1199

T R E N D L I N E S W W W . T H E Z W E I G L E T T E R . C O M M a y 8 , 2 0 1 7 , I s s u e 1 1 9 9

Current ratio

Getting people to do what you want them to do

According to Zweig Group’s 2017 Financial Performance Survey , fast- growth firms had a higher current ratio (2.26) than other growth categories. This is interesting because the current ratio measures the ability of a firm to pay its short-term debt (calculated as current assets divided by current liabilities). The higher the number, the better the firm’s ability to pay their short-term obligations. Slow-growth and stable firms had a current ratio just above 2, while slow-decline firms had the lowest ratio, at 1.75.

G etting people to do what you want them to do. This is what leadership is really all about. And it is never easy. Especially today in the A/E industry, where finding a job is not all that difficult. There is no “schtick,” so to speak. You cannot coerce people into doing what you want them to do. They have to WANT to do it. So how can you make that happen? Here are some thoughts: 1)Help them out. You want people to help you to respond to your requests? Then you need to help them. What can you do to make their job easier? What task can YOU do to help them finish their project? What roadblock can you clear out of the way to make their day better? Help out the other guy and they will help you. Simple idea. 2)Don’t (just) be a critic. Everyone – and I mean everyone – hates those who criticize and judge but don’t DO anything themselves. We had a guy like that in our other business. We tried to help him understand he would get zero cooperation unless he jumped in and worked side-by-side with those he was trying to direct. But he wouldn’t listen. Don’t be one of these people! Get in there and show everyone else how it is done by being a doer yourself. You will have a lot more influence over them and they will work to help you succeed if you can remember this. 3)Show you appreciate people. Tell them “thanks.” Send them an appreciatory email. Brag about them to a client. With some folks, if you just show the smallest amount of

“There’s a lot to this leadership stuff. The sad reality for a lot of us is this: Just when we have finally learned all the lessons we really need to know, it’s time to retire.”

Mark Zweig

OPEN FOR PARTICIPATION zweiggroup.com/survey-participation/

F I R M I N D E X Arconic. ................................................10 Belcan, LLC............................................2 Burns Engineering...................................2 Emerson...............................................12 Finegold Alexander Architects...............10 Fluor Corporation....................................4 Jacobs Engineering Group Inc................4 JENSEN HUGHES..................................8 Passero Associates.................................6 Southwest Research Institute..................8

MORE COLUMNS xz BRAND BUILDING: You gotta have faith Page 3 xz CONTINUING ED: Keep learning Page 9 xz M&A INSIGHTS: Failing to plan, planning to fail: Part two Page 11

See MARK ZWEIG, page 2

Page 6 Conference call: John Caruso

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 L T I N G F I R M S

ON THE MOVE LEE SHABE JOINS BELCAN AS PRESIDENT OF NEW GOVERNMENT SERVICES SEGMENT Belcan, LLC announced that Lee Shabe has joined the company as president of government services, the newly formed global business segment which will focus on cybersecurity, managed IT services, and data management for the U.S. government and institutions around the world. In his new position, Shabe will lead the planning and execution of strategic initiatives, major customer accounts, and mergers and acquisitions. “Government services segment unites our global portfolio of government IT and security offerings and provides a compelling, competitive platform for exceptional customer service,” said Lance Kwasniewski, CEO of Belcan. “Lee brings deep connections in the segment, with more than 20 years of senior leadership experience within the intelligence and defense sectors and proven ability as a dynamic leader.” “Belcan’s momentum in global government security is without equal,” said Shabe. “I am excited to work with the team to accelerate the development and expansion of their already extensive capabilities, particularly the government services and security offerings from Belcan’s acquisitions of The Kemtah Group and Intercom Consulting & Federal Systems. Now more than ever, these capabilities are in demand around the world.” Prior to joining Belcan, Shabe held senior management positions at leading government IT and security service providers. He was executive vice president of NNData and previously was vice president, cloud solutions program office for ViON Corporation. He also held executive positions at L-3 National Security Solutions and Data Tactics Corporation.

Take your advice from Mark Zweig to-go.

Shabe graduated from American Public University with a B.S. in criminal justice. He also received an M.S. in information security from Capella University and an MBA from Liberty University. MARK ADAMS JOINS BURNS, ENHANCES AIRPORT TECHNOLOGY AND SYSTEMS ENGINEERING Burns Engineering announced that Mark Adams, RCDD/NTS has joined Burns’ Aviation team as a principal systems manager. Adams will add tremendous value to the firm’s clients. Adams has more than 26 years of experience in airport technology systems engineering, and has been involved in the design and construction of some of the largest and most complex airport terminals in the world. Adams has provided specialized engineering design at more than 25 different domestic and international airports. Adams is a registered communications distribution designer and a BICSI network transport systems specialist. He is extremely active in his area of specialty and continuously stays in front of trends and developments in the world of airport technology. “Mark is someone we have known and respected for a long time, and to be able to add him to our staff is tremendous. The best part is knowing the exceptional service he will continue to display to our clients, teaming partners, and co-workers.” said Brian Phillips, vice president and leader of Burns’ aviation group. Adams has a B.S. from the University of Northern Colorado, and lives outside of Denver. Adams further bolsters Burns’ talented and growing airport technology and systems engineering practice, and enhances the firm’s ability to deliver exceptional and innovative solutions to the aviation industry.

thezweigletter.com/category/podcast/

1200 North College Ave. Fayetteville, AR 72703 Mark Zweig | Publisher mzweig@zweiggroup.com Richard Massey | Managing Editor rmassey@zweiggroup.com Christina Zweig | Contributing Editor christinaz@zweiggroup.com Sara Parkman | Editor and Designer sparkman@zweiggroup.com Liisa Andreassen | Correspondent landreassen@zweiggroup.com

MARK ZWEIG, from page 1

appreciation, it goes a really long way. Even if you show appreciation for someone who is just doing the job they are paid to do it will help you when it comes to getting them to do what you want/need them to do. 4)Don’t be a jerk to anyone else. Everyone hates to see someone get abused or nastily dressed-down. Even if you never do it to them personally, their fear is you will some- day IF people see you do it to anyone else. So be careful! Watch what you say and don’t give anyone a reason to not like you. Because if they don’t like you, odds are they will NOT be doing what you want them to do – at least not the way you want it done on the schedule you want it done on. 5)Be careful of making too many requests. One reason (not the only reason, but one reason), you could be the boss and the others aren’t is because you can multi-task and juggle your priorities. What I have discovered over a long time of working in this busi- ness is not everyone can. So if you bury them with too many requests at one time, some get ignored or forgotten. It’s not deliberate or malicious on their end. It’s just the reality of how they are wired. They forget stuff. So make them write it down – or put it in writ- ing yourself. There’s a lot to this leadership stuff. The sad reality for a lot of us is this: Just when we have finally learned all the lessons we really need to know, it’s time to retire. Or at least the younger people we work with think so! MARK ZWEIG is Zweig Group’s chairman and founder. Contact him at mzweig@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/yr.). $375 for one-year subscription, $675 for two-year subscription. Article reprints: For high-quality reprints, including Eprints and NXTprints, please contact The YGS Group at 717-399- 1900, ext. 139, or email TheZweigLetter@ TheYGSGroup.com. © Copyright 2017, Zweig Group. All rights reserved.

THE ZWEIG LETTER May 8, 2017, ISSUE 1199

O P I N I O N

You gotta have faith Break free from immediate metrics and returns, because with marketing, the ROI could take months or even years to realize.

G rowing up in the ‘80s, the recent passing of George Michael brought a lot of songs to mind that evoked that time period. When I debuted our new marketing course in Austin, Texas, and as I was discussing one of the essential traits that visionary AEC leaders exhibit when it comes to marketing, the song “Faith” came to mind. Then, of course, I was unable to get the song out of my head, especially the chorus: ‘Cause I gotta have faith, I gotta have faith, because I gotta have faith, faith, faith, I gotta have faith, faith, faith.

Chad Clinehens BRAND BUILDING

send out a bill for an hour.” Billable hours, and the money that results within about 60 days, wires our brains to think short-term and to demand similar returns on other firm investments. The “Because the tangible benefits of a true marketing campaign may not be realized for months or even years, visionary leaders must break free from the need for immediate metrics and returns.”

How does this relate to marketing? At some point, AEC leaders must have faith in their marketing investments. Because the tangible benefits of a true marketing campaign may not be realized for months or even years, visionary leaders must break free from the need for immediate metrics and returns. Typically, the time between pursuing a project and actually working on a project is quite lengthy in the AEC industry. It is directly translated into marketing investment and the time needed to realize results. As such, we must rely on a more ambiguous and vague sense of accomplishment, or even future accomplishment, to justify a continued investment in marketing. We work in an industry that is obsessed with the immediate feedback loop of “work an hour and

See CHAD CLINEHENS, page 4

THE ZWEIG LETTER May 8, 2017, ISSUE 1199

BUSINESS NEWS U.S. AIR FORCE AWARDS JACOBS 53RD WING TECHNICAL SUPPORT SERVICES TASK ORDER Jacobs Engineering Group Inc. has received a task order to support the United States Air Force 53rd Wing operations. The task order was awarded with a value of $204.9 million over four years and nine months if all options are exercised, and focuses on the provision of information technology support for weapons and computer systems related to systems development and operational activities. Work sites are primarily located at Eglin Air Force Base, Florida, with some additional services at Nellis, Creech, Tyndall, and Lackland Air Force bases, as well as the Patuxent River Naval Air Station. “This win builds on Jacobs’ longstanding partnership with the U.S. Air Force, ranging from research and development to test and evaluation, as well as support for complex IT and network programs,” said Jacobs Senior Vice President Aerospace and Technology Darren Kraabel. “This award reinforces our commitment to offer innovation and best practice solutions to the weapons system integration, cyber security, and IT markets.” Services detailed in the task order include a wide variety of support to weapon systems engineering and integration solutions, network solutions, test and evaluation network support, cyber security, software, computer systems

development, network systems operation, and operational test and evaluation support. It also includes support to related Department of Defense agency military operations, including the Foreign Partners and Foreign Military Sales defense programs. FLUOR’S NUSCALE POWER SMALL MODULAR NUCLEAR REACTOR DESIGN CERTIFICATION ACCEPTED FOR REVIEW BY U.S. NUCLEAR REGULATORY COMMISSION Fluor Corporation announced that NuScale Power, in which Fluor is the majority investor, has received notice that its design certification application has been accepted for review by the U.S. Nuclear Regulatory Commission. By accepting the completed application for review, the NRC confirms that NuScale’s submission addresses all NRC requirements and contains sufficient technical information to conduct the review. NuScale’s small modular nuclear reactor commercial power plant technology can deliver the energy diversity needed to power unique energy needs while also providing a safe, more flexible, carbon-free power generation solution. “Fluor is pleased that the NRC validated the receipt of NuScale’s design certification application in such a timely manner,” said David Seaton, Fluor’s chairman and CEO. “We believe that the future of the U.S. new-build power generation industry includes NuScale’s small modular reactor technology and that

NuScale is uniquely positioned as the only U.S. company leading the way.” “This is a great next step for a new U.S.-based nuclear technology and a step that affirms NuScale as a true leader in SMR technology development,” said John Hopkins, NuScale’s CEO. “The exceptional news that the NRC was able to accept our application during the 60-day docketing review period is validation of NuScale’s hard work over the past eight years.” NuScale’s small modular reactors include scalable plants, and the facility output can be incrementally increased depending upon the demand. The technology’s operational flexibility can also be integrated with other carbon-free renewable energy sources like wind and solar to provide consistent power and to help enable stable grid performance. NuScale marked a major milestone on December 31, 2016, when the company asked the NRC to approve its SMR design, the first submitted in the United States. Fluor has supported NuScale since October 2011 – before the U.S. Department of Energy announced its cost-sharing program – as part of a long history with nuclear energy. For more than 60 years, Fluor has been providing the engineering, procurement, construction, and maintenance of nuclear power plants.

the AEC industry. Period. Our new marketing seminar titled True Marketing for AEC Firms is the first of it’s kind in the industry. We go into hardcore marketing theory and prove the need for real investment in an attempt to break free from the reactive, never-ending cycle of proposals and interviews. Most firms react to preexisting market demand and find themselves very close to the industry average win rate of about 20 to 30 percent. Other firms with a real marketing strategy create demand, generate opportunities, and win more work and profit more from that work. More wins and more profit fuel growth, which in turn fuels returns to shareholders, which fuels demand for the stock. All of this contributes to a healthy, successful firm that out-paces the industry. You just gotta have faith! CHAD CLINEHENS is Zweig Group’s president and CEO. Contact him at cclinehens@zweiggroup.com. “Firms with a real marketing strategy create demand, generate opportunities, and win more work and profit more from that work. More wins and more profit fuel growth, which in turn fuels returns to shareholders, which fuels demand for the stock.”

CHAD CLINEHENS, from page 3

fact is, marketing may take a long time to produce results, and even then, the results may be difficult to tie back directly to the investment. However, that doesn’t mean we shouldn’t try to measure the ROI on marketing, and to do so to the best of our ability. A firm that employs a strong open book management philosophy, where a variety of metrics are tracked monthly and reported to the entire organization, can greatly aid in seeing the trends that should result from an intentional investment in true marketing. Some metrics include number of website hits, dollar volume of new work booked, proposal hit rate, social media likes/follows/shares, number of new contacts in the marketing database, etc. “The fact is, marketing may take a long time to produce results, and even then, the results may be difficult to tie back directly to the investment. However, that doesn’t mean we shouldn’t try to measure the ROI on marketing, and to do so to the best of our ability.” Take it from a company that has studied the industry for almost 30 years – marketing fuels growth and profits in

THE ZWEIG LETTER May 8, 2017, ISSUE 1199

This combination of seminars is a powerful antidote for stalled growth. IF YOU’RE NOT GOING VIRAL YOU MAY HAVE A VIRUS

The rst real true marketing course for AEC rms. Designed to bring clarity and distinction between marketing and sales (Business Development), this course will aid all levels of sta in understanding how to market the rm and build the brand in their respective roles.

This is a one-day seminar that was specically developed to help design and technical professionals in architecture, engineering, planning, and environmental rms become more comfortable dealing with clients and promoting the rm and your services.

TZL MEMBER EXCLUSIVE $125.00 OFF ANY SEMINAR REGISTRATION USE COUPON CODE: TZLMEMBER

zweiggroup.com/seminars/ for more information You may qualify for professional development credit. Zweig Group is registered with the AIA Continuing Education System (AIA/CES) and is committed to developing quality learning activities in accordance with the CES criteria.

THE ZWEIG LETTER May 8, 2017, ISSUE 1199

John

P R O F I L E

Conference call: John Caruso President of Passero Associates (Best Firm #5 Multidiscipline for 2016), an 85-person engineering and architecture firm based in Rochester, New York.

By LIISA ANDREASSEN Correspondent “T here’s lots of calculated risk,” Caruso says. A CONVERSATION WITH JOHN CARUSO. The Zweig Letter: What’s your philosophy on fee/ billing and accounts receivable? How do you col- lect fees from a difficult client? John Caruso: I like fee/billing and do not like A/R. We try to establish our policies upfront on collec- tions. When it does not work, we resort to an old fashioned sit-down meeting. TZL: What’s the recipe for creating an effective board?

JC: Communication, accountability, and transpar- ency. All people have different personalities. Some are good communicators and others are not. I have to understand each of them to try to keep our busi- ness together and in harmony. “All people have different personalities. Some are good communicators and others are not. I have to understand each of them to try to keep our business together and in harmony.”

John Caruso, President, Passero Associates

TZL: Is there a secret to effective ownership transition?

THE ZWEIG LETTER M

nCaruso

Zweig Group is social and posting every day! C O N N E C T W I T H U S

facebook.com/ ZweigGroup

twitter.com/ ZweigGroup

linkedin.com/company/ ZweigWhite

blog. ZweigGroup .com vimeo.com/ ZweigGroup

JC: Yes. Start early and disclose everything. TZL: How do you go about winning work? JC: Bidding and negotiating; some is strategic, some is re- peat business or referral. TZL: What’s the greatest problem to overcome in the pro- posal process? JC: Estimating phantom services until you are selected. “I like fee/billing and do not like A/R. We try to establish our policies upfront on collections. When it does not work, we resort to an old fashioned sit-down meeting.” TZL: Once you’ve won a contract, what are the “marching orders” for your PMs? JC: Solid due diligence, understand the schedule, design to client’s budget, and QA/QC. TZL: How does marketing contribute to your success rate? Are you content with your marketing efforts, or do you think you should increase/decrease marketing? JC: Marketing is a portfolio of effect. Some efforts are more effective and tactical, and others are less effective and vi- sionary. TZL: What has your firm done recently to upgrade its IT system? JC: Execute an annual funded strategic plan with targeted improvements (i.e., video conference). TZL: What’s the best way to recruit and retain top talent in a tight labor market? JC: Pay fair wages, offer great benefits, and maintain a great culture. We have also done the following to improve recruit- ment and retention: 1) Introduced a new human resource information system that reflects the firm’s commitment to placing key information in the hands of employees 24/7/365 via computer or mobile phone app. Through the implementation of payroll and self- service modules, employees can check their wage statements, request time off, verify PTO balances, review benefits and tax information, and accomplish a variety of other activities. This investment in our people allows them to stay connected and engaged, with easy access to pay and benefit information, and to company policies and procedures. 2) Improved communication and knowledge sharing within the firm. We introduced a new web-based, discussion forum/bul- letin board called, “PA Perspectives.” By sharing postings on events, our people, project news, new technologies, and other

topics, we stay better connected as “One Firm.” It’s a great way to spread news throughout our company, share knowl- edge, and hold discussions. 3) Introduced a 401(k) Safe Harbor Plan for the benefit of staff. Under the enhanced plan, the firm places 3 percent of each staff members’ salary in a 401(k) plan, without any match requirements. Our former 401(k) plan had matching require- ments. The new Safe Harbor Plan will help staff at all levels, and stages in their career, to save for retirement without added restrictions. 4) Introduced a technology committee, as part of our strategic plan, to identify, evaluate, and implement new technology that will allow us to better serve our clients and offer en- hanced deliverables. The committee’s charge includes replace- ment of old technologies with new, leading-edge systems. The committee researches advanced and emerging technologies such as drones/video promotion, tablets, and 3-D laser scan- ners. They also search out advances in 3-D-modeling, repro- graphic, and communication technologies. 5) Developed a PA Leadership Program that addresses key topics that fuel the growth of emerging leaders: leadership, behav- ioral analysis, marketing/business development/customer relations, giving/receiving feedback, critical behavior, inter- viewing (recruitment), firm governance, and financial metrics, to name a few. 6) Recognized in 2017 with a philanthropy award given by the Association of Fundraising Professionals, in recognition of Passero’s long-standing commitment to giving back 10 percent of our company’s annual profits to charity, and for active involvement in service to not-for-profit organizations throughout all our office locations. “By sharing postings on events, our people, project news, new technologies and other topics, we stay better connected as ‘One Firm.’ It’s a great way to spread news throughout our company, share knowledge, and hold discussions.” TZL: What’s the key benefit you give to your employees? Flexible schedule, incentive compensation, 401(k), etc.? JC: We have flex schedule, 401(k), and two peer-based re- wards systems. ❚ ❚ Thumbs up. This award program allows colleagues to recog- nize one another with a well-deserved “thank you” for areas of extra effort. In 2016, a record 188 “Thumbs Up” nominations were submitted, recognizing 62 members of our staff, who received gift cards. ❚ ❚ Cornerstone award program. This award program allows colleagues to recognize one another for exceptional perfor- mance and contributions around one or more of our See CONFERENCE CALL, page 8

May 8, 2017, ISSUE 1199

ON THE MOVE SWRI’S THACKER NAMED FELLOW OF AIAA Ben Thacker, director of the materials engineering department in Southwest Research Institute ’s mechanical engineering division, has been selected to the class of 2017 American Institute of Aeronautics and Astronautics Fellows. AIAA confers the distinction of fellow upon individuals in recognition of their notable and valuable contributions to the arts, sciences, or technology of aeronautics and astronautics. Thacker was cited “for exceptional leadership and technical contributions in probabilistic analysis, uncertainty quantification, and model validation, and for longstanding service to AIAA.” “This is a very prestigious honor for Southwest Research Institute,” said Danny Deffenbaugh, vice president of the mechanical engineering division. “Ben has been instrumental in furthering our research activities in probabilistic mechanics and uncertainty quantification. We are proud of his accomplishments in obtaining the position of Fellow in AIAA.” Thacker, who joined the SwRI staff in 1988, specializes in developing and implementing advanced probabilistic methods and model verification and validation methodologies for computational solid mechanics. For NASA’s Space Shuttle return-to-flight effort, he led the development of a probabilistic debris transport model and software tool for predicting the probability of critical damage to the orbiter’s leading edge and tile. He also was a key contributor to NASA’s Probabilistic Structural Analysis Methods for Select Propulsion System Components

program, a nine-year effort that led to the development of NESSUS. This probabilistic analysis software is used today by both government and industry to predict a diverse range of problems in aerospace structures, automotive structures, gas turbine engines, nuclear waste packaging, offshore structures, and pipelines, among others. At SwRI, Thacker leads a staff of more than 70 involved in a variety of programs related to materials engineering including materials development and characterization, failure analysis, surface engineering, musculoskeletal biomechanics, life assessment and prediction, probabilistic mechanics, corrosion, and mechanical testing. ALBERT SIMEONI, PH.D. HIRED AS DIRECTOR OF WILDLAND FIRE SERVICES FOR JENSEN HUGHES JENSEN HUGHES announced the addition of Albert Simeoni, Ph.D. as the new director of wildland fire services in their Framingham, Massachusetts office. Simeoni has 19 years of experience and is an internationally recognized leader in wildland fires, building protection, and fire science. He is a certified fire and explosion investigator and has developed experimental, analytical, and numerical techniques to better understand fire dynamics and to predict fire behavior. Simeoni will play a vital role to develop and guide the wildland fire research and development program and develop scientific tools and methods to help support root cause analysis, fire event reconstruction, structural design, and vegetation management. His extensive research background will also allow him to work on a wide range of fire-related

R&D projects. Brian Lattimer, vice president of research and development, noted, “We are very excited to have Albert join our team as we continue to expand our research and development program to support our existing clients and advance the science of safety.” Simeoni serves as a visiting professor with the School of Engineering at the University of Edinburgh in the U.K., where he provides guidance and leadership for wildfire research. Prior to joining JENSEN HUGHES, he served as senior manager where he developed and supported projects related to design in fire safety and failure analysis. Prior to that he served as a full professor and research chair of fire safety engineering at the University of Edinburgh in the U.K. where he developed research and teaching programs in fire safety, as associate professor of fire protection engineering at the Worcester Polytechnic Institute in Worcester, Massachusetts, and as associate professor of physics at the University of Corsica in Corte, France. He spent more than 10 years volunteering for the fire department of North-Corsica, France, serving in several roles including fire lieutenant, firefighter, and corporal, and is fully trained in management and wildfire firefighting operations. Simeoni’s technical expertise and leadership experience supports JENSEN HUGHES’ mission of advancing the science of safety and providing unparalleled research and consulting services to their clients and for the industry.

JC: We have had no M&A yet, but our organic growth has been from returning employees with new clients and/or old clients that move to new geographic areas and ask us to fol- low. “We have had no M&A yet, but our organic growth has been from returning employees with new clients and/or old clients that move to new geographic areas and ask us to follow.”

CONFERENCE CALL, from page 7

company’s “Four Cornerstones” – Best People, Fulfilling Work Environment, Growth and Profitability, and Exceptional Cli- ent Service and Outstanding Results. Cash awards ranging from $100 to $3,000 are awarded to staff as a result of peer recommendations. TZL: How do you raise capital? JC: Not applicable; we are privately held. “Through the implementation of payroll and self-service modules, employees can check their wage statements, request time off, verify PTO balances, review benefits and tax information, and accomplish a variety of other activities.” TZL: What’s your preferred strategy for growth, M&A or organic? Give us a synopsis of how your firm effected growth in the recent past.

TZL: What’s the greatest challenge presented by growth?

JC: Distance, clear communications, and accountability.

TZL: What’s your prediction for 2017 and for the next five years? JC: Good growth, 2 to 5 percent; five years, 3 to 5 percent. I’m a trend follower. I read and attend both local and re- gional events that discuss our economy. There’s lots of cal- culated risk.

THE ZWEIG LETTER May 8, 2017, ISSUE 1199

O P I N I O N

N ot too long ago, when my son was a senior in high school, I went to a local photography studio where my son had his senior pictures taken. While a great studio, equipped with all the latest gadgets and gear, they were still intent on selling me print copies, and every package included a set of wallet-sized photos. Keep learning If you rely solely on what you thought you once knew to be true, you run the risk of being an obsolete relic of yesteryear.

Bill Murphey CONTINUING ED

have become outdated, obsolete, or downright wrong. I remember the smallest things in nature being atoms. I only recently began learning about quarks and leptons. It has changed my whole perspective on the construct of the universe and has inspired me to search for more answers. “As we age, some of what we thought we knew to be fact may have become outdated, obsolete, or down-right wrong.”

When was the last time you pulled out your wallet to show off exactly one picture of your child? If asked, you would likely pull out your smart phone and scroll through hundreds of pictures in your gallery, Facebook account, Instagram page, or some other trendy social media app. But not your wallet. Technology has evolved and what this photographer thought was still in vogue has been gone for years. What he remembered was out of date. I’m certainly a rememberer. I enjoy the satisfaction of pulling information from the hidden recesses of my brain, long ago forgotten. However, there’s a downside to that. As we age, some of what we thought we knew to be fact may

See BILL MURPHEY, page 10

THE ZWEIG LETTER May 8, 2017, ISSUE 1199

BUSINESS NEWS ARCONIC ANNOUNCES MULTI-YEAR DEAL WITH TOYOTA Global technology, engineering, and advanced manufacturing leader Arconic announced a multi-year supply deal with Toyota North America. Arconic is supplying aluminum to Toyota for its all-new Lexus RX. The vehicle debuted last year and became Toyota’s first vehicle in North America to prominently feature aluminum exterior panels. “Automakers worldwide are turning to aluminum for the stronger, tougher, higher performing vehicles that consumers demand,” said Mark Vrablec, president of Arconic’s aerospace and automotive products business. “Many bestselling vehicles in America have already converted to aluminum for improved performance, including better fuel efficiency, more towing and payload capacity, and improved vehicle safety scores. This trend will continue. We are proud to expand our relationship with Toyota.” This makes Arconic the sole aluminum sheet supplier to Toyota for the Lexus RX, named by Consumer Reports as the Best Luxury SUV of 2016. The Arconic and Toyota deal draws on the strong automotive expertise andmanufacturing

capability of Arconic’s Global Rolled Products business. Arconic will supply Toyota from its plants in Davenport, Iowa, and Danville, Illinois. Arconic is a premier partner to the high- growth automotive industry with operations in Davenport, Iowa, and Alcoa, Tennessee, and breakthrough technologies like the Arconic Micromill in San Antonio, Texas. The company estimates that it will grow its automotive sheet revenue from $76 million in 2010 to $1.3 billion in 2018, and across Arconic’s full automotive portfolio, 98 percent of Arconic revenues come from products where it is number one or number two in its segment. UMASS AMHERST OLD CHAPEL TRANSFORMED INTO VIBRANT COMMUNITY CENTER Finegold Alexander Architects proudly announced the completion and official re-opening of the University of Massachusetts Amherst’s Old Chapel. The iconic Old Chapel first opened in 1885 and is on the National Register of Historic Places. The building closed in 1999 due to code and accessibility requirements. Today, the Old Chapel has emerged following a two-year, $21 million renovation as a vibrant community

space for student gatherings, exhibits, and events. The project is targeted for LEED Gold certification. “The historic preservation/renovation of the UMass Amherst Old Chapel allows the iconic building to remain central to the beauty of the campus while serving several new uses,” said Regan Shields Ives, principal, Finegold Alexander Architects. “We are pleased to have been part of this landmark project.” “Chancellor Kumble Subbaswamy, during his first visit to UMass Amherst, envisioned a restored Old Chapel as an inspiring and dynamic space for all who live, work, and visit at our flagship campus,” said Ed Blaguszewski, executive director, strategic communications, UMass Amherst. “Finegold Alexander and the team have done an extraordinary job in restoring this jewel.” The first floor provides a flexible layout for social gatherings, study, and events. The top floor Great Hall provides a large open space for lectures, seminars, performances, banquets, weddings, and private events. The restoration added a contemporary glass-entry addition, and an interactive display wall.

BILL MURPHEY, from page 9

a piece of advice I received decades ago: “You have to make them hate you before they’ll respect you.” I never followed that then, and I surely don’t believe it to be true today. I did my own research and learned there are better ways of moti- vating people. Unfortunately, there are those who still believe that’s the best way to run an organization, as evi- denced through the draconian policies enforced in some of our industry firms. ❚ ❚ Learning. The one-size-fits-all approach to education and training used to be king. If you didn’t understand the mate- rial, that was your problem and not the educator’s fault. The reality is we all learn in different ways. Some are visual learn- ers, some are auditory, while others are experiential learners. Design your firm’s professional development program with that in mind. Seek a variety of learning methods. ❚ ❚ Generational differences are real. Early leadership theory essentially ignored differences in generational upbringing and assumed anything can be overcome with “good management.” Studies in recent years have highlighted adaptability as a key attribute to being a successful leader. The leaders who have evolved to understand that everyone is different, with differ- ent expectations, life experiences, and learning preferences, will stand a better chance at succeeding. Only through continuous learning can we continue to grow intellectually and personally, and keep our memories updated. Accept that what you thought you once knew to be true may have been revised or made obsolete. Do you think you know everything there is to know about the tensile strength of all composite materials? Perhaps there’s some new research you’re not yet aware of. Keep learning. BILL MURPHEY is Zweig Group’s director of education. Contact him at bmurphey@zweiggroup.com.

Remember that famous quote by Bill Gates, that “nobody would ever need more than 640K of computer memory?” I remember hearing that years ago. The problem is, he never actually made that statement; something I just learned while writing this article, despite my repeating it all these years. “Only through continuous learning can we continue to grow intellectually and personally, and keep our memories updated. Accept that what you thought you once knew to be true may have been revised or made obsolete.” There are countless examples of what some people still assume to be correct. Here are just a few that stand out to me. ❚ ❚ Marketing. For decades – I’d even go as far as to say centu- ries – marketers pushed their products and services to the masses without understanding who was paying attention. It worked to some extent, but it wasn’t the most effective use of a marketing budget. The most effective marketing messages are targeted to specific audiences. The difference between these two marketing tactics is found in the return on invest- ment, but only those that have kept up with societal and cul- tural changes would understand the difference. ❚ ❚ Leadership. Another common belief was that to be effective as a leader, one had to rule with an iron fist. I’ll never forget

THE ZWEIG LETTER May 8, 2017, ISSUE 1199

O P I N I O N

Failing to plan, planning to fail: Part two If growth through M&A is part of your strategic plan, be prepared to embrace the integration process with an open mind.

L ast week we discussed strategic planning and how it is an integral part of growing the value of your firm. The firms that have undergone the strategic planning process with us have seen massive success. As an example, one of the firms we have helped through this process set a goal of growing from 100 people to 850 people in 10 years. They are well on their way. If you find yourself on either side of the buyer/seller equation, what should you expect and how should you react during the integration phase, post-transaction?

Phil Keil

out? Should you get your resume ready and start looking for other jobs? No! The ideal reaction is to embrace the integration process. You have a lot more power than you think, and it may just be the best thing to ever happen in your professional life. You can emerge with more knowledge, visibility, and skills, all of which can be leveraged moving forward. “A successful transition requires enthusiastic support from leadership and clear communication. Firm leaders only get one opportunity to do it right.”

We are big fans of open book management here at Zweig Group. A successful transition requires enthusiastic support from leadership and clear communication. Firm leaders only get one opportunity to do it right. For many individuals, it is a disruptive and potentially traumatic event. It is a lot of work integrating two firms and there can be a lot of tension, uncertainty, and stress. In general, this is not as true for the AEC industry as it is for others, but employees may still fixate on what they cannot control. As with most of life, if you change how you react to M&A, it can be one of the most exciting times in your career, with possibilities for innovation, personal growth, and new opportunities. What is the ideal reaction? Should you continue working day-to-day and simply hope things work

See PHIL KEIL, page 12

THE ZWEIG LETTER May 8, 2017, ISSUE 1199

BUSINESS NEWS EMERSON OPENS ADDITIVE MANUFACTURING CENTER IN SINGAPORE With the goal of spurring innovation to address customers’ engineering design challenges and accelerating speed to market for new, rigorously-tested products, Emerson opened an advanced additive manufacturing center at its Singapore campus. This is Emerson’s second location to have additive manufacturing capabilities. Additive manufacturing enables Emerson engineers to expand their thinking beyond the limits of standard manufacturing processes to develop cutting edge solutions to meet more demanding and stringent processes. Additive manufacturing also significantly accelerates the testing of multiple versions of a prototype product or part, and promises to greatly simplify the production supply chain. Through this center, Emerson

will be using additive manufacturing technologies to produce special customized and application-specific parts and products which are impossible with traditional technology. The Singapore center serves to strengthen Emerson’s additive manufacturing program, which was launched three years ago with the opening of its first additive manufacturing technology center in Marshalltown, Iowa, the global headquarters for its Fisher products. Together, the Marshalltown and Singapore centers are actively working on research and development and pilot production services for all Emerson businesses around the world. Singapore was selected for this additive manufacturing center because of its strong manufacturing ecosystem, favorable business

climate, excellent transportation linkages, an educated workforce and good universities, and robust intellectual property protections. Singapore has been the Asia-Pacific headquarters and a high-value manufacturing and technology hub for Emerson Automation Solutions since 1965. “This Singapore center, along with our Marshalltown center, will play a key role in helping Emerson move quickly to leverage the benefits of additive manufacturing to meet our customers’ needs in Asia Pacific and around the world,” said David Farr, chairman and CEO of Emerson. “We greatly appreciate the support of the Singapore Economic Development Board, which has been a great partner and gave us the confidence to make the investment here.”

The transition team will need to come up with a plan that can be effectively implemented. This process will be closely monitored by leadership and increases the opportunity for second-tier personnel to heighten their visibility. During a period of M&A, innovation and new types of thinking will be at the forefront of everyone’s mind. If you have new ideas, leadership of this new combined entity may be much more available and receptive to the solutions you propose. Finally, getting involved with the transition will require you to collaborate with both the buying and selling firm. It will help you build your skills communicating and working with people who have different perspectives, cultures, processes, and policies. Collaborative skills are as vital for a principal as they are for an associate. Many people have only worked with one firm their entire career. M&A gives you the opportunity to see what others are doing, implement the good things, and root out the problems. You need to plan for growth and go after your vision with dogged determination. Strategic planning is vital to every organization. It is disappointing how many firms do not do this. If M&A is a part of your firm’s strategy or is the strategy of a firm that merges with yours, understand that you can set your own trajectory. How you react to change is one of the most important factors in determining your success. If you would like to learn more or have any stories of your own, please let us know. PHIL KEIL is a consultant with Zweig Group’s M&A services. Contact him at pkeil@zweiggroup.com. “If M&A is a part of your firm’s strategy or is the strategy of a firm that merges with yours, understand that you can set your own trajectory. How you react to change is one of the most important factors in determining your success.”

PHIL KEIL, from page 11

Below you can find the results from our recent M&A survey on why sellers are considering buying or selling. As you can see, the number one reason is to increase opportunities for staff. It is up to you to figure out how to make this happen. With very few exceptions, change is inevitable. The first step is assessing yourself. Where do you fit in with the new combined organization? Determine what your strengths are, where your weaknesses lie, the opportunities within the firm and for the firm, and finally what types of threats you may face. Often, if there are efficiencies to be gained, the first place to look is in fields such as accounting, legal, and HR. If you serve one of these functions, the important thing is to showcase your skills outside of these areas. You may be one of the most critical people to the firm’s success and culture. Figuring out how to communicate that to new leadership will be vital. After taking a moment for some personal introspection, the next step is to seize the growth opportunities that are presented. There are various ways that firms attempt to integrate, but most will have a transition team that is responsible for a successful integration and realizing “synergies.” If you can get involved with this team, you will have the opportunity to showcase and build your execution, innovation, and collaboration skillset. integration and realizing ‘synergies.’ If you can get involved with this team, you will have the opportunity to showcase and build your execution, innovation, and collaboration skillset.” “There are various ways that firms attempt to integrate, but most will have a transition team that is responsible for a successful

THE ZWEIG LETTER May 8, 2017, ISSUE 1199

Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12

Made with FlippingBook Annual report