Conference call: Mike Cooper
Managing principal and president of HED, Inc. (Hot Firm #34 for 2017), a 350-person design firm with offices in Illinois, Michigan, and California.
By Liisa Andreassen
“Small changes often lead to significant results,” says Cooper, who believes in empowering the team and then letting them run.
A CONVERSATION WITH MIKE COOPER.
The Zweig Letter: Diversifying the portfolio is never a bad thing. What are the most recent steps you’ve taken to broaden your revenue streams?
Mike Cooper: We remain committed to leveraging all of our skills and capabilities across all office locations. This also serves to broaden our revenue stream – in the areas where we are strong as an organization. So, for example, if one of our offices has deep expertise in the research lab design, we want to make sure that all of the firm’s clients, across the nation, have access to that expertise. By using available technologies and with a willingness to travel between office locations, we’re able to effectively do this.
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?
MC: The key to project management success often lies in the team dynamic. Project teams should be more than the sum of their parts. When we set up teams that have the necessary leadership and technical capabilities, then the individual team members take on an appropriate level of project responsibility and then lean on their teammates for support. Project managers are a vital part of our project teams and they need the support of their team (and the organization). They should not have to take on more than they can reasonably handle.
TZL: What is the role of entrepreneurship in your firm?
MC: Entrepreneurship exists on many levels at our firm. Our core focus is on project teams, as the primary means of delivering value and design solutions to our clients. These teams are empowered to plan their projects, strategize the delivery, and do what it takes to get the job done. Our market leaders, technical leaders and corporate leaders provide support to those teams. Our commitment to lean operations drives all staff to continually look for ways to improve our processes, analyze the proposed changes, and then assist us with implementation. Nothing we do is off the table. Small changes often yield significant results.
TZL: In the next couple of years, what A/E segments will heat up, and which ones will cool down?
MC: I believe our core markets – healthcare, science and technology, corporate and commercial, and education – will all remain strong in the near term. The trend toward urbanism and more dense/walkable communities will continue to drive revitalization projects. The political climate in Washington, D.C., and uncertainty in public project funding will continue to impact the public sector.
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?
MC: Control of our overhead costs, proper alignment of staff with workload, and related time management initiatives are all positive contributors to our operational efficiency. Higher efficiencies allow us to spend more time with clients and on projects, and less time on internally-focused tasks that do not bring value to our clients. This benefits all of our clients.
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?
MC: The first step is to attract the right people. Our interview process is designed to ensure that candidate skill sets align with need, and that candidates’ sensibilities are aligned with values and core principles. That sets up a long-term, mutually beneficial relationship. Beyond that there is no silver bullet. We actively discuss career objectives with staff, and then employ a combination of mentorship and professional development. We give project assignments that push them beyond their current capabilities. In turn, this creates that strong leadership pipeline that we need in an environment that motivates and helps to achieve career objectives.
TZL: As you look for talent, what position do you most need to fill in the coming year and why?
MC: There are a few areas. We’re seeking strong technical people, project managers, market leaders, and experienced business support personnel. As our workload increases, experienced technical professionals and project managers can be difficult to find, so we expect those positions to be among the most pressing.
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?
MC: Start now and begin to engage the next generation of owners. Involve them in leadership and develop a reasonable timeline for transition. This should be an ongoing process so that long-term, ownership transition becomes a natural process. Retirements and such should not create undue burden on the organization.
TZL: Monthly happy hours and dog friendly offices. What do today’s CEOs need to know about today’s workforce?
MC: Today’s workforce is committed to great design, and to working in productive, collaborative, flexible, and inspiring environments. They often make decisions on which firm to join, based in part, on the working environment. Our charge, as business leaders, is to provide workplace environments that foster great design, with flexibility that leverages technology and collaboration tools, so that our talented staff can do what they do best. Happy hours, pet-friendly offices, telecommuting, etc. are all tools at our disposal.
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?
MC: We’re also seeing more technical staff involvement in marketing/BD. This is not surprising. More and more of our prospective clients want to engage directly with those working on their project. They know, as we do, the importance of team chemistry. As we continue to initiate conversations with new clients, maintain strong relationships with current ones, communicate our value proposition to our communities, and respond to project opportunities, we need both our technical and marketing staff to ensure we’re properly attending to all the tasks at hand.
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?
MC: I agree that longer term marketing efforts can be difficult to assess in terms of ROI. We do place great value on our long-term client relationships, and maintain communications on an ongoing basis, not just when there are project opportunities in play. This allows us to continue to provide value to clients, and to keep abreast of current industry trends affecting them. At the same time, we track metrics (marketing dollars spent per dollar of net revenue, RFQ responses, RFP responses, short lists, wins, etc.), as a way to help us focus on opportunities that are most closely aligned with our strengths. We then direct marketing dollars where they will be most beneficial.
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?
MC: At present, we do not see a downturn on the horizon. That said, I would acknowledge that for every economist who predicts a strong economy for the foreseeable future, there’s another who predicts a downturn.
TZL: They say failure is a great teacher. What’s the biggest lesson you’ve had to learn the hard way?
MC: They say it can take years, sometimes decades, to build a strong relationship, based on trust and mutual respect, and only a single bad experience to tear that all down. Unfortunately, I know this to be true. On the flip side, I also know that all projects will experience bumps in the road. It’s how we address and resolve those issues that can help strengthen relationships. We don’t run from issues, we solve them and keep moving forward.
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?
MC: There’s nothing to be gained by growing for the sake of growth. We look to expand as a way to provide greater value to our clients and at the same time, greater value and benefit to our staff. Organic growth has proven to be an effective means to infuse existing offices with new talent and to strengthen those locations. Mergers have been effective when we’re looking to enter a new geographic market or sector. Merger partners with a presence, name recognition, and local relationships help us to more quickly reach our objectives in these circumstances.
TZL: Do you use historical performance data or metrics to establish project billable hours and how does the type of contract play into determining the project budget?
MC: We carefully examine each project’s unique requirements, opportunities and constraints to determine the hours needed to successfully complete the assignment. We maintain a database of historical project performance information that we use to identify similar projects, confirm the hours required to complete those projects, and validate our assessment of the current opportunity.
TZL: What’s your prediction for 2018?
MC: We’re optimistic and anticipate 2018 to be as good, if not better, than 2017.
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