TZL 1236

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 F e b r u a r y 1 9 , 2 0 1 8 , I s s u e 1 2 3 6

IT directors’ billable hours

Reducing the stress of travel

I have been traveling my entire professional career, and as much as I hate to admit it, that is 38 years now. I’m sure I could have flown to Mars or something with as much flying as I have done. Travel isn’t fun for me but it can be tolerable IF I do certain things. Here are some of them: ❚ ❚ Eat before you get on the plane. You never know how long it will be before your next meal. You cannot count on the airlines to feed you much if anything these days and delays could mean that the luxurious layover you had planned for Chicago or DFW won’t occur. So eat up! ❚ ❚ Bring a bottle of water. Buy it AFTER you go through security or you’ll have to throw it out. ❚ ❚ Get the airline app. It can help you in so many ways. Like what gate your connecting flight is at. You can also check in from your phone and don’t need to stop at a kiosk. And it will tell you what carousel your bags are on. ❚ ❚ Take the first flight out of Dodge. The first flight of the day is the least likely one to be delayed. And if you are delayed, you’ll still have all day to get where you are going. ❚ ❚ Any time you can stand by for an earlier flight, do so. See my previous point above. Always smarter to play it safe. ❚ ❚ Get your seats in advance if you are on an airline that offers them. Get an aisle seat so you can get up when you want to. You will feel less constrained. And the luxury of being able to use the bathroom when you need to is hard to beat! ❚ ❚ Dress in layers. That way you can stay warm or peel off if needed. Sometimes planes are super hot and other times very cold.

“I have been travelling my entire professional career, and as much as I hate to admit it, that is 38 years now. I’m sure I could have flown to Mars or something with as much flying as I have done.”

In Zweig Group’s 2016 Information Technology Survey , IT directors in engineering firms were only billable between 1 and 2 percent of the time, whereas IT directors in architecture firms were billable nearly 25 percent of the time. The median billing rate for all IT directors was $157, with some billing out at rates above $220. Adding staff that can produce administrative results as well as chargeable projects is a key piece for firms that are looking to become fast-growth firms. OPEN FOR PARTICIPATION zweiggroup.com/survey-participation/

Mark Zweig

F I R M I N D E X Ames & Gough. ....................................10 Arup......................................................12 Bechtel. ..................................................8 DCI Engineers.........................................6 Gibbs & Cox, Inc...................................12 Greeley and Hansen................................2 KBR, Inc.. ...............................................8 KP Engineering. ....................................12 Pond.......................................................4

MORE COLUMNS xz GUEST SPEAKER: Team reset Page 3 xz GUEST SPEAKER: Public- private partnerships Page 9 xz GUEST SPEAKER: Three common problems Page 11

Conference call: Roger Heeringa 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 / P & E N V I R O N M E N TA L C O N S U L T I N G F I R M S

ON THE MOVE GREELEY AND HANSEN APPOINTS TWO NEW PRINCIPALS Greeley and Hansen , a leading global civil and environmental engineering, architectural, and management consulting firm, has named Joseph Dinkel and Michael Hope as principals. Both are accomplished engineers and leaders that exemplify Greeley and Hansen’s core values of client commitment and dedication to providing quality service. Dinkel is the manager of the firm’s mechanical, electrical, plumbing, and instrumentation and control group with overall responsibility for directing staff and providing high-level project delivery oversight. He has broad experience in management, engineering, construction, and project execution for a wide range of water, wastewater, and other infrastructure projects with special expertise in complex HVAC, plumbing, and fire protection systems. Hope currently serves as co-managing director of the North Atlantic operating group, leading the firm’s day-to-day business operations as well as business development and strategic growth efforts in Pennsylvania, Delaware, and New Jersey. He has extensive experience in managing a diverse range of large, complex water and wastewater programs and facility projects for utility clients in the northeast. “In addition to their depth of technical experience, Joe and Mike have consistently

Take your advice from Mark Zweig to-go.

demonstrated the strong leadership and management skills that will help us advance our long-range business goals,” said Chairman and CEO Andy Richardson. “Greeley and Hansen is focused on achieving sustained future growth, and Joe and Mike are both highly qualified and motivated professionals who can help accelerate the firm’s ongoing efforts to achieve our growth objectives.” Dinkel is a registered professional engineer with a B.S. in mechanical engineering from Michigan Technological University. He is certified in plumbing design and is also a member of the American Society of Plumbing Engineers and the American Society of Heating, Refrigerating, and Air Conditioning Engineers. Hope is a registered professional engineer and a New Jersey certified municipal engineer with a B.S. in civil engineering from Widener University. He is actively involved in a number of professional organizations, including the American Water Works Association, American Society of Civil Engineers, and New Jersey Water Environment Association. He is a past president of the New Jersey Society of Professional Engineers and has served in officer and committee roles for other organizations, including the New Jersey Department of Environmental Protection Advisory Committee for Standards for Individual Subsurface Disposal Systems.

thezweigletter.com/category/podcast/

MARK ZWEIG, from page 1

1200 North College Ave. Fayetteville, AR 72703 Mark Zweig | Publisher mzweig@zweiggroup.com Richard Massey | Managing Editor rmassey@zweiggroup.com Christina Zweig | Contributing Editor christinaz@zweiggroup.com Sara Parkman | Editor and Designer sparkman@zweiggroup.com Liisa Andreassen | Correspondent landreassen@zweiggroup.com

❚ ❚ Get to the airport early. That way if there’s an accident blocking the highway it won’t kill you. And if there are delays or problems you can reroute. ❚ ❚ Get “TSA Pre” status. Saves time going through security. ❚ ❚ Pack light and never check your bag. Checking means losing your bag about 10 per- cent of the time (Not to say they won’t eventually find it but who wants to go through that?). Do not gate check on commuter flights that have tight connections. You may wait 15 minutes on the tarmac and your flight was late arriving and that kills your abil- ity to make your connection. ❚ ❚ Carry all prescriptions and other drugs you need with you on the plane. Checked bags get lost. And keep the drugs where you can conveniently access them if you need them (side pouch?). ❚ ❚ Bring a spare pair of pants. I used to travel with a guy who would wear a pair of kha- kis for a two-day trip with no pants in reserve. Bad idea! You could have an accident and spill coffee on them. Whatever happens you want to be prepared. ❚ ❚ Have an auxiliary phone battery – charged. Always bring a spare. Get a good one. I have one that will charge my phone three times over. It cost $50. That is a big stress- reliever. ❚ ❚ Get noise-cancelling headphones. Chad Clinehens, Zweig Group’s president and CEO, bought me some of these for Christmas. Fantastic gift. They make every flight a pleas- ant experience. You can really zone out and relax ❚ ❚ Use Uber when you get to where you are going. Dealing with rental cars takes time and is a big hassle. Cabs are dirty and have bad drivers who don’t know where they are going. Uber has an app and pre-stored credit cards and the driver has GPS. I could go on but hopefully you’ll try some of these and have a less stressful travel experience next time. 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 Article reprints: For high-quality reprints, including Eprints and NXTprints, please contact The YGS Group at 717-399- 1900, ext. 139, or email TheZweigLetter@ TheYGSGroup.com. © Copyright 2018, Zweig Group. All rights reserved.

THE ZWEIG LETTER February 19, 2018, ISSUE 1236

O P I N I O N

Team reset

Now is a good time to make good on your 2018 work resolution to improve your team by turning the saboteurs into loyalists.

T he new year brings with it the opportunity for change, growth, and renewal. We commit to accomplishing new goals or resolve to finally complete old ambitions. Most of us feel more optimistic at the beginning of the year. New Year’s resolutions are expected. Gym memberships go through the roof in January. The “fresh start” feel of each new year is infectious.

Audrey Epstein GUEST SPEAKER

What if we could start over with our teams as well? What if we could take the old patterns of dysfunction, of gossip and infighting, or cliques and politics of 2017, and turn them into high- performing team behaviors in 2018? Toxic teams destroy employee morale and engagement, stifle creativity, and put personal agendas above team or company goals. So, how do you reset with your team? Follow these four steps: 1)Diagnose the current state of your team. You need to know what’s working and what’s not on your team before you do a full reset. Start your diagnosis by identifying the type of team you currently have. From our research, we know all teams can be catego- rized into one of the following four team types:

❚ ❚ Saboteur Teams: The worst of the worst – team hell. Distrust, politics, infighting, and gossip are hallmarks of Saboteur Teams. Win-lose thinking and survival tactics take precedence over shared goals. ❚ ❚ Benign Saboteur Teams: What team? These risk- averse groups are characterized by lack of interac- tion, support, and alignment. Typical character- istics include a “you stay in your lane while I stay in mine” mentality. While team members don’t actively hurt one another, they don’t do much to help, either. ❚ ❚ Situational Loyalist Teams: Good, but not great teams. Pockets of trust, collaboration, and sup- port exist, but not with all team members. There

See AUDREY EPSTEIN, page 4

THE ZWEIG LETTER February 19, 2018, ISSUE 1236

ON THE MOVE ALEX HOLBROOK NAMED PRINCIPAL AT POND Pond announced the appointment of Alex Holbrook as a principal of the firm. Holbrook has served as the building systems program director at Pond for the last three years. As a LEED accredited professional, he brings 28 years of diverse experience with the design and construction of many facility types. Holbrook’s knowledge in designing, studying, and troubleshooting complex electrical, mechanical, structural, and fire protection systems has been utilized in numerous federal, institutional, and industrial facility projects. His

experience also includes the mechanical and electrical design of both new construction and renovation and upgrade type projects. Over the past three years at Pond, Holbrook has spearheaded the engineering for higher learning institutions such as the Georgia Institute of Technology, Columbus State University, Lanier Technical College, and Georgia State University. Holbrook has also developed solutions for Pond’s industrial clients, medical institutions, and for federal work, such as the U.S. Corps of Engineers and the U.S. Fish and Wildlife.

“I enjoy seeing projects come together to fulfill the client’s need and manufacturing products that accomplish this goal,” Holbrook said. Holbrook also serves as a member of the Georgia Economic Developers Association, International Building Codes Task Force, and Greater Atlanta Electric League. “Alex has gone above and beyond to guide Pond down our path of continued success. His commitment to our strategic growth – and the hard work he puts in each and every day for client satisfaction – is absolutely invaluable to Pond,” said President and CEO Tony Parker.

If you have a good team you’re trying to make great, you may be ready for more advanced norms around candor, feedback, and accountability, such as: We will: ❚ ❚ Provide candid feedback to each other ❚ ❚ Put the toughest issues on the table and talk honestly about them ❚ ❚ Hold each other accountable for achieving our goals and living our team norms Once you agree to team norms, set up check-ins, reminders, and accountability to make norms real and meaningful for the team. 4)Set team goals. On Loyalist Teams, all team members have skin in the game. They are committed to shared goals – not just their own objectives and agendas. They work hard to bal- ance ego and personal ambition with team or company needs. You can build this type of joint commitment by developing shared team goals. Help team members see the bigger picture through exploring how work intersects and aligns. Share each team member’s goals with the whole team to look for gaps, overlaps, and commonalities. Enlist your team members in setting two or three team-level goals they can all support. When team members engage in planning and problem-solv- ing work together, they practice being a Loyalist Team. They learn the mindset and skills they need to sustain teamwork. They learn the power of joint accountability and commitment. The new year is the perfect time to reset your team. Once you start, you are likely to see improvements immediately. Be intentional in your efforts – and persistent – and you’ll reap the rewards. AUDREY EPSTEIN is a partner at The Trispective Group and the co- author with Linda Adams, Abby Curnow-Chavez and Rebecca Teasdale of The Loyalist Team: How Trust, Candor, and Authenticity Create Great Organizations . For more information, please visit trispectivegroup.com. “The new year is the perfect time to reset your team. Once you start, you are likely to see improvements immediately. Be intentional in your efforts – and persistent – and you’ll reap the rewards.”

AUDREY EPSTEIN, from page 3

is more focus on keeping the peace than speaking up, min- ing for conflict, or driving peer-to-peer accountability. ❚ ❚ Loyalist Teams: Extraordinary teams. On these highest- performing teams, all members feel accountable to shared and aligned goals, and provide honest, candid feedback. They actively work to make others better, trust one anoth- er unconditionally, and are loyal to each other, the team, and the organization. How would you characterize your team? Do you need to move from good to great? Is your biggest issue trust? Are you miss- ing shared goals? Reflect on your team leadership practices and talk with your team to analyze the current state. You can also take a simple and free online team assessment or download a Loyalist Team checklist for a more accurate view. 2)Set your intention and own your role. As a team leader, you have an exponential impact on the state of your team. If you want a team reset, announce your intention to the team. Take ownership for your role in allowing, or not adequately dealing with, the dysfunction. Create a compelling view of a better work life with a stronger team. Demonstrate commit- ment by setting up time and resources to develop the team. Loyalist Teams are built over time and with great intention. “How would you characterize your team? Do you need to move from good to great? Is your biggest issue trust? Are you missing shared goals? Reflect on your team leadership practices and talk with your team to analyze the current state.” 3)Create team norms. Toxic teams have learned bad habits. Without focused effort to transform this destructive behavior into new, more productive practices, the lingering resent- ment and negative patterns will re-emerge, even with good intention. Work with your team to identify five to seven new norms of behavior. If you have a Saboteur Team, you might want to start with the basics such as: We will: ❚ ❚ Extend trust and assume positive intent with each other ❚ ❚ Talk to each other, not about each other ❚ ❚ Respect each other and listen openly to others’ views

THE ZWEIG LETTER February 19, 2018, ISSUE 1236

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THE ZWEIG LETTER February 19, 2018, ISSUE 1236

Hee

P R O F I L E

Conference call: Roger Heeringa President and COO of DCI Engineers (Hot Firm #62 for 2017), a 320-person Seattle firm with offices in seven states.

By LIISA ANDREASSEN Correspondent

“S tart early,” Heeringa says of ownership tran- sition. “Make it a standard part of doing busi- ness. I’m a second-generation leader in the firm and we’ve been working on this for about 15 years. We’re almost always transitioning ownership.” Heeringa has been part of the DCI team for more than 20 years and was named president in 2012. A CONVERSATION WITH ROGER HEERINGA. The Zweig Letter: Measuring the effectiveness of marketing is difficult to do using hard metrics for ROI. How do you evaluate the success/fail- ure of your firm’s marketing efforts when results could take months, or even years, to materialize? Do you track any metrics to guide your market- ing plan?

Roger Heeringa: We don’t really use any hard met- rics. We rate a lot of success based on relationships that turn into projects. We’re always planting and harvesting. It all takes time. “We don’t really use any hard metrics. We rate a lot of success based on relationships that turn into projects. We’re always planting and harvesting. It all takes time.”

Roger Heeringa, President & COO, DCI Engineers

TZL: The talent war in the A/E industry is here. What steps do you take to create the leadership

THE ZWEIG LETTER Febru

er inga

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pipeline eeded to retain your top people and not lose them to other firms? RH: We’ve created a mandatory employee development program. An internal staff survey was its impetus. In addi- tion to technical classes, we have varying class levels that of- fer training, for example, on how to move up from a project manager to a senior project manager. It’s a pretty new pro- gram and we’re still working to formalize the process. There are 15 to 20 different classes and they occur year-round. We’re also in the process of developing a more formal men- toring program. “Listen and be open-minded. Different people take varied approaches to their careers. While I’m part of the grey-haired set now, I still believe that the most important thing to people is to be a part of something. They want to be appreciated and rewarded.” TZL: As you look for talent, what position do you most need to fill in the coming year and why? RH: We’re struggling to find production staff (AutoCAD and Revit). There’s a lot of competition for these skills, for example, in the gaming industry. There’s also a gap in the mid-level engineer jobs. I attribute a lot of that to the hiring freeze during the recession in 2008 to 2010. I’m also con- cerned that our education system is just not training people for the long-term. We need to promote STEM programming wherever we can. TZL: While plenty of firms have an ownership transition plan in place, many do not. What’s your advice for firms that have not taken steps to identify and empower the next generation of owners? RH: Start early. Make it a standard part of doing business. I’m a second-generation leader in the firm and we’ve been working on this for about 15 years. We’re almost always transitioning ownership. TZL: Monthly happy hours and dog friendly offices. What do today’s CEOs need to know about today’s workforce? RH: Listen and be open-minded. Different people take var- ied approaches to their careers. While I’m part of the grey- haired set now, I still believe that the most important thing to people is to be a part of something. They want to be ap- preciated and rewarded. TZL: Zweig Group research shows there has been a shift in business development strategies. More and more, technical staff, not marketing staff, are responsible for BD. What’s the BD formula in your firm?

RH: We have a designated business development staff of four. They are separate from marketing, but work close- ly with them. They help to plug us in where we need to be plugged in. TZL: Diversifying the portfolio is never a bad thing. What are the most recent steps you’ve taken to broaden your revenue streams? RH: We recently merged with a firm in Montana and ex- panded our California offices. Not only are we diversifying geographically, but also in terms of services. We’re doing industrial and open to pretty much anything that makes sense for us. We just monitor the risk and then if the re- ward is worth more than the risk, we explore it. TZL: The list of responsibilities for project managers is seemingly endless. How do you keep your PMs from burning out? And if they crash, how do you get them back out on the road, so to speak? RH: As a firm, we’re really working to clarify roles so proj- ect managers don’t take on more than they should. Senior staff stay involved to make sure they are getting the sup- port they need. Day-to-day management and communica- tion are key. We continue to push senior staff to be more involved. TZL: What is the role of entrepreneurship in your firm? RH: It’s something we always look for in senior manage- ment. Since most of our growth is organic, entrepreneur- ship is often responsible for how new offices open. It is something we admire and encourage. “I took over management in 2007, right before the recession. If there’s one thing I learned from that it was to learn how to be alert and nimble. You can’t be overly optimistic. Keep a clear eye on financial performance – things can change quickly.” TZL: In the next couple of years, what A/E segments will heat up, and which ones will cool down? RH: I’m really not sure. There’s a lot of dysfunction in our current political climate. One inappropriate tweet might catapult us in the wrong direction. There’s just too much unknown. TZL: The last few years have been good for the A/E indus- try. Is there a downturn in the forecast, and if so, when and to what severity? RH: I keep thinking it will slow down, but so far it hasn’t. We’re feeling some downward pressure from rising

See CONFERENCE CALL, page 8

uary 19, 2018, ISSUE 1236

BUSINESS NEWS KBR WINS MAJOR INDUSTRY AWARD FOR “CAMO TO KBR: VETERANS RECRUITMENT AND TRAINING PROGRAM” KBR, Inc. announced that its “Camo to KBR: Veterans Recruitment and Training Program” has received a prestigious Workforce Development Award from the Construction Users Roundtable, a national organization comprised of leaders in the construction industry. According to CURT, the award recognizes companies for “extraordinary, exemplary and innovative recruitment, training, and education programs, which encourage people to pursue careers in construction.” Camo to KBR is a comprehensive initiative to hire, train, develop, and transition military service members into the next generation of craft professionals and create leaders for KBR and the overall construction industry. The initiative is one approach to address craft workforce shortage issues and develop strong military talent into future supervisors and leaders in our industry. Camo to KBR is comprised of several initiatives including on-site project recruitment and training of veterans, partnerships with veterans organizations like NextOp in Houston, and partnering with the National Center for Construction Education & Research on their military credentialing reciprocity program. KBR also collaborated with Ft. Polk base command, Soldier For Life, and Central Louisiana Technical College to create a pipefitting training program for active duty soldiers who are transitioning to civilian life. “KBR is proud to help soldiers build on the foundation of their military training and provide a vehicle for veterans to translate their skills into the craft professions as they transition to civilian life,” said Farhan Mujib, KBR president, Engineering & Construction Americas. “Our

veterans represent an extraordinary pool of talent and discipline that the craft industry needs.” “KBR has a long history of supporting our armed forces in the field and at home and it is our honor to continue that legacy,” Mujib said. KBR is a global provider of differentiated professional services and technologies across the asset and program life cycle within the government services and hydrocarbons sectors. KBR employs more than 34,000 people worldwide (including joint ventures), with customers in more than 80 countries, and operations in 40 countries, across three synergistic global businesses: government services, technology and consulting, and engineering and construction. BECHTEL WINS AWARD FOR DIGITAL INNOVATION Bechtel , a global engineering, procurement, and construction leader, has been awarded the prestigious 2018 Digital Edge 50 Award in recognition of its new Pipeline Integrity Management tool. With support from Bechtel’s Future Fund, an internal incubator which finances development of disruptive technologies, innovators from the Bechtel pipeline business designed the tool to help customers prioritize critical pipeline integrity work and improve overall safety. The tool integrates pipeline data, geographic information systems, and data-science modelling to help customers better forecast maintenance and replacement of pipeline systems. “Bechtel has built more than 50,000 miles of pipeline – enough to circle the earth twice. This extensive experience, combined with our data analytics capabilities, is allowing us to build new predictive models and deliver unparalleled digital solutions for new and existing customers” said Richard Wall, Bechtel’s general manager for pipelines. “Our PIM tool

is one of our key competitive advantages in this sector and we are honored to receive this important award in recognition of the impact it will have across the pipeline industry.” Bechtel began development of the PIM tool after it was recognized that customers needed support establishing new standards of pipeline safety across the world. The tool utilizes massive geospatial data sets and proprietary algorithms, creating detailed risk assessments based on over 100 parameters and relationships known to contribute to pipeline failures. This data is then used to assess the impact of incremental changes in material, construction and geospatial characteristics along the length of the pipeline. Utilizing Bechtel’s Big Data & Analytics Center, the PIM tool can analyze hundreds of thousands of welds and joints of pipe in a matter of minutes, providing valuable assessments of a customer’s pipeline system in record time. Every year, the Digital Edge 50 Award recognizes a select group of digital achievers whose organizations have made great strides toward being a digital-centric business. Entries are judged by a distinguished panel of IT and business leaders on criteria including innovation, complexity, scale, and impact. Bechtel is one of the most respected global engineering, construction, and project management companies. Together with the company’s customers, Bechtel delivers landmark projects that create long-term progress and economic growth. Since 1898, Bechtel has completed more than 25,000 extraordinary projects across 160 countries on all seven continents. Bechtel operates through four global businesses: Infrastructure; nuclear, security, and environmental; oil, gas, and chemicals; and mining and metals.

CONFERENCE CALL, from page 7

RH: I took over management in 2007, right before the re- cession. If there’s one thing I learned from that it was to be alert and nimble. You can’t be overly optimistic. Keep a clear eye on financial performance – things can change quickly. TZL: While M&A is always an option, there’s something to be said about organic growth. What are your thoughts on why and how to grow a firm? RH: Mostly, organic growth has worked for us. We’ve bought or merged two offices. Organic growth allows us to more easily maintain our culture. We’ve never opened an of- fice that we’ve had to close. TZL: What’s your prediction for 2018? RH: Our backlog is as high as it has ever been. We will re- main strong. I think it will be a very good year. There will be a slow down at some point but not in 2018.

construction costs. While I don’t foresee a big downturn, I do think business will not continue to grow as quickly as it has. TZL: They say failure is a great teacher. What’s the big- gest lesson you’ve had to learn the hard way? services. We’re doing industrial and open to pretty much anything that makes sense for us. We just monitor the risk and then if the reward is worth more than the risk, we explore it.” “Not only are we diversifying geographically, but also in terms of

THE ZWEIG LETTER February 19, 2018, ISSUE 1236

O P I N I O N

Public-private partnerships

A s our nation turns to the urgent need to repair, replace, and rebuild our aging infrastructure with limited government financial resources, more and more public agencies are turning to public-private partnerships as a possible solution. By understanding the various risks associated with P3s and taking appropriate steps to manage them, A/E firms can put themselves in advantageous positions.

for the upfront costs of construction, financing and maintaining the roadway over a period of years with a profit, through the collection of toll revenue. At the end of the contract period, the road is turned over to the public-sector owner. A/E FIRMS AND P3. In P3 projects, engineers can play more and more public agencies are turning to public-private partnerships as a possible solution.” “As our nation turns to the urgent need to repair, replace, and rebuild our aging infrastructure with limited government financial resources,

Though still in the early stages in the U.S., P3s are growing as a means of project delivery. So far, 33 states have enacted P3 facilitating legislation. Most of the projects to date have been highways, bridges, and tunnels with toll revenue used as the means of paying back the private investment. Generally, P3s use design-build as the project delivery method. Most include financing as well as post-construction operation and maintenance. For example, on a highway built through a design- build-finance-operate-maintain P3, all aspects of a project from financing through post-construction are transferred to a single private-sector partner or concessionaire. The concessionaire uses projected revenue streams, such as tolls, or pre-determined payments from the public owner, to obtain private financing. The concessionaire is compensated

Michael Herlihy GUEST SPEAKER

See MICHAEL HERLIHY, page 10

THE ZWEIG LETTER February 19, 2018, ISSUE 1236

MICHAEL HERLIHY, from page 9

relatively small fee for forecasting, so they should seek a con- tractual limit to their liability. ❚ ❚ Perhaps considering the study cited above, adjust forecasts downward by 20 percent to minimize risk of overly optimistic projections. ❚ ❚ Refrain from bidding on any other phase of the project to avoid the appearance of a conflict. ❚ ❚ Maintain adequate professional liability insurance limits to address potentially elevated exposures associated with these services. ❚ ❚ Use a value for money analysis to compare the cost of P3 against a benchmark for traditional contracting for public sector projects. Known as the public sector comparator, the benchmark is a hypothetical risk-adjusted estimate of the cost of a publicly financed owned and operated project. “By understanding the various risks associated with P3 and taking appropriate steps to manage them, architects and engineers will be in the best position to take advantage of the potential opportunities these projects represent.” P3 IN PROJECT DELIVERY. In P3 contracts, the owner shifts design risks to the design-build prime. There’s generally enhanced collaboration between design and construction with BIM model sharing, which facilitates constructability input into the design, as well as design input into the con- struction. Because costs are known earlier, there’s greater potential for cost savings. There also may be financial in- centives for accelerated delivery and enhanced quality. At the same time, the design builder may be working under a guaranteed maximum price and won’t be able to charge more for the job. Without room for contingencies, A/E firms may need extra time to prepare designs with greater detail and accuracy before they can be released to the contractor. However, not releasing the designs until they are nearly completed could affect the bid price. When contractors press to receive designs sooner, A/E firms either have to push back or explain the need to build in an adequate contingency to account for different variables and factor this into the bid. Design firms also should insert language into the contract that delegates any quantity risk (the amount of materials needed to complete the project) to the contractor. In assessing P3 contractual risk, A/E firms need to engage outside counsel. Risks and rewards should be equitable and A/E firms seek to accept liability only for risks within their control. In performing their duties, they should stay within contractually agreed upon scope and try to amend the contract if the nature of their services changes. By understanding the various risks associated with P3 and taking appropriate steps to manage them, architects and engineers will be in the best position to take advantage of the potential opportunities these projects represent. MICHAEL HERLIHY is executive vice president of Ames & Gough. He can be reached at mherlihy@amesgough.com.

a variety of key roles, which involve different levels of risk. They include: ❚ ❚ Consultant to project owner. Engineers assume a greater level of risk as they formulate and present the P3, define the preferred P3 model, advise on process, or serve as overall pro- gram manager to owner. ❚ ❚ Engineer on P3 team. Engineers take on a normal level of project risk in serving as a consultant to the contractor, pro- viding design/construction phase services, or developing the operations and maintenance plan. ❚ ❚ Advisor to the investor(s). This involves the greatest degree of risk as generally the investor(s) are seeking projections and forecasts from the engineer in order to determine the finan- cial viability of the project. Engineering data may be used for forecasting, which in turn is used to obtain financing. A 2005 study examined 183 completed highway projects in 14 countries and found that in more than half of the projects, actual traffic varied by 20 percent from the forecasted volume and 25 percent had more than a 40 percent variance, according to the meticulously researched piece, “How (In)accurate Are Demand Forecasts in Public Works Projects?,” published in the Journal of the American Planning Association in 2005. For design firms making projections, accuracy is often a challenge and overly optimistic forecasts can be disastrous. The Australian unit of one global design firm paid $200 million to settle a claim for a toll road bankruptcy. The road cost more than $2 billion to build, but sold for just over $600 million. Another firm in Australia was sued for $2.2 billion when the actual revenue of an airport toll road fell 94 percent short of the initial revenue forecasts. Over-estimating also can trigger allegations of a conflict of interest for the engineer. In one P3 case, a court determined an engineering firm’s estimates to be intentionally rosy as the engineering firm was hoping to be selected to perform portions of the design as the project proceeded. “So far, 33 states have enacted P3 facilitating legislation. Most of the projects to date have been highways, bridges, and tunnels with toll revenue used as the means of paying back the private investment.” To address potential exposures, A/E firms might take the following precautions: ❚ ❚ Know the parties that will rely on a forecast and how they will use it. Clearly, when investors or lenders are involved, there’s a higher degree of risk. ❚ ❚ Limit the parties that can rely on the forecast. In contracts consider inserting wording such as: “No third party shall have any right to rely upon this study or its findings without the engineer’s formal written consent.” Be sure the engineering reports contain similar language. ❚ ❚ Negotiate a limitation of liability. Engineers typically receive a

THE ZWEIG LETTER February 19, 2018, ISSUE 1236

O P I N I O N

Three common problems

You’ll lose control of your office if you have no performance metrics, no accountability, and put employees in the wrong roles.

T he difference between leadership and management is quite substantial. Make no mistake, as a leader, you need to be good at both to win in today’s competitive marketplace. Leadership is working “on” the business – providing vision and clarity on where the company is headed and what to do when it gets there. In management mode, however, you are working “in” the business and executing that shared mission with your team.

Chris Hallberg GUEST SPEAKER

activity-based metrics, you get a view of the future instead of looking at lagging indicators, which pro- vide a good view of the past. Once you post lead- ing indicator numbers for all to see, “the cool kids” change. They are the ones at the top getting the work done, not the ones who seized power in an “Leadership is working ‘on’ the business ... In management mode, however, you are working ‘in’ the business.”

I’d like to focus on the management side in this article by pointing out some of the most common management issues I see working with CEOs and their leadership teams. 1)Lack of metrics to track employee performance. You think Dave is a great worker because every time you walk by, his head is down and he’s making things happen. The problem is, Dave is actually the lowest performer on your team from a pure output standpoint and the only time Dave works hard is when one of the “bosses” are out on the prowl. I’ve seen “the cool kids” take over an office culture and turn it into a high school scenario with all the ru- mors, cliques, and various other juvenile forms of behavior teenagers are known for. When you track

See CHRIS HALLBERG, page 12

THE ZWEIG LETTER February 19, 2018, ISSUE 1236

ON THE MOVE GIBBS & COX APPOINTS JEFFREY BOWLES DIRECTOR OF DONALD L. BLOUNT & ASSOCIATES DIVISION Gibbs & Cox, Inc. , a global leader in naval architecture and marine engineering, announced the appointment of Jeffrey Bowles as director of its division in Chesapeake, Virginia. Bowles joined DLBA in 2001 as a Webb Institute Naval Architect and earned a master’s degree in marine engineering from the University of Newcastle Upon Tyne. He was promoted to DLBA technical director in 2011. Bowles has served as detailed detail lead, project manager, and owner’s technical representative for many high performance craft projects, and is a licensed professional engineer in the states of Virginia, Florida, and New York, and is a certified project management professional. “Bowles’ impressive breadth of design and production expertise spans all our recreational, commercial, and military markets. Jeff brings a wide range of design, engineering, and research and development project experience to this position, which will help us continue to grow this business line,” states Chris Deegan, president and chief executive of Gibbs & Cox, Inc. ARUP ANNOUNCES PROMOTION OF JOSHUA CUSHNER TO PRINCIPAL Arup , the global design and consulting firm for the built environment, announced that Joshua Cushner has been named a principal of the firm. “For more than 10 years, Joshua has been a leading innovator at Arup, exploring new

knowledge in acoustics from both a social and a psychological standpoint,” said Andy Howard, chairman of Arup’s Americas Region. “With his promotion to principal, we are delighted to recognize not just his technical achievements, but his commitment to inspiring our client’s to thrive in a changing world.” Cushner joined Arup in 2006. As leader of Arup’s acoustics, audiovisual, and theatre consulting practice on the West Coast, he has completed more than 250 projects, leading multi-disciplinary teams to deliver advanced, creative solutions to the cultural, corporate, and educational sectors. Among his notable clients are the San Francisco Opera, Apple, Salesforce, SFMOMA, and Google. He has also led multi-media installation projects at Fort Mason National Park and the SPUR Urban Center. Cushner holds a master of studies degree in interdisciplinary design for the built environment from University of Cambridge, as well as master’s and bachelor’s degrees in mechanical engineering from Bucknell University. Arup provides planning, engineering, design, and consulting services for the most prominent projects and sites in the built environment. Since its founding in 1946, the firm has consistently delivered technical excellence, innovation, and value to its clients, while maintaining its core mission of shaping a better world. Arup opened its first U.S. office more than 30 years ago and now employs 1,400 people in the Americas. The firm’s employee-ownership

structure promotes ongoing investment in joint research to yield better outcomes that benefit its clients and partners. KP ENGINEERING EXPANDS MIDSTREAM CAPABILITIES WITH THE ADDITION OF MIDSTREAM PROCESS ENGINEERING EXPERT KP Engineering announced that James Fitzgerald has joined the company’s engineering staff. Fitzgerald is an internationally recognized authority in midstream process engineering and will serve as KPE’s senior vice president of process technology. He will be based in KPE’s Tulsa, Oklahoma, office. “We are excited to welcome Fitzgerald to our growing company,” said William Preston, president and chief operating officer. “He adds tremendous technical leadership to our already talented midstream process engineering team. His addition enhances our ability to partner and collaborate with our midstream customers to provide EPC solutions tailored to their needs. We are always looking to add top- tier talent, and Jimmy fits the bill. It obviously makes KPE better, but more importantly, it allows us to continue forging long-standing relationships and provide innovative results for our partners.” Fitzgerald has more than 20 years of process and midstream industry experience, predominantly in gas processing, with Linde Engineering and, most recently, with MarkWest Energy Partners, LP, where he was director of process engineering. He holds a Ph.D. in chemical engineering from Oklahoma State University.

plan. The pain of a single uncomfortable conversation is much less than the pain everyone else feels with having a poorly performing employee at the office day after day, with no end in sight. If you look at these three common management issues in your business, and make some positive changes, you will be amazed at how much easier business is when you surround yourself with the right people all sitting in the right seats. Life is way too short to do it any other way. Your business (and your employees) will thank you. CHRIS HALLBERG, ranked No. 9 on Inc. ’s Top 50 Leadership and Management Experts, is a seasoned business consultant, turnaround expert, United States Army veteran, and author of The Business Sergeant’s Field Manual . He can be reached at info@bizsgt.com. “If you look at these three common management issues in your business, and make some positive changes, you will be amazed at how much easier business is when you surround yourself with the right people all sitting in the right seats. Life is way too short to do it any other way.”

CHRIS HALLBERG, from page 11

environment of low accountability. This paradigm shift has helped many organizations morph their company culture and level the playing field with tangible metrics. 2)Failure to hold people accountable. If there is no conse- quence for habitually getting things wrong or not hitting agreed upon metrics, people generally won’t change their ways. Think about it: If every time you got pulled over for speeding and you got a warning rather than an expensive ticket, you’d probably never stop speeding. You must have a set process to deal with both cultural and performance issues with your employees. When do they get a warning and when do you start writing tickets? It’s up to you to decide. 3)Putting employees in the wrong seat. Oftentimes, we want to “reward” a long-time employee or one who has crushed their last position, so we hand out promotions as a pat on the back. But within a few months, you might regret doing so. Your company deserves to have the best possible em- ployee for every seat available, not one that “kind of ” gets it, or might get it someday. Ideally, you’re looking for a 10 out of 10. When your entire company is populated with eights, nines, and 10s, business becomes much easier, a lot more fun, and profitable, I might add. It’s the threes, fours, and fives of the business world who take up so much time with their issues – many of which will never be solved – as long as you allow them to stay without a clear performance improvement

THE ZWEIG LETTER February 19, 2018, ISSUE 1236

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