What you track and report really does matter

Screen Shot 2016-05-26 at 8.58.10 AMSometimes, firms get lost in utilization and profitability, and end up solving the wrong problem.

People respond to what you track and report. The accounting really does matter. For example, we’ve helped companies dismantle their geographic office profit centers countless times over the years‎ to implement market sector-based organization structures. It’s interesting to observe all the resistance that we typically encounter. Usually that resolves around issues such as, “Who will be the leader of the office?” (Answer – no one – the office isn’t a unit, it’s just a location and the people there report to market leaders who may or may not be in that particular location). The other frequent resistance issue is management having a hard time letting go of whether or not they “are making money in that office or not.” So, no matter what the new structure is they still insist on keeping a P&L for each office at the same time.

Doing this will completely defeat any attempt you make to change the structure. People will default to their old reporting relationships and behaviors because of the way you’re handling your accounting. Nothing is going to change. They’ll keep projects they should be getting others from inside the firm involved with because it best serves their interests. They’ll cut people in one location while hiring similar talent in another. There are many other potential problems. The bottom line is the accounting has to match the new structure. That means sales are tracked by sector, revenue, cost, profit and loss, backlog, and more. This is how you’ll get people thinking about the sector overall.

Another common issue we often see is the insistence of some companies on over-emphasizing employee utilization‎ rates. You’ll hear people saying things such as, “A one-percent increase in utilization makes us another $400K a year,” as if that was the most profound thought anyone has ever had. Problem is, that’s the greatest over-simplification there ever was. Utilization is probably down because there isn’t enough work to be done. You can’t just increase utilization – people don’t charge to jobs because there aren’t jobs with budgets to burn.

So management still tracks it, pushes it, reports on it, and penalizes those who can’t hit their utilization targets. And what is the result? Management gets what it has been wanting – higher utilization. Of course, they also get more project budget overruns and lower effective labor multiples. The increase in utilization was for naught. The problem is solved but it was the wrong problem!

One last example is the result of over-emphasizing project profitability. I have seen several companies that freak out the moment project profitability declines below a certain percentage. How could that be a problem, you may ask? It’s a problem when PMs begin choosing contract labor over the firm’s permanent staff because there’s no multiplier charged to it. The firm’s own staff suffers utilization problems while the PMs hire (theoretically) less qualified staff as contract laborers because it makes their projects “look better” financially.

We see countless incidences of how A/E firms measuring and reporting the wrong numbers can greatly impact their future. What examples do you have that you’d like to share with our readers? ‎Email me at mzweig@zweiggroup.com. See you next week!!

Mark Zweig is Zweig Group’s founder and CEO. Contact him at mzweig@zweiggroup.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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Sometimes ‘no’ is better than ‘yes’

Screen Shot 2016-05-24 at 9.04.19 AMIn a good economy, it’s easy to take on a lot of work and fill the pipeline, but some of that work can be bad for your firm. 

In a robust economy like the one we are now experiencing, it is easy to get caught up in the quick pace of accepting projects and enjoying the bounty of filling up the pipeline. The same often holds true when business is slow and you accept work just for the sake of staying busy.  Saying “yes” to every opportunity may feel gratifying or even necessary at times, but it can lead to problems that you might not have anticipated.

Planning and vetting. From a strategic standpoint, you must know the clients and markets you want and that your team can capably support. Are your clients expanding within those markets, and are you aware of those projects? Are your clients entering new markets that you really don’t want to enter?  Discerning the scope of your relationship with your client and the viability of your markets are keys to planning and vetting for your team.

This will inevitably mean paring down the list of projects or clients you can pursue or maintain so that you can manage the work you secure. By being realistic about your capacity and interest in the work, you will free up time to pursue projects that you have identified as more favorable to the success of your firm. If you follow the easy path and simply accept the work that crosses your path, you can end up with a full pipeline that can disappoint you. When the right project opportunity comes along, you may be too busy to accept it.

Being honest about your capacity. Do you have the capacity to do the work and deliver it based on your client’s needs? Being honest about your capacity and ability to do the work to the satisfaction of your client is an important step to enhancing your credibility and brand value. Long-term, there is greater benefit to the firm if you are recognized in the marketplace as a firm which performs as advertised.

When you say “yes” to everything, you may develop the reputation as the “dumping ground” in the market. It is possible that you are not getting the work because your client likes your service, but only because your competitors are turning them down. If you haven’t established your criteria to accept work which should include your capacity to engage in a project, complete it and profit from the work you accept, how can you continue to randomly accept work?

Because the economy has rebounded, there is also a serious shortage of talent and staffing resources. In this hiring environment, it can be very difficult and costly to buy your way out of this shortage. Are you spending all of your profit just to staff up for business when that business is not in your best long-term interest? Also, adding people just for the sake of gaining numbers to fill jobs for projects that do not fit your strategic plan can adversely impact your firm from the inside out.

Declining: The value of a strategic “no.” Internally, it is important that you clearly define what work and clients you want to pursue. By knowing each client’s markets and future opportunities, you can best position your firm to accept the work you want and decline the work that does not fit your strategic plans. So how do you say “no” when it is best for your firm, but still keep the clients you want? You explain why you are declining this specific project.

When you explain why you are saying “no,” you also have the opportunity to articulate the strategic goals of your firm to your clients and, more importantly, how those goals align with your client’s goals. In some cases, you may even refer these clients to competitors who might serve them best for a given project. This may seem counterintuitive, but if you are a true partner, then you need to offer the best advice that you can.

Avoid commoditizing your services. When you say decline and explain why, and when you turn down work or refer it to others who are better suited for that work, you build trust with your clients. You operate as an advisor and consultant, and your client will begin to more highly value your advice and work product. They will recognize that you have their best interest in mind just as much as you have that of your own firm.

By establishing this business relationship, you build added value to your services, and it becomes easier to avoid commoditization of your work. You should be proud of your work, so why ever consider selling it for less than it is worth?

What are you afraid of? There is the risk that you might alienate a client or that they won’t return to you because you have declined them. My experience is that if you say “no” and offer the reasons why, they do return. But if you say “yes” and fail to perform according to their expectations, the road back to the client will be long and difficult.

Instead of being afraid of declining work, you should be more afraid of blindly accepting projects that randomly present themselves. Consider the example of the food chain. The more highly advanced the species, the more selective they become on what they eat. So where do you want to be in the “food chain” of our industry?

Gaining confidence by being decisive. Stepping outside your comfort zone is never easy, but knowing and doing what is best for you and your firm is always the correct decision. Taking on the perceived risk of declining work, which I consider to be minimal risk for making decisions that are best for your firm, can be empowering for you and those who are on your team. We do this all the time in our personal lives, so why be afraid in a business setting?

By being decisive and leading your team to follow a strategic path that distinguishes your firm and demonstrates your core capabilities, you will develop the reputation that you deserve and discover the kind of growth that you will truly enjoy.

Stephen Lucy is CEO of JQ with offices in Austin, Dallas, Fort Worth, Houston and Lubbock, Texas. Contact him at slucy@jqeng.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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The client database – valuable yet neglected

Screen Shot 2016-04-22 at 3.50.03 PMYour firm’s list of contacts is critical to every marketing activity, and it can have a tremendous monetary value, too, so make it a priority.

This industry is still doing a poor job of building and maintaining a good client database, also known as CRM, or client relationship management. We see it all the time when we are working inside firms. Furthermore, our research shows that the average A/E firm’s database equates to 40 names per employee. That is horrendously low. Just think about the number of work-related contacts in your mobile phone and how that would affect the number you could claim as your contacts. I often stress the importance of making the distinction between marketing and sales for the purpose of measuring return on investment. The client database is clearly a critical marketing function that requires investment. Your client database is essential for many of your marketing activities so it’s time we start acting like it. Here are a few suggestions to inspire some changes in your client data management policy:

  • Less is more. Consider tying your CRM into your financial management software. Fewer databases is better. I am shocked at the number of firms that have three or more. Consider the inefficiencies and inaccuracies created by multiple sources of client information. We don’t dedicate enough resources to adequately keep up with one database, let alone two or more. Firms have more options than ever for client data management. You can buy an all-inclusive product or you can even tie in multiple databases using scripts or apps.
  • View it as an asset. Your client database is an asset that actually has a monetary value. The more you invest in it, the more it’s worth. You realize this value in being able to better market your services, which in turn drives growth in the enterprise. You can also realize a nice return in the form of cash if you were to sell your firm to the outside. In a transaction, a buyer is going to consider a great client database as one of your most valuable assets. For those of you who view marketing as nothing more than an overhead expense, maybe this will motivate you to start investing there.
  • It will grow your firm. Investment in the database should include both adding names and keeping the data accurate. A constant commitment to data integrity allows you to be more tactical and effective in your marketing. As such, you can increase the dollars spent on marketing with more confidence. Our research consistently shows that firms that spend more on marketing than others are more profitable and grow faster.

Once you commit to improving your client database and getting more out of it, consider making these items a part of the strategy:

  • Share the database companywide. Allow all employees access to client info. That does not mean you have to give everyone editing rights.
  • Assign one person to be in charge of the database. Make this person accountable for the data integrity, training people how to use the platform, and building the database.
  • Mine the data you already have. The widespread use of Microsoft Outlook means that many employees have work contacts in their phones and computers that need to be integrated into the company database. There are programs that can mine the contacts out of Outlook and put them in your main company database. Some of these can intelligently separate personal contacts from business contacts. Also consider integrating other places in the firm that house client data.
  • Use the database more in marketing. Have your marketing staff think of new ways to connect with your clients using the database. Newsletters, targeted white papers, and other information can better connect your clients to your company.

The quality of your database is a reflection of your brand. You cannot preach that you know your clients and take care of all their needs while mailing them a newsletter that has their name spelled wrong or the title they held before their last promotion. This kind of thing is happening everyday in firms everywhere. Your client database either works for you or against you. Start viewing your database like the valuable asset it is and start making it work for you!

Chad Clinehens is Zweig Group’s executive vice president. Contact him at cclinehens@zweiggroup.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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Being involved … just enough

Screen Shot 2016-05-18 at 9.35.39 AMMistakes happen, and to minimize them without demotivating your people, a measured response is critical.

We had a situation this week – a headline had been added to my recent article on millennials in the workforce by one of our TZL editors that inadvertently distorted what I wanted to say – and it caused some consternation from some of our readers and staff. As they say, “those things do happen” from time-to-time, but it indicated a need for us to change our review process here.

These things happen in A/E firms every day. Someone puts something in an email they shouldn’t put in an email. Or a change gets made to a project right before it’s shown to the client when the principal-in-charge knows that is not the direction the client wants to go. Or a proposal goes out with something majorly wrong with it. There are many more of these situations we have all experienced.

So yes, these things DO happen, but what matters is your response to it. A/Es typically respond by creating some sort of unsustainable review process that there’s no way to actually follow because it is so bureaucratic it eventually collapses. Or, the “boss” jumps in and starts trying to do everyone’s job – equally horrible and detrimental to the company. Neither of these is really the ideal way to handle things.

People hate bureaucracy. More forms to fill out. More meetings. More steps to get something done or “out.” It is a huge demotivator. It slows everything down. It really just doesn’t work very well in actuality even if the logic behind it seems sound. And when it comes to quality, having any steps in writing that you don’t always follow can be the exact evidence needed to prove your negligence.

And as far as the boss stepping in – this is part of the art of leadership. Don’t get involved when you need to and bad things can clearly happen. Get involved when you don’t need to and alienation and demotivation occurs. Do it all of the time and eventually you will be responsible for doing everything yourself. Your people will just throw up their hands.

I think the only real answer to this conundrum that all of us find ourselves in (probably daily), is this: You have to inject yourself – just the right amount of your input at the exact right time – so you get the end result you want but don’t demotivate anyone. You’ll also grow better people who can make good decisions on their own over time and then not need as much of “your input” into what they do. ‎And whatever grows our people is what we all need to be concerned with. That’s the only way for us to grow – as individuals and firms.

Thoughts on this subject? Send me your emails at mzweig@zweiggroup.com.

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

This article is from issue 1146 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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Engendering trust and respect

Screen Shot 2016-05-16 at 4.27.49 PMThose of us in the A/E/P industry have a choice to make. Should we be adversaries or colleagues? Colleagues is the right answer.

I’ve been thinking a lot lately about the place of “trust” and “respect” in the work we do. What is it, how do we get it, give it and sustain it? Why do some people and teams we work with thrive on it, taking all the stress out of the work we do, and others seem to foster conflict, antagonism and tension?

I’ve been aware of the degradation of trust and respect in our society for some time. I often refer to it as a loss of civility. But that’s only the symptom. I’m currently in a work setting where the respect level among the entire team is quite high, causing me to examine closely why this is the case. In this circumstance the team includes an architect, engineers, contractor, client/developer, city staff, and elected officials. In other words, it comprises nearly everyone needed to bring a program from an idea to a design, to permits, to construction, and to reality.

This program is in Reno, Nevada. What difference does that make? Different locales and companies have personalities, just like sports teams, police departments, and all manner of entities. By and large, Reno is a more respectful town than many of the places where I’ve lived and worked. I’m much more likely to observe civility here – not always, just more often.

I expect you’ve noticed this in your own work. One community treats you as an adversary, while another accepts you as a partner trying to make the city a better place. A contractor bombards you and the client with requests for information, delay claims, and change orders, while another sits down with you and works through their question or concern as a partner. Each setting contains something I’ll call a “Respect Coefficient.” I define that as an attitude among all involved of mutual trust and respect toward each other, as people and as firms. It also means a respect for and commitment to the mission, a shared notion of what we’re doing together, the process we’re using, and what the positive effects and benefits will be for our community.

A caveat: The group I’m currently working with subscribes to a “no a – – holes” rule. This applies to individuals as well as companies. The firm’s principals have been quite selective about the people they’ve hired and the consultants and contractors with whom they partner. In other words, people and firms with a high Respect Coefficient. There are exceptions. We’re committed to a specific locale and can’t choose to pick up our tent and go somewhere else. Many cities start out with a predisposed adversarial attitude toward developers and architects, based on previous experiences when trust was betrayed because truth was not a priority. City officials may have become embittered, or caught up in their own power/ego trips.

Trust and respect are reciprocal. We can choose to trust and respect, but if the response is still adversarial, we will not have a fruitful relationship. We have to learn how to build respectful and trusting relationships. Building such relationships starts with three commitments:

  1. Always tell the truth. The slightest deviation from truthfulness destroys trust instantaneously.
  2. Learn deeply about every person with whom we’ll interact. Asking another person about themselves, who they are and what they value is the highest form of respect. Talking primarily about yourself degrades the relationship quite quickly.
  3. Work toward defining a shared mission. An clear understanding of purpose and intent on the part of each participant will lead to a successful outcome that everyone will be proud of. An agreed-upon mission that we strive to achieve together means we do well together, our enterprise does well, and each of us does well as individuals. In achieving that common goal we’ll all share great pride in what it’s done for our community.

It takes hard work and patience to adhere to and deliver on these three commitments. There are frequently obstacles and attitudes based on past experience to overcome. Conflicting ideas and circumstances spring up all the time. How we deal with them either builds or destroys trust and respect. I have learned to ask one simple question, and teach others to do the same when a disagreement arises. I don’t blurt out what’s wrong with the other person’s idea, or tell the person how we’re going to do it because they’re so obviously wrong. I simply say, “Tell me more about that.” I sincerely want to explore the issue thoroughly together, demonstrating a respect for everyone’s point-of-view. I may learn something that changes my mind or vice versa. At the very least, we build trust when we are each committed to working together to find the best solution to the issue at hand. We make a commitment to not stop the conversation until all parties concur with a decision and direction.

I’ve found this very effective in interacting with public officials and staff as well. If we invest the time to seek out and agree to common goals for what we’re trying to accomplish, we build trust. If we demonstrate respect for each person’s ideas, we build trust further. What a wonderful experience it is when the entire city council or planning commission turns to an outlier, who has stubbornly refused to help find a solution, and tells the person to please take it up with one of them after the hearing.

These are not simple habits to form, but are very effective when you do. Please try them and let me know how they work for you.

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 1146 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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Workload vs. staff

Screen Shot 2016-05-12 at 3.05.45 PMHow do you get a handle on billable hours and overhead without losing yourself in spreadsheets? Rely on the gut instincts of your department managers.

I’m honored The Zweig Letter asked me to be a contributor. In the 15-plus years since Crafton Tull began our subscription, we have drawn on the newsletter’s wealth of information to help our business too many times to count. I hope I can live up to the high standard of this newsletter.

First, the obligatory disclaimer: I’m the CEO of a mid-sized architecture, engineering, and surveying firm located in the central part of the United States. Like anyone, it is my personal experiences that shape my views, and my opinions may or may not be applicable to your firm, depending on its size, location, or services offered. Many of the needs and processes of larger firms are decidedly different from those of mid-size or small firms.

I think probably the most difficult issue managers in the A/E/P and environmental industry have to grapple with daily is workload versus staff. The fastest train to the poorhouse as professional service providers is to have a bunch of people without enough billable work to do. It takes revenue generating work to cover expenses (especially that of payroll), so the more our people charge time to overhead tasks, the less revenue we produce, and the harder it is to make a profit.

Industry managers use many metrics to gauge whether their business is operating as well as it should be. From reading different publications and talking to my peers, it seems that each firm uses its own variety of measures to varying degrees. Our firm is no different. We look at project variance (budget overruns), as a measure of project management effectiveness. Our departments have goals for revenue, income from operations, and sales (new contracts). However, for my money, pound for pound, staff utilization (billable hours divided by total hours), gives the quickest insight to profitability. I know when we hit a certain percent utilization, we’ll be profitable, and if we don’t hit that number (say, during the holidays), we aren’t profitable.

Granted, like any other metric, staff utilization can be manipulated by the unscrupulous. You can pump up your utilization by charging an excess of hours to jobs, but then you risk running out of fee quickly. Or, you can charge actual billable time to overhead to keep your budget looking good, but your utilization suffers. We tell our people to ‘charge it like you work it’ and let the numbers fall where they may. Most firms I know include “Integrity” as a core value, so being honest on time sheets should be a given. If you’re going to have the word Integrity on a poster on the wall, then you ought to practice it throughout your business, including the time sheet.

So, how to manage workload vs. staff, and better yet, how to predict what it’s going to be over the coming months? We used to spend many hours in spreadsheets in the pursuit of estimating our revenue vs. costs over future time periods. Each project manager had a workload spreadsheet showing each of his or her projects, and each month they were to estimate the revenue for certain time periods. Those PM workload projection spreadsheets linked to department spreadsheets which then rolled up all the PM numbers for that department. We then added “marketing projections” for projects we were “sure” would be in-house in future months; and all departments were then linked and rolled into one giant spreadsheet showing projected company revenue for the coming months.

I know firms that use similar systems, whether spreadsheets or enterprise software, to do this. You can get really intricate by projecting the hours each person will work on each project in each week. You can then roll that information into summary spreadsheets and reports to project how busy each person, department, office, or division will be. I’m not opposed to that. PM’s and department managers gain real, useful insight by analyzing the amount of work and whether the right staff is on hand to get the work done.

However, from a top level management perspective, over many years of experience, we found a much simpler system that is about as accurate as the intricate. Each month, I ask our department managers to give me a quick guesstimate of their workload over future months 1-2, months 3-4, and months 5-6. Those estimates are represented using arrows: an up, green arrow means they will be busy and will meet or exceed their target; a side-to-side, yellow arrow means they will be steady and may or may not meet their target; and a down, red arrow means they need work and will struggle to meet their target. Put them all together and you’ve got a pretty good picture of what the coming months will look like.

Too simplistic? Maybe, but it works for us. We’ve found that this approach gives us a fairly accurate picture of what our workload will be for the coming six months. It also means we don’t have legions of people spending hours and hours in intricate spreadsheets trying to project revenue and costs down to the penny. And honestly, we’ve found we get as much accuracy with the simple system as we did with the complex.

Granted, this system, like any other, requires integrity and accountability. Our managers know that I expect honesty in their “arrow projections.” If a manager paints an all green, arrows up, rosy picture but doesn’t meet their target utilization, they know we’ll be having a talk about that.

Again, I’m not at all down on PMs and department managers getting into the nitty-gritty of project planning. I’m all for it. But, from the top level perspective, this simple, gut feel approach works for our business.

Matt Crafton is president and CEO of Crafton Tull – an architecture, engineering, and surveying firm based in Rogers, Arkansas. Contact him at matt.crafton@craftontull.com.

This article is from issue 1146 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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Proper attire required

Screen Shot 2016-05-10 at 9.02.20 AM

I got a text the other day from an old client and reader who said it had been a while since I addressed the topic of how to dress around clients. Apparently he is still suffering through the frustrations of dealing with his people who don’t seem to get it.

He said, “I’ve got grown men asking what the appropriate dress is for client meetings … REALLY … as you said in an article regarding manners, they just haven’t had anyone tell/show them what’s appropriate … that’s my positive rose-colored glasses perspective.”

So maybe it is time to talk about how to dress once again. I’m a man so most of my comments will apply to men. Doesn’t mean I think we shouldn’t have women in our firms or shouldn’t have women in the workplace. I strongly support the idea of both! But here are my thoughts:

  1. Not all clients are the same and appropriate dress varies widely. You don’t want to wear polyester sans-a-belt slacks to go see a successful developer. Conversely, you‎ don’t want to wear a $2,000 Armani suit (or whatever is considered high-style these days), to go see your local city engineer, either. Different clients have different expectations about what is appropriate.
  1. Never is it acceptable to wear clothing that is ripped, torn, frayed, or worn out. It drives me crazy when I see people wearing suits with tears around the pockets, sweaters with holes in the elbows, or one I see in many men today – T-shirts that are frayed around the collar. Or how about shoes with round heals or holes in the soles? Bad, bad, bad! Whatever you wear, it cannot be worn out. You’ll look like a bum.
  1. Whatever you wear, make sure it fits! I see so many guys – have been one myself – with suit coats or jackets that are too small. We get older – we live the “good” life and our gut expands – and clothes don’t always fit. I see it with women, too. Sometimes it’s embarrassing for you (and them). Make sure whatever you wear you get something that fits properly – not too big or too small.
  1. ‎Fabric – natural is better than poly or synthetic – at least for men. That means wool and cotton and silk, and maybe bamboo. Slick fabrics are bad. Stretchy fabrics – not for men. My suits and sport coats are 100 percent wool or wool/silk blends. And shirts – send them out to the cleaner. For $1.50 to $3.00, depending on where you live, you’ll look so much better. A nice, starchy cotton shirt, properly pressed – to me, it’s comfortable and looks like you care about yourself. I also like to wear jeans for work sometimes. I send mine out to the cleaner along with my shirts. Cotton rules. You’ll never see James Bond wearing polyester!
  1. Belts and other accessories. Don’t have a worn out belt! They get old and tired and look bad as your waistline goes up and down. Buy some new ones every once in a while! Ditto for your ties. Old ties look dated. IF you wear a tie get some new ones every so often from a good store (not Wal-Mart). And obviously, today there are a lot of people who don’t wear ties. If you are one of them, buy new T-shirts, please! We don’t want to see your worn, stretched, frayed and nasty T-shirts. New ones cost about $10 each. You can afford it! And get a new wallet. You don’t want to be pulling yours out to pay yours and your client’s lunch bill and have one that looks like you first got it 20 years ago. They wear out – like everything else!
  1. Laptop bags and luggage. Get quality ones. I like leather. It looks classier. Nylon is OK but don’t get a color that looks like it could be used by a college student. I’m not fond of backpacks because I’m an old man. A lot of younger, hipper folks are using them these days. I don’t wheel a bag, either. My leather duffle will stuff in any bin or under any seat and I never have that last minute, “Where’d my bag go?” drama that some of these wheeled bag users seem to generate.

Other thoughts? Send them to me at mzweig@zweiggroup.com. We may help make you famous and print them in a future issue!

Mark Zweig is Zweig Group’s founder and CEO. Contact him at mzweig@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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The numbers never lie

1446739965-R&Rsurveycover_web-2New Recruitment and Retention Survey sheds light on key issues in finding, hiring, and keeping the best talent in the design industry.

One thing I enjoy about working here at Zweig Group is that we offer a variety of services and products meant to help firms in the design industry do the best job possible, both internally and externally. We have many publications addressing everything from salary surveys, policies, procedures, and benefits, to recruitment and retention, with everything in between.

The data and information we compile helps paint a picture of how your peer firms are doing in the design industry. We compile our surveys to help create benchmarks for achievement and goal setting.

We recently completed the 2016 Recruitment & Retention Survey of AEP & Environmental Consulting Firms. We uncovered plenty of great statistics and information that give us a glimpse of where things are going in terms of talent acquisition.

This survey applies to a broad audience in the design industry. The largest group, firms from 51 to 200 people, comprised 41 percent of the poll, while the second largest group, firms from 11 to 50 people, comprised 30 percent.

Here are five important findings from this report that may affect the way you recruit and retain good people in the future:

  • 55 percent of firms polled have hired an executive search firm in the last two years. This statistic interests me not just because I am a recruiter but because we are starting to see more companies create in-house recruitment teams with one or more full-time recruiters on staff. This approach can benefit larger firms that are trying to keep their cost per hire in line. There will always be a need for recruiters because you may want to pursue someone that you can’t because of a peer firm relationship. Trust me these things can be problematic if not handled the right way.
  • If you don’t use a recruiter, you will have to figure out a way to get the word out about your open positions. A well-placed job posting can make the difference. According to the design firms polled, 71 percent said the best place to post jobs was on LinkedIn, and, believe it or not, Facebook was second at 22 percent. Career Builder, the Craigslist local job postings, and Indeed.com, round out the top five.
  • I don’t find this hard to believe given how prominent LinkedIn has become these past few years. Most recruiters and executive search specialists use LinkedIn as the standard bearer for getting a search off the ground. One of the widest audiences for business people is on LinkedIn and if you are posting a job, why not go to the biggest bulletin board to advertise your opening?
  • Even more interesting is that 57 percent of all activity on LinkedIn is done on a mobile device, according to CEO Reed Hastings. That means companies better get their ads and career sites optimized for mobile viewing. Most in our industry are not set up properly to take advantage of the candidate that wants to search for jobs and interact with companies on their mobile device. We have to embrace the times for they are a changing. And once you find that great candidate, you better make sure you do everything possible to close the deal.
  • Only 53 percent of those polled discuss a counter offer with the job candidate. I was not surprised by this figure. Most firms we come in contact with don’t spend time discussing the counter offer, and this is a mistake. Our recruiting team uses a script to discuss the matter with candidates to make sure we have touched on all of their concerns and whether there could be a stumbling block to them making a decision to join our client.
  • You must discuss it early and often. Most firms leave this part of the hiring process up in the air. In the design industry, it’s hard enough to find suitable candidates let alone leave things to chance. Companies are not letting go of good employees without a fight.
  • Almost 30 percent of those polled said they have used both contingency and retained recruiters to fill positions. Contingency recruiters don’t get paid until they make a placement. Retained recruiters need an upfront retainer for any and all searches done. The contract arrangement can vary from one firm to the next. Retained recruiting in the design industry is still a bit of a secret. Most companies we come across are content to use contingency recruiters but then complain when, a year or two later, those same recruiters raid the candidates they placed. I know, it sounds crazy, but it happens quite a bit. Most retained recruiters create a “hands off” list of client firms that they will not recruit from. We’ve done this at Zweig Group for almost three decades. If the client is not taken care of, they will go elsewhere.
  • 65 percent of companies polled use an employee referral bonus program. I’m torn about this statistic. Our founder, Mark Zweig, doesn’t like employee referral bonus programs for the simple reason that if things don’t work out with the referred candidate it creates a negative effect on the employee. Mark said, “You run the risk of alienating and angering the employee and may even create a situation where they work against the new person hired, so they fail.” It’s Mark’s contention that if employees like where they work, they should want to refer others to come onboard without the promise of a referral bonus. I guess it does come down to the culture of the workplace and what works in an organization. And speaking of culture:
  • 71 percent of those polled said that cultural fit was the most important aspect of hiring a candidate. I’ve written several articles about the importance of culture and how it plays into finding and hiring the best talent. Firms that cut corners in this area can pay the price for their lack of discretion. Firms in the design industry must have a complete handle on their culture. You should know beyond a shadow of a doubt the type of person that will make it in your organization and the type that doesn’t stand a chance. Usually, firms cut corners when they’ve added new projects and need extra people to get the job done. This is the worst time not to be mindful of your organization’s culture. You have to make sure you take care of the people already in the organization, and you need to make sure that the people you bring in understand what they are getting involved with. At Zweig Group, we require everyone to be a “Go-Getter” with a positive attitude. We don’t have time for negativity or schisms. Take it from me, one bad apple can ruin the whole bunch.

This Recruitment and Retention Survey is not only timely but telling, and you should take the statistics and figure out how they apply to your current situation. The numbers only lie when we ignore them.

If you are looking for ways to refine and tune up your recruitment and retention practice, there will be several opportunities to participate in our Becoming a Better Recruiter seminars throughout 2016. Join me for a one-day boot camp where we will bring these statistics to life and show you how to strengthen your organization in the process.

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

This article is from issue 1145 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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Break out of your compensation rut

Screen Shot 2016-05-03 at 9.14.25 AMEnd-of-year bonuses and evaluations are obsolete. Try monthly or quarterly perks for your staff.

It’s clear to me that A/E firms are all in a huge rut when it comes to how they pay their people. The typical firm reviews salaries once a year ‎after doing some sort of cumbersome performance appraisal system. Then the employee gets a raise – sometimes within the constraints posed by an arbitrary salary range for someone in that specific position, say “Engineer 4″ – and sometimes not.

Bonuses are handled similarly. The principals/partners decide who gets how much with little or no information to work with beyond what the employee got paid last year in the way of bonus and maybe their utilization data. The money is paid out once a year, either right before Christmas or on the last day of the year.

If you think paying people this way motivates them and enables you to hire and attract the best talent, then I probably can’t help you. If you think there HAS to be a better way, keep reading.

Here’s what I suggest‎ – and many of you will think this is too radical:

  1. Get rid of your annual evaluation process. No one likes to give or receive these reviews. They take a lot of time and are demotivational. And they also frequently provide the plaintiff with all they need to prove a wrongful termination case. The only feedback that really matters to most employee is the money anyway. Just get your managers used to the idea of providing instant feedback to their employees – both good and bad – as close to the incident as they can. It saves time and money and is much more effective.
  1. Dump your fixed salary ranges. You aren’t a government agency. Stop trying to put people in boxes. Who says these ranges make any sense anyway? Where did they come from? How often are they adjusted? Why do you need them? People are all different even if they work in the same job category.
  1. Change salaries for people as often as necessary. Once a year is not enough for really young people unless you want them to be recruited away by your competitors. Give individuals a raise when they need it based on your assessment of their value to your enterprise. You don’t really need‎ any set schedule. That is self-imposed. You know who is worth more than someone else. Pay them accordingly with no delay.
  1. Implement an open book financial reporting system. Show everyone how much money the company is making or losing, where you stand on collections, working capital, proposals, backlog and more. Tie the bonus pool to the actual cash basis profitability. Set the percentage to go to the all-employee pool, the management/key person pool, and the owner pool each year as a part of your business planning process. Tell everyone what pools they participate in.
  1. Start paying bonuses out monthly or quarterly. Once a year is way too long to wait. If there’s a loss, make up the loss before paying out any bonus monies. Let everyone see where the money is coming from based on the open book report. ‎Pay the individual bonuses based on the employee’s salary as a percentage of total salaries of people who make up that pool. For example, if the company makes $150K cash profit for the month, and 20 percent of that goes to the “all employee” pool, that is $30K in bonuses to be paid that month. If an individual employee has 3 percent of the total salaries of those in the pool, he or she would get $900.

You can disagree with me about how to pay people if you like, but I know what works over the long haul to attract, motivate, and reduce turnover. Doing these things makes life better. People will be happier. You’ll keep more folks as you’ll have some tools to keep them there. You’ll spend less time on it all. There will be more trust in management. People will better understand your business and feel the company is fair. And you’ll be encouraged to weed out the duds because they are getting bonus money they don’t deserve. All of this bodes well as it relates to improving the value of your enterprise – one of the primary objectives of an entrepreneurial venture.

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

This article is from issue 1145 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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Ready to sell?

Screen Shot 2016-04-28 at 9.29.11 AMAvoid these common M&A mistakes, which happen a lot when firms try to close a deal without the guidance of a seasoned pro.

When we talk to sellers in this industry, we often find that they have minimal experience with M&A. There’s nothing wrong with that. The problems arise when firms either seek to go at it themselves, or use inexperienced M&A professionals. This is a short list of four common mistakes made by sellers in our industry that we hear about on an all-too-regular basis. Mistakes made in these four areas during the M&A process reduce the final consideration you receive for selling your firm, and, unfortunately, can kill an otherwise tenable deal.

  1. Underestimating the time commitment. An external ownership transition is not an easy process. Successful M&A transactions are incredibly time consuming for the seller. From preparation to meetings, negotiations to due diligence, sellers will have to devote considerable time to the M&A process. M&A transactions usually take between six and nine months to close in our industry. Even with a team of experts (see item three, below, for more on that!), every seller feels exhausted – but hopefully relieved – at the end of the M&A marathon.
  1. Not organizing information ahead of time. The sheer volume of information that will be requested by a company interested in acquiring your firm is staggering. Everything from financial statements to contracts, employee information, corporate organizational documents, insurance information, and more will need to be shared with a buyer. Firms that gather the information ahead of time and either create a virtual data room, known as a VDR, or otherwise have these documents in an organized place, communicate to the potential buyer that they are serious and methodical about this process.
  1. Not hiring the right external team. This may sound self-serving, but as someone who works with business brokers on a regular basis, I can tell you that using a knowledgeable consultant with industry experience is the best way to assure a prompt transaction and a high price for your firm. I recently worked across the table with a general business broker, a firm that sells every type of company. They sent me a standard glossy prospectus with over twenty pages of bright charts and graphs – that had very little information that is actually relevant in our industry. For example, the prospectus didn’t disclose that the company was an MBE/DBE, and didn’t include net service revenue! In addition to a consultant, you’ve got to hire an M&A attorney with industry experience. Your regular corporate attorney does not know how to close an M&A deal.
  1. Having an unrealistic price expectation and misunderstanding of deal components. To avoid having an unrealistic expectation for the selling price of your firm, you need to understand true industry comparables. Do not tell a prospective buyer that you should be worth the same earnings ratio as Apple. You’re not Apple. In our industry, we see net service revenue, or NSR, and book value as the two consistent metrics that often correlate to the final sales price. Also, don’t slam the door on a prospective buyer based on the sales price discussed verbally. Remember that earn-outs, salaries, stock options, bonuses, and what is being acquired (Are you keeping cash? Receivables? Those can be tremendously valuable – and liquid!), are also critical parts of the deal.

The M&A process is challenging, time-consuming, and risky. But when two firms come together to create value, expand opportunities, and develop a growth trajectory greater than either could on its own, firms on both sides of the table tell us that it has been worth the pain. If you are considering selling your firm, the best thing you can do is begin the process with open eyes, and have industry experts in your corner to help you navigate.

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

This article is from issue 1145 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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Three things owners do that hurt their businesses

Screen Shot 2016-04-26 at 1.32.58 PMA lot of A/E/P firms complain, but in fact, they’re not really trying to grow.

As an executive in residence teaching entrepreneurship in the Sam M. Walton College of Business at the University of Arkansas‎, I get to learn a lot about entrepreneurial small business ventures in the state and region as a whole. And as a management consultant to the AEC industry working in this same field for more than 36 years, as well as founder of a company that will do more than 25 research studies on the A/E industry this year – I get to learn a lot about A/E/P firms.

People often ask me where business owners go wrong in the A/E world (and elsewhere). I can tell you it is in three things:

  • First problem. The owners take too much money out of the business and don’t reinvest enough back into it. Whether salaries are too high, bonuses are too large, too many relatives are on the payroll, or any number of other things, the result is the same – the company does not have the capital it needs to grow. Therefore, it gets stuck. Meanwhile, demands for cash from profits are high. Owners have lifestyles that were perhaps established while working in other jobs and they are not psychologically equipped to make the sacrifices necessary to really get the business to a position of strength where it is better able to survive any blows that may have occurred.
  • Second problem. The owners don’t do any marketing. There are many reasons for this. They don’t believe it really works, don’t have time, and don’t value anything but architecture or engineering. They think the marketing budget should be tied to revenue, and that it should decline if revenue declines. No matter what is, there’s no real marketing expenditures or activities. Sure, they’ll call their friend in a client organization if they think it will help win a job, but that’s not the kind of marketing I’m talking about. I’m talking about branding and positioning, doing unique research and publishing it, using direct mail, email, PR and social media, creating original communications and sharing them with a very targeted audience. Most companies do none of this!‎ Then they sit around and talk about how “word of mouth” is their most effective marketing. No one can give you word of mouth if they don’t try you in the first place!
  • The third problem. The owners take their people for granted. If you don’t believe me, pick up an A/E firm’s business plan and read it. Just look at how many references there are – substantive ones – about how they’ll make their firm a great place to work. Unique organizational structure? Structured training program? Open book management? Special rewards programs tying pay to overall company profits? Rotating board seat for a member of the rank and file? So much of this just ISN’T there. The implicit assumption is they just pay the least they have to so everyone doesn’t just quit and that should be sufficient to keep everyone motivated, engaged, and thrilled about providing outstanding client service. Guess what – it won’t be!! You cannot take your people for granted and then expect them to “Wow” all your clients. Just won’t happen!!

These three things – not a “lack of capital” or “being a mid-sized firm” – are what kills companies‎. Fix these three problems – ALL three of them – and you cannot help but be more successful!

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

This article is from issue 1144 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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It’s not personal. It’s business.

Screen Shot 2016-04-22 at 3.50.03 PMIn the AEC marketing world, proposals are usually treated as business as usual, but I believe we need to make them personal.

I will be celebrating my 20th wedding anniversary on June 1, 2016, (I married young, by the way). My love, loyalty, and commitment to my wife is confirmed, without a doubt, by the fact that I have sat down with her to watch (and enjoy, but let’s keep that a secret), the 1998 Warner Bros. hit, You’ve Got Mail, more than 25 times. Tom Hanks’ character is the head of a multimillion dollar bookstore chain that drove Meg Ryan’s local, independent children’s book store out of business. While trying to court her, Hanks’ character explains that what happened wasn’t personal, that it was business. She replied with: “Whatever else anything is, it ought to begin by being personal.” This piece of dialogue has always stuck with me.

In the A/E/C marketing world, proposals rule the land. They are usually treated as “business as usual,” but I believe we need to make them personal. One of the best, tried and true techniques to tailor proposals is the IFBP process (Issues, Features, Benefits, Proofs). In the IFBP process, benefits is the coveted “so what?” moment in which we drive the content to talk about the client’s goals. After all, we are always reminding practitioners (and ourselves) that “it is about them, not us.”

Client benefits have multiple layers, including: project (solution to a particular problem), business (cost savings and/or set-up to make money moving forward), department (improve standing within the corporate structure), staff (professional development), and a big picture “ultimate” goal (financial, social, sustainable, environmental, etc.). It is this “ultimate goal” that often gets lost in the shuffle and becomes a wasted opportunity to make the submittal personal.

Take, for example, a high school renovation/expansion project. A sample of the client’s benefits could be listed in the following levels:

  • Project. Modernization and expansion of aging facilities (problem solved!).
  • Business. Innovative engineering methods led the client to save money in overall project costs (good investment!).
  • Department. The Office of Facilities and Construction Management had been under scrutiny after the last two construction projects went severely over budget (great positioning for your firm moving forward!).
  • Staff. The recently appointed Chief Facilities Officer’s first completed project was a huge success (cultivate this relationship and it will last forever!).
  • Big picture. A community of over 5,000 students, previously under served, now has access to state-of-the art classrooms and ancillary facilities. The athletic fields adjacent to the school will be part of an extended-hours program that will benefit the community for years to come.

Even though we should weave all the benefits listed into the submittal, this “big picture” benefit should be our guiding light when preparing our proposal. As Vince Lombardi once said, “Success demands singleness of purpose,” and the only purpose for modernizing and renovating this high school was to better serve the students and the community. That is something everyone can get behind and relate to. It makes it “personal.” Don’t you want every kid to pursue their education at the best facilities we could offer? Drill down this message throughout your submittal because, at the end, we are all working towards the same goal.

Winning proposals are typically the result of having cultivated great relationships and submitting outstanding proposals. Reviewers that can easily understand our proposed approach and how we are working with them to achieve the “ultimate goal” will feel good about selecting us. The relationship will go to another level because we made it “personal.”

Who knows, maybe we can meet at the 91st Street Garden at Riverside Park in New York City as the main characters in You’ve Got Mail did and then we… Sorry, I seriously need to watch a superhero movie!

Javier Suarez is the central marketing and sales support manager with Geosyntec Consultants. Contact him at JSuarez@Geosyntec.com

This article is from issue 1144 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 the best from each other

Screen Shot 2016-04-20 at 10.05.11 AMToday’s workforce is multigenerational, so those with experience and seniority must learn to understand, and teach, younger colleagues.

I was born in 1944, a couple of years before the Baby Boom. But my values and my approach to relationships align pretty well with that generation. My challenge as a young professional was to communicate with “the greatest generation,” who didn’t always understand where I was coming from.

In my career, I’ve worked with Generation X, Generation Y, and now I’m working with Millennials. It’s been an interesting journey, as each generation has some unique characteristics. The success of our work and our firms is deeply dependent on our ability to communicate well across generations. Here are a few thoughts on what I’ve learned and observed on this topic.

I’ll start from a point early in my career. In 1972 I was assigned to work as the tenant development coordinator for the Oakland City Center. Both the developer and contractor asked that I attend the Owner/Architect/Contractor meetings each week so I would be familiar with the technology and operations of the building when meeting with tenants. This turned out to be a graduate course in how to take a complex project through design, bidding, buying, and into construction.

The project executive from the contractor became a role model for the balance of my career. One of the most important lessons he taught: not everything is urgent, so don’t treat every task the same. Some items were brought out to get everyone thinking about them, with a long-range date by which an answer was necessary.  Others, sometimes brought up at the spur of the moment, were urgent and needed action within an hour, a day or two days. I learned that in project leadership, you must understand this and not run a fire drill unless it’s necessary. He also gave me a feel for how a project proceeds.

I was also privileged early in my career to be within walking distance of a number of projects that I was working on. This offered me the opportunity to visit a project during the lunch hour, introduce myself to the subcontractors on the job, and ask them what they thought of our drawings. I wanted to know if our drawings communicated clearly our intent and, if not, how we might do them better. Once again, I was privileged to learn from seasoned professionals, who, because my inquiry was genuine, always took the time to guide me.

I’ve tried to model my experiences and what I learned as I’ve gotten older. Here are a few thoughts about how senior members of your firm can convey the wisdom they’ve gained over the years with younger staff:

  • Share willingly what you’ve learned. Don’t just tell a person what to do, tell them why to do it that way. Don’t lecture them; share what you know in a positive and collaborative way.
  • Listen well; ask a lot of questions. Don’t just jump in and give them an answer.
  • Don’t be patronizing or condescending in any way. Show the younger person respect. It will encourage them to continue to seek your advice and to show respect for others.

So what should this younger generation be aware of about themselves as they begin to develop in their careers?

Once I was talking with a technology executive from Germany during a TED Conference break about how dramatically both our professions had changed with the rapid advancements in technology. I expressed a concern about the difficulty of critiquing the work of my younger colleagues. Rather than a floor plan on a large sheet of paper, allowing me to look at the entire project in context, I was dealing with a colleague who had only a small window into the project on the computer screen. That made it impossible for me to comment with any sense of context.

I was amazed by the young employees and their ability to “see” in their minds the entirety of what they were working on while only being able to see a fraction of the drawing. Perhaps this came from hours of playing complex, multi-layered computer games, a direct simile for what was going on.

My German colleague said, “That’s nothing. I have a more severe problem. These young kids don’t know how to solve a problem as a team. I was frustrated last week when people sitting right next to each other sent text messages back and forth. In frustration, I called them all into a conference room, sat them down and said we’re not leaving until we solve this together. Within five minutes they were all screaming at one another and charged out of the room to continue with their way of solving a problem – by texting.” They clearly never learned the fine art of face-to-face negotiation.

So, for you as a young professional, on your way into a leadership role, here are some thoughts:

  • Learn to interact with your colleagues, young and old, by inquiry as opposed to command. Find out together what the right answer is. Learn to negotiate.
  • Take advantage of your more seasoned colleagues. They can make you look good.
  • Learn from their hard-earned people skills (those who actually took the time to gain them). A major part of your career path as you develop is your ability to boost morale, and make a decision about whether a conversation should take place face-to-face rather than via email or text.
  • Learn how and when to say “congratulations” on a job well done. Each of your colleagues reacts differently. Some appreciate recognition in front of others; some are more comfortable if it is delivered in private.

Being aware of and working through your inter-generational communication skills is worth the effort.

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 1143 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 entitled ones

Screen Shot 2016-02-12 at 10.31.22 AMFor most of my career, I have defended the “new generation,” i.e., those just getting out of school and starting their careers. The older people have always complained about the group coming in behind them, saying they don’t work as hard or have the commitment level that they had. After all, they walked six miles uphill in snowstorms both ways to school when they were kids. And they all started in the mailroom for $1 an hour and worked their way up. The cycle of bashing your successors continues from generation to generation.

My defense has frequently revolved around the idea that every generation DOES do this, and, young people, if given the right environment AND inspiration, will do whatever it takes and work their tails off to do a good job. And for the most part, I think ‎I was right. I think I still AM right – just not AS right as I used to be.

The newest generation does include some unbelievably diligent and intelligent workers who are willing to dig in and get the job done. We feel extremely fortunate to have a number of them working for us at Zweig Group and I would put them up against anyone for work ethic and willingness to do whatever has to be done to meet a deadline or fix a problem.

That said – I have seen and heard some examples of entitlement from millennials that blew my mind recently. As many of our readers know, I teach entrepreneurship at the undergraduate level at the University of Arkansas. During one class in the last year or so I asked my students what their plans were after college. One young woman who keeps a rather low profile in terms of class participation said she wanted to be a Fortune 500 CEO. I thought, “Great – she’s very ambitious.” Then I followed up with, “Awesome! What do you want to start out your career doing?” Her response: “I’m willing to start out as a COO.” I was so shocked I was nearly speechless! And she wasn’t joking.

Another example came to me from a local design/build firm. A young, degreed but not registered architect in their employ did some work on a set of plans for a former fellow employee – a project manager – who was fired a few months earlier for working on his own projects on company time. Not only that, the plans were prepared BY the firm a few months earlier but the former PM stole the project away from the firm before he was fired, and the employee knew all about this. In spite of the guy’s complete lack of ethics, the young architect refined the plans for the PM while on the company payroll. ‎The only reason the company learned about it was a contractor called them to warn them about potential litigation surrounding the project! When confronted, the young architect said he felt justified in his behavior because his “rent was due” and he “hadn’t had a raise” in too many months. He was “owed the money” he made working for a guy who stole from the company. Mind boggling!!

Yet another example was brought to me from a large engineering firm in the southeast. When interviewing a young engineering graduate for a potential position in their firm, the cocky fellow stopped the discussion and told them he would “not work one minute more than 40 hours per week and possibly four hours on Saturday,” or he “would not work there.” Hey, his time was his time, period! Guess what? He was right – he didn’t work there!

I could go on and on. There’s just too little respect for the senior people, too much of an attitude that the company owes someone a living because of their degree or just because, and too little willingness to do the crappy jobs that lead to better jobs. Again – not to put EVERY millennial in this pot – but there are too damned many of them who act like this.

Why do they act like this? There are many theories. Here’s mine: In a nutshell, life has been too easy on them. They’re living in $3,000 a month apartments as university sophomores instead of $100 a month mobile homes. Mom and dad are going in debt to pay for their degrees instead of them going in debt with student loans. They drive new Denalis and Tahoes and GT500 Mustangs, not $200, worn-out, six-cylinder Biscaynes. They don’t work in school but if they do, it’s only in a (relatively) highly-paid internship instead of the local service station or burger joint for $2 an hour. And don’t worry about living on Banquet pot pies and three-for-a-buck Swanson “Swiss Steak” dinners, or Kraft Mac N Cheese – go out for sushi on Mom and Dad’s credit card, or better yet, get the surf ‘N turf at a fine dining establishment. We created these monsters, folks, as the coddling parents and oft-spoiling grandparents of this new generation. And as their employers, we will undoubtedly pay the price for it.

But fellow baby-boomers out there – don’t despair. And please don’t work too hard this week. Life is short. And finally, as always, send your comments and feedback to me at mzweig@zweiggroup.com.

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

This article is from issue 1143 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 Spotlight Survey examines mobile devices

1451492543-CellPhonesurveycover_webThe inaugural Cell Phone & Mobile Devices Spotlight Survey of A/E/P & Environmental Consulting Firms was released April 6 by Zweig Group, the architecture, engineering, planning and environmental consulting industry’s go-to resource for management research, publications and consulting. After several years of including information about firm-provided cell phones in its Policies, Procedures & Benefits Survey of A/E/P & Environmental Consulting Firms, Zweig Group took the opportunity of its new Spotlight Surveys series for a more in-depth analysis of issues related to mobile device usage in A/E/P and environmental consulting firms.

“It almost goes without saying that firm-provided cell phones are almost a given in many architecture, engineering, planning and environmental firms, and we have the data that show that increase in popularity over the past several years” said Andrea Bennett, Zweig Group’s research and publications manager. “With this Spotlight Survey, we wanted to take it a step further: Who gets phones; how are they selected and paid for; how often are professionals using them? What about tablets and other devices? Have any firms jumped on the smart watch bandwagon?”

The results, provided by almost 100 A/E/P and environmental consulting professionals whose job titles most commonly include words such as “manager,” “director,” and “president,” show that, though firm-provided cell phones are definitely commonplace and tablets are becoming more common, other mobile devices have not yet caught on among most firms.

“The fact that smart watches and similar mobile devices are still in their infancy, both in terms of development and in their adoption by the A/E/P and environmental industry, is actually really exciting, from a research standpoint,” Bennett said. “Because we’re asking these questions now and will continue asking them in future editions of this survey, Zweig Group will be able to track in almost real-time how quickly these devices are implemented by the industry and for what purposes.”

Though 97 percent of survey respondents reported having a cell phone that they used for work at least some of the time – 49 percent using those phones “very frequently” most commonly to “answer emails/communicate with colleagues” – only 54 percent said that their firms provided those cell phones and cover the monthly bills. Similarly, 79 percent of respondents said they had a tablet, but only 44 percent said their firms provided it. However, for other mobile devices, the data trend in the opposite direction: Though only 17 percent of respondents report using a mobile device other than a cell phone, tablet or laptop, 20 percent said that their firms will pay for such devices.

The 2016 Cell Phone & Mobile Devices Spotlight Survey of A/E/P & Environmental Consulting Firms is a full-color, digital-only publication and can be downloaded here. More than 20 survey questionnaires for 2016 are currently open for participation, and respondents receive either 50 percent (for participating in a Spotlight Survey) or 65 percent (for participating in a full-length survey) off the purchase of any Zweig Group survey product. For more information, call 800.466.6275 or email research@zweiggroup.com.

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The power of the relationship

Screen Shot 2016-04-14 at 9.04.54 AMPeople want to do business with people they like, so make as many meaningful connections as possible if you want to grow your business. 

There are two instances where a powerful relationship with a client can lead to marketing success with little or no cost – Indefinite Delivery/Indefinite Quantity contracts and discretionary assignments.

ID/IQs allow you to visit a client and convince them to assign their current need to your contract rather than going through the effort of a full-blown solicitation process. The agency doesn’t add to staff workloads with selection committee assignments, and you don’t have the expense of proposing and presenting before adding the assignment to your firm’s backlog.

It’s a win-win situation for both the agency and your firm.

In 1996, while working on my first proposal for a U.S. Army Corps of Engineers (USACE) ID/IQ contract vehicle, I learned what I believe is the most important thing about ID/IQ contracts: An ID/IQ contract is not work; it is not a project. It is more like a license to hunt.

There is a guaranteed minimum fee if there are no assignments, but that fee is a tiny portion of the contract’s potential value. If you wait for the contracting officer to assign a project, you won’t realize more than a small fraction of the contract’s potential revenues. If you’re not marketing the ID/IQ contract, agency staff with projects and funding won’t know you are there, capable, and ready to work.

When an agency’s project manager or contracting officer mentions a possible project, you can tell them the work can be done under your ID/IQ contract. In most cases, they will be happy to give you the work and avoid the time and extra work of a full-blown solicitation process.

So the best way I know to get new tasks under an ID/IQ vehicle is to visit the client’s office, and talk with end users and/or project managers. Once you are in the agency’s or end user’s office, make the most of your time. Meet as many of their project managers and contracting officers as possible, and make sure they all get information on your contract. If you can, get everyone you already know to introduce you to someone else they think you should know.

In a previous employment, one of our environmental leaders wanted to increase the revenues from a USACE environmental ID/IQ. He visited a local Air Force Base every week, and always came away with a new contract. His complaint was that every new assignment was $25,000 or less, and he wanted to increase the “burn” on the contract.

I suggested that, until a larger assignment came along, he should visit the base three times a week and have every agency project manager with whom he worked introduce him to another project manager or contracting officer.

More visits with more project managers creates more relationships, and that equates to more business.

The second instance has to do with a client being able to give out work on a discretionary basis, with no formal selection process. Generally, these contracts must be for less than a specific dollar amount.

If you have a strong enough relationship with the person who gives out those assignments, many of those discretionary projects can come your way. It’s all about the value you bring to the person who makes that decision – whether the value is professional or personal – especially if it’s a value he or she can’t get elsewhere.

Here is a great example. A previous employer of mine did a lot of work for a major airport located near one of our offices. On one regular visit, our project manager commented on a picture on the client’s wall, showing a teen-ager with a tennis racquet and a trophy. The client explained that his 16-year-old son was a nationally-ranked player who had difficulty finding a local opponent good enough to give him a good challenge.

Our project manager, a strong player, offered himself as a partner, and the client accepted. The first game between teen-aged son and project manager turned into a once-a-month meeting. The son was happy. So the dad was happy. So we wound up on the receiving end of a lot of smaller projects for the airport without competing. So our project manager was happy, as were his division and office managers.

We know that, all other things being equal, people like to give work to people they like. So you have to develop relationships with multiple agency/client staff, and make them real friendships, not just people you greet when you pass them in the hall.

Personally, I subscribe to what a friend called the “Velcro theory of relationships,” where many people in your organization have relationships with many people at the client/agency. I think this approach helps people make relationships that are real, strong, stand the test of time, and bring value to all the people on both sides of the equation.

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 1143 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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Filling in the gap

Screen Shot 2016-04-12 at 8.32.54 AMFirm leaders often think they know what the company needs, but in reality, are looking for answers in the wrong places.

I receive a lot of phone calls from firms inquiring about many of Zweig Group’s educational offerings.  Oftentimes, I’m asked about a specific program, such as our project management or recruiting seminars, and after a short discussion, it becomes apparent there is a gap.

You know the gap. You realize your firm needs something, but you’re not quite sure what you need. It’s that standing-in-front-of-the-refrigerator-with-a-blank-stare gap. You want something or think you want something, but you can’t quite put your finger on what it is you want.

Some companies try to cover their performance gaps with assumptions, such as “What we need is more training.” I hear that one quite often. A performance gap may not be caused by a lack of training, but by something less visible. What they’re really looking for is process standardization.

Our survey data indicates only 26 percent of firms have a project management manual, so how would a new project manager know what a firm expects of them?  In that same survey, 76% of the respondents stated their firm relies on on-the-job training and mentorship for the necessary training. It’s difficult to accelerate a firm’s project management capabilities when a project manager’s training is left to the discretion of a mentor, or worse, as one firm told me, “our project managers are left to fend for themselves.”

Those are internal policy gaps that must be closed before a training program can truly be effective.  Finding and closing gaps is not as difficult as it may seem, but it takes a little effort.

  • Define success for your firm. What results do you wish to achieve? Let’s say you decide you want your firm to be more entrepreneurial. If so, you need to define what the term “entrepreneurial” means to your firm. Does it mean you want to expand your client base, or does it mean you intend to transform your firm into a high-energy, high-growth titan in the industry? Those are two very different definitions on different ends of the spectrum.
  • Close the gap by clearly stating the direction in which your firm is heading and the resources required to get there. Ensure everyone on your team understands both. That will drive their decisions and close the gap between what they’re doing and what they think they should be doing.
  • Communicate with and empower your staff. Ensure everyone is aware of your goals. I speak with a lot of human resources directors who tell me what they believe their firm needs. After talking through their challenges and discussing possible solutions, they usually end the conversation by telling me they need to talk with “the Principals” before they can make any decisions. There’s another gap. Some HR directors are treated as simple information hunter-gatherers. They’re instructed to find a solution to a vague problem and then report their findings to someone higher up in the organizational structure.
  • Arming these professionals with a clear understanding of the firm’s long term goals, as well as the authority to make decisions regarding training programs (which they are usually expected to manage), will expedite the process and ensure the training is completed in a timely manner.  Instead, companies waste precious time endlessly debating whether or not a program is right for the firm.
  • Identify the underlying issues, not the symptoms. When a firm says they’re having a problem retaining talented people, one assumption is that they’re simply hiring the wrong people. They lament that their internal recruiting staff had failed to find the “right” people. In an attempt to close the gap, some leaders believe that better recruiters will solve their talent-bleeding problem. The gap here is the chasm between the perception about why talented people leave and the actual cause of the brain drain.
  • Perhaps the firm has a much deeper problem. Perhaps the problem is rooted in the firm’s culture or pay and reward systems. An expert recruiter, no matter how talented she is, cannot overcome a weak firm. Who would want to stay with a firm that’s infected with passive-aggressive types or rewards longevity over performance? Of course, your best and brightest will leave; they’re miserable!
  • Spending time to uncover the underlying issues is vital to your firm’s long-term health. An unbiased assessment of your entire firm may be necessary to find that root cause. Only after you’ve uncovered it can you begin to discuss solutions. Rubbing ointment on a rash will do nothing for you if the real reason for the rash is an allergic reaction to a medication you’re taking.

We all have gaps we don’t recognize. We think we have the skills needed to perform at a higher level, but the reality is that we often have some limitations. Those gaps can be overcome by ensuring your team clearly understands your vision, by empowering them to make decisions based on your vision, and by spending time uncovering the root causes of your gaps. Like getting a new pair of eyeglasses, you’ll be amazed at what you’ve been missing when you can see more clearly.

This article is from issue 1143 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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New Zweig Group publication shows what’s in a name

1452694312-zg-jd-cover2Job Descriptions & Organizational Charts offers two resources for price of one.

Zweig Group’s newest managerial resource, Job Descriptions and Organizational Charts for A/E/P & Environmental Consulting Firms, second edition, aims to help architectural, engineering, planning, and environmental leaders answer that all-important question: What’s in a name (or job title)? And, the publication takes it analysis a step further, offering dozens of organizational, office and departmental charts depicting where those titles should fall in a firm’s overall hierarchy.

“Architectural, engineering, planning and environmental firms are living organizations,” said Andrea Bennett, Zweig Group’s research and publications manager. “Ongoing advancements in materials and technologies require evolving companies to create positions that can serve the needs of increasingly advanced client-bases. This second edition includes updates to Zweig Group’s original A/E Job Descriptions (2003) with job titles such as BIM CAD manager, BIM coordinator, BIM manager, and BIM specialist. Our hope is that the inclusion of these technologically specific positions will help readers determine the positions that they might need to add to best serve their clients.”

The book is divided by disciplines, including architecture, computer aided drafting, clerical and administrative, construction and inspection, engineering, environmental, finance and accounting, human resources, information technology, interiors, landscape architecture and planning, marketing, operations, project management, surveying and GIS, and top management. Each job description lays out the duties; experience; education; and knowledge, skills, and abilities that are required and/or preferred to successfully complete the work.

“Three major features that really set this publication apart are its specificity to the architectural, engineering, planning and environmental consulting industry, which is, of course, inherent in everything Zweig Group does,” Bennett said. “In addition to that, we have denoted each discipline by tabbing the pages, so that readers can easily find the information they need without returning to the contents page. Lastly, Job Descriptions and Organizational Charts offers readers another piece to the HR puzzle by providing the most recent average salaries, as determined by respondents to Zweig Group’s 2016 Salary Surveys, for several positions within the book.”

In addition to more than 300 job descriptions, Job Descriptions and Organizational Charts for A/E/P & Environmental Consulting Firms, second edition, also includes more than 60 organizational charts for firms, offices and departments, denoted by discipline and staff size.

“Once readers know the positions they need and about how much they should pay them, this book also serves as a benchmark for determining where to place them in the organization and/or its offices and departments, and it’s important to note that all of the listings and charts are used by real-world firms. The inclusion of all of this data really does make for a comprehensive publication.”

Job Descriptions and Organizational Charts for A/E/P & Environmental Consulting Firms is available now for $250 (print) or $150 (digital) at zweiggroup.com/books.php. For more information on this or any Zweig Group publication, email publishing@zweiggroup.com or call 800.466.6275.

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Some finer points on M&As

Screen Shot 2016-04-06 at 2.04.38 PMDon’t just get a good lawyer. Get one who knows the M&A industry, and don’t let minor, personal stuff derail the transaction.

I’ve been in this industry for 36 years now. That’s a long time. And I have to say that the amount of merger and acquisition activity in the A/E and environmental business has never been higher – at least that’s how it appears from my perspective. Our phone is literally ringing off the hook, and email boxes are jammed from all of the projects and inquiries from buyers and sellers. It is beyond insane!

That said, not everyone – certainly not the sellers and a lot of the buyers – has a lot of experience in this stuff. Here’s a few points that might be helpful to those of you who are currently involved in a merger, acquisition, or sale:

  1. Hire a good attorney. Time and time again we have the same issue. The buyer (or seller) gets their “usual” business attorney to work on papering up the deal they (think) they have negotiated with the other side. Big mistake. This is a very specialized area and you need to be dealing with someone who is very knowledgeable, not just in how to negotiate and write contracts for firm sale/merger transactions, but also someone who is familiar with the peculiarities of our particular industry.
  2. Get your attorney talking to their attorney. Whether you are a buyer or seller, have the attorneys do the difficult stuff. The reason is simple – you will have to live together in one way, shape, or form post-transaction. Don’t mess up that relationship arguing personally with the other side over sometimes minor stuff!!

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

This article is from issue 1142 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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