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Strategic planning as a challenge 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 J u l y 9 , 2 0 1 8 , I s s u e 1 2 5 5

The inevitable departures

Editor’s note: Originally published 4/25/2005 E very A/E and environmental firm experiences those inevitable departures of key employees. After the notice is turned in and the hand-wringing, self-flagellation, and/or angry statements come out from management, the next question is, “Now what?” Now, what should the firm do to recover from this blow to its capacity (and, maybe even more critical, psyche)? The answer to this question, like so many others, is the same: Be calm! No matter how much of a setback the loss of this key individual may appear at first, you have to remind yourself that you were probably in business before this person joined you, and you will be in business after they leave. No one is irreplaceable! No one – not even the founders. ❚ ❚ If someone isn’t happy working in your company, both you AND they will be better served by them leaving. I know that may be hard to believe – especially if you are caught off guard and don’t have a replacement lined up – but it is. ❚ ❚ Unhappy people are a cancer in the gut of the company, especially unhappy people in management or leadership posts. They will corrupt others’ thinking, even if it’s not their intention to do so. ❚ ❚ Don’t let the person hang around too long. Let’s all save face and transition everything that needs transitioning, but, most of the time, that doesn’t really take two weeks. Remember that lame ducks don’t tend to be very productive – even worse, they can hurt

“No matter how much

Zweig Group just completed the 2018 Principals, Partners & Owners Survey , and found great data on owners of AEC firms. When asked to rank challenges for owners (1-5), with five being the most difficult, principals in high-profit firms rated strategic planning at 2.5. Principals in low profit/loss firms, meanwhile, ranked strategic planning at 4.6, a clear indication that strategic planning leads to better-performing firms.

of a setback the loss may appear at first, you have to remind yourself that you were probably in business before this person joined you, and you will be after they leave.”

Mark Zweig

OPEN FOR PARTICIPATION zweiggroup.com/survey-participation/

F I R M I N D E X BIG RED DOG Engineering...................10 Braun Intertec.........................................8 HR Green, Inc.......................................10 O’Connell Robertson...............................2 Ware Malcomb........................................6 WSP USA...............................................4

MORE COLUMNS xz BRAND BUILDING: Succession and peril Page 3 xz GUEST SPEAKER: Don’t suck Page 9 xz GUEST SPEAKER: Increasing utilization Page 11

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: Lawrence Armstrong See MARK ZWEIG, page 2 Page 6

ON THE MOVE MEYER PROMOTED TO PRINCIPAL Ron Meyer, AIA, has been named a principal with O’Connell Robertson in recognition of his design expertise and leadership abilities applied to the pursuit of the firm’s vision, mission, and goals. Meyer serves as the project delivery leader for O’Connell Robertson, a role requiring strategic planning to implement the firm’s architectural goals; technical leadership guiding the best documentation practices; and resource management to support overall project scheduling and staffing assignments. “Ron’s technical expertise, deep understanding of the design process and integration of building information management, and ability to direct large complex projects brings a forward- thinking presence to our project delivery process,” said Kim Cochran, chief operating officer. Meyer brings more than 25 years of experience in architectural practice, working directly with clients, consultants, and construction teams

Take your advice from Mark Zweig to-go.

to facilitate an efficient and responsive process through each phase of project development. Meyer has extensive experience in the design of healthcare facilities in addition to experience with education, commercial, and sports projects. A graduate of Texas A&M University with a master’s degree in architecture, Meyer is a registered architect and is NCARB certified. “Ron’s leadership in this core business aspect supports O’Connell Robertson’s mission to provide professional services of unsurpassed quality as we continue to design environments that positively impact all who experience and interact with our work,” said Amy Jones, president. O’Connell Robertson is an integrated architecture and engineering design firm, established in Austin, Texas in 1950, whose mission-driven approach creates healthcare and education environments that enrich the lives of the people they were designed to serve.

MARK ZWEIG, from page 1

thezweigletter.com/category/podcast/

the morale of the other people. Get ‘em out of there ASAP. But be smart about it. Don’t cut off your nose to spite your face. Don’t make yourself look like you aren’t sensitive either, by rushing someone who is very popular with the people in your firm out the door TOO soon without a proper send-off. ❚ ❚ Take control of the communications, both inside and outside of the firm . Don’t let the person who is leaving send out just anything they want to clients of the firm. You need to decide what message is going out, not the person who quit! I have seen letters going out from the company the person is leaving, telling clients all about the employee’s new company and role. This is ridiculous in most every case, be- cause it can only harm the firm the person is leaving behind. Ditto for the inside emails from those leaving. I once had a guy quit who sent out an email to everyone as his last act – he was advertis- ing his cool new job to all of our employees. It made me mad, and I sent a follow-up to all staff that made me look like an ogre. With the person involved, we should have an- ticipated this guy’s last act and pulled the plug on his email account sooner! ❚ ❚ Get on with finding their replacement immediately! Time is of the essence. The sooner you can get someone else into the job of the person who quit, the better off you will appear (and actually BE !). It makes them look like they were easy to replace. And if you promoted someone from within, all the better. This could turn a negative event into a positive one (isn’t there some ancient Chinese proverb for that?) if you pick the right person. It shows everyone you promote from within. It gives that person a new and bet- ter job. And, it says to clients and others outside the firm that it’s business as usual in your company. ❚ ❚ Expect it. Have a succession plan in place. Know who will go where or how you will restructure if and when it happens. Anticipate these events. It’s always surprising how many firms are caught completely off guard when that key guy or girl quits. If the writ- ing on the wall is crystal clear (i.e., you hear firsthand that the person is actively inter- viewing), you may be best served to end the relationship on your terms, not theirs. Don’t be hasty with these kinds of decisions, but remember that, in this and all other matters, your role as an owner is to protect the interests of the organization as a whole. If you approach your decision-making from this point of view, you will usually do the right thing. MARK ZWEIG is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.

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

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 July 9, 2018, ISSUE 1255

O P I N I O N

Succession and peril

A failed leadership transition can destroy a brand. Take plenty of time, focus on the company, and beware of politics and interpersonal conflict.

S everal years ago I visited the church I grew up in and had an unexpected experience that left a lasting impression on me. As I approached the door, I noticed leaves had collected around the corners of the entrance, as though it was not used often. As people would enter the church, the doors would push the leaves into the corner. As you walked through the door, the carpets in the foyer were worn and dirty.

Chad Clinehens BRAND BUILDING

This was surprising as this was the “new” sanctuary, built just prior to me moving away. It was built at a time when the church was at its peak, enjoying high attendance and an abundance of programs. As I walked through the various hallways, I noticed rooms where I’d had class or that housed a vibrant program in the decades prior, now being used as storage. Corridors that previously were packed with people going from one area of the church to another were completely dark. The success of this church was attributed to what many successful organizations are built on – a great and singular leader. The senior pastor had

been at the church for more than 30 years and had built it from a one-building institution with less than 50 members into a multi-building campus that spanned a city block and had thousands of members. During the 14 years I lived away, my mom would fill me in on the stories of the church, all revolving around the difficulties of that senior pastor retiring. The stories sounded all too familiar to what is happening in many AEC firms today – difficulty in transitioning from a founder or long-time leader. The church waited too late to prepare for the exit of this powerful pastor and, when the day arrived,

See CHAD CLINEHENS, page 4

THE ZWEIG LETTER July 9, 2018, ISSUE 1255

ON THE MOVE WSP NAMES OSTERLE SUPERVISING ENGINEER FOR WATER AND ENVIRONMENT John Osterle has been named supervising engineer for water and environment in the Pittsburgh office of WSP USA , formerly WSP | Parsons Brinckerhoff, a leading engineering and professional services consultancy. In his new position, Osterle will focus on expanding the water engineering practice in Pennsylvania and across the United States. He will also provide technical support including inspection, permitting, design, analysis, and construction on a variety of water related and interdisciplinary projects. Osterle has worked as an engineering consultant for more than 32 years on a variety

of civil, hydraulic, geotechnical, and structural engineering projects. He is a nationally recognized expert in the fields of dam, levee, and flood protection engineering. Prior to joining WSP, he served as a vice president of an international engineering consulting firm. During his tenure, Osterle worked on some of the largest dam rehabilitation projects in the United States and overseas including Taum Sauk Dam, Saluda Dam, Bagnell Dam, and Wyaralong Dam. A registered professional engineer in 19 states, Osterle received his master’s and bachelor’s degrees in civil engineering from Carnegie- Mellon University. He is the vice chair of the environment and sustainability committee for the United States Society on Dams and has authored several technical papers, developed

training workshops, and participated in panel discussions on topics in his areas of expertise. WSP USA, formerly WSP | Parsons Brinckerhoff, is the United States operating company of one of the world’s leading engineering and professional services firms – WSP. Dedicated to serving local communities, WSP USA is made up of engineers, planners, technical experts, strategic advisors, and construction management professionals. WSP USA designs lasting solutions in the buildings, transportation, energy, water, and environment sectors. With more than 7,000 people in 100 offices across the United States, WSP USA partners with clients to help communities prosper.

CHAD CLINEHENS, from page 3

going pastor. As a result, they brought someone in who was a complete opposite. You must focus on someone who can fuse the past and the future together and can lead the change that is inevitable in transitions. Politics and interpersonal conflict are certain to derail any good leadership transition. Focus on keeping the people and business strong. ❚ ❚ Choose internal, if possible. Internal candidates are almost always more successful for a variety of reasons. First of all, they have the time invested for a five- to 10-year plan. Also, internal candidates are more accepted by the culture, as this has enhanced importance in the AEC industry. We don’t always have the right person internally for the job, but if we have a long-term and intentional plan, we can hire the right one and get them integrated. Leadership succession is important to all firms, but especially those with strong brands. There are many AEC firms that plug along, rising and falling with the markets. And then there are those firms that have aggressive and ambitious leaders that create extraordinary growth. While outsized success is exciting and does incredible things for the people and the community, it comes with a price. The hard work it takes to create that success must keep going. The organization must be able to evolve and adjust to the changing market and to new leadership. The staff relies on the continuance of company culture and the clients rely on the continuance and promise of the company’s brand. We have seen many firms that enjoy extraordinary success, only to have it diminished by a failed leadership transition, thus diminishing the brand. If your intention is to internally transition your firm, start early, focus on the person, and keep the brand in sharp focus. Don’t end up like my childhood church. CHAD CLINEHENS is Zweig Group’s president and CEO. Contact him at cclinehens@zweiggroup.com. “If your intention is to internally transition your firm, start early, focus on the person, and keep the brand in sharp focus. Don’t end up like my childhood church.”

the elders could not agree on how to fill his shoes. The rest is history, a history of decline. “We have seen many firms that enjoy extraordinary success, only to have it diminished by a failed leadership transition, thus diminishing the brand.” During that walk, the “brand” of that church changed dramatically. The reason this experience was so powerful to me is because I was also preparing for a similar transition in my company. I had just moved back to my hometown of Fayetteville to join Mark Zweig in re-building ZweigWhite, now Zweig Group, and to be his eventual successor. It was a dream job for me, but as I walked in the sanctuary and saw that three quarters of the seats were empty, the gravity of my own situation hit me. I realized that even though we’d helped hundreds of companies prepare for ownership and leadership transitions, we were not immune from failure, and even if we had a successful transition, that it would not be easy. Keeping the best of the heritage of the Zweig brand while preparing the company and the market for the next generation of the company became even more important. Here are some of the best pieces of advice I can offer to someone who might be facing a transition: ❚ ❚ Start early. Internal transitions need five to 10 years to ex- ecute. Start with a strategic plan that clearly spells out the company’s vision. Consider the changes that need to be made in various areas of the company to prepare for different lead- ership. Most firms that have powerful founders or leaders that created significant growth must consider that evolution in the company will happen with the transition. A lot of time may be required to prepare the people, systems, and pro- cesses. ❚ ❚ Focus on the business. You must focus on keeping the busi- ness strong and the momentum going. Going back to my childhood church, the elders over-focused on finding a leader that solved some of the perceived personality flaws of the out-

THE ZWEIG LETTER July 9, 2018, ISSUE 1255

VENUE: Hotel Monteleone It’s been said that the French Quarter begins in the lobby of Hotel Monteleone. This venerable New Orleans hotel sits majestically at the foot of Royal Street and oers valet parking with two garages. Our guests have the best point of departure for all things New Orleans. NEWORLEANS AUG 15-17 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 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. The Successful Successor roundtable is an exclusive event for income strategic leaders of rms and newly-minted strategic leaders of these rms. The purpose of this seminar is to discuss the highest-level issues facing newcomers to the c-suite and to individuals who are preparing to take on a CEO role in today’s

zweiggroup.com/successful-successor-seminar/

THE ZWEIG LETTER July 9, 2018, ISSUE 1255

P R O F I L E

The MicroVention Worldwide Innovation Center in Aliso Viejo, CA.

Conference call: Lawrence Armstrong CEO of Ware Malcomb (Hot Firm #8 for 2018), a 440-person international design firm based in Irvine, California.

By LIISA ANDREASSEN Correspondent

“S uccession planning has been an important part of our culture for more than 30 years,” Armstrong says. “It takes a lot of hard work and planning to identify the next leadership team. The succession plan needs consistent consultation with trusted advisors such as lawyers, accountants, and insurance agents.” A CONVERSATION WITH LAWRENCE ARMSTRONG. The Zweig Letter: What’s your policy on shar- ing the firm’s financials with your staff? Week- ly, monthly, quarterly, annually? And how far down into the org chart is financial information shared? Lawrence Armstrong: Our policy is to remain transparent with our staff since they are the back- bone of our success. We are proud to be a fiscal- ly conservative company. We strive to adopt best

practices for conservative business operations for the health of the company, our clients, and staff. This mindset also provides resiliency during eco- nomic downturns. “We are proud of the success of our business and don’t shy away from talking about it. It’s important to all of our leaders to share information about the health of the company with our dedicated staff.” On a biannual basis, we share revenue goals and progress with the entire company. Leadership meetings are held three times a year with leaders from our 22 offices across North

Lawrence Armstrong, CEO, Ware Malcomb

THE ZWEIG LETTER Ju

America to share companywide prog- ress, financial updates, and best prac- tices. Additionally, on a monthly basis, the executive team engages with each office to discuss financials and opera- tions in their respective region. We are proud of the success of our business and don’t shy away from talk- ing about it. It’s important to all of our leaders to share information about the health of the company with our dedi- cated staff. “It takes a lot of hard work and planning to identify the next leadership team. The succession plan needs consistent consultation with trusted advisors such as lawyers, accountants, and insurance agents.” 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? LA: Our business development strat- egy has always centered on the techni- cal staff leading the BD. Our market- ing team has always been a strategic, in-house asset supporting BD objec- tives. We have found this is the most effective formula to build our busi- ness. TZL: Diversifying the portfolio is never a bad thing. What are the most recent steps you’ve taken to broaden your revenue streams? LA: Ware Malcomb has been focused on diversification since the ‘90s. When we initially expanded to four offices in 1990, we focused on interior growth and continued firm diversification. It’s great to see all of the hard work pay off. Today, I’m proud to share that we are ranked No. 27 on Interior Design magazine’s Top 100 Giants. Our firm-wide focus on diversifica- tion remains within the corporate and commercial real estate umbrella. Ini- tiatives also include science and tech- nology, branding, healthcare, and civil engineering design services.

We made a strategic acquisition in 2016 and acquired a Denver-based civil engineering firm, Jansen Strawn Consulting Engineers, to augment our growing civil engineering practice. In May, we announced another acqui- sition – WorkSpace Plans, a building measurement services company. This addition to the company expands our service offerings and provides our cli- ents with the latest technology and expertise in building measurement. 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 gen- eration of owners? LA: My advice for firms that have not taken steps to identify the next gener- ation of owners is to start the succes- sion planning as soon as possible. Succession planning has been an im- portant part of our culture for more than 30 years. Ever since we transi- tioned Ware Malcomb from the origi- nal ownership, Bill Ware and Bill Mal- comb, we’ve been in constant plan- ning for the next transition. It takes a lot of hard work and planning to iden- tify the next leadership team. The suc- cession plan needs consistent consul- tation with trusted advisors such as lawyers, 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 fo- cus on the bigger picture. The vision set for the company focuses on build- ing a 100-year business and beyond. To make that happen you must em- brace ownership and leadership tran- sitions. TZL: What is the role of entrepre- neurship in your firm? See CONFERENCE CALL, page 8 “Entrepreneurship is a guiding philosophy at Ware Malcomb. We encourage our team members to grow from within and provide opportunities for them to do so.”

YEAR FOUNDED: 1972 HEADQUARTERS: Irvine, CA OFFICES: 22 offices across North America (U.S., Canada, Panama, and Mexico) NO. OF EMPLOYEES: 440 SERVICE OFFERINGS: ❚ ❚ Architecture ❚ ❚ Branding ❚ ❚ Sustainable ❚ ❚ Interiors ❚ ❚ Corporate accounts ❚ ❚ The United Workplace ❚ ❚ Civil engineering ❚ ❚ BIM ❚ ❚ Building measurement services COMPANY CULTURE: They are passionate about: ❚ ❚ Design ❚ ❚ Community ❚ ❚ Philanthropy ❚ ❚ Wellness They are involved, active, and engaged. GIVING BACK: Ware Malcomb values teamwork, design, creativity, community involvement, entrepreneurship, and the pursuit of excellence. As a result, it started the Ware Malcomb Foundation which offers scholarship opportunities to the children and dependents of Ware Malcomb employees. The employee must have been a full-time Ware Malcomb employee for a minimum of three years. Scholarships are given to those who emulate the company’s values.

uly 9, 2018, ISSUE 1255

ON THE MOVE BRAUN INTERTEC EXPANDS TECHNICAL EXPERTISE IN DALLAS AND TYLER, TEXAS Braun Intertec has announced three employee-owners have transferred to the firm’s new office locations in Dallas and Tyler, Texas, broadening Braun Intertec’s technical expertise in key sectors. The latest employee moves will bolster Braun Intertec’s current service offering in geotechnical engineering and construction materials testing. ❚ ❚ Cody Wardien, a project engineer with nearly seven years of experience, will now be located in Braun Intertec’s Tyler, Texas, office. Wardien has experience in geotechnical evaluations, construction materials testing project management, geotechnical and construction materials testing proposal development, and field instrumentation. Wardien has managed projects for a broad range of clients including, oil and gas facilities, residential home construction, agricultural facility construction, substation renovations, railroad improvement projects, and commercial construction.

❚ ❚ Eric Dagenhardt, a project engineer, is working at Braun Intertec’s GME Consulting Services office in Dallas, Texas, a subsidiary of Braun Intertec. With nearly seven years of experience, Dagenhardt brings expertise in geotechnical investigations and project management of large-scale commercial construction special inspections and testing projects. These projects included US Bank Stadium, the Minnesota Vikings Practice Facility, numerous University of Minnesota projects, and multiple high-rise residential buildings. ❚ ❚ Reece Taylor, a project engineer, will also be joining Braun Intertec’s GME Consulting Services in Dallas, as the field services coordinator, with eight years of experience. Taylor is responsible for special inspections and construction materials testing of commercial-related projects. As a special inspector, he has developed experience in concrete construction, masonry construction and soils. “To help meet increasing requests from our clients, we’re thrilled to bring more of our

highly-skilled, geotechnical and construction materials testing staff to the region,” says Jon Carlson, CEO of Braun Intertec. “The latest employee-owner additions to our Dallas and Tyler, Texas, offices will enhance the services we offer clients and pave the way for future expansion in Texas.” Thanks to Braun Intertec’s growing team of talented engineers, technicians, and scientists, Braun Intertec continues to expand its business and service expertise across the state of Texas for its clients. Based in Minneapolis, Minnesota, employee- owned Braun Intertec is a premier engineering, environmental consulting, and testing firm with nearly 1,000 employees located throughout the United States. Braun Intertec has offices in Iowa, Kansas, Louisiana, Minnesota, North Dakota, Texas, and Wisconsin. Braun Intertec subsidiaries include Agile Frameworks, LLC, based in Minneapolis, Minnesota, in addition to GME Consulting Services, Inc., based in Dallas, Texas.

The second lesson I’ve learned is the importance of relation- ships. The connections our leaders and I have made with clients, colleagues, and industry peers have been very im- portant to our success. Our business is based upon relation- ships, just like every aspect of the commercial real estate in- dustry. We are experts in design for commercial real estate and really understand our clients’ business. We look to help them be successful at attaining their goals, which may in- clude introducing them to other contacts to foster new rela- tionships and business synergies. 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? LA: Our philosophy has always been to grow and pro- mote from within. We have created opportunities for em- ployees to move into new markets and new disciplines within the firm. I am a great example of this; I had the opportunity to open and lead the Los Angeles office in 1985. Our commitment to our team members is shown through the average tenure at Ware Malcomb. I’m proud to share that the average tenure of a principal is 15 years, which demonstrates the longevity of the leadership team and em- phasis on growth from within. “Our business is based upon relationships, just like every aspect of the commercial real estate industry. We are experts in design for commercial real estate and really understand our clients’ business.”

CONFERENCE CALL, from page 7

LA: Entrepreneurship is a guiding philosophy at Ware Mal- comb. We encourage our team members to grow from with- in and provide opportunities for them to do so. We have created opportunities and positions in new offices and new business groups, to allow leaders to grow their ca- reers and demonstrate entrepreneurship. We empower our staff to lead their own career growth direction. By providing these opportunities the entrepreneurial spirit fosters busi- ness growth. “To effectively lead, you need to maintain a 360-degree view. This also applies to your career aspirations. Know and develop your strengths, and work towards improving in areas where you have less aptitude.” TZL: They say failure is a great teacher. What’s the big- gest lesson you’ve had to learn the hard way? LA: Two of the best lessons I have learned are the impor- tance of defining a clear vision of where you want to go, and building strong relationships in business. This holds true whether you’re defining your company’s vision, or charting your own personal career path. I was fortunate to become the CEO of Ware Malcomb in 1992. As a young leader, I was inspired to learn everything I possibly could about the busi- ness and have been continuously learning ever since. To ef- fectively lead, you need to maintain a 360-degree view. This also applies to your career aspirations. Know and develop your strengths, and work toward improving in areas where you have less aptitude. Use this all-encompassing view to define the vision that you work toward.

THE ZWEIG LETTER July 9, 2018, ISSUE 1255

O P I N I O N

Don’t suck

It might be a blunt mantra but it has a broad application across all facets of life and work, including the AEC industry.

W e all have leaders and figures in our lives who leave an enduring inspiration; those who we establish as the “high water mark” in our professional careers and whose standard we constantly strive to exceed. While I served in the Army and abroad in Iraq and Afghanistan, I had the privilege of such leadership in a number of individuals. But there was always one commander who made the greatest impression, and he had a great mantra: Don’t suck.

Shaun Theriot- Smith GUEST SPEAKER

and waning of business will give a lot of people the opportunity to experience the momentary highs of winning. But it’s in the discipline and “It was a simple phrase that often elicited a few laughs, but over the course of our deployment it became a touchstone for mission preparation and execution, and in part shaped how we took care of our soldiers.”

It was a simple phrase that often elicited a few laughs, but over the course of our deployment it became a touchstone for mission preparation and execution, and in part shaped how we took care of our soldiers. To this day, I always carry this commander’s challenge coin with me, which conveniently doubles as a bottle opener. Engraved on its face is this reminder of excellence: Don’t suck. A team member intuitively knows when their organization possesses a culture of excellence, almost like it’s written into the DNA of the company. This differs from the buzz of being on the “winning team.” The natural waxing

See SHAUN THERIOT-SMITH, page 10

THE ZWEIG LETTER July 9, 2018, ISSUE 1255

BUSINESS NEWS ACEC OF IOWA HONORS HR GREEN WITH 3 ENGINEERING AWARDS HR Green, Inc. received three engineering awards from the American Council of Engineering Companies of Iowa. The awards competition recognizes projects of engineering achievement by Iowa consulting engineering firms. Entries are judged on the basis of engineering excellence, the degree to which the client’s needs are met, and the benefits to the public. HR Green, Inc. received Engineering Achievement Awards in the Special Projects Category for the I-35/I-80/IA 141 Interchange IJR & NEPA project in Urbandale and the 5th Street Reconstruction project in Coralville. An Honor Award was received for the Raw Water Improvements project in the city of Spirit Lake in the Water and Wastewater category. Urbandale: I-35/I-80/IA 141 Interchange IJR & NEPA The joined I-35 and I-80 routes at the IA 141 interchange in Urbandale is a critical national Interstate System segment that has been a traffic operations and safety concern dating back to interchange studies in the early 1990s. Traffic backups and high crash rates

often occur. The project involved evaluation of complex Interstate related geometry and traffic operations analysis HRGreen led amulti-discipline team to conduct an Operations Study, Interchange Justification Report, and National Environmental Policy Act documentation. The successful completion of the IJR and NEPA documents and approval processes has the overall project on target for completion in 2020. Coralville: 5th Street Reconstruction The 5th Street Reconstruction Project included partial reconstruction of 5th Street from 2nd to 3rd Avenue and complete reconstruction from 3rd to 4th Avenue. HR Green, Inc.’s team of landscape architects and engineers worked together to produce a design that would improve the transportation, pedestrian, and stormwater issues facing the area. Many sustainable means and methods were incorporated into the design of this project and multi-modal accommodations were made. Spirit Lake: Raw Water Improvements The city of Spirit Lake needed improvements to its raw water system to increase capacity

and to protect the intakes from being clogged by either zebra mussels or sediment. HR Green, Inc. completed a Preliminary Design Report that evaluated the existing raw water system and made recommendations for improvements. During the preliminary design process, HR Green, Inc. recommended a phased approach regarding how the city could upsize the raw water transmission main. This approach removed hydraulic bottlenecks and provided more time for the city to begin the next phase of installing a long transmission main. HR Green is honored to be one of the nation’s longest operating engineering firms. Founded in 1913, HR Green, Inc. has offices in Iowa and throughout the United States. HR Green provides engineering, technical, and management services to clients in the following markets: Transportation, water, governmental services, land development, environmental, and construction. The HR Green family of companies includes HR Green, Inc., HR Green Pacific, HR Green California, and HR Green Development.

SHAUN THERIOT-SMITH, from page 9

research, be so thorough that your client or manager will wonder if you’re the one investing in the deal. Simply put, go whole hog – plus postage – in everything. How do leaders cultivate an organization aligned with disciplined action? It often boils down to who you hire and retain. Unlike the military, companies do not have the luxury of a talent pool that has undergone months of rigorous training before reporting for duty (unless, of course, you recruit veterans). With an intentional and systematic recruitment plan, organizations can create teams with similar values, where synergies create virtuous cycles and each person’s effort feeds the momentum. In this market, it’s difficult to be selective if you’ve got a growing backlog and need to increase your headcount to meet the demand. However, your employees will notice when hires are made for workload’s sake, especially when they don’t check all of the cultural boxes. Spend the same effort recruiting the right people that you do to develop the next big client. Discipline is part and parcel of excellence within an organization. For a company to thrive, it must be pervasive at all levels. The model of this performance begins at the top. When the disciplined employee on the line can look up at their leadership and see ambitious and humble professionals executing a deliberate plan, they can begin to have faith in their company and their roles within it. Leaders, take my commander’s advice: Don’t suck! SHAUN THERIOT-SMITH is a project engineer with BIG RED DOG Engineering working on land development and infrastructure projects in the Greater Houston area. A U.S. Army veteran of both Iraq and Afghanistan, Shaun first became passionate to build communities at home by helping build those abroad. He is a proud alumnus and former Student Body President of the University of Houston. You can find more at his Building Bayou City blog at theriotsmith.com.

commitment of excellence that great organizations inspire the faith of its members that, no matter what, they will prevail. This was of supreme importance on the battlefield with my commander, but it’s just as relevant in our AEC offices. “It’s in the discipline and commitment of excellence that great organizations inspire the faith of its members that, no matter what, they will prevail. This was of supreme importance on the battlefield with my commander, but it’s just as relevant in our AEC offices.” Jim Collins wrote of organizations: “Good is the enemy of great.” When we entertain the comfort of mediocrity in our work and our business, we’ve accepted that excellence is not fundamental to our mission. For many, this satisfies what they expect from their occupation, and the market will always provide a space for these professionals. But where mediocrity grows, so too does a lack of purpose and growth. The employees of great businesses, at every level, are never satisfied with mediocrity. So how does this translate to a member of a production team, such as myself, in an AEC firm? It means finding a way to provide value in every task that you’re given – complete each one as though your and your company’s reputation is at stake. When you respond to an internal email, do so as swiftly and thoughtfully as you would a major client. If you’re tasked with routine due diligence

THE ZWEIG LETTER July 9, 2018, ISSUE 1255

O P I N I O N

Increasing utilization

It’s not about taking one step, but about taking 10. This could also be painful, but there’s a lot of additional revenue on the back end.

T he employee utilization rate is one of a handful of key performance indicators used by AEC firms to measure the ability of the firm to keep employees working on billable projects. Firms are busier right now than I have seen in more than a decade, so I have to ask, if everyone is so busy, why do so many firms struggle to hit utilization targets?

June Jewell GUEST SPEAKER

“Hitting utilization targets involves careful attention to time management, employee assignments, scheduling best practices, and communication.”

Your employees are your firm’s primary asset and optimizing their performance and use of their time will make the difference between low or high project profit margins. For a 100-person AEC firm, just a 1 percent increase in utilization is about $225,000 in additional revenue per year. So why do so many firms fail to hit utilization targets and keep their billable staff fully utilized? There are really only a handful of reasons that utilization is not optimized: ❚ ❚ Poor and/or inaccurate time management ❚ ❚ Lack of direction/focus on non-billable time

❚ ❚ Lack of scheduling processes ❚ ❚ Inability to forecast ❚ ❚ Poor communication with staff

See JUNE JEWELL, page 12

THE ZWEIG LETTER July 9, 2018, ISSUE 1255

JUNE JEWELL, from page 11

and they take too long to perform the work. Ensuring that employees have clear directions about what is planned for them each week and how long each task should take will help guide them. 7)Budget for non-billable time. When your staff are not bill- able, what are they doing? If you have to pay them anyway, you might as well get as much value from their non-billable time as you can. Make sure you budget for all time, not just project work, and be very clear what your expectations are for prioritizing their time when they don’t have enough work. Also, give them clear direction who to go to when they don’t have enough work each day. “While some of these areas require a lot of time and effort, the pay-off can be enormous. Ultimately these measures will reduce the effort and manual processes required to assign and manage resources every week.” 8)Reporting/monitoring. If your managers and employees are not seeing utilization metrics often enough, they won’t be paying enough attention to ensuring that it is maximized. Once a month may not be enough to keep them focused and give them enough opportunity to make adjustments when needed. If targets are not being met, all of the areas above may need more consistent scrutiny and visibility. 9)PM accountability. It is ultimately up to the PM to manage utilization and ensure that their team is as busy as possible. Setting utilization targets for their teams, and reporting, measuring and monitoring utilization on a regular basis, will keep them focused. If a PM’s utilization is consistently low, it is likely due to one of the issues outlined above and should be evaluated to determine what help they might need to be suc- cessful. Providing PMs with training and mentoring on pro- cesses, systems, and communication can often help improve utilization significantly. 10) Teach and engage employees. Most employees do not understand the relationship between their timesheet and their paycheck. In fact, they often believe it is a compliance tool rather than a critical business management tool vital to the firm’s growth and survival. By training your staff, and particularly your PMs, about the relationship between utiliza- tion, overhead, and profitability, they will start to recognize the importance of accurate time management, and ensuring they have billable, and more importantly, chargeable work. You will also find you will get less resistance from them and it will be easier to get them to comply with timesheet policies. Managing utilization may often feel like a constant juggling act, but you can make it a lot easier by focusing on the 10 key areas above and engaging your staff to help ensure that their time and performance are optimized. While some of these areas require a lot of time and effort, the pay-off can be enormous. Ultimately these measures will reduce the effort and manual processes required to assign and manage resources every week. JUNE JEWELL is the author of the book Find the Lost Dollars: 6 Steps to Increase Profits in Architecture, Engineering, and Environmental Firms . She is the president of AEC Business Solutions, helping progressive A/E firm leaders increase project profits and employee performance. Connect with her on LinkedIn and learn more about how to improve your project financial performance at aecbusiness.com.

❚ ❚ Insufficient scrutiny/approval of time ❚ ❚ Not enough work

Hitting utilization targets involves careful attention to time management, employee assignments, scheduling best practices, and communication. Here are 10 actionable steps you can take immediately to improve utilization rates and lower overhead costs: 1)Timesheet accuracy. Dozens of studies over the years have shown that the more accurate your timesheets are, the higher your revenue will be. The key to accurate timesheets is requiring daily entry of timesheets by all staff. Can you remember what you did last Friday in 15-minute increments? I didn’t think so. Neither can your employees. If your staff isn’t entering time into your system daily, I promise you their timesheets are not accurate. 2)Bottom-up project budgeting. Project planning requires the development of a scope of services detailing the phases, tasks, and hours required to execute the project. By planning a project from the bottom-up, the project manager will have a framework to help them allocate people to projects and deter- mine when those resources will be needed. A good scheduling process requires a solid foundation built on the lowest level of detail to be successful. 3)Scheduling processes. Once you have a good foundation of project plans you can establish a regular, consistent process for assigning employees to jobs and analyzing potential con- flicts or shortfalls. If your firm has multiple teams or offices, it should be organized in such a way as to facilitate the shar- ing of resources across the firm. This should be done weekly and be as automated as possible. 4)Automation. In order to optimize the scheduling process, the budgeting, planning, and assignment of staff to projects should be automated using a resource planning tool. This will provide great visibility across teams and the entire company and enable better sharing of resources. It will also help firm leaders to make better hiring decisions and be able to forecast potential shortfalls in staff or in work needed to keep staff busy. For optimal visibility, ensure you are able to view staff availability into the future, taking into account weekly sched- ules and backlogs, along with potential expected opportuni- ties. “Firms are busier right now than I have seen in more than a decade, so I have to ask, if everyone is so busy, why do so many firms struggle to hit utilization targets?” 5)Individual targets. Each staff member should have an indi- vidual target utilization rate and have visibility into their own status each week to self-manage their utilization. One caveat with preaching too hard to staff about utilization is to balance expectations about utilization with project profitability. If you just ask staff to be utilized – they will be – at the expense of your fixed-fee projects. 6)Communication about job assignments. One reason that utilization is low is that time often has to be written off and moved to overhead. This is often due to failure to communi- cate to employees how many hours are budgeted for a task

THE ZWEIG LETTER July 9, 2018, ISSUE 1255

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