Setting goals TRENDLINES - The Zweig LetterLEED CERTIFIED: The U.S. Green Building Council announced the 50,000th LEED-certified green housing unit. “As one of the most rigorous

T R E N D L I N E S

A L S O I N S I D E

F I R M I N D E X

Fe b r u a r y 10 , 2 014 , I s s u e 10 4 2

w w w . t h e z w e i g l e t t e r . c o m

Keeping future owners satisfied

Page 3

xz BEST PRACTICES: Innovating your business processes? Page 6xz SEARCH SAVVY: Better reference checks. Page 7xz HR: Learning never stops here. Page 9

Passing the baton

ZweigWhite’s 2014 Merger & Acquisition Survey finds that the most important objectives firm leaders hope to achieve through a firm sale are expanding financial resources and transition ownership.

On a scale of 1 to 6, expanding firm’s financial resources ranks a mean of 4.4, while transition ownership averages 4.2 in importance.

Meanwhile, goals such as providing impetus for growth and increasing opportunities for staff rank 4 and 3.6, respectively. – Margot Suydam, Survey Manager

T H E V O I C E O F R E A S O N F O R A / E / P & E N V I R O N M E N T A L C O N S U L T I N G F I R M S

1.0

2.0

3.0

4.0

5.0

6.0

Expandfirm's financial

resources

Transitionownership

Provideimpetus

for growth

Increaseopportunities

for staff

Arcturis .................................................................. 3B.D. Abel Inc........................................................ 12Great Ecology ...................................................... 11Hirsch Bedner Associates ..................................... 4Jacobs Associates .............................................. 12JQ .......................................................................... 8Kitchell .................................................................. 9Pennoni Associates ............................................. 12Pond & Company ................................................... 9Schnabel Engineering ........................................... 3TerraTherm ............................................................ 9WOODARD & CURRAN ......................................... 3See MARK ZWEIG, page 2

Mark Zweig

HR | FINANCES U P P L E M E N T S

Pages 9 - 12

P R O F I L E

CFO takes on challenges with aplomb

Page 11

As we work with A/E/P and environmental firms around the

globe, the question of how best to set goals inevitably comes up.

Conventional wisdom on goal setting says, “Goals should be reasonably attainable but involve some degree of stretch.”

On one hand, I wonder how far man would get if this is how we did things. I doubt we’d ever have made it to the moon and back with that orientation. On the other hand, I know how frustrating it is to set high goals and never come close to achieving them. That doesn’t make much sense, either.

The essence of the conundrum, it seems, lies in who is setting the goals. Are they knowledgeable enough of the situation to set intelligent goals in the first place?

In the A/E/P world, if top management is setting goals in a vacuum, it isn’t going to work very well unless they just get lucky. The leaders of the business units – whether they are disciplines, offices, or client-centered groups – are probably in a better position to tell you what they expect to be able to sell and produce based on a wide variety of inputs. Eliminating their input makes no sense.

Setting goalsAre you reaching for the moon or sandbagging, Mark Zweig asks.

The essence of the conundrum, it seems, lies in

who is setting the goals. Are they knowledgeable enough of the

situation to set intelligent goals in

the first place?

THE ZWEIG LETTER | FEBRUARY 10, 2014, ISSUE 1042

2 © Copyright 2014. ZweigWhite. All rights reserved.

A/E BUSINESS NEWSMORE CONSTRUCTION: New construction starts in December grew 5 percent to a seasonally adjusted annual rate of $554.5 billion, according to McGraw Hill Construction. Although both nonresidential building and housing settled back during the final month of 2013, the nonbuilding construction sector (public works and electric utilities) finished the year on a strong note. For 2013 as a whole, total construction starts advanced 6 percent to $516.8 billion. This follows the 10 percent gain reported for 2012 (which drew support from a record amount of new electric utility starts that year) and modest 2 percent gains in both 2010 and 2011. If the volatile electric utility category is excluded, total construction starts in 2013 would be up 14 percent, following a 9 percent gain in 2012 and essentially flat activity during 2010 and 2011.

The December statistics produced a reading of 117 for the Dodge Index (2000=100), compared to 111 in November. This marked the third highest month for the Dodge Index during 2013, after September’s 118 and October’s 125. During the first eight months of the year, the Dodge Index had hovered within the fairly narrow range of 100 to 108, but then showed a stronger pace of activity during the final four months, reflecting in part the impact of several very large projects. In December, large projects that were entered as construction starts included the $1.5 billion Goethals Bridge replacement project in New York and New Jersey, two large natural gas-fired power plants, and two large manufacturing plants. For all of 2013, the

Dodge Index averaged 109, up from 103 in 2012.

“The construction industry in 2013 made progress towards establishing a more broad-based recovery, after several years in which the upturn was more limited in scope,” said Robert Murray, chief economist for McGraw Hill Construction. “Housing continued to lead the way, strengthening throughout much of 2013, and it was joined by a faster pace for commercial building, albeit from low levels. The institutional building sector registered a considerably smaller decline than in prior years, as its lengthy downturn appears to be ending. The public works sector in 2013 showed surprising strength, helped by the start of several major projects even amidst restrained government spending. Running counter in 2013 was a steep drop for new electric utility starts, after the robust amount reported in 2012. For 2014, the prospects look good for total construction, with growth anticipated for housing and commercial building, while the institutional building sector at least stabilizes.”

LEED CERTIFIED: The U.S. Green Building Council announced the 50,000th LEED-certified green housing unit.

“As one of the most rigorous green residential rating systems in the world, LEED for Homes is the standard against which all other such programs are measured,” said Rick Fedrizzi, president, CEO and founding chair, USGBC. “Despite its demanding technical aspects that set a high bar for green residential construction, LEED for Homes has also seen the broadest adoption among its

peers – indicative of its position as the rating system of choice to guide the design and construction of healthier, high-performance homes.”

Since the launch of the LEED for Homes rating system in 2007, the growth trajectory of the world’s most widely used residential green building program has been dramatic. From 392 housing units LEED-certified in 2007, the figure jumped to nearly 900 units certified within the year 2008 and nearly 3,000 certified within 2009. In 2012 and 2013 alone, USGBC certified more than 15,000 and 17,000 housing units, respectively.

Of the 50,000-plus certified units, 74 percent are within multifamily buildings, while 44 percent are classified as affordable housing. In addition, nearly 65 percent of the total units were certified in the past two years, a strong indicator of the continued momentum of the rating system.

There are also more than 82,000 units under construction and in the pipeline for LEED certification. The continued growth of LEED for Homes is attributable to its many proven benefits, including enhanced property value, healthier indoor environments, and energy and water savings that average 20 to 30 percent. LEED-certified homes are third-party inspected, tested and performance-verified, offering homeowners and renters piece of mind that their places of residence are efficient, saving them money and also better for the natural environment.

MARK ZWEIG, from page 1

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At the same time, top management needs to be able to provide direction and should not just blindly accept whatever goals line and/or junior managers propose. The drive to grow the enterprise may be stronger in the top managers than those tasked with the day-to-day.

Top down and bottom up participation are both necessary for any goal-setting exercise. Personally, I would rather set my goals somewhat higher than “reasonably attainable.” I want people to aim high. At the same time, I do make a major distinction between goals and projections. I hold projections to a much higher standard. While there could be good reasons for a high goal to not be met, there are a lot less of them for wildly missing projections.

I have worked with some companies over the years that had managers who consistently missed their projections. In those cases we occasionally developed equations to modify whatever they told us based on their historical “miss” rates on projections. While it may seem silly to do this, it can be a helpful tool that eliminates the bulk of the frustration of dealing with those who constantly miss their projections.

In any case, setting goals (and making projections) may be as much of an art as it is a science. Some people are good at it. Some aren’t. Some reach for the moon. Some set low targets and sandbag. If you are the CEO, it’s up to you to set the tone and the culture for how your firm handles goals.

MARK ZWEIG is the chairman and CEO of ZweigWhite. Contact him with questions or comments at [email protected].


3

Pay is part of the equation, but it goes well beyond that, as these firm leaders explain.

By LIISA SULLIVANCorrespondent

Principals are the heart and soul of a firm, and ensuring their pay is up to

snuff is a good way to get started. But for many, it comes down to much more than money. There’s a bigger picture in-volved.

Beyond money. Douglas McKeown, CEO, WOODARD & CURRAN (Port-land, ME), a 850-person integrated en-gineering, science and operations com-pany, says that more than money, prin-cipals’ satisfaction really comes down to how happy they are in their jobs and in knowing how they impact the firm’s success. This includes being able to work on exciting and challenging as-signments, opportunities for growth and a chance to make an impact.

“Of course, this has to include compen-sation that recognizes their impact in our success, which in turn helps them to see a return on their investment,” McKeown says. “Just owning stock for intrinsic value isn’t enough. It’s where some might start, but in the long run they want more.”

Transparency also matters.

“Financial awareness of the perfor-mance of the firm and a trust that the

information is and al-ways will be available to them is key,” McKe-own says. “And by transparency, I don’t mean reactive – send-ing them a financial re-port when they ask for one; I mean making it a way of doing business by sharing with them what you know about the firm’s performance and the direction its heading – making a connection and feeling part of a team.”

Traci O’Bryan, presi-dent and CEO, Arctu-ris (St. Louis, MO), a 50-person, full-service architectural and inte-rior design firm, says that it’s important to involve future owners in the strategic plan-

ning and decisions of the firm and fo-cus on their career development as leaders.

“Usually, if they know they are helping to shape the firm and share in the vi-sion, they are far more likely to stay en-gaged and committed than if we were solely raising their compensation each year based on performance and ten-ure,” she says.

The leaders of Schnabel Engineering (Glen Allen, VA), a 314-person civil en-gineering firm, consider many factors when it comes to keeping future own-ers smiling.

“As an employee-owned company, we strive to provide a total rewards pack-age that will meet the needs of our em-ployee owners as a whole,” says Gordon Matheson, president and CEO. “Some of the elements we consider when de-veloping these packages include com-

pensation (salary and bonus), benefits, pro-fessional development opportunities, and shared wealth via con-tinued growth of the firm.”

Schnabel’s overall busi-ness strategy, econom-ic realities and firm cul-ture drive decisions in reference to all of the above.

“We continually evaluate our total re-wards package via analysis of industry trends and benchmarking of individu-al components, and we believe that it’s important to maintain flexibility in of-ferings to be able to adjust to firm and external pressures,” Matheson says.

As an employee-owned company, Sch-nabel is committed to rewarding its employees, because it is their employ-ees who make it a success. It also dis-tributes the company’s profits each year through its employee stock own-ership plan (ESOP), bonus programs, and reinvestments in the firm.

“When our employees are able to share in the profits gained by their own hard work, they are motivated to excel in serving clients and delivering strong business performance. In turn, new opportunities and challenges are con-tinually provided to our employees,” Matheson says.

Additionally, Matheson knows that it’s extremely important that employees have the ability to achieve personal and professional goals.

“Our firm invests heavily in our em-ployees through training and continu-ing education,” he says.

Examine alternatives. O’Bryan

L E A D E R S H I P

Douglas McKeown, CEO, WOODARD & CURRAN.

Traci O’Bryan, President and CEO, Arcturis.

Gordon Matheson, President and CEO, Schnabel Engineering.

See FUTURE OWNERS, page 4

“Just owning stock for intrinsic value isn’t enough. It’s where some might start, but in the long run they want more.”

Keeping future owners satisfied

Nineteen percent of owners were given shares by their firms. Of those owners who were given shares, a median of 20 percent of the stock they own was given to them.

Source: 2013 Principals, Partners & Owners Survey, ZweigWhite: www.zweigwhite.com/p-2153-principals-partners-owners-survey-2013



RESOURCESM&A SURVEY: With all the changes the A/E industry has faced in recent years, more firms than ever are including a merger or acquisition in their strategic plan. If you think a merger or acquisition may be in your future – and even if it’s not currently in your firm’s plan – you’ll want to see the results in the 2014 Merger & Acquisition Survey of Architecture, Engineering, Planning & Environmental Consulting Firms. It’s the most comprehensive report available on the real buying, selling, and merging activity in the architecture, engineering, and environmental consulting industry today.

Now in its 24th edition, this all-inclusive report breaks data down by firm type, discipline, market sector, revenue size, region of the firm’s headquarters office, staff size, firm growth rate, and firm profit. You’ll be able to make comparisons between your firm – or one you’re looking to buy – and the rest of the industry. If you’re interested in a merger or a sale, you’ll be able to use this data to find out if there’s a market for your firm. Find out what types and sizes of firms buyers are looking for, and see what price you can expect to receive for your firm. See if buyers are still buying, or if the economy has cooled the market. If you’re interested in an acquisition, you’ll find out how successful other firms’ acquisitions have been and what you can expect to see in a purchase price. Other acquisition data included are the length of time it takes to buy a firm and whether firms are using asset or stock purchase deal structures to make acquisitions.

If you’ve recently completed a merger or acquisition deal, you’ll see how the price you paid or the amount you received compares with other similar deals and you’ll be able to compare other important details such as the degree of success or failure of the deal.

The 2014 Merger & Acquisition Survey goes beyond benchmarking statistics to provide invaluable advice from our experts. It also provides descriptions of more than 300 transactions of AEC firms that have bought, merged, or been sold since 2009 – these descriptions include firm names, locations, staff size, revenues, firm services, and other important details to help you gain valuable insight into recent M&A activity in the industry. Even if M&A activity isn’t currently in your firm’s plans, it may be sooner than you think, so you’ll still need a copy of this new resource. Whether you want to get a projected value for your own firm or one you’re looking to buy or you want to find

out how the details of the deal you recently made compare to other similar deals, this report has the answers you need.

This is only a sampling of the information covered in this report. Information on potential acquisition targets, reasons for an acquisition, projected firm sale prices, and reasons for a firm sale are also included. With the 2014 Merger & Acquisition Survey, not only will you see where your firm stands in every area of the merger and acquisition process, you’ll get the information you need to start planning for your firm’s future.

For more information or to buy a copy, call 800-466-6275 or log on to www.zweigwhite.com/p-2189-Merger_Acquisition_Survey_2014.

STATE DOT MARKET BOOK: The 2014-2017 State DOT Market for A/E/P & Environmental Consulting Firms is the indispensable resource for getting your share of the billions of dollars available in the U.S. highway and bridge market for engineers, environmental consultants, landscape architects, architects, and planners.

Get the most up-to-date data as well as a state-by-state analysis of the market with each state department of transportation. This 400-plus page report is based on DOT budget and project statistics, DOT documents, government data, plus scores of in-depth interviews with DOT decision-makers.

The 2014-2017 State DOT Market provides you with hundreds of pages containing profiles of each state department of transportation. Each state DOT profile provides you with contract awards data, requirements for doing business, upcoming project information, forecasts, and more.

This is the fifth edition of the definitive report on the state DOT market, featured in publications such as Civil Engineering, CE News, and Engineering News-Record. You couldn’t reproduce this research for 50 times the cost of the report. Save time and money on “do-it-yourself” or custom research and join the hundreds of AEC firms that have used this report to gain an increasing share of the state DOT market. Don’t be left behind.

For more information or to buy a copy, call 800-466-6275 or log on to www.zweigwhite.com/p-2184-the_2014_2017_state_dot_market_for_a_e_p_environmental_consulting_firms.

FUTURE OWNERS, from page 3

says that over the past few years, Arcturis has examined alternatives for principal’s compensation.

“We’ve kept base salaries lower, but have promised higher bonus percentages based on year-end results,” she says. “We’ve tried to maintain or improve overall benefits, de-spite the industry downswings for health-care coverage, and allow maximum job flex-ibility in terms of work hours and location, and bonus company stock.”

Ultimately, to ensure they are remaining competitive, Arcturis works to keep apprised of its peer firm’s principal compensation through industry networks and resources.

‘You’ is ‘we’. Rene Kaerskov, co-CEO, Hirsch Bedner As-sociates (Los Angeles, CA), a 1,312-person hospitality de-sign firm, believes that principals should share in their own profit without any ceiling on the possible bonus amount.

“Have them open their books, show them how much money they are making (or losing) and then let them share in it,” he says. “This way the ‘you’ becomes the ‘we.’ Without this un-derstanding in place, they cannot become and learn to act like future owners.”

Consult, compare and contrast. Woodard & Cur-ran’s McKeown says that they do two things to make sure they are in step with pay:

1) “We use an outside consultant every couple of years to check our compensation against industry averages for a full range of compensation and total rewards (benefits, perks, etc.). These consultants also work with us to initially set up salary bands and ranges for each position along with geographic adjust-ments,” he says.

2) “We have a more specific survey that we run for higher level positions, which is coordinated with about 15-20 firms in our space,” McKeown says. “We have worked with colleagues at these firms to agree to participate in exchange for sharing the same data. It tends to be more relevant to our size, business types and geographies.”

Rene Kaerskov, co-CEO, Hirsch Bedner Associates.


5

T R E N D S

See TECH, page 8

And some, or many, of them could end up affecting the way you do business.


Technology can be a powerful tool, but keeping up with all the chang-

es can be overwhelming. Here, we have compiled some data based on top re-search firm analyses.

“We have identified the top 10 tech-nologies that companies should factor into their strategic planning process-es,” David Cearley, vice president and Gartner Fellow at Gartner, Inc. said in a press release. “This does not necessar-ily mean adoption and investment in all of the listed technologies, but com-panies should look to make deliberate decisions about them during the next two years.”

Here are Gartner’s top 10:

1) Mobile device diversity and man-agement: Through 2018, the growing variety of devices, computing styles, user contexts and interaction para-digms will make “everything every-where” strategies unachievable. En-terprise policies on employee-owned hardware usage need to be thoroughly reviewed and, where necessary, up-dated and extended.

2) Mobile apps and applications: Through 2014, improved JavaScript performance will begin to push HTML5 and the browser as a main-stream enterprise application develop-ment environment. Developers should focus on creating expanded user inter-face models, including richer voice and video that can connect people in new and different ways. They should also seek ways to snap together apps to create larger applications. For the next few years, no one tool will be optimal for all types of mobile application, so expect to employ several.

3) The Internet of everything. The Internet is expanding beyond PCs and mobile devices into enterprise assets such as field equipment, and

consumer items. Imagine digitizing your most important products, ser-vices and assets.

4) Hybrid cloud and IT as service broker. Bringing together personal clouds and external private cloud ser-vices is imperative. Enterprises should design private cloud services with a hybrid future in mind and make sure future integration/interoperability is possible.

5) Cloud/client architecture. Cloud/client computing models are shifting. In the cloud/client archi-tecture, the client is a rich application running on an Internet-connected device, and the server is a set of ap-plication services hosted in an increas-ingly elastically scalable cloud comput-ing platform. The cloud is the control point and system or record and ap-plications can span multiple client de-vices. The client environment may be a native application or browser-based; the increasing power of the browser is available to many client devices, mo-bile and desktop alike.

6) The personal cloud era. This will mark a power shift away from devices toward services. In this new world, the specifics of devices will become less important for the organization to wor-ry about, although devices will still be necessary. Users will use a collection of devices, with the PC remaining one of many options, but no one device will be the primary hub. The personal cloud will take on that role. Access to the cloud and the content stored or shared from the cloud will be managed and secured, rather than solely focus-ing on the device itself.

7) Software-defined anything. Software-defined anything (SDx) is a collective term that encapsulates the growing market momentum for improved standards for infrastructure programmability and data center in-teroperability driven by automation inherent to cloud computing, DevOps and fast infrastructure provisioning. As a collective, SDx also incorporates various initiatives like OpenStack, OpenFlow, the Open Compute Project and Open Rack. As individual SDx technology silos evolve and con-sortiums arise, look for emerging standards and bridging capabilities to

benefit portfolios, but challenge indi-vidual technology suppliers to dem-onstrate their commitment to true interoperability standards within their specific domains.

8) Web-scale IT. Web-scale IT is a pat-tern of global-class computing that delivers the capabilities of large cloud service providers within an enterprise IT setting by rethinking positions across several dimensions. Web-scale IT looks to change the IT value chain in a systemic fashion. Data centers are designed with an industrial engineer-ing perspective that look for every opportunity to reduce cost and waste. This goes beyond redesigning facilities to be more energy efficient to also in-clude in-house design of key hardware components such as servers, storage and networks. Web-oriented architec-tures allows developers to build very flexible and resilient systems that re-cover from failure more quickly.

9) Smart machines. Through 2020, the smart machine era will blossom with a proliferation of contextually aware, intelligent personal assistants, smart advisors (such as IBM Watson), and more.

10) 3D Printing. Worldwide shipments of 3D printers are expected to grow 75 percent in 2014, followed by a near doubling of unit shipments in 2015. The market for devices ranging from $50,000 to $500 is young, but quickly growing.

Forrester, another top-rated research and analysis information technology company, released its top 10. They are:

1) Digital convergence erodes boundaries. Physical and digital worlds are converging. As a result, consumers expect uniform service whether they are in the physical or digital world. The convergence of the business and personal use of technol-ogy is also fueling this trend.

2) Digital experience delivery makes (or breaks) firms. A great digital experience is no longer a nice-to-have; it’s a make-or-break point for your business.

3) APIs become digital glue. Forrester draws a comparison between

Top tech trends for 2014



STEPHENLUCY

Innovating your business processes?Innovation is not as research intensive nor as expensive as you might think.

We are a risk averse industry and typically we are not early adopters of anything. However, we are also logical thinkers, and, thus, can assess risk and reward.

See STEVE LUCY, page 8

Innovation is the process of change to create a new process or product with the ultimate goal of

improvement. Innovation within the AEC industry is occurring daily. Some innovation comes in the form of usage of new products and equipment, but the type of innovation that can have the greatest impact on the operation of your firm and staff is innovation of your business processes.

Risk management assessment. No discussion on innovation gets very deep before the word “risk” enters the conversation. We are a risk averse industry and typical-ly we are not early adopters of anything. However, we are also logical thinkers, and, thus, can assess risk and reward.

The acknowledgement of risk and the allocation of rewards commensurate with those risks is becoming more prevalent in our industry. Design and construction teams have grown in size, but they have also become more collaborative in how they work and how they share information. It is difficult to take a “them versus us” approach if everyone is working in the same virtual space.

While the use of integrated design delivery is still not widely used, the goal is to utilize the collaborative working process for the benefit of all participants. Even when not under a contractual obligation to collaborate, our best projects are those in which the entire team – owner, contractor, architect and engineers – have worked to minimize everyone’s risk and maximize everyone’s rewards.

Technology pays off. Technology is the “glitzy” side of innovation. Everyone loves a new gadget, but do not discount its important role in improving your business processes. With the incredible volume of hardware and software options available, it is surprising how reluctant some firms are to evaluate and adopt new technology. It requires investment of capital and resources, but I have yet to see a study that has found that these forms of investment do not pay off.

If you have not yet started, here are some quick technology innovations that will enhance your processes:

z Hardware procurement. Stop buying your computers and lease. With the rapid pace of changes in computing needs, whatever you are buying today will be obsolete in the not too distant future. So why would you want to own it? Just like a car, the value plummets as soon as you “drive it off the lot.”

z BIM is here to stay and FIM is on its way. Building Information Modeling has been around for many years. Yet, it is shocking how many firms are not using this technology and how many think it is just for three-dimension-al drawing. It is also surprising that many large national and international firms are only now beginning to adopt BIM. If not for yourself, do it for your client. BIM is not going away. And get ready for Facility Information Manage-ment (FIM), as that is the ultimate use of BIM desired by your client.

z Tablets and apps. Contractors are rapidly adopting this technology as they clearly un-derstand the benefits afforded when their staff can work remotely and seamlessly with the office. Architects and engineers can also reap benefits from using tablets. Many applica-tions, which are specific to the AEC industry or those that can readily be adapted for our use, can be obtained free or for minimal expense. We have deployed tablets to all our teams. The cost of readily available applications that allow full functionality for our remote staff is less than $50 per tablet.

z Youth has its benefits. Admit that you and your senior management are probably not the most techno-savvy staff in the firm. Engage your young staff to do what they do best and let them evaluate the possibilities and make recommendations. Not only will your results be better, but you will also get their buy-in to the firm processes.


7

Jeremy Clarke

Better reference checksAn antiquated practice that can use some fine-tuning.

Reference-checking, as it stands in most firms today, is an antiquated mindless transaction that yields very little credible, or even valid results.

Reference-checking offers very little valid insight into predicting the future success of a prospective

employee. In most cases (especially in larger firms), reference checks are not even being conducted by the hiring manager, but rather by admins or coordinators with little (if any) subject matter expertise. What’s more, reference checks are typically done using generic questionnaires supplied by HR people! The end result is unqualified people asking questions such as, “Tell me about so-and-so’s strengths.” Or, “Rate so-and-so’s work ethic on a scale of one to 10.” What? Last, but certainly not least, most references supplied by candidates have been carefully selected for their predisposition to provide positive feedback and remarks.

Let’s be honest: This is just “going through the motions” in order to appease our conscience before extending a job offer. That’s why I say that reference-checking, as it stands in most firms today, is an antiquated mindless transaction that yields very little credible, or even valid results. Nonetheless, most firms still conduct reference checks formally or informally, so I suppose there’s room for suggesting a more effective reference-checking approach.

First, let’s catalog some of the reasons why reference reference-checking may be ineffective or misleading.

z As mentioned above, candidates often prep their references to provide positive feedback or say just the right things.

z Oftentimes, a predisposition to “get the job filled” may com-pel reference checkers to “lead” a reference to provide positive remarks based on the method and language they use when asking a question.

z Peers, rather than supervisors or managers, are given as refer-ences. As a result, very little information is gleaned regarding the candidate’s actual past performance.

z Related to the point above, rarely are really critical questions posed to references. An example: “Can you give me a sum-mary of their last performance appraisal?” Or, “How effective were they at diffusing conflict, and can you cite a specific example?”

z There are no clear criteria determining a “pass” or “fail” grade on a reference check. Interpreting the results is therefore subjective.

Many more errors could be listed in addition to these. If I haven’t convinced you to stop the antiquated practice of reference-checking yet, then please consider these four suggestions to improving your process:

1) Get the right people involved. The man-ager doing the hiring should contact the refer-ences. Why would you entrust this evaluation to an HR person with little or no subject matter expertise?

2) Get rid of generic questionnaires! Ref-erence-checking is not all that different from interviewing, so ask the appointed reference about the candidate’s past performance in rela-tion to the key objectives for the job. Example: “Sally will need to be able to incrementally grow revenue for this sector over the next 12 months. Have you observed Sally’s perfor-mance in this regard in a previous capacity? What were the results?”

3) Get supervisor/manager references. If the candidate hasn’t supplied you with the names/contact information of former super-visors/managers, then in reality they’ve only provided personal references. You need to get feedback from those who were actually en-trusted with supervising your candidate.

4) Measure your results. When was the last time you looked at the correlation between ref-erence checks and an employee’s performance reviews? If you’re seeing consistently poor performance from your hires, it may be time to reevaluate your approach to reference-checking.

See JEREMY CLARKE, page 12



TECH, from page 1

STEPHEN LUCY, from page 6

service-oriented architecture (SOA) and application platform interfaces (APIs). Like the former, the latter provides open access to useful functionality through network-based services using technologies that are readily accessible from a broad range of programming environments.

4) The business takes ownership of process and intel-ligence. IT is losing its control over business intelligence platforms, tools, and applications. As mobility increasingly becomes a strategic imperative of the entire business, greater levels of process and data innovation should arise.

5) Firms shed yesterday’s data limitations. Firms that embrace big data concepts, open data, and adopt new adap-tive intelligence approaches are creating next generation smart systems that overcome limitations and create disrup-tive business innovations. Cheaper, more agile, collaborative, and adaptive methods for analytics and data sharing are key. It is also important to design predictive apps able to sense their environment and respond in real-time, anticipate user action, and meet users in their moment of need.

6) Sensors and devices draw ecosystems together. The Internet-of-Things will move from hype to reality and wear-able computing will go from niche to broader use. This will turn the traditional “spray-and-pray promotional campaigns” into marketing to ecosystems that emerge because of these changes.

7) “Trust” and “identity” get a rethink. Trust has been irreparably harmed as it’s impossible to identify “trusted” interfaces. Consumerization of IT means that a greater num-ber of IT devices and apps are being used in the workplace, especially by the digital natives. IT needs to catch up.

8) Infrastructure takes on engagement. There are a num-ber of changes that will change infrastructure from barrier to progress to “enabler of business demand for engagement.” Leading companies are changing silo-unified communica-tions and collaboration, mobile device management, and desktop computing to more efficiently deliver and foster employee engagement and innovation.

9) Firms learn from the cloud and mobile. Many firms have cloud strategies and mobile strategies, but the benefits of the cloud will be limited by the speed with which tradition-al applications are re-written to take advantage of the cloud. Without this redesign, benefits will be limited. Additionally, mobile strategies that have been a part of IT strategies across industries for a couple of years are now insufficient, given the need to think of mobile as only one part of a broader Omni-channel approach.

10) IT becomes an agile service broker (or fades away). Today’s leading IT organizations are moving from aligned IT to empowered business technology practices. Examples include:

z Becoming technology service broker

z Modifying the software development lifecycle, architecture, and solutions development to deliver mobile, cloud, and big data solutions more readily

z Changing portfolio management to focus on products rath-er than projects; projects are more narrow in focus, leading to more narrow value

z Replacing the success metrics to gauge project manage-ment from time, cost, and resources to value, capacity, and time-to-market metrics.

Hesitant to change firm processes? The area of your operation that has the greatest impact on your prof-itability is firm management. Yet, this is probably the one area that receives the least amount of review and evalua-tion. We know it is not working or at least is not giving us the results we want, but we are hesitant to change.

An easy way to start is to identify those firms that you see as successful and ascertain how those firms are managed. Remember that innovation means change, so you don’t have to be the creator of a new process in order to implement change within your own firm. Ask your peers for input as many will provide information. Personally, I compare notes with three or four owners of peer firms on topics ranging from project management to accounts receivable and human resources. Our biggest expense is our staff, so why would we not want to be innovative in all processes related to staff and firm management?

Engage in higher education and recruitment. The lack of availability of quality staff is an area of indus-try concern. The development of current and future gradu-ates will require significant changes in our approach to edu-cation if we are to have any hope of maintaining our global position.

The AEC industry can be a significant partner with

academia to make this a reality. For example,Texas A&M University is just one year into its 25 By 25 initiative, which has a goal to have 25,000 engineering students within the Dwight Look College of Engineering by 2025 while continuing to raise the national rankings of the college. This is more than a 100 percent increase in enrollment in just 13 years.

In addition to recruitment of traditional faculty, Texas A&M plans to have up to one-third of the faculty consist of professors of practice who are industry professionals with technical expertise and who desire to participate in the preparation of the next generation of engineers.

It is up to us to shape our future industry leaders.

Keep innovating! Innovation is an ongoing process of evaluation and change and must be implemented in all ar-eas of your company. Not only will your firm be more suc-cessful, but you will be able to differentiate yourself from your peers. While innovation may seem confusing or risky when you realize how many options there are to improve your business processes, take the plunge. You will soon discover the productivity, profitability and improvements gained from doing so, and the respect generated from your team and your clients by being an industry innovator.

STEPHEN LUCY is managing principal at JQ in Dallas. Contact him at [email protected].

Staff development is certainly not taking a back seat at these three companies.


Firms seem to have some excit-ing plans for their staff in the days

ahead.

Getting schooled at work. Pam Gower, director of human resourc-es, Pond & Company (Norcross, GA), a 238-person architecture, engineer-ing and planning firm, says that among existing development-related resourc-es and benefits, it offers tuition reim-bursement, pays costs related to certi-fications, provides lunch ‘n learns, of-fers formal in-house training and spon-sors individuals to attend many out-of-house training efforts throughout each year.

This year, the firm has launched a sec-ond wave of formal training titled “Pond University.” In this new effort, it took leadership level training spanning both soft and hard skills to an identi-fied study body of existing and emerg-ing leaders.

“Modeled after an executive series of training last year, we felt it was logical to move to the next emerging level of development,” Gower says. “We plan to continue to develop and expand this ‘university’ program to encompass the entire firm.”

The vision is to have a defined curric-ulum and annual learning agenda that meets the needs of each level of au-thority and rank and provides a broad understanding of both universal and

Pond-specific concepts related to successful business management and leadership.

“Recognizing the accel-erated growth of the human capital in the firm and boasting our exceptionally-talented professionals, several years ago we put a fo-cus on each year’s busi-

ness plan that is specific to learning and development,” Gower says. “Each year, we’ve launched new programs that fall within this organizational de-velopment area. By far, this is the most expansive and exciting formal program we have brought to our professionals.”

At TerraTherm (Gardner, MA), a 65-person firm specializing in the de-velopment and implementation of in situ thermal remediation of organ-ic contaminants in subsurface source zones, Michelle Johnson, director of administration and human resourc-es, says that it has also been running a “university” series for the past couple of years.

TerraTherm University, known as TTU, runs once a month during lunch hour. They bring in sandwiches or pizza for those at their Gardner office and then run it through Go-To-Meeting for those people located at remote offices or at project sites throughout the U.S. and overseas.

“We are very fortunate to have a large number of experts working for us and everyone is willing to share their indi-vidual knowledge,” Johnson says. “Top-ics for these trainings include our ther-mal technologies, informational ses-sions on various in-house and on-site

programs and procedures, electricity 101, safety topics, and even finance for dummies coming up in February.”

TerraTherm has also partnered with a local college that was able to secure a training grant through the Common-wealth of Massachusetts. This 10-ses-sion series includes topics such as: Suc-cessful Project Management, Managing and Achieving Organizational Goals, Keeping Customers for Life, and Man-aging through Changing Times. Again, this is offered to all employees and is a hybrid of in-house and online sessions so everyone, everywhere can attend.

Additionally, a tuition reimbursement program is in the works.

Laman Snyder, direc-tor of human resourc-es at Kitchell (Phoe-nix, AZ), a 573-person AEC firm, says that two years ago, it started an internal leadership de-velopment program to facilitate the growth of emerging leaders.

“We begin our third class this spring,” Sny-der says. “So far, more

than 60 people and 10 percent of our employees have gone through this training. The program is a two-year,

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DEVELOPMENT

Pam Gower, Director of HR, Pond & Company.

Laman Snyder, Director of HR, Kitchell.

See LEARNING, page 10

“We are very fortunate to have a large number of experts working for us and everyone is willing to share their individual knowledge.”

Learning never stops here

Source: 2013 Policies, Procedures & Benefits Survey, ZweigWhite: www.zweigwhite.com/p-2150-policies-procedures-benefits-survey-2013

Firms that offer tuition or fee reimbursement typically pay a percentage of the cost per course (37 percent) or up to a certain dollar limit per year (30 percent). Eleven percent pay the full cost.



ON THE MOVEHILLIS-CARNES HIRES: Hillis-Carnes Engineering Associates, Inc. (Annapolis Junction, MD), an engineering consulting firm, has announced the newest addition to their family, Danielle Pendlebury, in the role of marketing coordinator.

Pendlebury is a recent college graduate from St. Bonaventure University in St. Bonaventure, N.Y., where she received her master’s degree in Integrated Marketing Communications.

“I once heard the saying, ‘A journey of a thousand miles must begin with a single step’,” Pendlebury said, “Sometimes we forget that life is one big journey; one adventure, one opportunity, one step after another. However, it’s when we decide to take that first step that triggers the endless possibilities ahead. The name of the college I recently graduated from, ‘Bonaventure,’ actually signifies and stands for, ‘The Good Journey,’ and that it has! I could not be more excited to be working for such an incredible engineering firm like Hillis-Carnes, and I’m eager to apply the knowledge I’ve learned throughout the past six years of my college career and bring a fresh new vibe to the company.”

SSE PROMOTES: Sam Schwartz Engineering (New York, NY), a 130-person interdisciplinary transportation engineering and planning firm, announced a series of promotions.

John McCormack has been promoted to vice president. He previously served as director of traffic in the New Jersey office.

Jolene Yeats has been promoted to deputy director of the Traffic Engineering department in New York. She will assist Jeff Smithline, director of traffic engineering, with managing the traffic engineering staff and projects.

Laura MacNeil has been promoted to senior planner I. MacNeil is the director of the award-winning Second Avenue Subway Community Information Center.

Ileanna Pappas has been promoted to co-general manager of pedestrian traffic management, and she is based in the New York office.

Robert Nadramia has been promoted to project manager. Nadramia works in the Traffic Engineering department in the New York office.

ARUP HIRES: Arup (London, UK), a multidisciplinary engineering and consulting firm, announced that Sanjeev Malhotra has joined the New York office as an associate principal and geotechnical practice leader.

With 22 years of wide ranging experience in the geotechnical design and construction of infrastructure projects located in the United

States, Australia, the Middle East and Asia, Malhotra provides consulting services in foundation and tunnel engineering, soil-structure interaction problems, earthworks, slope stability, landslide mitigation, and seismic studies in a variety of geologic conditions.

A professional engineer in the states of California, New York, Washington, Oregon and North Carolina, Malhotra has served on many notable projects, including: the Eastern Toll Corridor in Southern California, the Cooper River Bridge in South Carolina, JFK International Airport in New York, LAX Expansion in Los Angeles, the East Side Access and the Access to the Region’s Core in New York and the Honolulu High Capacity Transit Corridor in Hawaii.

“Sanjeev will focus on the continued growth and development of our geotechnical practice in the New York region,” said Gillian Blake, principal and leader of the infrastructure practice team in Arup’s New York office. “We look forward to having his experience and expertise at Arup.”

PENNONI HIRES: Pennoni Associates (Philadelphia, PA), an engineering, design, and consulting firm, announced the following hires to further solidify the firm’s energy capabilities:

Edward Patton has joined the firm as energy division manager and will work out of the firm’s Pittsburgh office.

Michael Cromer has joined the firm as a senior geologist and will work out of the firm’s West Chester office.

Pennoni has expertise in renewable energy as well as energy efficiency analysis and design, and can evaluate the economic and operational impacts of these technologies on a client’s facility.

“We are excited to expand our energy team with these new additions,” said Joe Viscuso, senior vice president for strategic growth. “The energy sector is wide-ranging and changing rapidly. The addition of both Ed and Mike will allow Pennoni to keep our clients informed of the emerging technologies that will benefit their operations. Ed’s knowledge and expertise in the industry will allow him to immediately step in and expand our initiatives while Mike’s attention to client service and detail make him an excellent choice to join our firm.”

Before joining Pennoni, Patton worked as the director of capital projects for Riverlife in Pittsburgh. He is a licensed professional engineer and a LEED accredited professional.

Cromer previously served as senior vice president of Dynamic Energy in Wayne, Pa. He is a professional geologist in Pennsylvania and Delaware and his specialties include site remediation, solid waste, land development, and distributed generation (solar and CHP).

LEARNING, from page 9

10-module, highly interactive program.

Kitchell will also continue with its senior leadership program into a second year – a development program designed for the executive level.

The firm also has a new talent management initiative that will identify key performers and analyze development needs for growth and succession planning.

“We are expanding our support for professional certifica-

tions and introducing even more in-house development and training programs, largely as a result of training grants we received in both Arizona and California,” Snyder says. “These funds will serve to enhance our people development pro-grams, designed to educate and grow our workforce.”

Finally, Kitchell has a state-of-the-art facility for live audi-ence and remote connectivity for in-house training. In addi-tion, the company opened another facility for computer and technical training and has purchased a portable system with 12 laptops for technical training in the field.

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P R O F I L E

Trey Munday thinks strategy and looks at the overall picture. Plus, he’s gutsy.

By LIISA SULLIVAN Correspondent

Trey Munday, CFO/COO, Great Ecology (New York, NY), a 27-person integrated science and design firm, has

worked in the investment and commercial banking industry for more than 15 years, most recently as a business lender to small and mid-market size companies. About seven years ago, he started to moonlight as an operational accounting consultant to small businesses and saw the need for CFO/controller services for many small businesses.

In 2010, he left his banking job to start a consulting business and provided outsourced CFO services to local small busi-nesses. This is what led to his current job at Great Ecology.

“I met Dr. Mark Laska, Great Ecology’s president and CEO, and was initially hired as an outsourced CFO in 2011 shortly after Dr. Laska opened the San Diego office,” Munday says. “In 2012, I joined Great Ecology full-time as both the CFO and COO.”

Munday is currently tasked with handling all elements of fi-nance and accounting, as well as back-office operations for the company.

CFO takes on challenges with aplomb

THE ZWEIG LETTER: What major accomplishment are you most proud of since you have been CFO?

Trey Munday: Our business model is essentially to sell really smart people’s time; it’s pretty straightforward. However, the company had been using a time-tracking system that was not built for the complicated project management that our company performs. The system was both bad on the front end, and the reporting end was horrendous. I spearheaded the project to move to a much more comprehensive time and resource-tracking system with very robust reporting features. The cost accounting system upgrade provided Great Ecology with a more efficient and accurate time accounting process and detailed insight into project profitability.

TZL: What are your key strengths? What do you feel the key strengths are for an effective CFO?

TM: I have the ability to think very high level and strategically. Overall, it’s important to be able see all the pieces and understand how they fit together in order to move an organization forward. I also have an appetite for risk. It’s important for the CFO to not be risk adverse, but to be able to mitigate risk. You cannot grow, either personally or organizationally, without taking risks.

TZL: How would you describe your work style?

TM: I love to experiment and I embrace change. Thankfully, I work with an incredibly bright team, who does not mind my experimentations and tinkering.

TZL: What are your top priorities for 2014?

TM: I am focused on processes that support further scalability for our organization. We are building internal communication systems and will potentially look at an ERP (enterprise resource planning) by the end of the year to integrate various isolated databases.

TZL: What has been your greatest on-the-job-challenge while at Great Ecology?

TM: Growth can be a painful process. I have worked hard to create an organizational structure that is as productive and efficient as possible. I have made mistakes along the way, and had to humbly request forgiveness and ask for help. When trying to build something that will last, being humble about one’s role can be very effective. 2013 was especially challenging for the firm. Since its founding in 2001, the firm has grown rapidly. At the start of 2013, Great Ecology’s annual revenues were estimated to reach $5 million, continuing the firm’s remarkable growth. However, in January, the firm experienced a dramatic and unforeseen drop in revenue as the largest client paused all consulting work to redevelop their strategy. The firm lost approximately $200,000 a month – 40 percent of its annual revenue. In the face of this severe revenue loss, we developed a strategy to accelerate client base diversification. As a result of our incredible

team and hard work, we replaced the lost revenue and experienced a positive growth rate, which once seemed impossible, and surpassed 2012 annual revenue. It was a challenging and stressful period because we were dedicated to keeping our staff despite the halt in revenue.

TZL: What is your favorite part of your job?

TM: I love every part of it, but most of all, I really like our team. We have a great team of people.

TZL: What do you enjoy in your spare time?

TM: I have three little boys and a gorgeous wife. The little spare time that I have is spent with them. I surf with my oldest, and play soccer and baseball with him. I coach my middle son’s soccer team, and love to go sailing with him. My youngest is only two, and is already a sports fanatic. My wife and I love to ski together and we all love to go on local hikes.

A CONVERSATION WITH TREY MUNDAY

“I have the ability to think very high level and strategically. Overall, it’s important to be able see all the pieces and understand how they fit together in order to move an organization forward.”

Trey Munday, CFO/COO, Great Ecology.

See TREY MUNDAY, page 12



TRANSACTIONSPENNONI BUYS: Pennoni Associates (Philadelphia, PA), a 950-person engineering, design, and consulting firm, acquired the assets of 40-person firm B.D. Abel Inc., of Wilmington, Del. The firm, which is one of the only engineering firms in the tri-state area to offer NEBB certified HVAC testing and balancing services, will now do business as B.D. Abel, a Pennoni Company.

“Perhaps just as important as the capabilities that the team at B.D. Abel will bring to Pennoni is the cultural match that exists between our two firms,” said David DeLizza, Pennoni’s COO. “Their motto of ‘Focus on Results’ is a mantra shared here at Pennoni, making sure that above all we are focused on the needs of our clients and providing creative, cost-effective solutions on-time and within budget.”

Founded in 1975, B.D. Abel has a strong reputation for providing engineering for laboratory and research facilities, clean room design, chiller/boiler plants, variable temperature/variable humidity environments, process and manufacturing, and electrical power design as well as standard mechanical, HVAC, and lighting design.

Adding to the unique offerings of the firm, B.D. Abel is certified by the National Environmental Balancing Bureau (NEBB) for testing, adjusting and balancing of air and hydronic systems. B.D. Abel is also certified by NEBB in building systems commissioning for HVAC and plumbing. B.D. Abel’s capabilities in testing and balancing will be an additional service for Pennoni and will be value-added to the firm’s existing client base, as well as opening new and exciting opportunities with potential clients.

B.D. Abel’s president, Robert Hayden, will now serve as associate vice president at Pennoni. The addition of B.D. Abel further strengthens Pennoni’s MEP engineering capabilities and provides an expanded client base for all Pennoni services.

“Pennoni’s commitment to superior client service aligned with our approach of targeting long-term relationships with our clients,” Hayden said. “We enjoy having to prove our value over and over again and Pennoni has been doing that longer than we have. We look forward to bringing our combined services to trusted existing clients, as well as new ones.”

TREY MUNDAY, from page 11

TZL: How many offices does Great Ecology have?

TM: Four: New York City, San Diego, Denver, and Sacramento; we also have one home-office employee in Kentucky.

Sarah Stevens, marketing manager at Great Ecology, says that Munday is not one to toot his own horn. She says that, “Trey has been instrumental in the firm’s growth, managing cash flow and high overhead costs during a period of dramat-ic growth and the above revenue loss. Working closely with the executive staff, he provides expert advice and strategy for the firm’s long-term strategic plan.”

Additionally, Munday’s expertise extends beyond just ac-

counting matters. He is a highly-respected team member. Despite the firm’s four distinct geographic locations and time zones, Munday travels regularly to each office to main-tain and develop staff relationships, particularly taking the time to get to know each team member on a professional and personal level. He is dedicated to building strong employee relationships, maintaining a high employee satisfaction, and a positive work environment.

“For example, as an avid surfer, he holds monthly ‘board meetings’ with the staff,” Stevens says. “As a result, he plays a crucial role in nurturing the strong collaborative and in-novative spirit that is essential to the firm’s success. Trans-parency is important too. He makes sure that each employ-ee knows the firm’s defined and documented quarterly and year-end goals.”

JACOBS ASSOCIATES OPENS OFFICE: Jacobs Associates (San Francisco, CA), a 150-person tunnel engineering firm, recently expanded its Midwest operations by opening an office in St. Louis, Mo. The new office will allow the firm to provide services more efficiently to our clients in the Central U.S.

This office is Jacobs Associates’ second Midwest office; the other is located in Cleveland, Ohio. However, the firm is not new to the area. It has been active in the region since the 1970s, and over the past two years has worked on Metropolitan St. Louis Sewer District’s Combined Sewer Overflows Program.

The office will be headed up by Senior Associate Wayne Lindsay, who joined Jacobs Associates in December 2013. Lindsay has been in the consulting industry for over 25 years, with a focus on water and wastewater infrastructure projects. He is a marketing expert in program and construction management, alternative delivery, and planning and design of large multiyear programs.

The St. Louis office will give us a sustained local presence and allow more clients immediate access to our company-wide pool of experts in engineering design, construction management, and claims/dispute resolution.

FIRMS ON THE MOVE

Let me offer one more word of caution – and this one is just a simple expression of respect for individuals: Some firms will check references (formally or informally) without first gaining consent from their candidate. That’s a bad practice. Sometimes references are listed on a candidates’ résumé (I agree… not a good practice), or other documentation, and that’s viewed as a license to begin making phone calls. Resist the urge. It’s always better to check with the candidate before conducting reference checks. Furthermore, some candidates may not be actively in a job search and are entrusting you to be good stewards of their confidential candidacy!

Reference-checking in most cases is just flat out ineffective. If you want to do a better job at hiring world-class talent, learn to conduct a world-class interview. Nonetheless, I’m a realist, and I realize that the likelihood that firms’ will opt not to do them is slim. Therefore, maximize your accuracy by getting the right people involved, getting the right questions asked, targeting the right references, and measuring results.

JEREMY CLARKE, from page 7

Documents

Setting goals TRENDLINES - The Zweig LetterLEED CERTIFIED: The U.S. Green Building Council announced the 50,000th LEED-certified green housing unit. “As one of the most rigorous