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T R E N D L I N E S J u n e 8 , 2 0 2 0 , I s s u e 1 3 4 8 W W W . T H E Z W E I G L E T T E R . C O M

Revenue factor

We each must decide what we can do, individually and collectively, to drive the kind of change we need. Importance of unity

Revenue factor was calculated and analyzed among participants in Zweig Group’s 2020 Financial Performance Survey of AEC Firms . This dual-threat statistic is a labor-related barometer of a firm’s overall performance, combining aspects of net multiplier and chargeability. The overall median revenue factor of the survey sample was 1.90, a four-year high for the AEC industry.

T his has been an excruciating week. Just when we thought the events of the last few months were taxing on this country – taking a toll on us physically, mentally, and emotionally – the senseless killing of George Floyd and the aftermath reminds us of a centuries long disease called racism. Our lack of unity around this continues today and although some might say we’ve come a long way, the events of the past week shout that we’ve got a long way to go. Lack of unity is what halts progress in anything – your family, your firm, or our country. As an advisor and hub of information, our role at Zweig Group often comes down to helping firms achieve unity. Whether it is around a strategic plan, an initiative to grow, a new market to tackle, our team recognizes the power of unity. Several years ago, we sought a greater purpose and to transcend beyond simply being a seller of products and services. That is where we found our new sense of mission – to “Elevate the Industry” – where we exist to advance the AEC profession. Two very important tenets of our mission are to “Diversify” and to drive “Change.” Both rely upon our ability to unify around important causes or initiatives. With the events of the past week, if we are to live our mission, we have to be prepared to stand for anti-racism. Being inspired by such a mandate, we can drive change through engaging in conversations about race and the role that race plays in holding the industry back. While many have been yearning for a return to normalcy, I submit that a new normal must be better than how life was in February. We each must decide what we can do, individually and collectively, to drive the kind of change needed in our households, in this industry, our country, and the world. This message is not enough. We ourselves have work to do to stand in solidarity with the black community in the fight against systemic racism. Our first step was to close last Friday afternoon so that our colleagues could use the time to commit to a better future through exercising their rights as citizens, through education, or simply to recharge. This is just a start, but it is the start of a commitment to designing a more just and equitable world. Will you unite with us in effecting real change in order to elevate our industry? If so, please call or email me and let’s go. CHAD CLINEHENS is Zweig Group’s president and CEO. Contact him at cclinehens@zweiggroup.com.

Chad Clinehens

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F I R M I N D E X GLY.......................................................12 Grisafe Architecture, Inc..........................2 JQ Infrastructure.....................................8 M. Grisafe Architect.................................2 O’Connell Robertson...............................4 PK Electrical............................................6 SCS Engineers......................................10 Ware Malcomb..................................4, 10 MO R E A R T I C L E S xz MARK ZWEIG: I’m upset but still have a business to run Page 3 xz Perseverance: Karen Purcell Page 6 xz EDUARDO SMITH: The soft stuff Page 9 xz TED HERB: Challenging times put values to the test Page 11

T H E V O I C E O F R E A S O N F O R T H E A E C I N D U S T R Y

NEW FROM ZWEIG GROUP

2020 FINANCIAL PERFORMANCE SURVEY REPORT Zweig Group’s 2020 Financial Performance Survey Report includes comprehensive data on the financial performance, financial departments, challenges, methodology, and financial practices of AEC industry firms. The 2020 edition has been updated with an additional chapter on COVID-19 outlook and budget/revenue projections, and also includes: ❚ ❚ Key financial statistics. This chapter includes net service revenue and profitability measures, labor multipliers, turnover rates, and professional/technical to administrative staff ratios, and so much more. Data is also segmented by firm type, staff size, region of headquarters, growth rate, and client base, with multiple years of trend data for overall medians or means. ❚ ❚ Personnel costs. Five major types of personnel costs are analyzed in this publication including: payroll taxes, vacation, holiday and sick leave, group insurance, pension, profit sharing and 401(k) plans, and bonuses. Trend data is also given for historical spending comparisons. This section also includes data on workers’ compensation premiums and claims. ❚ ❚ Other financial statistics. In addition to all the above information, this publication has data on additional financial topics – everything from financial software applications to cash flow reports and professional liability insurance.

BUSINESS NEWS LONG BEACH ARCHITECTURE FIRM, GRISAFE ARCHITECTURE, UNDERGOES REBRAND THAT REFLECTS COMPANY GROWTH M. Grisafe Architect , an established architecture firm in the city of Long Beach, California, announced recently that the company has undergone a rebrand – complete with a new company name, as well as a new visual identity. The architecture firm, which completes both residential and commercial architectural design projects, has also gone through the process of becoming a corporation. The Long Beach architecture firm will now be known as Grisafe Architecture, Inc. The previous name, M. Grisafe Architect, was chosen when the company was established with just one architect – owner Mark Grisafe. Now, with an expanded staff of design professionals, the architecture firm wanted a name that would both reflect past growth and support future growth. The name Grisafe Architecture gives a nod to the company’s founding, while also giving it a more corporate feel that is appropriate for the level of design work being completed. According to Mark Grisafe, “In the last several years, the company has begun to take on a life and identity of its own. I am no longer involved in every decision or responsible for all of the design work coming out of our office. While I’m still intimately connected to the company as its head architect, it is now much bigger than just me and I wanted a name that reflected that.” Along with the name change, Grisafe Architecture also had a new corporate logo designed by Southern California marketing firm Modmacro, Inc. About the new logo, Grisafe said, “When I first became an architect, it occurred to me that I

had joined a profession that counted among its ranks such names as Frank Lloyd Wright, Rudolph Schindler, Frank Gehry, and Ron Yeo. Our previous logos have given a nod to the history of architecture, and I wanted the new one to do so as well.” Grisafe continued, “In the new logo, we took the initials of Grisafe Architecture and used the ‘A’ to create a stylized compass, while the ‘G’ acts as a sweeping arch created by the compass. A component of good design is contrast, so we varied the thickness of the ‘G’ and the ‘A’. The new logo is also more refined than previous versions – reflecting not only the evolution of our firm, but also the increased sophistication of the projects on which we’re working.” Grisafe Architecture is a full-service architectural design firm, completing both commercial and residential design projects in Long Beach and the surrounding areas. The company is known not only for beautiful, clean, and functional design, but also for their desire to truly collaborate with their clients and provide excellent customer service and support. Grisafe Architecture is a full-service commercial and residential architecture firm based in Long Beach, California, offering commercial building planning and tenant improvements, new home design and custom remodels, landscape design, and interior design. With every project, Grisafe Architecture strives to exceed their clients’ design needs and help protect the finished projects from known risks and costly challenges.

1200 North College Ave. Fayetteville, AR 72703 Chad Clinehens | Publisher cclinehens@zweiggroup.com

Sara Parkman | Senior Editor & Designer sparkman@zweiggroup.com Christina Zweig | Contributing Editor czweig@zweiggroup.com Liisa Andreassen | Correspondent landreassen@zweiggroup.com

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THE ZWEIG LETTER JUNE 8, 2020, ISSUE 1348

O P I N I O N

No matter how you feel personally about anything happening in the country or world as a whole, it’s your job to do your job. I’m upset but still have a business to run

W ith so many negative things happening now, it’s easy to be depressed and worried and upset about any number of things. But here’s something that is hard to argue with: We still have businesses to run. We need to eat. We need to pay our bills. We also all have employees who are depending on us to keep their jobs. We have to keep our businesses going in spite of everything. Plus, we have clients who need us. Their problems aren’t going away. They need us now and will need us in the future more than ever. These are OUR responsibilities as business owners and managers.

Mark Zweig

The fact that we have these businesses that allow us to take care of our families and ourselves gives us the luxury of being able to worry about other people and the bigger picture of what is happening. We cannot forget that. Let’s take a look at our immediate priorities to make sure they are being addressed: 1)The safety and mental health of our families. This has to come first. Our children and spouses are not immune to the worry and stress of what is happening in our country. We have to talk to them, reassure them that they (and you) will be OK, and take care of paying the bills and getting them everything they need to have a decent life. We have

to be sensitive to their fears and be the calming voice of optimism in spite of it all. We will get through all of this. 2)Employee safety and well-being. I never like to compare employees to family members but the truth is they are in a sense just that. They are our business “family,” and they have all the same fears and anxieties our other family members are having. Regardless of how you feel about the COVID-19 virus yourself, we all need to be sure our offices are clean and support proper physical distancing before we can expect our people to come back in. This is extremely important. We also need to understand their other issues such as childcare or dealing with a

See MARK ZWEIG, page 4

THE ZWEIG LETTER JUNE 8, 2020, ISSUE 1348

ON THE MOVE O’CONNELL ROBERTSON WELCOMES CINDY VILLARREAL O’Connell Robertson announced that Cindy Villarreal, AIA, WELL AP, CDT, is joining the firm. Bringing more than 12 years of experience in higher education, science and tech, and healthcare design, Villarreal is located in Houston and will focus on regional expansion for O’Connell Robertson as she adds to the firm’s knowledge and expertise in these project types. Villarreal’s experience includes academic health such as nursing and dental school projects at the University of Texas Medical Branch, Stephen F. Austin and Sam Houston State Universities. She has designed notable projects for Texas Children’s Hospital and the Debakey High School for Health Professions. Her portfolio of work includes skills, simulation, BSL-3 and general labs; research facilities; and a variety of classrooms and administration spaces. As the First RELi Accredited professional in Houston, Villarreal is committed to human- centric design to help people thrive in the built environment, while contributing to a more sustainable future for upcoming generations. RELi is a rating system and resilience standard that takes a holistic approach to resilient design. This system can be used by architects to assess and prepare for threats that buildings and communities can face during unplanned events. She is also a WELL Accredited Professional and LEED AP BD+C certified. “Cindy’s commitment to sustainable and resilient design provides an exciting new depth of knowledge and enthusiasm for designing for ideal occupant well-being,” said Amy

Jones, president. “This specialization is a great complement to O’Connell Robertson’s focus on healthcare and education facilities that impact how people live well, and learn, throughout Texas.” Villarreal is a native Houstonian, a lifelong learner, and a graduate of the University of Houston. She has written articles and presented on resilience and sustainable design at regional and national conferences, sharing and exchanging her knowledge with other industry professionals. Villarreal and her husband Stephen, also an architect, have a deep fascination for connecting information, problem solving, and experiencing history and cultures. O’Connell Robertson is a full-service architecture, engineering and interior design firm whose mission-driven approach creates education and healthcare environments that enrich the lives of the people they were designed to serve. With offices in Austin and San Antonio and more than six decades in business, the firm has established deep roots in Texas, which have helped it to establish valuable relationships with clients, organizations, consultants, and builders throughout the state. WARE MALCOMB PROMOTES DENNIS PHAN TO CONTROLLER Ware Malcomb , an award- winning international design firm, announced Dennis Phan has been promoted to Controller in the firm’s Irvine, California-based headquarters office. In this role, Phan manages the financial operations of the firm under the direction of CFO and executive vice president Tobin Sloane. Phan brings more than 14 years of

experience to his new position as controller. He joined Ware Malcomb in 2015 as a senior staff accountant and was promoted to assistant controller in 2018. During this time, he has added tremendous value in the leadership and management of the firm’s financials. “The talent and dedication that Dennis has demonstrated, combined with the incredible team he has developed, have been instrumental in effectively managing the financial complexities of the firm,” said Sloane. “We look forward to his continued leadership and will rely on him and his team to serve as the backbone of Ware Malcomb’s financials as the firm continues to grow and diversify.” Phan earned a bachelor’s degree in biological sciences from the University of California at Irvine, and a master’s degree in accountancy from California State University at Fullerton. Established in 1972, Ware Malcomb is an international design firm providing planning, architecture, interior design, branding, civil engineering and building measurement services to commercial real estate and corporate clients. With office locations throughout the United States, Canada and Mexico, the firm specializes in the design of commercial office, corporate, industrial, science & technology, healthcare, retail, auto, public/educational facilities and renovation projects. Ware Malcomb is recognized as a Hot Firm and Best Firm To Work For by Zweig Group.

work in process cleaned out every month? Are you doing everything you can to relieve any overhead expenses? Are you doing what you have to do to collect money that’s owed to you? Are you doing what you should to have all the available credit you might need? These things are essential now more than ever. Be relentless! My conclusion here – you have a lot of responsibility and no matter how you feel personally about anything happening in the country or world as a whole, it’s your job to do your job. So hold your head up and do it!! MARK ZWEIG is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com. “The fact that we have these businesses that allow us to take care of our families and ourselves gives us the luxury of being able to worry about other people and the bigger picture of what is happening. We cannot forget that.”

MARK ZWEIG, from page 3

sick family member whom they can’t see, and worries about their other family members or friends. 3)Clients’ immediate and longer term needs that must be met. I was talking to a friend of mine this weekend who works in operations and IT for a company. He said if he had his druthers he would never talk to a client but rather just do his technical stuff and communicate with the people who work for him. But he also said he regularly ends up talking with their clients and always learns something from that. All of our businesses depend on clients and meeting their needs. That is the most fundamental thing we have to remember. But do we really know what those needs are right now? And what are we changing in our businesses and offerings that reflect an understanding of those client needs? It isn’t “business as usual” for most of our clients and we cannot act as if it’s so. We have to be sensitive to their priorities and concerns and act accordingly. We need to TALK to these people and not assume our people are doing what is necessary to determine and address those needs. It is our job to do so. 4)Financial condition of the business. Cash flow and solvency are number one. Are you doing your cash flow forecasting? Are you relentlessly getting all that unbilled

THE ZWEIG LETTER JUNE 8, 2020, ISSUE 1348

Work From Home & Online Learning Opportunities

KEEP YOUR CAREER DEVELOPMENT A PRIORITY - UPDATED WEEKLY

NEW LIVE WEBINARS HERDING THE DOLLARS: CASH FLOW MANAGEMENT FOR AEC FIRMS - WEBINAR FREE OVERVIEW: The conversion of projects into cash – and every step from the timesheet to the invoice to the bank account – is important for the survival of any business. With a median average collection period of 70 days, AEC firms may not be able to control every aspect of the collection process, but there are steps that each firm can take to more effectively manage working capital. In this hour-long webinar, we will review Zweig Group’s data and discuss what the data tells us works for AEC firms and we will discuss specific cash flow tips to improve the collection process and control disburse- ments. THIS WEBINAR WILL AIR ON JUNE 9, 2020 AT 12 PM CST. LEARN MORE

NEW VIRTUAL SEMINARS

THE PRINCIPALS ACADEMY - VIRTUAL SEMINAR PRICE: $799 LEARN MORE

OVERVIEW: With the uncertainty of traveling to In-Person events, Zweig Group has created a virtual seminar program for The Principals Academy. This is a 6 week pro- gram of 2 hours each week of a live zoom meeting with our seminar instructors. These meetings will be a mix of presentations as well as open ended Q&A sessions. This will be the same great content that is taught during our in-person The Principals Academy seminar that has trained over 800 attendees in the last 5 years. This program will have a limit of 30 participants so each participant will have time to ask questions and get the same cohort feel as an in-person seminar does. THIS VIRTUAL SEMINAR WILL BEGIN ON JUNE 17, 2020 AT 10 AM CST PROJECT MANAGEMENT FOR AEC PROFESSIONALS - VIRTUAL SEMINAR PRICE: $499 LEARN MORE OVERVIEW: With the uncertainty of traveling to In-Person events, Zweig Group has created a NEW virtual seminar program perfect for upcoming and current project managers. This is a 6 week program of 1 hours each week live zoom meetings with our seminar instructors. These meetings will be a mix of presentations, discussions, and open ended Q&A sessions, with the ability to continue the discussion via discussion forum from week to week. This will be the same great content that is taught during our in-person Project Management for AEC Professionals seminar. This program will have a limit of 30 participants so each participant will have time to ask questions and get the same cohort feel as an in-person seminar does. THIS VIRTUAL SEMINAR WILL BEGIN ON JUNE 30, 2020 AT 11 AM CST

VIEW ALL ONLINE LEARNING OPPORTUNITIES

Zweig Group is an approved provider by the AIA & SHRM

THE ZWEIG LETTER JUNE 8, 2020, ISSUE 1348

P R O F I L E

Perseverance: Karen Purcell Founding principal of PK Electrical (Reno, NV), a women-owned, small business electrical engineering and design firm founded in 1996.

By LIISA ANDREASSEN Correspondent

P urcell wears many hats. She’s the Electrical Engineer of Record for many projects, oversees and does project proposals, marketing, financials, mentoring, hiring, quality control, customer service, and meets with clients. She’s also the author of Unlocking Your Brilliance: Smart Strategies for Women to Thrive in Science, Technology, Engineering, and Mat h. “As a woman engineer and a business owner in a field that is strongly dominated by men, I know what it is like to be the only woman in the room and not feel included,” Purcell says. “That shouldn’t happen to anyone.” A CONVERSATION WITH KAREN PURCELL. The Zweig Letter: What measures are you taking to protect your employees during the COVID-19 crisis? Karen Purcell: Everyone has been working remotely since mid-March. As we re-open the office, guidelines regarding social distancing, in-person meetings, sanitizing work

areas, etc. have been issued. Additionally, any employee who does not feel comfortable coming back to the office may continue to work from home. TZL: What are the three to four key business performance indicators that you watch most carefully? Do you share that information with your staff? KP: Our key performance indicators include proposal dollar amount per month/quarter/year; percentage of won/lost proposals; revenue growth company wide and by office; revenue diversity (what industry is the revenue coming from) and profitability. We do not share actual dollar amounts in terms of revenue with our staff. The metrics that we share with our staff are mostly in terms of percentage. TZL: How far into the future are you able to reliably predict your workload and cashflow? KP: I’m sure we all wish we had a crystal ball to help us

THE ZWEIG LETTER JU

TZL: What financial metrics do you monitor to gauge the health of your firm? KP: We look at our proposal dollar value to help us estimate our future revenue, our actual revenue, and the dollar value per employee based on revenue. This helps us ensure that we aren’t under- or over-staffed based on our actual and projected revenue. TZL: Ownership transition can be tricky, to say the least. What’s the key to ensuring a smooth passing of the baton? What’s the biggest pitfall to avoid? KP: Early on I recognized some key staff who I felt were knowledgeable in our field, knew how to provide amazing customer service, could handle difficult situations, lived our company values, and most importantly, were people that I wanted to be in business with. We are a relatively small firm (less than 40 staff) and started our transition plan six years ago. We have three other shareholders (besides myself) that I will be transitioning the company to and we are all working on the transition plan together. I am very open and honest with my timeline, our company metrics, and really every aspect of the business. I value and respect their opinion. The greatest pitfall to avoid, in my opinion, is to wait until it’s too late to start the transition planning. TZL: They say failure is a great teacher. What’s the biggest lesson you’ve had to learn the hard way? KP: One of my early failures was not terminating employees fast enough. For example, if they weren’t a good fit for the company and our core values, or if they didn’t have the technical knowledge or ability to learn the required skills, they probably needed to go. I was afraid of the uncomfortable situation. Not only was I costing the company money by keeping the employees on, but it was affecting staff morale, and I wasn’t helping the “to be” terminated employees be successful at something else. Our motto now is hire slow, fire fast. TZL: In one word or phrase, what do you describe as your number one job responsibility as CEO? KP: Leadership. TZL: Diversity and inclusion is lacking. See PERSEVERANCE, page 8

determine and predict workload and cashflow. For workload, about six months to a year, and for cashflow about three to six months. TZL: How much time do you spend working “in the business” rather than “on the business?” KP: I would estimate that I spend about 90 percent of my time working on the business. We had a business coach several years ago who stressed the importance of spending the majority of my time on the business. I think that this has helped with the success of our firm as well as our ability to sustain during the Great Recession. “We recently had a couple of employees come back to us after they left several years ago because of our culture and environment.” TZL: What role does your family play in your career? Are work and family separate, or is there overlap? KP: Family is why I do what I do. For the most part, they are separate. I feel that it’s better to keep the two separate so that you can focus on the family when you are with the family and on the business when you are at the office. TZL: Are you using the R&D tax credit? If so, how is it working for your firm? If not, why not? KP: At this point we are not. However, we are looking into this. TZL: How are you staying in touch with your clients during this pandemic? KP: We are communicating with our clients via the phone, email, Zoom, etc. to check in with them to see how they are doing and letting them know that we are fully working and available for whatever they need. TZL: How often do you valuate your firm and what key metrics do you use in the process? Do you valuate using in- house staff or is it outsourced? KP: Our firm is valued once a year. We typically use Zweig Group’s numbers to determine the company value. This year we intend to have the firm professionally valued.

HEADQUARTERS: Reno, NV NUMBER OF EMPLOYEES: 37 YEAR FOUNDED: 1996 OFFICE LOCATIONS: ❚ ❚ Reno, NV ❚ ❚ Denver, CO SERVICES: Computer aided drafting, construction administration, cost estimating and budgeting, electrical designs, electrical field observations, electrical system studies, emergency power systems, expert witness, feasibility studies, fire alarm study and design, Leadership in Energy and Environmental Design, lighting consultation and calculations, lightning protection design, lightning protection risk assessments, low voltage (audio/ visual, CCTV/CATV, data/comm, nurse call, SCADA, VoIP, security and video/surveillance), master planning, medium voltage design, selective coordination studies, site planning, SKM (short circuit coordination, voltage drop, demand load, load flow, ANSI fault study, transient motor starting Study, CAPTOR studies, DAPPER studies, equipment evaluations, and arc flash hazard analysis with the ability to print the PPE labels), special use permit, sustainable design (wind, photovoltaics, geothermal) VISION: Passion. Commitment. Integrity. Innovation. Accountability.

UNE 8, 2020, ISSUE 1348

BUSINESS NEWS JQ PROVIDES STRUCTURAL ENGINEERING SERVICES ON FORT WORTH’S JQ Infrastructure announced that it is providing structural engineering services for the city of Fort Worth’s newest animal care and adoption campus, currently under construction, according to JQ’s Fort Worth principal Carlo Taddei. The new, eight-acre animal care campus is located adjacent to the city’s North Service Center and Drop-Off Station at 301 Hillshire Drive in the city’s fast-growing far northern area near the intersection of Highway 81 and Hicks Road. Voters approved $13.7 million in the 2018 bond election to build this new state- of-the-art animal care facility. Groundbreaking ceremonies took place in January. JQ’s scope of engagement includes providing

structural engineering for the complex, which will include a one-story facility designed to house 300 pets along with space for potential adopters to meet pets; a veterinary clinic with surgery and triage units; staff work spaces and indoor kennels with attached outdoor spaces. “This much needed municipal facility will provide important pet adoption and education services, and an outstanding environment for care,” says Taddei. The facility consists of seven buildings oriented in a semi-circular fashion around an existing pond with native prairie landscape. The campus was designed with sustainability in mind utilizing natural light for the buildings, recycled steel for the superstructure and cladding, durable finishes with low-VOC

content, native planting, walking trails and maximizing green space. The project was designed by PGAL and the Construction Manager at Risk is Muckleroy & Falls. Construction is targeted for completion in January 2021. Founded in 1984, JQ provides structural and civil engineering, geospatial and facility performance services throughout the United States. The firm is considered a leader in engineering design innovation and technology to support its complex, multi-state and multi- market projects. Nationally, JQ has been recognized as a Hot Firm and Best Firm To Work For by Zweig Group. JQ has offices in Austin, Dallas, Fort Worth, Houston, Lubbock, and San Antonio.

PK Electrical staff having fun at a customer service training event.

provide opportunities and benefits that let our employees thrive both inside and outside of the office, and we aren’t afraid to invest in our employees. We recently had a couple of employees come back to us after they left several years ago because of our culture and environment. We don’t micro-manage, we provide opportunities and benefits that let our employees thrive both inside and outside of the office, and we aren’t afraid to invest in our employees.” “We provide an environment that is welcoming, professional, fun, and flexible.

PERSEVERANCE, from page 7

What steps are you taking to address the issue?

KP: I believe very strongly in providing a workplace that is both diverse and inclusive. Being mindful, aware, and non-judgmental are all important. As a woman engineer and a business owner in a field that is strongly dominated by men, I know what it is like to be the only woman in the room and not feel included. That shouldn’t happen to anyone. TZL: A firm’s longevity is valuable. What are you doing to encourage your staff to stick around? KP: We provide an environment that is welcoming, professional, fun, and flexible. We don’t micro-manage, we

THE ZWEIG LETTER JUNE 8, 2020, ISSUE 1348

O P I N I O N

The soft stuff

Company culture, employee engagement, and morale are often the differentiators between common and great companies.

I n his book The Advantage , Patrick Lencioni presents a compelling argument that a company’s health is the differentiator between common and great companies. In the typical AEC firm, the focus is often on metrics like utilization, direct labor multiplier, and return on business development expense. The “soft stuff” like culture, employee engagement, and overall health are often overlooked.

Eduardo Smith

my own), which became our South Florida operation, and had a legacy office in Tampa. Three distinct cultures came together under one flag. Naturally, silos began to form, and our financial performance and employee morale started to suffer, a sign we were becoming unhealthy. “After finalizing them, our values were always top of mind. We discussed them in virtually every meeting; they were our rallying cry. We insisted on teamwork and serving the client first.”

Lencioni describes a firm that is healthy as one with “minimal politics and confusion, high degrees of morale and productivity, and very low turnover among good employees.” He asserts that: “Turning an unhealthy company into a healthy one will create a massive competitive advantage and improved bottom line. It will also make a real difference in the lives of the people who work there. And for the leaders who spearhead those efforts, it will be one of the most meaningful and rewarding endeavors they will ever pursue.” At SCS Engineers, I had the perfect laboratory to test Lencioni’s assertion. In 2015, I was given the opportunity to serve as the regional manager of our Southeast Region. We had recently acquired two small firms (including

See EDUARDO SMITH, page 10

THE ZWEIG LETTER JUNE 8, 2020, ISSUE 1348

BUSINESS NEWS WARE MALCOMB ANNOUNCES CONSTRUCTION IS COMPLETE ON NEW PROFESSIONAL BEAUTY ASSOCIATION OFFICES IN SCOTTSDALE Ware Malcomb , an international design firm, announced construction is complete on the new offices of the Professional Beauty Association located at 7755 East Gray Road in Scottsdale, Arizona. Ware Malcomb provided interior architecture and design services for the project. The Professional Beauty Association made the move to their new office location to accommodate the organization’s growth. The 17,000 square foot tenant improvement project included the creation of private offices, huddle rooms, conference rooms, a gym and a break room. The design incorporated a

feature staircase to an existing mezzanine area that was previously inaccessible, providing a striking focal point to the space as well as increasing its functionality. Prior to demolition, the space had been used as a restaurant. The design features an open floorplan concept highlighting exposed ceilings throughout the space, creating a modern and industrial feel. New skylights and exterior windows were added to bring more natural light to the space. A neutral color palette is accentuated with pops of color that reflect the Professional Beauty Association brand. Modern finishes complete the design, incorporating various materials including ceramic tile, luxury vinyl tile, carpet and quartz countertops.

“It is always exciting to have the opportunity to completely demo and reimagine a space through the lens of our client,” said Kevin Evernham, Principal of Ware Malcomb’s Phoenix office. “In addition to providing more space to accommodate current and future growth, the new offices of the Professional Beauty Association are a perfect reflection of the organization’s energy, brand and culture.” Established in 1972, Ware Malcomb is an international design firm providing planning, architecture, interior design, branding, civil engineering and building measurement services to commercial real estate and corporate clients. Ware Malcomb is recognized as a Hot Firm and Best Firm to Work For by Zweig Group.

EDUARDO SMITH, from page 9

over the next two months and developed strategies (more like aspirational goals) that were ready to present to the rest of the group. Our values were simply stated: “We are client-centered, teamwork focused, and we develop and challenge our staff to meet their personal goals.” We fine-tuned the message and words after a couple of months while meeting with staff to get their input as part of the alignment process. After finalizing them, our values were always top of mind. We discussed them in virtually every meeting; they were our rallying cry. We insisted on teamwork and serving the client first. To do otherwise was to cross onto the wrong side of a proverbial line in the sand. The results of these steps far exceeded our expectations. Four months into the process, our region was the worst performing in the company. We lost staff that didn’t believe in the direction we were going. Many were questioning why we were spending the time and money on the “soft stuff,” asking why we were not focusing solely on being more billable. But in the remaining eight months of the year, we turned it around. We ended our year growing our net revenue by more than 30 percent and became one of the leading performers in the company. That mindset, culture, and performance success continue to this day. We have doubled our revenue in five years, which started with our mindset change. We don’t harp on utilization and the metrics many AEC firms focus on; we keep our focus on our overall health. Company health may sound too squishy for our technical profession. It’s hard to measure and track. The results, however, can be quite visible. But be warned, it’s something we can’t take for granted, or we will backslide into old habits. By the way, Lencioni was right. The year I focused most of my time on our transformation into a healthy region, was the most rewarding year of my career. EDUARDO SMITH, P.E. is senior vice president of client success at SCS Engineers. Contact him at esmith@scsengineers.com.

I spent months getting to know our office managers and the needs of their staff and clients. Most of us agreed that we were not satisfied with our performance and we needed to do something about it. We worked as a team to hone in and agree on our message to the staff. We kept the message straightforward, inflexible, and with clear expectations; we work hard, and work as a team. Nothing less would do. If each team member did those two things, they could always count on our support. If they were unwilling, they would quickly find that this region of SCS was not the place for them. “In the typical AEC firm, the focus is often on metrics like utilization, direct labor multiplier, and return on business development expense. The “soft stuff” like culture, employee engagement, and overall health are often overlooked.” Now what? Having participated in SCS’ leadership development program, I turned to Bob Elliott of Transpective, who facilitated the program and remained my coach. We gathered staff in a couple of locations enabling interaction across offices to conduct personality profile workshops using DiSC and to begin formulating a strategy for the region. We discussed general mindsets and blind spots of the different personality types and how best to work with those who have a different way of processing information and the like. That day-long workshop alone began to have immediate effects. We started viewing each other as human beings, each with a story to tell. We discovered that we weren’t very different from one another, and all of us wanted SCS and our region to be successful. After the DiSC work, about 15 of us gathered to start working on strategies to keep the momentum going. A day later, we had some ideas but weren’t close to something that we could rally around. A subgroup continued working

THE ZWEIG LETTER JUNE 8, 2020, ISSUE 1348

O P I N I O N

O ne of the only things we can rely on when everything we know is changing so fast is that what served us well in the past might not necessarily carry us confidently into the future. It’s important to revisit your purpose and values statements from time to time to make sure they still hold true for your firm. Challenging times put values to the test

IVORY TOWER VERSUS COLLECTIVE WISDOM. This hierarchical approach worked just fine in a time when processes and outcomes were fairly predictable and direction could be set from the top down with a degree of confidence. In today’s climate, where projects are highly complex, schedules are compressed, technology transforms processes from one day to the next, and external factors such as climate and health play an ever greater role in our built environment – it was clear that we needed a different approach. “I was stunned by the wide variety of interpretations of each value. The same words meant radically different things to different people.”

Last year our company was impacted by a serious event that caused us all to scrutinize our culture and our purpose. We realized that our stated values had grown stale and that our mission and purpose had evolved in response to a rapidly changing market environment. We saw this as an opportunity to focus on something positive that would engage people across the organization and help with the healing process. As with most companies that have been around for some time, it’s not the first time we’ve revisited our purpose and values statements. Last time we did this we elected a small group of senior management and key stakeholders, shut ourselves in a room, and, through a semi-facilitated process of review, emerged with some tweaked wording and a sense that everything still held true.

Ted Herb

See TED HERB, page 12

THE ZWEIG LETTER JUNE 8, 2020, ISSUE 1348

REACHING A DECISION. What I learned from the whole process is that there’s a time and place to tap into an organization’s collective wisdom, and there are times when it’s not the right tool for the job. To examine the validity and resonance of our values, broad stakeholder engagement, although at times unwieldy, led to a far better understanding of what’s important and greater alignment across the firm. However, someone had to make the final call. For some people this was a very emotional process and not everyone can have the exact wording they propose. In the end the people who made the final call were the ones who have the biggest stake in communicating and conveying the meaning behind our values: our head of HR and our head of marketing. I facilitated the discussion, but the final version is the result of their agreement. LEADERSHIP IS A TEAM SPORT. Hard on the heels of this process came the challenge of the COVID-19 pandemic. We needed to convene an Emergency Response Task Force as a priority and put it in place immediately. This was a focused task force of key specialists dealing with daily decisions versus a larger stakeholder group and specifically avoided duplication of executive committee members. Two years ago I’d have immediately put myself on it. However, the process of rethinking our values taught me that our company has a deep bench of leaders that are ready to take on any challenge and that the next generation needs to be given the chance to step up. One of the essential goals of the Task Force is to anticipate how work will be different when the immediate emergency is past and to think about a model for continuity from today into coming back online having learned some hard lessons. Our next generation of leaders will be living with the consequences of today’s actions for years to come, they need to be part of the solution. I am so very proud of how well our company has navigated this fluid situation. Everyone is thoughtful, measured, passionate, and they care deeply about every decision we are having to make. Our value of “Lead with Integrity” with the support phrase, “the right path is not always the easiest route” is certainly being put to the test. Leadership is a team sport and I’m glad to be part of this team, continuously learning. TED HERB joined GLY in 1987 as a project engineer, rising to vice president of operations by 2008, and has served as president since 2016. Today as both president and CEO, he brings a deep understanding of the diverse skills and perspectives that contribute to successful project delivery at every level within the general construction industry. In addition to leading numerous projects that help to shape the story of the city of Bellevue’s growth, including Lincoln Square real estate development projects and Overlake Hospital’s expansions, he has played a pivotal role in shaping the company’s cultural focus on safety and continuous improvement. Ted also honors GLY’s legacy of service through his involvement with a number of community organizations including the Overlake Medical Center Foundation Board and Path with Art.

TED HERB, from page 11

We are very clear in our understanding that the people who deliver our projects, support our IT infrastructure, manage our billing, protect our IP, tell our story, and keep the kitchen fridge stocked are the ones who truly understand what it takes to run this business. Most importantly, they get to choose who they work for, so if they choose to work with us it’s because we share a common purpose and values. The question wasn’t what to do, but rather how to democratize the process. A few years ago we’d made changes to significantly broaden stakeholder input into our business planning processes. Building on this we invited about 65 people from different disciplines, tenure, and years of experience from across the organization (field and office) to participate in a facilitated process to review our current value statements. We didn’t assign groups, we simply allowed individuals to choose the value most important to them. Without any organization, each group attracted diverse individuals. Everyone spoke about what came to mind, testing the validity of each value, and capturing their thoughts on paper before reporting out to the larger group. I was stunned by the wide variety of interpretations of each value. The same words meant radically different things to different people. “Last year our company was impacted by a serious event that caused us all to scrutinize our culture and our purpose. We realized that our stated values had grown stale and that our mission and purpose had evolved in response to a rapidly changing market environment.” A LIFE OF ITS OWN. The initiative took on a life of its own leading to three rounds of continued refinement. It takes work to bring people together to work on an initiative that doesn’t draw a tangible line to revenue generation. It is testament to the importance of values in an organization that people kept showing up to bake the cake. But you do reach a point of diminishing returns. Having four people debate three words stops being useful, however well- intentioned. It was time to stop meeting. At this point we needed to engage people who know our corporate voice to craft the final language that would embody our newly clarified values. This is when we hit the next unanticipated hurdle. The people we asked to help with this effort had not all participated in the original discussions. This led to more questioning and testing. As frustrating as it was to see the process drag on longer, the end result was far greater alignment and buy-in across the board.

TALK TO US Are you interested in having your firm featured in our Business News section? Let us know. If interested, please send your press release to sparkman@zweiggroup.com.

THE ZWEIG LETTER JUNE 8, 2020, ISSUE 1348

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