1259

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 6 , 2 0 1 8 , I s s u e 1 2 5 9

Firm-wide profit-sharing

Selling a lot of work

A s it relates to the AEC “industry,” we all should know by now that those who can sell a lot of work are the people who rise to the top of their firms, have the greatest job security, and make the most money. And yet, in spite of the irrefutable evidence that what I’m saying is true, so many people in this business – and ones who actually WANT to get ahead – don’t do what they should be doing TO sell a lot of work. Besides all of the dysfunctional stereotypes that are used for sales people, and the attitude that so many design professionals have – engineers most of all – that selling means you are a “liar,” there are still some people who manage to be successful sellers of lots of work AND are still effective professionals in whatever their primary discipline area is. Let’s examine some of what makes these people different from everyone else: 1)They believe they CAN succeed. No one will accomplish anything if they don’t believe it is possible in the first place. This is fundamental and is essential in being successful in your sell- ing efforts for AEC services. 2)They have a disciplined approach toward their selling activities. This means they make so many calls to clients and potential clients every week on a specific schedule. This consis- tent outbound effort to “reach out” (and I can’t stand this clichéd phrase!), generates a certain number of opportunities over time. It’s a sta- tistical certainty. But it takes a lot of discipline to make these calls. 3)They value long-term relationships with other people. The best way to sell is when

“We all should know by now that those who can sell a lot of work are the people who rise to the top of their firms, have the greatest job security, and make the most money.”

Zweig Group’s 2018 Incentive Compensation Survey yields a data point that speaks volumes about the upswing in the AEC market. Firm- wide profit-sharing as a percentage of net service revenue has grown by an impressive 200 percent, from 1.6 percent in 2013 to 4.8 percent this year. OPEN FOR PARTICIPATION zweiggroup.com/survey-participation/

Mark Zweig

F I R M I N D E X 3-Tier Alaska, Corp...............................12

BSA LifeStructures................................10

MORE COLUMNS xz MARKETING MATTERS: MSCE, PE, AIA? Not always Page 3 xz THE FAST LANE: Change management Page 9 xz GUEST SPEAKER: Extreme ambition Page 11

CRB........................................................8

KSA......................................................12

McDermott International, Inc...................2

Michael Baker International. ....................8

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 Conference call: Ownership transition See MARK ZWEIG, page 2 Northland Surveying & Consulting.........12 Page 6

ON THE MOVE MCDERMOTT APPOINTS SAMIK MUKHERJEE AS CHIEF OPERATING OFFICER McDermott International, Inc. announced that Samik Mukherjee has been appointed to serve as the company’s new executive vice president and chief operating officer. “Samik possesses tremendous experience and knowledge of our industry and has a strong track record of driving operational excellence on a global scale,” said David Dickson, president and CEO of McDermott. “I am confident that he will effectively leverage our integrated, end-to-end solutions to help McDermott grow and win new business, execute our projects on time and on budget, and develop strategic, long-term relationships with our customers.” As the COO, Samik will be responsible for globally leading McDermott’s operations covering the four geographic areas. He will also oversee McDermott’s key product lines and services to ensure internal strategy and decisions are based on a strong understanding of customer needs. Samik has more than 25 years of experience in operations as well as commercial and strategy roles, having served in leadership roles for the upstream and downstream oil and gas industry around the world. He also has extensive experience in process technologies. Prior to his appointment as McDermott’s COO, Samik was the executive vice president of Corporate Development, Strategy, Mergers and Acquisitions, Digital and IT for TechnipFMC. He joined Technip in 1998 in The Netherlands, and during his career with the company, he led the business unit for Africa, served as managing director in India before moving

to France to serve as the global head for subsea business and strategy, and later as the senior vice president of the Europe, Middle East, India, and Africa region for onshore- offshore. Samik holds a master’s degree in business administration from the Rotterdam School of Management at Erasmus University in The Netherlands, a bachelor’s degree in chemical engineering from the Indian Institute of Technology Kanpur and has completed the Harvard Business School Executive Program on Aligning and Executing Strategy. McDermott is a premier, fully integrated provider of technology, engineering, and construction solutions to the energy industry. For more than a century, customers have trusted McDermott to design and build end-to-end infrastructure and technology solutions – from the wellhead to the storage tank – to transport and transform oil and gas into the products the world needs today. McDermott’s proprietary technologies, integrated expertise, and comprehensive solutions deliver certainty, innovation, and added value to energy projects around the world. Customers rely on McDermott to deliver certainty to the most complex projects, from concept to commissioning. It is called the “One McDermott Way.” Operating in more than 54 countries, McDermott’s locally focused and globally-integrated resources include approximately 40,000 employees and engineers, a diversified fleet of specialty marine construction vessels and fabrication facilities around the world.

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

MARK ZWEIG, from page 1

your clients become your friends. They won’t be your friends overnight, though. It takes time. And we all know the older we get the more difficult it is to form new, long-term connections. As individuals, we only have so much time and emotional energy to put into these new relationships when it’s hard enough to sustain the old ones. But it’s es- sential if you want to ultimately succeed as a consistent seller of services in this indus- try. 4)They understand that selling is often not a short-term process. There are many steps. Your goal is not to make a sale the first time you speak with a potential client. It is simply to establish the next meeting/call. Inexperienced people try to sell too soon – before the relationship of trust is established. More contact during any period is one way to accelerate the process, but at some point, only patience and time will do. 5)They like to help people. I know the number one salesman at one of our local car deal- ers here. He sold 264 cars last year. He told me that he doesn’t really “sell” anything. All he does is help people with problems. My experience observing the top sellers in AEC firms is much the same. They don’t “sell.” Rather, they help. If you help enough people, they’ll eventually be buying from you. Makes sense. How to sell more work is one of those topics that never goes out of style. After all, we can’t do any of the good stuff we do without first making a sale! 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 August 6, 2018, ISSUE 1259

O P I N I O N

MSCE, PE, AIA? Not always

Y ou don’t need to be an engineer to help engineers run their business. You don’t even need to be an architect or engineer to run or own an AEC firm. AEC credentials are necessary for the work of designing and building, but that’s not the case regarding firm management and ownership.

as well as our clients, to sometimes forget that we aren’t the same. Zweig Group is NOT an AEC firm – and thank goodness for that! Zweig Group does not give advice on how to design more attractive buildings, or better streets. “I can’t tell you how to build a suspension bridge or use cross- laminated timber in construction – and that’s OK, because it doesn’t make me any less able to help you structure your marketing department, motivate your employees, or create a great website.”

When we at Zweig Group write these articles, we write from what we see and experience when working with you, our clients, in your AEC firms. We also write from a management perspective. We draw parallels between our experience in our firm and what you experience working in your firm. There are a lot of parallels. Like an AEC firm, Zweig Group sells services. We sell time and expertise. Like many of you, I manage people, I have clients, projects, and deadlines. I’m also an owner. I work in marketing and market an organization that has a section of people who work primarily with clients and don’t always understand what is going on back in my department. I know many of you who work in AEC firms can relate to all of those things. I know we share many of the same struggles and challenges – something that helps me help you. We work so closely with AEC firms it’s easy for us,

Christina Zweig Niehues

See CHRISTINA ZWEIG NIEHUES, page 4

THE ZWEIG LETTER August 6, 2018, ISSUE 1259

NEW FROM ZWEIG GROUP

NEW SURVEY FROM ZWEIG GROUP 2018 Principals, Partners & Owners Survey of Architecture, Engineering, Planning & Environmental Consulting Firms is a comprehensive study of owners and top managers of U.S. architecture, consulting engineering, and environmental consulting firms. This eye-opening report covers ownership, stock appreciation, buy/sell agreements, non-compete agreements, voting rights, roles, responsibilities, perks, compensation, and more. The 2018 Principals, Partners, and Owners Survey has data on the following: Zweig Group’s ❚ ❚ Principal compensation, benefits, and perks ❚ ❚ Common issues and challenges related to running an A/E/P or environmental consulting firm

❚ ❚ Qualifications, job requirements, and demographics of principals, partners, and owners in the industry ❚ ❚ Employment agreements, non-competes, and stock buyback provisions ❚ ❚ How principals manage time and break down the work day Zweig Group’s 2018 Principals, Partners & Owners Survey of Architecture, Engineering, Planning & Environmental Consulting Firms is the one annual report for, by, and about principals and top managers in U.S. A/E firms, and it’s the only source of inside information on the issues that principals are really concerned with. For more information visit bit.ly/2tHjsqk or call 800.466.6275

CHRISTINA ZWEIG NIEHUES, from page 3

A/E industry, I have experienced being taken for granted. Starting as a temporary file clerk 11 years ago and working my way to the role of business manager, I have faced many challenges – one of them being I do not have a degree in engineering. Not having an engineering degree hasn’t prevented me from fulfilling my responsibilities, but it has caused others to treat me as if I was less ‘smart.’” “Being a registered engineer or architect does not make someone any better at managing an AEC firm than someone who does not have this professional designation.” How often do those without engineering or architecture degrees, or professional registrations, end up in ownership and leadership roles in the AEC industry? Zweig Group’s recently released Principals, Partners & Owners Survey found that 14 percent of owners describe their background as “business management” instead of “engineer/architect,” or other technical professional. The survey also found that just a little less than half, at 46 percent of firms, have “professional registration/licensure” as one of the criteria necessary to be eligible to become an owner. We tell any new hires at Zweig Group that it takes two years of working in the industry to understand it. Unequivocally, you need industry expertise to do well – but expertise and experience do not necessarily mean letters after your name. Being a registered engineer or architect does not make someone any better at managing an AEC firm than someone who does not have this professional designation. Not everyone in every role in an AEC firm needs to be working on billable, technical projects. I would argue that NOT having to do these kinds of activities may make certain people even better at doing the jobs they do – jobs that are extremely important in firms just like yours. CHRISTINA ZWEIG NIEHUES is Zweig Group’s director of marketing. Contact her at christinaz@zweiggroup.com.

I can’t tell you how to build a suspension bridge or use cross-laminated timber in construction – and that’s OK, because it doesn’t make me any less able to help you structure your marketing department, motivate your employees, or create a great website. Because I don’t make money as an architect or engineer, I’ve had other experiences. In addition to working in quite a few unrelated industries, I’ve toured a hundred different AEC firms. I’ve looked at and analyzed thousands of industry websites, marketing materials, marketing campaigns, and proposals. I’ve read more than 36,000 employee responses to surveys. I’ve conducted client interviews and client perception studies with hundreds of different firms working in nearly every market sector and geographic region in North America (and internationally). I’ve worked in email marketing platforms, CRMs, and e-commerce websites. I’ve participated in dozens of strategic planning retreats. I’m Mark Zweig’s daughter – I literally grew up talking about engineering, architecture, and business management at the dinner table every night. I still have that to this day, too, as I married a registered landscape architect who works at an engineering firm. “Unequivocally, you need industry expertise to do well – but expertise and experience do not necessarily mean letters after your name.” I work with some incredible professionals from a variety of backgrounds, everything from journalism and graphic design, to business and law. Their own experiences, expertise, and passion for the industry make them highly qualified for the roles they hold. Unfortunately, not everyone in the AEC industry feels that way. I spoke with a business manager at an engineering firm on the West Coast. She recently became a shareholder in the firm. Here’s what she told me: “Building my career in the

THE ZWEIG LETTER August 6, 2018, ISSUE 1259

This is an exclusive event for top leaders to discuss the highest level issues facing CEOs and the C-suite of today’s AEC rm. This two-day event includes educational and networking sessions in an upscale setting, and is part of Zweig Group’s new Experience Education series. The November 7-9 event will explore the roots of Kentucky bourbon and how these family owned distilleries have grown to serve a worldwide boom while maintaining the culture and character of their businesses. Bourbon lovers or just lovers of the outdoors will enjoy the trip as we travel the Kentucky countryside to some of the most well known distilleries. During our tour of these historic and architectural sites, we will learn the roots of businesses, how these organizations have scaled operations to meet worldwide demand, and how their marketing, sales, and management strategies have built strong brands and rich cultures. We will couple this experience and knowledge with the most pressing issues and ideas in AEC rms today. With attendees in control of the subject matter, we will conduct roundtable discussions on a variety of topics that will hit right at the heart of what is needed to eect change in your organization. The program is led by industry experts with extensive experience working with and leading AEC rms. The two-day agenda covers areas of discussion determined by those in attendance. It’s presented in a guided discussion format to encourage discussion among all attendees. CEO ROUNDTABLE BOURBON EXPERIENCE November 7-9 Louisville, KY

Follow the link for more details, the agenda, information on the presenters, and venue. zweiggroup.com/seminars/ceo-roundtable/

P R O F I L E

Conference call: Ownership transition Each week, The Zweig Letter features commentary from top-flight leaders of AEC firms. Here is a compilation of their thoughts on maintaining the leadership pipeline.

By The Zweig Letter Staff

N IC ANDREANI, PRESIDENT WITH W&M ENVIRONMENTAL GROUP, LLC One thing we didn’t expect is the significant impact it has on the firm’s culture. Not only does it communicate that there’s a plan in place, but it shows everyone in the firm that there’s opportuni- ty and recognition for hard work and perseverance. AL BARKOULI, CHAIRMAN AND CEO OF DAVID EVANS AND ASSOCI- ATES, INC. Ownership transition is crucial, especially for privately held firms in our industry. A lack of in- ternal ownership and inability to transition owner- ship are key reasons why small and mid-size firms disappear. We had some ownership transition chal- lenges when a few large shareholders retired during the recession in 2007 and 2008, when the markets were declining. In a downturn, buying back shares can be a significant stress on the balance sheet of a privately-held firm. In good times, ownership tran- sition can be a little easier. Either way, firms need to have a funded internal ownership transition

plan. The plan must address how a firm will attract or create the next generation of owners. “A lack of internal ownership and inability to transition ownership are key reasons why small and mid-size firms disappear.” MIKE COOPER, PRESIDENT OF HED, INC. Start now and be- gin to engage the next generation of owners. In- volve them in leadership and develop a reasonable timeline for transition. This should be an ongoing process so that long-term, ownership transition becomes a natural process. Retirements and such should not create undue burden on the organiza- tion. JOHN HILTZ, PRESIDENT OF OHM ADVISORS Several years ago, we identified that our future ownership transition

THE ZWEIG LETTER Aug

ELLEN LONG, PRESIDENT OF LONG ENGINEERING, INC. You need to de- termine an ownership transition timeline first to judge how long you have to invest in new talent. Begin to iden- tify internally if you have potential owners you can mentor and enable them to be financially capable to invest in the transition. In our opinion, it takes eight to 10 years to fully transition leadership and ownership. If you don’t have any options, you may have to consider an acquisition route. SEPIDEH SAIDI, PRESIDENT AND CEO OF SEPI ENGINEERING & CONSTRUCTION, INC. You have to have it – whether internal or external. Lead- ers need to prepare mentally and emotionally. They need to “have the conversation.” When it’s time, the transition needs to happen quickly. Once that’s realized, the planning can begin to maximize the value of the company. Show po- tential leaders the opportunities that can be available and then get them ready for that financial commitment. JIM TIPPMANN, CEO OF FRCH Start early. Create an entrepreneurial culture that encourages leaders and feeds successors to take on new responsibilities. An individual will grow as a person and as a professional in this type of culture. LAWRENCE ARMSTRONG, CEO OF WARE MALCOMB My advice for firms that have not taken steps to identify the next generation of owners is to start the succession planning as soon as possi- ble. Succession planning has been an important part of our culture for more than 30 years. Ever since we transitioned Ware Malcomb from the original ownership, Bill Ware and Bill Malcomb, we’ve been in constant planning for the next transition. It takes a lot of hard work and planning to iden- tify the next leadership team. The succession plan needs consistent consultation with trusted advisors such as law- yers, accountants, and insurance agents. At Ware Malcomb, our succession planning is also tied to the vision for the company. It has never been about the current one or two owners; we focus on the bigger picture. The vision set for the company focuses on building a 100-year business and beyond. To make that happen you must embrace ownership and leadership transitions. “Leaders need to prepare mentally and emotionally. They need to ‘have the conversation.’ When it’s time, the transition needs to happen quickly. Once that’s realized, the planning can begin to maximize the value of the company.” DOUG MCKEOWN, CEO OF WOODARD & CURRAN Ownership programs need to reflect the ownership goals of the firm. If internal ownership transition is desired, the program should be designed to enable that outcome. Waiting until an owner decides that she or he now wants to sell, might result in the inability for the internal leaders to afford to buy down the founders. Decide what you want to accomplish, design the plan to do that, and work with your team to gain the thoughts and support for the program. WILL SCHNIER, CEO OF BIG RED DOG ENGINEERING & CONSULTING The se- cret to an effective ownership transition is to have a plan and strategy for an effective ownership transition. And See CONFERENCE CALL, page 8

needed to be staggered to minimize volatility while also encouraging the next generation to come to the ownership table. Identifying and empowering the next generation of owners is critical, and we’re fortunate to have 36 partners, all at various stages of their careers. We recommend that firms continually train and develop the next generation of talent, and in doing so, they strengthen their firms and re- duce the volatility around ownership transitions. “Start early. Create an entrepreneurial culture that encourages leaders and feeds successors to take on new responsibilities. An individual will grow as a person and as a professional in this type of culture.” RAMESH GUNDA, FOUNDER AND PRESIDENT OF GUNDA CORPORATION I once heard from a veteran in the field that you only have three options for ownership transition: transition ownership internally, sell the firm to an outsider, or close shop if you didn’t plan for either of the first two options. Unless you’re comfortable with the third option, it’s crucial to have a stra- tegic/ownership transition plan in place, even for firms that are young or small. The plan will help your team understand where the firm is going and what opportunities are available to them. GARY DAHMS, PRESIDENT, CEO, AND CHAIRMAN OF THE BOARD FOR T&M AS- SOCIATES Start now, it’s never too early. We’re wholly owned by company employees. Our stockholders are the owners and leaders. The program we have in place maps out the criteria and steps that need to be taken from any stage in their career to become a stockholder. Regardless of age, our stockholders range from millennials to baby boomers and they must be motivated to improve, innovate, and grow the business. A clear vision and strategic plan for the future helps us to identify those next generation leaders who will help lead the firm to those goals and beyond. MARK SMOLINSKI, PRINCIPAL AT G2 CONSULTING Ownership transi- tion is a long process that requires planning over a period extending up to a decade. Start early and engage the firm’s future leaders. DAVE FABIANSKI, CEO OF APEX COMPANIES, LLC The value of your com- pany is based on how well positioned it is to deliver sus- tainable performance and value creation in the years ahead. Succession planning needs to start years before transition planning. KEVIN HONOMICHL, CO-FOUNDER AND PRESIDENT OF BHC RHODES It’s a long runway. We’re a first-generation firm and have a stock ownership plan in place. It’s different for every firm. Focus on leadership development. I don’t think ESOPs are the end all. It takes careful planning. GRANT GIBSON, FOUNDER AND CEO OF GATE Ownership is the key in- gredient for our business. We do this via restricted stock grants and options. The plan was developed more than five years ago and is still in progress. We are just coming out of an oil price crash and that has presented an opportunity for us to issue options to our staff that will see more upside. My advice is to start early and hire some advisors to help you make good decisions.

gust 6, 2018, ISSUE 1259

ON THE MOVE SEASONED CLIENT-SIDE VETERAN JOINS CRB’S BUSINESS DEVELOPMENT AND STRATEGY TEAM Ralph Grant, a chemical engineer with 28 years of experience leading high-performing project teams, has joined CRB ’s Central region as the director of business development. Grant’s strong engineering skills and personal interests as an award-winning photographer and painter are the perfect mix of science and art that will benefit business development at CRB. These skills bring an understanding of client needs in the evolving world of engineering consulting and sourcing of capital projects. Grant was previously the senior director of engineering at Mallinckrodt Pharmaceuticals, managing capital strategy for its generics businesses. He has worked in many market segments, including engineering consulting, construction, process safety, skid fabrication, specialty chemicals, pharmaceuticals, biofuels, food, beverage, and dairy. Grant has executed hundreds of projects, aligning business with capital strategy and finding economic solutions to technical engineering problems. “In my previous position, working with CRB helped me be successful on many projects. I’m excited to be a part of CRB’s culture of technical excellence, entrepreneurialism, and relentless pursuit of success,” Grant said. Grant will focus on cultivating relationships with new and existing clients – getting to know their strengths and opportunities. He will address their needs by accessing CRB’s deep bench of experts in engineering, consulting and construction. While Grant will be based in St. Louis, he will support clients in the nine- state region and clients who have offices abroad. “Ralph brings a keen strategic eye to his work that is pragmatic yet always creative. We have

witnessed his talents when partnering with him on projects over the past 10 years,” Central Region Leader, Tim Greenwald, said. “We are thrilled to have his innovative thinking and dry wit as part of our entrepreneurial team. I’m confident our clients will find tremendous value in his expertise.” CRB is a full-service network of engineers, architects, constructors, and consultants, assisting advanced technology organizations in the planning, design, construction, and operational support of facilities across the globe. With world-class technical expertise and an empowered team of more than 1,000, CRB relentlessly pursues and delivers the right solutions to its clients’ technical challenges, no matter how big or small. Over CRB’s nearly 30- year history, the firm has earned a reputation for providing value-based solutions, delivering superior quality work and developing long- term partnerships built on trust and productive collaboration. MICHAEL BAKER INTERNATIONAL STRENGTHENS MINNEAPOLIS OPERATIONS WITH APPOINTMENT OF KEVIN ANDERSON, P.E., D.B.I.A., AS OFFICE MANAGER Michael Baker International , a global leader in engineering, planning, and consulting services, announced that Kevin Anderson, P.E., D.B.I.A., has joined the firm as office manager in Minneapolis. In this role, Anderson will deliver exceptional highway and bridge projects for clients across Minnesota, in addition to managing marketing efforts, business development, and operations for the office. He also will work to diversify the office’s project portfolio in design-build, highway design and transit design. “Addressing Minnesota’s infrastructure needs is of the utmost importance, especially given the state’s ongoing investments to improve and integrate its transportation system,” said Kent Zinn, P.E., S.E., Michael Baker’s vice president

and Great Lakes regional director. “Leveraging Kevin’s vast transportation background and project management expertise, the company is poised to provide innovative solutions to enhance the state’s infrastructure.” Anderson brings more than 26 years of experience to his role at Michael Baker. He has managed all aspects of transportation projects, including bridge design, highway design, construction management, and quality management. For his most recent project, he served as the project manager leading the design for the St. Paul High Bridge construction manager/ceneral contractor project. Previously, he worked 18 years for the Minnesota Department of Transportation where he was involved in the agency’s design- build program since its inception in 2001. This included serving as the MnDOT project manager for the $136 million I-494 design- build project. Anderson earned his bachelor’s degree in civil engineering from the University of Minnesota. He is a licensed professional engineer in the state of Minnesota and a certified design-build professional. Michael Baker International is a leading provider of engineering and consulting services, including design, planning, architectural, environmental, construction, and program management. The company provides its comprehensive range of services and solutions to support U.S. federal, state, and municipal governments, foreign allied governments, and a wide range of commercial clients. Michael Baker’s more than 3,000 employees across nearly 100 locations are committed to a culture of innovation, collaboration and technological advancement to help solve challenges for clients and communities throughout the country.

or informal. Time flies when you’re having fun so you don’t want to be caught without a good plan in place. Start identi- fying your replacement at least five to seven years ahead of your planned exit date and begin the mentoring and guid- ance necessary to help that person develop the confidence to step into the role. This should be done for all key firm positions. “I think it’s a big mistake not to have a plan in place – formal or informal. Time flies when you’re having fun so you don’t want to be caught without a good plan in place. Start identifying your replacement at least five to seven years ahead of your planned exit date.”

CONFERENCE CALL, from page 7

you’ve got to have that plan in place and executable five to 10 years before the transition is set to be finalized. If that plan is not in place, then you’re looking at an external sale or closing the firm. Nearly every week I speak with a firm owner about an acquisition. We have around $18 million of annual revenue, so our acquisition targets generally tend to be half our size or smaller with a single owner or very small ownership group. Almost without fail, they tell us that they have a plan to sell their firm internally to their next genera- tion of leaders. Of course, when I ask to review that plan, there typically is nothing documented. For owners in that situation, an external sale becomes their only option. With no plan, there is no transition. There is only an external sale or a closing. CHRISTINE FRANKLIN, PRESIDENT OF COMPREHENSIVE ENVIRONMENTAL, INC. I think it’s a big mistake not to have a plan in place – formal

THE ZWEIG LETTER August 6, 2018, ISSUE 1259

O P I N I O N

Change management

Mergers and acquisitions, among other events, can wreak havoc on firms. Keep in mind that when faced with upheaval, different people adjust in different ways.

I checked Wikipedia at the start of this article, and found a broad and interesting definition for the term “change management,” as follows: “Change management is a collective term for all approaches to prepare and support individuals, teams, and organizations in making organizational changes. The most common change drivers include ... pressure from new business entrants, acquisitions, mergers, and organizational restructuring.”

Bernie Siben THE FAST LANE

And when the two firms involved have different cultures, the “settling in” period can be longer and much more painful than any of the owners imagined. Some changes are small, requiring little effort “Change is never easy, and it brings its own difficulties to the leaders who instigate the change as well as the employees who have to adapt.”

Having been a full-time employee in multiple firms that either acquired or were acquired by another, it is my experience that the two most troubling of the drivers listed above are generally acquisitions and mergers, especially in a professional services company. Both acquisition and merger change your company’s service offering and the way it delivers those services, and also change the overall way your company does business, the way it plans for the future, the way it pursues new projects, the way its administrative processes flow and impact the work, and a host of other factors.

See BERNIE SIBEN, page 10

THE ZWEIG LETTER August 6, 2018, ISSUE 1259

ON THE MOVE BSA LIFESTRUCTURES HIRES NEW DIRECTOR OF BUSINESS DEVELOPMENT Nationally recognized architecture and engineering firm, BSA LifeStructures announces the addition of Lynn Dunn, director of business development, for the firm’s Raleigh office. Dunn, a licensed architect, has more than 20 years of experience in the AEC industry including experience directing business development activities, managing strategic initiatives, and developing and maintaining long-term relationships. “Lynn’s experience and expertise are a valuable addition to the team,” said Kenyon Worrell, BSA LifeStructures’s regional director, Raleigh. “Lynn’s comprehensive background will positively impact our

future growth and stability, both locally and nationally.” A North Carolina State University graduate, Dunn has experience directing business development endeavors for national clients and has more than a decade of experience designing and delivering large-scale, complex mixed-use projects across the southeast. “It’s exciting to join a company with a notable track record and so much opportunity providing solutions that make a difference for our clients and communities,” said Dunn. “I am looking forward to making unique and lasting connections with the organizations that we help by designing LifeStructures. The focus at BSA on partnership and creating

inspired solutions lines up with my own goals in supporting clients.” Headquartered in Indianapolis, Indiana, BSA LifeStructures is a national interdisciplinary design firm that creates inspired solutions that improve lives. BSA LifeStructures provides architecture, engineering, interior design, and planning services for spaces that support and enhance healing, learning, and discovery – facilities known as LifeStructures. The firm has seven regional offices in the United States that include: Austin, Texas, Atlanta, Georgia, Denver, Colorado, St. Louis, Missouri, Indianapolis, Indiana, Raleigh, North Carolina and Kansas City, Kansas.

BERNIE SIBEN, from page 9

individual coping mechanisms and attitudes about change, so they adjust to change at different speeds. Given a large organizational change, you can count on some people adjusting easily, making the change, and moving into the new processes easily. But you can also count on others who will have great difficulty making the change, and who will require much more patience if you value them as employees and don’t want to lose them. In addition, there will be people at many different places along this spectrum. Finally, and most unfortunately, there will be those who will actively refuse to adapt to the changes. The one thing a leader MUST NOT DO is tell any of these resistors that they don’t have to make the change, because that will anger those who have already worked through the change or are still struggling with the difficulty. The ones who can’t, or won’t, change will ultimately have to be let go, unless they leave of their own accord first. Then the leaders must make decisions about how to deal with these departures. Is there severance pay, are there reference letters, is there help in finding a new position. This will depend on the individual’s place in the spectrum of adaptation and whether the leaders feel they made a true effort to adapt or just dug their heels in and resisted. Change is never easy, and it brings its own difficulties to the leaders who instigate the change as well as the employees who have to adapt. BERNIE SIBEN, CPSM, is owner and principal consultant of The Siben Consult, LLC, an independent A/E marketing and strategic consultancy located in Austin, Texas. He can be reached at 559.901.9596 or at siben@sibenconsult.com. “Both acquisition and merger change your company’s service offering and the way it delivers those services, and also change the overall way your company does business.”

beyond acknowledging the change and the new process it requires. Other changes are huge, requiring a lot of implementation planning, a lot of explaining to ensure company-wide understanding and acceptance, and a lot of pain as staff members work through the change. “Given a large organizational change, you can count on some people adjusting easily, making the change, and moving into the new processes easily. But you can also count on others who will have great difficulty making the change.” Some changes are potentially so big that two of them should never be attempted at the same time. Here is an example: An A/E firm with multiple offices acquired another A/E firm with multiple offices, resulting in a firm with six offices in five cities. The different corporate cultures of the firms resulted in some internal competition. Settling into its new dynamic, the leaders decided that two major changes needed to happen: 1)The overall management structure had to become something completely different from the previous structure of either firm. 2)The six offices needed to recognize that “we are all one firm,” and focus on the real competition – other firms. I talked about these two changes with leaders at other firms, both large and small. They agreed that these two changes should not be undertaken simultaneously because each one represents almost as much change as any group can handle at one time. Pursuing both simultaneously would likely just overwhelm the staff. So it looked like there would need to be a lot of staff hand- holding, because people process change differently. Some can process multiple changes at once; others are strictly one-at-a-time. In addition, different people have different

THE ZWEIG LETTER August 6, 2018, ISSUE 1259

O P I N I O N

Extreme ambition

O K, two years might be a bit of an exaggeration. Or maybe not. We once had a young engineer who had been with the firm for only a few months after college. Upon meeting the president of our firm, the young engineer said, “Great to meet you, sir. Thanks for keeping my chair warm for me.” After just two years, they want to be the CEO. Molding the go-getters (early on) is crucial if you don’t want them to leave for better opportunities at another firm.

Mitch Fortner GUEST SPEAKER

Extreme personal ambition. How do you manage it in a consulting firm? After all, unless your firm is growing at warp speed, there are limited opportunities for rapid advancement of personal careers. The typical career progression for an engineer goes something like this: summer internship, full-time engineer in training or engineering intern, design engineer, project engineer, project manager, group leader, and then advancement to either a technical leadership position, business development leadership position, or corporate leadership position. It’s very rare for an individual to demonstrate such extreme leadership skills that they skip a significant portion of that career path. So what about the younger professional who desires an expedited ride to the upper levels of management? Is there some way to challenge and prepare them for upper level management without losing them

to a company with more opportunity for their immediate advancement? Over the years, KSA, just like every other consulting firm, has struggled with this issue. We have lost our fair share of talented and ambitious young professionals due at least in part to unmet career development expectations. These losses are exacerbated by a hyper-competitive employment market with extremely low unemployment rates. We are working hard to arrest this trend and find ways to channel that ambition into areas that are productive for the company and satisfying for the employee. Extremely ambitious young professionals are typically very talented and quite often among the highest performers in their peer group. Rather than resent them for being yet another problem to

See MITCH FORTNER, page 12

THE ZWEIG LETTER August 6, 2018, ISSUE 1259

TRANSACT IONS TWO LONG-TIME FAIRBANKS LAND SURVEYING FIRMS, 3-TIER ALASKA AND NORTHLAND SURVEYING & CONSULTING HAVE MERGED 3-Tier Alaska, Corp has merged with Northland Surveying & Consulting , combining more than 70 years of land surveying experience for thousands of customers in the interior of Alaska and rural villages across the state. A generational ‘passing of the torch’ has occurred in the land surveying and civil engineering industry in Alaska. Jim Ringstad, the founder of 3-Tier Alaska, Corp, along with Richard Heieren, the founder of Northland Surveying & Consulting, have merged their companies under the new leadership of Jim’s son, Nick Ringstad, who will retain the 3-Tier Alaska name. “Both 3-Tier Alaska and Northland Surveying & Consulting are leaders in their field, with first- class reputations,” said Nick Ringstad, owner of 3-Tier Alaska. “I am honored that my father and Richard have entrusted their legacy to me. After working on the pipeline, my father’s dream was to run his own business and it’s been my dream to follow in his footsteps. Though at times the elements can be challenging, it’s rewarding to take a project from the drafting

table to real life and plot out a community that will grow and develop over years to come.” 3-Tier Alaska and Northland Surveying & Consulting have many shared similarities making them well-suited to combine forces. Both were founded more than 35 years ago in Fairbanks, specialize in land surveying, and have surveyed new property lines in a state with arguably the most vast and un- surveyed land boundaries. 3-Tier Alaska brings two licensed professional engineers to the new organization to offer complementary civil engineering-related design services to Northland’s land surveying expertise. Additionally, Northland brings three licensed professional land surveyors to bolster 3-Tier Alaska’s Land Surveying knowledge. While Jim Ringstad and Richard Heieren will remain with the merged company, the day-to-day operations will be run by Nick, a professional engineer registered in the states of Alaska and Washington. “It was a pleasure to work with Nick during the acquisition process. I enjoyed getting to know him,” shared Heieren. “He has an excellent skill set to lead the company for the next

generation of surveyors and engineers. With the expert staff at 3-Tier Alaska and Northland, the future has never been brighter. When you’re dealing with an asset as valuable as someone’s property, or critical civil structures such as roads and bridges, or mapping an entire city or village, you need deep domain expertise and years of experience at your side, which is what sets the new company apart.” A shared, guiding philosophy is at the heart of the merger. Ringstad’s vision is to build on the two company’s combined 70 years of expertise to develop the next generation of land surveyors by digitally transforming 3-Tier Alaska with continuing education, training, and evolving a century’s old practice with modern technology solutions like GPS and artificial intelligence-related technologies such as robotic stations. Both companies have been market leaders in land surveying in the interior of Alaska since the early 1980s. Historically, the two companies have accomplished nearly 1,000 jobs per year with services in civil engineering and land surveying consultancy and design.

MITCH FORTNER, from page 11

the business classics or take advantage of the services of a personal executive coach. 3)Pair them up with the right mentor. One of the ways that we are trying to prepare the ambitious young professionals in our firm for future upper management positions is through mentorship sessions. Reading and discussing business books together. At appropriate levels, reviewing firm financial performance together and learning to read and understand financial statements. Working on special management or Human Resources projects together. When we notice that someone “lights up” on certain aspects of the management or operation of the firm, we try to assign them a few problems to solve, or better yet, let them lead a cross-functional team tasked with solving a recurring problem within the firm. And obviously, when a suitable position becomes available or can reasonably be created, remember these talented and am- bitious young professionals and give them a chance as soon as they have a realistic chance for success in their next position. 4)Be flexible and tailor your approach to the needs of the young professional. There is probably not a one-size-fits-all answer for satisfying and retaining employees with extreme ambition. But in an economy with 3.5 percent overall unem- ployment and 2 percent unemployment for civil engineers, there is a very good chance that your young professionals can find plenty of opportunities to move to another firm or start their own firm. We believe an open dialogue, career planning, mentoring, combined with a competitive compensation and benefits package, can help to reduce the risk of losing ambi- tious young professionals. We also believe that the effort to do so is time and money well spent. After all, as a firm leader, you are going to want those ambitious young professionals to ultimately take over and lead your company someday. MITCH FORTNER is president of KSA. He can be reached via LinkedIn, on Twitter @MitchFortner, or by email at mfortner@ksaeng.com.

deal with, maybe we should be thankful when they come to us and say, “I’m bored and need a new challenge.” But if we don’t have a position open and ready for them, how will we satisfy their itch? Here are four suggestions that have worked well for us at KSA: 1)Discuss their career goals. First, and most importantly, sit down and talk about their career goals and next steps. Antici- pate their need to have this discussion. Be proactive and don’t wait until frustration sets in. Consider questions like these: What are they passionate about? Where do they see their tal- ents and skills leading them? What are their one-, five-, and 10-year career goals? As the manager or firm leader, once you are on the same page, you might consider the following: Is there room for additional responsibility within their current position? Are there gaps in their technical or soft skills that need to be addressed be- fore they can firmly plant their foot on the next rung of their ideal career ladder? Do they demonstrate a healthy sense of self-awareness? Are they developing those who serve on their team? Have they developed a good succession plan for when they are promoted from their existing position? After identifying those areas within their existing position that they might focus on, work together to determine what type of position and responsibilities they might be best suited for in the future. 2)Document a career development plan. At this point, you might consider preparing and documenting a career develop- ment plan that they can pour themselves into. Perhaps they should enroll in an MBA program and begin taking classes in the evening and on weekends. Maybe there are industry training programs that they should attend. Webinars on spe- cific industry related issues. Maybe they need to start reading

THE ZWEIG LETTER August 6, 2018, ISSUE 1259

Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12

Made with FlippingBook Annual report