TZL 1304

TRANSPARENT INTENTIONS, from page 7

net labor multiplier. Our business is about generating revenue dollars for dollars invested in labor. We monitor this closely to ensure our dollars are being utilized effectively. 3) Operating profit on net revenue – We use this metric for a quick comparison versus prior fiscal years and fiscal periods (monthly, quarterly, annual) of operating profitability. This is a great indicator of effectively utilizing resources. TZL: Ownership transition can be tricky, to say the least. What’s the key to ensuring a smooth passing of the ba- ton? What’s the biggest pitfall to avoid? AR: The most important key is transparency. Over 52 years there have only been two presidents. Our founder did not openly discuss transition and as a result we lost several key employees. I want to provide as much experience, educa- tion, and knowledge that will allow for the continued suc- cess of our firm. I must be transparent with my intentions, time frame, transition options, and the financial options. I try to avoid the “water cooler” talk that may become toxic and, most importantly, incorrect. 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? AR: Always promote forward-thinking and the long-term success. This means the staffmust have the freedom and en- couragement to promote client relations and career growth. There will be times when the utilization rate and revenue is low, but this should be a result of promoting the business, generating proposals, and client relations. This will pro- vide long-term benefits and growth. Being a small firm, this must be monitored regularly and if the revenue and backlog are dropping significantly, adjustments must be made. “We’ve taken initiatives to promote improved remote access, flexible work time, and allow staff to adjust their schedules to achieve a better work-family balance. We have also improved our maternity/paternity leave benefits and promote educational and professional growth seminars.” TZL: They say failure is a great teacher. What’s the big- gest lesson you’ve had to learn the hard way? AR: Learning to write better, as I failed my first college the- sis. This forced me to better understand the English lan- guage. Our firm generates many reports, studies, and cor- respondence. Over the years I’ve forced myself to improve my writing technique. I have impressed this requirement on my staff through writing seminars and encouraging them to self-critique their work. Another lesson learned is understanding the need to be up- front with clients, even if a project is going south. The client will respect you more in the long run. I have had times when

I did not want to disappoint the client and held bad infor- mation too long. This led to a bad situation. TZL: Research shows that PMs are overworked, under- staffed, and that many firms do not have formal training programs for PMs. What is your firm doing to support its PMs? AR: This is constantly discussed during our leadership meet- ings. When creating our new organizational structure, we realized the need to hire younger staff to support our upper management and reduce their workload. The goal is to train them to be productive earlier in their career. We recently hired three graduates and are now focusing on our new on- boarding program. This has me taking an active role and I’m personally involved in the process. I spend at least one hour per week discussing experiences, what they’ve learned, and technical issues. Over the past three months our PMs have seen a drop in their workload, which is good. TZL: How many years of experience – or large enough book of business – is enough to become a principal in your firm? Are you naming principals in their 20s or 30s? AR: Yes, we are naming employees in their 30s as principals. The minimum experience is 10 years with our firm. Since the new principals started with our firm at a young age, the 10-year tenure is achieved within the 30s. In combination with their experience, potential principals must show man- agement capabilities, leadership qualities, and revenue pro- duction. TZL: In one word or phrase, what do you describe as your number one job responsibility as CEO? AR: Support. TZL: What happens to the firm if you leave tomorrow? AR: My ultimate goal is for the company to be successful without me; we’re making great progress. My objective is to train and share experiences with the team about the busi- ness operations side so they can manage and grow the com- pany on their own. I am planning for my retirement and transition. I have retained a business consultant to better understand the transition process and the options. It’s an exciting time.

THE ZWEIG LETTER July 15, 2019, ISSUE 1304

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