Conference call: Doug McKeown

Jun 12, 2017

CEO of Woodard & Curran (Hot Firm #80 for 2016), a 1,000-person integrated engineering, science, and operations firm based in Portland, Maine.

By Liisa Andreassen Correspondent

Live by the contract; never lose sight of it,” McKeown says.

A conversation with Doug McKeown.

The Zweig Letter: What’s your philosophy on fee/billing and accounts receivable? How do you collect fees from a difficult client?

Doug McKeown: We haven’t had many issues in this department. Client selection helps. It also doesn’t hurt that 25 percent of our revenue is from long-term contracts in operations and management. We’ve also been doing more design-build work with lump sum contracts. And, while these contracts have more risk, you learn to manage that.

TZL: What’s the recipe for creating an effective board?

DM: I think more and more companies are seeing the value in having inside and outside board members. The main function of a board is to keep the CEO on task and accountable. We’ve gained a great deal from having outside board members – they force us to have a strategic mindset.

TZL: Is there a secret to effective ownership transition?

DM: We’ve had three acquisitions in five years and it’s important to have a really good ownership model in place. You have to plan ahead and make sure that everyone on board is committed to the same mission and will support the strategy. You also have to have a long view and transition over time. We took 20 years to transition from the original founders. A lot of thought and no debt.

TZL: How do you go about winning work?

DM: Pick your spots. You can’t be all things to all people. Invest your time and money in building a reputation, building a brand, and building relationships. It’s all about market positioning. While we’re lucky enough to have 90 percent repeat business, if we didn’t know how to bring in new clients, we’d be losing 10 percent of business.

TZL: What’s the greatest problem to overcome in the proposal process?

DM: Having a good go/no-go process. You have to focus your resources and invest in the right areas. And, in order to bring on a new client, you have to help convince them that you know how to solve their problem. It has to be about them. You have to speak to them and them only. You don’t just want to offer a bunch of silver tray items.

TZL: Once you’ve won a contract, what are the “marching orders” for your PMs?

DM: I always tell people, it’s our reputation before our wallet. Of course, we don’t want to lose money, but we want to deliver on what we said we would do. Live by the contract; never lose sight of it.

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?

DM: Our marketing has really evolved. We have, too. We’ve shifted away from older channels and are focused on social media, branding, and co-branding and getting employees involved in the process, too. We also do a branding assessment every few years. It’s done by an outside party and based on that data, we develop a game plan. Again, invest in areas where you want to accelerate, pick your spots, double down, and make an impact.

TZL: What has your firm done recently to upgrade its IT system?

DM: Our phone system is completely Skype-based now. It made our recent merger an easy transition since everyone could be connected right away. We also have cloud-based storage and recently upgraded to a private, in-house system, similar to LinkedIn. We used a company called Knowledge Architecture to help us with this. The system is called Compass. It’s important that employees feel connected to each other. It helps with engagement, too.

TZL: What’s the best way to recruit and retain top talent in a tight labor market?

DM: It’s a challenge for sure. There are three main ways we do it:

  1. Internships
  2. Employee referrals
  3. Four in-house recruiters – they are constantly recruiting and ahead of what we need. You have to keep a pipeline of talent and we work with ambassador programs and universities.

Our recruitment and retention is closely tied to our marketing and branding. People want to know who they are working with and what we are all about. They want to know they are a culture they want to be a part of. They don’t just want to know about pay and benefits.

TZL: What’s the key benefit you give to your employees? Flex schedule, incentive compensation, 401(k), etc.?

DM: We offer a rich package. We provide 80 percent medical for families and 30 percent match for 401(k) plans. We’ve never missed a 401(k) payment, even during the recession. It’s important that our employees feel financially healthy. We don’t have things like sick days or a sick policy. We want people to take days when they need them. We trust them. Our values are built around trusting people. A unique benefit we offer is an adoption benefit. Not everyone can have kids so we provide time for people to take off and pursue adoption if it’s something they want to do.

TZL: How do you raise capital?

DM: We have a good relationship with TD Bank. We also have open lines of communication with private equity firms.

TZL: What’s your preferred strategy for growth, M&A or organic? Give us a synopsis of how your firm effected growth in the recent past.

DM: Organic, even though sometimes it has to be by M&A. For example, we needed to establish a presence in California. There was no other way to do that than to find a like-minded company to partner up with. That’s what we did this last fall. We added seven offices and 120 people when we merged with RMC Water and Environment. It’s been a great match. It jumped our revenue by about 10 percent, too. Ultimately growth has to happen around strategy and vision; M&A just plays a part.

TZL: What’s the role of entrepreneurship in your firm?

DM: We’ve always been thought of as a firm with an entrepreneurial spirit. We don’t put too many speed bumps around our people. In fact, we have a director of innovations and new ventures who focuses on just that. We give people latitude as long as ideas are working to help the overall good.

TZL: What’s the greatest challenge presented by growth?

DM: Getting people to stay committed to the mission and direction of the firm. The larger you get the more difficult it is to keep everyone on the same page. You have to avoid fragmentation.

TZL: What’s your prediction for 2017 and for the next five years?

DM: You know, it’s pretty fascinating. I was recently at a conference in Washington, D.C., and someone made a good point. He said, “We need to stop trying to predict the future and focus on developing scenarios that could play out.” I agree with that. I do think there will be some investment in infrastructure, and that environmental regulations may change, but I don’t think companies really want to go backwards. Industries and communities are more committed to being good stewards now. They don’t want to roll back. Consumers are choosing to work with these companies more and more. For example, I heard the CEO of GE say that they had started a program called Ecomagination – their growth strategy to enhance resource productivity and reduce environmental impact at a global scale through commercial solutions for their customers and own operations. They’re not going to stop that. I’d say the next five years are going to be about the same as the last three years – modest growth.

About Zweig Group

Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training. Zweig Group exists to help AEC firms succeed in a complicated and challenging marketplace through services that include: Mergers & Acquisitions, Strategic Planning, Valuation, Executive Search, Board of Director Services, Ownership Transition, Marketing & Branding, and Business Development Training. The firm has offices in Dallas and Fayetteville, Arkansas.