Managing change

Screen Shot 2016-05-11 at 2.29.38 PMChange is a powerful force, so embrace it, learn from it, and by all means, take account of its effects and be reasonable in dealing with it.

Life would be more comfortable if clichés helped. “Change is the only constant.” “Without change we’d never have progress.” “Change should be embraced.” If only it were that easy.

Scientists talk about the ripple effect of one small change in ecosystems in the natural world. Change has the same effect on the patterns and systems that we set up in our own lives.

Imagine, then, the impact of change on organizations; leadership transition; reorganization; redefining departmental vision; merging departments and trying to bring together two different cultures; and the constant technological accommodations required by all of us these days.

Even the smallest diversion from the norm can cause tremendous resistance for the following reasons.

  • When we are in transition we are, at least for a time, deprived of knowledge. When our knowledge base is eroded, we feel we no longer have our influence. Control becomes a real issue.
  • When we are not in control, we have a tendency to hang onto the familiar. Often we dig in our heels and insist on staying with the old ways. Sometimes we even sabotage our own progress or the progress of others, a phenomenon known as “success sabotage,” or “fear of success,” so we don’t have to face the unknown.
  • Anxiety increases and it is not really about the present because we know what’s happening at the moment. Anxiety invokes the past. We remember what we went through with past transitions. Or it is about the future. We anticipate the worst.
  • There is a loss of the familiar. We may be giving up a feeling of expertise, old habits, or comfortable working relationships. Even when the changes are needed and positive, we are losing familiarity and predictability, which leads to a loss of confidence. “We have always done it that way,” means we know how to do it that way and it is no longer a struggle. In a world of tension and inherent difficulty, sameness can be calming and soothing. The fact that a new direction is appealing does not mean we don’t long for the old.
  • Stress increases. Stress results, not merely from hard work, but from the gap between working hard and not accomplishing what needs to be accomplished. Changes increase that gap.
  • Finally, positive change can be just as stressful as negative change because with every gain there is a loss. There are trade-offs, both anticipated and unanticipated.

So what should we do?

  1. Recognize resistance, concern, anxiety, and stress as normal reactions during periods of change. We do not need to add judgment to an already tense situation. If people’s self-esteem is already strained by having to learn a new protocol, for instance, it certainly will not be enhanced by berating them for not accommodating the changes. In other words, accept how people feel. Feelings aren’t right or wrong, they just are. If they exist, they’re valid.
  2. While enumerating the gains and positive aspects of the change, also address the losses. What are they giving up? What will they miss? Listen to what they’re telling you about the trade-offs. People don’t have to be right, they just need to be heard.
  3. Learn what has to be accomplished to accommodate the changes and make a reasonable plan for getting it done. At the same time, recognize that everyone has his or her own pace. Respect personal styles – and to the extent possible – take them into account. When people believe their unique approaches will be tolerated, the pressure reduces and they can often make transitions faster.
  4. Support one another. Those who are able to make changes more quickly can either be intolerant of those who need more time or they can help them in a non-judgmental way. Helping is rewarding and builds a team atmosphere.
  5. Acknowledge that a single change affects the entire system. To the extent those ramifications can be anticipated, you’ll be that much farther ahead. However, it’s not possible to predict everything. Expect the unexpected. If the surprises are seen as normal, people will be less likely to be negatively affected by them.
  6. It is essential to communicate far more often than usual even when there is not much to say. Keep as few secrets as possible. Have more meetings rather than less, in order to check in. Time taken now will, ultimately, save time later.
  7. And, most important, include employees in the decision-making process whenever possible. The people who do the job every day know how to solve the problems. The more their expertise is tapped, the more invested they’ll be in the outcome.

Employees need to trust their executives and executives need to trust their employees. Be accessible and available and, please, realize that a one-time announcement is simply not enough. If, as most say, “your employees are your greatest asset,” reflect that philosophy as you facilitate change within your organization.

Gerri King, Ph.D., is a founding partner and president of Human Dynamics Associates Inc., in Concord New Hampshire. For more information, visit gerriking.com.

This article is from issue 1154 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

 

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Deep client engagement

Screen Shot 2016-05-11 at 2.05.30 PMFriendships are not only good for the soul, their good for business, so make as many of them as you can if you want your firm to prosper. 

Personal engagement with clients determines so much of a firm’s success. A client’s satisfaction with the personal relationship with you and your team affects the recommendation they will give to other clients or prospects. It affects whether or not they turn to you for additional work. It affects what they’ll say to their friends about the experience they had, and it even affects the degree to which they pay your bills on time or argue about changes to your scope of services that require additional fees.

Here are some recommended rules of engagement:

  1. Mirror your client. Learn how they learn. Be a student of their personality traits, values and attitudes. You don’t need to be a chameleon, adopting their mannerisms, but you do need to understand who they are and where they come from to avoid offending them or getting into unnecessary arguments about things that have nothing to do with what you’re working on.

    Learn how they absorb information. Are they visual or verbal people? Would they rather see or be told? Do they rely heavily on the opinion or advice of others because, secretly, they have difficulty translating something they see pictorially into how they are going to experience it in real life? Field trips to, or photos of, solutions similar to what you’re presenting can help a great deal. Do they struggle with technical information? Can you find a peer of your client, whom they trust, to endorse what you’re recommending?

  1. Innovate. Think beyond the scope of the work you’ve been engaged to do. Start by learning what’s important to your client. Determine what will make their business perform at a higher level. Are there aspects of what you’re going to do with them that you never talked about in the interview, or wrote about in the contract, that can change their organization’s life?
  1. Become friends. Learn about your client’s family, likes and dislikes, fears and hobbies. Share your own. In my career, I became very close to almost every client, remaining friends long after our business had been concluded.

I’m reminded of Stephen Ambrose’s book, Undaunted Courage, which follows Lewis and Clark’s journals of their expedition to America’s West. Ambrose wrote extensively about the nature of friendship, which was so evident in the relationship between Lewis and Clark. It was the element which gave them the strength to endure the hardships they faced as they crossed the continent as the first explorers ever to do so. Working for a client can often seem as daunting.

The description made me appreciate the deep and lasting friendships which have been so much a part of my life, and to realize how important friendship has been in achieving the things we were able to accomplish together. I hope you find this passage from the book worthwhile and wish for you true friendships with the people with whom you share your work.

“Friendship is different from all other human relationships. Unlike acquaintanceship, friendship is based on love. Unlike lovers and married couples, friendship is free of jealousy. Unlike children and parents, friendship knows neither criticism nor resentment nor rebellion. Friendship has no status in law. Business partnerships are based on a contract, as is marriage. Parents are bound by the law as are children. 

“But friendship is freely entered into, freely given, freely exercised. Friends never cheat on one another, or take advantage, or lie. Friends do not spy on one another, yet they have no secrets. Friends glory in each other’s successes and are downcast by their failures. Friends minister to each other. Friends give to each other, worry about each other, stand always ready to help. At its height, friendship is an ecstasy. For Lewis and Clark, it was an ecstasy and the critical factor in their success.”

Follow these “Rules of Engagement” and you’ll be richly rewarded. You’ll enjoy your work more, you’ll take greater pride in what you’ve accomplished with your clients, you’ll receive more repeat and referral business with people you’ve genuinely come to like, and your brand will be richly embellished.

Edward Friedrichs, FAIA, FIIDA, is a consultant with Zweig Group and the former CEO and president of Gensler. Contact him at efriedrichs@zweiggroup.com.

This article is from issue 1154 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

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A transformative process

Screen Shot 2016-05-04 at 12.46.59 PMIf a firm is to achieve something spectacular, its leaders have to have big hearts, and they have to galvanize the entire staff.

One of the most rewarding things we do as consultants is guide a client through the strategic planning and business planning process.

We often spend more than 16 weeks interviewing the leadership team and the firm’s clients. Some people might have good things to say, others not so much. We conduct anonymous online surveys with the employees. We amass, review, and analyze an enormous amount of data – financial, organizational, human resources, and even past strategic plans – anything that will give us a window into the firm so we can understand it better.

This effort translates into a review document that assesses, evaluates, and recommends improvements to the firm in many areas. It often is a 150-plus page document that is distributed for review prior to a two-day onsite meeting with as many as 30 people. Sometimes people approach this exercise with doubts, fears, and pre-conceived ideas on what will occur. Our role is to facilitate the process and turn the experience into a solid 10 for all involved. It’s exhausting and rewarding all at the same time.

The process, to be truly transformative, allows all the participants to share their thoughts and opinions, and many times, these are the very leaders that will implement the vision with the support of their studios, offices or lines of business, taking the firm into a future that requires them to stretch out of what is comfortable and achieve the extraordinary.

As we move the participants through this process, and hearing many diverse and different approaches to the practice of architecture, engineering and planning, part of the transformation that occurs is to identify what many perceive as ordinary parts of the design effort.

Many elements of the work effort, due to the longevity of the participants in the respective practice, are often perceived as ordinary elements of the work that they do; the plumbing detail, the culvert design, the space plan, the fenestration design, the electric load calculation, the Phase 1 study and the structural load calculation. The reality is that these are all extraordinary efforts, brought about by equally extraordinary staff members who have forgotten that attitude and approach can be transformative. If the senior leaders can rally around the concept that everything is extraordinary, there is an ability to inject new energy into their departments by transforming the attitudes of their staff.

The development of a tangible, quantifiable vision is often started by the suggestion that all areas of the firm need to move from one level of revenue to a radical look forward over five years. Often this amounts to doubling, tripling, or quadrupling revenue growth.

Recently, with a planning session involving both senior leaders in their late 50s and early 60s, and a mid-level leadership team ranging from their early 30s to late 40s, the collective decision took the firm from $15 million in annual gross revenue to over $50 million by 2020. This transformative plan was crafted on day one, and on day two, we asked how that $50-million goal felt after a good night’s sleep.

One brave soul raised their hand and stated what many felt: “This plan was sheer terror and fear.” But they were reassured by the senior leaders that they stood behind the plan and would commit the resources required to achieve this epic vision. The new president was equally passionate in his commitment to reassure the team that there would be no obstacles standing in the way of creating a transformation. WOW!

Revenue growth that is this transformative has so many components that every facet of the organization has to engage in the effort. Business development goals, management goals, production and staffing needs, potential merger and acquisition strategies, technology, and new ways of staffing and planning. The firm must commit to assess and manage the strategic vision by reviewing the monthly or quarterly goals. The only way success can be achieved is by always keeping everyone’s eye on the prize.

Transformation ultimately drives down to the staff level, and what will their impact be on how the firm achieves the goals that it’s established? By participating and being invited to engage in the process!

Truly transformative change can often start with the third tier, the 25 to 30 year olds who should be valued for their ability to think outside the box, review processes, and create efficiencies through an unfiltered view of how work can be accomplished.

And here is the true secret of transformative change. In The Truth about Leadership, by James M. Kouzes and Barry Z. Posners, the 10th point focuses on the concept that “Leadership Requires Heart.” In other words, care and concern are the foundations of great leaders. Positive leadership generates positive emotion and, in that space, teams can create amazing and extraordinary results!

Ted Maziejka is a Zweig Group financial and management consultant. Contact him at tmaziejka@zweiggroup.com.

This article is from issue 1153 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

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Questions and answers

Screen Shot 2016-05-03 at 4.23.51 PMWhen positioning your firm for a potential sale, you should be prepared to talk about all facets of the organization, not just the C-suite.   

As an M&A consultant, I come into contact with sellers of all varieties. From “Maybe it’s time to start planning our exit” sellers, to “Get me out of here yesterday” sellers. Anyone considering an external ownership transition should be prepared to answer a few questions that come up in every M&A conversation. You only get one chance to have a first conversation with a potential buyer; you would be well-served by spending some time thinking about answers to the questions that are always raised.

  1. Why are you considering a sale? This one sounds like a no-brainer, but having an honest answer to this question opens up the dialogue in a way that nothing else does. A candid answer to this question starts the discussion with a tone of trust and credibility that are essential to moving the conversation forward.
  2. Tell me about your firm. Sellers need to be prepared to “sell” their firm to the party on the other end of the phone. According to IBIS World, there are 143,172 engineering services firms, and 72,346 architecture firms in the U.S. What makes your firm one in a couple-hundred thousand? Be able to articulate what makes your firm special (i.e. valuable!), and make an impression on the prospective buyer that they will not soon forget.
  3. What are your plans after the sale? I try not to “coach” sellers to give specific answers to questions, but this one, specifically, is my exception to the rule. I don’t have a right answer to this, but I can tell you that the wrong answer is that you plan to retire immediately after closing. If that is the truth, then be aware that leaving the firm before the ink is dry on the transaction documents will drive down your value considerably. The business you have built up will need you to maintain stability for some period of time before you pass the baton to the buyer. Letting the prospective buyer know that you’d like to retire after a few years is a much better answer than telling the buyer that you’re ready to retire immediately.
  4. Tell me about your staff. This is the opportunity to talk about the high quality second-tier of leadership that you have developed and mentored over the last few years (because you’ve done that, right?). Buyers want to know who they can count on in the short-, medium-, and long-term to keep the business on track. Spending the conversation talking about yourself and starting every sentence with “I did this” and “I did that” raises a red flag, especially if you just told the prospective buyer that you’re ready to retire. Focus on the answer to the question from the buyer’s perspective – what can you say about your people that will give the buyer confidence in the ability of your firm to continue to perform without you there?

I experienced a great example of seller preparation at a recent meeting with a prospective seller. This firm prepared a presentation for me to help me understand who they are, why they are the best, and what sets them apart. The presentation included market sectors, a few award-winning projects that they were proud of (and – I loved this detail – which of their all-star staff worked on the project other than leadership!), and their business model. An additional detail that was new to me in these types of conversations was a discussion of all of their major technology and equipment investments over the last few years, from how they financed the purchases, to how they were using those tools to generate revenue. I was blown away. That level of preparation answers a lot of questions before they are raised. I left the meeting with a better understanding of this firm’s commitment to cutting-edge technology, and confidence that this firm was ready to talk to potential buyers.

These questions and examples are just a few of the initial items on the list, but they are the ones that seem to occur during every introductory conversation. Remember that the person on the other end of the phone has already looked up your firm; they know what is on the website. The key to having a great initial conversation (which leads to great deals and partnerships), is preparation. They don’t know who you are and what makes your firm worth pursuing – so take some time and be ready to tell them!

Jamie Claire Kiser is Zweig Group’s director of M&A services. Contact her at jkiser@zweiggroup.com.

This article is from issue 1153 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

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Nodding your head

Screen Shot 2016-05-04 at 12.53.07 PM
It’s easy to spout acronyms, tell inside jokes, and use empty jargon, but oftentimes, people are just pretending to know what you mean.

Have you ever been in one of those meetings where a topic came up or an acronym reared its ugly head and you found yourself thinking that you’re probably the only person in the room who has no idea what everyone is talking about? I’ve been there multiple times. It’s an uncomfortable feeling. It’s the joke everyone laughs at, but you don’t understand. You just politely smile and nod your head.

I saw this in action years ago while teaching a master’s level class on global logistics. My fellow instructor and I created an outstanding presentation with all kinds of facts, figures, and diagrams, and spent a day talking about logistics processes and the importance of “Tip-fid” discipline and what can happen if one doesn’t “follow the Tip-fid.” We fostered excellent dialogue with and among the two dozen graduate students. As an instructor, there’s nothing better than when you know your students “got it.”

Except none of our students “got it.” The day after we returned home, I received an email from one of the students whom I had known for several years. He asked me if he could interview me as a subject matter expert for his thesis paper and then in a somewhat sheepish manner, he added at the bottom of the email, “By the way, what’s a ‘Tip-fid?’”

In this case, I was referring to Time-Phased Force Deployment Data, a standard term to describe the priority process used to move Department of Defense people and equipment. It’s a well-known term, but only if you’ve been exposed to that level of logistics, which was not the case for my students. So, who was at fault for the confusion? Why, that was me. The next time I taught that course, I spent a half hour describing the term and its meaning, and the class went so much better than the first one.

Is there something you say on a regular basis that you assume everyone around you understands, but in reality they may have no clue what you’re talking about? Is there an acronym or saying you use that may have different meanings to different audiences?

  • How confident are you that your clients understand everything you’ve proposed to them?
  • How many sports analogies do you make in your daily conversations? Have you ever called “audible” on a project or asked someone to “take a knee” when presented with a scope change request?
  • Do your biweekly production meetings occur twice a week or every other week?

Unambiguous speech is a force multiplier. It gets everyone moving in the same direction, as opposed to the classic: “I’m turning left, right?” There are several things you can do to help others avoid that uncomfortable feeling of not knowing what you’re talking about.

  • Avoid using acronyms outside of your organization. If you must use acronyms in a presentation, spell them out the first time you use them.
  • Build and maintain a master list of acronyms and commonly used terms in your organization. They are immensely helpful for your new hires. They can also make a great addition to your contract proposal to ensure there’s no ambiguity between your firm and your client’s firm.
  • Sometimes using acronyms with a client can signal to them that you understand their issue on a deeper level or even that you understand their company’s culture. Cover yourself and use the full phrase at least once to confirm your understanding of the acronym is the same as your client’s understanding.
  • Know your audience. If you’re leading a meeting, make sure you understand the audience before you begin. If your discussion ventures into areas possibly unknown to others, throw them a lifeline and provide a brief summary or background on the concept at hand.
  • Avoid using faddish terms found in the latest business management books. What exactly is a BHAG? And I don’t know anything about your cheese or care about what’s in your bucket or what color hat you’re wearing. Chances are most people will not have read those books and they may view you as a smug bloviator. Don’t get me wrong. I have my favorite business books, but if I’m going to make a reference to a concept I found in a book, I translate it so that everyone around me understands the point I’m trying to make.
  • Minimize the use of slang. The Pentagon is a breeding ground for such extraneous nothingness. If I had a dollar for every time I heard about a “self-licking ice cream cone” – code for a purposeless, self-serving process – or a dog that won’t hunt, I’d be a rich man. It literally took me months to figure out the thing about the ice cream cone.

I don’t know anyone who likes to be the person who doesn’t get the inside joke. Do your clients and your audience a favor and speak in terms they’ll understand, because not everyone will get everything you’re saying – even if they’re smiling and nodding their heads.

Bill Murphey is Zweig Group’s director of education. Contact him at bmurphey@zweiggroup.com.

This article is from issue 1153 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

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Prepare Your Business for Sale Today

Phillip Kiel“I’m not ready to sell my business,” “I am not ready to retire,” or “business is too good right now for me to sell” are all statements you might be thinking right now, but there are very good reasons that you need to start preparing to sell today.

“My business is not for sale though.” Well, it is better to be ready to sell your businesses when you want to, and not when you need to. The overwhelming majority of businesses are not ready for sale. You never know when a great opportunity to sell might come your way and you want to be prepared. Other factors that may lead to a need to sell can include illness, death, sudden relocation, loss of staff, exhaustion, and more. The last thing you want to worry about at a time like that is getting the business in order so that you can sell. Furthermore, not being prepared can lead to receiving a low value or simply being forced to close the doors.

The good news is that most of the steps you take to prepare your business to sell are good business practices that will benefit your business in the long run. “Should I sell my business or shut the doors?” That is a question that all business owners must face at some point. Selling is generally the better choice. You have spent years building a reputation, a team, and a vision. As an entrepreneur, we all want to ensure the success of the people we have hired to help us build our vision.

Are you prepared to sell your business today?

  • Could you respond to a strategic buyer if they were to approach your business about a sale?
  • Do you have a plan for your business to continue without you should your circumstances change?
  • Does that include a strategy for growth and new business?
  • Can you respond to questions about your competitive advantage and market fit?

A potential buyer is going to spend a lot of time on due diligence and reviewing your firm’s history. It will take you even longer to prepare to make a good first impression. The earlier you get started, the better. First, there are a few questions you need to ask.

  1. When is the best time for me to sell my business?
  2. What will I do after the sale?
  3. How much money will I need to sell my business for to achieve my goals?

The first thing that a potential buyer will ask for is a copy of your financial statements going back at least 3 years. Up to date, clean, and audited financials will get you started off on the right foot. You will also want to ensure your business has contracts in place with customers, employees, and suppliers. Rushing around getting contracts negotiated before a sale may send up red flags to your customers and staff, so the ideal time to put these in place is at the time of business.

Understand your motivations and goals for selling your business and ensure that you maximize the value you can receive for your business. Some other things you can do to prepare for a sale include: preparing a strategic plan including expected future revenue (the higher the backlog the better), prepare a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis, ensure your business documentation (key processes, procedures, contracts, records, etc.) are in place and easily accessible, prepare management and employee succession plans, understand  what your valuation is, and prepare documentation on anything that can show a good business reputation and good customer relationships.

When preparing to sell, think of it from a buyers prospective. If you were going to buy a firm, what would you like to see? What would make a good first impression on you? This will allow you to position your business for the highest value. Taking the steps to prepare your business for sale will make your business more successful. Therefore, today is the day to start preparing your business for sale.

Phillip Keil is a member of Zweig Group’s M&A team. He can be reached at pkeil@zweiggroup.com

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Making marketing matter

Screen Shot 2016-06-30 at 10.33.35 AMIf you’re one of those people who still thinks “word of mouth” is the way to go when it comes to marketing, my guess is you have a very small firm that will remain a small firm. If that’s what you are interested in continuing to be, read no further. This isn’t for you. Today, I’m trying to reach out to those architects and engineers who want to grow their businesses.

Marketing is critical to your success. It isn’t some BS stuff that can be doled out to someone – anyone – and everyone else can just go back to real work (i.e., architecture, engineering, planning, surveying, etc.). It is REAL work. It takes a lot of heavy lifting. And it permeates every single area of the company. It isn’t just something that hangs off to the side that we call in when we need their help. It’s not just a “support” group.

We have a big problem in this industry. It stems from a lack of business education and from a basic belief that marketers are full of bull liars and exaggerators. While we can’t solve that perception problem easily, we can give you some advice about how to elevate marketing’s importance in your firm – a crucial first step if you want to make its contributions more impactful to the firm.

Here are my thoughts:

  1. Hire the right person for the job. I’m talking about the head of marketing – CMO or VP of marketing or whatever you want to call him or her. You need someone dynamic. You need someone who is inspired. You need someone who is positive. You need someone who is creative. You need someone who can communicate. You need someone who will work their tail off. And you need someone who wants to be successful, needs to be successful. Notice I didn’t talk about degrees and years of experience? That’s because those things don’t mean squat if the person doesn’t have those other qualities, which, quite frankly, are much more important!
  1. Put the person in the right spot on the organization chart. That means that he or she (whoever heads up marketing), reports to the president or CEO of the company. They don’t report to a group, they don’t report to a committee, and they don’t report to anyone who isn’t the one who can allocate resources and kick ass and make things happen in the organization. This is essential, because if your marketing person is going to get anything done they will be CHANGING things inside the organization. That will ruffle feathers. Those whose feathers get ruffled will be obstructing change. Someone will probably have to confront them.
  1. Show what is getting done marketing-wise. This means constant and continuous reporting of leads, sales, new clients, new jobs, new prospects, backlog, web hits, press mentions, and about a hundred OTHER things that show something is happening marketing-wise. It has to go out to everyone in the firm – NOT just the owners and managers – so everyone can see what’s happening that’s good and bad and support the firm’s marketing efforts as best they can. That’s what it’s about – getting everyone involved!
  1. While everything we do marketing-wise is a team effort, don’t forget to recognize and promote the very specific contributions of your top marketing person and other marketing team members. I think sometimes firm principals are actually AFRAID to do this, that the professional and technical staff may complain or feel slighted if they aren’t the ones in the constant limelight. It’s BS, though. The marketing people need some love, too—some PDA (public displays of affection!). Give it to them – if you don’t, someone else will!

Doing these four things will help elevate the importance of marketing in your firm, and that’s going to help marketing get more done for you. Trust me – I know!

Mark Zweig is Zweig Group’s founder and CEO. Contact him at mzweig@zweiggroup.com.

This article is from issue 1152 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

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Let’s talk about student loans

Screen Shot 2016-06-30 at 10.17.38 AMWith college debt at an all-time high and expected to increase, now’s the time to think about adding loan reduction as a benefit.

Recruiting great talent takes skill, a little bit of luck, and some great benefits. The other day I was trying to figure out ways our clients could separate themselves from the competition when it comes to recruiting the best talent.

Of course, everyone wants to just throw money at the problem without thinking about the factors that drive a candidate to decide to go with one firm or another. It’s probably a bit more involved than that. Ask any recruiter and they will tell you that the deal isn’t done until the candidate signs the offer letter, and even then things can fall by the wayside through no fault of your own.

I was on a plane recently and stumbled across an article in The Wall Street Journal that addressed student relief as a corporate perk.

What a novel idea!

This issue got me thinking about the challenges facing young engineers and architects who are looking to work for a great company. It’s hard enough beating the pavement and finding a job, and when you add to it the stress of dealing with student loan debt ($35,000 average student loan debt at graduation in 2015), the decision-making process for these newly minted engineers and architects becomes a bit tricky.

Here are some ideas to consider as you work to fine tune your pay and benefits package to attract this millennial generation of talent.

Imagine being able to offer new employees healthcare, a 401(k) program, and a student loan repayment option or bonus. That’s a big deal for a young employee dealing with the kind of debt that this millennial generation is facing.

National student-loan debt is at an all-time high – and is expected to double in 10 years. Projections by the Congressional Budget Office put the total outstanding federal student-loan debt at $2.4 trillion by 2025.

According to a 2015 survey by Iontuition.com (a website that helps manage student-loan payments), more than half of current students and recent college graduates with student loans said they would rather receive an offer of loan help than a health plan. Nearly half of those surveyed also stated that they would rather have student-loan help than a 401(k).

These survey results are very telling. In the immortal words of the great R&B group, the O’Jays: “Give the people what they want.”

This new opportunity has even spawned start-up companies that have developed student-loan repayment programs. Companies like Boston-based Gradifi Inc., and Student Loan Genius, located in Austin, have developed platforms that can help firms implement these new benefits.

PricewaterhouseCoopers has taken this idea and leveraged it to their advantage on college campuses throughout the nation as they work to attract new hires. PwC worked directly with Gradifi to get the program up and running and make student loan repayment a reality for new employees joining the firm.

Now I should say that, according to an SHRM survey, only 3 percent of companies in 2015 were currently offering to help their employees pay off their student loans. Based on anecdotal evidence, it appears the number is quickly rising.

The biggest challenge to this option is the tax implication. Money to help pay student loans is taxable income. There is a bill in Congress right now, the Employer Participation in Student Loan Assistance Act, introduced by Rep. Rodney Davis (R-Ill.) on the House side, and on the Senate side by Sen. Mark Warner (D-Va.). The House bill seeks to extend the tax exclusion that currently applies to employer-provided tuition assistance – up to $5,250 per year – to include employer contributions to employees’ student loans. The bill would also provide incentives for employers to subsidize student loan repayments.

Whether this bill passes or not, there are some creative ways that a company can implement this benefit and create a strong recruitment and retention tool for new and current employees. This is one of those benefits that has yet to take hold in the design industry. I suspect that those early adopters who figure out a way to make this work will have a tremendous advantage over peer firms who are not willing to be creative when it comes to developing new ideas and programs to attract and retain the best talent available.

I honestly hope that someone will read this article and sit down with their CFO, controller, and head of HR, and figure something out. Please, do share your efforts with me and let me know how things go. As always, I’m available to discuss this topic or anything else related to recruitment, retention, and leadership.

Randy Wilburn is Zweig Group’s director of executive search. Contact him at rwilburn@zweiggroup.com.

This article is from issue 1151 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

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Getting serious about training your people

Screen Shot 2016-06-30 at 10.10.44 AMMy extensive observations on the AEC business tell me that the only training most of us do is catch-as-catch-can, luck-based training. There’s no structure or thought or meaningful budget applied to it in most companies in this business (with a few exceptions). Yet it is so important! It’s not like it’s easy to just hire the people you want and need who already know everything they need to know to perform the way you want them too. You HAVE to train people to get the workers you need to run and grow your business.

Here are my thoughts on the subject:

  1. You need to get involved personally. This isn’t one of those areas where you can just get out your checkbook. You have to do some work. As the founders/owners/top managers/best people at what you do in your firm, YOU have knowledge your people need.
  1. Not everyone wants to learn. The best people, however, do want to learn. If you find, as you get into your training effort, that certain people don’t want to learn, you need to get them out. They will undermine all your training efforts with everyone else. Not being willing to learn is unacceptable and a good reason to cut someone from your team. Get ’em out!
  1. Office layout/seating is crucial‎. People, ideally, should be physically located near those who are supposed to be training them. There are just too many “teaching moments” lost when that is not the case. Walled offices with closed doors are your enemies to effective training!
  1. Take people with you when going to job sites or visiting clients or regulators. This is how I was trained in how to sell A/E/P services. My “boss,” the company president, just asked me to go along with him. I learned a lot watching him. And he told me in no uncertain terms to be quiet unless he asked me to say something!
  1. Real world projects versus theory is crucial. I think too much training involves general concepts and theory, and not enough on practical problem-solving for real world situations. As a result, the training doesn’t seem relevant. Why not solve real problems and train people for future generations at the same time? But to do this, the trainer has to get involved and poke their nose into specific project situations. You cannot expect your people to bring you these every time on their own.
  1. Use your best people – not your worst – to train. So many companies dole off training duties to those who are the least busy. Huge mistake! The busiest people are the best people. You need them doing it – not your worst people. Your trainees need to emulate success, not mediocrity. And while you’re at it – get some diversity going. Using more women and people with different ethnic backgrounds may bring a different perspective to things that could help with creativity.

There’s a lot more to this topic. Your thoughts? Send them to me at mzweig@zweiggroup.com.

This article is from issue 1151 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

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The temperature is rising, and so is the Hot Firm List

234467LOGORegistration for the Best Firms To Work For Awards, Zweig Group’s ranking of the best workplaces in the A/E/P and environmental consulting industry, has come to a close, but entries to Zweig Group’s other awards are just starting to heat up.

The Hot Firm List, now in its 17th year, is Zweig Group’s ranking of the 100 fastest growing firms in the A/E/P and environmental consulting industry. Firms are ranked on a combination of dollar growth and percentage growth over a three-year period.

Applying to the list has major benefits. The Hot Firm List helps a firm benchmark their growth goals and also offers an opportunity for tremendous celebration of growth and success. Many firms have received significant press and media coverage as a result of Zweig Group Awards.

In a recent podcast interview, Will Schnier, CEO of Austin-based BIG RED DOG Engineering | Consulting (Hot Firm #26 for 2015), says the award is a powerful motivator and a source of pride for all his team members.

“They are working very hard, day in and day out, we all are. These outside awards, Hot Firm award in particular, is a great validation of these efforts,” Schnier says. “When they can go home and tell their family members, tell their friends, and the people they went to school with: ‘My firm was the 26th fastest growing engineering and architecture firm in North America’ – that’s an incredible feather in their cap.”

The Hot Firm List has seen a major shakeup recently. Last year, 25 firms were new to the list. Twenty-nine firms were both Hot Firms and Best Firms to Work For. Merger and acquisition activity was partially responsible for large changes on the list, but 62 percent of last year’s firms grew organically during the three-year period.

GATE, Inc. (Houston), has climbed the list by leaps and bounds over the past few years to hit the number one spot in 2015. LJA Engineering, Inc. (Houston), just made it onto the list in 2013, taking the number 100 spot, but steadily climbed the list over the next three years to land in the number two spot last year. Landpoint, Inc. (Bossier City, LA), number four on the list in 2015, has stayed near the top of the list after a climb from number 28 in 2013. The firm was narrowly edged out of the number three spot last year by O’Neal (Greenville, SC), a company that is no stranger to the top 10.

From 2014 to 2015, the average growth rate increased from 108 percent to 115 percent, and median growth rate increased from 74 percent to 88 percent. Will the trend of increased growth rates continue for 2016? Our experts predict yes, but we won’t know until entries close on June 1.

Last year, the Trifecta Award was introduced, an award honoring firms that win three separate awards: Hot Firm, Best Firms to Work For, and Marketing Excellence. Three firms, Maser Consulting P.A. (Red Bank, NJ), GARVER (North Little Rock, AR), and Westwood Professional Services (Eden Prairie, MN), were given this award in 2015. More firms are expected to win this award in 2016, and Zweig Group is offering a financial incentive for those that do.

Winners of all the awards will be celebrated at the 2016 Hot Firm and A/E Industry Awards Conference held at the Arizona Biltmore in Phoenix on September 22-23. With an extensive educational agenda and networking opportunities in a beautiful setting, it’s an event that anyone who wants to learn about success in the industry cannot afford to miss!

To register, click here.

Christina Zweig is Zweig Group’s director of research and marketing. Contact her at christinaz@zweiggroup.com.

This article is from issue 1151 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

 

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Are you an amateur?

Screen Shot 2016-06-27 at 9.30.42 AMA professional firm should have professional collateral, but all too often, bad photos, poor design, and sloppy writing dilute the brand.

Of course you’re not an amateur. You are a professional. You work for a professional organization. You put the “pro” in professional. So why do you let bad grammar and poor graphic design impair how your firm is represented to the world? We set such high standards for our profession, yet we allow a constant flow of bad brochures, reports, communications, proposals, and presentations to influence our brand image. Even our routine emails to clients say something about our organization and incrementally affect how we are received. Even though there are numerous examples that could be discussed, I’ll focus on the ones that seem to be the most common in this industry:

  • Bad pictures. Even though I am seeing improvement, this is a huge problem. The improvements I am seeing are mostly driven by technological advances, rather than an intentional strategy to improve project pictures. Are you sending your junior staff out to take photos of projects with no direction or training? This is how we end up with images taken through the bug-splattered windshield of the Ford Taurus company car. Pictures of poor pixelated quality, bad angles, people frowning or in odd poses, and pictures that do not show anything meaningful, are just some of the bad graphics that need to be culled from your inventory.
  • Bad grammar and spelling. The misuse of me, myself, or I, incorrect punctuation, jarring fonts, overuse of center justification, improper indentation, and incorrect spelling are some of the offenders in this category of brand busters. These also represent the most common and most visible of mistakes your people are making in their communications. This is happening all day, every day, in emails, reports, proposals, and presentations. The list goes on. Now that we have moved from verbal communication to almost all written, our shortcomings in this area are greatly enhanced and visible to our audience.
  • Bad message. Another way we look like amateurs is saying things like: “Our projects are on time and within budget.” Congratulations! That means you provide the minimum standard of performance to be a practicing professional. The further translation of such statements is that you are an amateur among your peers. This industry seems obsessed with overused statements like: “We pride ourselves in offering cost effective and innovative solutions.” If you are saying the same thing everyone else is saying, then you are calling yourself a commodity. We are not putting enough thought into what we are saying and instead our messaging is being lost in a sea of similar messages from competing firms.

The overarching point here is that your brand is defined daily by a number of influencers. It is everything written, visual, and experiential that involves your company. Bad uses of graphics and pictures, grammar, and spelling incrementally erode the image of quality that nearly every firm is trying to project. I would challenge you to do an audit on the pictures and communications that are being used by your firm right now. I’m certain you will find at least a few examples that will make you cringe.

The situation can be improved, and the problem even solved, through education and accountability. There are a number of resources available that offer basic training on grammar and graphics. Online sources such as Lynda.com can provide employees simple courses to work through. Access to the site can be purchased for your entire organization. Also consider “lunch and learns” to engage staff and foster ideas for best practices.

Additionally, a quality control process for outgoing transmissions and materials should be developed and implemented. Recognize that everything your firm produces defines the level of professionalism of your staff and the firm overall. Don’t look like an amateur with bad pictures and written communications, silly fonts and stale messaging. Set the standard high for everything your firm does and have it permeate every area of the organization. Say something different and say it correctly and you have already set your firm apart from the others!

Chad Clinehens is Zweig Group’s executive vice president. Contact him at cclinehens@zweiggroup.com.

This article is from issue 1151 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

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The blue pill or the red pill?

Screen Shot 2016-06-23 at 10.15.34 AMSuccessful ownership transition is difficult to achieve, and for it to happen, the first tier has to embrace the transformation brought on by the second tier.

Over the last two years, Zweig Group has supported more than 20 architecture, engineering, and planning firms in their pursuit of transitioning ownership from the founders to the second tier. We have assisted in moving them both financially and holistically to engage the new generation.

Passionately engaged in the work of the firm, these founders worked their entire professional careers to build their organizations. It is no wonder that most often ownership transition is not just a financial transaction, but a process of letting go. “Breaking up is hard to do,” but letting go is harder – and can create potential opportunity beyond anything they could imagine.

The fear is often the realization that they are turning over what they created, the very end game of their career, and placing their annuity in the hands of a younger generation that has to make good on its promise to safeguard the legacy.

The challenge of the founder is to not just sell stock to another tier of leaders, but most importantly, to let second- and third-tier leaders handle vision, business development, and day-to-day operations. We have helped those in their seventies realize and materialize their idea, and we have assisted those in their thirties with creating their end goal transition so that when they reach their 50s, they have a strategic succession plan.

When we finally get into the details of the leadership transition, we often find that the senior leaders have often not thought about “Who are the Whos?” – the most critical and often least thought about question.

Recently, we provided strategic planning to a highly dynamic firm that could not make the decision as to “Who are the Whos?” from a leadership transition perspective. Turning to wisdom that transcends even our rational thought, Dr. Seuss provided the answer to the conundrum. It was classic Dr. Seuss, in How the Grinch Stole Christmas. All of the Who’s in Whoville were saved by Mary Lou Who, the Who who transformed the Grinch and saved Christmas. Without the courage to step up and challenge the Grinch, the Who’s in Whoville would have been lost. Mary Lou Who saved them, just like identifying the Whos that will take over the leadership of a firm and propel it in a new direction.

We are often placed into challenging positions to force the leadership transition decision, to radically transform a founder’s thinking and to go out and recommend who we believe could provide significant change to the organization.

In the cult classic, The Matrix, Neo is faced with an extreme decision from the character Morpheus: Take the blue pill and nothing changes, or take the red pill and his world is radically transformed.

Without change, the status quo is maintained, the firm does not change and grow, and senior leadership runs the risk that without embracing the ideas and enthusiasm from the second tier, they compromise their annuity. By taking the risk, the status quo is radically shifted. Change is managed and mentored and the second tier takes the firm to places that the first tier never imagined.

In recent engagements, we have recommended that highly valued, highly competent staff members in their early thirties become, in one instance, the chief vision officer, and in another, president of the firm. In both cases, the staff members were women, offering a radical transformation to the firm’s previous leadership culture and organizational structure.

This change does not come without thought, exploration, and vetting of the second-tier ideas and ideology. Ultimately, it is their responsibility to prove to the first tier that they have what it takes to lead the firm.

Change, in any situation, is never easy. Simple as a concept, but the ramifications are usually sudden, short-lived and over, and everyone moves forward. In ownership transition, the dynamics create the opportunity for long-term change, to radically alter the way the firm moves and operates. That risk has to be assimilated and embraced by the senior first tier.

When change is fully accepted, and the second tier steps in, the first tier need only guide their successors. Their best approach is to gradually phase away from the day-to-day, allow the new team to engage the market, transform the firm, and successfully grow the organization into the future.

The blue pill or the red pill? An apparently simple choice, just not an easy one!

Ted Maziejka is a Zweig Group financial and management consultant. Contact him at tmaziejka@zweiggroup.com.

This article is from issue 1150 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

1461791672-InsiderGuideTransition_book_cov_webZweig Group is releasing a new book on ownership transition on August 5, 2016.  See the Insider’s Guide to Ownership & Succession Planning for Architecture, Engineering & Environmental Consulting Firms

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Trade shows, yes or no?

Screen Shot 2016-06-21 at 9.33.48 AMTake a look at the strategic plan, the budget, and the checklist, before making the decision on whether or not to attend.

Attending trade shows can be a very expensive proposition, ranging from whether your firm sends only one person to having a booth and maybe hosting a hospitality event. So I get asked this question by my clients pretty often. And I have a definitive answer to the question: IT DEPENDS!

There are a number of questions that I believe must be answered in making this decision. The checklist at right shows the questions I always ask myself in making – or helping a client make – the decision about trade show attendance.

If you’re not sure about the answer to question #1, ask your accounting folks. They will know if the firm ever wrote a check for that event. And their records will show whether you registered one person, multiple people, or a booth.

An email to firm leadership down to the department head level will give you the answer to question #2. If the answer to question #1 is “yes” and the answer to question #2 is “no,” this event might be an automatic “no go.”

If questions #1 and #2 result in “yes” answers, look at questions #3 and #4. If either or both result in “yes” answers, the prospects of attending are looking rosier.

If the answer to question #5 is “yes,” there is someone you have been trying to meet who will be at the show, this event might be an automatic “go.” How will you know? Ask the event sponsors. If it is within a month of the event, they will probably share the current registration list. If not, ask for a list of last year’s attendees to get an idea of who really attends. If there are other attendees you want to meet, keep a separate list of them. You will use that list later.

For question #6, compare the description of the event and its attendees to your firm’s strategic plan. If there is convergence, it will be obvious.

For questions #7 and #8, you might turn to your professional network – whether in your address book, or on LinkedIn or another online platform. Ask if others you know have attended this event and what they thought of it, whether they met people they wanted/needed to meet, whether opportunities to present or propose came from those meetings, etc. They will have useful insights about the event and the need for various levels of attendance and/or hospitality.

An additional consideration for question #8 is exclusivity. At one municipal association, no attendee can host an event when there is a trade show event going on. So all the breakfast events are the same morning and all the cocktail parties are the same evening. Under such restrictions, attendees tend to “work their way down the hall,” stopping in each room for a drink and a snack and then moving on to see what’s in the next room. If you are lucky enough to be at either end of the hall, you may keep your visitors for a longer period of time. Otherwise, they will probably be in and out within 10 minutes, and may even make dinner plans with others.

If you host an evening event, be sure to have 6-10 cards to give special attendees inviting them to join you for dinner later that evening. Otherwise, you could end up losing every prospect to someone else’s hospitality.

The answer to question #9 depends on the level of hospitality you choose. If you just want someone to attend, who can wander the exhibit floor, giving out business cards and brochures, and maybe giving out dinner invitations, one person might be enough. If you take a booth, you need at least two, so the booth is always attended. If you choose to host a hospitality suite, you can always have additional people there just to help in the suite without having them give up work days and paying for them to attend the show.

As for question #10, make sure your estimate also includes the salaries of anyone who attends for all the travel and attendance hours they spend, as well as the cost of your give-aways and any hospitality expenses.

For question #11, I like to have one or two inexpensive items that I can keep on the table, and one more expensive item that I keep under the table and give only to those people who spend some time with me telling me about their firm’s needs and letting me share information on how my firm can help with those needs. These are the interactions more likely to result in an extended conversation later, an opportunity to present or propose, or even a contract for a specific project.

Whether you decide to put a representative on the exhibit floor, host a booth or host a hospitality event, make sure to invite the people you listed in the answer to question #5. If you’re just having one or two people attend, you can still contact someone, express a desire to meet them for 10-15 minutes, and offer to “buy the first cup of coffee.” If one or two of the people you want to meet agree to meet you for coffee or a meal, you might consider attendance at the trade show well worth the price.

Bernie Siben, CPSM, is owner and principal consultant with the Siben Consult, LLC, an independent A/E marketing and strategic consultant located in Austin, Texas. He can be reached 559-901-9596 or at bernie@sibenconsult.com.

This article is from issue 1150 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

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Believe it: Quality counts

Screen Shot 2016-06-17 at 9.01.27 AMIf a firm wants to succeed at a high level, it must keep a keen eye on the documents, and have an ear for what the client needs.

It’s my experience that too many firms give lip service to quality assurance and quality control. Quality assurance is the process or set of processes used to measure and assure the quality of a product, while quality control is the process of ensuring products and services meet consumer expectations.

Do you have an active and thorough QA/QC program in your firm? If not, why not? If you were to ask your clients, “How important is it that we have a QA/QC program?” how do you think they would respond?  Probably with something like, “WHAT? What kind of question is that? How could we trust you if you didn’t?”

While most organizations I talk to claim they have QA/QC processes, when I look deeply into the firm’s practices, the reality of any rigorous QA/QC program is virtually non-existent. I’ve pressed the firms I’ve worked with to query their insurance carrier about what the impact of a well-documented QA/QC, metrics-driven program could have on their insurance rates. Their jaws have dropped.

Yes, QA/QC can pay for itself many times over – not just with reduced rates, but with reduced claims for errors and omissions and fewer claims from contractors for time extensions, which usually find their way to your doorstep if an error in your drawing is the cause.

In our business, quality assurance relates to the accuracy and completeness of the documents from which a project will be built. There are a few excellent methods to catch problems before your drawings get into the contractor’s hands.

In 1976 when I opened an office for Gensler in Los Angeles, one of the young, aspiring architects I hired came to me one morning and said, “We need some grey hair around here,” meaning someone who had seen every flaw in a set of drawings that could be made and who would review and mark up the drawings for correction. Subsequently, we got a three-for-one package when we hired the senior architect the young architect recommended.

John Perkins had an eagle eye for errors, inconsistencies, missing information and inappropriate or impossible-to-build details. He was also a great coach and a wonderful specification writer.  He had the ability to teach a group of young practitioners how to put together a complete and consistent set of drawings, but also how to completely connect the drawings with the specifications. The latter is one of the greatest flaws that lead to claims in the field or, worse, in the courtroom. We made it a practice never to let a set of drawings out of the office without John’s scrutiny and feedback. No one ever resented it, and all of us became stronger practitioners.

We kept metrics on how we were doing:

  • Number of plan-check corrections
  • Number of Requests for Information (RFIs) from the contractor
  • Number of Change Orders & Claims

When John finally retired for good, and we grew, it was too much for one person. We had several senior production people who took on John’s role. At various milestones in a project (schematic design, design development, then at 50 percent completion of construction documents, and finally at 100 percent), someone reviewed each project, looking for buildability, completeness and accuracy. The overseer shared the responsibility to guide and instruct the person or team that had done the job.

Not just anyone is well suited for this quality assurance role. It’s essential to assign someone who has a keen eye, a clear understanding of how drawings and specifications support one another, and a personal coaching style that is supportive of learning.

Beyond making sure drawings are completed and accurate, quality control ensures the work is a consistent and creative solution to what the client is trying to accomplish. Think about it: The building has been completed on time/on budget, with no errors or omissions, no disputes, and a very happy relationship between owner, architect and contractor – but it’s the wrong building! It doesn’t accomplish its purpose very well. It’s a church where the parishioners don’t feel spiritual and don’t put much in the offering plate. It’s a call center where turnover increases, raising recruiting and training costs. It’s a hospital where rates of infection go up and post-operative patient stays increase.

We always started every project by asking key questions about the metrics our clients wanted to track to be sure the building was affecting business performance indicators in a positive manner. We asked the client why they had hired us, what they saw in us that they felt would make their business perform successfully. We needed to know what was important to them.

We displayed these client notes, often in the form of a large storyboard, at each design meeting, so we could check in with the client to see if these were still the priorities, or if something needed to be added. We presented each design element, describing how it would affect behavior in such a way that it enhanced business performance. Post completion, we gathered statistical evidence from the client to be certain our design had accomplished what we and the client set out to do. This process kept us focused on the project goals, and gave us a body of data about our work. It also helped set a cultural attitude about what we were doing on each succeeding project.

Give these ideas a try. Let me know if your work improves, your insurance rates go down, your staff has a better time, and your clients tell other potential clients how terrific you are. 

Edward Friedrichs, FAIA, FIIDA, is a consultant with Zweig Group and the former CEO and president of Gensler. Contact him at efriedrichs@zweiggroup.com.

This article is from issue 1149 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

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Competition and the Theory of Relativity

Screen Shot 2016-06-15 at 9.31.44 AMYou have to keep your firm moving if you hope to stay ahead of the competition, and if you want your firm to age gracefully.

If you’ve ever spent any time at the beach, you may have noticed two distinct characters. One is the tanned, 50-year-old blonde basking in the sun on her lounge chair. Her leather-like skin makes her look 20 years older than she really is. Contrast that with the 50-year-old surfer, effortlessly maneuvering his longboard on the rolling waves. He’s nearly indistinguishable from the other surfers 20 years his junior.

Albert Einstein thought about this. Well, not about this beach scene. But he did discuss the relationship between fast- and slow-moving objects in his Special Theory of Relativity.

So what does this have to do with the AEC industry, you ask? I’m one of those people who is always searching for a way to connect the dots, and I found that Einstein’s Special Theory of Relativity provides another way of explaining the difference between fast-growth entrepreneurial firms and slow-growth small businesses.

In a previous TZL article, I recommended reading obscure books few others read as a way to broaden your river of knowledge in leadership and business concepts. The current book on my nightstand is Stephen Hawking’s A Brief History of Time. Released in 1988, Hawking’s book does a great job of explaining the space-time concept of Einstein’s theory that we can use to understand how some firms out-compete other firms in our industry.

In very simplistic terms, Einstein’s theory suggests that objects in motion, and traveling at very high speeds relative to slow-moving observers, will age more slowly than the static observers.

Imagine two successful engineers, Andrew and Ben. They begin working at the same design firm straight out of college and at age 40 each decides to leave the company to establish his own firm.

Andrew begins building his business by reaching out to his past clients and grows at the industry average of 5 percent per year. Ben decides to take another path and competes for projects beyond his firm’s current capacity. His strategy pays off and he’s able to grow at the rate of 20% each year.

By the time Andrew and Ben turn 50, Ben has increased his firm’s revenue four-fold relative to Andrew’s firm. Both have likely worked a similar number of hours each week, but it’s also likely that Ben’s work hours were more productive with a flurry of activity. Not the 186,000 miles per second speed of light kind of flurry, but it sure felt that way to Ben. I’m sure Andrew was busy, as well, as he enthusiastically prepared project proposals with the non-inspiring lead in: “We provide innovative solutions to give you a competitive advantage.” It’s no wonder Andrew’s is a slow-growth firm.

Einstein’s Special Theory of Relativity states that when two bodies later converge, the slower-moving body will have aged considerably relative to the fast-moving body. Indeed, when Andrew and Ben meet again at Zweig Group’s Hot Firm and AEC Industry Awards Conference 10 years later, there’s a distinct difference between the two firm owners.

Both are now age 60, but look at the work years remaining. Andrew has only a few years left to increase the value of his firm before he reaches normal retirement age. At this 20-year point, the revenue at Andrew’s firm is the same as Ben’s firm at the 5-year point. In other words, Andrew’s slow-growth firm will have aged 20 years to Ben’s fast-growth firm’s 5 years. To me, that sounds exactly as Einstein predicted when he published his theory over one hundred years ago!

With a much higher firm valuation, Ben is in the driver’s seat and can command a better price for his firm when he decides to sell. That would afford him the opportunity to move to a place where it’s always sunny and warm and he can hit the surf every morning. Andrew, on the other hand, will have to decide between working late into life or retiring and selling his firm at a much reduced price relative to Ben’s firm.

What can you do to slow your firm’s aging process?

  • Move! Keep your firm in motion, and as car aficionado Mark Zweig says: “Don’t let up on the gas!” Slowing down to bask in the glow of last year’s successes accelerates the aging process by forcing you to work harder to catch up with the fast-growth competition.
  • Develop a growth plan and stick to it. Don’t get too comfortable with the status quo. Push yourself and your firm beyond the “business as usual” mentality. View every decision your firm makes from the lens of: “Will this contribute to the growth of our firm?” If it doesn’t contribute to your growth, it could be slowing you down and causing you to age faster.
  • Stay engaged. Continue to improve the skills of your principals, project managers, and team members by ensuring they’re educated and trained in the latest concepts and techniques. Attending conferences to stay abreast of the current issues in the industry will keep your eyes fresh.
  • Constantly read to keep your mind active. It doesn’t matter whether you’re reading a newspaper or a physics book. Reading exercises the synapses in your brain and, according to one study, can rewire your brain and transform you into a continuous learner. Create a “Recommended Reading List” for your firm.

Which path is your firm on? Are the decisions you’re making today designed to keep your firm young, vibrant, and competitive, or is your firm simply lying on the beach growing old?

Bill Murphey is Zweig Group’s director of education. Contact him at bmurphey@zweiggroup.com.

This article is from issue 1149 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

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12 quick bits of advice from a war-torn veteran

Screen Shot 2016-06-14 at 9.14.22 AMNow in my 36th year of this business, ‎I am still learning. Here are some quick bits of advice that have helped me over the years:

  1. Never lose your temper. Being calm is always best. But if you do, say you’re sorry. And mean it!
  2. If something goes wrong on a project, eat it. Don’t try to fight doing what you know you need to do and will do anyway. The sooner you get to fixing the problem, the better.
  3. Don’t ignore HR problems. They will just get worse. Deal with them head-on, sooner rather than later.
  4. A productive team member is far better than a destructive “star.” A destructive star may do the work of two or three people but run off 10 or 20. You can’t let that happen.
  5. The best time to sell is when you don’t need the work. You’ll be more honest with the client and more confident. That will lead to a better fee and relationship.
  6. There’s always something to fix in every business. But you can’t let that make you negative and cynical. Negative, cynical people are not ultimately successful.
  7. Focus on building your strengths versus trying to fix every weakness. It’s always good to figure out what you like to do and are best at. Do more of that and less of what you aren’t so good at.
  8. Longterm relationships are worth investing in. It’s easy to be seduced by a brighter smile or lower price but it takes a long time to build a relationship with a subconsultant or supplier. Don’t cast those aside quickly – especially for those you know have good intentions.
  9. Do as I do, not as I say, is always best if you’re the boss. Set a good example. Don’t be above any job. Demonstrate your competence in the basic work to be done. Pitch in and help out.
  10. Don’t create your own trap. It’s good to be good at doing stuff but not if you are so good that no one else can come close to meeting your standard. You’ll never get away from anything if that’s the way you operate. Trust the other guy to perform.
  11. There’s some truth to every rumor. Where there’s smoke, there’s fire. Investigate and find out what is really going on with your clients, subs, and employees, because it could affect you.
  12. Take care of your people. They aren’t easily replaced. Loyalty and care for the business should be rewarded.

Mark Zweig is Zweig Group’s founder and CEO. Contact him at mzweig@zweiggroup.com.

This article is from issue 1148 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

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Underperforming teams

Screen Shot 2016-06-09 at 3.52.50 PMThere’s a lot to evaluate, and measures can be severe, but if fiefdoms form, or if turnover is high, it’s time to take action.   

Are you frustrated because some of your teams, groups or offices are not hitting their financial goals or performing at their highest level? If you have groups that struggle to be profitable, have high turnover, or don’t embrace your firm’s culture, it can be difficult to pinpoint what the issues are and get them on track. Very often an office is opened or a new team assembled in order to accomplish one of the firm’s strategic goals such as entering a new market, geography or client. Depending on how the group was created – from breaking off from another successful division, to an acquisition, to a key strategic hire, many things can cause a group or remote office to underachieve.

A recent survey of our clients found that the average A/E firm has between two and six teams that are underperforming, and there are many different reasons for this. Options to confronting this problem include replacing team leadership, closing a remote office, or other severe measures. So how do you figure out what the primary problems are?

In measuring the performance of our groups or teams, we often look at revenue or profit goals, but it is also important to understand the other key metrics behind the scenes that are causing the group to miss their primary targets. A variety of key metrics, such as win-rate, backlog and utilization need to be evaluated, as well as other intangible factors including:

  • Poor leadership
  • Ineffective operational and business processes
  • Winning enough business to sustain backlog and utilization
  • Skills and talents of the team
  • Types of projects and clients being pursued
  • Failure to embrace the firm’s mission and culture
  • Unsatisfactory client satisfaction
  • Reporting and group compensation plans

It is important to analyze your organizational structure and compensation practices to determine if you are rewarding the type of behavior that will drive profitability. Remote offices or groups are often not incentivized to share staff, cross-sell or provide work to other offices or groups when measured primarily on their own performance. It is also common for bonus plans to be given on a discretionary basis which promotes individual performance over the best interests of the firm.

Another problem is failure of individual teams to follow company processes and use systems. These groups develop their own processes, use spreadsheets to manage projects, and don’t embrace the company strategy and vision. Silos form and remote offices are often referred to as “fiefdoms.” This is usually the opposite of the desired culture, and stems from a lack of training and oversight, as well as failure to hold staff accountable for performance and not adhering to company policies. This can have a substantial impact on profitability and limit the ability for your company to grow and thrive.

These issues are especially evident when another firm has been acquired, and has completely different systems, processes and values from the corporate office. It can take a lot of time and effort to integrate a completely new company into your mainstream business practices. And when resources are tight to begin with, this is an area that is often not given enough attention.

If possible, moving a key executive to a new office can have the best results. Bringing the discipline, values and knowledge of company practices to a new office or group is challenging, and having someone there from the beginning that already believes in your firm’s mission, follows established processes and embraces use of systems may get the best results. In addition I recommend:

  • Conduct a business assessment to determine primary issues
  • Get one-on-one feedback from staff
  • Schedule regular meetings by firm leaders to all remote offices
  • Include group leaders in regular corporate leadership meetings
  • Evaluate whether organizational structure and compensation practices are encouraging desired behaviors

In some cases, you may try everything possible and discover that a group, team or office is just not working out. So how do you know when to cut the cord? Obviously you want to try everything possible to turn things around, especially if you have made a large investment in them, and have a lot of talented staff that you could lose. The final decision must be based on whether management believes that the team’s results will improve, as well as whether the team is contributing to or detracting from the overall company strategy.

If after all of these steps have been taken over a reasonable period of time, and results have not improved, then there may be no other option than to replace key staff or close an office all together. The key is to make improvements quickly rather than let problems fester and deteriorate. Real improvement can be made with clear communication, determination to instill accountability at every level of the organization, and swift action to stop the bleeding.

JUNE JEWELL is the president of AEC Business Solutions.

This article is from issue 1148 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

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RSVP in the A/E/P

234467LOGOIf you are planning an event, pay attention to the details so that your firm can reap the full benefits of publicity, business development, and old-fashioned fun.

Holding an event is not something just for the big mega firms. It is a great opportunity for smaller companies to gain exposure, especially to local potential clients, and to sell itself without the pressure of an interview. Here are a few ways to make it a sure success.

Planning an event takes time. Zweig Group holds a yearly event, the Hot Firm and A/E Industry Awards Conference. Planning for this event starts over a year in advance (prior to the previous year’s conference even happening). Your firm’s event doesn’t need to be elaborate and overly time consuming, but be sure to give yourself enough time.

We know that every marketing dollar counts. Make your firm’s event pay off – it should eventually translate into new clients and better jobs. Open houses with bad Sam’s Club appetizers and cheap wine/beer do not usually do that.

Get specific with a targeted audience. Decide who you want to come and why they should come. Hosting a new product demo, holding a seminar or educational event, or bringing in some kind of entertainment can get people together. Friendly competition such as a chili cook-off, sports teams, or a 5K run is also a powerful incentive.

A local firm we work with hosts an event called “Catfish, Corndogs, & Cornhole.” In addition to the event’s catchy name, it has plenty of good food and attending businesses form teams to compete in Cornhole, which is similar to horseshoes except players throw corn bags into wooden boxes. The event benefits The Boys & Girls Club, giving it a charitable aspect that further encourages attendance and publicity. This event brings a bunch of potential and current clients together and everyone gets to interact with the dynamic leader of the company.

Get help, partner up with another firm, or even bring in something/someone outside your industry. Hickok Cole Architects (Georgetown, DC), took home first place in Zweig Group’s 2015 Marketing Excellence Awards in the Special Event category for its social marketing event – Art Night. Every October, HCA transforms its four-floor offices into a huge art gallery and the proceeds from the sale of artwork are split between the nonprofit organization, Washington Project for the Arts, and local participating artists. Even though Hickok Cole foots the bill, the event brings in over 700 people and the firm estimates the press/media coverage is equal to at least $10,000 worth of advertising and exposure.

Other things to keep in mind:

  • Timing is everything. Consider other area events, industry events, holidays, location and weather.
  • Alert the media (and not just through social media).
  • Charge if necessary (even if the money is going to charity or a speaker/presenter). Guests who are willing to pay the price to attend an event often anticipate that their experience will be valuable or, at the very least, they are interested and curious about what you have to offer.
  • Don’t overlook the details. Whether you are holding this event at your firm’s office or somewhere else, have appropriate lighting, music, sound, food/drink, restrooms, and whatever else will keep people comfortable and having a good time.
  • Capture the event with photo/video so it can continue to work as marketing.
  • Make sure every attendee is walking away with something of value (can just be information).
  • Keep a guest list and follow up with every attendee.

Follow these tips, get a little creative, have some fun, and you’ll be well on your way to hosting a successful event!

Christina Zweig is Zweig Group’s director of research and marketing. Contact her at christinaz@zweiggroup.com.

This article is from issue 1148 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

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Timing, acceptance, and corporate culture

Screen Shot 2016-06-03 at 11.02.19 AMNo two M&As are alike, and the more you know about them, the better prepared you are for the unknowns.

Westwood’s long-term plan includes organic growth and the strategic procurement of companies and people that align with our values and vision. Over the years, we have entered several new geographic markets and have learned that no two opportunities are alike. When considering a new geographic location, there are always a variety of entry options to choose from. For example, we might open an office and then staff it with existing employees, relocate a senior leader to drive the local strategy, acquire local experts, or procure a local and established firm and kick-start national expansion. Or, we might do a combination of those things. Westwood has experienced all of these scenarios, but I am certain we haven’t experienced everything that goes with them. There is always more to learn.

As with any opportunity that presents itself, I believe that success requires the backing of a larger strategy and alignment with our business objectives. Westwood’s strategic plan calls for increasing our revenue over the next three years through organic growth and acquisition. There are times that we look for acquisition opportunities where we can grow a particular market in a particular geographic location. Other times, we seek to grow certain markets with less of a focus on where those opportunities present themselves.

For example, we completed an acquisition a few years ago which focused on both residential market growth and geographic expansion. The talent and experience of the people we acquired were the reason for pursuing the opportunity and achieving the success that we did. Westwood was able to quickly build name recognition, enhance our local position, and expand regionally. It also set the stage for future acquisitions in the same location.

We also recently acquired a great group of eleven people in a place that was not on our radar. Our strategy was to grow our power generation group by leveraging more talented and established resources to handle and increase workload. Our newly acquired team had the education, experience, relationships, and the unique expertise to expand our service offerings. It really didn’t matter much where they were located, they were the right people to have on staff! Better people. Better results. Our people are our greatest asset.

Through our learning process, Westwood has become pretty good at focusing on our direction and doing our due diligence. Even still, there are going to be things that are tough to predict or plan for. Three biggies are market timing, market acceptance, and corporate culture.

  1. Market timing. This is when all of the stars align and we can see opportunities clearly. Or so we think. Westwood has opened offices in locations where we felt certain of our success – only to have a shift in a market economy just after we were handed the keys to the front door. These situations are out of our control. The key to survival is having an exit strategy; knowing if, when, and how to act, rather than react.
  2. Market acceptance. Anyone will tell you that it is difficult to break into a new market, especially when there are highly respected and well-established firms already there. Acquisitions should greatly increase our odds of success, yet it can be difficult to foresee how newly acquired clients will respond to the transition. Due diligence to avoid any potential conflicts of interest and quickly demonstrating the advantages of the blended companies will help build acceptance and promote new client retention.
  3. Corporate culture. In our business, the greatest asset we have is our people. Westwood works hard to instill strong values and create a positive work environment – as do the people and companies we seek. Whether through strategic hire or merging businesses, success in blending people and cultures is found when we engage early to discover each other’s personalities and principles, and enable people to share their knowledge and leverage new expertise.

Speed in transition of people, technologies, processes, and products is also vital along each step of the way – though fast is not always best. The rate of speed will vary depending on each circumstance and each step being taken.

Working with Zweig Group, Westwood recently completed two strategic acquisitions. In December, we acquired Pogue Engineering & Development, Inc., out of Dallas-Fort Worth. And, in February, Kadleck & Associates, Inc., also out of DFW. I am happy to say that we are already experiencing success in leveraging each other’s expertise to expand our mutual opportunities. As we continue our growth plan, we look forward to the next opportunity. Even though there will always be things we can’t predict, we continue to learn and become better prepared for what lies ahead.

Paul Greenhagen is president and CEO of Westwood Professional Services. Contact him at paul.greenhagen@westwoodps.com.

This article is from issue 1147 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

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Newest Zweig Group research publication takes in-depth look at social media

1451491637-SocialMediasurveycover_webSpotlight Survey finds firms most likely to promote, engage, communicate, spy via various networks.

Zweig Group, the leading source of management advice and industry data for architecture, engineering, planning, and environmental consulting firms, has released its inaugural Social Media Spotlight Survey of A/E/P & Environmental Firms. The full-color, 140 page, digital document offers readers insights on social media usage across the A/E/P and environmental industry related to topics such as promotion, recruiting and retention, and marketing, among others.

“There’s no denying that social media is pervasive in our personal lives,” said Andrea Bennett, Zweig Group’s research and publications manager. “The Social Media Spotlight Survey takes that analysis a step farther – behind the doors of leading architecture, engineering, and environmental firms – to see if and how the best in our industry are implementing these tools to reach their goals for communication, recruiting and retention, and marketing.”

The data show that A/E/P and environmental firms see some social networking platforms – specifically Facebook, LinkedIn, and Twitter, with 47 percent, 47 percent, and 31 percent of respondents reporting a presence there – as more valuable for reaching their target demographics than others, such as YouTube, Tumblr, Instagram, Pinterest, Snapchat, Flickr, Foursquare, and Behance.

“Firms are definitely seeing these platforms as a means to generate awareness of their services and areas of expertise,” Bennett said, “and they are strategic about including additional media or interactive elements to generate more involvement with the posts.”

The 2016 Social Media Spotlight Survey data show that firms are most likely to use their social media accounts to promote their services (66 percent); network with clients, potential clients, suppliers, etc. (52 percent); post job openings (38 percent); share blog posts, videos, white papers, etc., by employees (36 percent); and promote new hires and/or the achievements of current employees (36 percent). To make these posts more engaging, 63 percent of respondents report including photos, videos, and podcasts.

In terms of recruiting, specifically, there is various among firms’ usage of social media networks to attempt to reach the best and the brightest candidates.

Though only 23 percent of firms overall report “sometimes” using social media for recruiting purposes, among fast growth firms – those that have experienced an average annual growth in revenue and staff of at least 20 percent over the past three years – that number jumps to 40 percent. Interestingly, only 20 percent of fast growth firms report using social media for recruiting “frequently and thoroughly,” closer to one-third of high/very high profit firms (29 percent) – those with annual pre-tax, pre-bonus profits of more than 10 percent over the past three years – and firms overall (30 percent) report doing so.

The outlook for social media marketing as a budget line looks bleak – possibly because most of these networks are free to participate on – with almost three-quarters (72 percent) of firms devoting less than 5 percent of their marketing budget to social media activities and about one-quarter of respondents citing social media marketing as “very unimportant.”

It could be determined, from this very basic overview of the wealth of information contained within the 2016 Social Media Spotlight Survey for A/E/P & Environmental Firms, that the industry is still working to decide the best uses of these vast and ever-changing platforms. Though most firms seem to recognize the importance of a least having a presence on certain social media outlets, and there is definitely an interest in networks such as LinkedIn as tools for recruitment, there also seems to be some hesitancy to devote actual marketing or other monies to social media endeavors, perhaps because – as the Spotlight Survey shows – there seems to be no agreed upon means for determining success or return on investment when using these channels.

In any event, the 2016 Social Media Spotlight Survey of A/E/P & Environmental Firms is a definite must-have for anyone interested in the future of marketing and recruiting – especially digital marketing and recruiting – in our industry, as this inaugural edition will provide the benchmark for all that follow.

For more information on this or any Zweig Group publication, call 800.466.6275 or email info@zweiggroup.com. To purchase the 2016 Social Media Spotlight Survey, click here.

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