By Liisa Andreassen Correspondent
“The most important formula for ownership transition is to be profitable,” Maser says. “Unless you have good profitability to allow funds to go to ownership transition, it will not be effective.”
A conversation with Richard Maser.
The Zweig Letter: What’s your philosophy on fee/billing and accounts receivable? How do you collect fees from a difficult client?
Richard Maser: For billing purposes, we prefer lump sum fees. We try to avoid hourly as not to exceed our client’s budget. Every project is billed once a month, and we follow up on accounts receivable through a monthly team effort as each project manager is assigned to a billing administrator. If a private client does not pay us in a timely manner, sometimes it’s necessary to stop work until fees have been paid.
TZL: What’s the recipe for creating an effective board?
RM: Our executive team is made up of leaders from each of our eight core disciplines. Having open communication between disciplines helps to ensure our board members are aware of trends, problems, and solutions within every department and better enables them to make effective decisions companywide. In addition, we have two respected outside advisors who bring a different perspective and expertise to the group.
TZL: Is there a secret to effective ownership transition?
RM: The most important formula for ownership transition is to be profitable. Unless you have good profitability to allow funds to go to ownership transition, it will not be effective. It’s also crucial not to wait until the last minute to model a strategic plan. The plan should encompass a five-year or longer period to predict where you will end up. In this process, key players are identified to stay honed in on the economic climate so we can alter and adjust our plans as we go.
TZL: How do you go about winning work?
RM: The majority of winning work is built on being responsive to our clients and giving them creative solutions that create client satisfaction and long lasting relationships. Because we are a full-service engineering firm, having clients use our other services in-house is more economical for them. We rely on quality-based submissions and are not looking to be the low bidder.
TZL: What’s the greatest problem to overcome in the proposal process?
RM: We are very selective about what we go after; coordination is the most complicated element in the proposal process. A lot of the projects we pursue are multi-disciplinary, so there are several groups that have to provide input from both a scope and fee perspective.
TZL: Once you’ve won a contract, what are the “marching orders” for your PMs?
RM: After we win a proposal, our first priority is to make sure all the contract items and phases are set up correctly for billing purposes and cost tracking through their relationship with their billing administrator. The project managers are instructed to ensure they discuss how the client wants to be communicated with and who within the client’s organization the communication should go to.
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?
RM: Our marketing department is comprised of experts in the AEC industry who constantly attend conferences, network, and take training to keep abreast of industry trends and how to steer our services. The department has two distinct areas – the proposal preparation side and the public relations side, both of which are essential elements to company success. Proposals and qualifications are part of an ongoing process you have to constantly stay ahead of – searching for opportunities and making sure that all our submission materials are up to date and submitted on time. The public relations side of marketing brands our 22 offices as one solid entity and our employees as experts through articles, speaking presentations, and social media. They get the word out about who we are and what our capabilities are nationwide and ensure our name is recognized whether opening an office in a new region or introducing a new service. On top of that, our social media presence is strong and drives our brand to a worldwide market. Both sides of our marketing department work closely together to ensure our branding is effective in keeping our name at the industry forefront. The department will grow appropriately to keep in stride with our growth.
TZL: What has your firm done recently to upgrade its IT system?
RM: We’re constantly upgrading IT systems. At the beginning of each year, we look at what needs to be done over the next 12 months, prioritize, and then phase it in. The most recent significant effort was upgrading our financial/project management software with BST 10. We also recently installed a video-conferencing system and phones with a video screen to better connect people throughout our office network as we grow nationally. This helps us to maintain a friendly internal culture and greatly improves communication between offices.
TZL: What’s the best way to recruit and retain top talent in a tight labor market?
RM: In addition to outside recruiters, we currently employ two, full-time recruiters who bring numerous candidates to us. The number one way we acquire top talent is through references from existing employees and clients. We have made many strategic hires through friendship/professional relationships within our existing staff. We also like to keep our employees happy with good health and retirement benefits, personal and professional development opportunities, a mentorship program, group activities, and a comfortable workplace. We also pride ourselves on our internal culture and provide employees with everything they need to excel.
TZL: What’s the key benefit you give your employees? Flex schedule, incentive compensation, 401(k), etc.?
RM: Our health benefit package is better than most of our competitors and as an added benefit, we offer a program that pays for health care deductibles. Our 401(k) is very good in terms of the industry average. Probably the most significant differential in our benefits is incentive compensation. Our bonuses tend to be typically larger for all staff than our competitors.
TZL: How do you raise capital?
RM: Through our traditional banking partner, between our line of credit for normal fluctuation of cash flow and an equipment line. With our equipment line we usually rely on three-year repayment plans for these purchases.
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?
RM: We have executed several acquisitions over the years, most of them relatively small. Generally, most of our growth has been organic where we have either moved into new areas or expanded offices regionally. Our most significant growth has come from strategic hires. These strategic hires bring in revenue, additional staff, and, most recently, new service lines that can eventually be built upon.
TZL: What’s the greatest challenge presented by growth?
RM: Our greatest challenge has been maintaining the company culture. With such a diverse geographic presence, the personalities and lifestyles of our staff vary throughout the country. Trying to make all employees feel like they are part of one company, working for the same common goals is a challenge. The implementation of a video-conferencing system has proven to be effective in bringing people together who may never meet face to face.
TZL: What’s your prediction for 2017 and or the next five years?
RM: I’m anticipating 2017 will be a very good year for the company, partially based on a healthy 2016 and also because we recently picked up two new divisions: one in oil and gas and a new UAS service. These services bring a new dimension to our existing services and we feel will bring a lot of opportunities into the company in both the federal and law enforcement markets. The economy is trending in a positive way and I expect that to continue.