TZL 1307

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 A u g u s t 5 , 2 0 1 9 , I s s u e 1 3 0 7

Completion fees

Making a big push

S ometimes in business you just have to do something that generates results NOW . There’s no time to waste. You need action and something good to happen. Your prosperity depends on it. Your very survival may even depend on it. On some of these occasions, as a leader, this action is all up to you. At other times, it takes a lot people. When it’s all on you, it’s easier. You know that you have the discipline and the know- how. Both are essential. I remember the early days of Mark Zweig and Associates. Although we appeared to go straight up for our first 13 years in business, we were thinly capitalized (we started with only $1,000) and there were times things got a little scary (like when Bank of New England failed and froze our line of credit, among others!). But I could always get on the phone and quickly generate some cash from either new work with retainers/advance payments or collect something owed to us early. All it took was for me to sit at my desk in the Hogan’s Block building in downtown Natick with my window open, and I would smoke cigarettes (Fred White used to call it my secret weapon when I smoked) and stay on the phone, and lo and behold, good things would happen. As your business grows and matures, it may get harder. The numbers increase geometrically and you have to enlist the support of others for your business development or collection campaigns. When that is the case, here’s my quick advice: 1) Share what is happening and why you need

“Sometimes in business you just have to do something that generates results NOW. There’s no time to waste. You need action and something good to happen. Your prosperity depends on it.”

Mark Zweig

In Zweig Group’s recently released 2019 Fee & Billing Survey of AEC Firms , firms were asked what percentage of project fees were charged at the completion of certain project phases. There is an interesting takeaway when comparing firms with low profit or loss with firms experiencing average profit or better . Profitable firms are charging earlier in the design phases while more low profit firms (25 percent) are waiting until the construction phase to charge their clients. The longer you wait to charge your clients, the longer your firm must finance the project, affecting profitability and growth potential. 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 ADC Engineering, Inc..............................6 CORE Consultants, Inc...........................4 Hitchcock Design Group.......................12 Kimley-Horn............................................2 Talley Associates.....................................2 Three Living Architecture.........................2 WSP.......................................................4

MORE COLUMNS xz BLAKE CALVERT: Why it matters Page 3

xz PETER ATHERTON: Learning strategy Page 9 xz BILL INMAN: Ready for change? Page 11

Family man: Mark Dillon See MARK ZWEIG, page 2

Page 6

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

BUSINESS NEWS AWARD-WINNINGCOMPANYTOUNVEIL ‘TOUCHMARK AT EMERALD LAKE,’ NEW RETIREMENT COMMUNITY COMING TO MCKINNEY Touchmark at Emerald Lake plans to be a suburban oasis for retirees 55 and older who are ready to begin a new chapter filled with friends, life-enriching activities and new opportunities. The new community will be built in McKinney, Texas – just 35 miles north of Dallas and a few miles from the new PGA headquarters in Frisco. Touchmark at Emerald Lake will be the newest retirement community developed and operated by Touchmark. The new community will be built in two phases. The first will include 12 lake homes, 20 casitas, 99 independent living apartment homes, 50 assisted living apartment homes and 32 memory care residences. Once phase two is completed, the community will include approximately 390 homes. A schematic design for the new community is in the works, and the project is expected to begin construction in 2020 and take two years. Touchmark has been working with McKinney civil engineering firm Kimley-Horn as well as two Dallas consultants: Three Living Architecture and Talley Associates on landscape design and master planning. In addition to bringing a new vibrant retirement community to the area, the development is expected to provide more than 350 local jobs and nearly $25 million in local economic impact when fully built. “We are excited to open our first location in Texas, a state that exemplifies our core value of creating community,” said CEO Marcus Breuer. “Each Touchmark community is designed to reflect the local environment. With this site’s picturesque lakeside backdrop and warm climate, the design will certainly include

an abundance of open-air dining and outdoor entertainment.” For example, Touchmark at Emerald Lake will include on-site eateries, a lakeside pavilion, outdoor pool, private courtyards and an expansive lawn for live concerts, nature walks, and lake activities. The company’s full life wellness and life enrichment program, which has received national and international recognition over the years, is based on staff working with residents to identify their current and future interests and creating a full calendar of events, activities, and classes reflecting those. Membership in the on-site health and fitness club with indoor pool and spa, state-of-the-art equipment and certified fitness professionals will also be available to the public, ages 50 and older. McKinney, specifically, has been on Touchmark’s radar as a potential site for several years. “As someone who grew up and went to school in the area, I was excited to help bring Touchmark to North Texas. The ‘sense of place’ created by Emerald Lake is perfect for the unique experiences we like to create,” says Kendra Lackey, president of Touchmark Development & Construction. “The Turrentine family was interested in keeping much of the land natural and liked how our plan focuses on green spaces and the lake while providing a community where people can live, thrive and enjoy life.” Based in Beaverton, Oregon, since 1980, Touchmark is an award-winning company that develops, builds and operates full-service retirement communities providing Gold Standard hospitality in the U.S. and Canada.

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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 and Designer sparkman@zweiggroup.com Liisa Andreassen | Correspondent landreassen@zweiggroup.com

MARK ZWEIG, from page 1

everyone’s help as soon as possible. Don’t be afraid to be honest with your people about the situation. They will trust you more as a result. 2) Pay attention to those who volunteer to help out. They are telling you a lot about their commitment level and that is a very important thing for you to know about them. These are your best people. 3) Make your assignments and track and report the results. Nothing like a little public dis- closure to create peer pressure to perform. 4) Celebrate your victories and achievements. Make those who come through your “heroes of the day.” 5) Set a good example yourself. Don’t try to just be a manager but instead be a doer. And make darn sure your effort and results are as good or better than anyone else’s because that is how you will get their respect. 6) After the campaign is done, take a hard look at why you were in a crisis in the first place. What needs to change in the way you do things to avoid this situation in the future? If you are facing one of these situations right now yourself, see if my advice is helpful. And when the crisis is over, drop me a line to tell us what worked and didn’t work for you. We can all learn from each other! MARK ZWEIG is Zweig Group’s chairman and founder. Contact him at mzweig@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 August 5, 2019, ISSUE 1307

O P I N I O N

Why it matters

If you figure out the big question, it’ll invigorate your culture, differentiate your company, and inform everything you do in your business.

W hy? It’s a simple question that doesn’t always have a simple answer. But discovering our company’s Why has been the differentiator in our success.

CORE’s Why in order to maintain the culture that had been vital to our early success. We gave all our team members the opportunity to contribute to our company’s Why – one-on-one discussions, survey feedback, and a Why discovery retreat. The process of refining and redefining our Why was powerful, and it reaffirmed the reason why we started CORE in the first place. members in those early years at CORE. But as our company grew, it became evident that we needed to formally articulate CORE’s Why in order to maintain the culture that had been vital to our early success.” “Our unique culture was unwritten but engrained into our team

After spending nearly 20 years in the AEC industry, I started asking myself why – why did I choose this career? Why do I get out of bed every morning? And why does any of this matter? I was burnt out. If I wanted to continue the path of my civil engineering career, something needed to change. I wanted flexibility, balance, and purpose in the workplace so I could get back to the core of who I really was – as a person and as an engineer. I joined forces with a handful of colleagues who shared my values and beliefs, and we founded CORE Consultants. We were finding balance, having fun, and producing great work. And people were noticing. Our clients were enthusiastic for our cause and referring more and more work. We turned a profit in the first year, and nearly tripled our revenue in the second year. Our unique culture was unwritten but engrained into our team members in those early years at CORE. But as our company grew, it became evident that we needed to formally articulate

Blake Calvert

See BLAKE CALVERT, page 4

THE ZWEIG LETTER August 5, 2019, ISSUE 1307

BUSINESS NEWS WSP PARTNERS WITH KAHUA TO DRIVE AGILITY AND FUEL GROWTH IN PROPERTY AND BUILDINGS BUSINESS UNIT WSP Canada, a leading management and technical consultancy for the property sector, has selected Kahua as its real estate development program management and collaboration technology platform. Under the agreement, WSP’s Canadian Buildings Project Management business unit will standardize around Kahua to manage programs and projects with The Kahua Network. WSP Buildings Project Management is a solution-driven advisor and development manager for clients across a broad range of industry segments. They deliver innovative, integrated solutions to complex problems, leadership in project delivery and a focus on value-driven results. The agreement with Kahua reflects a commitment to investment in new technology that provides a flexible and efficient way to manage complex projects across a diverse client base. Kahua provides the world’s premiere collaborative network for real estate and construction program and project management. The Kahua Network, delivered as an Application Platform as a Service, will connect WSPwith its clients and supply chains, allowing applications, business processes and information to be shared across organizations

to more effectively manage the entire lifecycle of their capital assets. “WSP was looking for an agile and forward- thinking system to meet our clients’ needs now and well into the future,” said Roger Puttock, national vice president of project management at WSP. “High-performing project management teams need tools that support collaboration, accuracy and a constant focus on achieving results, and that is why Kahua is part of our strategy. Kahua’s program management solutions will help us to improve communication with our clients, streamline operations and ultimately deliver the best possible outcomes for our clients.” “WSP has long been recognized as one of the premier global consulting firms in our industry and they are consistently on the forefront of innovation,” said Scott Unger, chief executive officer of Kahua. “We are pleased that they have chosen Kahua to help them set the standard in client experience by improving communication and operational efficiency. The Kahua Network will help support WSP in their mission to challenge the status quo and help societies thrive.” Kahua is changing the way that capital projects are delivered and managed. The Kahua Network is the world’s leading collaborative network for real estate and construction project management. Kahua’s collaborative project management solutions

improve communication and performance throughout the entire lifecycle of your capital assets. Delivered as a secure, scalable Application Platform as a Service, the Kahua Network enables users to easily share data, documents and workflows across all applications and projects. Kahua supports leading mobile devices and tablets, integrates with third-party applications and numerous accounting systems, and enables customers and certified development partners to quickly modify existing applications or build custom applications that operate on The Kahua Network. As one of the world’s leading professional services firms, WSP provides engineering and design services to clients in the fransportation and infrastructure, property and buildings, environment, power and energy, resources and industry sectors, as well as offering strategic advisory services. WSP’s experts include engineers, advisors, technicians, scientists, architects, planners, surveyors, and environmental specialists, as well as other design, program, and construction management professionals. With approximately 48,000 talented people globally, WSP is uniquely positioned to deliver successful and sustainable projects, wherever clients need them.

BLAKE CALVERT, from page 3

Need further proof that knowing your Why will benefit your company? Simon Sinek, leadership guru and author of Find Your Why has found that “people and organizations who know their Why enjoy greater long-term success, command greater trust and loyalty among employees and customers, and are more forward thinking and innovative than their competition.” “After spending nearly 20 years in the AEC industry, I started asking myself why – why did I choose this career? Why do I get out of bed every morning? And why does any of this matter? I was burnt out.” Understanding our Why has made all the difference in CORE’s success – both for our culture and the bottom line. Our focus on people and balance has resulted in happy employees, happy clients, and successful communities. It’s why our clients choose us over our competitors. It’s why our employees come to work every day. It’s why I chose this career. It’s why I get out of bed every morning. And why it all matters. BLAKE CALVERT, P.E., is principal, president, and CEO of CORE Consultants, Inc. The Colorado start-up received Zweig Group’s inaugural Top New Venture Award in 2018 (#1). Learn more about CORE by visiting liveyourcore.com.

CORE exists “to empower people to thrive at home, at work, and in their community.” Understanding and communicating our Why has inspired and instilled trust and loyalty in our employees and customers alike. While your company’s Why will be different from ours, it will help you to maintain your culture, differentiate your company, and inform everything you do in your business: ❚ ❚ Mission and vision. Knowing our Why made developing our mission and vision statements relatively simple. Because our Why is people-centric, our mission and vision are people- centric. Both support our culture of balance, fun, passion, and producing great work. And our people identify with it. ❚ ❚ Recruiting and retention. Communicating our Why to potential employees allows us to attract the right employees that share our values and beliefs. Hiring the right people from the get-go enhances our culture and improves loyalty and re- tention. ❚ ❚ Marketing and business development. Our Why inspires our marketing and business development efforts – from our elevator speech, to our social media, to our website – we love showing potential customers how we are thriving, and they want to become part of it! Communicating our Why in our marketing and business development efforts helps us to attract customers who share our values and promotes long- term, win-win business partnerships.

THE ZWEIG LETTER August 5, 2019, ISSUE 1307

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THE ZWEIG LETTER August 5, 2019, ISSUE 1307

P R O F I L E

Family man: Mark Dillon President and co-founder of ADC Engineering, Inc., a multidisciplinary firm based in Hanaham, South Carolina.

By LIISA ANDREASSEN Correspondent

“C ommoditization is a problem all engineers face,” Dillon says. “We don’t have any pricing strategies. We simply offer fair fees for the scope of work defined and encourage discussion if our fee is higher than expected. There are always comparisons to other firms and other projects and we sometimes lose work due to not offering the lowest fee.” A CONVERSATION WITH MARK DILLON. The Zweig Letter: What are the three to four key business performance indicators that you watch most carefully? Do you share that information with your staff? Mark Dillon: Quarterly, we watch billings as a percentage of salaries, work backlog, and billings compared to past years. The billings, as a percentage, let us know how we are doing relative to meeting overhead and making profit. Month-to-month reports on this are not as informative as

quarterly reporting as you can have an exceptionally low or high month that is not really indicative of the overall health. The backlog trend lets us know the status of work in hand as a multiplier of monthly billings. A healthy backlog gives us confidence for staff retention or hiring. Comparing the backlog to past months and past years is an indicator for future billings. The billing trends let us know if we are progressing toward overall yearly goals and it helps us see positive or negative trends. We share financial information with senior staff partnership and department heads, but not with the overall company staff. We feel it’s important that the staff has confidence in the company’s financial health, so we hold monthly meetings where the staff hears from each department about upcoming and current projects. TZL: How far into the future are you able to reliably predict your workload and cashflow?

THE ZWEIG LETTER Aug

MD: We can predict workload and cash flow approximately three months out. The cash flow is easier to predict as we know billings at the end of any month, and we have enough payment history to reliably predict future income. Workload can change based on owner decisions. In some cases, owners delay projects due to funding or tenant issues and delay projects that had resources committed. In a good economy, this happens less but in an uncertain economy we see this happen fairly often. TZL: What role does your family play in your career? Are work and family separate, or is there overlap? MD: I am blessed to have a wonderful family life that has meshed well with my professional career during the past 30 years. This timeframe has seen all my children grow to adulthood. We experienced all the typical events of ball games, dance recitals, vacations, birthday parties, and graduations, all while work progressed and deadlines were met. My family, especially my wife of 35 years, has been very supportive and encouraging. They have comforted me and energized me during the mostly positive, but sometimes negative, business events, always giving me a respite from work life. TZL: What, if anything, are you doing to protect your firm from a potential economic slowdown in the future? MD: When we discussed financial data during the Great Recession, we realized that we had survived several negative economic downturns since 1990 and didn’t even know it. As a small company with a home office in a mid-sized tourist city, we’re somewhat insulated from national trends. The 2008 event affected us, but not nearly as severe as other firms or national trends for firms our size. From the company’s beginning, we’ve been fiscally responsible which has allowed us to build and maintain a strong financial foundation. Having a diverse portfolio of sectors has also benefitted us when the economy slowed. In the end, our best protection from future negative events comes from ensuring a quality work product along with a high level of client commitment and tracking the trends previously discussed. TZL: How are you balancing investment in the next generation – which is at an all-time high – with rewards for tenured staff? MD: This has always been a challenge,

but seems heightened as investments in development have increased. We have a tremendous desire to see the next generations succeed within our firm. When the founding partners were considering options for ownership transition it was an easy decision to transition internally. This allowed us to promote our senior project management staff into ownership and to bring new energy into the partnership. Collectively, the partnership is already discussing the next generation of owners. While this is the primary investment in the next generations, we’re also investing in internal mentoring and continuing education which we do with local speakers and national webinars. Just this year, our PTO policy was changed to benefit employees who have been with the company more than five years. Previously, employees had to be with the company for eight years before receiving an additional 40 hours of PTO, but we felt that was too long to wait to reward our employees’ loyalty and dedication to the firm. TZL: When you identify a part of your business that is not pulling its weight in terms of profitability or alignment with the firm’s mission, what steps do you take, and what’s the timeline, to address the issue while minimizing impacts to the rest of the company? MD: We track the financial performance of each of the various disciplines as well as each of the firm’s branch offices. There’s no panic if one discipline or one location shows a temporary downward trend. We know there are always cycles and we have absolute confidence in our staff to know that any negative result will be reversed. One benefit of having multiple disciplines and locations is the balance that it affords. 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? MD: We value the firm annually to set the stock price each year. We have a process for stock sale or purchase that can happen annually. The valuation is performed by our independent accountant using standard repeatable evaluation techniques which give us confidence from year to year of fair valuations. TZL: Ownership transition can be See FAMILY MAN, page 8

YEAR FOUNDED: 1990 HEADQUARTERS: Hanahan, SC NO. OF EMPLOYEES: 62 NO. OF OFFICES: 3 MARK DILLON: President and co- founder of ADC Engineering, Inc., Dillon also serves as a structural project manager and design engineer. As principal structural engineer, he performs structural design and analysis for all aspects of structural systems, including new designs and forensic investigations. He is also responsible for the development and coordination of proposals, bid documents, and construction administration services. SERVICES: ❚ ❚ Building envelope ❚ ❚ Structural ❚ ❚ Site services ❚ ❚ Civil engineering ❚ ❚ Landscape architecture ❚ ❚ Surveying

MARKETS: ❚ ❚ Aviation ❚ ❚ Commercial

❚ ❚ Higher education ❚ ❚ K-12 education ❚ ❚ Federal ❚ ❚ Healthcare ❚ ❚ Parks and recreation ❚ ❚ Residential ❚ ❚ Historic ❚ ❚ Hospitality/hotel ❚ ❚ Institutional ❚ ❚ Maintenance and restoration ❚ ❚ Industrial ❚ ❚ Infrastructure ❚ ❚ State/municipal ❚ ❚ Sustainable design

gust 5, 2019, ISSUE 1307

On the Day of Caring, ADC built an outdoor garden for the students at Beech Hill Elementary in Summerville, SC.

FAMILY MAN, from page 7

and of course the client gets more than they pay for. 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? MD: We do not have a set age, or years of experience metric that we use. We simply try to recognize the value of the individual and the contribution that person makes to the company. The original partners are now in their 50s and partnerships have been offered to senior project managers in their 40s and 30s. TZL: What happens to the firm if you leave tomorrow? MD: If I were to leave, the specific department that I manage would be just fine. Two of the newer partners are in my same department and they are excellent engineers, managers, and leaders. I’m confident they would do great in my absence. TZL: A firm’s longevity is valuable. What are you doing to encourage your staff to stick around? MD: We’ve been blessed with a staff that has remained loyal for many years. I don’t think there is any one feature or quality that has caused this retention. I believe a combination of family atmosphere, good compensation and benefits, challenging work, and respect for the employee have contributed to the longevity.

tricky, to say the least. What’s the key to ensuring a smooth passing of the baton? What’s the biggest pitfall to avoid? MD: Our transition plan is intended to be very attractive to future owners, so our process is carefully documented and thorough. As engineers, attention to detail is in our blood and so far, that has been a key element of process success. Another key element is simply the level of talent and commitment of those who have been offered ownership. So far, we have not experienced a big pitfall, but from experience, I would say that if someone sees an ownership transition happening in the next year, he/she is already behind the ball. The process is complex and takes at least 18 to 24 months. TZL: What unique or innovative pricing strategies have you developed, or are you developing, to combat the commoditization of engineering services? MD: Commoditization is a problem all engineers face. We don’t have any pricing strategies; we simply offer fair fees for the scope of work defined and encourage discussion if our fee is higher than expected. There are always comparisons to other firms and other projects and we sometimes lose work due to not offering the lowest fee. Our firm enjoys an excellent technical reputation which tends to associate us with more complicated projects that rely on our technical abilities versus just using the lowest priced engineer. We believe we offer the best overall value,

THE ZWEIG LETTER August 5, 2019, ISSUE 1307

O P I N I O N

Learning strategy

M ost leaders agree that employee recruitment and retention is the number one issue facing AEC firms today. At the same time, employee growth and development is our talents’ top priority. Why is it then that most firms don’t have a formal or strategic employee learning and development program? Your peoples’ top priority is development. If you want to keep them, you need to identify the ideal learning and development strategy for you and your firm.

25 percent of the time. This would be 40 hours of a typical 160-hour work month. In this scenario, the remaining time would consist of work on routine assignments with previously mastered skills. If we apply the 70/20/10 rule, 10 hours per week would be focused on learning and development “Leave the status quo, continuous overload, and the threat of disruption and displacement to others by prioritizing more effective learning and development for you and your firm.”

Peter Atherton

Connecting these dots is a direct path to greater organizational growth, attractiveness, and profits. To get to where we want to be, we can leverage both proven models and innovative practices. THE 70/20/10 MODEL. The 70/20/10 learning and de- velopment model works, especially in professional services. The idea is for 70 percent of our time to be “on-the-job” training with challenging stretch assignments focused on future needs and growth goals, 20 percent with one-on-one supervisor coaching and mentoring, and 10 percent with relevant outside training, coursework, or reading. To put this in context, let’s assume we want to formally teach and develop our talent only

See PETER ATHERTON, page 10

THE ZWEIG LETTER August 5, 2019, ISSUE 1307

PETER ATHERTON, from page 9

for safety, trust, and effective facilitation. ERGs can also begin with outside facilitation and then be transitioned after a six-, nine-, or 12-month period. “Most leaders agree that employee recruitment and retention is the number one issue facing AEC firms today. At the same time, employee growth and development is our talents’ top priority. Why is it then that most firms don’t have a formal or strategic employee learning and development program?” PEER-TO-PEER LEARNING FOR LEADERS. As much as ERGs can bring out the best in our organizations and provide critical insight, it is not enough for leaders who are tasked with continuously positioning their teams and organizations for success. For most leaders, external peer-to-peer learning is the key to greater growth and development. Such opportunities can take the form of: ❚ ❚ Executive coaching ❚ ❚ Formal or informal outside board of directors ❚ ❚ Attendance at roundtable events ❚ ❚ Participation in mastermind groups There are advantages and benefits to each – and all can apply. The idea is for leaders to consistently surround themselves with people who share common goals, but have a diversity of experiences, circumstances, ideas, and perspectives. Goals and strategies are important. The 70/20/10 model helps guide supervisor engagement and employee growth and development. Peer-to-peer learning helps us connect and unleash the power of many. Successfully combining these, however, is ideal for building vertically and horizontally strong organizations positioned to thrive. Leaders: Leave the status quo, continuous overload, and the threat of disruption and displacement to others by prioritizing more effective learning and development for you and your firm. PETER ATHERTON, P.E., is an AEC industry insider who has spent more than 20 years as a successful professional civil engineer, principal, major owner, and member of the board of directors for a high-achieving firm. Atherton is now president and founder of ActionsProve, LLC, author of Reversing Burnout. How to Immediately Engage Top Talent and Grow! A Blueprint for Professionals and Business Owners , and creator of the I.M.P.A.C.T. process. Atherton works with AEC firms to grow and advance their success through strategic planning implementation, executive coaching, performance-based employee engagement, and corporate impact design. Connect with him at pete@ actionsprove.com.

and would generally break down into seven hours of stretch assignments, two hours of supervisor coaching, and one hour of outside training. Does this look like a typical week for your employees? Even if we wanted to reduce the formal learning and development by half, would our employees routinely have three to four hours per week of planned stretch assignments, one hour of coaching with supervisors, and 30 minutes of relevant outside training? For many organizations, this may still not be the case. As leaders, if we aren’t instilling a culture of learning and development, creating capacity for supervisors, and incentivizing the behaviors we seek, how can we really expect to have fully engaged, growing, and loyal talent? YOU ARE NOT ALONE. The war for talent is real and the pace of change is accelerating. Leaders today are busy – but our efforts need to take us, our teams, and our organizations to a better place. To compete and win, we all need to adapt. Larger firms need to be more agile. Smaller firms need to systemize. Firms that grow through mergers and acquisitions need more cohesion, while those favoring organic methods need to be more entrepreneurial. Leaders cannot (and should not) take this all on alone. It’s better to tap into larger resources – some located much closer than we think. “Goals and strategies are important. The 70/20/10 model helps guide supervisor engagement and employee growth and development. Peer-to-peer learning helps us connect and unleash the power of many.” PEER-TO-PEER LEARNING FOR EMPLOYEES. Peer-to-peer learning is a method where engaged peers learn from and with each other. Internally, peer-to-peer learning can take place in a variety of employee resource groups (ERG). These can be technical or functional in basis (e.g., process engineers, quality control advocates, project managers, principals, etc.) or have a personal interest basis (e.g., young professionals, working parents, veterans, empty-nesters, etc.). The idea is to bring together peers and their ideas to build community, comradery, connections, collaboration, and solutions across offices, regions, and divisions to improve both performance and culture. The design of a group’s charter is essential, as is the need

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

THE ZWEIG LETTER August 5, 2019, ISSUE 1307

O P I N I O N

When Bill announced the leadership transition, that same day the entire staff worked on coming up with ideas for Hitchcock 2.0 and this new strategic plan (based on the recommendations of an outside consultant).

Ready for change?

Effecting a real-life leadership transition takes years of planning, and the ability to dismiss entrenched perceptions and past assumptions.

G etting ready to transition a firm’s leadership is a pivotal period in any firm’s lifecycle, and how you do it will set the tone for the firm’s culture, and the effectiveness of the new leader’s first year.

Hitchcock Design Group transitioned its leadership on January 1st of 2019, marked by our board and our founding Principal, Rick Hitchcock, asking me to take the reins at the beginning of the firm’s 39th year. As of today, and nearly five months into our transition, it’s clear that our preparation positioned us well for a smooth transition, and equally as important, enabled us to execute timely change, strengthen the best aspects of our brand, and put our people first – moving us toward our best tomorrow. I’m not sure we can claim that we scripted the optimum transition plan, and, candidly, we had to improvise along the way to react to both internal and external factors. Reflecting on our journey, here’s some of the key aspects that have influenced our current success: ❚ ❚ We planned way-ahead. I know, this sounds like a firm grip on the obvious, but what seemed like

misplaced emphasis years ago turned out to be time well spent. To elaborate, our founding principal es- tablished the mechanics of ownership transition ear- ly on, adding two-tiers of ownership over time, and implementing a suite of employment and ownership agreements outlining how the firm’s equity would be transferred. As this plan matured, we set earnings aside for the future, investing in a side-fund to help payout our future retiring shareholders. And now that we’re on the doorstep of buying-out our found- ing principal – and what will likely be the firm’s biggest equity transfer for some time – we’re happy that this framework is in place. Looking ahead, we’ll continue to invest in the side-fund to retire future shareholders, and simultaneously attract new share- holders into the firm. That’s a good place for our firm to be, and it sends a confident message to our team about our future. ❚ ❚ We built consensus. Our board first worked

Bill Inman

See BILL INMAN, page 12

THE ZWEIG LETTER August 5, 2019, ISSUE 1307

BILL INMAN, from page 11

together to build consensus on who would become CEO, and then crafted specific position descriptions for the transition- ing roles 18-months in advance. This process helped us under- stand what I was passionate about and what was important to our current CEO during his transition. This was a great pro- cess for us because it allowed us to work through iterations of the transition concept. After much work and conversations, we settled in on both the transition and disengagement framework. The board then formally approved our path and crafted the initial message to our staff. ❚ ❚ We gave our staff time to process the message. It was broadly assumed by members of the firm that I would take the reins of Hitchcock Design Group when Rick retired, but our shareholders and staff still frequently asked, “What’s our plan?” In hindsight, the inquirers were looking for assurance of business model continuity and leadership’s united vote of confidence. Six months prior to the transition, we made the face-to-face announcement to staff. In the moment, nobody said anything as we looked at blank expressions. The good news is that nobody resigned the next day. Change needs to be processed and that takes time. It was a little weird, but giv- en the timing options we had, we thought communicating to our staff “well in advance” was better than the Friday prior to transition Monday. In hindsight, the confidence behind this message launched our team into our next phase of transition preparation – strategic planning. “Nearly five months into our transition, it’s clear that our preparation positioned us well for a smooth transition, and equally as important, enabled us to execute timely change, strengthen the best aspects of our brand, and to put our people first – moving us toward our best tomorrow.” ❚ ❚ We looked WAY past the transition. Much of our leader- ship transition planning to date had focused on the financial transaction related to buying out our founding principal, which is a very important aspect of any leadership transition. However, the leadership team realized that we needed to up- date our strategic plan and unify our principal team around some common goals. We started this process six months prior to the January 1 transition date by getting some out- side consultation. We engaged a professional AEC planning consultant to take us through an energetic planning process that ultimately set us on a renewed path and punctuated the launch of what became known as Hitchcock 2.0. This five-year strategic plan, while not executed as precisely from day to day as our business plan, has created a sense of buy-in, and a culture-shift toward learning, innovation, communication, transparency, and change. ❚ ❚ We sent a clear message to our markets. Getting the word out to our marketplace has never been easier, and our mar- keting team made sure we reached everyone we needed to with a consistent message. Social media, including LinkedIn, Facebook, and Twitter carried the message broadly to our markets, press releases were published by business periodicals and local newspapers, e-casts took the message directly to our clients’ inbox, and hundreds of emails and phone calls were placed and fielded to our most attentive audience members. The message promoted continuity, “the same high-level of

When Bill announced the leadership transition, that same day the entire staff worked on coming up with ideas for Hitchcock 2.0.

service,” and positive energy, “fresh next-gen approach to a solid practice.” Within three weeks, the message penetrated our circles and we refocused our energies on improving the firm. ❚ ❚ We purposefully listened to our staff. During the first weeks of the transition, our newly formed corporate team (made up of me, our CFO, and our marketing coordinator) dug into the human resource objectives of the strategic plan and transformed our long-standing (and much complained about) employee performance review process. We attacked that right away because we knew it would give us a forum with everyone in the firm, to one by one discuss their goals and listen to their ideas to improve the function of our design teams. It shifted the review approach from “technical and financial” (impersonal) to “behavior and character” (personal) and launched a cloud-based 360-review platform to operate it from. We then met with each staff member individually over the course of six weeks to review the feedback they each re- ceived from team members regarding teamwork, honesty, in- tegrity, servant-leadership, reliability, initiative, attitude, skill, and alignment with our existing pillars: purposeful creativity, caring relationships, responsible advocacy, and specialized ex- pertise. Not only did we receive valuable ideas, but also clear insight on who was in alignment with our firm’s improving culture, and who might not be. ❚ ❚ Embrace your current realities. Ask “why.” Then ask it again. And then three more times ask “why.” I’ve been a part of Hitchcock’s design studio/office leadership, board of direc- tors, and executive committee for more than a decade prior to becoming CEO, and once I was in the chair, many aspects of our practice simply looked different. It’s an interesting phenomenon. When facing the reality of making the best decisions for the firm, I firmly believe it’s the CEO’s duty to go well beyond trying to improve “what we do” and rather dig deep into answering “why we do it.” This applies not only to our discipline, but our entire practice. Our corporate team has pursued multiple angles of improvement over the last five months using a decision-making protocol based on facts, identifying our real opportunities, and dismissing entrenched perceptions and past assumptions failing in today’s context. Frankly, it’s been a little overwhelming when combined with the new responsibilities of running a business, but we believe that honestly addressing challenges makes us better, and builds trust between us all. BILL INMAN is president and CEO, Hitchcock Design Group. He can be reached at binman@hitchcockdesigngroup.com.

THE ZWEIG LETTER August 5, 2019, ISSUE 1307

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