Conference call: Jon Lindberg

President of Gale Associates Inc. (Best Firm #18 Multi-discipline for 2018), a 115-person consulting firm based in Weymouth, Massachusetts.

By Liisa Andreassen Correspondent

“Gale has been involved with a number of design-build procurements, primarily for our federal agency clients,” Lindberg says. “Our success can be attributed to a couple of key factors: knowing your partner (builder) and a strong risk management process. If the contract terms and conditions are not favorable, we walk.”

A CONVERSATION WITH JON LINDBERG.

The Zweig Letter: 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?

Jon Lindberg: Gale is 100 percent organic. I constantly receive calls and inquiries regarding our interest in buying, selling, or merging. Growing organically is akin to sustainability. We don’t hire staff specifically for a large project, just to release them when the project is done. Systematically hiring and training capable and driven staff for depth and opportunity equals longevity and loyalty. If a firm does not provide staff with a profession and a future – why should they stay? It has been working for Gale for 54-plus years and gives those with loyalty and drive an opportunity to be a leader and owner.

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?

JL: Gale is currently in its fourth ownership transition in 54-plus years. Although today’s environment appears to be dominated by M&A, Gale has remained an organically-grown firm and will continue to give motivated staff the opportunity to be an owner. Ownership transitions take years and they are constantly morphing. If today’s managing partners/principals have not been transitioning staff from the day they are employed, the choices will come down to sell externally or establish an ESOP! At Gale, we’ll continue the internal transition and ownership route.

TZL: There are AEC leaders who say profit centers create corrosive internal competition for firm resources. What’s your opinion on profit centers?

JL: In today’s quickly-changing economic landscape, businesses have to understand their market share and their revenue producers. We use profit centers to gauge performance and investment. As our leadership team is unified, when the profit centers succeed, the firm succeeds. We are structured to share staff resources, and we share profits both corporately and individually. So far, it works for us.

TZL: What’s your policy on sharing the firm’s financials with your staff? Weekly, monthly, quarterly, annually? And how far down into the org chart is financial information shared?

JL: Monthly and annual financials are shared with partners, discipline managers, and regional/office managers. Project financials are transparent and available daily to project managers, project engineers, and other staff, depending on roles. This allows staff resources and scheduling to be cross reviewed and balanced throughout our six offices.

TZL: The design-build delivery model appears to be trending upward. What are the keys to a successful design-build project? What are the risks?

JL: Gale has been involved with a number of design-build procurements, primarily for our federal agency clients. Our success can be attributed to a couple of key factors: knowing your partner (builder) and a strong risk management process. If the contract terms and conditions are not favorable, we walk. We will be responsible for our design liability, but not construction liability. Knowing and trusting the “B” (builder/contractor) is a critical factor. We want the contractor to have the mindset to “do the right thing,” not just the less expensive way to save money or make money. Finally, having an experienced and savvy team leader (the “A” team) running it for Gale is important. The “A” team understands the risks inherent with design-build procurement/delivery and proactively manages that risk.

TZL: The talent war in the AEC 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?

JL: To retain, we communicate and provide career paths for growth and opportunity, which we constantly revisit. We are in the middle of re-aligning our strategic plan and goals to bring us through the next five years. This is coinciding with ongoing leadership transitions. The committee (comprised of about 25 percent of staff) is a cross-section of Gale, with all disciplines, operations, and offices represented. We encourage staff to be involved in all aspects of our business: human resources, marketing, and technical organizations. We realize we can’t keep everyone but we will provide support and opportunity to help them decide to stay at Gale.

TZL: As you look for talent, what position do you most need to fill in the coming year and why?

JL: We are constantly looking for discipline leaders, project managers, and engineers/architects of all experience levels in all of our offices. As a professional services consulting and design firm, the search for experienced staff is constant and never ending. Our policy now includes heavier recruiting for entry-level engineers and architects. Once hired, they go through strong technical and non-technical training programs to get them up to speed quicker (two years rather than three to four years). This has provided us with good depth as we add one to two entry level staff for each discipline and each office every year – whether workloads demand it or not.

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?

JL: Our formula is simple. All staff are encouraged to sell. We typically do not have dedicated business development professionals. All staff (not just technical) are encouraged to seek out opportunities and potential new clients. In our firm, “power comes to those that bring in work.” Everyone can contribute.

TZL: Diversifying the portfolio is never a bad thing. What are the most recent steps you’ve taken to broaden your revenue streams?

JL: Gale offers five distinct and somewhat differing technical disciplines. Each discipline is fairly independent of the other; however, they have similar public/private sector client bases. Cross-selling our technical disciplines has recently become a greater priority at Gale. Partnering with other firms for a “piece of the pie,” rather than holding out for the whole pie, is also increasing and strengthening our revenue stream.

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?

JL: Project manager workload is a constant concern. This position is the “workhorse” of any professional services corporation. It’s been this way for as long as I’ve been in this business. Project managers are responsible for everything: getting clients, managing clients and staff, getting paid, making a profit, getting the clients to come back, and growing and mentoring staff. The list goes on. We attempt to spread the project manager assignments and provide the appropriate staff back up to avoid the “crash and burn” scenario. So far, it appears to be working. We also support a healthy vacation allowance, flex time, and bonus sharing based on profitability, which also helps!

TZL: What is the role of entrepreneurship in your firm?

JL: At Gale, everyone has a voice. All ideas are considered and staff is encouraged to contribute to business and discipline development. Our staff, particularly our younger staff, are often the ones that recognize opportunity. Cross selling and understanding client needs in relationship to what Gale brings to the table results in growth. Growth is key to opportunity. Opportunity is key to staff retention and the future of the employee and firm.

TZL: In the next couple of years, what AEC segments will heat up, and which ones will cool down?

JL: If I had the crystal ball for this answer, I would give up my day job. Given today’s political environment, I don’t feel anyone can be infinitely positive regarding the potential fallout from tariffs, immigration, and foreign policy. What I can be somewhat confident in is healthcare and our aging population. Gale’s market is strong with higher education, healthcare, and institutional clients. We plan on sticking with and expanding this base. Downturns in the economy typically affect private industry more than public, so we will continue to service state, municipal, and federal agency clients.

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?

JL: We have found it difficult to measure our success with marketing. Marketing costs and expenses are tracked to our profit centers so we can extrapolate our return on marketing and business development efforts. When entering a new geographic region with an existing discipline, we give it three years to show a return, even a marginal one, prior to making a decision. Based on my experience, investments in marketing and business development are critical to the health of the firm, in good times and, more importantly, in not so good times.

TZL: They say failure is a great teacher. What’s the biggest lesson you’ve had to learn the hard way?

JL: The biggest lesson for me has been allowing marginal, underperforming staff that are not excited to be part of Gale to remain. Marginal employees drag others down and do not put a proactive effort into their assignments, which can be a liability to the corporation. Poor attention to detail can be costly through “re-design,” design liability or staff morale. When workload is strong, it’s easy to allow this to continue. The lesson is – don’t let it. Address poor and marginal performance immediately.

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?

JL: While we track all project financials to maintain historical data for fees and profit, we do not establish fees based on this information alone. Each opportunity is unique. While we have learning lessons on many projects and clients, no two are identical. So, the response is – no, we don’t use historical data alone to determine new opportunity fees. However, the information is useful when we consider client needs and expectations.

TZL: What’s your prediction for 2018?

JL: My gut instinct says that the current boom our profession and industries are experiencing will start to soften by early 2019. We anticipate certain markets will remain strong, such as healthcare and military. However, those that are tied more to speculation, like residential and endowment growth, may soften. But, I can say that my crystal ball is not always accurate. Gale will remain diversified with our services and clients to help insulate the firm from the fluctuations of the economy. Not unsimilar to the balanced portfolio the investment experts tell us to maintain.