w w w . t h e z w e i g l e t t e r . c o m
HR | FINANCE S U P P L E M E N T S Pages 9 - 12
D e c e m b e r 5 , 2 011 , I s s u e 9 3 7
Lessons learned in 2011 to make 2012 better!
T R E N D L I N E S
It could be a better year if you follow Mark Zweig’s suggestions. 2011 wasn’t a great year. It was a flat year – the third (or fourth) flat or negative year in a row (depending on your situation). What makes anyone think 2012 will be any different? It is an election year. Business likes (the illusion of) “certainty.” 2012 will be anything but certain, so I expect another flat year. As the year winds up (where did 2011 go?) I find myself thinking about the lessons learned this year that could be applied to next year. Here are some lessons I learned in 2011 that I plan on benefiting from in 2012: 1)Cut early, cut deep. I wish I had cut a non-productive group earlier in 2011 than we did. We could have saved significant money if we had just looked at the signs in the marketplace sooner and not been in denial about why we were struggling. 2)Follow your collection procedures! When I came back to ZW, we had a huge slug of old AR. Some of it was almost three years old and, with clients in foreign countries, some AR was just stuff that had crept up past 90 days for no ostensible reason. When we got into it (and collected just about all of it) it became completely clear that our established collection procedures that at one time allowed us to never exceed a 29-day average collection period were not being followed. We changed out a few folks in accounting, got back to doing what we knew worked, and collected the money. It won’t happen again!
F I R M I N D E X Bowman Consulting Group Ltd............................ 12 BPACE Engineers................................................. 12 Collier Wade Livingstone. ................................... 12 Degenkolb Engineers............................................. 5 DEI Professional Services, LLC............................ 12 Delta Airport Consultants, Inc............................... 5 Energy Solutions Inc............................................ 12 FDH Engineering, Inc........................................... 12 Huckabee............................................................... 5 Jacobs Engineering Group Inc............................. 12 KlingStubbins. ..................................................... 12 RLF......................................................................... 6 Scott&Goble Architects......................................... 9 Sullivan International Group, Inc........................... 3 With the recent economic challenges facing A/E firms, pay increase percentage has dropped in the in the last few years, according to the 2011 Policies, Procedures, & Benefits Survey. The report finds that pay increases remained constant at around 4 percent until 2010, when they dropped to 2 percent. In 2011, however, pay increases grew slightly to 2.5 percent. – Margot Suydam, Survey Manager
See Mark Zweig, page 2
Look at the units that are doing well and see how much you are spending there marketing-wise. Then look at the areas that aren’t doing so well. My bet is you may see an inverse relationship – i.e., you are spending more percentage-wise on services that won’t sell in an attempt to prop them up. Stop!
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I N S I D E
Technology boosts efficiency; productivity | Cloud storage comes with host of risks Pages 5 and 6 TECH FOCUS
xz top player: Breaking barriers leads to success. Page 3 xz finance: Key performance indicators to track. Page 11
T H E V O I C E O F R E A S O N F O R A / E / P & E N V I R O N M E N TA L C O N S U LT I N G F I R M S
THE ZWEIG LETTER | DECEMBER 5, 2011, ISSUE 937
A/E BUSINESS NEWS Transportation projects in jeopardy: U.S. Secretary of Transportation Ray LaHood warned that a congressional super committee’s failure to come to an agreement on budget reductions on Nov. 21, leading to an automatic $1.2 trillion in cuts that severely affect transportation and infrastructure programs. “Because the super committee failed to reach an agreement, we now face across-the-board cuts to programs that are critical to rebuilding our crumbling transportation infrastructure and putting Americans back to work,” LaHood said in a statement. LaHood urged Congress to set aside politics and get to work on a bipartisan plan that will allow the United States to rebuild critical transportation infrastructure. The Department of Transportation controls billions of dollars in ongoing spending for transportation and infrastructure projects, including highway, airport and port. Failure by the committee of six Republicans and six Democrats to agree on a budget blueprint means the cuts could kick in starting in the 2013 fiscal year, which begins Oct. 1, 2012. Green app world: The U.S. Green Building Council (USGBC) has launched its online App Lab as part of its LEED Automation Program. The lab launched with eight applications, developed by LEED Automation Partners, and is designed for use with Internet browsers, tablets, smartphones and other devices. The App Lab is a searchable catalog of third-party apps that are integrated with LEED data. Each app is a fully functional software tool that has been enhanced to provide LEED projects teams and administrators integration with LEED Online and address the LEED certification process. These tools are already being used for helping with task management, data interchange, file uploads, credit scorecards, credit strategies, team messaging and other uses, and are now capable of interacting directly with USGBC’s LEED Online system. “The potential leverage points are so numerous that we really cannot anticipate the full impact of the App Lab. All we are sure of is that we have created a place to ignite the flames of true innovation and growth. LEED already embodied innovation. Now we are pushing LEED toward an entirely new world of possibilities,” said Scot Horst, senior vice president, LEED, U.S. Green Building Council.
Mark Zweig , from page 1
3)Cash is king. I don’t mind saying that I like having some cash on hand. It helps you stay calm in the face of adversity and also allows you to have some “dry powder” for potential opportunistic hires or small acquisitions. Don’t let it go easily! 4)Sell what sells. A lesson I have had to learn repeatedly. Look at the units that are doing well and see how much you are spending there marketing- wise. Then look at the areas that aren’t doing so well. My bet is you may see an inverse relationship – i.e., you are spending more percentage-wise on services that won’t sell in an attempt to prop them up. Stop! The market has spoken. Throw gas on the fires that are already burning! 5)Get the right people in all seats. When things aren’t going the way you want – marketing tasks aren’t getting done, money not being collected, services aren’t selling like you want, quality is not what you expect, or someone is too difficult to manage – change the person! It doesn’t mean you have to just fire everyone (although that is a possibility if the situation is really bad....), but you may need, at a minimum, to do some reassignments to get some new blood into some crucial jobs. 6)You cannot build your business on luck. If your month or your year rests on getting one project or getting paid by one client who owes you lots of money – you are in trouble! Big clients and big projects may mean big risk – you may be better off with lots of clients and many small or mid-size projects. 7)Focus on client needs. What do your clients want? What aren’t they getting from you and their other service providers? Stop acting like you cannot make any changes in your services, processes, and deliverables. This entire business is changing quickly. If you cannot get tuned in to what the buyers want you will have another bad year in 2012. I saw it in our firm (from our If your month or your year rests on getting one project or getting paid by one client who owes you lots of money – you are in trouble!
proposals to our deliverables to our fee basis) in a number of service lines – and a big part of it was the people running those areas didn’t understand the clients. Make the changes needed. Get people into the firm who understand your audience – coming out of the clients’ organizations is best. 8)Spend less time managing and more time selling and doing. Why do firms need a 14-person BOD when a five-person BOD will do? Why does the BOD meet monthly instead of quarterly? Why do they need weekly meetings with 20 managers? Why are so many people copied on everything? Why do we have all the people and meetings we have if it doesn’t improve the speed or quality of management decision making? Change! Get a small group of your best managers running things and put everyone else back on the tasks of selling and doing! I am confident that many of you had to learn the same lessons I did this year. Let’s vow to not relearn them in 2012. Together we can do some great work, create some good jobs and make a little brighter future for ourselves and our families. Mark Zweig is the founder and CEO of ZweigWhite. Contact him with questions or comments at email@example.com .
38West Trenton Blvd., Suite 101 Fayetteville, AR 72701 Mark Zweig | Publisher firstname.lastname@example.org João Ferreira | Managing Editor email@example.com Julie Kyle | Editor firstname.lastname@example.org Christina Zweig | Staff Writer email@example.com Tel: 800-466-6275 Fax: 508-653-6522 E-mail: firstname.lastname@example.org
Online: www.thezweigletter.com Twitter: twitter.com/zweigwhite Blog: zweigwhite.blogspot.com Published continuously since 1992 by ZweigWhite, Fayetteville, Arkansas, USA. ISSN 1068-1310. Issued weekly (48 issues/yr.). $475 for one-year membership, $775 for two-year membership. Article reprints: For high-quality reprints, including Eprints and NXTprints, please contact The YGS Group at 717-399-1900, ext. 139, or e-mail TheZweigLetter@TheYGSGroup.com. © Copyright 2011, ZweigWhite. All rights reserved.
© Copyright 2011. ZweigWhite. All rights reserved.
THE ZWEIG LETTER | DECEMBER 5, 2011, ISSUE 937
TO P P L AY E R
Breaking barriers leads to success
Hot Firm leader’s holistic approach to business has delivered results. S teven Sullivan’s tenacity – his ability to create solutions to seemingly im- possible problems – may explain how Sullivan International Group, Inc. , attained Inc. 500 status just six years after its founding in 1998. The San Diego, Calif.-based, 150-per- son science, engineering and technol-
except the paper boy! TZL: What is it in your DNA that drives you to success? Is it audac- ity and risk-taking; a can-do at- titude and a relentless pursuit of perfection; something else more abstract? SS: I truly love a challenge: The abili- ty to break through barriers that oth- ers can’t fathom, dreaming big and making it happen – this really is rocket fuel for me. People who are close to me know that I am tenacious and will cre- ate a solution to navigate through most any impossible situation. I’m a vision- ary – not in the sense that I think I am some gifted business guru, I just really can clearly see pictures of what I want to achieve and then make it happen. TZL: In today’s difficult business climate, what does it take to suc- ceed? Is the spectrum of failure a motivator? SS: Fear of failure does stimulate the entrepreneurial soul, but the real deal is to not let the noise around us over- come our individual and collective spir- it to succeed. What I’m trying to say is that the six o’clock news can provide enough doom and gloom for just about anyone who is willing to get sucked into it… there are always ways to survive and I have found there are more people out there that want to see you succeed than fail – even in this crazy business climate. The other reality is that there is always a client with a need. Keeping your finger on the pulse of your clients and industry niche will help to ensure you rise about the fray and succeed – no matter how daunting the world may seem. Focus on your dream – you may need to pull off at the rest stop occa- sionally, but ultimately, you will arrive at your destination… TZL: Where do you see this indus- try in 10 or 20 years? What trends are influencing it? What about your company?
bore you with kinder- garten and piano les- sons, I will provide a snapshot of where I came from… I grew up in Minnesota, came from a large Irish Catholic fam- ily, dropped out of col- lege after my freshman year after my father (Jerry) said that my in- terest in environmen- tal studies was going to go nowhere… I spent a year in Florida study- ing world beers and re- fining my cooking skills in a fun little restaurant on Sanibel Island and came to my senses after a year of unfocused fun. Six months later I was in the U.S. Navy and spent the next 15 years in the
Steven Sullivan, CEO and BOD Chair, Sullivan International Group, Inc.
“I truly love a challenge: The ability to break through barriers that others can’t fathom, dreaming big and making it happen – this really is rocket fuel for me.”
ogy firm has also attained Hot Firm status, sitting pretty at No. 7 in The Zweig Letter 2011 Hot Firm List. In this interview, Sullivan talks about his diverse professional background, his firm’s growth and success, dedica- tion to others and continuous growth. The Zweig Letter: What does it mean to be a Hot Firm? Steven Sullivan: It really means we’re doing what we planned to do. Great plans are really only good if they are properly executed. Successful execu- tion of our annual business plan is tru- ly driven by our talented staff and their dedication to our valued clients – I know it sounds corny but it’s the truth! This is all driven by a culture built on solid core values and a clear mission and vision – something they can be- lieve in and also feel they contribute to regarding the future success of the company. This also provides them with new technical and professional oppor- tunities. TZL: How did you get where you are today? SS: It’s an interesting story… So I don’t
Naval Submarine Force. I finished col- lege while I was in the Navy and started Sullivan in 1998 after accepting a gift of early retirement from the Navy cour- tesy of President Clinton. Started Sul- livan International Group in Novem- ber 1998 and have enjoyed learning and growing from my experiences with our extraordinary employees, part- ners and clients. Of course, I could not have done it without support and per- suasion from friends, family and Kev- in Hayford, my life partner for the past 20-plus years. TZL: Do you remember your first paid job? What did you learn then that still influences the way you work today? SS: I had a paper route in St. Paul, Minn., and delivered both the morn- ing and evening papers in 7th and 8th grades. I had established a decent enough résumé to apply for an execu- tive ice cream server position at the lo- cal malt shop, and restaurants became my bread-and-butter job until I joined the Navy. I guess one of the things I think about occasionally is the fact that you can get a lot done between 5 and 6:30 in the morning when no one is up
See top player, page 4
THE ZWEIG LETTER | DECEMBER 5, 2011, ISSUE 937
top player , from page 3
currently enrolled in a Global MBA pro- gram at Manchester Business School in Manchester, England. At the age of 46, I figured if I didn’t do it then, I would never be able to experience this incred- ible journey. I travel to England every two months for workshops and haul bags of books back with me each time. I am now about nine months away from completing the program and have been able to meet so many great business ex- ecutives from all over the world. It has truly opened my eyes to so many new opportunities and also confirmed the fact the world is truly getting small- er. This is a good thing and I believe it will create greater opportunity for those who choose to leverage this criti- cal point in the development of an ex- panding global economy. Marketing in our industry is changing! It is not business as usual for A/E/P and environmental firms. The tough economy and the increasing power of the Internet and electronic communications are changing everything marketing-wise. Spend the day with the industry’s leading management expert, Mark Zweig, for an in-depth discussion of how marketing needs to adapt to deliver results now. Find out what your firm needs to be doing to stand out from the crowd, and how everyone in your firm can be actively involved in the process. Attendees will learn: ❚ ❚ The role management needs to play in marketing ❚ ❚ How to develop a good business plan that works in today’s market ❚ ❚ How everyone in the firm can be selling ❚ ❚ Ways to help technical people overcome marketing-phobia CALENDAR Marketing In Today’s World: ❚ ❚ Positioning strategies for specific market sectors that will make the phone ring ❚ ❚ Tactics you should employ to find new leads for projects in a bad market Upcoming events are scheduled for Jan. 12 in New Orleans, Jan. 13 in Houston, and Jan. 19 in Memphis. Also, Feb. 2 in Kansas City, Feb. 3 in Fayetteville, Ark., and Feb. 9 in Oklahoma City, Okla. For more information or to register, call 800-466-6275 or log on to www.zweigwhite.com/seminars/ mktsem/index.asp.
these issues. Ed is never pushy or over- ly involved, providing just enough in- formation to help fill in the gaps and allow me to come to a resolution on many challenges over the years. He is truly a great friend and will happily ac- cept a glass of cold Chardonnay in re- turn for his support. TZL: What’s the one trait you most admire in people and why? SS: I really admire people who have a sense of responsibility for their com- munity. I know that we can’t all be ser- vants to every community issue that we are confronted with, but it’s those that are willing to make a sacrifice of time, money and other resources to help those in need that I truly admire. Caring about your community says a lot about who you are and what you value. TZL: Describe the most challenging thing you have ever done/the big- gest challenge you have taken on outside of work. SS: Kevin and I cared for my Aunt Jo in San Diego for five years. She was di- agnosed with Alzheimer’s in 1997 and lived with us until 2002, until she was placed in a nursing home in San Di- ego. She was my mother’s (Tess) older sister and had no children. When she moved in, Kevin and I basically adopt- ed a child. It was truly heartbreaking to see this former Air Force Officer de- cline into really a newborn condition. We had a caregiver during the day- time but evenings and weekends were our shifts. She was an amazing lady – joined the Army Nurse Corps in 1937 and retired from the Air Force in 1964. Aunt Jo passed away in April of 2004. TZL: What question would you ask of another Hot Firm leader? SS: Would you sell me your compa- ny for a dollar? Just kidding… I would really want to ask them what they thought would be the next “big thing” in the industry. We all have our own in- dustry focus and I am always intrigued to hear about areas of opportunity our firm is not currently pursuing. TZL: What lesson learned would you pass along to a recent college graduate embarking on a career in the A/E/P and environmental con- sulting fields? SS: You’re never too old to learn. I am
“Fear of failure does stimulate the entrepreneurial soul,
SS: In the United States, I believe the industry will evolve around a holistic approach to everything we do within the AEP arena; an “end-to-end” consid- eration on how we influence the envi- ronment – starting from development, into design and ultimately the build- ing and operation of all facilities. We will continue to deal with environmen- tal impacts that have contaminated the earth from past and present industri- al operations. Environmental harm will continue to be a growing concern, es- pecially with so many Third World na- tions playing catch up with current First World nations that have had a mo- nopoly on fossil fuel, which has played a significant role in the rapid growth we have had over the past 100 years in both technology and subsequent im- pact it has had on the environment. I think that as silly as the new saying is – 50 is the new 30 – we may be say- ing the same thing in 20 years – 2030 is the new 2010 with far more reaching impacts on the environment than we can even fathom today. I am not a pes- simist – just a realist. When’s the last time you had lunch with a Chinese en- vironmental regulator? TZL: Do hold someone as a special mentor? How did this person influ- ence who you are? SS: Ed Sternagle has played an active role with Sullivan for the past 10 years. He was my TEC chair in 2003 and has been in various management positions within the firm since 2005. He is a bril- liant and proven entrepreneur, inven- tor, and best of all, a patient and com- passionate soul. Sullivan has had some great runs and we have also had some really difficult times that many would have walked away from. Ed has pro- vided deep insight on these issues and helped me visualize ways to resolve but the real deal is to not let the noise around us overcome our individual and collective spirit to succeed.”
© Copyright 2011. ZweigWhite. All rights reserved.
THE ZWEIG LETTER | DECEMBER 5, 2011, ISSUE 937
O P E R AT I O N S
Technology boosts efficiency; productivity
Most firms are using a combination of systems to accomplish their goals. By Liisa Sullivan Correspondent I nformation is all around us and its getting increasingly more difficult to manage. Companies need strategies not only for managing money, inven- tories and people, but information as well. The sheer quantity of information that descends upon organizations to- day is rapidly creating a set of circum- stances where firms can no longer just “wing it.” Using software to the max. Delta Airport Consultants, Inc . (Richmond, VA), is a firm of 65 em- ployees with locations in eight offic- es around the country. Established in 1978, it specializes exclusively in air- port consulting. Its staff of aviation professionals includes civil and elec- trical engineers as well as airport plan- ners and environmental specialists.
company moved to using Newforma for its document and project informa- tion management needs. “Again, our goal was to facilitate team- work across multiple offices and to im- prove communications with our cli- ents, consultants and contractors,” Beamon says. “We’ve noticed particu- lar improvements with the request for information and submittal functional- ity; and e-mail filing is also a treasured feature.”
agement firm, reveals that his firm has made a significant investment in tech- nology; however, he hesitates to iden- tify a single product that has single- handedly improved efficiency or pro- ductivity. “We approach technology with a ques- tion: ‘How will this support our overall mission to service our clients?’” Lueck says. “Hardware and software are only one piece of the puzzle; our processes and procedures are what define who Huckabee is and how we service our cli- ents.” Huckabee looks for technology that will enable productivity and support its business. “We stay away from the ‘one-size-fits- all’ solutions that tend to box you in and limit your flexibility,” Lueck says. “This approach has served us well; we have several systems, from the com- plex to the simple, that enable pro- ductivity and provide flexibility.” For instance, Huckabee has a comput- ing environment that can be accessed from just about any device with Inter- net connectivity. This allows its team to draw, update, review, communicate and access critical data from anywhere. “We use Microsoft OneNote for infor- mation collection and collaboration throughout the different phases of a project,” Lueck says. “We use Revit and SpecLink for our de- sign and documentation for each proj- ect. Our construction observers use tablets to collect, manage and view project specific information in field.” It’s a combination of all of these sys- tems, integrated together and connect- ed through its processes and proce- dures that enable Huckabee and Delta Airport Consultants to be productive, efficient and effective within its overall mission to service its clients.
Alethea O’Dell, direc- tor of marketing and business development at Degenkolb Engi- neers (San Francisco, CA), 175-person earth- quake and structural engineering firm, says that Deltek Vision has made its proposal pro- cess more efficient. It has also helped to streamline its business development reporting
Alethea O’Dell, Director of Marketing and BD, Degenkolb Engineers.
process. “Before implementing Deltek Vision, we had to send out e-mails to staff to see if anyone remembered a certain type of project. Different offices had project information stored in master résumés and experience lists on differ- ent networks,” O’Dell says. “And, you could never be sure if you had the most recent description un- til a project manager reviewed it and said, ‘Wait, I rewrote this for so and so last time. Find that description.’ Now, we have a process and the technology to house all project and résumé data in one location that is easily accessible by multiple offices.” Technology must support company mission. Tom Lueck, president of Huckabee (Fort Worth, TX), a 60-person educational architec- ture, engineering and program man-
So, how do they keep in contact with all these offices and ensure that things run smoothly on a daily basis? Courtney Beamon, vice president and CFO, re- ports that her compa- ny is a Deltek Vision customer and that they make full use of its software. “From tracking em-
Courtney Beamon, VP and CFO, Delta Airport Consultants, Inc.
ployee and client data to forecast- ing our backlog and managing our project accounting needs, we use it all,” Beamon says. “Plus, we’ve con- tracted with Knowledge Architec- ture (based in San Francisco, CA) to develop an integrated solution that pulls much of this information over to our company intranet. Having data at our virtual fingertips helps us to stay connected despite our geograph- ic dispersion across the country.” When it comes to project management, Beamon explains that in early 2010 the
“We approach technology with a question: ‘How will this support our overall mission to service our clients?’ Hardware and software are only one piece of the puzzle.”
THE ZWEIG LETTER | DECEMBER 5, 2011, ISSUE 937
A R C H I V I N G
Cloud storage comes with host of risks
As firms need more than more space, remote archives are a viable option, however. By Julie Kyle Editor A s more people and businesses use web-based applications, the list of known vulnerabilities increases; and with it, the number of cases of securi- ty breach and data theft at companies around the world. Security of files and documents that hold sensitive company and customer information is of top concern to leaders of A/E/P and environmental firms. The recently released Information Tech- nology Survey of Architecture, Engi- neering, Planning and Environmental Consulting Firms indicates the biggest challenge is data storage or file man- agement; the top priority for 2011 is data storage or organization. “There are always risks with putting anything online because you are trans- ferring the data through the Internet infrastructure, and once it’s there it is exposed to more people and more com- puting processes that are not under your direct control,” says Duane Craig, publisher of Construction Cloud Com- puting. “Still, it is not inherently more risky than say your own poorly guarded in-house storage system that everyone in your organization accesses every day using a wide range of devices, many of which are accessing the files from the Internet. “For some companies, online storage may be quite a bit more secure than what they have in their offices,” Craig says. David Singer, an insurance pro- fessional who helps A/E/P and envi- ronmental firms with their insurance needs, says risks of online storage in- clude reliance on a third party. “In a recent example, a privately held third-party vendor created a front-end system which, in turn, used a Micro- soft cloud platform. The smaller vendor
kept these days is contracts, says Da- vid Yates, controller. Everything else is stored electronically. However, the company is hesitant about cloud or third-party storage. “Our need is low-cost, reliable, long- term electronic storage space,” Yates says. “There has been some discussion about the cloud and off-site data farms, and either may be viable solutions for our future needs.” For now, RLF scans or prints every- thing to PDF for long-term electronic retention. “This includes A/P and A/R information as well,” Yates says. “We keep project related files in their native format along with a PDF copy when ap- propriate. Model files, renderings, and animations are kept in common file formats.” RLF rents approximately 1,200 square feet of storage space for archived proj- ects and corporate information. “We also have more than 200 DVDs of ar- chived electronic information,” Yates says. When RLF began making im- provements to its archive policy, man- agement consulted with its corporate attorney, its professional liability in- surance agent and carrier and even some of its clients. “This was an im- portant step to make sure we knew the rules,” Yates says. Florida’s Statutes of Limitations and Repose is 10 years. RLF burns DVDs of entire project folder structures, includ- ing email, when projects are archived. “We then move the project off our main servers to a NAS (network-attached storage) server. RLF does this so our staff can access the archived informa- tion without corrupting the original data,” Yates says. “Our experience has been NAS servers are a very cost-ef- fective and reliable storage facility. The NAS is backed-up annually using the current back-up format for the year.” This new policy has worked so far, Yates says, but IT staff is concerned about the growth rate of storage requirements, which may eventually push the compa- ny to the cloud.
provided the front end system design and service to the design firm. Should that entity experience volatility or ser- vice issues, the design firm may expe- rience the same issues downstream (think lost data, inaccessible records, staffing issues vis a vis point of contact, archiving problems).” Acquisitions compound this issue, he says, as smaller companies are being bought up and platforms are changing very quickly. “I was told about an article recently that listed 90 cloud computing companies to watch in 2011 – the arti- cle also bid farewell to a host of compa- nies that did not survive 2010. Design firms need to choose a vendor carefully and make sure information is retriev- able and transferrable.” Sensitive information stored online in a data storage scenario can be sto- len, damaged or destroyed, Craig says. Companies that store information on- line are also subject to compliance con- siderations such as HIPAA, SOX, FIS- MA. If a firm does business across na- tional borders, security considerations are more complex. But many cloud li- cense agreements just specify the ven- dor only has to make its best effort when it comes to security, he says. “Ask for some plain language that de- tails just what they guarantee and what they don’t guarantee. Find out how they store the data, what types of back- ups are included and how they qualify the employees who will be working in the data center where your data will be stored. Ask them to describe what your responsibilities are as well,” he says. “Basically, you’re letting someone else take a great deal of responsibility for the security of your data so you have to balance your tolerance for risk with their reputation, longevity and docu- mented practices and guarantees.” Craig recommends a best practices pa- per from The Cloud Security Alliance that can help with this process. No more paper. At RLF (Winter Park, FL), a 130-person architectur- al, interior design, and MEP design services firm, the only form of paper
© Copyright 2011. ZweigWhite. All rights reserved.
THE ZWEIG LETTER | DECEMBER 5, 2011, ISSUE 937
Get ready for that sudden bump While many economic indicators are pointing to some stabilization, recovery will be marked by rough patches.
environment. While corporate earnings and the economy may improve in 2012, the building and construction markets may not participate to the same degree as the economy as a whole. There are still too many issues with overcapacity in many real-estate markets and lenders who are not ready to jump back in the game. There is also no guarantee that the United States will see significant economic recovery in 2012. The headwinds to an economic recovery are caused by long-term dislocations that will not improve in a quarter or two. The continued high rates of unemployment and underemployment are signs that the economy is not growing in a way to utilize the excess capacity that exists in the system. Even though the economy has grown, unemployment is much higher than in recent recoveries. The high variability of unemployment rates from region to region and state to state also point to structural issues that are damping the ability of people to move where jobs are available. Studies have shown that the economy is creating jobs; unfortunately these jobs are often going unfilled due to a lack of qualified applicants. While I do not prescribe to the apocalyptic scenarios of some, most signs point that the U.S. economy will continue to struggle for at least another year, if not two. Unlike other recessions, neither government spending nor simple GDP growth can pull the design industry from its plight. The good news is that we are not Europe and the United States has time to change its course. The bad news is that Europe’s day to pay the fiddler arrived at a time when the global economy is unlikely to brush off a default by a large country or the failure of a large European bank. Will a Greek default mean that a mid-sized U.S. architectural or engineering firm is doomed for 2012? I think the answer is no. However, I would rather run with the wind on my back, than into the teeth of the wind. The issues facing our economy are real and are deep. While I do not prescribe to the apocalyptic scenarios of some, most signs point that the U.S. economy will continue to struggle for at least another year, if not two. Unlike other recessions, neither government spending nor simple GDP growth can pull the design industry from its plight. The most likely scenario for the foreseeable future is periods of smooth sailing with sudden turbulence from problems with root causes sowed many years ago. Today’s environment requires that firms have a laser-like focus on their markets and serving their clients. Only the best in class will thrive in this environment. The show must go on, but I think the best advice can be taken from the captain on that rough flight, “Please keep your seat belt buckled while in your seat, just as we do up on the flight deck.” W. Hobson Hogan is a ZweigWhite principal specializing in mergers and acquisitions, finance and strategic planning. Contact him at email@example.com.
I travel quite a bit, mostly by airplane. I was on a particularly rough flight the other day and the captain came over the loud speaker and asked for flight attendants to be seated. It was not the consistent chop that you often get; it was periods of smooth sailing punctuated by big drops and jaw-jarring updrafts. After each “bump,” I was wondering if that was the last one or if we had more turbulence ahead. I then came to realize this was a great analogy for where we are in the current economic cycle. The economy moves along for a while and things feel like we may get back to normal, then boom! – down go the markets. First it was subprime, and then Lehman Brothers, now it’s Greece and Europe. It seems that we are stuck at a rough altitude and air traffic control is doing us no favors. Most people that I talk to are worried about a double-dip recession. Professor Chris Lundblad from the Kenan-Flagler Business School at the University of North Carolina, a personal friend, believes that while technically a double-dip recession is possible, the U.S. economy never really recovered from the financial crisis of 2008. In spite of the fiscal and monetary stimulus provided in 2009 and 2010, the recovery has
been tepid at best. High levels of debt, especially held by individuals, have given the economy a hangover. Our long economic expansion was fueled by funds borrowed cheaply from abroad, at the expense of long-term savings. The difficulty of the economic situation today is that it is in the long term best interest of the U.S. economy to increase savings and curtail deficit spending; however, this will hamper consumption and suppress economic growth in the near term. Administrator Martha Johnson of the General Service Administration summed up the U.S. economy conundrum perfectly. She told the GovGreen conference that the General Services Administration has “no new buildings” in their budget for 2012 and this was after GSA’s new building budget was slashed 91 percent in 2011. Considering the lifeline that government work provided to many firms in 2008 and 2009, the loss of significant demand from the public sector would be unwelcome news. Members of Congress have received the message from their constituents and the financial markets: Cut the deficit or you’re fired. The problem is that cuts to government spending do not have offsetting increases in private spending in this
THE ZWEIG LETTER | DECEMBER 5, 2011, ISSUE 937
Networking with a mission It’s a discipline and a practice, and not an annual event to check off your calendar. Here are six essential steps to make it work.
associations, events and people these key people are drawn to.
Most networking is unproductive because it’s not strategic. Walk in the door knowing who you want to talk with and why. You may need to wait for the right timing, but be patient and persistent. Go deep. Don’t spread yourself too thin. It’s better to get involved in one key association by serving on a com- mittee or the board, than skipping around to a half dozen. And don’t think that going to a luncheon every six months will do anything. When you serve on a board or commit- tee, people get to know you. My best business development contacts can be traced back to my work on committees and boards. But you have to be committed. Networking can be effective if you’re focused, patient and committed to making it work. Above all, remember that it’s a discipline and a practice, and not an annual event to check off your calendar. Lighten up. You don’t need to be hyper-focused on re- sults at every function. Dale Carnegie tells salespeople to smile. It’s simple, but there is truth to it. Scowls are not people magnets. Lighten up and expect to get to know some people as peo- ple. Ask someone what they did over the weekend or if they’ve been to a Timbers game. When it comes up (and it will), tell them what kinds of clients you are looking for or your area of passion. Ask them about their work and how you might be able to help them. You don’t need to be handing over your client list to that insurance agent you met, but you never know who knows who. Stay connected. Most networking suffers from sheer neglect. If you connected with someone new, follow up right away with a note. Determine the pool of key people that are critical to advancing your career and touch base with them quarterly. Author Ford Harding conducted a sur- vey of 100 rainmakers and found they all shared one thing: they were disciplined to consistently feed and tend to their network. It doesn’t always need to be a phone call or coffee, either. This column and newsletter are very effective ways for me to stay in touch. People are busy; stay top of mind to get the most out of your network. Networking can be effective if you’re focused, patient and committed to making it work. Above all, remember that it’s a discipline and a practice, and not an annual event to check off your calendar.
F or many people, networking is a lot like doing sit-ups: a painful exercise they never seem to find time to fit into their routines. After all, how many industry events have you dutifully attended, stocked with business cards, only to talk to a few people who were never going to hire you?
How does one ensure that networking isn’t going to be a colossal waste of time?
Start at home. Remember the people who believe in you. Start by networking with friends and associates who already want to help you. The number one root of ineffective networking is the failure to inform champions that you’re interested in their help. People buy from people they like and trust. Why spend all that time trying to make new friends when you haven’t fully tapped your existing network? Are you afraid of being a burden by having your hand out? That’s a good instinct. Be sure to think of how to help your friends succeed. The universe has a way of repaying those people who are tuned into helping others first.
Know why. People are busy. Know why you want to meet with someone. “Looking for leads” is a lazy excuse for a more strategic approach to networking. What kind of clients are you looking for? What is the area you want to become known for? Do you want to develop a reputation in hospital HVAC system design or urban planning for Oregon coastal towns? The more you focus your practice, the more knowledgeable you become. And the more knowledgeable you become, the more you are a resource within the industry. People want to know about what others in the industry are doing. Your effectiveness at reaching the right people will exponentially increase as you become recognized as one of the people in the know. Know who. While friends are a great base, they are not always the conduit for new relationships. Know who you specifically need to meet. Ask your friends for introductions, but don’t stop there. Look at the
Leo MacLeod is a new business coach and strategic consultant. He can be reached at firstname.lastname@example.org.
Originally published in the Daily Journal of Commerce.
© Copyright 2011. ZweigWhite. All rights reserved.
HR A SUPPLEMENT OF THE ZWEIG LETTER
DECEMBER 5, 2011, ISSUE 937
B E S T F I RM
Scott&Goble Architects land of opportunity Fast FAQs Employees: 104 Quick history: Founded in 1995 by Dale Scott and Suzanne Taylor (both
The firm’s culture is a reflection of the belief that happy people do great work. By Liisa Sullivan Correspondent B eing surrounded by passionate people who want to make a posi- tive difference is what it’s all about at Scott&Goble Architects (Tulsa, OK), ZweigWhite’s No. 5 Best Architecture Firm to Work For. “The culture of SGA is the differen- tiator,” says Chris Goble, president. “While we compare ourselves to the upper quartile of ‘best firms to work for’ regarding perks and benefits, it re- ally comes down to the atmosphere and environment that defines our culture – being surrounded by great people who have a passion for making a positive difference.” Hal Staples, a project architect for SGA, has been with the firm eight years. “One of the great things about working at SGA is the family atmosphere,” he says. “The wedding and baby showers, firm-wide events like the summer pic- nic and holiday celebrations are all part of what makes SGA tick. These events and the open office environment set the stage for building great relation- ships with coworkers.” Lighten up. Having fun is important no matter where you are, and if you can squeeze some in while working… so be it. SGA is serious about what they do, but they also know when to lighten up. Fun events include annual bake sales, chili cook-offs and grilling competi- tions. Staff likes to dress up for Hallow- een parties, team spirit day and Cinco de Mayo. A Thanksgiving potluck also brings people together to give thanks for the important things in life. Outside of the office, staff can often be found working on community projects such as “Rebuilding Together” – the na-
retired) as TaylorScott Architects. The idea then was simple and similar to most start-up architectural firms – they wanted to do the kind of work they enjoyed while having fun along the way. What they do: SGA is
tion’s leading nonprofit that works to preserve affordable home ownership and revitalize communities. Its net- work of more than 200 affiliates pro- vides free rehabilitation and critical repairs to the homes of low-income Americans. SGA also organizes canned food drives and participates in Project Elf – a group that works with schools and other agencies to help provide basic needs to school-aged children in the Tulsa area. It helps with uniforms, shoes, socks, underwear, coats and more. Positive company culture = positive recruitment and re- tention. Oftentimes people need more than money to feel valued in their jobs, something that SGA doesn’t take lightly. “The firm has done a great job of depict- ing SGA’s culture on the website – and it’s really cool that those images are a genuine reflection of what our culture is truly about,” says Clint Hoppes, di- rector of human resources. Hoppes has been with SGA for four years and says that it has been a privilege to work for firm leaders who care about individu- als. “They truly work hard to make SGA a great place to have a career, and to be able to share their heartfelt focus on culture is invaluable when it comes to recruiting,” Hoppes says. Sixty-three employees have been with
a leader in national architectural programs, prototype development, management and maintenance, architectural forensic analysis and sustainable design.
SGA for five years or more. And be- cause of the firm’s growth, 22 new peo- ple have joined the firm since the be- ginning of 2010. Intern development. SGA’s growth and success is also due, in part, to its commitment to the National Council of Architectural Registration Board’s intern development program. The support of this program has prov- en to be a strategic advantage to the company’s growth by emphasizing its importance to current employees, the community, its clients, and the intern himself. SGA will help with licensure and continues to advance and support the professional growth of its staff. Goble sums up what makes SGA a Best Firm best when he says, “The culture is defined formally as a ‘land of opportu- nity’ for all those who want to help us succeed while realizing their personal and professional goals. “Our culture is a reflection of our be- lief that happy people do great work. If you enjoy the work, the people you are teamed with and the clients you serve, then great results will happen. Life is too short for anything other than an exciting and engaging journey,” he says.
THE ZWEIG LETTER | DECEMBER 5, 2011, ISSUE 937
ON THE MOVE HAKS with new president and CEO: The HAKS Group Inc. (NewYork, NY), a multi- disciplined, global construction management, engineering, architecture, land surveying and material testing firm, has appointed Elliot “Lee” Sander , former CEO of the Metropolitan Transportation Authority of New York, as its new president and CEO. Sander will be responsible for directing daily operations of HAKS’ national and international offices, and will be working in tandem with chairman and co-founder Husam Ahmad to expand the firm’s global operations. In addition to his leadership at the MTA, the largest public transportation and toll network in the Western Hemisphere, Sander’s long résumé of public-sector service includes commissioner of the NewYork City DOT, director of Transit for the NewYork State DOT, and deputy commissioner of the NYS Division of Housing and Community Renewal. Founder of the Rudin Center for Transportation Policy and Management and a founding co-chair of the Empire State Transportation Alliance, Sander currently serves as chairman of the Regional Plan Association, an independent planning organization that has played a vital role in the region’s infrastructure and economic development. Prior to joining HAKS, he led the worldwide transportation practice of a large global architecture and engineering firm. “HAKS is on an extraordinary growth trajectory due to its exceptional project delivery standards, commitment to customer service and emphasis on maintaining a dynamic, people-oriented and uniquely multicultural environment. I am particularly looking forward to directing an organization of this caliber, taking on major projects on a global scale while achieving the highest level of customer satisfaction and employee engagement,” Sander said in a statement. “Lee has an unparalleled record in delivering complex infrastructure projects on a global scale and has played a critical role advancing the downstate metropolitan area’s transportation system over the past two decades. We are very proud to have him leading our team forward,” Ahmad said. Skelly and Loy hires three: Skelly and Loy (Harrisburg, PA), an engineering and environmental consulting firm, has hired Daniel Davis , Sean James and Trent Sustich to perform environmental site assessment and compliance services from the firm’s Pittsburgh office. With more than 25 years of experience, Davis is an environmental remediation
HR BRIEFS Saving for retirement up: Despite a poor outlook about their economic expectations, American workers are renewing their commitment to retirement savings, according to the latest Mercer Workplace Survey. For example, over the past year 41 percent of participants claimed to have increased their 401(k) contribution rate (up from 31 percent), 40 percent reallocated existing portfolios (up from 33 percent) and 38 percent reallocated their future contributions (up from 29 percent). In the coming year, participants also plan to contribute more to their 401(k) plans and a slightly higher percentage expect to contribute the tax-deferred maximum (11 percent, up from 8 percent in 2010). These positive actions mirror a corresponding shift in attitude, with participants becoming more accountable for their key retirement decisions. A resounding 85 percent of participants feel confident in their 401(k) asset allocation, 83 percent in their investment selection and 77 percent in their contribution amount. These results are all improvements over 2010 results and, in fact, top some levels found in pre- recession responses. Economic prospects aren’t so good, however. The percentage of participants expecting a recession has nearly doubled (42 percent versus 23 percent in 2010). A record number of participants fear job loss (45 percent, up from 36 percent in 2010) and plan to delay retirement (44 percent up from 35 percent in 2010). Health costs hinder recovery: Nearly everyone is feeling the pain of health care costs that are high, and rising. According to a new report fromThe Commonwealth Fund, between 2003 and 2010, the cost employers paid for family coverage rose 50 percent to an average of $13,871 a year – and employees’ share of that tab increased 63 percent. In the process, health care has gobbled up an enormous amount of capital that employers could have used for salary or wage increases, benefits, or hiring new workers. It’s a problem has become pervasive across the nation. In 2003, 13 states had average premiums that were under 14 percent of their average incomes. Today, that number has dropped to zero. In 2003, only one state had an average annual premium above 20 percent of average household income. Today, there are 23, home to 62 percent of the nation’s population. And with higher deductibles, those premiums pay for less in terms of financial protection than previously.
program manager responsible for staff supervision, client relations, cost estimates, project scheduling, and all other management aspects involved in abatement design. As an environmental scientist with four years of experience, James is responsible for asbestos abatement oversight and air monitoring, indoor air quality investigations for mold and other contaminants and field testing and inspection for a variety of environmental contaminants. An Environmental Scientist with a strong educational background, Sustich is tasked with asbestos inspection, sampling, and report preparation. 3tarchitects hires: Architecture and planning firm 3tarchitects (Albany, NY) has hired landscape architect Craig Church . Church joins 3tarchitects after spending the last dozen years as a landscape architect at Stantec’s Albany office, formerly Vollmer Associates. Before that, he worked for six years in several capacities for the U.S. Army Corps of Engineers at both Fort Kobbe in Panama, and at Fort Drum in NewYork. “Craig’s strengths in planning conceptualization, site design and technical detailing, as well as his illustration and project management abilities, make him a true asset to our team,” said Scott Townsend, founder and principal of 3tarchitects. “Our existing and future clients will benefit greatly from his knowledge and skill sets that incorporate land use and environmental stewardship that naturally manifest themselves into sustainable and exquisite site designs.” Dennis names VP: Dennis Corporation (Columbia, SC), a civil engineering, surveying and construction management firm, announced that Frank Hribar has been named vice president. In addition to his new responsibilities, Hribar will continue to oversee the Construction Management division’s daily activities. Hribar has worked in the engineering and construction fields for over 25 years. He has successfully managed a wide range of projects including roads, bridges, airports, water and sewer service, stormwater and wastewater treatment plants. “It is an honor and privilege to be named an officer of Dennis Corporation. I look forward to continuing to be a voice for all employees at Dennis Corporation,” Hribar said. “It was an honor to ask Frank to Serve as Vice President. I have known Frank for almost 15 years and consider him first and foremost a friend and secondly a great leader,” said Dan Dennis, company president.
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