Conference call: L. Andrew White
President and CEO of HRP Associates, Inc. (Hot Firm #76 for 2016), a 120-person engineering consulting firm based in Farmington, Connecticut.
“Big, bold, rapid changes are exciting and sometimes needed, but well planned, steady change can often be more effective and sustainable,” says White, referring to lessons learned.
A conversation with L. Andrew White.
The Zweig Letter: 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?
L. Andrew White: We’ve taken a few. We’ve hired a full-time recruiter to bring in top talent and developed an Emerging Leaders development group coached by an outside business consultant. We benchmark compensation with Zweig Group surveys on an annual basis and provide extreme flexibility (work at home, non-routine hours, etc.) We also hold employee meetings and do internal surveys to obtain feedback, and then act on that feedback.
TZL: As you look for talent, what position do you most need to fill in the coming year and why?
LAW: It’s difficult to select one position. I would argue another sales person, as the seller/doer model seems less successful as time goes on.
TZL: While plenty of firms have an ownership transition plan in place, many do not. What’s your advice for firms that have not taken steps to identify and empower the next generation of owners?
- Go to a well-chosen ownership transition seminar and get started now.
- Determine what you want your legacy to be and determine if you have the talent and interest in-house to maintain it.
- Plan two levels of leaders down.
- Conduct 360-degree reviews throughout the firm of the targeted potential owners, prioritize internal mentoring, and consider leadership coaching with outside perspectives.
- Don’t let their heads get too big too early.
- Evaluate all means to finance the transition.
- If the potential leadership ability and interest isn’t there, bring it in if you have time, or consider an outside sale, knowing you may have to stay involved for a period after the closing.
TZL: Monthly happy hours and dog friendly offices. What do today’s CEOs need to know about today’s workforce?
LAW: As a generality, today’s workforce prefers flexibility, minimized impact to their personal lives, appreciation, fun, a company that makes a positive impact on the world and is not all about profit, a place to go no matter what their talent distribution is, and accountability by management.
TZL: Zweig Group research shows there has been a shift in business development strategies. More and more, technical staff, not marketing staff, are responsible for BD. What’s the BD formula in your firm?
LAW: Apparently we are out of sync. We’ve been successful for 35 years with seller/doer, but it is very demanding for PMs to fill both ends of the spectrum, and as employees’ priorities seem to become more balanced towards increased time with family, the personal investment often needed for seller/doer success seems to be on the downslide. We have therefore become more receptive to a sales force complement.
TZL: Diversifying the portfolio is never a bad thing. What are the most recent steps you’ve taken to broaden your revenue streams?
LAW: We have always pursued diversification of private versus government, growing new arenas of technical services, and expanding geographic coverage. Opening up a Midwest office a couple of years ago helped support our growth immensely. And, moving into the oil and gas sector provided more depth to our private industry portfolio. We are developing more IT-focused services now to support existing service areas as well as new offerings.
TZL: The list of responsibilities for project managers is seemingly endless. How do you keep your PMs from burning out? And if they crash, how do you get them back out on the road, so to speak?
LAW: We recognize that with the huge breadth of responsibilities and the ever increasing difficulties and new challenges in our industry, not every situation will be handled perfectly. We request that PMs talk to us early if they anticipate problems, and if they do occur, we give them tremendous front line, visible support to help rectify the situation and learn from it, without engaging in a punitive atmosphere. We also hold many fun events (small and large) to blow off steam and provide a high level of concern for, and flexibility with, family situations. Simply, we care about our employees. We give bonuses twice a year and provide cars for regional office managers.
TZL: What is the role of entrepreneurship in your firm?
LAW: We have the attitude that any opportunity we are interested in is within our reach, and achievable, alone or with one or more partners. (Even if it really isn’t, we at least lay the groundwork for learning, expanding relationships, and being better prepared the next time.)
TZL: With overhead rates declining over the last five years and utilization rates slowly climbing back up to pre-recession levels, how do you deal with time management policies for your project teams? Is it different for different clients?
LAW: They do not vary by client, unless it’s a government contract that dictates how time is charged and when. We tell people to put all chargeable time on a project even if it is over budget and will be written off. Otherwise we don’t learn how to correct budgets. (Technology and multiple forms of instant communication have made the workforce more efficient, but has also led to very significant amounts of down time for all of us, due to personal distractions that affect job focus and production. We have not yet dealt with this issue.)
TZL: Measuring the effectiveness of marketing is difficult to do using hard metrics for ROI. How do you evaluate the success/failure of your firm’s marketing efforts when results could take months, or even years, to materialize? Do you track any metrics to guide your marketing plan?
LAW: All of these metrics are tracked by dollar amount and number of submittals, by month, year, and for the company at large: offices, regions, managers, and project type. Specifically, we track:
- Monthly proposals submitted
- Monthly proposals captured
- Monthly on call contracts submitted
- Monthly on call contracts awarded
- Job openings
- Marketing hours by staff
TZL: The last few years have been good for the A/E industry. Is there a downturn in the forecast, and if so, when and to what severity?
LAW: Zweig Group probably has more qualified predictions on that from their market research. I believe it will vary tremendously with client sector, technical service, and geography.
TZL: They say failure is a great teacher. What’s the biggest lesson you’ve had to learn the hard way?
LAW: Big, bold, rapid changes are exciting and sometimes needed, but well planned, steady change can often be more effective and sustainable.
TZL: While M&A is always an option, there’s something to be said about organic growth. What are your thoughts on why and how to grow a firm?
LAW: Organic growth is the best way to maintain your culture. It’s also often the best way to create opportunity and reward dedicated managers who want to move into ownership. It’s slower, but typically more stable. Organic growth with occasional small acquisitions to increase the growth rate without incurring tremendous amounts of debt is our preferred growth model.
TZL: What’s your prediction for 2018?
LAW: Best year ever – after a slow start.
Winners from Zweig Group’s Hot Firm and A/E Industry Awards Conference are highlighted in The Zweig Letter, in addition to being celebrated at the conference. Click here to learn more about Zweig Group’s awards.