of the control of the consulting firm, could prove disastrous to an AEC firm. The average firm reported 73 percent of their work is coming from past clients. This reliance on well-established clients and overflow of work is leading to another issue – lackadaisical go/no-go processes. Just 11 percent of respondents reported they “always” follow this formal process, and 17 percent reported they rarely followed one! More firms than ever are embracing social media – with almost all reporting the use of LinkedIn (96 percent, up from last year’s figure of 94 percent) and 84 percent on Facebook. What’s shocking

Christina Zweig Niehues

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

ON THE MOVE RETTEW ANNOUNCES STRATEGIC LEADERSHIP SUCCESSION RETTEW announced Senior Vice President and CMO Clayton Bubeck, P.E., will be promoted to the role of president. Integral to this plan is the continuation of Mark Lauriello, P.E., as CEO of RETTEW. Having held the position of president since 2004, and CEO since 2016, Lauriello will work closely with Bubeck to ensure a smooth transition. “I’m honored and thrilled by the opportunity to lead RETTEW into the next chapter of its 50- year history,” Bubeck said. “Mark has set a high standard of leadership here. He consistently delivers outstanding performance and has built a strong foundation for long-term growth.” As president, Bubeck will be responsible for both top line revenue and bottom line profit for the company. He will maintain his role in guiding the firm’s strategic business development efforts in its focus markets, while also working with the COO and regional managers to drive the growth and profitability of 13 service areas and three geographic regions. Bubeck will also oversee the firm’s associates and principals programs going forward. “I am confident now is the right time to transition the company to its next leader, and Clayton is unquestionably the right person for the job,” Lauriello said. “He has played an instrumental role in the transformation and growth of our company during the past 19 years. Clayton is an excellent business developer with a proven track record of execution throughout his career at RETTEW.” This carefully planned leadership transition comes at an opportune time for RETTEW, with the firm’s recent move to becoming a

100 percent employee-owned company. Bubeck will continue to apply his team-oriented leadership style to develop an employee-owner culture across the company. Bubeck started his career in RETTEW’s regional offices in Schuylkill County, Pennsylvania, before leading the company’s entry into the oil and gas market. As vice president of oil and gas, he helped evolve RETTEW from a mid-Atlantic based firm to one now competing on a national level. More recently, Bubeck was heavily involved in RETTEW’s acquisition of Enviroscan. Bubeck graduated from Wilkes University with a bachelor’s degree in environmental engineering and is a licensed P.E. in 24 states. He has more than 20 years of managerial and technical experience, including the design of two award- winning abandoned mine drainage treatment systems. He is a member of the ASCE, the Greater Philadelphia Energy Action Team, and the National Water Environment Federation. He is a recent graduate of ACEC’s Senior Executive Institute and received a certificate from the Wharton School of Executive Education at The University of Pennsylvania. “RETTEW is well-positioned for growth and I am excited to see Clayton apply his unique leadership experience to take full advantage of the tremendous opportunities in front of us,” Lauriello said. “I look forward to assisting Clayton and the leadership team to ensure a seamless transition for our employees and clients.” RETTEW began providing civil engineering and surveying services in 1969. Today RETTEW has more than 350 employees and 11 offices in Pennsylvania, Ohio, West Virginia, and Colorado.

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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

CHRISTINA ZWEIG NIEHUES, from page 1

is that only 45 percent of firms are on Instagram (28 percent were last year) and only 6 percent of firms are on Pinterest! With AEC firms reporting “promoting services” as the top use of social media accounts, it’s surprising that they neglect image heavy Instagram and home/structure-focused Pinterest. Interaction is an important component of social media, and, although many firms are still not actively interacting, this is an area of improvement. This year, almost half of all firms (48 percent) reported they shared other’s content on Facebook – last year this was 42 percent. Likewise, 46 percent of firms retweeted other Twitter users, up from 38 percent last year. LinkedIn, the favorite social media platform for the AEC industry, was the one channel on which more firms were interacting than were not, 58 percent reported they liked content shared on LinkedIn, an increase from last year’s 46 percent. Although it may be slow, change is occurring in the AEC industry. This year’s Marketing Survey shows that tried and true methods such as word of mouth and repeat business will always be staples of the industry, but a healthy dose of caution and protocol is still advisable as we look toward the future. The AEC industry needs to balance new investments and ensure that a healthy balance of new work still comes through the door as we look toward a potential market downturn. CHRISTINA ZWEIG NIEHUES is Zweig Group’s director of of research and e-commerce. She can be reached at czweig@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 October 7, 2019, ISSUE 1315

O P I N I O N

Eliminating waste

B usiness is good but you’re not hitting your profit goals? Look to the expense portion of your income statement. I have always said I can’t find a $10 million AEC firm that I couldn’t cut between $500K and $1 million worth of expenses out of. “How do you stack up in these seven areas? Is money being wasted? If so, take action now!”

go to offices regularly with no reason to be there. I say go when there’s a need to sell a project or do something billable, but otherwise minimize non- billable travel. But there are other examples of un- paid travel. Sometimes I find firms are too willing to make unpaid trips to sell when they should be charg- ing clients for the work they are providing. Being too “easy” in this regard has ruined the finances of more than one architect, and creates an image of despera- tion in the eyes of the clients that can be hard to shake later on when it comes time to negotiate a fee for a real job. “Sometimes I find firms are too willing to make unpaid trips to sell when they should be charging clients for the work they are providing.”

Here are some of the more common expenses that get out of control: 1)Office space. How much space does each person really need? If you have 500 square feet or more per employee, you have way too much. I was in an archi- tecture firm not long ago where the bulk of their em- ployees sat in a carrel that was about 30 inches deep and 50 inches wide. Just think how many employees you could put into your space if you did that? 2)Branch offices. The more you have the higher your overhead will likely be. Duplicating conference rooms, receptionists, non-billable inter-company travel, and additional accounting costs and tax re- turns can all be part of the equation. Plus, the more offices you have the harder it is to maintain your consistent culture and the more management time you need to spend. 3)Unbillable (and unnecessary) travel. This is, of course, a bigger problem when you have a lot of of- fices. I was never one to think the boss should just

Mark Zweig

See MARK ZWEIG, page 4

THE ZWEIG LETTER October 7, 2019, ISSUE 1315

BUSINESS NEWS KŌʻULA GROUNDBREAKING AND CONSTRUCTION FINANCING FOR ‘A’ALI’I MARK NEW MILESTONES AT WARD VILLAGE The Howard Hughes Corporation continues to make strong progress at its Ward Village master planned community, securing a $293.7 million loan for its fifth residential tower, ‘A’ali’i, and breaking ground on its newest residential building, Kōʻula. “With each passing milestone, Ward Village continues its transformation into one of the country’s most sought-after urban communities,” said David Weinreb, CEO, The Howard Hughes Corporation. “Breaking ground on Kō’ula, obtaining financing for ‘A’ali’i, and generating robust year-to-date sales demonstrate Ward Village’s ongoing momentum and unique position in the market.” Kō’ula is the first tower to be designed in Hawai’i by Studio Gang , an architecture and urban design practice led by acclaimed American architect and MacArthur Fellow Jeanne Gang. Gang was recently included on Time Magazine ’s TIME 100, its list of the most influential people in the world. The building’s interiors are designed by the internationally recognized Yabu Pushelberg. Kō’ula’s fluid façade exterior bends with the coastline and gives way to interiors with stunning ocean views, natural light, and private lanais in every home. Targeting LEED certification, the bold structure improves energy efficiency by reducing solar heat gain. Located adjacent to Victoria Ward Park, Kō’ula will feature 565 residences. Ward Village currently includes the completed towers of Waiea, Anaha, Aeʻo, and Ke Kilohana, with ‘A’ali’i and Kō’ula under

construction. ‘A’ali’i offers a sophisticated, space-conscious design that embodies smarter living. The 41-story tower is slated for completion in 2021 and will be comprised of 750 homes and 11,230 square feet of ground floor retail space. “Ward Village is creating a new urban island lifestyle for Honolulu, rejuvenating the community as a true gathering place that integrates Hawai`i’s natural beauty with a thoughtfully planned and diverse spectrum of homes,” said Simon Treacy, president, Hawai`i of The Howard Hughes Corporation. “With this latest accomplishment, we are pleased to continue to nurture the evolution of this forward-looking community while paying homage to the island’s rich legacy.” Ward Village is a 60-acre coastal master planned community in the heart of Honolulu, located between downtown and Waikīkī in the Kaka’ako district. Honoring the distinct history of its land, Ward Village is at the forefront of sustainable community development, integrating significant architecture, local culture, and public space to create a destination that focuses on wellness, connectivity, and vibrant placemaking set along O’ahu’s south shore. New tree-lined sidewalks and bike lanes provide access to an over 100-acre public beach park, as well as the recently revitalized Kewalo Harbor. At full build-out, the development will include approximately 1 million square feet of unique retail experiences and thousands of homes in the community that was named “Master Planned Community of the Year” by the National Association of Home Builders and “Best Planned Community in the United States” by Architectural Digest .

Resulting from strong demand for new housing in Honolulu and the desire for an urban walkable lifestyle, Ward Village is quickly approaching the sellout of its first four delivered residential towers– Waiea, Anaha, Ae’o, and Ke Kilohana – which are transforming the popular shopping and dining district into a vibrant neighborhood that offers ocean views and a thoughtfully curated mix of retail and lifestyle experiences set among walkable, open spaces. ‘A’ali’i and Kō’ula will continue to expand the selection of new homes as well as activate the community’s newly opened outdoor gathering place, Victoria Ward Park. Named after the land’s most famous steward, Victoria Ward, the park serves as the community hub for outdoor recreation and ongoing events. In May 2019, Ward Village welcomed its latest residents to Ke Kilohana, the neighborhood’s first affordable housing tower. Art and culture play an integral role at Ward Village, with public art highlighted throughout the neighborhood, including large-scale wall murals, sculptures and locally inspired exhibits. As a destination for art and culture, Ward Village continues to serve as the founding and co-title sponsor of the Honolulu Biennial. As the first approved LEED‐ND Platinum certified master planned development in the country and the only one in Hawai’i, Ward Village is at the forefront of sustainable community development and will feature public amenities at a scale not offered by any other urban development in the state. will include over 4,500 homes and approximately one million square feet of retail.

MARK ZWEIG, from page 3

witnesses the excesses. They feel like saving money or being efficient isn’t important. Or, they become demotivated be- cause they feel they don’t get the rewards they are entitled to because of this waste. 6)Deadweight principals. People who are owners and who don’t carry their weight are a huge problem for AEC firms of all types. And when you combine this with a lack of respect for the firm’s culture you have a double whammy that is a cancer that has to be eradicated. Again, the problem goes far beyond the considerable financial burden these people repre- sent. 7)Outside consultants/professional services. A lot of money is wasted here. Sometimes these people have been around so long they are unable to provide honest advice to the firm principals and therefore become part of the problem. When cutting costs, I always take a hard look at outside legal, ac- counting, management, marketing, and PR services to make sure they are actually earning their fees. How do you stack up in these seven areas? Is money being wasted? If so, take action now! MARK ZWEIG is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.

4)Admin support staff. I’m sorry to say it, but too many of these people end up as personal assistants doing stuff they really shouldn’t be doing because it doesn’t benefit the busi- ness. Picking up cleaning and making dinner reservations for the boss’s wedding anniversary, or making travel arrange- ments for the boss and his kid who are doing college tours, are really matters that the boss should find another way to get done. The older the company, and the older the principals, the more likely this situation will exist. “Business is good but you’re not hitting your profit goals? Look to the expense portion of your income statement. I have always said I can’t find a $10 million AEC firm that I couldn’t cut between $500K and $1 million worth of expenses out of.” 5)Meals and entertainment. So much is wasted here by firm principals, and the problem goes far beyond the money spent. It’s really about the example that’s set for everyone else who

THE ZWEIG LETTER October 7, 2019, ISSUE 1315

2019 Zweig Group Seminar Calendar

P R O F I L E

Role model: Randy Regier President and principal-in-charge at Taylor Design, an architecture and interior design firm headquartered in Irvine, California.

By LIISA ANDREASSEN Correspondent

I n addition to his responsibilities as president and principal-in-charge of Taylor Design, Regier devotes attention to projects by supporting its teams and assuring that client needs are effectively addressed. “The change occurring in the industry is far more rapid now than even five years ago,” Regier says. “Managing change well is no longer optional; it is vital.” A CONVERSATION WITH RANDY REGIER. The Zweig Letter: How much time do you spend working “in the business” rather than “on the business?” Randy Regier: Honestly, my time is disproportionately skewed to “in the business” these days, working to build the business through business development efforts and launching major projects. I do try to strike a balance between the projects that I’m actively involved in and the business of running the firm. I’m a strong believer of staying closely connected with the industry and what

points are moving the needle one way or the other. Our office leaders do a great job managing staff workloads and projects. I meet on a weekly basis with our leadership team to work “on the business” as part of an effort for strategic planning, oversight, firmwide initiatives, and continuous improvement. We also connect on a monthly basis to focus on two or three key strategic topics. TZL: What, if anything, are you doing to protect your firm from a potential economic slowdown in the future? RR: We have made a concerted effort in the last few years to diversify our market sectors, delivery methods, and partnering relationships as a means of providing protection for our firm during economic uncertainty. While we are California-centric, we’re extending our geography by opening new offices to gain access to different recruiting bases and being closer to clients we are doing – or want to do – business with. TZL: It is often said that people leave managers, not

THE ZWEIG LETTER Octo

companies. What are you doing to ensure that your line of leadership are great people managers? RR: Being recognized and ranked as the No. 1 Best Firm To Work For in the architecture category by Zweig Group this year means we have an excellent foundation of happy and empowered staff. We used the feedback from that survey, along with internal, in-person interviews with our staff to create “Engagement Communities” within our firm. This is where everyone has a voice and a place to belong. Through these communities, our staff has active roles in the success of the firm and a sense of tribe where everyone plays – and everyone learns leadership skills regardless of their role or expertise. “We have made a concerted effort in the last few years to diversify our market sectors, delivery methods, and partnering relationships as a means of providing protection for our firm during economic uncertainty.” 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? RR: Over the years we’ve developed strong relationships with local architecture and interior design schools to help foster upcoming talent. We’ve hosted design workshops, participated in design review panels, and we regularly host “firm crawl” tours in our offices. In our San Francisco office we’re hosting Cal Poly students and helping to provide input for their workshops. Most of our interns have stayed on to join the firm as full-time employees after graduation. TZL: Is change management a topic regularly addressed by the leadership at your firm? If so, elaborate. RR: The change occurring in the industry is far more rapid now than even five years ago. Managing change well is no longer optional; it is vital. We address change management through regular leadership team off-site workshops, our Key Player (principal, senior associate, and associates) meetings, and staff “What the Heck?” meetings.

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? RR: We valuate our firm on an annual basis using an external trustee who retains an independent appraiser to determine the value per share of our ESOP stock. Key metrics include past and projected financial performance, company history, organizational structure and management, economic conditions, industry outlook, and the competitive environment. Because we are a 100 percent employee-owned firm, we regularly communicate the key metrics for improving our valuation with our staff . 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? RR: The key to ensuring a smooth transition is to always be working on it – grooming and growing those to one day take the helm, but in bite-sized chunks. We created and implemented a succession plan with a focus on leadership development of our Key Player group. This plan includes focused training on leadership qualities for the entire firm, with an emphasis on those within the Key Player Program who have been identified as high-potential future leaders. Through consistent training, focused mentoring, and group meetings, we have designed a transparent succession plan that will set us up successfully for the next transition. Biggest pitfall? Ignoring it. “Since being founded in 1979, we’ve had numerous staff celebrate 20th anniversaries (and beyond) with the firm. Our culture of continuous learning has contributed to the longevity of our staff.” 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? RR: We monitor our staff utilization rates closely, with supervisors setting target ratios for each employee for the

HEADQUARTERS: Irvine, CA NUMBER OF EMPLOYEES: 74 YEAR FOUNDED: 1979 NUMBER OF OFFICE LOCATIONS: Five offices in California: ❚ ❚ Irvine ❚ ❚ Los Angeles (opening soon) ❚ ❚ Sacramento ❚ ❚ San Diego ❚ ❚ San Francisco SERVICES: ❚ ❚ Architectural design

❚ ❚ Interior design ❚ ❚ Design strategy SECTORS:

❚ ❚ Healthcare ❚ ❚ Education ❚ ❚ Science and technology ❚ ❚ Senior living MISSION: Design that empowers people. STRATEGY-BASED DESIGN: This approach to design incorporates human-centered research, Lean methodology and environmental responsibility, so Taylor Design is always striving to improve solutions for the built environment that positively impacts the health and safety of its end users. CULTURE: Taylor Design supports a corporate culture of sustainability, through wellness programs, professional development and office initiatives, which empowers staff to make a positive impact on projects and beyond.

See ROLE MODEL, page 8

ober 7, 2019, ISSUE 1315

ON THE MOVE PENNONI APPOINTS NEW CHIEF OPERATING OFFICER Pennoni , a multidisciplinary consulting engineering firm, announced that David Pennoni has been selected as the firm’s new COO. Dave will be succeeding David DeLizza who was promoted to president and CEO. “Dave’s strong drive for results and his knowledge, experience, and success within the profession and the firm make him an excellent choice for this position,” said C.R.

“Chuck” Pennoni, founder and chairman. “Dave exemplifies Pennoni’s core values of Honesty, Integrity, and Service and drives the firm’s goals of Excellent Reputation, Profit, and Growth.” Dave has more than 35 years of experience with Pennoni, rising from graduate engineer to most recently the regional vice president for one of the firm’s largest and most successful regions. As RVP, Dave has helped grow the

Greater Philadelphia region by more than 40 percent over the last eight years. Dave’s experience includes an emphasis on client satisfaction and a strong grasp of the multiple services offered by Pennoni. “I am honored to be named COO and I look forward to working with our new president and CEO, Dave DeLizza, our colleagues, and our clients to continue the successful growth of the firm in the years to come,” said Dave.

Employees at Taylor Design enjoy social time.

ROLE MODEL, from page 7

attention to diversifying that client base can come at great cost. I had to close the office and terminate the employees when that primary client went through a rapid rough patch. A rough lesson. TZL: In one word or phrase, what do you describe as your number one job responsibility as CEO? RR: Inspire! Be the role model for behavior, networking, and navigating client relationships. TZL: A firm’s longevity is valuable. What are you doing to encourage your staff to stick around? RR: Since being founded in 1979, we’ve had numerous staff celebrate 20th anniversaries (and beyond) with the firm. Our culture of continuous learning has contributed to the longevity of our staff. We launched a new employee Goal Setting Program firmwide, which has allowed for total transparency in the professional development of our staff and financial rewards available upon successful completion. The ESOP plays a role in longevity as well. Promoting the value and growth opportunity that comes over time and building a culture around ownership increases employee retention.

percentage of the employee’s time that we expect will be charged to regular, revenue-producing projects, then build our annual plan based on that planned utilization. We also encourage our staff to incorporate business development and client relationship management into their workload as part of an annual, goal-setting exercise. “Being recognized and ranked as the No. 1 Best Firm To Work For in the architecture category by Zweig Group this year means we have an excellent foundation of happy and empowered staff.” TZL: They say failure is a great teacher. What’s the biggest lesson you’ve had to learn the hard way? RR: A very hard lesson learned as an office leader while at a previous firm was having too many eggs in one basket. Committing to a client relationship is important, especially for a small start-up office location. However, not paying

THE ZWEIG LETTER October 7, 2019, ISSUE 1315

O P I N I O N

Start small, end big

The industry is in desperate need of future leaders who know how to talk with, and understand, their people.

I recently conducted a survey of 30 owners in the AEC industry to learn about their biggest leadership challenges. The number one issue is finding leaders who have the inclination or potential to be more in tune with their colleagues. “I’ve got people who are good engineers, but they don’t have the emotional intelligence to inspire and influence people to follow them,” says one executive.

Leo MacLeod

The industry is in desperate need of future leaders not to engineer a solution to a technical problem, but to be aware of what’s going on with their own emotions, to manage their emotions, to read people, and to have the sense of how to talk to someone. The industry could use leaders who know when to listen and be empathetic like a therapist, and when to be as direct and as clear as a drill sergeant. And to know how to do it well so they don’t lose people but gain their admiration and trust. But can people really change? I’ve coached executives who were technically brilliant but emotionally clueless. I’ve had tremendous success at transformation. The key is to start ridiculously small.

The foundation of emotional intelligence is empathy, or the ability to put yourself in the place of someone else to better understand their thoughts and feelings. If we expand our view to include how others may perceive a situation, we can improve the outcome of an interaction. We move from a self-centered approach to an other- centered approach. When we consider how others feel and think about a situation and adapt our approach to include them, they feel acknowledged and respected, have a sense of ownership, work harder and longer, and produce better work. There’s no need to micro-manage for results, when people are engaged and working to their full

See LEO MACLEOD, page 10

THE ZWEIG LETTER October 7, 2019, ISSUE 1315

ON THE MOVE JQ ANNOUNCES MULTIPLE NEW HIRES IN SAN ANTONIO TO SUPPORT THE FIRM’S GROWTH JQ is pleased to announce the addition of four new hires in its San Antonio office, according to JQ CEO Stephen H. Lucy, PE. Joining JQ are civil engineering team lead Erlath W. (Trey) Zuehl III, PE; Henry C. Casal, Jr., RPLS and survey manager; Brett Bechtel, senior technician and civil designer; and Matt McCabe, senior survey technician. “The San Antonio market continues to provide growth opportunities for our clients and strong demand for our services. With the addition of these senior professionals and technical staff, we are better positioned to serve our current clients and to win more work in the region,” says Lucy. Erlath W. (Trey) Zuehl III, PE brings 30 years of civil engineering experience to JQ. His experience in civil site design, utility and infrastructure design, hydrological and hydraulic analysis and design, construction

management and project management are sought after by clients. Zuehl earned his bachelor’s degree in civil engineering from Texas A&M University. He is an active member in the American Society of Civil Engineers. Henry C. (Tres) Casal, Jr., RPLS is a professional land surveyor with more than 25 years of experience in all aspects of land surveying, including topographic, boundary, construction, as-built, TxDOT and ground control for photogrammetric surveys. Casal is the past president of the Alamo Chapter of the Texas Society of Professional Surveyors and is a current member. Brett Bechtel joins JQ as a senior technician and civil designer. Bechtel has 20 years of experience as an engineering technician producing design documents across numerous project types. He is proficient in AutoCAD Civil3D and able to take projects from initial survey to final plan preparation.

Bechtel earned his Associate of Applied Science degree from Southeast Community College in Milford, Nebraska. Matt McCabe joins the firm as a civil/survey technician with more than six years of experience in computer aided drafting and design using AutoCAD, Revit and Microstation, as well as surveying field work. McCabe earned an Associate of Applied Science degree in Computer Aided Drafting from Aims Community College in Greeley, CO. JQ provides structural and civil engineering, geospatial and facility performance services throughout the U.S. The firm is considered a leader in engineering design innovation and technology to support its complex, multi-state and multi-market projects. Recognized as a Best Firm To Work For and as a Hot Firm by Zweig Group, JQ has offices in Austin, Dallas, Fort Worth, Houston, Lubbock and San Antonio.

LEO MACLEOD, from page 9

I then gave him an assignment that may seem overly simplistic, but surprisingly effective: Start each day at work by asking an innocuous question like, “How was your weekend?” This was not a big ask and so he did it. What he found over the course of five months was that by asking about little things that weren’t too personal, things shifted for him. People started to see him as more approachable. They started to bring him in on issues they were having about real work on their projects. As he invested more time talking to people, they became more interesting to him. What started as an academic exercise became part of his daily routine of connecting with people in a way that he hadn’t imagined. He learned, “It’s not just asking once and checking the box but taking a genuine interest in their lives.” Once he came to know someone’s story, he would ask about updates that showed he cared enough to remember the details of their last conversation – seeing how their son’s first job was going, if they had finished a wood puzzle they were making for a granddaughter, or if the CAT scan had revealed anymore cancer in their wife. “I’m not a big pet person, but for some people it’s their world. Just because it’s not important to me, doesn’t mean it’s not really important to other people,” he says. When people feel more connected on a personal level, working together is easier and smoother. “I’ve learned that by taking time to talk about personal things, they feel like a person rather than a number.” He had previously drawn a hard line between work and personal life. “I used to think of employees as resources. I valued them for how much they could produce and the quality of their plans,” he says. That strategy served him as a manager but not as an effective leader. So, what’s the big insight into building emotionally intelligent leaders? Start small. LEO MACLEOD is a leadership coach in Portland, Oregon. He can be reached at leo@leomacleod.com.

potential. If the connection between empathy and output is so strong, why is it so hard for people to embrace? One of the obstacles to greater empathy in the workplace is that some people draw a strong line between their professional and personal lives. Those who live on the left side of the brain tend to be more guarded and less open about their feelings, so it’s difficult for them to hear someone else express theirs. I worked with an engineer who managed a small team, who was very clear about his boundaries. “This is a place of work. I’m not comfortable with getting into emotional issues at work.” I asked him if it was a matter of being comfortable sharing his feelings. “With my wife and buddies, but not at work.” “The industry is in desperate need of future leaders not to engineer a solution to a technical problem, but to be aware of what’s going on with their own emotions, to manage their emotions, to read people, and to have the sense of how to talk to someone.” As a consequence, he appeared closed down and uncaring. People didn’t come to him with their problems. On one hand, it worked pretty well: If you don’t appear to care, people won’t even bother sharing how they feel and you’ll get more work done and get home on time! If you’re a patient listener and let people talk, there’s the potential it can monopolize your time. And if you’re really empathetic, a line can form outside your door. But when people didn’t come to him with project problems, he realized he was also out of the loop when it mattered. He wasn’t sure how to strike a balance between caring and not caring. He felt damned if he did and damned if he didn’t.

THE ZWEIG LETTER October 7, 2019, ISSUE 1315

O P I N I O N

Prevention through design

“W hen you build a new house, make a parapet around your roof so that you may not bring the guilt of bloodshed on your house if someone falls from the roof.” Deuteronomy 22:8 (New International Version). There’s a push for architects and engineers to consider the safety of construction and maintenance workers when designing new structures.

WHAT IS PREVENTION THROUGH DESIGN? A concept that dates, perhaps, to the days of the Old Testament is getting a fresh look. Known as Prevention Through Design, or PtD for short, some advocates for construction safety are urging that design pro- fessionals consider the safety of construction and maintenance workers when designing new struc- tures. In November 2018, the American Society of Civil Engineers published a provocative article in the Journal of Legal Affairs and Dispute Resolu- tion in Engineering and Construction, titled, “Pre- vention through Design: Promising or Perilous?” The article discussed the benefits and risks of PtD. Several other names are used to describe this movement. For example, some call it “Design for Construction Safety,” or “Construction Hazards Prevention through Design.” In the U.K. it is called simply “Safety in Design.” All mean essentially the same thing, that architects and engineers should be considering means and methods of construc- tion when they design buildings and structures. This concept, of course, is totally contrary to the current thinking that design firms design for the end result, the finished building or facility, and it is up to the contractor to determine how to best – and most safely – build it. So-called “means, meth- ods, and techniques” of construction are left solely up to the contractor. Well, that concept could

change if the proponents of PtD have their way. IT’S A DANGEROUS INDUSTRY. Nobody can deny the sta- tistics put out each year by the U.S. Department of Labor, that construction is one of the nation’s most dangerous industries in terms of injuries and loss of life. Due to state workers’ compensation laws, however, which grant immunity to the em- ployer of the injured worker (despite even OSHA citations for violating safety standards), plaintiffs’ lawyers often sue the design professional (who is not immune) claiming violation of some duty owed to the worker. Insurance claim statistics from 1999 to 2008 show that about 3 percent of all claims against design professionals came from injured workers. Suits by injured workers led the design community to clarify responsibility for site safety decades ago in the standard contract documents. For example, the AIA’s A201 Gen- eral Conditions of the Contract for Construction (2017 edition) clearly states: “The Architect will not have control over, charge of, or responsibility for the construction means, methods, techniques, sequences or procedures, or for the safety precau- tions and programs in connection with the Work, since these are solely the Contractor’s rights and responsibilities under the Contract Documents.”

William Quatman

See WILLIAM QUATMAN, page 12

THE ZWEIG LETTER October 7, 2019, ISSUE 1315

WILLIAM QUATMAN, from page 11

is questionable whether designers are ready to handle that new role. Some firms might engage a trained safety consul- tant to review their plans, or hire a “peer reviewer” for PtD, but most will be at risk of handling a new legal obligation without proper training. Will owners increase fees to com- pensate for this training and review? Not likely. The ACEC 2016 white paper observes that, “To the extent design professionals lack this knowledge, training, and experi- ence, they must acquire it for [PtD] to be successful. The potential cost of this training likely would be substantial, and would include a significant investment of employee time as well.” Training architects and engineers on PtD will take years, and require new college curriculum, seminars, workshops, and, perhaps, even certification in “safety by design.” We have to ask: Are design professionals really the best ones to take on this risk? A review by the contractor and, perhaps, trade subcontractors during design development could point out areas in which safety might be improved through design. But in this scenario, the design firm will be relying on the expertise of the construction community to advise on safety. By adopting their recommendations, who will bear the risk? Contractors and subcontractors who enjoy workers’ comp immunity might resist contract clauses that require them to indemnity and defend the design professional who relies on their input in PtD implementation, even if that is where the risk is best placed, on the team member most knowledgeable in site safety. SAFE HARBOR NEEDED. When the Americans With Disabilities Act was enacted in 1990, it provided broad principles for the elimination of discrimination against persons with dis- abilities. Congress charged the U.S. Attorney General to is- sue more specific standards for accessibility under Title III of the ADA. The Department of Justice adopted the ADA Accessibility Guidelines for Buildings and Facilities, which provided a sort of “safe harbor” for design professionals, by scripting out exactly what height and spacing, or slope, was best suited for accessibility. As one court stated: “The ADAAG Standards act as a safe harbor. A designer who ad- heres to the letter of those standards, as interpreted by the courts and DOJ, ordinarily will be in compliance with the ADA regulations, at least with regard to the particular de- sign elements covered by those standards.” If PtD becomes law, it seems logical and fair that the industry, and govern- ment, should provide similar guidance for design profes- sionals on just how to best address safety “through design.” CONCLUSION. We have to admit that construction is danger- ous work – the statistics prove that. Most construction companies take safety very seriously and work hard to train all employees on “safety first.” Can we do better, how- ever, if designs better accommodated the worker? Certain- ly. But this has to be well thought out, and the risks need to be allocated to those best trained and able to handle them. PtD has potential to reduce worker injuries but only if those most knowledgeable in construction means and methods are giving the input, and that is not necessarily the design professional. WILLIAM QUATMAN, FAIA, Esq., is general counsel and senior vice president at Burns & McDonnell Engineering Co. He can be reached at bquatman@burnsmcd.com.

This concept has become standard in most U.S. design and construction contracts and is accepted by the industry and its sureties and insurers as a fair allocation of risk. As the ASCE 2018 article points out, decades of court cases decided under these standard contracts have resulted in a fully developed body of case law and precedent upon which design firms have relied. Courts hold, generally, that: “Unless [an architect or engineer] has undertaken by conduct or contract to supervise a construction project, he is under no duty to notify or warn workers or employees of the contractor or subcontractor of hazardous conditions on the construction site.” At least ten states have enacted legislation that expands worker’s compensation immunity to the design professional, granting them immunity from injured worker claims, with two exceptions: 1) If responsibility for safety practices is specifically assumed by contract; or, 2) If the accident is due to the negligent preparation of design plans or specifications. Adoption of PtD could void this statutory protection if the design firm is sued for not preventing the accident “through design.” PTD IS GAINING ATTENTION. In the U.S., PtD has only been dis- cussed for about the past decade. In 2011, the American National Standards Institute and the American Society of Safety Engineers published a voluntary standard, ANSI/ ASSE Z590.3, titled “Prevention through Design: Guide- lines for Addressing Occupational Hazards and Risks in Design and Redesign Processes.” In 2016, the American Council of Engineering Companies’ Risk Management Committee published a white paper on “Design for Con- struction Safety.” However, in the U.K., this concept is more fully developed and is already written into the law. The U.K.’s Construction Design and Management Regula- tions of 2007 require designers to minimize the hazards associated with construction at as early a stage as possible. Two years before the U.K. initiative, the Australian gov- ernment took a leadership role in requiring safer designs for construction. The National Standard for Construction Work, NOHSC:1016, promotes as one of its priorities “eliminate hazards at the design stage.” WHAT IF PTD LEGISLATION IS PASSED IN THE U.S.? The ASCE article suggests that if design professionals become the targets of litigation under PtD, the insurance industry may react by either increasing premiums or excluding coverage for such services. Both would have a significant impact and decades of case precedent might be thrown out the window, super- seded by new legal obligations shifting site safety respon- sibilities to designers. One idea that has been floated is to promote PtD as a voluntary act protected under a “good Samaritan” concept. Many states have passed legislation giving immunity to those who volunteer, especially to de- sign professionals assisting in times of a natural disaster or emergency. Why not expand this concept to PtD to encour- age, not penalize, designers for considering the safety of workers? WHO BEST TO BEAR THE RISK? Few, if any, standard college pro- grams in architecture or engineering have courses in how to design for site safety. The state licensing examinations similarly do not test on this subject. So, while safety ad- vocates might think that shifting safety risk to the design professional is the answer to reducing worker injuries, it

THE ZWEIG LETTER October 7, 2019, ISSUE 1315

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