PSMJ Podcasts Presents

Profit optimizer, Brian Flynn, covers what business school never taught you--how to optimize a small business operation. Brian Flynn, P.E., BCEE, author of Maximizing Engineering Firm Profits—Profit Fundamentals, talks about making money when running a small engineering and architectural firm. In less than 20 minutes he presents the business fundamentals of SUM. He covers the basics about the SUM Concept—P=1- 1/(SUM), where profitability equals: •Salary to expense ratio •Utilization •Multiplier

Ryan Suydam invites your questions. Design firms understand that success depends on strong client relationships. A 2019 study commissioned by SMPS shows that 54 percent of A/E/C leaders believe they will be competing primarily on the basis of Client Experience (CX) by 2022. And yet, only 18 percent of firms have started exploring a CX initiative in their firm. The smartest firms are using CX to empower their strategic plans. Not sure how? Have other questions? Spend a half hour with Client Savvy’s Ryan Suydam, Chief Experience Officer and start to get some straightforward answer to your toughest CX questions.

Amid one of the most competitive job markets in history, A/E/C firm leadership are ready to consider any tool that may give them an advantage when it comes to recruitment, retention, and alignment of individual performance with firm performance. As the number of employee stock ownership plans (ESOP) has decreased, and the number of employees covered by them has increased, Bob Jack feels that with the right leadership, ESOP can lead to “a special employee ownership culture.” Author of Increasing Firm Competitive Advantage Through Use of an Employee Stock Ownership Plan (ESOP), Jack offers insight on how design firms can gain employee commitment, a takeover defense strategy, a plan for succession strategy, and a foundation for a good corporate culture. By attending this podcast, you will learn… -What is it like to go from publicly-traded to employee owned? - How well does worker enterprise and capitalism motivate employees? - Can you gain Millennial commitment through ESOPs? - Communicating the rewards of retirement distributions. We also talk with Jackie Shufelberger of Bartlett & West whose small firm is a successful mature ESOP. About the Presenter: Bob Jack career includes 24 years with global engineering and construction company Parsons Corporation in Pasadena, CA. Jack holds a BA in Economics from California State University at Los Angeles and earned an MBA from Azusa Pacific University and Masters of Science in Advanced Management from Claremont Graduate University’s Drucker School.

The most successful design firm leaders have one thing in common—they always look ahead. While they execute their plans for the current year, they look forward to the years to come: •How will they navigate through a potential economic downturn? •What impact will the 2020 elections have on their firms and the industry? •What investments should they be making? •What technologies should they be considering? Gene Marks, CPA and business owner, helps business leaders envision the future. He knows design firm leaders have people who rely on them—staff, clients, subcontractors, vendors, and partners—and expect them to grow and thrive in good markets and in more difficult times. Marks uses the most current information available and hard to come by data and shares the tactics, strategies, and ideas that firm leaders need to grow their businesses beyond 2020. By attending this podcast, you will learn... •Political candidates and their potential impact on healthcare, taxes, and the economy •Compensation and management trends and strategies you need to know •Tax and regulatory considerations in play in the decade ahead •Technologies coming in 10 years and decisions in this area needed now Handout: https://cdn2.hubspot.net/hubfs/279002/PODCAST%20Handout_Youre%20Living%20in%202019.%20Im%20Already%20in%202029_2020.pdf

The PSMJ 2020 participation season is open. Participate today (https://www.psmj.com/survey-participation). This year marks our 40th survey season. Only with your help can PSMJ share the most current, accurate, and valuable benchmarking data for the A/E/C industry. To give you a small taste of our comprehensive survey data, here’s PSMJ’s Dave Burstein addressing his recent compensation master class. Firms that benchmark enjoy greater and more sustainable success than their peers who do not measure and compare performance. And firms that participate in PSMJ surveys value hard data and are more likely to benchmark. Learn more today! Go to https://www.psmj.com/survey-participation

Forming a strategic alliance isn’t a walk in the park, but when it’s planned correctly and the parties commit the right level of leadership and resources, your architecture, engineering, or construction firm can win work that was previously out of reach. Here are 10 major benefits of forming a strategic alliance. A strategic alliance enables your firm to: 1. Gain new client base and add competitive skills. Seek an alliance partner with a strong specialty reputation to augment a firm’s skill set and create a force that offers the total package to your clients. Gaining new competitive skills without incurring the burden of recruiting, paying and caring for new staff is one of the two top alliance-model sellers. 2. Enter new business territories. Entering new geographic marketplaces with a partner who knows the ropes in a particular territory is the second top alliance-model seller because it can shave years off the geographic expansion learning curve. Seek an alliance partner with well-developed relationships and complimentary work experience in the territory you are targeting to create a force that offers a compelling total package to this new geographic marketplace. 3. Create different sources of additional income. Rather than duplicating resources or outsourcing to non-alliance partners, keep the work in the family by improving and expanding the resources already available within your own firm to service your partner. 4. Level industry ups and downs. Use your alliance partners to outsource work during rises in your or your partner’s marketplace economic cycle. Once your alliance is up and running and the new team has joint work experience under their belts, you can help each other out as the markets ebb and flow. 5. Build valuable intellectual capital. If you are trying to dig deeper, think harder. Be a more holistic client advocate, and ally with a complimentary or even a competitor firm to create the magic. 6. Affordable alternative to merger/acquisitions. The A/E/C industry is primarily a collection of small- to medium-sized firms. Leaders of these firms typically strive on independence and are more than likely reluctant to grow through the merger or acquisition of others. This model allows interdependence to occur where mergers and acquisitions is a dependent model, enabling leaders to have their cake and eat it, too. 7. Reduce risk. Keep doing what you do best. We were educated to understand that we can do “anything and everything.” The honest truth is—we cannot. But as a long-term team and collection of others with complimentary talents, we can come much closer to our ideal of doing anything and everything. 8. Leapfrog the competition. Reap the benefits of the hype surrounding “the federation.” A new alliance in the marketplace can become a formidable new force for competitors to fear. It will also fascinate clients. Create a solid value proposition for your new alliance from the start, building on it over time. 9. Gain new resources and improve existing resources. Provide your resource teams with in-depth training and mentoring without hiring trainers or consultants. 10. Create a different perception of each firm. For example, many observers may view your firm as a small firm that specializes in a narrow range of project types. By entering into a successful alliance with a well-established firm specializing in a broader range of project types, your firm will likely benefit from the reputation of the established firm, while creating a softer image for the well-established firm.

Emerging leaders not only need to understand technical skills, but also how the business works and the leadership skills they are going to need to be successful. It is essential to have a leadership development program that is formalized within your organization. By doing so, firms encourage their best stars to stay by investing in them. They also attract potential stars who want that type of training. Such action is a powerful recruiting and retention tool.

Listen as PSMJ Founder and CEO Frank A. Stasiowski, FAIA, author of IMPACT 2030—Disruptions in The Design Industry for The Next 10 Years, examines where the A/E/C industry is headed and details changes to a design profession. Frank explains how demographics, globalization, government expansion, and dramatic technological changes will benefit firms that plan — or seriously challenge firms that fail to map out their futures.

Capacity is the maximum possible output of a company. In the A/E/C industry capacity is usually measured in numbers of hours. Planning looks at the right amount of resources to cover not only current projects, but those coming on line in the near future. Since many firms are very busy these days, PSMJ’s Dave Burstein wonders how many leaders are currently worried about outselling capacity. “Right now, most firms find it easier to get more work than to hire more people,” Burstein says. But despite consultant advice to “stress” capacity, most firm leaders are worried about how to handle outselling their capacity. One thing that many principals fail to consider is the lag time between the date the client says they will start the project and the date they actually start it, Burstein says. “One large engineering firm studied this lag time scientifically and came up with some interesting results,” he explains. “For example, they found that on transportation projects, there was typically a 6 – 9 month slippage between the RFP start date and the actual project start date. “For projects in New York City or Los Angeles, the slippage averaged 12 months. And on design-build projects, the slippage averaged 18 months!” So, when considering whether you have (or can hire) the capacity to do the projects you are proposing, remember that they don’t always start when the clients say they will.

People are busy. Project managers who want to get their point across need to know how to speak and respond in a timely manner—while exuding both confidence and empathy. So what does effective communication look like? “Sometimes it's proactive to address risk, and sometimes it's reactive to address issues,” says veteran PM and organizational change agent Vicki Hoard, PMP, LSSBB, CSM, Management Consultant. “It's always a continuous process, and it improves as you go on. There are a lot of lessons learned and lessons taught.” Here’s how to start the process: •Be clear. Speak in plain language, be explicit, and use short sentences with concrete words—sort of like how information gets transmitted in an email or text. And be sure to address people by the proper pronoun. (For the sake of clarity, ask.) •Measure how you're doing. Establish a baseline by asking questions. How much rework do you have to do? Are there errors? Are your client’s needs met? What about the needs of the people in your firm—even those above you? •Don't dictate and demand. Bad communication, such as telling technical staff to stay in their lanes, can be shaming and lead to disarray. “Emotional vampires can suck the energy out of projects and ultimately sabotage them,” says Hoard. This can lead to overrun, scope creep, scheduling issues, stop work orders, and other negative impacts. •Avoid barriers. “Self-awareness is one of the biggest tools out there,” says Hoard. “One of the most important things a project manager can do is to be knowledgeable about yourself—to understand what you're doing, who you are, and what you’re there for. “People who jump to conclusions often hear what they expect to hear instead of what was actually said, and those who believe there is only one way to do something often struggle when working with a team. Bring people together to create “a shared culture that has meaning for everyone.” •Support others. The best project managers do not say, “My job is to make sure you do your job.” They say, “My job is to help you be successful in your job.” Hoard calls the second leadership style a “grow-with-you type of mentorship”—one that invites reflection from both sides. •Stay calm. People are much more responsive when a leader explains anger and frustration instead of expressing it. •Listen more. Ask questions, clarify, summarize, and provide feedback. “Don’t take it as a threat when someone on your team asks a question about what you meant,” Hoard says. •Use data. You want to be able to back up what you communicate. Says Hoard: “You never want anyone to question who you are and what you are in the organization. “You want to be trustworthy. You want to be able to say, ‘If I'm wrong, prove it. It's that important.’”