TZL 1478 (web)

The PDF edition of The Zweig Letter.

February 27, 2023, Issue 1478 WWW.ZWEIGGROUP.COM

TRENDLINES

Median base salary increase

0% 2% 4% 6% 8% 10%

In 2022, mergers and acquisitions continued to flourish as a growth strategy throughout the AEC industry. An M&A year in review

Young professionals Older professionals

Zweig Group’s 2023 Salary Report of AEC Firms provides base salary trends for engineers at all levels. Analysis of median base salary for engineers from 2022 to 2023 identified that young professionals (those with fewer than seven years of experience) picked up a 9 percent increase in median base salary while their older colleagues (those with more than 10 years of experience) only saw a 4.5 percent increase. Participate in in the 2023 Financial Performance Survey and save 50 percent on the final or pre- publication price of any Zweig Group research publication.

I n recent years, the AEC industry has been recognized for its large amount of consolidation and M&A activity. With the infrastructure bill presented in 2021 and the unprecedented amount of backlog AEC firms held after the halting of projects in 2020, mergers and acquisitions continue to flourish throughout our industry. With 346 transactions in 2019, 377 in 2020, and 577 in 2021, the AEC industry continues to show impressive growth with more than 552 transactions in 2022. Of the transactions, 354 were U.S. based and 198 were international. This is only a 4 percent decrease from the prior year, but when you look at the historic number of transactions year-after-year, the activity level remained relatively the same. Zweig Group data indicates that M&A continues to be a suitable growth strategy for firms looking to grow their firm and enhance their competitive position. We gathered and analyzed all of the available data from the 552 acquisitions that occurred in our industry over the last year to report an industry outlook and share our experience on the biggest trends that we saw in 2022: ■ Sellers by discipline. Buyers continue to pursue pure-play engineering, architecture, and environmental firms to further strengthen certain service offerings or to establish a stronger market presence in specific markets. We found that 184 engineering firms, 81 architecture firms, and 93 environmental firms were acquired in 2022. However, this does not take into account that 80 additional transactions were multi-disciplined firms that consist of architecture and engineering, multi- disciplined engineering, and full-service firms. These types of firms were more commonly targeted by bigger corporations – with an average FTE count of 3,000. We also found that there were an additional 114 firms acquired that are not necessarily considered engineering or architecture firms, but technology focused firms or consultancies. With the world entering a transformative era of ground-breaking technological changes, we see the big players in our industry expanding their technological capabilities. ■ Services and markets. As for the main service of acquired firms, we continue to see that firms offering civil engineering,

Adrian De la Garza, CM&AA

FIRM INDEX Fluor Corporation..................................................4

Hanbury....................................................................... 6

HUNT........................................................................... 10

Shumaker................................................................. 10

WK Dickson...............................................................4

MORE ARTICLES n KRAIG KERN: You better check your blind spots Page 3 n Empowering talent: David Keith Page 6 n JOHNNY SMITH: A study of voluntary turnover Page 9 n MARK ZWEIG: Disruption, or caretaking? Page 11

See ADRIAN DE LA GARZA, page 2

THE VOICE OF REASON FOR THE AEC INDUSTRY

ADRIAN DE LA GARZA, from page 1

environmental services, or architecture services are most sought-after. Each of these disciplines amount to roughly 18 percent of sellers; or more than 54 percent of the total sellers. However, many of the main markets for these firms were industry agnostic – meaning they had no main market and operated in a variety of markets. The most prevalent markets that these firms operated in were commercial and residential (21 percent), government (14 percent), education (12 percent), and water/wastewater (8 percent). The data indicates that there were a great deal of strategic acquisitions in terms of services and markets even though the industry’s most active buyers are still prioritizing water/wastewater, transportation, and environmental firms in their acquisition efforts for 2023. ■ Size and geography. Prior years have shown us that there are certain geographic hotspots where buyers are more interested in acquiring. These hotspots include California, Florida, and Texas. Unsurprisingly, these states were still the hotspots in 2022. To break it down, 45 firms were acquired in California, 43 in Florida, and 37 in Texas. There were 358 total firms acquired in the United States, meaning that these three states account for just over 35 percent of total U.S. based transactions. Historically, the median size of the acquired firms has been relatively small (30 employees in 2021, 25 employees in 2020, and 20 employees in 2019) and we saw this trend continue in 2022 with the median size being 26 employees. It gets interesting on the buyer side, where the median size declined from 700 in 2021 to 560 in 2022. The median size for buyers from 2014 to 2020 was 460 employees, but that was when the number of transactions each year ranged from 340 to 390. With 2021 being a massive year in the volume of transactions, we can interpret that there were more and bigger players utilizing mergers and acquisitions as their growth strategy starting in 2021. ■ Private equity involvement. Similarly to 2021, we continued to see private equity involvement in our industry in 2022. Private equity buyers in 2022 accounted for 30 transactions, compared to 37 transactions in 2021. However, the number of companies acquired as a platform company and private equity backed transactions increased by more than 20 percent. We’re seeing private equity backed AEC firms utilizing this backing to grow in terms of both size and service offerings. The firms utilizing this strategy include, but are certainly not limited to, Trilon Group (seven acquisitions), Ardurra Group (five acquisitions), and Global Infrastructure Solutions (four acquisitions). Nevertheless, this does not take away from firms that were active buyers in our industry without private equity backing, including RSK Group (19 acquisitions), WSP Global (eight acquisitions), and Salas O’Brien (seven acquisitions). The trends above are certainly not the only ones to come out of the 552 total acquisitions that occurred in the AEC industry during 2022, but they were some of the most noticeable. We’ll continue to gather M&A activity data this year and report on the trends and noticeable investments from the players of our industry. To learn more about Zweig Group’s M&A advisory services, click here. Adrian De la Garza, CM&AA is a senior analyst within Zwieg Group’s M&A advisory team. Contact him at adelagarza@zweiggroup.com.

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THE ZWEIG LETTER FEBRUARY 27, 2023, ISSUE 1478

OPINION

Identifying and fixing crucial problems is the job of leadership, but sometimes the most debilitating problems are with the leaders themselves. You better check your blind spots

I learned a valuable lesson recently. I lost a person I hand-picked to be my successor. I’m not getting any younger, and I strongly believe in the adage, “always hire your replacement,” when looking for new talent. Steve Jobs probably said it best, “It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so that they can tell us what to do.”

Kraig Kern, CPSM

So over the course of a year and a half, I believed I was mentoring, encouraging, recognizing, and inspiring my new, young marketing specialist. I gave her challenging but creative projects to work on, provided feedback constructively, patiently tolerated her ever-changing work-from-home schedule, offered a ton of variety in her week, issued multiple bonuses, and ultimately thought she loved what she was doing. Little did I know that frustration was percolating right below the surface. My blind spots created a disengaged employee, and it was already too late when I started to recognize them.

There are many kinds of blind spots, such as those that create a moral dilemma and force one to look the other way when something is wrong. But I’m referring to the leadership variety – the kind where you lack self-awareness. In business, a blind spot is easy to miss when the only thing those in management worry about is the bottom line. When sales slip or the economy collapses, we certainly pay attention. But what about when stress, anger, or sadness arise in our employees? Do we even know what happened? Do we write it off as moodiness?

See KRAIG KERN, page 4

THE ZWEIG LETTER FEBRUARY 27, 2023, ISSUE 1478

BUSINESS NEWS FLUOR JOINT VENTURE OPENS MEDFORD BRANCH OF BOSTON GREEN LINE RAIL EXTENSION PROJECT Fluor Corporation announced that its joint venture team Green Line Extension Constructors – comprised of Fluor, Balfour Beatty Infrastructure, Inc., Herzog Contracting Group and The Middlesex Corp. – has opened the Medford Branch of the Green Line Extension light rail project for the Massachusetts Bay Transportation Authority. “Boston is one of the most vibrant cities in the United States, and the opening of the Green Line Extension immediately improves transportation access for the greater Boston area,” said Thomas Nilsson, president of Fluor’s Infrastructure business. “Safe and reliable infrastructure is also vitally important to local, state and regional commerce.” The Green Line Extension will improve local and regional mobility to downtown

Boston as well as support municipal plans for sustainable growth and urban redevelopment by offering non-stop rides to downtown Boston. It will also help reduce the number of automobiles on local roads leading to lower greenhouse gas emissions and other forms of air pollution. The four-mile line is the second of two distinct branch lines to open as part of the Green Line Extension Project. The first branch, a 0.7-mile rail segment running from the new and relocated Lechmere Station in Cambridge to Union Square in Somerville, opened in March 2022. The second branch runs from Lechmere Station through Somerville and ends in Medford at the Medford/Tufts Station. The new branch includes five stations in addition to the operating Lechmere and Union Square Stations. Three large Traction Power Substations were also

designed and built to provide power to the line as well as the replacement of two bridges and modification of four others. The projected daily ridership at the seven stations is estimated to be 45,000 by 2030. Construction began in 2018. Fluor Corporation is building a better future by applying world-class expertise to solve its clients’ greatest challenges. Fluor’s 41,000 employees provide professional and technical solutions that deliver safe, well-executed, capital- efficient projects to clients around the world. Fluor had revenue of $12.4 billion in 2021 and is ranked 196 among the Fortune 500 companies. With headquarters in Irving, Texas, Fluor has provided engineering, procurement and construction services for more than 100 years.

not me. Why didn’t she come talk with me and ask for help? Perhaps she’s the kind of person who never feels settled, and there’s nothing I could have done to keep her engaged and happy. But I’ll bet if I had recognized my blind spots earlier, the results would have been different. We all work with people who have obvious blind spots. Some manifest themselves in their tone when they talk to subordinates, others in how unresponsive they are to emails and text messages, and then some get so busy and myopic they forget to stand up and walk around to engage their team. I have learned that it’s much easier to see the unconscious and self-defeating behaviors in others than our own and miss much of what’s happening around us as a result. I think this occurs because of overconfidence in our own abilities. I’m no self-help guru, so I don’t have a quick fix that works for everyone. All I know is that my blind spots cost me a potential superstar. If there’s one thing I do recognize, great leaders are not only vulnerable and self-aware, but they also have a constant desire to improve. Identifying and fixing crucial problems is the leader’s job, and sometimes the most debilitating problems are with the leaders themselves. Like the Gallup book details, GDP growth, stock prices, and inflation still dominate the headlines and captivate leaders’ attention. Yet absent from leadership metrics are how their people feel. This is why today’s leaders constantly miss the rise in worry, stress, sadness, and anger. When the leaders of tomorrow are asked, “What indicators do you follow most closely?” – hopefully, many of them will say “employee happiness.” Kraig Kern, CPSM is vice president and director of marketing at WK Dickson. Contact him at kckern@wkdickson.com.

KRAIG KERN, from page 3

I once went through a dark period early in my career and had a boss who recognized my change in mood, but instead of patience and empathy, he told me to “get over it.” I left three months later. “It’s much easier to see the unconscious and self-defeating behaviors in others than our own and miss much of what’s happening around us as a result. I think this occurs because of overconfidence in our own abilities.” I’m not much of a reader and don’t usually recommend books, but Jon Clifton of Gallup published a book titled Blind Spot: The Global Rise of Unhappiness and How Leaders Missed It , and I recognize many similarities in my management style. In the book, he suggests that most leaders don’t know how much unhappiness there is in their business today. And that is concerning because unhappiness is now at a record high. According to Gallup, people feel more anger, sadness, pain, worry, and stress than ever. In my case, each day, I would see a pleasant marketing specialist who outwardly appeared to be enjoying her job and her team. Yet, according to her exit interview with HR, she felt like she wasn’t getting anywhere, had no career path, and that her manager (me) needed training on how to manage people. Ouch! I’m a sensitive person, and that stung. I had no idea she felt that way. You might be saying it’s a two-way street. Maybe it’s her,

THE ZWEIG LETTER FEBRUARY 27, 2023, ISSUE 1478

PROFILE

Empowering talent: David Keith Design principal and CEO at Hanbury, a firm that is a global resource for its clients that specializes in higher education, civic, and commercial environments.

By LIISA ANDREASSEN Correspondent

K eith has centered his career around creating environments that promote great people, integrated design approaches, and innovative design leadership. He believes that architects and planners are great problem solvers and that, together, great things are possible. “Empowering talent is great business,” Keith says. A CONVERSATION WITH DAVID KEITH. The Zweig Letter: How do you balance leading the firm and projects too? Any organizational management strategies that you find work better than others? David Keith: In preparation for Nick Vlattas’ retirement, we divided up leadership roles to create a variety of leadership and strategic teams. Last year, we decided that we wanted to include more voices at the table, so we expanded our teams to include leadership and strategic “councils” that provide a diversity of voices from a variety of experience levels and focus areas to complement our leadership and strategic team leaders. This has proven to be a fantastic move. It provides

growth opportunities for many of our younger staff while also understanding firsthand many of the priorities and concerns of our co-workers. It has also relieved some of the leadership time commitment from top leadership, allowing more time for strategic project, mentorship, and firm initiatives. TZL: What concerns you most about the future of AEC? How is your firm working to address those concerns? DK: Our profession has a difficult time keeping the best and brightest. Most architectural businesses have one to two outstanding leaders who have success, but often don’t know how to grow their next generation of leaders. Because of this, the profession has become over-saturated with mega-firms which typically have uninspiring or unsupportive environments for creative freedom. Many of our most talented people have a difficult time finding where they fit in. To attract and keep our talent, we need to be more relevant – adding intrinsic value to every client, project, and initiative we lead. We must be artists, managers, cost-experts, presenters, caretakers, and leaders. We must lean into everything we do.

THE ZWEIG LETTER FEBR

To address this, we’ve developed a growth strategy that’s based on finding extraordinary leaders. This requires in-depth knowledge of each employee’s strengths, goals, aspirations, and personal challenges. This knowledge is gained through assigning each team member challenging assignments with every project, formal performance planning discussions, and informal interactions. TZL: Trust is essential. How do you earn the trust of your clients? DK: Client trust is fragile and at times can be armor-clad. Perhaps the most important way we earn our clients’ trust is through clear communication, listening, and responding nimbly, accurately, and creatively. Once trust is earned, they’re our best advocate. However, the way to ensure that trust continues is to perform at our best when times are tough. These are our best opportunities to show them what makes us tick. TZL: You’ve been firm president for a little over five years. What springs to mind as an accomplishment that you’re most proud of? Why? DK: Embracing the firmwide culture and expertise that existed prior to me joining Hanbury and focusing our firm to be a talent- based one. We’ve brought in additional design and market leadership and grown the firm three-fold. While we are now in multiple locations, the culture is “OneHanbury” and it contrasts many of the large firms that seem too interested in corporate growth, expansion, and growth of stock value to focus on each individual’s potential within the firm. “Perhaps the most important way we earn our clients’ trust is through clear communication, listening, and responding nimbly, accurately, and creatively. Once trust is earned, they’re our best advocate.” TZL: Who are you admiring right now in the AEC industry? Where do you see thought leadership and excellence? DK: I’ve been working closely with Höweler + Yoon in Cambridge, Massachusetts, on the Karsh Institute of Democracy at the University of Virginia. The company is relatively young – it was founded in 2004 – however the impacts of their work, research, unique variety of projects, and contributions to educating

the next generations of young architects are remarkable. I believe their practice is a model of what’s possible, not confined by pre- conceived norms – stretching the possible while not taking unnecessary risks on unlikely outcomes. “Talent is key to success and motivated talent will always be successful.” TZL: What skills are required to run a successful practice? What do you wish you knew starting out that you know now? DK: Talent is key to success and motivated talent will always be successful. I’ve been a student of the profession for many years. Starting as a design architect, I believed that good design would be the best business model. However, over the years I have come to understand that good design is essential, but those that thrive have more – they provide something for their people, their clients, and the community that is sought out. I think the ability to design with ideas that stretch our clients’ reach, to tell clear stories that elevate the ideas around the project, to have the ability to deliver those ideas within the framework provided, and to have fun doing it is a pretty great way to practice. TZL: Tell me about the Legacy programs. How did they come about? What do you hope to get out of them? How do they relate to the concept of a “living company?” DK: Our Legacy programs are very unique. They were developed to create better connections to address the “Why?” of what made us get into the profession in the first place. For many in the profession, school is the best time of our careers. We’re challenged to think broadly, to see things globally and to collaborate with others. This spirit of exploration is the foundation of the Legacy Programs and each one contributes to our culture in a different way: 1. Jane C. Rathbone Design Retreat. Annually, about 10-12 employees are selected to travel abroad and immerse themselves. The travel is curated to include visits to significant architecture in the region as well as visits with notable architecture firms. Most of the trips are to Europe and often are collaborations with universities with overseas programs. Destinations have included: Riva San Vitale, Genoa, Copenhagen, Shanghai, Zurich, Venice, Barcelona, Bilbao, Egypt, See EMPOWERING TALENT , page 8

HEADQUARTERS: None – Hanbury is one firm located in:

Norfolk, VA

■

Richmond, VA

■

Raleigh, NC

■

Baltimore, MD

■

Blacksburg, VA

■

Clemson, SC

■

NUMBER OF EMPLOYEES: 120

YEAR FOUNDED: 1979

MARKETS:

Higher education

■

Science and technology

■

Civic/community

■

SERVICES:

Architecture

■

Interior design

■

Planning and urban design

■

Laboratory planning

■

RUARY 27, 2023, ISSUE 1478

The Hanbury team.

we have incredible talent, so we’ll always be really good. To attract the best and brightest, we have to provide opportunities for them to lead. Sometimes this puts them in a position to experience something unexpected. Most times they over- perform, but at times, they can make mistakes. As firm leaders, these are our most important moments. Our leadership always responds to these challenges with support, guidance, and mentorship. We never beat-up people for their mistakes. “Many of our most talented people have a difficult time finding where they fit in. To attract and keep our talent, we need to be more relevant – adding intrinsic value to every client, project, and initiative we lead.” 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? DK: In my experience, ownership transition is the biggest pitfall. In small- to medium-sized firms, first generation owners tend to hold onto the large share of the firm and seldom groom the next generation of owners. In larger firms, there are often surges of success and growth around markets or a robust economy where multiple leaders contribute in meaningful ways. This can create an enormous burden on the next generation of leadership to be able to pay-off the shares of the retiring leadership that benefit most financially from the rapid growth. I’ve seen first-hand how improper preparation has led to a sharp downturn of a very successful firm. Firm leadership roles should not be transitioned based on those who can afford to “pay to play” or longevity. Rather, they should be merit-based. Hanbury has benefited from a transition plan that included transitioning to an ESOP. We are now a 100 percent ESOP.

EMPOWERING TALENT , from page 7

London, Brazil, and Lisbon. As the program has visited locations around the globe, the photography, sketches, and rich experiences are shared with the broader firm in special presentations. These shared experiences influence all of our projects. 2. The Nicholas E. Vlattas Summer Scholar Program. Over the past five years, we’ve expanded this program to include an immersive, two-month long project that the scholars curate and lead. We provide housing, training, design trips, and special project opportunities to ensure the program is attractive and open for a diverse student population nationally and internationally. The program engages and nurtures the entire firm and their research projects often engage with our local communities and the design community. The program has attracted more than 60 scholars from 26 prestigious schools of architecture. This past year, we had more than 125 applicants for 10 positions. 3. The S. Michael Evans Design Medalist. This program invites distinguished members of architecture, design, and planning academia to engage with our staff for several weeks during the summer. The program supports our belief in lifelong learning, research, and continuous growth. Each medalist provides an opportunity for Hanbury to benefit from an academic lens while providing an opportunity for professors to connect to the profession. Medalists spend time presenting their work and research, critiquing work, and delivering lectures. TZL: It is often said that people leave managers, not companies. What are you doing to ensure that your line leadership are great people managers? DK: For us, the “no jerks rule” prevails. Architecture is a tough profession that requires a lot of human interaction, skill, patience, and experimentation. We’ll never be perfect, but

THE ZWEIG LETTER FEBRUARY 27, 2023, ISSUE 1478

OPINION

A study of voluntary turnover

What characteristics of a job, firm, and industry act as predictors of voluntary turnover?

M anagers often assume that employees leave a company in search of higher pay, but recent research from Personnel Psychology suggests that pay is just one of many factors that contribute to turnover. According to the study, other important factors include non-cash benefits, professional development opportunities, and job characteristics. To reduce turnover, managers should consider implementing strategies that address these other factors, as they may be more cost-effective and have a greater impact on employee retention than increasing pay alone.

Johnny Smith

One important predictor of turnover that is gaining attention in the research is employee engagement. Studies have found that engagement is a useful predictor of turnover, and that employees who feel a sense of meaning in their work, feel safe and supported in the workplace, and are able to manage work-life balance are more likely to stay with a company. Managers can foster engagement by creating a positive work culture, promoting open communication and idea sharing, and providing support for work-life balance. At a high level of importance to turnover predictability is job market perceptions and withdrawal attitudes.

How would a manager measure these factors, though? It is obvious that employees would be hesitant to share their actual opinions on other job prospects and experienced withdrawal feelings with their employer. One way to handle this issue is to collect data on these topics while maintaining employee anonymity. Speaking to this, the researchers suggest managers bring in “neutral consultants to administer surveys,” which will help employees feel confident in their anonymity. On top of this, managers can use absentee rates and monitor how employees utilize time on the clock if an unobtrusive measure is desired.

See JOHNNY SMITH , page 10

THE ZWEIG LETTER FEBRUARY 27, 2023, ISSUE 1478

TRANSACTIONS HUNT ENGINEERS, ARCHITECTS, LAND SURVEYORS & LANDSCAPE ARCHITECT, DPC ANNOUNCES ACQUISITION OF SHUMAKER CONSULTING ENGINEERING AND LAND SURVEYING, DPC HUNT Engineers, Architects, Land Surveyors & Landscape Architect, DPC, a full-service multidisciplinary leader in engineering, architectural, land surveying and landscape architectural services, announced that it has acquired civil and environmental engineering and geomatics firm Shumaker Consulting Engineering and Land Surveying, DPC. HUNT CEO/President, Christopher Bond, PE, announces the acquisition of Shumaker stating, “With this acquisition, we have a unique opportunity to expand our full-service consulting and design capabilities to provide our clients with a broader range of services that supports our mission and vision for the communities in which we serve. With HUNT office locations in Rochester, New York, Horseheads, New York, and Towanda, Pennsylvania, and Shumaker offices located in Binghamton, New York, and Albany, New York, the combined professional resources will enhance HUNT’s geographic presence, consulting, and design service capacity. This will allow us to expand our breadth of capabilities and provide a more effective and streamlined project capacity from inception to project closeout.”

Shumaker President, Linda Shumaker, PE, is thrilled about the acquisition of the firm her father founded in 1956. “As a leading provider of engineering, environmental, and geomatics services in New York, I have successfully managed the firm since 1992. The HUNT transition will begin a new chapter for our loyal employees, many of whom have been with Shumaker for decades. I anticipate our close working relationship with HUNT and shared common ideologies will ensure a seamless transfer of leadership. Thereby safeguarding the exceptional service our clients have come to expect over the past 65 years. The Shumaker staff is looking forward to joining HUNT and being an essential component to future development.” Dedicated to taking a personal approach to its projects, HUNT has long been an entrusted partner, providing full- service expertise in architectural and engineering design services for K-12 clients, as well as public and private sector clients throughout western and central New York and Pennsylvania. HUNT also has an expansive municipal and private development portfolio which includes site and civil engineering, architectural design, land surveying, and planning services. Ultimately, the acquisition will further diversify HUNT’s full-service capabilities

as a premier provider of professional services within the many disciplines encompassing engineering, architecture, and surveying. Shumaker will be rebranded as HUNT, and will retain existing office locations and services, as well as culture. HUNT and Shumaker will support existing partnerships and long- term client relationships, now assisted with an enhanced team connection. Zweig Group advised Shumaker through the transaction, and the deal team included Drake Hamilton, an advisor with Zweig Group’s M&A team; Tracey Eaves, MBA, CBA, CVA, BCA, CMEA, an advisor with Zweig Group’s valuation team; and Jamie Claire Kiser, managing principal at Zweig Group. “Shumaker Consulting is a quality organization with a notable reputation and it has been a pleasure to assist Linda Shumaker and the Shumaker team in moving to the next chapter,” Eaves said. “We are excited to see two great companies joining forces to enhance client services.” Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training.

meaningfulness they experience from their work) stray from the firm’s average, the more likely the individual is to leave as they will be cognizant of the dissimilarity. In summary, pay is an important factor in turnover, but it is not the only one. Managers should also consider other factors like non-cash rewards, job characteristics, leadership, climate, and organizational support when developing strategies to reduce turnover. Furthermore, focusing on employee engagement, work-life balance, and alignment of employees’ values and personalities with the company culture are also crucial to employee retention. Johnny Smith is an intern focusing on strategy and operations at Zweig Group. Contact him at johnny.smith@zweiggroup.com. “Pay is an important factor in turnover, but it is not the only one. Managers should also consider non-cash rewards, job characteristics, leadership, climate, and organizational support when developing strategies to reduce turnover.”

JOHNNY SMITH , from page 9

Alongside addressing issues with current employees’ levels of engagement and withdrawal attitudes, it is extremely cost- efficient to avoid hiring individuals who could be considered a “bad fit.” An important consideration when making hiring decisions is how well a candidate’s values and personality align with the company’s culture. Candidates who share the company’s values, such as a strong emphasis on professional development, are more likely to be successful and stay with the company for the long-term. Additionally, assessing candidates’ emotional stability and conscientiousness through personality tests may help to identify those who are more likely to stay with the company. Adding to the consideration one should make when examining person-company fit, the meta-analysis offers useful data. The relationship between mean-level data and employee characteristics such as job satisfaction and organizational commitment are negative. For example, in a firm that is full of highly committed and happy individuals, an unhappy individual is more likely to resign. This is why it is important for a new hire to share similarities with the company’s current staff. The more an individual’s characteristics (such as how much

THE ZWEIG LETTER FEBRUARY 27, 2023, ISSUE 1478

FROM THE FOUNDER

Disruption, or caretaking?

For every situation that mandates disruption, there will be an equal number of situations that require maintenance of the status quo.

I t seems like everyone wants to be “disruptive” these days. I guess they want “to shake things up,” or maybe “break something that wasn’t broken.” In all seriousness, some things do need shaking up and some radical redirection needs to occur when an organization or part of it isn’t performing.

Mark Zweig

On the other hand, maybe some of the time disruption is the last thing needed. What could be needed instead may be best described as “caretaking.” Keeping things that are being done right in an organization that does something well. Not messing up “grandma’s recipe.” Disruption may be easier to pull off than caretaking. Think about it. You don’t have to know as much. You are unfettered by information or past practices. Tradition and history aren’t important. Caretaking involves intimate knowledge of the situation and the cast of characters. It does not provide radically different results. It’s a maintenance role. It’s not as exciting as disruption. Nor may it draw as much attention to yourself. I have written recently that knowing what to change and what to keep the same is a big part of the art

of management. What if nothing really needs to change? There are plenty of businesses in that position. “Disruptors” and the radical disruption they create could well be a threat to the business. How do you know if something needs to be disrupted? I would raise and answer the following: ■ Is the business declining, or is it still growing? If still growing, that is one indication that it doesn’t need radical change. ■ How is the business performing relative to industry norms? Better, worse, or the same? This means you need to first know how you are performing across a wide range of typical performance metrics and then track how you are

See MARK ZWEIG , page 12

THE ZWEIG LETTER FEBRUARY 27, 2023, ISSUE 1478

ON THE MOVE SHEPLEY BULFINCH EXPANDS REACH IN HOUSTON MARKET THROUGH NEW TALENT ACQUISITION & SENIOR PROMOTION Leading architectural firm Shepley Bulfinch announced the addition of Trent Williams as a principal and the promotion of Natalie Thurman, AIA, to principal at its growing Houston studio. Williams, who comes to Shepley Bulfinch with an extensive background in Houston’s healthcare and higher education design and construction industry, brings a bold and unique perspective to the firm. Thurman, who has been with Shepley Bulfinch since 2019, will continue to bring her design leadership both to the Houston studio and across the firm. Williams previously served as the director of capital projects at Texas Medical Center, and before that was the senior director, capital projects, at the University of Houston. Williams also spent more than a decade as a construction project manager in Houston and received his bachelor’s degree in construction science from Texas A&M. Williams’ background as both a client and a construction manager positions him with a fresh approach to the design process, and his experience in Houston will help Shepley Bulfinch expand its footprint in this dynamic architecture market. “I was intrigued by Shepley Bulfinch’s

purpose-driven architecture philosophy and its culture of designers who truly listen and embrace what clients have to say,” said Williams. “In this business, collaboration between parties is critical to a project’s success, and Shepley Bulfinch is uniquely positioned to leverage that through its approach. I am thrilled to be joining this team of highly skilled architects and to build upon the great work that Shepley Bulfinch is doing in Houston.” “Trent Williams brings a wealth of career experience and personal connections in the Houston market to Shepley Bulfinch and we are very excited to have him on board,” said Angela Watson, FAIA, president and CEO of Shepley Bulfinch. “We have a great team in place at our Houston studio, and with Trent and Natalie’s leadership, we are confident that Shepley Bulfinch’s presence and reach in Houston will continue to grow for years to come.” Thurman, a key contributor to Shepley Bulfinch’s success in the Houston market, has led design teams on a wide range of healthcare, higher education, and research projects. “I believe that design should be innovative, purposeful, and sustainable, and it all starts with effective collaboration,” said Thurman. “Working alongside Trent, I am looking forward to furthering Shepley Bulfinch’s impact in Houston.” Shepley Bulfinch has a strong history in Houston, with projects including: The

University of Houston’s John M. O’Quinn Law School, the University of Houston’s Health and Biomedical Sciences Buildings, the Bellaire Health Hub at Memorial Hermann Medical Group, the Fondren Library at Rice University, The Awty International School, the Houston Public Library, and the Howard Hughes Corporation. “Houston is a dynamic market and one that is always looking for innovative and new ideas,” said Williams. “This is a city where relationships and trust between parties are key. Through my experience, I know what it’s like to be on all sides of the table, and we at the Houston studio will work hard every day to strengthen those relationships and that trust between Shepley Bulfinch and its clients.” Shepley Bulfinch is a national architecture and design firm with studios in Boston, Massachusetts; Durham, North Carolina; Hartford, Connecticut; Houston, Texas; and Phoenix, Arizona. Founded in 1874, the firm has a notable legacy of challenging convention, pioneering visionary design ideas, and collaborating with clients who seek to drive measurable change. Shepley Bulfinch architects and designers are regarded for their expertise in tackling complex projects, especially in the areas of education, healthcare, and urban development.

For every situation that mandates disruption, there will be an equal number of situations that require maintenance of the status quo. Knowing the difference, and recognizing and appreciating that caretaking is an important function could be critical to your long-term success. Mark Zweig is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com. in that position. ‘Disruptors’ and the radical disruption they create could well be a threat to the business.” “What if nothing really needs to change? There are plenty of businesses

MARK ZWEIG , from page 11

doing compared to what’s typical. This is super-important. If you are outperforming the industry, that is one indication you don’t need radical disruption. ■ What is the state of employee morale? If it’s good, that means radical change could impact it in a negative way. The only way to know is through constant polling and an examination of the voluntary staff turnover rate compared to historical firm and industry norms. ■ How do the clients feel about the business? Are problems and complaints about service increasing or declining? These have to be tracked and dealt with. If problems aren’t increasing, maybe disruption is the last thing you need. Every company and unit in it – and every situation – is different.

THE ZWEIG LETTER FEBRUARY 27, 2023, ISSUE 1478

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