President and CEO of SEPI Engineering & Construction, Inc. (Hot Firm #74 for 2017), a 350-person firm based in Raleigh, North Carolina.
By Liisa Andreassen Correspondent
“People need to feel like their work life is an extension of their personal life,” Saidi says. “It’s a very intentional mesh and mix – personal and professional.”
A CONVERSATION WITH SEPIDEH SAIDI.
The Zweig Letter: 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?
Sepideh Saidi: Up until last year, business development was not a dedicated position. Personally, I enjoy business development, but I know I can’t do it alone. And, not everyone enjoys the dynamics involved in business development so you can’t rely on or expect people in more technical positions to enjoy that or be good at it. I knew I needed to hire a full-time business development person. He’s actually from a different industry, but what impressed me most was his understanding of the process involved. It’s also important to bring in outside staff to teach employees the basics of business development. Not everyone is a natural.
TZL: Diversifying the portfolio is never a bad thing. What are the most recent steps you’ve taken to broaden your revenue streams?
SS: We recently added a surface utility engineer to surveying and also added GIS services. Both complement what we already do.
TZL: Profit centers. There are A/E leaders who say profit centers create corrosive internal competition for firm resources. What’s your opinion on profit centers?
SS: We track based on service line. It’s important to measure how each line is doing. That helps us to determine which area needs more resources. That said, if one service line is not doing as well as another, we don’t compare. Each line has its own goals and budgets. Leadership needs to set the tone for all to succeed.
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?
SS: This is something I’ve struggled with in the past. All financial details are shared with each service line manager. They can then share what they choose to with their teams, not other teams. Monthly, we have an all-hands on staff conference call that lasts about 30-45 minutes. The CFO talks about year-to-date numbers and margins. We don’t discuss the bottom line.
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?
SS: The success lies in the formation of the team. Everyone on the team needs to understand the process and what’s needed to be delivered. The design team’s relationship with the construction company is key. It has to be one that is transparent, encourages creativity, is on budget, and instills trust and respect. Communication will yield cost savings and limit risk which only burdens the staff. The rewards are great once everyone understands the common goal.
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?
SS: For the last two years, I’ve been focused on creating a leadership pipeline. We’re doing this in two ways:
- Bonus program. We offer quarterly performance bonuses to people who are nominated by their service line managers.
- Associate’s program. We offer stock ownership. That’s a big incentive.
More than these two programs, I’m really working to create a culture and company that’s supportive and feels like a family. We offer leadership classes, training, and cool office spaces. People need to feel like their work life is an extension of their personal life. It’s a very intentional mesh and mix – personal and professional. Blending that sense of sameness is important. As we grow, we’ll continue to approach our culture with a small-firm attitude.
TZL: As you look for talent, what position do you most need to fill in the coming year and why?
SS: We’re looking for positions in all areas – entry-level engineers, scientists, surveyors, and construction managers. We have diversified client sectors – private, public, federal, and municipality. Right now, North Carolina is in a very good position and there’s a great demand for our services.
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?
SS: You have to have it – whether internal or external. Leaders need to prepare mentally and emotionally. They need to “have the conversation.” When it’s time, the transition needs to happen quickly. Once that’s realized, the planning can begin to maximize the value of the company. Show potential leaders the opportunities that can be available and then get them ready for that financial commitment.
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?
SS: The leaders need to pay attention to what’s happening. Also, to lessen the load, we’ve started hiring project manager assistants. These are people who can take away duties that can be easily handled by someone else – e.g., writing meeting minutes. It’s also important to encourage them to take time off or to leave early. Leadership must provide support.
TZL: What is the role of entrepreneurship in your firm?
SS: If people thrive on new ideas and some risk, they will love it here. We’re all about entrepreneurship. There’s lots of opportunity if you’re willing to take some risk. I’m an entrepreneur, and to me, the unknown is fun. For others, it may be scary and make them uncomfortable. I explain to leaders that they need to support new ideas.
TZL: In the next couple of years, what A/E segments will heat up, and which ones will cool down?
SS: I think municipal engineering will heat up – water, sewer, broadband, more public transportation and light rail and people movers. The future will depend on transportation planning. I don’t see many areas cooling down.
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?
SS: Here’s an example. We had a specific strategy to grow municipal work. It took about 12 to 18 months to realize results. It’s not that difficult if you can get your head around it. Measure against the plan and process and then you’ll see results. You just can’t be random about it – it has to be very specific. Don’t be a generalist.
TZL: They say failure is a great teacher. What’s the biggest lesson you’ve had to learn the hard way?
SS: It has to do with retention and recruitment. My greatest disappointment was in hiring key people that were not right for their jobs. It didn’t take me much time to figure out the fit was poor, but it took me too long to make a change. This created negativity and impacted others.
TZL: 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?
SS: So far, we’ve mainly grown organically. I think how you grow depends on where you are in the life of the firm. A younger firm will likely be more poised for organic growth. You have to build the house with a strong foundation first and then you can think about acquiring and adding on. We’re just now getting ready.
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?
SS: We’ve invested in accounting software so we can access historical data. We have different types of budgets in place for public sector and private sector. Some are hours and overhead, others are lump sums. We track budgets every month and review projects to see if we are over or under or right on target.
TZL: What’s your prediction for 2018?
SS: Very strong. We have a good backlog. I always try to predict what we need to do differently – geographically, service lines, etc. North Carolina has many strong opportunities for several years to come. My plan is to diversify client sectors, continue to build relationships and keep the leverage.
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