Lessons I’ve learned lately

1477789_10152791298915678_4946862984534976341_nBeing human, we all have opportunities to learn (and re-learn) valuable truths for dealing with others.

You’re never too old to learn, if you keep your mind open to it. I have found over the years that whatever I’m experiencing in my life is also happening to a lot of our readers. So, I thought I would share some recent lessons I have learned.

  1. Don’t ever deny your first instincts about people. If you think maybe they are disingenuous or dishonest, they probably are. If you think they are good and worth investing in, they probably are. First impressions are accurate more often than not. Always follow your gut.
  2. It’s good to give people freedom and autonomy. It helps them develop their decision-making skills. But don’t forget to keep working on making yourself useful and productive no matter how good you are at delegating. You always have to keep getting better, doing more, being more productive, and looking for your own highest and best use inside the organization.
  3. Success is fun. No matter what anyone says about how great the learning opportunities provided by failure are, being successful is always better. Yes – the seeds of failure could be sown in your success, but success always beats the alternative.
  4. There is just no substitute for honest, ethical dealings with people, and everyone should be treated with dignity. We always have two choices when it comes to dealing with people: We can be decent or we can be a-holes. Decent people know how to treat everyone they interact with. A-holes do not and always seek to bully or coerce what they want from people.
  5. ALWAYS take care of your best clients. Give them the best people, best service, and best pricing you can. Reward their loyalty – don’t punish it by price gouging or providing poor service just because you can get away with it.
  6. When an employee says or does something so stupid that you want to fire them over it immediately, don’t. Take your time and deal with them smartly on whatever the best possible schedule is for you. Be calm and remember that a level head makes better decisions!
  7. No matter how many times we learn some of these lessons, we will always have the opportunity to re-learn them. We are all human beings. As such, we have a great capacity for self-delusion. We can easily talk ourselves out of doing hard stuff or into doing easy stuff. So, we repeat mistakes because of it.

What important lessons have you learned lately? Have any you want to share them with our readers? If so, email me. We may publish your feedback!

MARK ZWEIG is founder and CEO of Zweig Group. Contact him at mzweig@zweiggroup.com.
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Speaker Spotlight: John Zweig

Zweig Photo (00000002)Keynote Title:  “THE GOSPEL OF FREDERICO” — Insights on hot firms from a spiritual seeker and creative devil.

Speaker: John Zweig, Chairman of specialist communications, WPP Group

Description:  Start, build, acquire, sell… lead, collaborate, integrate. John Zweig has seen it all from the vantage point of the world’s largest, most diverse, 180,000 person marketing services firm.

Hear what John and his brother learned from their 95 year-old father that turned out to be the critical ingredient missing from all the speeches you’ve ever heard, courses you’ve ever taken and books you’ve ever read.  You will entertained, informed and inspired!

About: If anyone has an eye for spotting excellence, it’s John Zweig.  He’s overseen more than 50 companies for the world’s largest advertising and marketing services organization, WPP.  He’s been pivotal in building firms, merging firms, buying them, and selling them.  He’s spent 30 years observing what makes great organizations great – all over the world.  You’ll be surprised – and inspired – by what he’s discovered about organizations, and mostly, people.  Come share an extraordinary hour with John Zweig.  You might just discover a whole new perspective on the excellence that resides in you.

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Do small firms even need a board of directors?

bodHere’s a small excerpt from the A/E Board of Director’s Manual….

In short, some do and some don’t….Since a majority of firms in the industry—most of which are small—have boards, it would seem that boards are a popular solution for many small firms. But even so, size is definitely a factor when it comes to deciding whether or not to create a board of directors.

For some firm leaders, once the company hits a certain number of employees, creating a
board becomes an imperative. For 470-person environmental engineering firm Woodard
& Curran’s CEO and Chairman, Albert Curran, the magic number of employees the firm
should have before considering creating a board of directors is about 100 people. “At
less than 100 people, with all the issues a small firm has, dealing with the nuts and bolts
of converting from a private practice to a professional firm, [creating a board of directors]
is probably beyond what’s necessary. But certainly, from 100 employees on,
[firms] should move toward having a board of directors.”

For other firms, the question is not the number of employees, but the number of owners
or shareholders, the number of branch offices, a major ownership transition, incorporating
the firm, or hitting a certain revenue milestone that precipitates the implementation
of a board of directors. Some firms have a board in place from the day they are founded
and others have “theoretical” boards that are not active but could be pressed into service
should the need arise. For these firms, the question is not whether to create the board,
but whether they need the benefits a board can provide.

Whether to have an active board at all is a perennial question among firm leaders,
especially in the thousands of small firms that make up the majority of the companies
in the industry. Many leaders wonder how the board can provide any additional benefit
to the firm, especially because in most cases, and almost always in its initial stages,
the board will probably be made up of the same people you see every day and talk to
regularly—the other owners, shareholders, and business unit leaders.
Although A/E/P and environmental consulting firms tend to be owned, managed, and
staffed by the same people, there are some good reasons to have a designated group of
people serving as a board of directors. Instituting a board of directors—even if it is
drawn entirely from the ranks of top management—will professionalize the governance
of the firm. A board that meets regularly and discusses things other than the
day-to-day issues of running the firm and focus on more of the global issues facing the
firm can only help organizations that are looking to grow long-term.

Board meetings are an opportunity to sit down together to talk about the overall
business. Every A/E/P and environmental consulting firm can benefit from this. Most
firms are too project-oriented and get caught up in the details of getting the work done.
External, client-imposed deadlines make everything else seem secondary. How many
major initiatives has your firm abandoned partway through because everyone seemed
to get too busy to keep pushing the ball forward? This is one of the vital functions the
board can serve: keeping the bigger picture goals and programs on track. Sometimes,
you need to look at and discuss the entire firm, not just a project or a problem that
became evident in the course of doing a project. The board meeting is the only time
when this occurs in many firms, and having a board to follow through on lessons
learned from such meetings can make the difference between your firm makeing the
same mistake again or getting better.

Board meetings provide a forum to talk frankly about the other owners. Unless
every owner has been named to the board of directors, which many firms do but
should avoid, the board meeting is a good chance to compare notes on key people and
observations about how they are doing, particularly the other principals and owners.
Reviewing other owners and top management personnel should be a standing agenda
item at board meetings. If changes in key personnel are needed, the board meeting is
the right place to talk about it and come up with alternatives that management may not
have even considered. At some levels, this should be an operational question, but when
it comes to executive leadership, such as the CFO or someone who heads up a business
unit that comprises 40% of your fee volume, it becomes a big picture issue and
one appropriate of the board’s attention.

Board meetings and having a board in general can be a refocusing experience.
Sometimes firms go off course and forget their strategic plans. In the rush to get projects
done and move onto the next deadline, busy firm executives and board members
sometimes forget why they are in business and what the global priorities, core values,
and mission of the firm are and should be. The board meeting is a good opportunity to
Board of Directors Manual for A/E/P and Environmental 16 Consulting Firms
remind the key people (board members) what it’s all about and what their jobs really
are (including the CEO).

Board meetings are a formal opportunity to share personal information. Whether
that includes plans for the future, retirement issues for major shareholders, or what
each board member wants personally from the company, it’s good for the top people to
know what issues their fellow board members are grappling with. Often these issues
would not come up unless these individuals sit down and talk about them. The board
of directors meeting, as well as the social warm-up prior to it and whatever fun activities
might be planned as a wrap up, is the perfect place to share these kinds of
thoughts with fellow board members. It’s also a chance to inject a little more humanity
into the sometimes sterile day-to-day world of running a business. People work to support
families and achieve personal goals, and it’s important to remember that sometimes.
Meeting regularly with an advisory group like a board can help reconnect decision
makers with that fundamental truth of the modern workplace

Board meetings are a good way to keep others informed, especially when the firm
is multifaceted or spread out geographically. Although most informational meetings
can be successfully and inexpensively conducted via conference call, these types of
distance meetings have their limits—the best people don’t always get a chance to comment
or ask questions of each other and the distance can stifle free discussion. The
board of directors meeting can be such a time for the key people to really gain an
understanding of the problems each geographic location or service division is facing
and offer up solutions. Board meetings can function as a company-wide checking-in
and brainstorming session.

Board meetings are also a chance to train others in how to run the business.
Board meetings are a great place to apprentice the up-and-comers in your firm. Use
the board to develop younger talent. And while you may have a great branch manager,
division manager, or project manager, you cannot assume these individuals all understand
the broader issues related to running the firm, so an early introduction may be
the right approach in your firm. Inviting the bright young stars to a board meeting to
see the inner workings of the firm can provide an opportunity for these future leaders
to gain valuable exposure to those who were there first. It’ll probably make them feel
like a “chosen one” which can be a huge motivator for them to work harder, bring in
more business, and remain with your firm for the long haul, effectively keeping them
right where you want them.

A board of directors that meets regularly, has a tight agenda, and perhaps even has one
or two outsiders on it, can easily develop into one of your firm’s biggest assets as the
firm grows and evolves.

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Hot Firm Speaker Spotlight: Noah Eckhouse

Noah Eckhouse

Keynote Title:  Driving more ROI from your Existing IT Investments

Speaker: Noah Eckhouse, VP Portfolio Development

Description: Plenty of software vendors are anxious to sell CIOs and CFOs “the next great thing”; however, only a few vendors take the time to revisit the efficacy of your firm’s existing investments and look for greater returns. Bentley Systems is uniquely positioned to enhance your recognized value by benchmarking your firm against your peers, understanding best practices and finding new force multipliers. Bentley Systems’ VP, Portfolio Development, Noah Eckhouse, will showcase effective and emerging strategies for BIM advancement to the mutual advantage of your firms and your clients!

Breakout Title: Introducing Bentley’s CONNECT Edition: Advancing Project Delivery Speakers: Noah Eckhouse and Nicole Stephano

Description: This presentation will highlight the business and technology drivers that are fundamental to Bentley’s next infrastructure advancement ‐ The CONNECT Edition’s Common Environment for Comprehensive Project Delivery.  This informative presentation will introduce the CONNECT Edition, Bentley’s common environment for comprehensive project delivery, that will redefine the way teams design, engineer, build, and collaborate.  You will learn how to increase productivity and collaboration for infrastructure projects of all sizes.

About the speaker:  Noah Eckhouse is the Vice President of Portfolio Development for Bentley Systems, a $650M software company focused on infrastructure design, construction and operations.  With over 25 years of experience in emerging technology, he has worked on projects ranging from GPS guided golf carts to America’s Cup Sailboats to eCommerce optimization.  His career highlights include winning the 1992 America’s Cup; running a laboratory at MIT; the founding, financing and successful sale of three different startups; C-level roles in engineering, product development, corporate development, M&A and sales; and significant volunteer involvement in town government.  A frequent lecturer on college campuses, Eckhouse has spoken at Yale, Stanford, Tufts, UMaryland, Columbia, The Art Institute of Chicago, UCal/Berkeley and other notable institutions.  Eckhouse holds a BS with honors in Electrical Engineering from Tufts University and has been an instructor at the Massachusetts Institute of Technology. A LEED Accredited Professional, he is actively involved in local, national and international sustainability efforts and the evolution of new standards.  His home includes a solar hot water system, a composter, and wood heat.

Eckhouse has lived in Lincoln, MA since 1994 with his wife Catherine.  His children Michela and Eli attend Lincoln-Sudbury High School.  In his free time, Eckhouse enjoys sailing, cycling and exploring foreign grocery stores.  He is a board member of both Cycle Kids (a 401(c)3 nonprofit combatting childhood obesity) and the Tufts University Entrepreneurial Leadership Program.  He is an elected leader for the Town of Lincoln, having twice chaired the Lincoln Board of Selectmen.

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Keep your cool!

Great leaders know when to hold their tongues, take a step back, ask questions, and come to a better solution.

Every day that goes by, the more convinced I am that our abilities to keep our individual cool during potentially emotional situations is one of the most important skills we can develop. And, like most other skills, it is improved with practice.

Here are some examples of what I am talking about:

  • An employee says/writes something incredibly stupid to you that proves without a doubt how misguided they are or how inflated their opinion of themselves is, and you want to fire them on the spot because of it. Has this ever happened to you? If so, you aren’t alone. But you may want to think about that immediate firing. What will happen to the projects this person is working on? Who will complete those projects? What will the client(s) think? Is all of the employee’s work where you can get to it on your server, or is it stored somewhere else? Also, this employee could be well-loved by other employees, who will see you a monster for what you did, and you could screw up the morale of the whole team. Keep your cool before you act.
  • A client wants you to do something for free or at a price that you just can’t possibly agree to. Has this ever happened to you? It certainly has me. But, before scoffing and acting insulted and telling him/her there’s no way you can meet the request, you would be better off to stay cool and start asking questions. Why does he/she think this is needed? Is it absolutely necessary? Why does the client think you should do it for free – is there a perceived “debt” for you to work-off (in his/her mind)? How much is this client relationship worth to you? Is the marketing benefit of the free/reduced price work worth what it costs you? While it is tempting to laugh off the request or give a smart alec response, stay cool – don’t be sarcastic – and you will probably come out ahead.
  • A subconsultant is simply not performing. You want to fire him/her immediately and get someone else on the job. Has this ever happened to you? I would bet it has. Once again, while it may be tempting to drop the axe, it may also be expensive. What is this sub’s relationship to your client? What will be said about you? Are you sure you are dealing with the right person in the subconsultant’s organization? Maybe the principal is presently unaware of the non-performance and needs to be informed. How much would it cost to restart the project with another firm? Is anyone else on-deck and ready to go, if you do that? How will your firing the sub on this job affect other jobs your firm might have that organization working on? What will your fellow principals think of you if you fired him/her? Stay calm and cool and answer these questions – and more – before you act.

I could go on and on with more examples, but the bottom line is this:IF you can bite your tongue, think, get some questions answered, and not act emotionally, YOU can respond to the problem the way you really want to –on YOURschedule with the least amount of fallout. And that, my friends, is the hallmark of a great leader.

MARK ZWEIG is founder and CEO of Zweig Group. Contact him at mzweig@zweiggroup.com.
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Award Winners!

IMG_0909 (2)Here’s some news and updates relating to our awards program and the Hot Firm and A/E Industry Awards Conference:

We have some great speakers coming to the conference here are just a couple:

Check out Langdon Morris who will be talking about Agile Innovation and the workplace: https://www.innovationmanagement.se/author/langdon-morris/

Chris Doerschlag from WD Partners talks about how embracing change has been a key to his success: http://www.dispatch.com/content/stories/business/2015/02/15/embracing-change-key-to-this-success.html 

 

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Is it time for a client break-up?

Take an honest look at your client relationship and ask yourself if it’s still mutually beneficial; if it’s not, it is time to do the hard thing.

January 2015 [ocs 217

In addition to working at Zweig Group, I also run a small horse-boarding and horseback-riding lessons program out of my home, a farm on 13.5 acres just outside of town. I started this business in 2011 at a different location as a way to subsidize the costs of my own horses’ feed and to make some improvements to my property. Many of my boarders became friends and were great companions for horse shows and as farm-sitters if I needed to travel.

Though I’ve always been conscious of keeping it small, since it was never meant to support me financially, after a move to a new and better location, my side business rapidly gained momentum and started to grow. Suddenly, I found myself with 12 horses to care for, multiple students, children riding who needed supervision every day of the week, and two other outside instructors working out of my property. I was proud of my beautiful property and my reputation of providing a high-level of care, so I rarely said no to requests from boarders.

Before I knew what was happening, dozens of people were at my house every day. A literal parking lot developed in my side-yard, and people who I often didn’t know very well were at my house and using my bathroom at all daylight hours. Every single extra second of my time was taken up with horse activities, and I was unable to do things like go to the grocery store or go out to dinner after work. I even had to pay my sister to run to the store for me, so I could use what precious daylight was left to finish chores around the farm. After a misunderstanding about a boarding agreement made with the parents of a teenage girl and the girl herself, I was berated with multiple lengthy texts from the teenager and suddenly came to a horrifying reality: My horse business had become a “runaway train,” and it was completely off the tracks!

Although mucking stalls is different than providing design services, many A/E/P and environmental firms fall into the same trap that I did and don’t stop to look objectively at their current client situation. While it might not be prudent to fire a client in the middle of a job, there are certain things to take into consideration when making the decision to pursue additional services or work in the future. If some of your client relationships don’t give you a good feeling, ask yourself:

  • Does the math add up? If you’re losing money on a client and the relationship isn’t bringing future opportunities, it’s probably time to re-evaluate your fees or the client.
  • Does the work fill you with dread? If every time you have to converse with this client you get off the phone with a bad taste in your mouth, it’s probably time for a break-up.
  • Are you proud to be working with them? If your client has a bad reputation, is always talking badly about other people and/or firms, or is doing such bad things with your work that you don’t want to be associated with him/her, it’s time to end the relationship. The last thing you need is a client talking poorly about your firm.
  • Are there more problems and failures than success stories? It can be tricky to turn down work from a client you like, but if the work never goes as planned you might not have the strengths to really perform well for this client.

Many of my clients paid late, showed up at inconvenient times, and weren’t respectful of my personal space or property. Additionally, when I ran the numbers, I learned I was working for free – at best – and usually at a large personal expense.

Although it may be scary to turn down work from a client, especially one that you already have a relationship with, it’s probably the best thing for both parties. If you’re unhappy with your client, they are probably unhappy with you, and your time and resources can be put to a much better use.

I had to face the scary fact that I had become a doormat and the only solution was to fire some of my bad clients. Telling these people they had to leave was very difficult, but once I imagined a future for myself not working 80-hour weeks, having more ability to travel, not bending over backward for ungrateful clients, and having some personal time at my own home, it was an incredible relief!

CHRISTINA ZWEIG is a Zweig Group marketing and management consultant. Contact her atchristinaz@zweiggroup.com.
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Taking the plane off auto-pilot

Don’t let the current market surge allow you to become too busy or lazy to effect needed changes, and don’t underestimate the time and resources this will require.

shutterstock_225113527​Have you ever been at the controls of a plane when autopilot is turned off? I had an opportunity to do this many years ago on the small, single-engine company plane that my previous firm owned. As I held the controls, I assumed that if I just held them steady where they were, the plane would remain on course. That was not the case. When the pilot turned off the auto-pilot feature, the plane immediately started to dive and moving the controls was much harder than I was expecting. After about 10 seconds of terror – that felt like 10 minutes – the pilot took the controls and steadied the plane.

As I was discussing a part of our business with Mark Zweig last week, I used the analogy of taking that part of our business off auto-pilot. As soon as I said it, the story above came to mind, and it made the analogy even more powerful. All of us have experienced the auto-pilot scenario at some point. Whether it is one part of our business or the entire firm, being on auto-pilot is easy and maintains the status-quo. The chances of turning the auto-pilot feature on are enhanced when we get busy or lazy. Auto-pilot takes us to a destination at a steady, direct course. In the context of our business, it can also enable market trends and changes to go unaddressed, allowing many problems to accrue. In my experience, every part of the business is subject to this risk. As a consultant, I see many marketing departments that are stagnated after being on auto-pilot for so long. They become simply a proposal grind that is never-ending, often yielding market benchmark results that are unacceptable, in my opinion. Here are some issues that tend to manifest from auto-pilot status.

  • Your boilerplate marketing material is out of date. I am referring to those standard introductions and descriptions of the firm and its services. Nearly every firm I work with as a marketing consultant has an outdated – or even irrelevant – boilerplate. It’s not unusual to find material that is 10 or more years old! I am not a fan of boilerplate text because it never gets looked at and just fills up space. Our lives are now bombarded with “content” – from social media to other marketing mediums. Firms should strip all standard material out of marketing materials and only say the most powerful messages that can influence purchasing decisions. Less is more!
  • Cover letters are not saying enough. Studies show that your clients’ attention spans and ability to recall facts from your marketing documents is highest at the very beginning of their review. This means the cover letter of a proposal needs to give the most attention to crafting a powerful message that speaks directly to the reader. However, instead of doing this, we often reuse cover letters and just change the project name and contact information before including standard boilerplate material. We also start every letter with “we are pleased to submit this proposal for the above referenced project” or something similar. To maximize your chances of getting the attention of your client, write a powerful and personal letter from scratch for every submittal.
  • You marketing staff is too busy. As the current market surge continues, I am seeing an unfortunate trend in nearly every firm I work with: Marketing departments are doing more proposals than ever with no end in sight. This is the enemy of creativity – and of these critical support roles to provide the level of service they are capable of. More proposals means they are in more of a sales-support role and critical marketing activities are not getting done at all. True marketing is essential for building and maintaining a strong brand to empower the firm to achieve critical growth into new areas, both geographic and service. If you had 30 percent growth over the past year, have you added 30 percent more marketing resources? I doubt it. Scale up your marketing department with the rest of the firm. If you have an ambitious growth and/or diversification plan, you might need to add even more marketing resources proportionate to the rest of your business.

As this historic market surge continues in our industry, I am seeing many departments and firms going into auto-pilot mode. The reason for this is our focus is shifting to completing the incredible volume of work that firms have right now. This stretches all resources and commands an “all hands on deck” atmosphere. Meanwhile, we are not spending the time necessary to look ahead and plan for that upcoming weather system that could cause us turbulence. Even worse, there might be a mountain ahead that we could crash into. Not putting critical business functions into auto-pilot mode while we all work to get this work done is difficult to resist. It’s more important than ever to do it now, while you have the financial resources to invest. Once a downturn comes onto the horizon, it is too late. Take the controls now and change your altitude to a nice climb, taking your firm to new heights. Be looking far ahead now and steer your plane to avoid the things coming that will certainly cause your firm turbulence or even casualties.

CHAD CLINEHENS is Zweig Group’s executive vice president. Contact him at cec@zweiggroup.com.
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Knowing what you want

Sometimes firm owners feign ignorance to avoid spending time, money necessary to achieve their goals.

​It’s been said before: “You can’t get what you want if you don’t know what that is.” Nowhere is that more true than when you own a business. If you cannot articulate where you want that business to go and what you want it to be like, you’re sunk.

However true this may be, I see a lot of A/E and environmental firms with owners who don’t seem to really know what they want – at least they act like they don’t. Here’s some of what we see/hear on a daily/weekly/monthly basis:

  1. “I want to grow, but I don’t know if I really want to grow.” This conflict is present in half or more firm owners. Growth sounds kinda good because it makes the firm more valuable and boosts the ego, yet it requires spending money on things that may or may not pay off. That lack of certainty, coupled with a career path that, perhaps, has an end in sight, results in inaction.
  2. “I want to hire people, but I don’t want to spend what it takes on recruiting or pay-wise to actually hire someone.” Common problem! We see a lot of people paying lip-service to the idea of hiring but not succeeding at it, because it is expensive. The owners, once again, may be closer to “harvest” time than they are “planting” time. So, the inaction gives the owners the appearance of not knowing what they really want.
  3. “I know we need better clients/projects/fees, but I don’t really want to spend any more on marketing.”This situation exists in most firms for two reasons. One, many firms don’t need more work now. They have all they can handle and can’t/won’t hire more people to do it. The second problem is most owners don’t really believe there’s a link between marketing spending and results. So, we talk about it but don’t actually do anything, giving the appearance of not knowing what we really want.
  4. “I’d like to get out of the business, but I don’t know what I’d do if I did get out.” This condition also exists in many firms with many owners. They really are tired of the grind but don’t know what else to do with their time. Perhaps their spouses would drive them nuts with too many “honey do’s,” or they’re just more interested in remaining productive than they are in eating dinner at 4 o’clock. Either way, their lack of ability to decide what they want drives the other principals crazy and may create ownership- and leadership-transition problems.
  5. “I want my people to act like owners, but I don’t want to have any more owners.” Again, a common situation. These people want to have their cake and eat it, too. Even if you can’t make everyone who you’d like to be an owner into an owner, you can share information, bring people into certain decisions, and treat them with the respect you’d give an actual owner, and you can pay them accordingly. We see a lot of indecision here.
  6. “I want my people to be better managers, but I won’t give them any training nor any time to actually be a manager.”The desire to make employees better managers clearly isn’t strong enough to actually invest in people. If it were, they’d do it.
  7. “I want my people to take more responsibility for dealing with clients, but I don’t want them taking over any of MY clients.” Again, how badly do these owners really want to pass the baton? If you did make that decision, you would pass the baton. Common problem. Don’t be one of these people!

So do people in this business really not know what they want? Or are they just unwilling to be honest about it and act accordingly? You tell me…

MARK ZWEIG is founder and CEO of Zweig Group. Contact him at mzweig@zweiggroup.com.
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Working with the government

1477789_10152791298915678_4946862984534976341_nSix suggestions for firms seeking to work with the largest buyer of A/E and environmental services.

Let’s face it: The government – be it local, state, or federal – is the biggest buyer of A/E and environmental consulting services there is. Many firms in this industry rely on government work for half, or more, of their business.

If you are going to work for the government, here are a few suggestions:

  1. Know their rules. If you don’t know them, you’ll have a hard time getting work in the first place. But it is important to know what you can and cannot do when it comes to buying meals for clients and travelling on client meetings, what you can charge and not charge for, who you can hire, and so much more. Ignorance is no excuse. Do your homework, and save yourself a lot of grief.
  2. Accounting differences can be hard to deal with. Take a look at any company that does both public and private work: There’s usually a balancing-act between accurately tracking every hour worked on private client projects and not charging any more than 40 hours a week to their timesheet for public work when they are being paid on a cost-plus basis. These things can create ethical, and even legal, problems for firms, depending on how they are handled.
  3. Make every suppliers and subconsultants comply with what you have to do for your client. In other words: Make them bill you in the same fashion you bill for your services; make them charge their time the same way you do; make them comply with all federal and local hiring laws, workers’ compensation requirements, and more. Some agencies can make you, as a prime, responsible for each of your subs being in complete compliance.
  4. Hire people from governmental organizations, but be sure to hire the right people. It can be risky. Someone is retiring from your state DOT, and you hire them, thinking it will be a coups. But, instead, you get the dud – the one they were all sick of and couldn’t wait to get out of there – and they will not work with your firm as long as you have anything to do with him or her. Be careful! Do your due-diligence before hiring. You cannot afford a mistake.
  5. Don’t look too flashy. Most government clients don’t want to see your new supercharged Bentley or $8,000 Rolex. If they do, they’ll think they’re paying you too much and will want to stop doing business with you. Be extremely cautious! Even if you do drive a Ferrari F360 Modena to the office every day, keep a 5-year-old Taurus or Camry around that you can drive if you need to.
  6. Don’t let them ruin you. I have seen a lot of A/E firms that work for the government start to morph into the clients they serve. They hire government people, adopt governmental pay practices, adopt governmental policies, lay out their offices similarly to governmental agencies, and even mirror governmental organization structures. You probably don’t want this, IF you want to run a profitable, growing company, as the government isn’t known for efficiency and entrepreneurial spirit.
MARK ZWEIG is founder and CEO of Zweig Group. Contact him at mzweig@zweiggroup.com.
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Strategic M&A Search: Making a Connection

jamiekiser_hoverThis is part one of a two-part series on the acquisition process, written by  Jamie Claire Kiser, Director of M&A Services, and Ryan Renard, Financial Analyst/Consultant. Part one focuses on the search phase of an acquisition, part two will discuss the process from contact to closing.

I’ve heard the same question several times during recent strategic planning sessions that Zweig Group has facilitated for our clients: “Should we buy a company to grow?” With so much attention focused to the industry’s recent and forecasted consolidation phase, M&A is a hot topic in the media and in discussions with our clients. The question shouldn’t really be whether or not a company should grow through acquisition. The question should be if the firm is prepared to handle the acquisition process.

The decision to grow through a strategic acquisition can change a company’s growth trajectory and add immediate value to the firm’s bottom line. That’s the best case. The worst case is a firm blindly stumbling through the process, sucking up months – or even years – of time with nothing to show for it, or with a botched acquisition that drains considerably more resources. An acquisition growth strategy is a major commitment and needs to be the direction that all of management agrees to pursue. Acquisitions, even successful ones, require coordination, fast action, resolution to see the “big picture”, and, of course, a significant amount of time and money.

The purpose of this article isn’t to scare would-be buyers off. Instead, it’s to help firms considering an acquisition strategy gain a better, albeit basic, understanding of the process. There are several steps to preparing for and executing a strategic search for a new merger or acquisition target, and there are plenty of resources out there that take this discussion to a scholarly level. Instead, we are going to explain the process using a tried-and-true analogy that everyone understands: finding your soul-mate.

Creating a dating profile: Despite what we tell ourselves, everyone has a “type” in dating, and every firm needs to recognize the “type” that interests them in a potential acquisition. The work begins with a clearly defined growth strategy. Identifying the characteristics of the potential targets helps narrow your search to a manageable scale and provides objective parameters for the discussion. You don’t ever want to be in the position of pitching a firm to your partners because the owner is a “really nice guy.” Know what you want, write it down, and seek it out.

Discussing the answers to questions like these with your partners will help make sure that you are all in agreement from the outset, which will speed up the process when you actually begin courting firms. Talking through strategic objectives and goals will benefit your firm immensely, and not just in regards to an acquisition. Some questions (among many): Is your firm interested in growing their home geographic area? Improving design strength in a pre-existing sector or discipline? Or is your firm looking to strike out and diversify through a new geographic area, market sector, or discipline? How will you finance this growth? What are the characteristics of the ideal firm? What values are important to your firm, and how will you transfer your culture? What do you do well that you can immediately bring to a new firm?

Pre-dating, a euphemism for stalking: At this point, you know what you want and you’ve filled out that online dating profile, uploaded a flattering photo, and paid your subscription fees. You’ve seen a few pictures, they look like they match your profile, and now you’ve got to figure out if they’re even available or interested before you waste your time trying to impress them. It’s the exact same when you want to acquire a firm.

This is where your basic research begins; you have to start compiling a list of all the companies you think would be a good match to the criteria you set forth. Don’t underestimate the time and leg-work required for research. Have you ever seen an engineering firm with a “For Sale By Owner” sign slapped across the front door? Instead of opening up an app and swiping left and right to find a match, you have to contact dozens – if not hundreds – of firms to determine if they would even consider being acquired, let alone whether or not they meet your criteria.

The initial contact has to be made with absolute discretion, especially if you are contacting targets located close to you, to avoid scaring the employees of the target firm. We usually begin with a brief, one-page letter sent to all possible targets asking them to contact us if they are interested in learning more. The contact letter is directed to the president or owner of the firm. If we don’t get a response to our contact letter, we follow up with an email. Since we don’t take the hint as well as many online daters, we reach out to the firms that didn’t respond to either the letter or email with a phone call. Brace yourself for rejection. It stings less over time.

Flirting: After you’ve narrowed your list to only firms that are interested in talking, you have to do some more research before you can commit to taking them out for a first date. In dating, you have to look this person up, make sure they aren’t wanted for felonies, and verify that the attraction is at least based in reality (Photoshop can really work magic!).

In acquisitions, after you have a list of possible targets, and have skimmed away the ones that aren’t interested in talking to you, use as many resources as are available to you to find out everything you can about the remaining firms on the list. This will allow you to make some cuts right away and save you time later down the road.

The next step is to set up preliminary phone calls with the firms remaining on the list to try to get to know them better before you ask them on a date. Ask the firm owner or executive about their basic characteristics and maybe a little backstory. There’s very little information available in the public realm for these companies that will let you see much beyond their market sector, discipline, or geography. It’s better to have a more expansive list from the start, and whittle down the possible matches from there instead of relying on the accuracy of the internet. Even if they meet your profile in terms of all three characteristics, their website won’t indicate if they excel in their field or the portion of revenue they generate from each of their market sectors. Does the firm have a designation (such as DBE, MBE, etc.) that wasn’t obvious on the website? How many owners come with the firm? Are the rainmakers planning to retire next week? Are they a size that you can afford to purchase, or are you going to have to give up some power and go with more of a merger-style transaction?

You don’t have to get into a lot of detail at this point. The goal here is to verify that the firm fits the basic outline of your profile. You’ll have plenty of time to get to know the firm better when you’re further down the road.

Part two of this series will be posted next week and will pick up after the initial information-gathering phase of an acquisition, beginning with what we are calling “The First Date.” 

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Big trends in the A/E business

revenuehotfirmFirm leaders would be wise to reflect on current happenings in industry and to prepare for what’s next.

When you’re lucky enough to survive to a “certain age,” you suddenly become aware of “certain things.” That diet you’ve had for 55-plus years might finally be catching up to you, and you have to change your eating habits or go on diabetes and cholesterol drugs. Your friends start dying off  –  sometimes more than one in a given year  –  and you regularly find yourself reading the obituary pages in the local newspaper. Your teeth have problems they never had before, and, before you know it, you’re in a dental chair going through a painful implant process that includes bone grafts from cadavers. Let’s just say the trends become clear and will affect many of us as we age.

The same thing applies to our industry: The trends are becoming very clear to me. They will affect all of us – you, me, everyone  –  in the A/E/P and environmental business.

Here they are:

  • We’re in boom times. This means a lot of firms are overloaded with work. They’re worrying less about marketing and more about doing. Our people are overloaded and complaining about it. We’re understaffed. We’re making more money than we ever have before, and how we use that (i.e., suck it out or reinvest in the firm) is crucial to our future success.
  • There’s a merger of design with construction. You can ignore this at your peril, but the fact is more and more clients want design-build, versus design-bid-build. That means you can either get on board with this idea and figure out how to make it work for you, or fight it and get smaller and smaller. It’s a huge deal. We all need more construction knowledge and a different attitude toward risk to deal with this.
  • Firms are adding in other, nontraditional services. It might be going into at-risk construction, or strategic planning, or providing an app or piece of software, or going in the temporary help business, or any number of very different services that aren’t “normally” part of an A/E firm’s offerings. These initiatives are critical to growth and can significantly differentiate a company, giving them a leg up on success.
  • Firms are really beginning to embrace e-marketing. It is not just spam. It is a completely viable marketing tool that works. And more A/E and environmental firms are using it to promote jobs, people, market sector knowledge, poll clients, promote invents, send out newsletters and more. E-marketing works. It’s cheap and cost effective. But it takes a good list to be able to use it. And most companies in this business do not have that.
  • Some firms are spending big money on recruiting. It is so critical to be able to find the talent you need. It is also getting harder and harder to keep the people you have. Aggressive companies are recruiting like mad, and your best people may be getting called every day by your competitors and their recruiting agents. How much is a lot of money? How about $10,000, $15,000, or even $18,000 per head-hired for recruiting? This is spread across ALL hires, including neophytes and support people. Think about that. Adding 50 people and replacing 20 who leave? That’s 70 people at $10,000 each  –  $700,000  –  or 70 people at $15,000 each  –  $1.05 million. It’s a lot of money. But, if you don’t spend it, what kind of talent will you be able to find  –  if any?

Time marches on, and things do change over time. Be thinking about all of these trends: You must look ahead, or you will suffer the consequences of not doing so.

Mark Zweig is president and CEO of Zweig Group. Contact him at mzweig@zweiggroup.com.
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Assembling the M&A Deal Team: When to Bring in an M&A Attorney

jamiekiser_hoverBy Jamie Claire Kiser, Director of M&A Services

As experts in finding buyers and sellers for architecture, engineering, and environmental consulting firms, Zweig Group’s M&A team generally speaks with business owners at the inception of the M&A process. One question that I am asked frequently by our clients is “when do we need to get the lawyers involved?”

I should note that “lawyers” is often said with a slight tone of disdain – the implication is that things will grind to a halt and bills will run through the roof when you get a lawyer involved. As a lawyer myself, I both recognize this aversion, and can somewhat understand it. That said, if you’ve got the right lawyer – one who is highly qualified, familiar with our industry, and busy helping lots of other firms through their transactions – you don’t need to worry.

Think of a general corporate attorney as your general practitioner; the doctor you go to for annual check-ups and as the first person you call when you think you might have a medical (or, in this analogy, legal) issue. When you are working on something as complicated and nuanced as selling your firm – the business that you have spent your career building to this very point – or buying another firm – a process with more unknowns than knowns – you need to call in a specialist. You need an attorney who is experienced in mergers and acquisitions, and we always recommend someone who works in our industry.

What is a qualified M&A attorney? It’s not me, it’s not your general corporate attorney, and it’s not your brother-in-law who practices insurance law and said he can help you draw up a contract for free. General business attorneys simply do not have the specialized M&A experience and skills needed to help you evaluate or prepare contracts. In addition, keep in mind that if you’re a seller, your general corporate attorney stands to lose a client if you successfully sell your firm. When we work with attorneys who seem to “slow down the process,” it’s almost always because a firm is using a general corporate attorney who is either in over their head, or is aware that they are losing a significant portion of their customer base as they negotiate the sale of your company. The M&A attorney will understand the legal aspects of the agreements that you will negotiate, and ultimately sign, as part of the transaction, and is an objective collaborator and partner as you evaluate your options.

The M&A specialist, much like a surgeon, will come with a higher hourly bill rate than your normal business attorney (and higher than your brother-in-law, for that matter). However, don’t get sticker shock too quickly. An M&A specialist often concludes services with a lower overall bill than someone who charges much less by the hour. The specialist acts deftly and knows what they’re doing. They work fast and thoroughly. There will be fewer re-writes when you work with these attorneys, and you will never have to worry about whether you’re paying your regular attorney by the hour to figure out how to handle your transaction.

Remember, just as with your brain surgery, you can’t afford not to invest in the highest quality services available. A mistake in the acquisition or sale of your firm could be incredibly costly. Overlooking something simple in a contract, or being unfamiliar with the due diligence process as it relates to our industry, could cause you to leave money on the table (if you’re selling) or could cause you to purchase more risk than you bargained for (if you’re buying).

A great M&A lawyer sees himself or herself as a member of your team and doesn’t want to drag on the transaction to hit more billable hour goals. This person’s job is to thoroughly protect your interests and to get you to the closing table with eyes wide open. These lawyers are busy, highly sought-after, and diligent. They’ve seen many transactions and can work quickly, but you have got to make sure to utilize them as soon as you get serious about a target firm. You need the input of your qualified M&A attorney before you put anything down in writing that could be construed as a commitment.

A myth that I’d like to dispel quickly is that you should take the deal as far as you can on your own before you get an attorney involved. We talk to firms who want to use their general attorney to draft LOIs or non-binding outlines of what a deal might look like – or, rarely and much more deleteriously – want to draft initial documents themselves. The risk here is that you will be actively creating a mess for your M&A attorney to clean up later in the process, which will delay closing, cause a perception of higher legal bills, and could even damage the foundation of the transaction if you promise more than you can deliver. Retain a qualified M&A lawyer on the front end, and use them as you proceed into negotiations. The entire process will be streamlined when you partner with expert advisors, and, often, your legal bill will be lower than if you partner with someone who doesn’t know what they are doing.

Depending on the complexity of the transaction and the background of the M&A attorney you retain, it also may be in your best interest to retain a tax attorney in addition to your M&A attorney. Note that M&A attorneys have tax expertise that is almost always sufficient for the needs of the businesses in this industry, but in highly complex transactions (such as international deals), your M&A attorney may recommend bringing a tax specialist into the deal as well. A tax attorney (which, by the way, is generally an individual who holds an accounting degree, is a qualified CPA, went to law school, and generally holds an LLM – a “master’s degree” for lawyers – in taxation). Generally, a firm’s CPA working with the M&A attorney is appropriate, but if the transaction is more complicated or unique, talk to your M&A attorney about whether an additional tax expert would be appropriate.

Although we pretend to hate the lawyer jokes, most attorneys I know and work with recognize the ounce (or gallon) of truth hidden below the surface. So bring the jokes, but, more importantly, do not move toward closing a transaction without bringing your specialized M&A attorney with you at the outset.

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MZ’s travel tips

iphone 077Years of travel have led to some rules-of-thumb that firm leaders can implement while building their companies.

In the “good ol’ days” I used to fly 150,000-200,000 miles each year. Now I am down to probably 50,000-80,000 miles a year, but I still go somewhere about 35-40 weeks out of the year. As someone who has been doing this for a long time, I’ve learned some things that help make travel easier. A lot of you are in the same boat – travelling more than ever as you build your companies from local firms into regional, national, and even international ones.

Here are some of my best travel tips:

  1. Have a toiletry bag pre-packed. There’s no reason to be trying to remember to bring your toothpaste and prescription drugs or to pack a razor before each trip. I include everything I might need in one bag and leave that in the bigger bag I travel with. Deodorant, nail clippers, sewing kit (for buttons that fall off), cold meds, Advil, Aspirin, beta-blockers, Band-Aids, sharp razor, hair brush, toothpaste and toothbrush, dental floss, phone charger, and more – all are there, so I never forget what I need and have it every time. I keep all liquids and gels in a separate Ziploc bag, even though, as a recognized frequent traveler, I rarely have to pull them out these days. I keep this toiletry bag on the same side of my bigger bag and zip it such that I can quickly pull my liquids and gels out, if needed. One more thing: It is a good idea to check your inventory periodically to be sure you have everything you need.
  2. Get a good soft-sided bag. I do not use a bag with wheels. Why? Because I can ALWAYS fit my bag on the plane – even a small commuter. This is critical when you have frequently tight connections between flights, as we do flying out of Northwest Arkansas Regional. I usually go to Dallas, Chicago, Atlanta, or Charlotte on my way to most other places, and the fact that I don’t have to wait in a long queue in the jetway to retrieve my plane-side checked bag gives me a good 5-10 minutes that I may need to catch my next flight. It also relieves stress. And, if I do stand-by and get on a crowded flight at the last minute — trying to get home early — I never have a problem with my bag. I can fold it in half and jam it under the seat in front of me, if necessary. You CANNOT do this with a bag that has wheels, yet everyone seems to want them.
  3. Have multiple charging devices. I have my beloved BlackBerry Classic phone plus an iPad, and I bring portable rechargeable batteries that will work with either. I have more than one wall charger and cord for each, in case I have problems. I have the lighter socket plug-in, too, as some planes have those types of sockets, and I may need a charge. Not much is worse than running out of power on a trip: You are completely cut off.
  4. If there is GoGo internet on the flight, pay for it every time. Why? I can get more done, instead of sitting there reading Skymall (yes, it’s back in the seat pockets again), and when I land, I only have phone calls and texts to read and respond to, without an additional 47 emails. That reduces stress greatly and makes me more responsive.
  5. Get the Uber app. I rarely rent cars, doing so just slows me down and is expensive. Only if I have to go from SFO to Napa, or something, would I even consider it. Otherwise, I use Uber, if it is available. Uber is faster and better in every way than a stinky cab, piloted by someone who just got to this country three weeks ago and who does not know anything about where they are going. And, believe me, that is the profile of the typical cab driver who will wait in a two-hour line at the airport to pick up a single fare. Cab drivers who wait in that line are kind of like hair stylists who work at Supercuts: They are neophytes, just starting out. Their cars are clapped out and, nine times out of 10, they don’t even have a clue about where you want to go.
  6. Concentrate your miles on one airline. For me, that’s American. It depends on where you live and where you go, but the dominant player is the one you want to invest your miles in. That way, you are more likely to get a higher status frequent-flyer certification – and therefore more miles, faster, and more free tickets and upgrades. And the upgrades really do make flying better, believe me. It isn’t just the free drinks in first class that I rarely take advantage of, it’s food that may not be too bad and a lot better seating, where you aren’t jammed between two other people who are spreading into your personal space. (Most airline seats would be perfect if everyone was 4’8” and weighed 86 pounds!)
  7. Bring a book. If all your powered accessories fail or prove to be unusable, you will always have your book to read. If not a book, stock up on your back issues of The Zweig Letter, Civil + Structural Engineer, and Inc. Magazine. Have something worth reading, better than The American Way (American Airlines’ magazine).
  8. Expect things to go wrong. They always do, and if you expect it, then maybe you won’t be so bothered when it happens. Don’t get upset when you get stuck in Chicago for the night, or the plane develops a malfunction that they cannot fix and you miss your connection, or the crew needs to be changed out because they just worked too many hours and your departure is delayed because of it. All of these things – and many more – will happen. It is amazing the system works as well as it does and we all get where we are going safely. Any trip where I make it where I am going is a good trip, as far as I am concerned. I cannot stand it when I see someone yelling and cursing at a gate agent about a late flight – as if the gate agent can do anything about it. Be calm, be nice, and relax, and you and your fellow travelers will all be a lot happier.

I could go on – but I am out of space. What are your favorite travel tips you’d like to share with our readers?  Email me, and maybe we can publish them!

Mark Zweig is president and CEO of Zweig Group. Contact him at mzweig@zweiggroup.com.
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‘Coopetition’ is good business

Strategic cooperation among competitors can result in big gains for each firm and better projects for clients.

FriedrichsI hadn’t heard of “coopetition”  –  a contraction of cooperation and competition  –  for a while, but it has come to mind several times lately, as I have listened to some recent conversations. The obvious ones have had to do with politics, where our nation has become radically polarized. There seems to no longer be a middle ground or any attempt to compromise. The last two people in government I remember embracing the notion of cooperating, even though they held competing views, were Ronald Reagan and Tip O’Neill.

Applied to our professions, coopetition refers to cooperating, or collaborating, with a competitor. I’ve suggested to a few clients that, for any number of reasons, it would be a good idea to partner with another firm that, in their mind, might be considered a rival. There are a number of reasons why this could be advantageous: the other firm is geographically closer to a client that it would be both expensive and difficult to serve, they have a unique specialty that would help do the project better, they have the horsepower to actually deliver the work, and/or your firm is over-subscribed at the moment.

“Why on Earth would we want do this? They’ll steal our ideas or our people. We compete with them frequently, and they’ll learn our trade secrets,” are the typical reactions.
Rarely do I hear: “That would be really good for the client” or “We might learn something from them.”

The world, and the nature of our projects, has become much more complicated. In many circumstances today, I find firms lacking any number of key ingredients required to do the complete scope of what a client needs. But these firms feel partnering would somehow compromise their organization, its reputation or stature.

During my tenure at Gensler, we frequently teamed with other firms. We even learned that we didn’t always have to be the “design architect.” We would do project management and production, if that would serve the client best. The relationship didn’t have to be equal. Either of us could play a stronger role, while the other was in a more modest one. We could even play a subservient role on a project we had brought to the table. We had a singular filter for determining how to structure the relationship: What’s best for the client?

Though most collaborations worked extremely well, leading to productive, long-term friendships, mutual respect and, often, continued collaboration, one of them proved awkward. A firm was working on a project where the client was unhappy with the design direction, particularly the interiors. We had a strong interior design capability that could augment the other firm’s architectural skills, so the firm invited us to join the team.

Things were going fine until I got a call from the client saying they would prefer to work just with us and would like to terminate the other firm.

I said: “Let me get back to you.” I told my colleague at the other firm what had happened. He acknowledged things had been going poorly for him with the client. We agreed my firm would only take on the complete assignment if he were immediately fully paid for all work to date, along with a termination fee. I went back to the client, insisted on those payment terms, and we proceeded. The best part? We remained friendly with the other firm. They shared our attitude about doing what is best for the client.

Coopetition can reach beyond projects. When our office was in Santa Monica, we had a great relationship with Ellerbe Becket (now practicing as AECOMM), which was in a neighboring building. We shared staff members: If either of us was very busy and needed help on a short-term basis, we would reach out to the other. We negotiated a prearranged hourly rate structure for borrowing and lending and worked this way for years. We were lucky, too. Their slow periods seemed to coincide with our busy times and vice versa.

Weren’t either of us afraid the other might try to steal our staff? Of course! But we also understood it was each firm’s responsibility to create an environment and team camaraderie that bound each person to his or her respective firm. In all the years we did this, only one person left Ellerbe Becket to join Gensler. He had gone back and forth several times, and both firms agreed he was better suited, based on his talents and interests, to be with Gensler. There were no hard feelings, and our relationship continued for many years.

I encourage you, as I wish I could influence those in the public sector, to “reach across the aisle.” Keep your mind open to opportunities to collaborate, even if it’s with a competitor, to find the best way to serve your client.

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

© Copyright 2015. Zweig Group. All rights reserved.

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Why Zweig Group M&A?

jamiekiser_hoverThere are plenty of consultants out there who offer M&A consulting services, but there’s only one Zweig Group. We are a small team of professionals dedicated to finding the best candidates for deals in the AEC industry. Our goal is to allow you to stay focused on doing what you do best – running your business – while we deliver candidate companies – be they acquisition prospects if you’re buying, or potential suitors if you’re selling – that are a perfect match for your unique needs.

  • Our size: Our small teams of experienced professionals handle each client with a one-on-one touch that gives you the best possible experience. We can move quickly and work on your time frame. You will be working with a group of people are familiar with you on a first-name basis and who all understand the goals of this transaction and your company’s specifics.
  • Our responsiveness: We are always on call for our clients. Sudden change of plans or new information? Shoot us an email. Just remembered something that you wanted us to keep in mind? Text us. Deal keeping you up at night? Call us. Our small size allows us to put your needs first and to respond immediately to new information or questions.
  • Our industry experience: We aren’t just here to close the deal and move on. We live and breathe AEC. Zweig Group has built its reputation over almost 30 years devoted entirely to this industry. We know the ratios that matter and we know what your firm does. We understand the unique challenges and considerations facing your industry better than anyone else. You can count on the Zweig Group team to bring professionalism and a seasoned approach to each and every conversation.
  • Our responsibility: We know what it takes to get the deal closed – and we know what the other guys charge for extras that you don’t really need. The key to Zweig Group’s success is referrals from our completely satisfied customers. We only work in this industry – if you aren’t happy, we aren’t finished yet. We will never propose a service to you that you don’t need. We start small, and add on as we go. Each transaction is a customized interaction. We can’t tell you how many times we get clients from our competitors after they are tired of being charged for hidden costs and paying for services that don’t yield results.
  • Our contacts: After a third of a century in AEC, we know who the key players are – and we have been doing business with them for years! We have extensive industry contacts in all niches of the market and with firms of all sizes. We know who to call and how to research.
  • Our capabilities: We can work with you on a single transaction or help your team develop an acquisition strategy program.  We can work with you to accomplish all of your needs associated with the transaction in-house, from ownership transition modeling to a comprehensive post-deal re-branding.

Jamie Claire Kiser is Zweig Group’s Director of M&A Services. You can reach her via email at jkiser@zweiggroup.com

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Endless possibilities

January 2015 [ocs 051When it comes to generating opportunities for your firm, the more, the better.

Entrepreneurial architects and engineers all do one thing well – they create lots and lots of possibilities. The more possibilities, the greater the chance something good will happen. This is confirmed to me every single day through observing our clients and seeing it in my own businesses.

Here are some specifics:

  • More clients. The more clients you have, the greater the chances that one of them is going to need you to do something  –  maybe a whole lot of something. One hundred clients is better than 10 clients. A thousand clients is better than 100 clients. The more clients you have, the easier it is to part with those who won’t pay good fees, won’t pay their bills, won’t do what they should, or who are just plain difficult and no fun to work with!
  • More services. The more services you provide, the greater the likelihood that one of them will be in short supply and high demand. Something is always hot; something is always not. Minimize the odds of being in a dead service area by having lots of diversity in the services you provide. Don’t define what you do so narrowly that you reduce your possible points of entry to a client.
  • More locations. One area may be hot and another not. It’s good to be somewhere hot, though, so you aren’t fighting uphill battles in every location. And when one area is hot – and doing well  –  it can help feed your other locations and prop them up until they are hot again. Yes, more locations do create a certain amount of redundant overhead and inefficiency. But, when it comes to the sustainability and consistent financial performance of the enterprise, they often make sense.
  • More proposals. The more proposals you’re writing the greater the odds you’ll win some new work. Not to say I believe in throwing balls of mud against the proverbial barn wall to see what sticks – these should be quality proposals, well-researched and thought-out. But numbers (i.e., possibilities) ARE important to your chances of winning new projects. Keep writing proposals even when you don’t need the work to make sure you won’t have a problem.
  • More job candidates. The more people you have to consider for any job you want to fill, the better off you are. You’ll make a better decision AND be more likely to fill the job, because your top-ranked candidate may turn down your offer for any number of reasons. Choices  –lots of them  –  improves the quality of your decision making. Don’t stop recruiting when you have just one or two possible hires. I see a lot of firms making this mistake. Keep recruiting until you have a signed offer acceptance letter.
  • More people selling. The more people you have in your firm who can sell work, the better off you will be. More people equates to more possibilities to make a sale. It also greatly improves the value of the enterprise when selling activities are not restricted to one or a few people. That reduces the overall risk associated with the business. This is why everyone needs to be trained in how to sell!

Isn’t it time you started creating more possibilities in every area of YOUR business? Time’s a’wasting! Get with it!

Mark Zweig is president and CEO of Zweig Group. Contact him at mzweig@zweiggroup.com.

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The moving sidewalk

i-BZbRLwn-LThe current momentum of the A/E market is like a moving sidewalk: Are you in a hurry to pass your competitors or just standing still?

What do you do when you are on one of those moving sidewalks at the airport? Do you walk (or run) on the left or do you stand on the right?

In this industry, you and all of your competitors are on a moving sidewalk – the A/E market – that is moving you forward. For many years, our moving sidewalk was broken, leaving many of us idle. Now, times are great and our moving sidewalk is functioning again. A/E firms’ revenues are growing. Profits are growing. Hiring is strong. M&A activity is sharply up. The market is hot, and we are finally reaping the benefits of it.

So, are you standing still on the moving sidewalk – simply moving along at the same pace as your competitors – or are you walking – or even running – to pass them?

There are a lot of firms patting themselves on the back for a job well done right now. The market wave we are all riding has everyone on a high and feeling very successful. It’s a great feeling! It is important, however, to distinguish between market success and individual firm success. Because the market is so strong, it might actually cause you to relax on some very important activities as you are working to get projects done. Right now, you should be marketing, selling, and recruiting harder than ever, while strategic planning is top-of-mind.
Making key investments with profits is more important than ever. Now is the time to build something meaningful and strategic with the resources that are available. Now is the time to prepare your firm for the next downturn. It’s not fun to think about these things when you are enjoying seeing those days in your rear view mirror, but unfortunately, they are also on the horizon in front of you at some point. Consider these activities to keep you focused on the long term:

  • Update all marketing. Branding and re-branding activities can be expensive. Many A/E firm websites are stale after little attention for years. Update all of your marketing materials now. Upgrade your website and add functionality and search engine optimization to set your firm apart from the competition. Investing in this now will bring rewards later, when you really need them.
  • Train your staff to sell and perform. Invest in in-house training, lunch-and-learns, and so forth. Now is the time to focus on selling and doing. Train your project managers to be more efficient and keep jobs moving without numerous meetings and other time-wasters. Also, invest in an on-boarding process that gets new employees engaged and productive quickly and efficiently.
  • Invest in growth. Develop your in-house recruiting team or hire a third party to create a constant pipeline of top-shelf talent. Line up candidates for anticipated open positions and replace under-performing or negative staff. Get serious about developing new capabilities and revenue streams now, while you have the funds and time to do so.
  • Update that strategic plan. Get a group together that can truly affect change and spend a few days talking about your business. Commit to some simple yet powerful initiatives that improve current operations and force you to invest in long term initiatives.

The summary of this is to invest now. Feel good about the times that we are in but keep working as hard as you did in the recession to create work and build your company. Feel the exhilaration as you speed down the moving sidewalk, passing your competitors, who are standing there enjoying the free ride the market is providing. At some point the sidewalk will slow again, but you will be far ahead of where you are now and you will see your competitors in your rear view mirror instead of only seeing the good times of today.

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

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When PM meets FM

Several organizations have found that bringing financial management staff onto the project management team results in heaven-sent synergies.

In Zweig Group’s consulting practice, we see many firms grapple with the interface between project managers and financial management staff. It sometimes feels like there is a distinct difference in thinking, approach, processing of information, and communication. It’s almost as if, to coin a well-known book, “Project Managers are from Mars, Financial Management Staff is from Venus”!

Best-practice firms that value the technical staff for their expertise and the administrative staff for theirs often find powerful synergies develop between the project managers and the financial management staff. In some cases, these connections are so powerful that the financial team integrates into the project team, supports and leverages the project managers’ time, and adds tremendous value to the team and the firm, and contributes to the success of both.

The starting point of these synergies lies in a clearly delineated organizational structure within the firm in approaching client relations:

  • Principal in Charge – Firm  ->  Client PIC
  • Project Manager – Firm  ->  Client PM
  • Financial Staff – Firm  ->  Client Financial Staff

Architectural, engineering, and planning schools do not place a great deal of emphasis on the financial and management aspects of firm management. Most technical professionals that we encounter are reluctant to deal with the financial aspects of contracts, fees, and collections.

Who better to hand those responsibilities to than the folks who like to deal with dollars?

This relationship is communicated and clearly defined during project kick-off, when the contract is reviewed with the client for scope, schedule, and fees. It is critical during that meeting that the financial staff and elements of the project are introduced and defined. The firm’s PM and PIC should walk away from the kick-off meeting with the client’s financial team members’ names, phone numbers, and email address.

This allows the firm’s financial staff to immediately connect to the clients staff and work out all the contractual details: how the project will be tracked, what the invoice format and required contractual constraints are, and when the invoice is due to the client for review and payment. The process also establishes a dialogue that is invaluable during the duration of the project.

The financial team is also best adept to manage the collection process for the firm, as they have the relationship with the client’s financial staff. Working with the PM, the financial staff can quickly flag when things are starting to go south with the client. With the firm adopting a clearly defined billing and collection process, the financial staff allows the PM to remain the prime client relations manager.

The following process allows for clearly defined expectations and mitigates risk of nonpayment by the client. This is clearly dependent on client contractual terms and applies to both new and existing clients as a standard operating procedure:

  • Day 1: Monthly close of firm’s financial data produces invoice draft review; allow one to two days for PM review.
  • Day 5: All invoices are emailed to client (or uploaded to client defined site). If contractual requirement is to create physical copies, the financial team emails all invoices in addition to hard-copies.
  • Day 10: A/E/P firm’s financial staff emails client’s financial staff to confirm receipt and request a date when payment will be made.
  • Days 30-35: A/E/P firm’s financial staff reviews aging status; call is made if payment is not received.
  • Day 35: A/E/P financial staff asks PM to contact client’s PM.
  • Day 37: A/E/P PM determines there is an issue, reviews with PIC.
  • Day 40: A/E/P PIC contacts client’s PIC for clarification; if positive, he/she requests date and amount of check.
  • Day 45: A/E/P financial staff advises PIC and PM on nonpayment.
  • Day 45: A/E/P PIC stops services until resolution is clear.

Often, this process does not occur until 90 days. By that time, the damage could be done, deliverables turned over, and resolution unreachable, if there is a problem with this client.

One of the more valuable ways firms integrate the financial staff into the project management process is by utilizing them in the role of assisting the PM with project controls. This role leverages the PM by allowing the project controls staff members to assist in the financial management of the project. They become adept at the project scope, schedule, and resource allocation management. They are full billable, working with multiple PMs and multiple projects, and allow the PM to focus on managing the project team and the client. Firms that integrate this role find it to be invaluable, because the PM is able to focus on his/her expertise.

This was recently illustrated with a client who integrated Newforma as a project management tool that interfaced with Deltek Vision. They had implemented the Newforma tool, to the degree that all fee planning, scheduling, and resource allocation were done by the financial control staff during the proposal and fully integrated with Deltek.

Once the project was awarded, the PM tweaked the system with staff, addressed any changes in scope and fee based on contract review with the client, and the project was part of the firm’s backlog for weekly review. Staffing was defined for each team, office, and the firm, and the predictability allowed senior leadership to make resource decisions for new staff, computer hardware and software, and other equipment needs.   The system also assisted in the evaluation of the pipeline of opportunities and the modeling of a predictable cash-flow review each week for the life of the project. The project controls staff provided accurate input of all information, which made the firm highly fluid in its decision making process.

Imagine that: One point of entry, fully integrated! When synergy develops between PMs and financial staff, it’s truly a match made in heaven!

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

© Copyright 2015. Zweig Group. All rights reserved.

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Reaching the right people

Today’s competitive market – and the fact that the best employees aren’t necessarily looking for a job – means your digital footprint must be big enough to reach everyone.

Creating a game plan for recruiting and retaining the best and brightest talent is not for the meek at heart. In the AEC industry, we are constantly faced with new opportunities and project deadlines, all at the same time. It’s a constant reminder for us that we have to ensure that we have the best people in place to get the job done. No one ever hires a structural engineering firm to design or build half a building. Everyone wants a finished product, and that requires manpower.

In my past few months back at the helm of Zweig Group Recruiting, I have realized how important it is to have a solid plan to create a digital footprint in the area of recruiting for your firm. It’s certainly a part of the overall strategic branding effort that most of our clients are undertaking to make their firm’s websites more user-friendly, informative, and responsive to the needs of the client and general public. This is no longer an option, but a necessity.

In order to be successful in the AEC industry, there are several areas in recruiting that need to be fine- tuned to the point that they become second nature: You must have a strong applicant tracking system, also known as an ATS; you have to make sure that you can communicate the narrative or story that makes your firm a compelling place to work; and you have to be everywhere online with your job opportunities. I don’t have enough space in this article to focus on all of these areas, but rest assured I will address them one by one in future issues. I want to first talk about Job Boards and what it takes to “be everywhere” with your job postings.

Since the early 1990s, job boards have slowly become one of the dominant ways for firms to get their job postings out. What used to be strictly word-of-mouth, the Jobs section of the local newspaper, and internal job postings has now taken on a different form that is more deliberate and available.

But now, even the strongest of the Job Boards are taking heat from Social Media: The LinkedIns, Facebooks, and Twitters of the world are becoming fertile ground for recruiting.

According to Jobvite’s statistics gathered on recruiting in 2014, 94 percent of recruiters use or plan to use social media for recruiting. In addition, this same report cited that 73 percent of 18-34 year olds, also known as Millenials, found their last job through a social network. I could keep killing you with statistics to make my point, but I just want to make it very clear that we are in a changing environment.

Of course, you may be wondering: What does all of this mean to me and my company?

It could mean nothing or everything, depending on where you stand with technology and how well you market the opportunities that exist within your firm. There are big and small job boards out there, and almost every job sector and discipline has a job site that is geared almost exclusively to it.

One of the biggest challenges I hear from clients and potential clients is that they don’t know where to look for good people. I’ve said it before: “Good people are not necessarily looking!”  But, it can’t hurt to be where they may look. At Zweig Group, we advertise positions on several job boards for our clients, and we’ve even found that it can really be hit-or-miss when looking for the right engineer or architect.

Recently, Zweig Group decided to resurrect a job board we had started several years ago, and AECWorkforce.com is back up and running!

We jump-started this brand to offer AEC firms a place to advertise their most important positions and to identify talent that is appropriate for their needs. We are adding new AEC industry-specific jobs and encouraging AEC workers looking for new opportunities to visit the site and review all of the postings related to their expertise. It’s not yet a perfect solution, but it’s certainly a great start.

I believe that you have to “be everywhere” when it comes to recruiting, and a good place to start is posting on niche job boards like AECWorkforce.com and ramping up your social media presence so that the good people that are actually looking for work can find you. I know it sounds like a lot of work, and it actually is, but I’ve found that once you build a solid digital foundation for your recruitment program everything else can fall easily into place.

To find out more about AECWorkforce.com or to post a job for FREE, visit the site.  In addition, if you haven’t already, start taking social media seriously or if you are just perplexed about where to start, give me a call, shoot me an email, or hit me up on Twitter @RandyWilburn or @ZGRecruiting, and I will see what I can do to get you pointed  in the right direction.

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

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