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ON THE MOVE ESP ASSOCIATES NAMES DAVE DICKEY AS CHIEF EXECUTIVE OFFICER ESP Associates, Inc., an ENR Top 500 multidisciplinary engineering design, planning, and geospatial firm, announced today that C. David Dickey, Jr., AICP has joined the firm as chief executive officer. Dickey brings a wealth of expertise to ESP, having served in a number of senior and executive leadership roles within the AEC community over more than 35 years of experience. A certified planner with a background in engineering and geology, Dickey has an excellent track record for developing vision and advancing growth strategy, translating objectives into actionable plans, and providing decisive leadership across multiple critical infrastructure markets. Dickey’s tenure begins immediately as he assumes leadership from ESP’s longtime President, Joe Hendrick, as part of a strategic succession plan initiated in 2017 when ESP partnered with Strength Capital Partners, LLC. “After more than 37 years at ESP and nearly 25 years as President, I am deeply
humbled and incredibly proud of the way ESP has adapted and innovated to ensure we remain a trusted partner for our clients and communities,” said Hendrick. “It has been an honor to lead this organization, and I know Dave’s leadership will take ESP to even greater heights as we continue to grow and provide opportunity to our team members for many years to come.” “I am deeply grateful for this opportunity to assume leadership of a multidisciplinary firm with such a rich history of excellence across a variety of service lines and market sectors,” said Dickey. “Moving forward, I will be working closely with Joe Hendrick and the board of directors on organic and inorganic (M&A) strategic initiatives across the enterprise as we remain committed to strong client relationships, core values that reflect a healthy workplace, and strategic, measured growth that builds upon our strengths as one unified team of companies.” Mark McCammon, co-founder and managing partner at Strength, added,
“We are excited to welcome Dave as the new CEO of ESP. Dave is an outstanding leader whose extensive management experience and exceptional strategic capabilities make him an ideal choice for our next CEO. We would also like to extend our gratitude to Joe Hendrick for his unwavering dedication and leadership both prior to and during our partnership with the company. As ESP continues its transformational journey, we look forward to working with Dave to build a broadly diversified, market leading infrastructure growth platform that delivers lasting value for employees, clients, and shareholders.” ESP Associates, Inc., a portfolio company of Strength Capital Partners, is a multidisciplinary engineering design and infrastructure consulting firm providing clients with civil engineering, surveying and mapping, planning and landscape architecture, geo-environmental, environmental, subsurface utility engineering, construction engineering inspection, and water resource management services.
4. In order to grow at a faster rate than the industry, the company has got to make greater investments in people, marketing, and systems. Acquisitions will also probably have to be part of the strategy and practice. Just because these things take money directly out of potential short- term profits doesn’t mean they aren’t worth doing. They must be done in spite of that fact. 5. In order to sustain growth, the company has to be continuously innovating and improving all it does, and bringing out new service offerings that differentiate it from the dozens of competitors it inevitably has. Innovation and “new” has to be baked into the practice and culture of the firm on a daily basis. It must be part of the business planning process for each revenue-generating unit in the firm, and management has to see to it that it actually happens and isn’t just something that gets done if there isn’t any billable work to charge time to. These five things are fundamental to the entrepreneurial firm. It takes unanimity of the owners who must all understand the hows and whys of entrepreneurial management principles. Don’t underestimate the power of having even a single unsupportive leader. The good news is we have some really smart people who own the firms in our industry. They can “get it” IF they understand the logic. So explain it. Sell it. Talk about it until they all get it. The benefits of doing so can be enormous. Mark Zweig is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.
MARK ZWEIG, from page 5
to see what happens when revenue for any business is growing rapidly. Value multiples of EBIT go out the window. We have seen rapidly growing AEC firms be worth as much as three times annual revenue in a few external transactions, which is mind-blowing in light of the historic industry multiples of 50 percent to 100 percent of net service revenue. It was only because of their growth rate! 2. Growth in revenue has to be seen as more important than maximizing profitability. Any company can make a 20 percent or 30 percent profit or better in any given year if they want to – but at what price? Cut all overhead functions and it isn’t hard. But what happens later? Growth will plateau. Entrepreneurial firms figure out that by maximizing their growth rate they also end up being more profitable than their peers anyway because their revenue is always growing faster than their overhead. It’s a great paradox, but believe me it’s real! 3. There has to be a valuation methodology for the company in place that ties internal transaction value to the real market value of the firm were it to be sold externally. You can’t transact internal shares or ownership interest based on book value or a multiple of book value or historic EBIT when the real value of the company is going to be assessed using projected EBIT based on a certain growth rate. This is fundamental. Otherwise, there is not a connection between doing the things that maximize value because the incentives encourage a much less aggressive strategy.
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THE ZWEIG LETTER MAY 6, 2024, ISSUE 1536
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