President and CEO of VHB (Best Firm Civil #23 and Hot Firm #46 for 2017), a 1,400-person firm based in Boston, Massachusetts.
By Liisa Andreassen Correspondent
“Bottom line, when it’s the right move, and when it will benefit employees and enable us to serve our clients better, we go all in to provide the support needed to make it happen,” Carragher says.
A CONVERSATION WITH MICHAEL CARRAGHER.
The Zweig Letter: The A/E market is great right now. What are you doing to cushion your firm in the event of a downturn?
Michael Carragher: Listening and learning are the critical components here. We’re listening to our clients and understanding their challenges and concerns; listening to economists; and staying ahead of market trends. We’re always looking on the horizon. In the past, we’ve adapted to downturns by balancing our mix of public and private work and short- and longer-term projects. We continue to strive for this balance, and our work is focused across six primary markets: transportation agencies, real estate, institutions, energy, federal government, and local government. I also believe that you need to remain focused on practical investments and fight the urge to take advantage of good times by investing in riskier ventures – stay focused on the things that are right to do – in up and down economies.
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?
MC: We don’t start with “steps for removal.” Supervisors work to discuss how an employee is meeting expectations, and we are clear about areas for improvement. There is much opportunity to work with employees to help them be successful. We try to be clear on performance expectations and goals. We encourage candid, frequent feedback so there are no surprises and we outline a clear process to turn things around when expectations are not being met. Next steps and outcomes are outlined and we follow through.
Yes, there are times it’s not a fit and we work closely and professionally with HR to make the best decision for the employee, VHB, and our clients.
TZL: Firms that have principals and firm owners who 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?
MC: We work hard to compensate our employees appropriately for their expertise, level of responsibility, and contributions to our future through salary, benefits, and incentive compensation. Separately, we seek to create long-term wealth building opportunities by managing a successful business venture. An employee’s role in the day-to-day operation of the company determines their compensation. An owner (approximately 25 percent of our employees) is someone who has demonstrated consistent strong performance and consistency with our core values and has been vetted and recommended for ownership by senior management and approved by the board of directors. Our employee owners also have the opportunity to acquire additional stock on an annual basis based upon their contributions driving the company forward and exhibiting positive behaviors consistent with our core values.
In summary, our compensation program is focused on annual performance and market conditions; it thereby results in having the financial opportunity to invest in VHB’s future. The ability to accumulate long-term wealth results from ensuring the company’s consistent balanced short- and long-term performance.
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?
MC: Individuals within marketing and communications are too often our unsung heroes. Their partnership with our engineers, scientists, planners, and designers helps to effectively tell VHB’s stories and convey our value to our clients in a way that positions us to secure increasing opportunities to help our clients succeed and VHB to grow. Their unique skills and insights, along with their dedication to advancing our organization, is highly valued.
It’s an exciting time to be part of VHB. We’re experiencing unprecedented growth across regions, markets, and services. Through this growth, we’re adding offices, reaching new clients, and enhancing our skills. We are in the enviable position of strengthening our amazing team by welcoming hundreds of new VHBers each year. To maintain our culture and deliver the high quality on which we have built our brand, we’ll continue to invest in marketing as well as communications to make sure our organization meets the new demands and is scalable as we grow. We are currently focused on a broader approach to our marketing processes and training to engage technical professionals as well as increase the strategic value and influence of our marketing, design, and communications professionals.
TZL: If there was one program, course, or degree program that you could take or recommend before becoming a principal or owner, what would it be?
MC: At VHB, it would be our LEADs program. It’s a two-day workshop designed for VHB leaders to build personal effectiveness and continue to enhance VHB’s status as a generational company and an employer of choice.
The program helps VHB leaders to increase their leadership impact through:
- Reinforcing the criticality of leadership to VHB’s future, and to individual career success.
- Helping individuals to review their competency-based 360 degree feedback in a frank and authentic way, and plan for behavioral changes necessary to reinforce strengths and develop/change areas of challenge.
- Learning about motivational preferences as a way to build more productive relationships.
- Understanding how to manage ego (self and others) for more successful interactions.
- Recognizing communication styles and how they change in different circumstances.
- Addressing contemporary leadership challenges (e.g., managing the younger generation of workers, managing in tough economic times, succeeding in a matrixed organization, succession planning) of their own identification through best-practice sharing with peers.
- Creating a personal action plan that includes accountability around change and a plan for each individual’s leadership legacy for VHB.
In addition, two of VHB’s co-founders, Rich Hangen and Bob Brustlin, have talked candidly with some of our LEAD alumni about their decision to create our generational company culture. Their perspective is invaluable; we created a video of Rich’s last workshop overview so that VHBers can continue to benefit from his insight.
TZL: What’s the greatest challenge presented by growth?
MC: There are many. For VHB it’s about maintaining balance as we grow – balancing business performance with consistency and strength of our core values and culture. We have no desire to just be bigger than someone else; our desire is to create a successful, healthy, growing VHB that stays true to our core values and culture, and in the end, is a company in better condition than when each of us joined. If we do this, we’ll succeed as good stewards.
TZL: What is the role of entrepreneurship in your firm?
MC: Entrepreneurship is what brought me to VHB! I had never encountered such an embrace of entrepreneurship before. Entrepreneurship is encouraged and intelligently challenged to help you really think through a strong strategy and business plan. And then, VHB provides tremendous support to help you succeed.
I came to VHB to start a transit and rail practice nearly two decades ago. It’s grown and evolved to become an integral practice at VHB. More recently, we honed our focus on applied technologies and hired a leader to create a vision and build a team and a client facing practice that has resulted in significant successes for VHB.
Bottom line, when it’s the right move, and it will benefit employees and enable us to serve our clients better, we go all in to provide the support needed to make it happen.
In addition to the technical aspect and finding ways to better serve clients, we also support our employees’ entrepreneurial spirit, passion, and drive that makes local young professional groups, volunteer efforts, and wellness programs more successful. Our employees really drive these efforts and these programs are a tremendously important part of our culture.
TZL: What’s your prediction for 2017 and for the next five years?
MC: I’m an engineer at heart, not a soothsayer. Any outcome will be different than what I predict! Change is inevitable and exciting and our mission is to adapt and evolve to overcome new and unexpected challenges our clients will face that come along with increasing urbanization. As we continue to grow, VHB will stay true to who we are. Bring it on!
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