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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 2 7 , 2 0 1 8 , I s s u e 1 2 6 2

A few responsible people wanted

I n recently revising our own policy manual here at Zweig Group, it became apparent to us that we cannot have a policy that addresses every single thing that someone in our employ could do (or not do). I don’t think we’re much different from the organizations where readers of The Zweig Letter work. What we REALLY need are responsible, conscientious employees versus hard and fast rules on how to deal with people who aren’t that. Here’s some of what I am talking about: 1)Timesheets. People have to turn them in so we can pay them and bill our clients. We can threaten it but can’t really dock the pay of salaried employees who don’t turn their timesheets in. We just need conscientious and responsible people who understand why do- ing so is crucial to the business, not those who require us to be heavy-handed and draconian. 2)Comp time. I don’t like formal comp time policies – never have. The big problem with them is their underlying assumption that a 40-hour workweek is “standard,” when we know that most salaried people in this busi- ness need to work 44 to 46 hours a week, and management 50-plus, to make a decent profit. So why in the world would you want to “cap” the productive week at 40 hours and give those who work more than that the equivalent time off the next week? It doesn’t make any sense. We need conscientious people who un- derstand that if they worked excessive hours they can take off to see their kid’s soccer game and that’s fine. Conversely, those who never

“What we really need are responsible, conscientious employees versus hard and fast rules on how to deal

Mark Zweig

with people who aren’t that.”

F I R M I N D E X Backen, Gillam & Kroeger. ......................8 DPS Group. ..........................................12 EAPC....................................................12 F4PE.....................................................12 Graham Greene. ...................................10 Handel Architects....................................4 Joseph B. Callaghan, Inc.. ....................10 KAI Design & Build..................................2 Stantec.................................................10 WSB.......................................................6

MORE COLUMNS xz FROM THE CHAIRMAN: Answer all the questions Page 3 xz GUEST SPEAKER: The

income statement Page 9 xz GUEST SPEAKER: Eliminating waste Page 11

See MARK ZWEIG, page 2

Page 6 Conference call: Bret Weiss, part 2

T H E V O I C E O F R E A S O N F O R A / E / P & E N V I R O N M E N TA L C O N S U L T I N G F I R M S

ON THE MOVE KAI PROMOTES TODD R. JACOBS, AIA, TO DIRECTOR OF DESIGN KAI Design & Build has announced the promotion of Todd Jacobs, AIA, FHFI, LEED AP, to director of design. Jacobs, who was hired in November 2016 as vice president and senior project manager, will replace Marcus Moomey, AIA, DBIA, who is moving from the director of design position to a new position as director of design- build. As director of design, Jacobs will provide overall leadership for KAI’s architecture and interior design practice and foster a climate focused on collaboration within KAI’s multi-disciplined teams, delivering design and build solutions on complex projects. Jacobs will also represent KAI in the community by participating in professional organizations, speaking engagements and civic events. Jacobs has more than 30 years of management, collaboration, master planning, and design experience. His extensive portfolio includes projects within the healthcare, education, religious, and corporate industries. Jacobs will oversee 36 employees at KAI offices in St. Louis, Dallas, Atlanta, San Antonio, and Omaha. “Todd is a demonstrated leader as an active member of the American Institute of Architects and past president of the St. Louis Chapter. We are delighted to elevate Todd to this leadership role where he will drive the quality of our design work to satisfy our customers’ needs,” said Michael Hein, AIA, PMP, chief integration officer at KAI. Major projects Jacobs has worked on while at KAI include: ❚ ❚ St. Louis Community College Center for Nursing and Health Sciences

❚ ❚ Martin Luther King, Jr. Recreation & Aquatic Center in Atlanta ❚ ❚ Deaconess Center for Child Well-Being in St. Louis ❚ ❚ SSM North County Pediatric Clinic in St. Louis Jacobs, a registered architect in Missouri and Illinois, has a bachelor’s degrees in architecture and in business administration from Kansas State University. He is a member of the KSU Professional Advisory Board, St. Louis Construction Forum Advisory Board, and several AIA committees. KAI Design & Build is a national more than 100 person design and build firm headquartered in St. Louis, Missouri. KAI provides design and build integrated project delivery solutions through client collaboration, the latest technology, proprietary processes and individual expertise. Since its inception in 1980, KAI has been instrumental in reshaping the urban environment through its expertise in housing, K-12 schools, transit facilities, collegiate structures, commercial buildings, sports and recreational facilities, government/justice centers, and healthcare facilities. Beginning as an architectural design firm, KAI added mechanical/electrical/plumbing engineering to give clients a full package of in-house disciplines for their projects. Today, KAI continues with its original core service of design and has quickly grown its general construction and construction management groups since 1997. Additionally, KAI is a leader in building information modeling, applying the skill set to architectural, engineering and construction projects firm-wide. KAI’s affiliate locations include Atlanta, Omaha, Dallas, and San Antonio.

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

do that (work over 40), should probably use their PTO to cover those hours. We need responsible employees with good judgement here. 3)Work from home. We want to be flexible. We want to allow this in select cases, but not as a steady diet. But there will always be those who emerge as abusers of the policy or practice. When interns are calling in to “work from home,” or certain people seem to do it half the time for no good reason, they need to understand they are potentially causing problems for management. First off, other employees who aren’t “working from home” typically resent those who do. They may feel there’s a double standard there that some people get away with it and others don’t. The other problem is it puts the manager in a tight spot. He or she may not want to say “no” to the employee because that isn’t pleas- ant, but the employee is putting them in a tough spot of either saying “no” and making them unhappy, or saying “yes” (or saying nothing which is tacit approval of their behav- ior), and then suffering through the complaints of others who feel they aren’t getting the same treatment. Either way it’s an issue. We need responsible employees who don’t create this problem through abusing the system. I could go on. Hard and fast rules are hard to enforce and sustain. It isn’t in our nature and doesn’t create the kind of climate we all want to work in. 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 27, 2018, ISSUE 1262

O P I N I O N

Answer all the questions

P hillip Van Hooser spoke in Reno a few months ago. He is the author of the best- selling book Leaders Ought to Know: 11 Ground Rules for Common Sense Leadership . I’m impressed with Van Hooser’s common sense approach to leadership and his tidy list of 12 ways to maximize professional impact: The things we need to do to be great leaders are right in front of us, but we must also be deliberately consistent.

Ed Friedrichs

Van Hooser could have taken this list from my own leadership playbook. His tenets closely match how I tried to conduct myself in my career. “There are a number of life lessons – for parents, employees, managers, and business leaders – buried in the Disney anecdote and Van Hooser’s 12 suggestions for common sense leadership.” My father, who owned a bakery in Hayward, California, lived by these principles, providing

1) Always offer your assistance. 2) Take a minute longer than is necessary. 3) Do more than is expected. 4) Don’t whine, don’t whisper, don’t wonder. 5) Guard your reputation. 6) Never compromise your reputation. 7) Commit to constant improvement. 8) Work to solve problems, rather than place blame. 9) Be loyal. 10) Strive for excellence, not perfection. 11) Don’t give up, give out. 12) Be thankful.

See ED FRIEDRICHS, page 4

THE ZWEIG LETTER August 27, 2018, ISSUE 1262

BUSINESS NEWS TRUMARK’S THE PACIFIC NAMED “MULTI-FAMILY COMMUNITY OF THE YEAR” AT 2018 PCBC GOLD NUGGET AWARDS: TRUMARK RECEIVES TOP HONORS FOR ADAPTIVE REUSE CONDOMINIUM BUILDING IN SAN FRANCISCO’S PACIFIC HEIGHTS Trumark Companies announced that The Pacific, an adaptive reuse residential building in San Francisco’s prestigious Pacific Heights neighborhood, was named “Multi-Family Community of the Year” at the 55th Annual Gold Nugget Awards presented by PCBC, the largest annual homebuilding trade show in the Western United States. Known as the “Academy Awards” within the homebuilding industry, the Gold Nugget Awards are the premier event of the two-day annual PCBC conference. Honoring the very best in the homebuilding industry, the Gold Nugget Awards celebrate those who have raised the bar for innovative architecture, planning, and construction concepts. The awards gala, held in June at the San Francisco Moscone Center, drew a crowd of more than 10,000 of the most respected industry professionals and innovators in real estate. “PCBC truly represents the best of the best in the industry and we are honored to be recognized among our peers and bestowed

this distinction by such an esteemed panel of judges,” said Gregg Nelson, co-founder and principal of Trumark Companies. “We are incredibly thankful to our dedicated team at Trumark who makes all of this possible.” The Pacific is a LEED Gold development featuring 76 residences in San Francisco’s prestigious Pacific Heights neighborhood. An adaptive reuse development and former site of the University of the Pacific Dugoni School of Dentistry, The Pacific was the only significant newly constructed, residential development in central Pacific Heights in decades. With stunning architecture envisioned and executed by internationally acclaimed Glenn Rescalvo at Handel Architects and interior design of all common spaces and residences by Handel Interior Design, the property features an array of one-, two-, and three-bedroom flats and three-level townhomes in the building, along with a rare collection of seven penthouses. “It’s rare that an area like Pacific Heights encounters a sizable new development project, so the conversion was a historic one,” added Nelson. “From a building and design perspective, transforming the existing structure into a new use and elegant property

well-suited for the neighborhood was an exciting challenge and a new type of project for the entire design team and the supporting community,” added Nelson. The oldest and largest program of its kind, PCBC has been endorsed as the official show of Leading Builders of America. The winners of the PCBC Gold Nugget Awards are featured in online and print publications, including Builder and Developer , Builder , and Professional Builder . In addition to the Gold Nugget Awards, The Pacific has previously received recognition for San Francisco Business Times ’ 2017 Real Estate Deals of the Year. Handel Architects LLP is an architecture firm that was founded in New York City in 1994. The firm has offices in New York City, San Francisco, Hong Kong, and Abu Dhabi. The firm is composed of five partners: Gary Handel, Blake Middleton, Glenn Rescalvo, Frank Fusaro, and Michael Arad. Well-known projects include Cornell University’s New York City Tech Campus Residential Tower, the Ritz-Carlton in Washington, D.C., and the World Trade Center Memorial in Lower Manhattan.

ED FRIEDRICHS, from page 3

conversations and get great ideas from him, worth well in excess of the small tips they paid him. Walt asked Mike to visit with the boy’s family and give the child a permanent pass onto the studio lot. Mike figured out where the boy lived, knocked on the door and introduced himself to the mother and father. They were appalled that their son had been sneaking onto the lot, but Mike reassured them. He handed the parents a permanent studio pass issued by Disney himself, allowing their son to come by anytime. But Mike was curious about this young boy and asked the parents what they had done to make him so thoughtful and bright. They said he was just an ordinary kid, got decent grades, played little league – just a normal boy. Mike was frustrated and, as he was leaving, asked the question one more time. The father thought about it for a minute and finally said, “I just answered all his questions.” Brilliant! After I heard Mike’s story, I started doing that with my kids and, sure enough, they grew into inquisitive and intelligent adults. I notice today that my kids model that same behavior with my granddaughters There are a number of life lessons – for parents, employees, managers, and business leaders – buried in the Disney anecdote and Van Hooser’s 12 suggestions for common sense leadership. We just need to take note and work to put the suggestions into practice. The most important realization for me, however, was that we must be deliberately consistent. EDWARD FRIEDRICHS, FAIA, FIIDA, is the former CEO and president of Gensler. Contact him at ed@friedrichsgroup.com.

me with the perfect role model from the time I started working in the bakery at age 5, folding donut boxes. This also reminds me of a story told to me by Mike Vance, when my children were young and constantly pestering their mother and me with questions. Mike had been a congregational minister for 10 years before he joined Walt Disney as a creative director – now there’s a career path for you. Walt was a penny pincher, checking every dime spent in the Disney organization. At one point, Walt noticed a number of requests for small reimbursements from the Story Department, which worked on cartoons. Walt sent Mike out to investigate. “We just need to take note and work to put the suggestions into practice. The most important realization for me, however, was that we must be deliberately consistent.” Mike found these reimbursement requests were little “tips” given to a young boy who would sneak onto the studio lot (he lived in the neighborhood across the street) and wander into the animators’ building. The stories created there involved developing a storyline, then making many little sketches of what the visuals would be and pasting them onto a storyboard. The storyboards were hung in a broad corridor to solicit comments from people passing by. The animators befriended the young boy, who would ask about what he saw. They would engage in long

THE ZWEIG LETTER August 27, 2018, ISSUE 1262

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/

THE ZWEIG LETTER August 27, 2018, ISSUE 1262

P R O F I L E

A small group of WSB staff showcasing company- wide fundraising stats for the firm’s annual food drive that takes place each November-December.

Conference call: Bret Weiss, part 2 Co-founder, president, and CEO of WSB (Hot Firm #34 for 2018), a 475-person full- service consulting and design firm based in Minneapolis.

By LIISA ANDREASSEN Correspondent

“T he best PMs create their own brand, support- ers, and clients,” Weiss says. “They quick- ly become ‘go-to’ people inside and outside of the firm …These high-level performers are not ones to complain until it is too late. Regular communica- tion and sometimes action steps are necessary to lighten workload and protect these important com- pany assets.” A CONVERSATION WITH BRET WEISS. The Zweig Letter: There are A/E leaders who say profit centers create corrosive internal competi- tion for firm resources. What’s your opinion on profit centers? Bret Weiss: While we don’t believe that inter- nal profit centers are helpful to providing quality work and positive relationships within the firm, we do use metrics to guide the success of each of our groups. We have found that internal profit centers cause managers to hold on to work to reach their goals, but in reality, the work would have been

better suited for another specialist who has more expertise in the area. This can create risk for our firm and our clients. We subscribe to the philoso- phy that we are “One Company.” While this isn’t the only measure of our success, we believe that it drives cross-selling of services and increases our quality. “As a society, we are inundated with information so we try to be strategic in our information sharing. We believe that information overload TZL: What’s your policy on sharing the firm’s financials with your staff? Weekly, monthly, quarterly, annually? And how far down into the is real and it’s important that we manage that consistently and effectively.”

Bret Weiss, Co-founder, President & CEO, WSB

THE ZWEIG LETTER Aug

org chart is financial information shared? BW: We share financial informa- tion with the entire firm every other month at our all staff meeting. I don’t believe that the depth of the informa- tion provided should be the same for everyone at our firm. We try to ensure that we share the appropriate infor- mation with each individual. Trans- parency is important and as our staff grows in responsibility and in their understanding of the business, we share more detail so that they under- stand why decisions are being made. Some staff members are less interest- ed in specific financials and prefer to only know whether we are doing well or poorly. As a society, we are inun- dated with information so we try to be strategic in our information sharing. We believe that information overload is real and it’s important that we man- age that consistently and effectively. “Lifestyle is becoming more important to some, which means that our industry needs to continue to evolve. This is challenging, but necessary for all of us to retain the best in the industry.” TZL: The talent war in the A/E indus- try is here. What steps do you take to create the leadership pipeline need- ed to retain your top people and not lose them to other firms? BW: We have heavily invested in WSB University, WSB’s innovative learning center, and continue to look for ways to improve how we provide educa- tional opportunities to current staff, as well as external talent working in the A/E industry. WSBU is an ambi- tious initiative for us that will contin- ually evolve as staff continues to grow and adapt to new methods and tech- nology. Additionally, we’re focused on benefits, equipment, technology, fa- cilities, and our culture to elevate our- selves amongst competitors. There is no one step that will solve this issue for us, but we are convinced that by striv- ing to be the best that we can be, we will retain at a high rate. Our biggest challenge is losing staff to our clients. Lifestyle is becoming more important

to some, which means that our indus- try needs to continue to evolve. This is challenging, but necessary for all of us to retain the best in the industry. TZL: As you look for talent, what po- sition do you most need to fill in the coming year and why? BW: Mid-career staff is always the most difficult to find throughout our service areas. We have been success- ful recruiting new graduates and don’t see an issue competing for young pro- fessionals. Finding experienced staff is always difficult and seems to be where we lose staff who leave based on life- style needs or a shift in their career paths. 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? BW: Wake up! Stop being greedy and start sharing ownership with those who are helping you be successful! This is not an industry where you can transfer ownership without using your profits. Our salaries don’t sup- port a big investment and your staff have other responsibilities and com- mitments. You can retain your best staff by helping them become owners, if you have a transition plan that will motivate your team to grow and in- crease your value. This is a win-win sit- uation and if you haven’t started, you are doing a disservice to yourself and your team. 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? BW: We prefer the seller/doer model since it seems to create continued suc- cess, but we also recognize that busi- ness development staff are necessary to set the table. We have a combina- tion of staff in each area and are fo- cused on developing more as we grow. TZL: Diversifying the portfolio is never a bad thing. What are the most recent steps you’ve taken to broaden your revenue streams? BW: We have been committed to this See CONFERENCE CALL, page 8

YEAR FOUNDED: 1995 (Bret Weiss has served as WSB’s president/CEO since 2000. Under his leadership, WSB has grown and transformed from a provider of engineering services to a full-service consulting and design firm.) HEADQUARTERS: Minneapolis, MN OFFICES: 12 offices in 4 states. NO. OF EMPLOYEES: 475 (full-time, part-time, and seasonal) SERVICE OFFERINGS: ❚ ❚ Civil and municipal engineering ❚ ❚ Community planning ❚ ❚ Transportation ❚ ❚ Construction ❚ ❚ Energy ❚ ❚ Environmental ❚ ❚ GIS and asset management ❚ ❚ Landscape architecture ❚ ❚ Transportation ❚ ❚ Water WHAT’S THE WSB WAY? It’s a commitment made by all staff to each other and their clients. In their daily work, WSB staff members embody this set of staff- developed principles called the WSB Way. These principles define their culture and value system and describe how they serve each other and their clients. This program causes staff to challenge each other to be the best they can be and focuses their attention on three primary attributes: ❚ ❚ Over-the-top customer service ❚ ❚ Integrity ❚ ❚ Technical excellence

gust 27, 2018, ISSUE 1262

BUSINESS NEWS RH UNVEILS RH NASHVILLE, THE GALLERY AT GREEN HILLS RH announced the opening of RH Nashville, The Gallery at Green Hills. RH Nashville represents the brand’s quest to revolutionize physical retailing, and its continued foray into hospitality. Commanding four levels and more than 70,000 total interior and exterior square feet, this retail concept features artistic installations of home furnishings in a gallery setting, including expansive spaces dedicated to RH Interiors, RH Modern, RH Outdoor, RH Baby & Child, and RH TEEN. The gallery also includes an interactive Design Atelier, offering clients professional interior design services. RH Chairman and CEO Gary Friedman commented, “RH Nashville reflects our ongoing quest to revolutionize physical retailing by seamlessly integrating food, wine, art, and design. We don’t build retail stores. We build inspiring spaces that blur the lines between residential and retail, indoors and outdoors, home and hospitality – spaces that activate all of the senses, and cannot be replicated online.” “We are proud to bring this first-of-its-kind concept to Nashville – one of the most creative cities in the world,” Friedman concluded. RH Nashville marks Friedman’s ongoing collaboration with design architect James Gillam of Backen, Gillam & Kroeger , a firm recognized as one of Architectural Digest ’s Top 100 architect and design firms in the world. Conceptualized as a contemporary, yet classically-inspired structure that is a reflection of human design, RH Nashville features a charcoal grey Venetian plaster exterior with an expanse of glass-and-steel French doors that open onto a streetscape of white crepe myrtle trees and oversized Japanese boxwood

globes set within weathered steel planters. Looking overhead, guests will admire Juliet balconies, a terrace lush with white wisteria and the Conservatory & Rooftop Park. Once inside the gallery, visitors will first discover the Wine Vault, a striking lounge space with elegant banquette seating and iridescent gold, groin-vaulted ceilings where they can savor a glass of rosé or cabernet. In the adjoining RH Café, a seasonal, ingredient- driven menu can be enjoyed sitting beneath a soaring glass atrium defined by its heritage olive trees, massive crystal and iron chandelier, and 12-foot central fountain. A second Wine Vault, as well as the Barista Bar – with its craft espresso and house- made pastries – adjoin the far side of the café. Dramatic arched passageways lead to a classical arrangement of rooms with artistic installations featuring RH Interiors collections from internationally renowned designers. Continuing their journey to the upper floors, visitors will ascend one of two glass-enclosed staircases, each with a spectacular installation of crystal Helix chandeliers hanging 65 feet overhead. Cascading compositions of gilded antique mirrors create an endless reflection and further illuminate the way. Level two features the RH Design Atelier – a 6,500-square-foot studio anchored by four, 10-foot custom tables offering a fully integrated workspace for clients, designers, and architects to reimagine one room or an entire home, inside and out. Guests can work with the RH Interior Design team to create functional and elegant spaces. A place for collaboration and ideation, the Design Atelier features access to RH’s vast library of fabrics, leathers, and furniture and lighting finishes. Additional RH Design Atelier resources include

a Ben Soleimani rug showroom displaying the fourth-generation designer’s hand-knotted and handwoven rugs, and other specialized galleries for window treatments, bed and bath linens, and bath hardware. On the third level, visitors will find a 9,500-square-foot exhibition space presenting RH Modern. Developed in collaboration with a select group of acclaimed global designers, RH Modern’s design vernacular represents a fresh and innovative point of view, defined by a minimalist aesthetic, the finest materials and maximum comfort. Contemporary art from the GENERAL PUBLIC x RH collection will also be showcased. A first-of-its-kind art curation and publishing company founded by award-winning actress and artist Portia de Rossi, GENERAL PUBLIC’s revolutionary Synograph technology produces 3D prints capturing texture and brushwork in such detail that they are nearly indistinguishable from the original. Level three also features dedicated RH Baby & Child and RH TEEN galleries, offering tasteful furnishings for children and young adults that are distinctive in their own right, but blend seamlessly with the rest of the home. At the top of the grand stairs, guests will arrive to the Conservatory & Rooftop Park. The garden space will first be experienced within a structure of glass and steel with towering banana palms, Mediterranean olive trees, exotic succulents and 18-foot ceilings at its apex. The indoor space opens onto a spectacular rooftop with sculptural evergreen hedging, geometric topiaries and white crepe myrtle trees set within colossal steel planters accented with blue star juniper. This one-of- a-kind destination features open-air pavilions, glimmering chandeliers and trickling fountains.

workload and protect these important company assets. It’s vital to maintain some work/life integration to mitigate burnout that could lead to a potential resignation for a less stressful opportunity. Often, it is the person that causes the stress and it is hard for them to see it. We have had some high performers that we did not manage well and unfortu- nately you can lose them. We have learned our lesson and identify those that are predisposed to that behavior and manage them closely. transition plan that will motivate your team to grow and increase your value. This is a win-win situation and if you haven’t started, you are doing a disservice to yourself and your team.” “You can retain your best staff by helping them become owners, if you have a

CONFERENCE CALL, from page 7

philosophy since our firm’s beginning. We don’t set any spe- cific goals, but rather remain nimble and watch for opportu- nities. We ensure to set aside investment dollars to develop new services or markets. These don’t happen overnight. It takes courage and patience. We empower our staff to devel- op their own services and provide the funds to help them develop a business within a business. TZL: The list of responsibilities for project managers is seemingly endless. How do you keep your PMs from burning out? And if they crash, how do you get them back out on the road, so to speak? BW: The best PMs create their own brand, supporters, and clients. They quickly become go-to people inside and out- side of the firm. Using project controls to manage the lev- el of workload for all staff is the first step to managing po- tential stress and burnout. These high-level performers are not ones to complain until it is too late. Regular communi- cation and sometimes action steps are necessary to lighten

THE ZWEIG LETTER August 27, 2018, ISSUE 1262

O P I N I O N

The income statement

A t JBCI, one of our guiding principles is transparency. We embrace sharing relevant financial information through condensed income statements during management team meetings. These statements include key performance indicators that provide a snapshot of the short- and long-term health of the firm. What engineers need to know (but often don’t) about this critical financial tool and how it can help a firm succeed.

or $50,000, in February, and the final 20 percent, or $20,000, in March. For the first quarter of the year the revenue will be $100,000. The objective is to match the revenue that was generated to the ex- pense that was incurred to earn that revenue (labor and materials, or direct expense). “A better understanding of the income statement is critical when analyzing KPIs because many of the KPIs are derived from the information contained within the income statement.”

John McCardell GUEST SPEAKER

The income statement – AKA profit and loss or P&L – is one of these useful tools. A better understanding of the income statement is critical when analyzing KPIs because many of them are derived from the information contained within the income statement. So what does the income statement include? It is simple and made up of three sections: 1)Revenue. A firm’s revenue is a measure of how much raw income a company is generating from services rendered. In essence, this is the fee that is generated from the skilled and technical work that is produced. As an example, a firm receives a fixed fee contract of $100,000 in January. According to the percentage of completion method, the firm will recognize revenue on the income statement of 30 percent, or $30,000, in January, 50 percent,

See JOHN MCCARDELL, page 10

THE ZWEIG LETTER August 27, 2018, ISSUE 1262

BUSINESS NEWS ZOM LIVING BREAKS GROUND ON LUXURY APARTMENTS IN DALLAS ARTS DISTRICT ZOM Living recently broke ground on a new luxury high-rise in the flourishing Dallas Arts District. Designed by Stantec , Atelier is a mixed- use community comprised of 364 luxury residential tower units with unmatched panoramic views of both Uptown and Downtown. It will be the tallest rental tower in the Dallas area at 41 stories. Residents will enjoy more than 26,000 square feet of amenity space and 15,000 square feet of onsite retail. Atelier will also be home to Flora Lofts, 52 affordable artist lofts developed by local architect Graham Greene to provide needed housing for the local arts community. In addition, there will be 157 hourly-fee public parking spaces in the underground structure and 553 resident spaces in a 10-story parking garage. Situated in the Arts District directly between Uptown and Downtown, and only steps from Klyde Warren Park, Atelier is perfectly located at the intersection of arts, culture, employment, shopping, dining, and transit.

This architecturally stunning building will take advantage of the best urban lifestyle Dallas has to offer. “We are proud to be part of the transformation of this evolving neighborhood,” said Greg West, ZOM CEO. “The Arts District, Downtown and Uptown are merging into a vibrant, highly desirable, 24-hour urban area and Atelier sits at the heart of this very important intersection.” “Daiwa House is excited to be part of this unique opportunity which will provide luxury and affordable housing to the Arts District,” stated Takeshi Wakita, president of Daiwa House Texas Inc. Graham Greene added, “We celebrate the beginning of Atelier Luxury Residential development in the Dallas Arts District and have great confidence in its success. The wonderful, adjacent companion element in the development – Flora Lofts, mixed income housing for working artists – is continuing in anticipation of closing on financing and advancing the project over the coming months. Flora Lofts vision remains strong and

its supporters remain committed to realizing a project that helps fulfill our commitment to a vibrant inclusive arts community in Dallas. We encourage our supporters to stay strong with their desire to see the fulfillment of this Arts District affordable artists housing dream. We remain committed to its fulfillment.” One-, two-, and three-bedroom units will range from 702 to 2,266 square feet and the 11th floor amenity deck will feature a lushly landscaped deck surrounding a resort-style pool, multiple spacious open lounge areas with Wi-Fi, membership-quality fitness center, yoga/spin room, e-lounge, conference room, co-working spaces, fire pits, dog salon, private wine lockers, BBQ grills, and an entertainment kitchen with indoor and outdoor dining areas. The amenity level is intended to foster interaction among residents and provide an urban oasis, a variety of social settings and activities without having to leave the community.

JOHN MCCARDELL, from page 9

As controller at JBCI, my responsibilities include managing and analyzing the income statement along with the many KPIs to get a pulse of the company. Essentially, all activity that occurs on a daily basis can be seen on the income statement, since the income statement is the revenue and expenses during the period the financial transactions occurred. The financial data, along with current market assumptions, is used to create financial projections well into the future and enable the firm to establish goals such as new markets, new office locations, promoting key members, as well as onboarding additional resources. “Having a solid understanding of financial statements, particularly the income statement, will enable you to make decisions in the present that set the firm up for growth in the future.” Having a solid understanding of financial statements, particularly the income statement, will enable you to make decisions in the present that set the firm up for growth in the future. The income statement is a direct result of the efforts of the highly skilled work which your firm delivers on a regular basis. Having this understanding can increase company profits, enabling your firm to take on new initiatives and invest in skills development or cutting edge technology. Next time you are presented with an income statement, I hope you feel more equipped with a better understanding of the information. JOHN MCCARDELL is the controller at Joseph B. Callaghan, Inc. He can be reached at jmccardell@jbciengineers.com.

2)Expenses. These are the inputs that are required to generate the revenue. These inputs come in many forms such as labor, insurance, communications, business development, employee benefits, and the list continues. All expenses fall into two cat- egories: ❚ ❚ Direct expenses. These are intuitive and tied directly to a project or a cost incurred to generate the revenue of a specified project. An example of a direct expense is direct salaries (billable hours assigned to a project through the timesheet process). Direct expenses can also come in many forms such as mileage reimbursement, printing expenses related to drawings, outsourced skilled services, delivery/ courier services, and many others. These types of costs are assigned directly to a specific project number. ❚ ❚ Indirect expenses. Also referred to as overhead, these are the inputs required for the business to operate as a whole but cannot be traced directly to a specified project. Some typical indirect expenses are: insurance, rent/lease, busi- ness development, marketing, your favorite financial man- ager, and various indirect time for business/professional development, sales/proposal preparation, paid time off/ holiday, and administrative responsibilities. 3)Net income. The result of the fiscal period being reviewed is commonly known as “the bottom line.” This is a direct result of the revenues recognized, or fees generated, minus the ex- penses incurred to generate that fee. During our management meeting, the team reviews the income statement and begins questioning different items. Being analytically inclined, they crave more information and explanation. Engineers did not become engineers for the joy of reviewing financial statements; however, they do realize it is necessary to understand in order to manage and operate a successful AEC firm. This is where the controller or CFO can help.

THE ZWEIG LETTER August 27, 2018, ISSUE 1262

O P I N I O N

EAPC staff go through the “try-storming” process with a client.

Eliminating waste

W hy is LEAN-based space planning so important in healthcare facilities? It’s a simple answer: New buildings won’t fix broken processes. Giving your clients a say in the layout of their new healthcare space will improve that client’s processes, enhancing overall flow.

LEAN-based space planning departs from the old architectural approach by focusing first on the client’s process. By focusing on process and flow, both the client and EAPC can identify wastes and determine where the flow of the process is being limited. After these improvement opportunities are identified, the space planning process moves into the 3P application stage (Production, Process, Preparation). The 3P process was developed by Toyota to compress their automotive design cycle (e. g. concept to showroom) from three to four years to 18 months and has been applied in the healthcare industry in the last five to 10 years with great success. One of the tools of 3P, called “try-storming,” is utilized with the client to help them develop their new space layout based on their improved process. Try-storming utilizes an iterative approach where the stakeholders of the process

“try” multiple layouts to determine how they will address the flow issues identified during the LEAN observation phase and ensure waste does not enter back into their process. By pushing the stakeholder teams to “try” multiple options, the effect is a final hybrid layout where stakeholders have total ownership. Through this process, they have addressed much of the flow and waste issues identified and validated by the team. The result of the LEAN-based space planning process is a stakeholder-owned design that will compress the time to realization in the build phase of the project, improve flow and patient satisfaction, and ultimately reduce costs to the client both from an operations and capital perspective. Following are three ways LEAN-based space planning reduces costs: 1)Less waste. LEAN defines waste as anything the

Chad Frost GUEST SPEAKER

See CHAD FROST, page 12

THE ZWEIG LETTER August 27, 2018, ISSUE 1262

TRANSACT IONS DPS GROUP ACQUIRE BELGIAN ENGINEERING CONSULTANCY F4PE DPS Group , the Irish engineering and project management group, has acquired F4PE , a Belgian specialised engineering group which provides high quality services in the field of clean rooms and process facilities for production and laboratory facilities. The terms of the acquisition have not been disclosed. This is the first acquisition by DPS Group in Continental Europe, although the group already has existing operations in Belgium and the Netherlands. DPS has also made a series of acquisitions in the United States in the past five years.

F4PE offers services ranging frombasic design, through full commissioning and qualification of complete facilities. With a group of 35 highly specialised engineers and designers, F4PE supports clients in the pharmaceuticals and biotechnology sector with their facility investments. The company has a turnover of approximately €5 million. DPS COO Brian Donohoe said the group’s existing operations in Belgiumwill be integrated with those of F4PE, and the combined operations will have 70 personnel serving clients in the pharma and biotech sectors. “The combination of F4PE’s local presence and engineering and construction management

capability, combined with DPS Group’s Centre of Excellence offices in Dublin and Cork, will enable us to significantly improve the service we offer clients in Belgium. I’m particularly delighted that all of the F4PE management team and senior managers will be remaining with the expanding company under the direction of DPS-F4PE Managing Director Alain Ruys,” Donohoe said. “Expanding in Europe is a core element in our strategy and acquiring an excellent business like F4PE, with its excellent management and staff, fits in perfectly with the strategy of having strong local engineering capabilities to better serve our clients,” Donohoe added.

CHAD FROST, from page 11

waste. By identifying the wastes in the process, you can begin to improve the flow of the process and thereby its overall ef- ficiency. A recent example of poor flow was identified when observing a client’s process for routing patients for lab work during an urgent care visit. The stakeholder team value-stream mapped the various steps of the process and found a considerable amount of waiting and travel wastes were experienced by the patient, resulting in a much longer-than-necessary stay. The stakeholders focused on the identified steps to see which ones could be removed entirely and which could be reduced significantly by managing tasks/flow differently and making architectural changes to the future layout during the 3P space planning exercise. The client was able to reduce the wastes considerably and defined other areas for potential improve- ment and efficiency gain who were supporting this process as well. 3)Inventory/overall extra space. We ask our clients this ques- tion before launching a LEAN-based approach: “What should be the top three priorities of this space planning exercise?” The dominating response is always “Adding more space!” Believe it or not, in many of the LEAN-based space planning projects we have done with clients, we have found that more than enough space exists in the current layout! To understand how this happens, many departments do not have steady growth plans, but rather grow based on sudden increases in demand or by the rare instance of investment. The result of this approach is a patchwork of processes, spaces, and inventory closets that were forced to fit versus creating spaces to support the original process. During the iterative 3P approach of the LEAN-based design process, EAPC collaborates with the stakeholder teams to create mul- tiple versions of the final layout. We then ask the teams to compress the space to help reduce the wastes of travel and motion and to help them visually see how much space is left over from the original layout. Immediately, the client sees the benefits of this process because in most cases a new building isn’t needed due to all the additional space that is generated during the planning process. By using a LEAN-based space planning approach, the client experiences significant capital cost savings with a remodel versus a new building and the increase in efficiency enhances patient experience and satisfaction. CHAD FROST is LEAN design specialist at EAPC. He can be reached at 701.775.3077 or at chad.frost@eapc.net.

patient is not willing to pay for during their interaction with our client. It’s a tough concept to get the client to understand because they view the process from their point of view rather than the patient’s point of view. Once you switch this process, then you begin to ask questions like, “Why do we do this and what value does it have to our patients?” If the answers are, “We’ve always done it that way” and/or “I’m not sure,” then it’s possible you have defined a waste in your process that needs to be reviewed and possibly removed, or lessened im- mediately. A recent example of waste was identified when observing a client’s process which involves archiving lab samples that are performed multiple times a day. The placement of the archive fridge and associated computer required to archive the samples was a significant walking distance for most of the lab technicians. The excessive movement of samples between process steps is called travel waste. Once the team identi- fied this waste, they were able to implement changes to the process to significantly reduce the travel waste and increase utilization of fridge space within their own work area. The solution, defined by the team, will increase productivity and reduce the turn-around time to complete these services for the patients/providers. 2)Efficient flow/space patterns/circulation. LEAN focuses on the flow of a process to determine where it stops and starts and where it flows smoothly without interruption. The overall efficiency of a process is highly dependent upon the flow of the product or service through the process. If the process involves multiple stops, starts, and waiting for the delivery of the product or service to the next step, then the efficiency will be poor for this specific process. Most interruptions to the flow of a process are created by “Try-storming utilizes an iterative approach where the stakeholders of the process ‘try’ multiple layouts to determine how they will address the flow issues identified during the LEAN observation phase and ensure waste does not enter back into their process.”

THE ZWEIG LETTER August 27, 2018, ISSUE 1262

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