Conference call: Mark Israel
President and CEO of Universal Engineering Sciences (Hot Firm #85 for 2016), a 715-person multi-discipline firm based in Orlando, Florida.
By Liisa Andreassen
“We make a distinction between marketing and sales,” Israel says. “We believe marketing is the process of putting yourself in position to make the sale, and that sales is the actual sale of business.”
A CONVERSATION WITH MARK ISRAEL.
The Zweig Letter: The A/E market is great right now. What are you doing to cushion your firm in the event of a downturn?
Mark Israel: Prior to the last downturn, due to several market forces (some good, some not so good) our workload was more heavily weighted to private work than we prefer. Just prior to the downturn, we started focusing on servicing major projects as well as design-build highway work. We have been very fortunate in both arenas in that we have won more than our share. We’re currently very busy in both private- and public-sector work which should help cushion against a downturn. Additionally, our balance sheet is better now than before the downturn and we feel we have better tools to more quickly identify a downturn.
TZL: Monthly happy hours and dog friendly offices. What do today’s CEOs need to know about today’s workforce?
MI: We’re always reading about ping-pong tables at work, happy hours, and ice cream parties. Other than holiday parties and the occasional barbecue or ballgame outing, we do very little of this. That said, several of our offices have won multiple best places to work awards. While today’s workforce may be different, we still believe in these four principles:
- Employees want to feel their work is valued
- People want to know there is room for advancement (certainly faster these days)
- People want to know their boss and company care about them
- People need a close friend at work
TZL: In the event of failure, how does your firm react?
MI: Our response to failure typically has been to dig our heels in and keep trying. Sometimes it feels like we’re banging our heads against the wall and the smart choice would be to accept defeat, but we don’t like that so we don’t do it.
TZL: The talent war in the A/E industry is here. What steps do you take to create the leadership pipeline needed to retain your top people and not lose them to other firms?
MI: The talent war is very real and salaries are skyrocketing. We try to identify young future leaders and put them through a management training program so we do have a pipeline when needed. We also try to keep open communication with our current employees to help identify their career goals and try to match them to their roles. The open communication also helps if they’re approached by other firms.
TZL: How do you deal with underperforming employees? What are your steps for removal after they have proven to be ineffective, or even counterproductive, to your firm?
MI: We’re probably too patient with underperforming or counter-productive employees. We’re never accused of not giving someone enough time to turn things around. Once we do make a decision, we very often try to find another role in the company where the employee can be more successful. That often doesn’t work, but we feel that we have given every effort to make things work.
TZL: Firms that have principals and firm owners that lower their compensation and invest back into the firm perform better, grow quicker, and have higher valuations. How do you balance owner compensation with investment in the firm?
MI: We only have one owner so the compensation issue is easy. We never hold back on investment in the firm due to lack of resources. We may be a little too conservative on our risk reward evaluation.
TZL: How does marketing contribute to your success rate? Are you content with your marketing efforts, or do you think you should increase/decrease marketing?
MI: We’ve made a renewed effort to expand and improve our marketing department. We make a distinction between marketing and sales. We believe marketing is the process of putting yourself in position to make the sale, and that sales is the actual sale of business. We have always been very focused on sales, we have 16 commissioned business development representatives. In the last two years we have upgraded our marketing efforts and we see real benefits. If anything, we would be looking to increase our marketing efforts.
TZL: If there was one program, course, or degree program that you could take or recommend before becoming a principal or owner, what would it be?
MI: Managerial/differential cost accounting.
TZL: What’s the greatest challenge presented by growth?
MI: Without a doubt, talent/labor shortages.
TZL: What is the role of entrepreneurship in your firm?
MI: We consider ourselves to be extremely entrepreneurial in every facet of our business. We’re constantly trying new avenues of business and new business practices. We refer to it as “intrepreneurialism,” where an employee can start a business unit within our structure that will benefit the company and create greater opportunities for the employee.
TZL: What’s your prediction for 2017 and for the next five years?
MI: Overall, we feel that 2017 through 2020 will be years of continued growth and profitability. We hope for the same after that, but for us it is too far to predict.
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