President and CEO of Hitchcock Design Group (Best Firm Architecture #7 for 2018), a 35-person landscape architecture firm headquartered in Naperville, Illinois.
By Liisa Andreassen Correspondent
“We’ll invest heavily in people who are smart and want to get smarter, who are humble and work well in teams, and who are hungry for success,” Inman says. “I believe culture is what you make of it in the moment, not some nebulous ideal that someone else should provide for you.”
A conversation with Bill Inman.
The Zweig Letter: Do you tie compensation to performance for your top leaders?
Bill Inman: Absolutely. Hitchcock is a performance-based organization, defined both by metrics and cultural commitments. We are committed to compensating all members of our firm in the top-quartile of the market, as defined by their roles, responsibilities, expectations, and experience level.
In our firm, all top leaders are responsible for bringing in work, caring for clients, delivering innovative and profitable solutions, and adding value to our culture. Awesome individual performances are then rewarded in the moment with firm-wide recognition and perks, and annually with cash bonus awards.
Our philosophy is that when the firm pays bonuses, everyone gets something for being part of the team, and the highest performing offices and individuals are awarded higher amounts. And since many of our top-leaders are owners, the firm value created by top-owners is further rewarded through incremental intangible-value awards as part of our deferred compensation program.
TZL: What actions do you take to address a geographic office or specific discipline in the event of non-performance?
BI: This hasn’t been much of an issue for us, but sometimes individual offices don’t have the backlog to support their talent, so our workgroup leaders work with each other to share talent between offices to smooth out utilization. We have five workgroup studios across our four offices, but we treat our company as one firm. If a workgroup is really struggling, it’s everyone’s responsibility to support them and help out.
The same is true when a workgroup has too much backlog or too many consecutive deadlines. If we do this right, we continually engage all of the design intelligence across our firm – but it’s a lot of work to do that consistently requires all of us to be proactive and holster our egos.
TZL: Internal transition is expensive. How do you “sell” this investment opportunity to your next generation of principals? How do you prepare them for the next step?
BI: Due to the foresight of our founding principal, we’ve been working at this for a couple of decades now. Over that time, we have created two tiers of ownership where our senior principals invest in 50 shares each and our principals invest in 10 shares each. Each share value represents its portion of the balance sheet’s book-value of the firm. About half of firm members are currently shareholders.
Then, our intangible value is calculated every year, using three years of normalized earnings and giving the most weight to the current year. The current intangible value, as calculated annually, is owned by the shareholders with annual increments (either positive or negative) being awarded on a performance basis.
Each owner’s shares, and their respective intangible value account is paid back at retirement in accordance to simple agreements we have with each other. Plus, we’ve invested some money on the side in a corporate owned life-insurance vehicle to help fund a shareholder’s retirement, making our current and future internal transitions relatively easy and pain free. We’ll be putting our efforts to the ultimate test in the next couple of years when our founding principal hangs up his T-square and rides off into the sunset with his equity!
TZL: In one word or phrase, what do you describe as your number one job responsibility as CEO?
BI: One word or phrase? That seems impossible, but when I think deeply, it’s this: Keep our company moving fast by choreographing our firm’s collective intelligence-horsepower into a powerful engine of professional progress.
Okay, that was wordy and my passion for muscle cars clearly influenced this analogy, but I think that pretty much sums it up. It’s mostly not about me, but rather the total talent we’ve grown organically in the firm. Maybe a simpler way to describe my biggest responsibility is to say “continuously improve our culture,” which encompasses absolutely everything we do, and that starts with me. Culture is as culture does. I think Forrest Gump may have said that.
TZL: What happens to the firm if you leave tomorrow?
BI: Jack squat. That means nothing. We keep growing and succeeding. In our 35-person company, there are at least three other people who could step into my job right now and probably do it better.
TZL: There is no substitute for experience, but there is pressure to give responsibility to younger staff. What are you doing to address the risk while pursuing the opportunity to develop your team?
BI: Our betterment comes from our relentless ambition to be a prominent, distinctive, client-centered planning and design practice, but our strength comes from our collective experience, which is extensive. More than half of us at Hitchcock have more than 20 years of professional landscape architecture experience, and of those folks, much of that has been invested with our firm. That gives us the opportunity to be one of the best teaching firms in our markets, providing front-line experiences for all of our staff, while mitigating risk through firm-wide collaboration and workgroup-centric quality management procedures.
TZL: Landscape architects love being landscape architects, but what are you doing to instill a business culture in your firm?
BI: Great question, and since we are all members of a private practice landscape architectural firm, understanding the business is inherently a requirement of our culture, so the engagement in the business side of our practice is already pretty high.
We recently completed an energizing five-year strategic planning process that everyone in the firm participated in. It outlines a balanced scorecard of improvement objectives with opportunities to dig in to what interests you the most. We just rolled that out at the beginning of 2019 and it’s my hope that the business practice engagement increases even more as the strategic plan evolves.
There is also broad participation in the assembly of our annual business plan, which formulates hiring plans, business development strategies, sales targets, revenue and profit metrics, and expense budgets for each of our five workgroups. We report against this plan monthly, sharing financial performance data to everyone, and then quarterly, we review the firm’s overall performance in person with the whole firm, focusing on our culture, design innovation, client success stories, and our finances.
Day to day, we mentor interested staff on a wide variety of business lessons, from how to prepare detailed project budgets for a new client to maintaining a profitable client-base over the long-term. We provide live project data on everyone’s desktop to manage against, so there’s little excuse to blindly tank a project.
TZL: The seller-doer model is very successful, but with growth you need to adapt to new models. What is your program?
BI: The seller-doer model has been the foundation for our long-term success and we don’t plan to stray very far from this model. To keep this model effective as we grow, we need to “remain small” at the same time. It’s critical for us to maintain the relationship of our repeat customers, which account for a high percentage of our work.
But to grow, we need to pursue clients and projects that profile our skill sets and values. To do that, we deploy a broad sales team, and each member contributes in ways that engage their best skills and passions. For example, the managing principals of our workgroups are, in general, wired to pursue new business, so they lead many of the competitive RFQ/Ps we choose to pursue. They are directly responsible for building and maintaining their workgroup’s backlog, so they tend to manage fewer projects directly. Other members of our sales team excel at research, publishing articles, or public speaking, but everyone contributes.
TZL: A firm’s longevity is valuable. What are you doing to encourage your staff to stick around?
BI: I’ve been with this firm for almost 30 years, and I credit our founding principal with identifying opportunities where I could be successful, then supporting me with resources in a manner proportional to the degree I remained engaged making progress. I intend to uphold that tradition and continue to tweak our structure to create unique environments where you can show the firm “your stuff.”
Beyond that, we want to take care of our people with good policies, top of market compensation and benefits, useful feedback loops, challenging projects, strong teams to work within, and solid examples of leadership to profile. Firms that openly promote respect, recognition, and relationship will get it done. If we promote an environment that respects people, recognizes good work, and fosters positive relationships, we’ll get it done, too.
But I also won’t kid myself; we can’t be everything to everybody, and I simply refuse to chase every demand. I’m a staunch believer in writing your own ticket, and if you have ambition, the firm will be right there to help you succeed. But if you think you’re a hotshot and need special treatment, this firm isn’t for you. We’ll invest heavily in people who are smart and want to get smarter, who are humble and work well in teams, and who are hungry for success. I believe culture is what you make of it in the moment, not some nebulous ideal that someone else should provide for you.
TZL: What scares you about the geopolitical environment today?
BI: Just the general uncertainty of it all. Personally, I believe we can make our own successes with tactical management even in the face of headwinds. However, I hear at least once a day that a recession is coming this year and that the economy is strong and has a lot of runway left. So, I do two things: Read everything I can get my hands on to stay current, then ignore the noise and focus on the next thing that will improve our firm.
TZL: Are you currently pursuing the R&D tax credit?
BI: We are. This was brought to our attention by our new accounting firm and we’re encouraged by the tax credit possibilities they’ve discovered so far. Since a large part of what we do is managing multi-disciplinary project delivery teams as the prime consultant, we’ve been told we’ll likely qualify, and they’re figuring out the how-much part right now. Fingers crossed!