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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 1 , 2 0 1 7 , I s s u e 1 1 9 8

Staff growth or decline

More on business planning

B usiness planning in an AEC firm is such a critical function. It really is one of the key roles of the CEO. Yet we seem to struggle with it. Here are some of the ways we see firms go wrong every single day: 1)No legwork gets done. I never could under- stand how ANY company can embark on the business planning process without talking to their clients and employees first. Just seems to make sense that they have input that would be valuable to you since you’d be out of business if you didn’t have either of their support (cli- ents and employees). 2)Too many people involved. I don’t know why some firms think all the owners or all the managers need to sit down in one room and work out a business plan at the same time. But I do know this DOESN’T work! It makes it hard to confront the really tough stuff. People aren’t honest. It takes too long. The energy gets sucked out by having everyone weigh in on everything. It’s crazy inefficient. 3)Bad facilitator. I am talking primarily about people who don’t understand the AEC busi- ness. They always seem to have a book list everyone is supposed to be reading from be- fore embarking on the process. There’s a lot to know about this business. It just isn’t smart to educate someone on your nickel. I want to work with people who have tons of experi- ence, examples and resources – you should, too! There’s also the problem of the weak and overly touchy-feely facilitator who cannot ever get anything to resolution. 4)Bad facility. I have been on some terrible business planning retreats over the years. When you are virtually the only people in a 1,000-room resort, it’s going to be bad. And it was! Or when you are stuck in a basement

“Business planning in an AEC firm is such a critical function. It really is one of the key roles of the CEO. Yet we seem to struggle with it.”

According to Zweig Group’s 2017 Financial Performance Survey , some firms reduced headcount last year while other increased personnel. As expected, fast-growth firms added more staff (9 percent) in 2016 than any other growth category. Slow-growth firms added 7 percent and declining- growth firms added 2 percent. Stable- growth firms , however, reduced headcount by 4.2 percent. This highlights an industry dynamic, that when profitability stagnates, firms need to run lean to improve profitability and to discover efficiencies.

Mark Zweig

OPEN FOR PARTICIPATION zweiggroup.com/survey-participation/

F I R M I N D E X Atwell, LLC. ..........................................10 Bal Seal Engineering, Inc.........................8 Fluor Corporation....................................4 Jacobs Engineering Group Inc................4 JENSEN HUGHES..................................2 Maser Consulting P.A..............................6

MORE COLUMNS xz MARKETING MATTERS: Marketing metrics Page 3 xz M&A INSIGHTS: Failing to plan, planning to fail: Part one Page 9 xz FINANCIAL FITNESS: A match made in heaven Page 11

See MARK ZWEIG, page 2

Conference call: Richard Maser

Page 6

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 CHRISTIAN NOLES, PE, HIRED AS SENIOR FIRE PROTECTION ENGINEER FOR JENSEN HUGHES JENSEN HUGHES announced the addition of Christian M. Noles, PE, as senior fire protection engineer in their Raleigh, North Carolina, office. Noles has 26 years of experience in design, code consulting, code administration, alternative design/approval, appeals, hazardous material assessment, inspection, product review, certification, and instruction. His experience incorporates several projects that have not been prescriptively addressed by the code, including commercial, residential, and mixed use buildings. Noles will play a vital role in the fire protection program working with clients on services that range from design to product evaluation to verifying code compliance, working with local fire and building officials, building owners, and architects on a variety of complicated code and design problems. He has extensive experience in fire protection system design, special inspections, specification development, and installation oversight of fire protection systems. David Bhuta, director of the Raleigh office, noted, “We are very excited to have Chris join our team as we continue to expand

Take your advice from Mark Zweig to-go.

our fire protection program to support our existing clients and advance the science of safety.” Prior to joining JENSEN HUGHES, Noles served as deputy commissioner at the North Carolina Office of State Fire Marshal where he served as technical supervisor for the Engineering and Codes Section of the State Fire Marshal’s Office. Noles also previously served as chief fire protection code consultant at the North Carolina Office of State Fire Marshal and was a senior staff engineer for the building officials and code administrators which is now part of the International Code Council. Both roles were responsible for promulgation, interpretation, and teaching codes. Noles holds a B.S. in mechanical engineering from Southern Illinois University, an associate of science degree from Parkland College, Illinois, and is a registered professional engineer in Illinois and North Carolina. Noles’ technical expertise and leadership experience supports JENSEN HUGHES’ mission and provides unparalleled fire protection and code consulting services to their clients throughout North Carolina and worldwide.

thezweigletter.com/category/podcast/

MARK ZWEIG, from page 1

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

meeting room with no windows and people who hate each other, it’s not fun. I could go on and on but you get the picture. 5)Not understanding what goes in the plan. Mission, vision, strategies, goals, and ac- tion items. Each of these elements has a gray area about what it is or isn’t, but they cer- tainly are not all interchangeable. Mission is why you are in business. Vision is what you are trying to become by some point in time. Strategies are what your basic philosophies are for how you do business in every area of the company. Goals should be quantitative and measurable. Action items answer the questions of: “Who, what, when, where, and why?” Sometimes “core values” are also part of the plan and they can easily spill into strategies and mission. 6)Too many things get assigned to committees. I see this all of the time. Every “action” becomes a “study” and gets assigned to a committee. Committees are where initiatives go to die. 7)Buzzword and cliché mania. I will NEVER understand why some people are like junk- ies on this stuff. They read every book and article and jump on every new bandwagon. And then they communicate on this stuff with the assumption that you and everyone else understands their gobbledy-gook. Keep the language clear and straightforward! 8)No communications to the rest of the company. When the top people go off for a business planning “retreat” or meeting, the rest of the employees are all waiting to hear what happened. It’s a big deal. Too often the participants forget that just the fact that the company is having this meeting could scare the rank and file employees who may automatically (and incorrectly) assume that this means firings or something negative is going to happen. As a result, you cannot waste a single moment in calling your staff together and telling them about the meeting and the plan. The list goes on – and on. How do you stack up? 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 1, 2017, ISSUE 1198

O P I N I O N

Z weig Group’s 2016 Marketing Survey found that 27 percent of A/E/P and environmental firms did not create a formal marketing plan. You can’t improve what you don’t measure. Marketing metrics There’s a critical set of benchmarks you need to measure so you’ll know what works, what doesn’t, and how to be more effective.

2)New/repeat client ratio. Only 75 percent of firms track this. You have to know if you are retaining cli- ents. It’s also important to know if a large volume of your work is dependent on one or two main clients – that’s a dangerous position to be in. Set goals to keep repeat clients as well as develop new business. For the average firm in this industry about one- quarter of all work comes from new clients and the rest from repeat clients. 3)Proposal hit rate. You have to know how many pro- posals your firm is sending out both in dollar value “Are you consistently meeting your goals or falling short? If you don’t like the answer to this question, maybe you need to adjust your goals or re- evaluate your marketing techniques or spending.”

Make your marketing count. Here are seven marketing metrics you need to be tracking. 1)Revenue/sales goals. While not exactly a measure of your firm’s marketing success, revenue or sales goals should be the cornerstone of your firm’s mar- keting plan and strategy. Are you consistently meet- ing your goals or falling short? If you don’t like the answer to this question, maybe you need to adjust your goals or re-evaluate your marketing techniques or spending. Zweig Group’s 2017 Marketing Survey found that only 49 percent of respondents had rev- enue/sales goals as a part of their firm’s marketing plan. Related to this is measuring the actual dollar volume of work sold. Only 71 percent of all firms track this metric and only 33 percent share this in- formation with marketing staff. These goals should be directly correlated with the firm’s marketing budget. It seems like a no-brainer, but only 45 percent of firms prepare an annual mar- keting budget. Not only does your firm need to do this, but someone needs to hold your firm account- able to sticking to it. On average, a marketing budget is 5 percent of net revenue.

Christina Zweig Niehues

See CHRISTINA ZWEIG NIEHUES, page 4

THE ZWEIG LETTER May 1, 2017, ISSUE 1198

BUSINESS NEWS JACOBS WINS LOGISTICS SERVICES CONTRACT FOR MARINE CORPS SPECIAL OPERATIONS COMMAND Jacobs Engineering Group Inc. was awarded a task order by theGeneral ServicesAdministration to provide the U.S. Marine Corps Special Operations Command Raiders with logistics services for its facilities located at Camp Lejeune and Camp Pendleton. The Marine Raider Regiment provides tailored military combat-skills training and advisor support for identified foreign forces in order to enhance their tactical capabilities. The contract has a potential value in excess of $39 million if all options are exercised. Under the terms of the contract Jacobs is expected to provide a range of services related to weapons system sustainment, including logistics services in operations, material management, supply administration, warehouse operations and transportation support to include both embarkation and motor transport operations. The contract also includes maintenance support and management of communications-electronics, motor transport, engineering ordnance, deployable assets, and facilities management. “Jacobs has a long history of providing support for the MARSOC Raiders and this new opportunity is a testament to the hard work and dedication of our people,” said Jacobs Senior Vice President Darren Kraabel. “This award represents an important milestone in our growth strategy to bring new solutions to the weapons system sustainment market.”

PREORDER

While this can be hard to measure, do your best, then spend money on the things that are bringing in the most money. “Set goals to keep repeat clients as well as develop new business. For the average firm in this industry about one-quarter of all work comes from new clients and the rest from repeat clients.” “Fluor has been working with Yara since 2012 and we are delighted that our relationship has been extended and expanded to support Yara’s activities around the globe,” said Al Collins, president of Fluor’s energy and chemicals business in Europe, Africa, and the Middle East. “Fluor’s integrated team will leverage our extensive industry knowledge, utilizing the latest techniques and technologies, to reduce costs and allow for the safe and efficient operation of Yara’s plants.” Yara delivers responsible solutions for sustainable agriculture to 20 million farmers worldwide while protecting the environment. In 2015, Yara helped its customers reduce 1.4 million tons of nitrogen oxide emissions. Established in Oslo, Norway in 1905, the company has a worldwide presence including operations and offices in more than 50 countries. 7)Social media statistics. You know, fol- lowers, engagement, and overall impres- sions. This is one area where constant growth is possible. Set goals and achieve them! If you aren’t measuring these things, it’s not too late. Start now and see how much more effective your marketing becomes. CHRISTINA ZWEIG NIEHUES is Zweig Group’s director of marketing. Contact her at christinaz@ zweiggroup.com. FLUOR SELECTED BY YARA FOR GLOBAL ALLIANCE FRAMEWORK AGREEMENT Fluor Corporation announced that its global alliance framework agreement with Yara Belgium SA, Europe’s largest producer of ammonia and nitrate fertilizer, has been extended by three years and expanded to provide engineering, procurement, and construction management services to support Yara’s global operations. The agreement covers a diverse range of projects as part of a program management scope and will be managed through Fluor’s Bergen Op Zoom office in the Netherlands and Yara’s project office in Brussels, Belgium.

2017 MARKETING SURVEY Zweig Group’s 2017 Marketing Survey of Architecture, Engineering, Planning & Environmental Consulting Firms is a benchmarking and advisory guide to industry firm marketing activities, budgets, marketing department organization, staffing levels, compensation, and investments in marketing systems and infrastructure. This report also has statistics on proposal activity, hit rates, and other useful analytics. The topics covered in this report are: ❚ ❚ Marketing staff. This section presents data on marketing departments at firms of different sizes/types, along with experience, education, compensation, and expectations and sales goals for various marketing related job roles. ❚ ❚ Proposals and sales. A full breakdown of proposal actives and hit rates by firm type, size, location, and other factors. ❚ ❚ Marketing systems. This section has data on the prevalence of various marketing systems and data relating to their use. ❚ ❚ Promotion. See what most firms in the industry are doing to promote themselves, along with a full report on statistics of what is working and what is not working. ❚ ❚ Marketing expenditures. Data on marketing related expenses including actual figures from the previous year and budgeting for the future. ❚ ❚ Strategies. See data on the use and effectiveness of a variety of marketing approaches. ❚ ❚ Challenges. Data on what respondents feel have been marketing challenges and victories for their firms over the past year. To learn more or to preorder this survey, visit bit.ly/2nFv0WG or call 800.466.6275.

CHRISTINA ZWEIG NIEHUES, from page 3

and actual number, as well as your average win rate. According to the 2016 Marketing Survey , the average A/E firm submitted 332 proposals in 2015 for a total dollar value of $69.4 million. These firms were shortlisted for 22 percent of proposals submitted and ultimately won 41 percent of those they were shortlisted for. Fast- growth firms submitted 53 percent more proposals than the average firm! If your win rate is far less than this, you may need to take a look at what you’re doing. Think about how much more revenue you could earn by winning just 4 percent more proposals. 4)Total number of contacts in the CRM database or contact mailing list. Do you know either of these numbers? If not, you should. 5)All the statistics relating to your web- site. According to the marketing survey, the average number of unique visits per week in this industry is only around 750. You also need to know your website bounce rate and average length of visit. 6)Qualified leads via each marketing channel and leads that result in jobs.

THE ZWEIG LETTER May 1, 2017, ISSUE 1198

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THE ZWEIG LETTER January 9, 2017, ISSUE 1182

Richa

P R O F I L E

Conference call: Richard Maser Chairman and CEO of Maser Consulting P.A. (#12 Best Firm Multidiscipline and #16 Hot Firm for 2016), a 650-person firm with 22 offices across eight states.

By LIISA ANDREASSEN Correspondent “T he most important formula for ownership transition is to be profitable,” Maser says. “Unless you have good profitability to allow funds to go to ownership transition, it will not be effec- tive.” A CONVERSATION WITH RICHARD MASER. The Zweig Letter: What’s your philosophy on fee/ billing and accounts receivable? How do you col- lect fees from a difficult client? Richard Maser: For billing purposes, we prefer lump sum fees. We try to avoid hourly as not to exceed our client’s budget. Every project is billed once a month, and we follow up on accounts receiv- able through a monthly team effort as each project manager is assigned to a billing administrator. If a

private client does not pay us in a timely manner, sometimes it’s necessary to stop work until fees have been paid. “Having open communication between disciplines helps to ensure our board members are aware of trends, problems, and solutions within every department and better enables them to make effective decisions companywide.” TZL: What’s the recipe for creating an effective board?

Richard Maser, Chairman and CEO, Maser Consulting P.A.

RM: Our executive team is made up of leaders from

THE ZWEIG LETTER M

ardMaser

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

rate? Are you content with your marketing efforts, or do you think you should increase/decrease marketing? RM: Our marketing department is comprised of experts in the AEC industry who constantly attend conferences, net- work, and take training to keep abreast of industry trends and how to steer our services. The department has two dis- tinct areas – the proposal preparation side and the public relations side, both of which are essential elements to com- pany success. Proposals and qualifications are part of an on- going process you have to constantly stay ahead of – search- ing for opportunities and making sure that all our submis- sion materials are up to date and submitted on time. The public relations side of marketing brands our 22 offices as one solid entity and our employees as experts through ar- ticles, speaking presentations, and social media. They get the word out about who we are and what our capabilities are nationwide and ensure our name is recognized whether opening an office in a new region or introducing a new ser- vice. On top of that, our social media presence is strong and drives our brand to a worldwide market. Both sides of our marketing department work closely together to ensure our branding is effective in keeping our name at the industry forefront. The department will grow appropriately to keep in stride with our growth. “Our marketing department is comprised of experts in the AEC industry who constantly attend conferences, network, and take training to keep abreast of industry trends and how to steer our services. The department has two distinct areas – the proposal preparation side and the public relations side.” TZL: What has your firm done recently to upgrade its IT system? RM: We’re constantly upgrading IT systems. At the begin- ning of each year, we look at what needs to be done over the next 12 months, prioritize, and then phase it in. The most recent significant effort was upgrading our financial/ project management software with BST 10. We also recent- ly installed a video-conferencing system and phones with a video screen to better connect people throughout our office network as we grow nationally. This helps us to maintain a friendly internal culture and greatly improves communica- tion between offices. TZL: What’s the best way to recruit and retain top talent in a tight labor market? RM: In addition to outside recruiters, we currently employ See CONFERENCE CALL, page 8

each of our eight core disciplines. Having open communi- cation between disciplines helps to ensure our board mem- bers are aware of trends, problems, and solutions within ev- ery department and better enables them to make effective decisions companywide. In addition, we have two respected outside advisors who bring a different perspective and ex- pertise to the group. “Unless you have good profitability to allow funds to go to ownership transition, it will not be effective. It’s also crucial not to wait until the last minute to model a strategic plan.” TZL: Is there a secret to effective ownership transition? RM: The most important formula for ownership transition is to be profitable. Unless you have good profitability to al- low funds to go to ownership transition, it will not be ef- fective. It’s also crucial not to wait until the last minute to model a strategic plan. The plan should encompass a five- year or longer period to predict where you will end up. In this process, key players are identified to stay honed in on the economic climate so we can alter and adjust our plans as we go. TZL: How do you go about winning work? RM: The majority of winning work is built on being respon- sive to our clients and giving them creative solutions that create client satisfaction and long lasting relationships. Because we are a full-service engineering firm, having cli- ents use our other services in-house is more economical for them. We rely on quality-based submissions and are not looking to be the low bidder. TZL: What’s the greatest problem to overcome in the pro- posal process? RM: We are very selective about what we go after; coordina- tion is the most complicated element in the proposal pro- cess. A lot of the projects we pursue are multi-disciplinary, so there are several groups that have to provide input from both a scope and fee perspective. TZL: Once you’ve won a contract, what are the “marching orders” for your PMs? RM: After we win a proposal, our first priority is to make sure all the contract items and phases are set up correct- ly for billing purposes and cost tracking through their rela- tionship with their billing administrator. The project man- agers are instructed to ensure they discuss how the client wants to be communicated with and who within the client’s organization the communication should go to. TZL: How does marketing contribute to your success

May 1, 2017, ISSUE 1198

ON THE MOVE SOEDE NAMED TO HEAD BAL SEAL ENGINEERING’S EMEA REGION: NEW GM WILL OVERSEE FINANCIAL, STRATEGIC SALES OPERATIONS Bal Seal Engineering, Inc. has announced the appointment of Jan Soede to the position of general manager, EMEA. In his new role, Soede will be responsible for the oversight of the company’s financial operations and strategic sales activities for Europe, the Middle East, and Africa. He will work from the company’s European headquarters in Amsterdam, the Netherlands. Soede, who holds an M.S. in aerospace engineering from the Delft University of Technology, previously served as deputy vice president of marketing for a Swiss German global access and security company. Prior to this, he worked as managing director for a European manufacturer of data and energy transmission systems,

and as sales director for a global distributor of aerospace and defense components. As Bal Seal Engineering’s new general manager EMEA, Soede will play a key role in supporting sales of the company’s custom- engineered seals, springs, and electrical contacts to existing and new customers in the region. He will also lead efforts to identify new applications, markets, and segments in which the company’s Bal Spring canted coil spring and Bal Seal spring-energized sealing technology can help engineers improve equipment performance and reliability. “We have a reputation for creating solutions that help advance technology and give customers a competitive edge in mission critical systems,” Soede says. “And while this is well-known in the U.S., I think we are more of a behind-the-scenes champion in Europe. It will be my goal to ensure that our value is

more widely communicated and understood in Europe and beyond.” Commenting on Soede’s appointment, Bal Seal Engineering Vice President of Global Sales and Marketing Gary Stoffer says he is “thrilled” to have the new general manager on board. “I’m confident that Jan’s technical background and rich industry experience will fuel our company’s growth in the European region,” Stoffer says. “Given his engineering study and practice, he knows the challenges designers face, because he has lived them first-hand. And he knows how our products can be applied to solve them.” Bal Seal Engineering, Inc. is a leading global provider of custom-engineered sealing, connecting, conducting, and EMI/RFI shielding and grounding solutions.

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? RM: We have executed several acquisitions over the years, most of them relatively small. Generally, most of our growth has been organic where we have either moved into new areas or expanded offices regionally. Our most signifi- cant growth has come from strategic hires. These strategic hires bring in revenue, additional staff, and, most recently, new service lines that can eventually be built upon. TZL: What’s the greatest challenge presented by growth? RM: Our greatest challenge has been maintaining the com- pany culture. With such a diverse geographic presence, the personalities and lifestyles of our staff vary throughout the country. Trying to make all employees feel like they are part of one company, working for the same common goals is a challenge. The implementation of a video-conferencing sys- tem has proven to be effective in bringing people together who may never meet face to face. TZL: What’s your prediction for 2017 and or the next five years? RM: I’m anticipating 2017 will be a very good year for the company, partially based on a healthy 2016 and also be- cause we recently picked up two new divisions: one in oil and gas and a new UAS service. These services bring a new dimension to our existing services and we feel will bring a lot of opportunities into the company in both the federal and law enforcement markets. The economy is trending in a positive way and I expect that to continue. “Our most significant growth has come from strategic hires. These strategic hires bring in revenue, additional staff, and most recently, new service lines that can eventually be built upon.”

CONFERENCE CALL, from page 7

two, full-time recruiters who bring numerous candidates to us. The number one way we acquire top talent is through references from existing employees and clients. We have made many strategic hires through friendship/professional relationships within our existing staff. We also like to keep our employees happy with good health and retirement ben- efits, personal and professional development opportunities, a mentorship program, group activities, and a comfortable workplace. We also pride ourselves on our internal culture and provide employees with everything they need to excel. TZL: What’s the key benefit you give your employees? Flex schedule, incentive compensation, 401(k), etc.? RM: Our health benefit package is better than most of our competitors and as an added benefit, we offer a program that pays for health care deductibles. Our 401(k) is very good in terms of the industry average. Probably the most significant differential in our benefits is incentive compen- sation. Our bonuses tend to be typically larger for all staff than our competitors. “The number one way we acquire top talent is through references from existing employees and clients. We have made many strategic hires through friendship/ professional relationships within our existing staff.”

TZL: How do you raise capital?

RM: Through our traditional banking partner, between our line of credit for normal fluctuation of cash flow and an equipment line. With our equipment line we usually rely on three-year repayment plans for these purchases.

THE ZWEIG LETTER May 1, 2017, ISSUE 1198

O P I N I O N

Failing to plan, planning to fail: Part one Strategic planning is the roadmap to your firm’s success. Without it, you might get knocked down and never get back up.

I have a lot on my mind this week, so get ready, buckle up, and let’s go! We can start with a famous quote from Mike Tyson: “Everybody has a plan until they get punched in the mouth.” Similar sentiments were shared by the likes of Dwight Eisenhower and Winston Churchill. Even if those guys were right – we get punched and circumstances change – it doesn’t mean we shouldn’t plan in the first place.

Phil Keil

about once a month. There are several reasons to go through this process and I’ll highlight a couple. Have you been operating under the assumption that every partner and principal are on the same “Like financial projections looking out five or more years, it is not the strategic plan as written that is important, but the strategic planning process itself.”

We’re all extremely busy. It can seem like bombs are going off everywhere. The world doesn’t stop for us to plan. Business is a dynamic, unpredictable, and ever-changing environment. Nonetheless, strategic planning is vital to the growth of your firm. And if you’re not doing it, you need to, because if you’re not growing, you’re failing. Like financial projections looking out five or more years, it is not the strategic plan as written that is important, but the strategic planning process itself. You may be thinking, “It’s May. I’ve finished strategic planning for the year.” But your strategic plan is a fluid document that should be revisited

See PHIL KEIL, page 10

THE ZWEIG LETTER May 1, 2017, ISSUE 1198

ON THE MOVE MICHAEL PARK, PE, JOINS ATWELL Consulting, engineering, and construction services firm Atwell, LLC announced Michael Park, PE, has joined the firm as project manager, land development. Based in Mesa, Arizona, he will provide leadership support to project teams while promoting and expanding Atwell’s services into emerging geographic markets throughout the Southwest. Park has extensive experience in design, construction management, and project

management of residential, institutional, commercial, and industrial site development projects. Park has expertise with the preparation of alternative analysis studies, final engineering and permitting for multiple site improvement projects. He is a successful project manager with proven experience managing a team of experts and providing clients with an accurate and detailed product. Prior to joining Atwell, Park was a project manager with Giffels Webster. He has

held positions as lead engineer, owner’s representative, and general contracting project manager. His expertise is in residential and commercial development, urban redevelopment, and sustainable design. “We are excited to have Michael on our team,” said Regional Vice President, Ted Northrop. “His experience as an owner’s representative, coupled with his expertise in land development project management gives us deeper insight to our clients’ needs.”

Our process involves four phases and additional services as needed. You’ll notice that it fits in with the conceptual framework I outlined above. The first phase is the research phase. We conduct management/leadership interviews, perform an anonymous firm-wide survey, a client perception study, operational and financial benchmarking, and a desk audit in order to really find out where the firm stands. The second phase consists of analysis. This is compiling data to create an up-to-date picture of what the firm faces, shedding light on the firm’s strengths, weaknesses, opportunities, threats, key challenges, specific recommendations, and priorities. To be strategic, the plan should focus as much as possible on the organizational level and key stakeholders, not on the individual level. Individuals will become important later on, when action items need to be implemented. Phase three of the Zweig Group process consists of a two- day business planning retreat to solidify the vision and the strategic plan. You will leave that retreat with a road map for years to come, plus an operational plan for the coming year. The final phase is implementation, where the focus is on action and accountability to bring the plan to life. That’s the high-level overview of what we do at Zweig Group. Please contact me if you are interested in learning more about how our process can help you succeed. And stay tuned to Part Two of this article, where I’ll give you an example of a firm seeing massive success after undergoing the Zweig Group process. PHIL KEIL is a consultant with Zweig Group’s M&A services. Contact him at pkeil@zweiggroup.com. “If you can determine who you are, what you believe, and what you would like to achieve, a back-up plan should be unnecessary. In fact, a new study conducted through a joint effort by Wharton and the University of Wisconsin suggests that making a backup plan can hurt performance and reduce the motivation to reach the initial goal.”

PHIL KEIL, from page 9

page? Having discussions on these topics is great, but there is something about putting those discussions into a written document that people must sign off on. You may find there is not as much agreement as you thought. A plan also serves as a catalyst for change. It provides a platform, a line in the sand, from which you can measure success and track progress. That is the reason I suggest reviewing your plan monthly. And what about a back-up plan? If you can determine who you are, what you believe, and what you would like to achieve, a back-up plan should be unnecessary. In fact, a new study conducted through a joint effort by Wharton and the University of Wisconsin suggests that making a backup plan can hurt performance and reduce the motivation to reach the initial goal. The question is this: Are you planning to fail? I see this over and over. If you are already looking for excuses or a way out, you may need to reevaluate what is in your plan to begin with. I am not suggesting that you never make a backup plan, just that you should hold off on doing so until you’ve first put as much effort as possible into making your original plan succeed. “Have you been operating under the assumption that every partner and principal are on the same page? Having discussions on these topics is great, but there is something about putting those discussions into a written document that people must sign off on.” Now, if you are not familiar with the strategic planning process, how do you get started? Conceptually, it consists of determining where your firm is today, why you exist or what’s important, identifying the actions you will take to reach your vision, determining who is accountable, and constantly reviewing. Simply Google strategic plans and you’ll see all kinds of platitudes, cliché’s, and buzzwords. That is not how we operate here at Zweig Group. After 30 years of working with only A/E firms, our strategic planning process has been refined to perfection. We deliver an actionable plan where everyone in the firm has a compelling role and can feel passionate about working toward the goal.

THE ZWEIG LETTER May 1, 2017, ISSUE 1198

O P I N I O N

A match made in heaven Try employing a project management accountant to support the project manager, and watch the work and the cash flow improve.

I n supporting many of the firms that we work with, we find varying models of how project managers are either effectively utilized or how they are not.

❚ ❚ Provide leadership and morale to keep the team happy, engaged, and productive ❚ ❚ Drive performance to meet a dynamic landscape when it comes to changes the client makes, issues that the team uncovers, and management of the schedule ❚ ❚ Provide the firm’s senior management with status See TED MAZIEJKA, page 12 “One of the most successful models that we have seen is the linking of an effective project manager with an equally effective project management accountant.”

Project managers have the daunting task of providing the following to the clients, most of the time all at once: ❚ ❚ Communicate and delineate expectations clearly to the client ❚ ❚ Ensure that the team is aware of what the client feels would be success on the project ❚ ❚ Ensure that whatever will keep the client up at night is covered ❚ ❚ Ensure that whatever risk issues the client has illu- minated are known to the team ❚ ❚ Manage the internal and external team members ❚ ❚ Resource plan and maintain the team’s contract hours

Ted Maziejka

THE ZWEIG LETTER May 1, 2017, ISSUE 1198

TED MAZIEJKA, from page 11

1)Contract review/management. At the commencement of the project, the PMA is involved with the PM on all administrative issues that revolve around the contract. The PMA is introduced to the client, either in person or as an agenda item. The PMA reviews the contract terms, interfaces with the client’s accounting team, and gets a draft invoice to the client to ensure that all the boxes and information re- quirements are checked. “PMAs play a valuable role in creating a close relationship between the PMs and the financial management team. By leveraging the PMA to assist the PM, we get closer to achieving what is the best and highest use of personnel.” 2)Scheduling and resource allocation. Depending on how the firm manages resource allocation in their PM or accounting systems, the PMA transmits the data into the financial sys- tem. This impacts labor forecasting, revenue forecasting, cash flow management, and the overall schedule. Why would we want highly creative architects and designers, or highly technical engineers, touching the financial manage- ment system? Let’s give the financial management team Revit BIM, Civil 3D, or any of the other technical tools, and have them work into those programs. Otherwise, we’re wasting our time by not utilizing everyone to their best and highest purpose. A PMA can also assist the PM in maintaining the schedule, ensuring that all pending milestone dates are reviewed in advance, manage charging requirements, and oversee the al- location of resources. 3)Financial management team assistance. ❚ ❚ Work with the financial team to ensure that invoice dead- lines are met in accordance with the client’s requirements ❚ ❚ Assist the financial team in the post invoice follow-up with the client (five days after invoice is emailed, PMA follows up to ensure invoice was received) ❚ ❚ Assist the financial team in the collection effort and main- tain invoices within the terms of the agreement ❚ ❚ Staying on top of the PM during invoice follow up ❚ ❚ Help the team achieve the required project inputs related to time cards and expense reports PMAs play a valuable role in creating a close relationship between the PMs and the financial management team. By leveraging the PMA to assist the PM, we get closer to achieving what is the best and highest use of personnel. TED MAZIEJKA is a Zweig Group financial and management consultant. Contact him at tmaziejka@zweiggroup.com.

updates and maintain the project’s financial performance ❚ ❚ Look into the future to see what other services the firm can provide ❚ ❚ Continue to provide the sales team with RFP response, fee plans, and schedules ❚ ❚ Create an informative point of contact where the clients see the project manager and the firm as more valuable at the end rather than at the beginning of the contract ❚ ❚ Invoice the client in a timely manner ❚ ❚ Collect on the invoices that have been submitted to the client ❚ ❚ All other duties as required Sheesh – and all this before they’ve had their first cup of coffee! One of the most successful models that we have seen is the linking of an effective project manager with an equally effective project management accountant. This role is not an overhead position, despite the fact that the expertise that this individual brings to the team is financially oriented. This is nothing new to large firms that have either contract managers supporting the PMs or accountants that gravitate to assisting the PMs. This role is 100 percent chargeable. Project managers, according to Zweig Group’s Project Management Survey , have a range of billing rates from $136 to $360 per hour. Successful firms recognize that the PM has many tasks that can be managed and executed by the project management accountant. The PMA has a billing rate that, in some cases, is a third of the PM’s. This allows PMs to leverage their time, which in turn allows the PMA to perform tasks that are the PM’s responsibility – but at a third of the cost. The analogy to this role is found in the dental profession. Dentists realized that they could accomplish more of what they were trained to do by shifting tasks to the dental hygienist. All of the preliminary tasks that they provide allow the dentist to focus on the higher-level work. The direct result? The dentist can see more clients, charge higher fees for higher skills, and make more money in the process. So what does the PMA do that allows the PM to be optimized? “The PMA has a billing rate that, in some cases, is a third of the PM’s. This allows PMs to leverage their time, which in turn allows the PMA to perform tasks that are the PM’s responsibility – but at one third the cost.”

TALK TO US Do you have an interesting story to tell? Is your company doing things differently and getting results? Let us know. We’d love to contact you and feature you in an upcoming case study. If interested, please email rmassey@zweiggroup.com.

THE ZWEIG LETTER May 1, 2017, ISSUE 1198

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