TZL 1338

T R E N D L I N E S M a r c h 3 0 , 2 0 2 0 , I s s u e 1 3 3 8 W W W . T H E Z W E I G L E T T E R . C O M

Value per net service revenue

“It will take everything we have as leaders to get our firms and ourselves through this.” Demonstrate your leadership

In Zweig Group’s 2020 Valuation Report of AEC Firms , valuation ratios were analyzed by firm staff size over the last three years. In relation to value per net service revenue, we see that firms see a general increase in value with growing staff size. The median value for firms with less than 25 employees was 0.54, meaning that they were valued at around 54 percent of their annual NSR. F I R M I N D E X CHA Consulting, Inc................................2 CMTA. ..................................................12 Daft-McCune-Walker, Inc........................8 EES Consulting, Inc................................4 GDS Associates, Inc...............................4 GH2 Architects.......................................6 LACO Associates....................................8 McCracken & Lopez. ............................12 PCS Structural Solutions.........................4 Pennoni................................................10 MO R E A R T I C L E S xz TED RYAN: Get it done Page 3 xz Working together: Michael Hall Page 6 xz JOSEPH VISCUSO: Smarter solutions (Part 2) Page 9 xz STEPHEN KEEFE: Intellectual property (Part 2) Page 11 Participate in a survey and save 50 percent on any Zweig Group research publication.

N ow is the time we are all being tested. None of us has been through anything like this before. It will take everything we have as leaders to get our firms and ourselves through however long the virus-related slowdown lasts. Unlike most situations A/E firms could find themselves in, I won’t pretend to have the answers for this one. It’s not like a typical turnaround situation or recession that I have experienced many times in the past. This is different. It is an immediate nationwide – even worldwide – slowdown at best and a stoppage at worst. This will test us as individuals and organizations. Here’s some of what I am thinking that I hope will be helpful to our readers: 1)Survival is number one. We can’t achieve our purpose-driven missions or lofty visions if we aren’t in business to do so. This has to be at the forefront of every decision we make for our companies. We are all going to have to make some hard decisions. Decisions on who to lay off and who to keep. Who to pay and who not to pay. What we can cut that allows us to keep the doors open one more day because tomorrow things could be better. The sooner we come to grips with the idea that this is not going to go away in the future and it’s going to be real ugly, and make the tough decisions now with that in mind, the more likely we will be in business when it ends. 2)Survival also includes us, as the individual owners and managers in the organizations we work in. We have to take care of ourselves and our families. That means our individual health is beyond crucial. I won’t use my space here to review the CDC guidelines for social distancing or hand washing in this article – not that I won’t keep following them long after this virus has supposedly run its course – as we are all seeing them 20 times a day from so many different sources. But beyond staying alive (which could be challenging enough for us older folks), we have to stay psychologically healthy. That means we need to eat right, rest, exercise, and we can’t be too attached to our identities and our stuff. When this ends we may not have everything we had before it started. If we are still healthy – physically and mentally – we can get all that back (if we still want it). 3)Looking back now won’t do you any good. We can all long for the good old days and lament decisions we made or didn’t make in the past. Instead, as a leader you have to look forward. What clients need you the most now? What can you do for them that will help them survive this thing? Those and many more are the questions you need to be finding the answers to quickly if you are going to be able to make it through the current and coming storm. 4)Just like a combat pilot will tell you, being a helpless passenger will get you killed. You can take control of your airplane. It may be damaged right now and you may not have the control over it that you

Mark Zweig

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