President of Wakefield Beasley & Associates (Hot Firm #14 for 2016), a 165-person architectural design firm based in Alpharetta, Georgia.
By Liisa Andreassen Correspondent
“We are a fast-paced, high-performance company, and underperformers are detrimental to the morale of our workforce and the quality of our services,” Beasley says.
A CONVERSATION WITH JOHN BEASLEY.
The Zweig Letter: In the event of failure, how does your firm react?
John Beasley: The business of design is not a perfect process, and when failure occurs we pick up the pieces, pick up the phone, accept responsibility, resolve the issue as quickly as possible, and move on. We treat problems and resolutions as learning opportunities, and never reprimand or embarrass the guilty party. As in most business issues, communication is critical. Informing the client that a problem exists, explaining how we are going to fix it, and following through to resolution gives us an opportunity to demonstrate our professional ethics and strengthen our relationship.
TZL: Monthly happy hours and dog-friendly offices. What do today’s CEOs need to know about today’s workforce?
JB: While I am a baby boomer, and we have other silverbacks in our company, overall we have a young workforce. Our average age companywide is 42, including a significant number of millennials. Today’s workforce is experiencing such rapid change in technology and the way business is done, and the next generation will undoubtedly be totally different. Culture is the glue that holds creative companies together, and providing a collaborative atmosphere, allowing flexibility in work/life schedules, sharing company information, creating opportunities for personal and professional growth, and rewarding performance over tenure are all important to today’s workforce.
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?
JB: The best way to retain our top people has been to create a company that they don’t want to leave. Our culture includes open and honest communication about the company, both good and bad, operational and financial. We empower key people to make important decisions, without having to call special meetings or waste time. We respect and support the desired career paths of our top people, and provide mentorship and training in skills that they want and we know they will need to lead the company. We pay above industry average salaries and bonuses, and promote on performance, not tenure. Identifying future leaders early in their careers has been very important to our growth and success, and while we occasionally lose a key person to another firm, our retention record for top people has been excellent.
TZL: The A/E market is great right now. What are you doing to cushion your firm in the event of a downturn?
JB: Prior to the Great Recession, our practice was heavily based on developer projects, primarily retail, speculative office, and industrial. When these projects began to dwindle, we panicked and started chasing every project we could, whether or not we had experience in that project type, with minimal success. In order to qualify for projects outside of our realm of experience, we hired strong designers and managers in higher education, government, justice, multifamily, and hospitality projects. We opened branch offices here and abroad. Diversity in the types of projects we design and clients we serve pulled us out of the recession and helped us grow as the economy turned around. When the next recession comes, and it will, we feel well positioned to adjust to market conditions.
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?
JB: We have clear disciplinary standards and apply them uniformly, but underperforming employees are a difficult issue, especially with the shortage of labor in our industry. We will give underperformers verbal and written evaluations explaining specific areas where they are not meeting our expectations. We give the employee a reasonable amount of time to respond and correct the problems. Should they fail to respond to our evaluation, we will terminate the employee. We are a fast-paced, high-performance company, and underperformers are detrimental to the morale of our work force and the quality of our services.
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?
JB: While the two founding principals of the company have base compensation higher than the others, those principals have lower than industry average salaries but are entitled to a percentage of profits for the studios which they lead. Each year the principals meet to decide on the percentage of overall corporate profit which will remain in the company, and not be subject to distribution to shareholders. This percentage changes annually based on company performance, projected capital requirements, economic conditions, etc. The true compensation for our principals is measured in the increase in value of their stock.
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?
JB: Business is changing so fast now that I don’t see how anyone can be content with their marketing efforts! We are constantly striving to increase our marketing. We see a direct correlation between our marketing efforts and our success rate, and this year we added two additional full time business development managers to nurture existing client relationships and develop new client relationships in all of the markets we serve. Hiring an outside consultant to handle our social media program has been a great decision, and we are seeing positive market awareness across several platforms we had previously been ignoring. We have conducted several creative marketing campaigns this year with good results, and plan to have more as some high profile projects we designed are being completed. Increase marketing? Yes!
TZL: If there was one program, course, or degree program you could take or recommend before becoming a principal or owner, what would it be?
JB: Besides the obvious degrees I should have pursued before starting our firm (MBA, J.D., and Ph.D.), a program in building interpersonal relationships would be a great asset for new principals in a design firm. So much of winning projects and maintaining a healthy work environment is based upon human interaction and communication. Once a client has selected a firm to design a project, nurturing the relationship and staying in position to win the client’s next project and spread the word about the firm’s quality and professionalism is critical to the design firm’s reputation, growth, and success.
TZL: What’s the greatest challenge presented by growth?
JB: Maintaining and protecting the brand we have created has been a big challenge as we have grown significantly over the past few years. Immersing new hires in the way we do business, including procedures and systems, is critical. Bringing new team members up to speed with evolving technologies has required heavy investment in infrastructure and training, but in doing so we are well prepared to continue our pattern of expanding into new markets and adding staff to meet our clients’ needs.
TZL: What is the role of entrepreneurship in your firm?
JB: Hire the best people we can find and then get out of their way! That has been a key component for our company’s success since its founding. We recruit for personality and train for skills. Our culture promotes and supports entrepreneurial behavior, thus giving our staff opportunities to increase firm profitability and their compensation. Gradually increasing responsibility has helped us identify future leaders and develop their entrepreneurial skills.
TZL: What’s your prediction for 2017 and for the next five years?
JB: 2017 will be the best year in our 37-year history, as we have major projects in mixed-use, retail, office, multifamily, and hospitality. There are some headwinds, as labor is scarce, a recession is overdue, and Congress is gridlocked. But if corporate tax reform does happen this year, we see the potential for explosive growth over the next few years. While we are registered to practice in 34 states, most of our projects are located here in the southeast. We are headquartered in suburban Atlanta, my hometown, so I may be slightly prejudiced in my opinion, but corporate America wants to, has to be here, and being home to the world’s busiest airport only enhances this city’s and this region’s desirability and potential for growth.Subscribe to the electronic version of The Zweig Letter for free.