TZL 1371

T R E N D L I N E S D e c e m b e r 1 4 , 2 0 2 0 , I s s u e 1 3 7 1 W W W . T H E Z W E I G L E T T E R . C O M

EBITDA margin

Practice becoming a better communicator, and you’ll build better rapport and credibility with clients, colleagues, and everyone else. Take the time

I n today’s world we can access real time updates from the opposite side of the globe in a matter of seconds, and I’m barely even impressed by it anymore. Most of us don’t realize how difficult it was 25 years ago to dig up information on topics like global politics, technological advancements, business partnerships, historical discoveries, favorite recipes, or cats wearing pajamas. The continued improvement of our communications infrastructure has put us in a very unique position of power ... and weakness. We have a virtually immeasurable amount of combined knowledge, but we also too often rely on the easiest avenue to bring us that knowledge. We’re conditioning ourselves to work around a critical process in communication when we start to measure success by the amount of time we spent on the task. Sometimes, time is the exact thing we need to apply more of when it comes to providing a unique experience for a client or a memorable communication effort for an employee. The list of things you can do to improve communication is endless, but here are some that I have been trying to practice a lot of lately: ❚ ❚ Listening. Go into any type of communication being ready to listen to everyone involved. Nonverbal actions like good eye contact, motions for understanding, and removing distractions like your cell phone or computer from view all help build the foundation for a good experience. ❚ ❚ Confidence. A lot of people misunderstand what it means to be a confident person. Confidence should come from knowing you can handle any outcome to the situation no matter if it’s negative or positive. It’s also one of those contagious mind-sets that can be great for group discussions. ❚ ❚ Empathy. When you can develop a good sense of empathy it allows you to address someone else’s mood and to offer the appropriate support and understanding. This can be helpful in more ways than just knowing how to cheer someone up. It can help you spotlight and resolve issues with clients and employees or even identify worthy opportunities for charitable support that fit in with the culture of the firm. ❚ ❚ Virtual presence. We are nine nauseating months into the COVID-19 pandemic and an opinion article published in The New York Times predicted that someone in a similar situation to myself is standing in line behind 268 million people to receive the vaccine. It might be another year before we can safely open our offices to employees and those others that we want to invite into our environments. Being comfortable with all common forms of video conferencing is a must along with being comfortable with the camera turned on. Investing $50 for a basic camera light and microphone can make a world of

Zweig Group’s 2020 Best Performing Firms Report of AEC Firms combines data from six publications and three surveys filled out by award-winners to compare the best of the best to the AEC industry average. Included in this report is a chapter on financial performance of high performing firms. Looking specifically at EBITDA margin on net service revenue, it’s not shocking that fast growth firms and very high profit firms are outpacing the industry standard by a significant margin. How does your firm stack up against the best in the industry? Participate in a survey and save 50 percent on the final or pre- publication price of any Zweig Group research publication. F I R M I N D E X Brown and Caldwell..............................10 Burns & McDonnell Engineering Co.........4 HDR........................................................2 Manhard Consulting..............................12 Neel-Schaffer, Inc..................................10 Sain Associates. ...................................12 Wiss, Janney, Elstner Associates, Inc......6 MO R E A R T I C L E S xz WILLIAM QUATMAN: Liability for cost estimates/cost overruns Page 3 xz Culture carrier: William Nugent Page 6 xz MARK ZWEIG: Give it gas – or let off the throttle? Page 9 xz CAROLINE YOUNG: Increasing your firm’s retention Page 11

Chad Coldiron

See CHAD COLDIRON, page 2

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

ON THE MOVE BEN PIERCE TO LEAD HDR’S NEW MOBILITY & OPERATIONAL TECHNOLOGY SERVICES Recognizing the importance of integrating technology into transportation operations, HDR is establishing a new initiative: Mobility & Operational Technology Services. Led by transportation technology leader Ben Pierce, the program brings together a wide range of experts with a broad understanding of the rapidly changing environment and experience in the application and implementation of technology-focused mobility solutions. The team will help clients understand the benefit of new technologies and develop adoption and operational plans for connected and automated vehicles, transportation system management and operations, tolling, zero emissions/electrified mobility and more. Pierce will serve as director of the initiative and will be responsible for expanding HDR’s technical application and deployment capabilities, working in partnership with Joey Yang, technical director of HDR’s Advanced Technology for Surface Transportation practice. Pierce has supported innovative projects across transportation markets, including work for airports, transit agencies, DOTs and local communities. He has contributed his expertise to Florida’s connected and automated vehicle initiatives, ITS general engineering consulting contracts with NYCDOT, the Denver Mobility Choice Blueprint and the Greater Cleveland Regional Transit Authority Strategic Plan. “Technology is not something to be afraid of but something to embrace,” said Pierce. “At the same time, it’s important to have an adoption plan for different technologies and understand what solutions would be most beneficial – and that’s what HDR can help with.”

Emerging technologies each create their own specificchallenges,whether related toconnected and automated vehicles, electric vehicles or technology centric traffic strategies. HDR’s professionals are well-versed in the adoption, planning and delivery of these technologies and can assist agencies with developing holistic solutions tailored to a community’s needs. The Mobility & Operational Technology Services program will address every form of mobility as well as the repercussions of new technology such as upgrades and changes to related infrastructure and architecture like power delivery, vehicle facilities and system integration. “The technological transformation of transportation has affected the process of infrastructure development, planning, design, operation and management, touching all markets and technical service areas,” said Transportation Business Development Director Rick Pilgrim. “HDR is continuing to evolve to meet our clients’ needs and the public’s demand for enhanced and safe transportation systems.” For over a century, HDR has partnered with clients to shape communities and push the boundaries of what’s possible. HDR’s expertise spans more than 10,000 employees in more than 200 locations around the world – and counting. The firm’s engineering, architecture, environmental, and construction services bring an impressive breadth of knowledge to every project. HDR’s optimistic approach to finding innovative solutions defined its past and drives its future.

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PO Box 1528 Fayetteville, AR 72702

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

CHAD COLDIRON, from page 1

difference in the overall quality of an important conversation. Sharing and collaborating on documents in real time is also becoming quite common and has improved efficiencies on many levels. ❚ ❚ Grace. Grace in business can be a foreign concept to some but when it comes to managing people in business there is a simple philosophy I follow. Hire someone for their character, give them space to succeed, show appreciation, and let them control their career without by-the-book oversight. Showing grace in business will motivate individuals to put forth their best effort. Whatever you plan on focusing on improving, just remember that not a day goes by that most of us aren’t participating in some form of communication with others. Opportunities to improve are around every corner and in every conversation. Check out Zweig Groups virtual learning opportunities to join us for a range of topics that all involve effective communication practices. When we become better communicators, we instantly build better rapport and credibility with clients, colleagues, and just about everyone under the sun. CHAD COLDIRON is director of executive search at Zweig Group. Contact him at ccoldiron@ zweiggroup.com.

Tel: 800-466-6275 Fax: 800-842-1560

Email: info@zweiggroup.com Online: thezweigletter.com Twitter: twitter.com/zweigletter Facebook: facebook.com/thezweigletter Published continuously since 1992 by Zweig Group, Fayetteville, Arkansas, USA. ISSN 1068-1310. Issued weekly (48 issues/year) $250 for one-year print subscription; free electronic subscription at thezweigletter.com/subscribe © Copyright 2020, Zweig Group. All rights reserved.

THE ZWEIG LETTER DECEMBER 14, 2020, ISSUE 1371

O P I N I O N

W hen you take your car in for repairs, the mechanic gives you an “estimate.” Jurors understand this concept, that a customer relies on an “estimate” before authorizing work, and should not have to pay more. How about estimates of construction costs? Contract disclaimers reflect the reality that estimating is an art, not a science – and that design professionals cannot guarantee or warrant the actual costs of construction. Liability for cost estimates/cost overruns

William Quatman

Architects are often criticized for being unable to accurately estimate construction costs. In one case it was said that, “There seems to be no reported case in which an architect is alleged to have over- estimated the cost of a building project. Indeed, no case reveals that an architect has [ever] correctly estimated the cost of a project although tradition assures that this does occur.” Williams Engineering, Inc. v. Goodyear , 496 So.2d 1012 (La. 1986). Since design professionals cannot predict the exact amount that contractors will bid, their estimates of construction costs are normally not guarantees, but professional opinions which, for years, the AIA called “Opinions of Probable Construction Costs” – a phrase still used by many firms, and recommended by some lawyers and insurers. However, when the designer’s contract contains a fixed budget, courts generally hold that

design professionals have to use reasonable care to prepare a design that will meet that budget. A harsh rule of law was developed over the years that if costs far exceeded the owner’s budget, the design professional could not recover its fee. This rule has its roots in cases from the early 1900s and is so strict, that some of the older cases held that even where there was no agreement on construction cost, an owner may reject the plans if the cost proves to be too great. Some of those older cases also held that an architect only gets one shot at the design, and the owner was not obligated to allow the architect to revise the design to meet budget. Generally, absent a disclaimer, courts today look to the “standard of care” to see if the design professional was negligent in their estimates

See WILLIAM QUATMAN, page 4

THE ZWEIG LETTER DECEMBER 14, 2020, ISSUE 1371

WILLIAM QUATMAN, from page 3

Without discussing the effect of the AIA disclaimer, the court held that the architect “lost his right to recover compensation when he designed a building impossible of construction within the maximum cost limitation” – even though there was no maximum cost in the contract! The court allowed evidence of an oral agreement on cost to supplement the written contract. In another case examining an AIA disclaimer, the architect’s estimate was $39,973, but the actual cost was nearly $80,000 (a 100 percent error). The architect was found to be negligent and was denied its fee. Expert testimony was not required because the error was so gross. As to the disclaimer, citing to another case, the court said, “If, as the [architect] seems to infer, it means that an architect will under no circumstances be bound by his estimate, we would consider it contrary to public policy because it would mean that no matter how large the bid for doing the work, [the owner] would be obligated to pay an architectural fee based on that amount.” In a 2014 New Jersey case, a homeowner sued his architect claiming he contracted for a house with a budget of $5 million, but the architect designed a larger house costing between $11 million and $13 million. While expert testimony was not required due to the huge variation, the trial court dismissed the lawsuit based on disclaimers that the preliminary budget was not a guarantee or warranty of the contractor’s estimates. When the owner saw the actual estimate, he asked the architect, whimsically: “What are you guys smoking over there?” and felt the numbers were inflated. The court found that the owner thought the architect’s estimates were in error and directed the architect to complete the design. As a result, the owner essentially assumed the risk and consented to the design of the more costly house. OVER-ESTIMATING? While the opening quote from a 1986 case may have been true at the time, i.e. that no reported case found a designer had over-estimated the cost of a project, that changed in 1993 when an engineering firm was sued in Florida for actually over-estimating the cost of construction, which led the county to issue bonds for more than was needed. However, the engineer’s contract said that estimates of probable construction cost could not be guaranteed and that actual costs might vary from the estimate. Although a jury found in favor of the county, the appellate court reversed, finding no breach of contract, given the disclaimer. SUMMARY. When a group of 10 bidders estimate a project, they all come up with different costs for the same project – and these companies estimate work for a living! Why then should design professionals be expected to get it exactly right when 10 contractors cannot agree on the cost? Therein lies the standard of care, which does not hold architects or engineers to a perfection standard, but to a reasonable standard. Contract disclaimers, like those used by AIA, reflect the reality that estimating is an art, not a science – and that design professionals use reasonable care, but cannot guarantee or warrant the actual costs of construction. A candid discussion with the owner, up front, might be the best approach to set expectations. If the owner wants a more reliable estimate, they may want to hire an independent estimator. WILLIAM QUATMAN, FAIA, Esq., is general counsel and senior vice president at Burns & McDonnell Engineering Co. He can be reached at bquatman@burnsmcd.com.

when given a firm budget. There is no hard, fast rule on this “standard,” but in a 1974 federal case, where the bids were twice the owner’s budget, there was evidence that the architect should have been reasonably able to estimate costs to within a 20 percent to 25 percent margin of error. AIA-TYPE DISCLAIMERS. In response to the old, tough cases, standard industry contracts (like the AIA and EJCDC documents) now routinely contain disclaimers regarding the designer’s liability for estimates. Under the current 2017 edition of the AIA’s B101 Owner-Architect Agreement, the architect provides three estimates during design, and the architect’s basic services only include “conceptual” estimates based on area or volume of the structure (“detailed cost estimating” is deemed to be “Supplemental Services” for an additional fee). First is an estimate based on a preliminary design. Based on the owner’s approval, the architect proceeds to the design development phase, which includes an “update” of the first estimate. If the owner approves again, the architect then moves into the construction documents phase in which it once again updates the estimate and requests the owner’s approval. As in prior versions of the AIA contracts, Article 6 of the current B101 disclaims any warranty or representation that actual bids will not vary from the owner’s budget or any estimate prepared by the architect. In the 1997 version of the AIA’s Owner-Architect Agreement, the words “best judgment” were deleted – a phrase that had been used for many decades and which arguably raised the standard of care from “reasonable” to “best.” (Compare 1997’s B141, Par. 2.1.7.2 to Par. 5.2.1 of the 1987 B141.) Thirty-some years ago, the 1987 edition of the AIA contract also stated that there was no fixed limit of construction cost established as a condition of the agreement, unless agreed to in writing signed by the parties. However, that clause was dropped in the 1997 version. Par. 6.6 of the 2017 AIA B101 provides specific contract remedies if the lowest “bona fide” bid comes in over budget. Those remedies include: 1) owner approves an increase in the budget; 2) owner authorizes re-bidding or re-negotiation; 3) owner terminates the contract, but pays the architect; 4) owner revises the project program, scope, or quality to reduce the cost; or, 5) some other “mutually acceptable alternative.” If the owner chooses to revise the scope of the project, the 2007 version required the architect to revise the drawings without additional charge to meet the budget. In 2017, that was changed to delete “without additional compensation” if the change is due to unanticipated market conditions. Also, modifying the design is the “limit of the architect’s responsibility,” a type of limitation of liability clause. EFFECT OF DISCLAIMERS. Cases involving AIA-like disclaimers have had mixed results. In one case, despite disclaimers, the court held that the cost representations were negligently made to the construction lender, who could sue the engineer for damages. The court also rejected an argument that the estimates were merely “opinions,” which are not actionable. In another case, Malo v. Gilman , 379 N.E.2d 554 (Ind. App. 3 Dist. 1978), the architect’s estimate was $70,000, but the lowest bid was $105,000 (a 50 percent error) and the architect was denied its fee.

THE ZWEIG LETTER DECEMBER 14, 2020, ISSUE 1371

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THE ZWEIG LETTER DECEMBER 14, 2020, ISSUE 1371

P R O F I L E

Culture carrier: William Nugent President and CEO of Wiss, Janney, Elstner Associates, Inc. (Northbrook, IL), a global firm that’s committed to helping clients solve, repair, and avoid problems in the built world.

By LIISA ANDREASSEN Correspondent

W illiam Nugent joined WJE in 1976 and has since completed more than 500 investigation, testing, and repair design projects. He has presented lectures on structural failures, seismic performance, and cladding problems and repair techniques. “Our stated vision is to be a group of extraordinary people working together to set the standard in our business. Accordingly, we seek to employ people who have the potential to become extraordinary WJE professionals and who have the drive to work together to set the standard in our business and thereby make a positive difference in our world,” Nugent says. A CONVERSATION WITH WILLIAM NUGENT. The Zweig Letter: Since you joined the firm, what are some of the most significant changes you’ve seen? William Nugent: One significant change is the increase in our size. When I started, we had about 30 employees; today we have more than 700. However, by far the most significant change I’ve seen is our increasing use of

advancements in technology. When I started, we hand- drafted initial reports, relied on main-frame computers for our significant structural analysis work, and used pay-phones to call-in from the field. In our structural laboratory, we made strain and deflection measurements by hand or recorded them electronically one gage at a time with a voltmeter. The advent of desktop computing, electronic data acquisition systems, the internet, and – more recently – tablets, smartphones, and related technologies has changed the way we do business. It’s widened our capabilities, enhanced our efficiency, and generally made things much easier. TZL: Trust is crucial. How do you earn the trust of your clients? WN: We earn our clients’ trust by trusting our employees. Unlike many companies, we have very few rules and policies. Rather, we stress five core values: consummate professionalism, shared destiny, technical excellence, exceptional service, and fiscal responsibility. These are the principles upon which we strive to base all our actions.

THE ZWEIG LETTER DECEM

Above all, we encourage our employees to simply do what’s right. We’ve found that our employees respond well to the freedom that our trust-based culture provides, and they take seriously the personal responsibility that it requires. We regularly see them do extraordinary work to serve our clients, which across time has helped us develop a large and loyal client base. TZL: How has COVID affected your business on a daily basis? WN: As you might guess, the most significant daily change has been our virtually across-the-board transition from working in the office to working from home. In addition, when it’s been necessary to do certain work on job sites and in our laboratories and offices, our staff have adopted new daily practices (social distancing, frequent hand washing, and wearing masks) to help protect everyone’s health and mitigate the spread of COVID-19. As an organization, we’ve also remained flexible, adapting internal systems and processes where needed to better support our employees and our clients. In particular, we’ve continued to enhance our already strong suite of technology and communications tools, including Zoom, Skype, and Teams. The good news for us has been that even though many daily practices have changed, our ability to deliver distinguished work product and exceptional service to our clients has not. Since the pandemic first hit, we’ve continued to do business from our homes, the field, and our offices and laboratories in accordance with government guidelines almost without interruption. TZL: What type of leader do you consider yourself to be? WN: First let me say that I consider the opportunity to fill a key leadership role at WJE an honor and a privilege. I work hard every day to be worthy of that honor and to continue to earn that privilege. Beyond that, I think it’s most important to ask what type of leader others consider me to be. In that regard, I hope I’m seen as a values- driven leader who cares profoundly about the success of our company as well as the success and well-being of every one of our employees. I also hope that I’m seen as someone who has high expectations of himself and others; who puts the good of the company and others first; who is strong

in his convictions, but still open to new and/or better ideas; who believes almost anything is possible; and who, above all, always strives to do what’s right. 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? WN: For starters, we work hard to select the right people to be our managers. We believe that our front-line managers’ number one responsibility is to help the people they manage succeed. Almost all of our people managers have worked in our company for at least 10 years or more before they’re asked to become managers. This gives us a great opportunity to observe their behaviors and understand their talents. We often say that we’re always looking for people who have the “WJE manager gene” – people with selfless motivation and the innate ability to work with a variety of different individuals to help them succeed. “We’ve found that our employees respond well to the freedom that our trust-based culture provides, and they take seriously the personal responsibility that it requires.” Individuals selected to be our front-line managers initially go through a two-day “now that you’re a manager” internal orientation class. Once in the role, all our managers attend semi-annual two- day workshops to further develop their management/leadership knowledge and skills. In addition, we encourage each of our managers to develop and maintain informal relationships with other managers. We refer to it as “managers helping managers.” Across time, we’ve been fortunate to have exceptional front-line managers. Their diligence is one of the reasons we have such a strong and positive culture and a very low staff turnover. In fact, more than half our employees have worked at WJE for more than 20 years. TZL: If you had to pick one thing that you’re most proud of during your career with WJE to date, what springs to mind? WN: Almost from the day I started working at WJE, I realized that our founders had

HEADQUARTERS: Northbrook, IL NUMBER OF EMPLOYEES: 725 YEAR FOUNDED: 1956 NUMBER OF OFFICE LOCATIONS: 29 EXPERTISE:

❚ ❚ Engineering ❚ ❚ Architecture ❚ ❚ Field ❚ ❚ Forensics ❚ ❚ Design ❚ ❚ Laboratory ❚ ❚ Markets: ❚ ❚ Buildings ❚ ❚ Energy ❚ ❚ Construction ❚ ❚ Industrial

❚ ❚ Infrastructure ❚ ❚ Insurance and ❚ ❚ Testing ❚ ❚ Research EVERY YEAR: More than 7,000

projects are completed WHAT ARE C 2 E 2 PEOPLE?

WJE seeks to employ only C 2 E 2 people – people with outstanding character, unwavering commitment, strong expertise, and genuine enthusiasm.

See CULTURE CARRIER, page 8

MBER 14, 2020, ISSUE 1371

CULTURE CARRIER, from page 7

WN: “WJE culture carrier.” I came to the role of CEO almost 23 years ago. At the time, I had already worked at WJE for 22 years, several of those directly alongside our founders. That background helped me gain an understanding of the culture bequeathed on us. Since day one, I’ve tried to do everything I can as CEO to enhance our culture and help promote an understanding of its elements and value throughout our company. I believe that more than anything else maintaining our special culture will ensure our success for generations to come. TZL: WJE is committed to helping clients solve, repair, and avoid problems in the built world. Is there a specific project that really stands out for you? Can you provide some of the details of what the problem was and how it was solved? WN: One project that really stands out was the reconstruction of TWA Flight 800. In the summer of 1996, Flight 800, a Boeing 747 aircraft, was on its way from New York to Paris, and exploded about 12 minutes after take-off. All 245 passengers and crew were lost. The National Transportation Safety Board immediately began an investigation to determine the cause of the disaster. Working with the U.S. Navy, they soon recovered close to 100 percent of the wreckage and placed it in an abandoned aircraft hangar on Long Island. WJE was subsequently retained by the NTSB to reconstruct a 100-foot section of the aircraft’s fuselage, including the passenger cabin, fuel tanks, luggage compartments, and wing stubs in that section. No aircraft reconstruction of that scale had ever been done before, and it was hoped that successfully doing so would provide investigators some key clues needed to determine the cause of the crash. Against a tight deadline, three WJE technicians and five WJE structural engineers, including myself, devised a plan for the reconstruction. We then spent eight non-stop weeks on Long Island physically performing the work ourselves. The completed reconstruction helped the NTSB conclusively determine that the explosion had originated in the plane’s central fuel tank likely ignited by a spark from frayed electrical wiring. Afterwards, WJE was retained to move the reconstructed aircraft to NTSB’s facility near Dulles Airport where it has been used for years to train new generations of accident investigators. For WJE, and for all of us who participated, the project was unique, challenging, and extremely rewarding. TZL: A firm’s longevity is valuable. What are you doing to encourage your staff to stick around? WN: We’re committed to creating the most fulfilling work environment in our business: one that is based on trust and personal responsibility; one that encourages open communication, continued learning, innovative thinking, and teamwork; and one that provides each individual, regardless of position, a combined opportunity for personal, professional, and financial growth that is unequaled in our business. I believe the main reason staff “stick around” at WJE is that they enjoy the high expectations as well as the substantial rewards that our environment provides.

sown the seeds of a very special culture. It was founded on values, based on trust, centered on people, and focused on excellence. It’s a culture that across time has helped set us apart as a great place to work, a sought-after professional services provider and a leader in our business. TZL: Does your firm work closely with any higher education institutions to gain access to the latest technology, experience, and innovation and/or recruiting to find qualified resources? WN: WJE has always had partners in higher education, and we’ve continuously nurtured and grown those partnerships. This has allowed us to consistently find a diverse group of talented new employees who are passionate about problem solving, want to contribute to our unique culture, and are ready to make a real difference in their professions. The foundation of these partnerships is our “campus champions” program. It builds on our employee alumni relationships with professors and other university staff to help connect us with students who have the character, commitment, expertise, and enthusiasm we seek in all our staff. Besides maintaining these important relationships, we support the respective universities’ engineering and architecture departments by attending career fairs, presenting guest-lectures, hosting student groups in our offices, and providing tours of our Janney Technical Center laboratories. In addition, we often collaborate with various universities on significant research projects. One of our company’s core tenets is to contribute to the betterment of our professions. Our partnerships with leading universities reinforce a shared commitment to expanding our industry’s knowledge. TZL: They say failure is a great teacher. What’s the biggest lesson you’ve had to learn the hard way? WN: The biggest lesson I’ve learned is to be humble. I’ve made my share of mistakes, some more consequential than others, but thankfully none so serious they couldn’t be remedied. These failures and many other experiences have helped teach me humility. Working with so many intelligent colleagues has shown me how much I’ve yet to learn. And working with so many supportive people has made me realize how my success is as much due to their help as it is to my own efforts. TZL: In one word or phrase, what do you describe as your number one job responsibility as CEO? “Since day one, I’ve tried to do everything I can as CEO to enhance our culture and help promote an understanding of its elements and value throughout our company. I believe maintaining our special culture will ensure our success for generations to come.”

THE ZWEIG LETTER DECEMBER 14, 2020, ISSUE 1371

O P I N I O N

When times get tough, you have two choices: You can cut expenses and eliminate all investments, or you can double down on making improvements in your business. Give it the gas – or let off the throttle?

I f you are driving your car up a long hill, and it starts to slow down, what do you do? Do you let off the gas because it is straining – or do you give it MORE gas to get over the hill?

Entrepreneurship and business ownership of an A/E firm is much the same. When times get tough, you have two choices. You can cut expenses and eliminate all investments, or you can double down on making improvements in your business, increasing marketing expenses and making key hires and investing in things that make you more efficient. Why do so many people in this business do the former versus the latter? Is it a matter of confidence? Is it a matter of perspective? Is it a matter of fear? I don’t know. But it doesn’t change the facts. The response of “letting off the gas” could be the worst thing for the business as it goes into a tough market. It will slow it down even more. If you don’t want this to happen to your business

and aren’t planning on winding it down, “pouring on the gas” means increasing marketing spending. And please don’t ask me what a “normal” marketing budget should be for a firm like yours. High design firms can spend up to 15 percent of net service revenue on marketing. MEP and structural engineering firms that do most of their work as subconsultants to other firms in this business can spend as little as 3 percent of net service revenue on marketing. Everyone else in this business falls somewhere in between. The significance of these numbers is singular. You need to do more than you did marketing-wise over the last 10 years of boom times. That translates into spending more.

Mark Zweig

And while I am on this topic of marketing

See MARK ZWEIG, page 10

THE ZWEIG LETTER DECEMBER 14, 2020, ISSUE 1371

ON THE MOVE BROWN AND CALDWELL WELCOMES NEW HEAD OF DIVERSITY AND INCLUSION Leading environmental engineering and construction firm Brown and Caldwell announced Andrea Hall has joined the company as senior director of diversity and inclusion. Hall brings a 17-year track record of creating and leading company-wide diversity and inclusion strategy and strengthening equitable processes for global organizations. Hall’s experience includes improving diverse talent hiring, launching employee empowerment platforms, enhancing career progression policies, developing solutions to interrupt process and procedural bias, and driving diversity and inclusion education and awareness. As senior director of diversity and inclusion, Hall will be responsible for identifying and implementing programs to maintain and promote Brown and Caldwell’s culture of belonging, diversity, and inclusion. Additionally, she will enhance current diversity and inclusion initiatives as the foundation of its recruitment, retention, and professional advancement practices. “This new position builds on our commitment to providing a balanced workplace of perspectives, backgrounds, and talent where ideas thrive and each of our 1,700 employee-

owners is valued and respected,” said Brown and Caldwell Chief People Officer Bob Chapman. “I am thrilled to welcome Andrea and look forward to seeing her impact as we continue to build belonging, inclusivity, and collaboration in our industry, organization, and local communities.” Headquartered in Walnut Creek, California, Brown and Caldwell is a full-service environmental engineering and construction firm with 52 offices and more than 1,700 professionals across North America and the Pacific. For more than 70 years, Brown and Caldwell’s creative solutions have helped municipalities, private industry, and government agencies successfully overcome their most challenging water and environmental obstacles. As an employee-owned company, Brown and Caldwell is passionate about exceeding our clients’ expectations and making a difference for its employees, its communities, and its environment. KYLE GRANTHAM JOINS NEEL-SCHAFFER AS WATER RESOURCES ENGINEER IN MISSISSIPPI Neel-Schaffer, Inc. announced that Kyle Grantham, PE, CFM, has joined the firm and will serve as a water resources engineer based in the firm’s Southaven, Mississippi, office.

Grantham has six years of experience in all aspects of hydrology and hydraulic engineering and design. In addition to being a licensed professional engineer, Grantham is a Certified Floodplain Manager. Grantham’s experience also includes three years working for the Mississippi Department of Transportation. “We are extremely excited to have Kyle join our Water Resources team at Neel-Schaffer,” said Glenn Ledet, PE, Neel-Schaffer’s Coastal Science and Water Resources Manager. “He is a skilled engineer in the hydrology and hydraulic and water resources fields and his experience both in consulting and in the public sector will certainly add value to our team.” Grantham holds a bachelor’s degree in civil engineering from the University of Mississippi in Oxford, Mississippi. Neel-Schaffer is a multi-disciplined engineering and planning firm with offices throughout the South. Founded in 1983, Neel-Schaffer is ranked 230th on Engineering News-Record’s list of the nation’s Top 500 Design Firms for 2020.

MARK ZWEIG, from page 9

Recruiting and hiring is another way for firms to “pour on the gas.” Again, the typical response of A/E firms to challenges in current or future workload is to cut labor, not increase it. Yet tough times could indicate the firm needs to do the opposite. The market is saying it doesn’t like the firm’s current offerings for whatever reason. What firms should be doing is (quickly) figuring out what the market DOES want from them, and then investing in building that capability as fast as possible. And maybe the firm should decide to go after entirely new markets or add all new services because their current markets are just too hammered. That could mean spending more on recruiting and labor, not less. And finally, we have the matter of spending on efficiency improvements. Instead of cutting back or spending less on software and systems and training, “pouring on the gas” could mean spending more on these things. Sure it sounds like investing versus expense reduction, because it is! And that spending needs to go up just when you ostensibly can least afford to do so. So, what are you doing as the hill ahead looms? Are you letting off the throttle so you don’t strain your “engine,” or giving it throttle and burning more fuel so you can get over the hill? Real entrepreneurs will press on the accelerator harder, and pass everyone else who is crawling up that hill! MARK ZWEIG is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.

spending, let me say that no one in this business is actually spending what they think they’re spending on marketing. There are so many distortions you will find in the numbers. For example, most firms let nearly anyone in the firm charge their time to “marketing.” My personal experience is that when things slow down, it looks better to charge your time to “marketing” versus uncategorized “non- billable.” So people do that and it looks like the company is spending more than it does. “What are you doing as the hill ahead looms? Are you letting off the throttle so you don’t strain your ‘engine,’ or giving it throttle and burning more fuel so you can get over the hill? Real entrepreneurs will press on the accelerator harder, and pass everyone else who is crawling up that hill!” Another way marketing spending is distorted goes the other direction. When companies have a practice of rolling all marketing and business development costs into a project once they win it, that means their marketing costs from an accounting standpoint only represent marketing costs that did NOT lead to a project. So marketing spending in that case is underreported.

THE ZWEIG LETTER DECEMBER 14, 2020, ISSUE 1371

O P I N I O N

Positively impact your firm’s retention rates by turning abstract ideas into actionable goals. Increasing your firm’s retention

D o you have someone in the family known for their home-cooking? I do, and it is nearly impossible to replicate their dish. When I ask for the family recipe, I receive an imprecise response: “Oh, a dash of this” or “Two handfuls of this spice should do it.” Their cooking doesn’t rely on a written recipe, but rather years of experience, spontaneity, and instinct.

Caroline Young

When discussing retention goals and initiatives, I feel like I’m having a similar conversation – a mishmash of ideas without a clear answer. You’ve probably heard the same areas on which firms should focus: culture, compensation, incentive packages, recognition, and the list goes on. After working on our retention goals at Sain Associates, I realized how important it is to turn abstract ideas like firm culture into an actionable goal. Here are some ways you can begin to positively impact your firm’s retention rates: 1)Train and actively support your managers. Your managers are an important part of creating and maintaining company culture. Interestingly, managers also have one of the biggest impacts on your retention rates because they affect their employees’ career growth and job satisfaction, two key factors in retaining good employees. With this

in mind, managers need specific training in how to support their employees because often they have the best technical knowledge but are new to managing people. During the training program, you should rely on solid teaching techniques that reinforce learning, and as a former teacher, I have a couple of favorites. First, we can learn from each other through sharing the areas we have struggled with, what we learned from our experience, and how to proactively plan should the situation present itself again. At Sain, we use the term “lessons learned,” and we share our stories of what could have improved our performance as managers and engineers. It is our executive team who first models this behavior, which allows others to feel safe in sharing their lessons learned in a vulnerable environment.

See CAROLINE YOUNG, page 12

THE ZWEIG LETTER DECEMBER 14, 2020, ISSUE 1371

BUSINESS NEWS MANHARD CONSULTING OPENS AUSTIN OFFICE National civil engineering and surveying firm Manhard Consulting has opened a new office in Austin, Texas. The firm’s newest location, its 10th office nationwide, is managed by Jesse Conrad, vice president, who is based in the company’s Dallas office and responsible for managing all of Texas. Austin has been a target market for Manhard, and after careful analysis, the opportunity to bring the right associates onto the team, and given the region’s growth, it made sense to establish a presence there. In addition to Conrad as manager, new Manhard team members based in Austin include Adam Burke, PE, project manager and associate principal; Casey Giles, PE, senior project manager and associate principal; and John Lewis, who will manage projects and work on business development. “These leaders support the growth in the Austin area, and the office complements our existing presence in Texas,” said Don Manhard, Jr.,

president and CEO. “This move aligns with our steady approach to growth, and to better serve our clients across the region. Austin is a perfect fit – a diverse and expanding market, a great opportunity to grow, and it aligns well with our national strategy.” Recent Texas projects the firm has had a role in include: ❚ ❚ Sierra Vista in Iowa Colony, TX – engineering and surveying services for development of 900-acre, 1,800-lot master-planned community ❚ ❚ Sapphire Bay in Rowlett, TX – civil engineering, land planning, surveying, entitlement, and construction administration services for a 117-acre, $1 billion mixed- use development ❚ ❚ Valley View-DFW Commerce Park in Dallas, TX – civil engineering for onsite and offsite improvements for a three building industrial park totaling approximately 1.6 million square feet on 120 acres. “Given the explosive growth in that market,

and the top-tier talent we’ve recruited to build our foundation locally, we’re excited at the potential for us here, and beyond, for our newest office and future Texas opportunities,” noted Conrad. Manhard Consulting’s new Austin team members are located at 2101 E. St. Elmo, Building 1, Suite 100, Austin. The firm has had a Texas presence for five years, and the new location will work closely with Manhard’s existing office in Dallas, and its other offices across the country. Manhard Consulting is a full-service civil engineering and surveying firm that serves public and private clients nationwide. With more than 275 employees, and 10 offices across the United States, Manhard Consulting continues to lead the industry as one of the most responsive, innovative and technologically advanced civil engineering and surveying firms in the country.

CAROLINE YOUNG, from page 11

one-on-one relationships and company-wide events. Transparency is a buzzword but for good reason. Our leadership also encourages transparency by holding a company breakfast bi-monthly, where they review the state of the firm, financial data, recognize recent employee successes, and address any other business-related items. In the company newsletter, the firm also shares financial data, including how the firm is performing on a monthly basis. Each year the firm also shares the annual strategic plan with staff, which outlines the firm’s goals. Workplaces without open communication tend to be more toxic – office politics thrive on trading the need-to-know information and there is more anxiety among staff. Direct communication with all staff members can cut down on these issues. Open communication also goes hand-in-hand with building healthy relationships. Our leadership works toward this by sponsoring monthly birthday lunches and other periodic social events, walking around the office to chat with employees, and supporting employees through special life events. Investing time in employees is a great way to ensure that they will come to you when they need you. Employees, including myself, can easily access executives and schedule appointments with them. Because we’ve built a relationship, I am more likely to approach them when there is a need. Why employees stay or leave involves many factors, which also means there are many ways to increase retention. I suggest choosing one or two goals that can positively impact your retention rate for the next year. Then, focus your policies and programs consistently, and be patient. Some changes take time to see the benefits. CAROLINE YOUNG is the HR coordinator at Sain Associates. Founded in 1972, Sain Associates is a full-service consulting engineering firm that specializes in civil engineering, transportation planning and engineering, surveying, construction engineering and inspection, and geographic information systems. Sain Associates is headquartered in Birmingham, Alabama, with additional branch offices in Pulaski, Tennessee and Huntsville, Alabama. Caroline can be contacted via LinkedIn or at cyoung@sain.com.

Another teaching technique I enjoy is role-playing. By giving managers the ability to role-play, they can encounter a variety of scenarios related to people management, practice how they might respond, and receive feedback from their peers on ways they could have tackled the problem differently. “Why employees stay or leave involves many factors, which also means there are many ways to increase retention. Choose one or two goals that can positively impact your retention rate for the next year. Then, focus your policies and programs consistently, and be patient.” 2)Talk to your employees. Firm-wide surveys can be helpful in determining where to improve retention efforts, but I am able to find out more when I have a conversation with an employee. In a survey, employees may leave out items because they are in a rush or don’t feel like it is important. In person, employees are more likely to give meaningful feedback on what they love about the company and ways to improve. I encourage you to go on a fact-finding mission with employees with differing tenure. In my first year at Sain, I met with employees to learn what they valued so I could create programs that targeted their interest. I would enter the meeting by having a couple of pre-set discussion questions, but I was flexible to let the conversation go where they take it. Their information also helped me focus on maintaining the aspects they loved and allowed me to recruit for the firm more effectively. 3)Encourage transparency from leadership through

THE ZWEIG LETTER DECEMBER 14, 2020, ISSUE 1371

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