Path finding in uncharted territory

Jan 20, 2020

As Zweig Group’s director of ownership transition, Will Swearingen understands the emotional stakes at play when a firm founder decides it’s time to pass the torch.

By Richard Massey Managing Editor

Sometimes Will Swearingen feels like a paramedic or a psychologist showing up at the scene of a crime. Perhaps a bit of hyperbole, but it speaks to the emotional stakes oftentimes at play when a firm founder decides to hand his or her legacy off to the next generation. Lives change. Identities transform. The routine of decades is upended. It’s an uncertain time that requires sound financials and a can-do mindset, both of which Swearingen can deliver.


The Zweig Letter: In your role at Zweig Group, how do you Elevate the Industry?

Will Swearingen: Since coming to Zweig Group, I have worked in multiple roles and tried to make myself available to fill the highest priority need that I can. I led the research group for awhile and became fascinated with how much information Zweig Group collects each year from the AEC industry, and by how much the industry needs that information. I have used that insight, and additional experience, to better understand how we as a company can truly Elevate the Industry. We do this through quality consulting based on sound data.

There is an old saying that comes to mind here: Only two things are certain in life: taxes and death. The industry is highly fragmented with a large percentage of design professionals in the AEC industry working in small, privately held companies. In these companies, firm owners grow older, and younger staff need to see their career trajectory to remain engaged. Ownership transition couples these two components. We work with firm leaders on succession planning, leadership development, and, ultimately, ownership transition. We want more architects and engineers to get a piece of the action and unlock the true potential for growth in the design industry.

TZL: You are building out a new business line in ownership transition. While exciting, this certainly has its share of growing pains. Tell us about creating an advisory service from the ground up, the good and the bad.

WS: This service line has been a staple of Zweig Group for many years, but I stepped into the role out of necessity as we continue to find the right mix of talent and drive to grow our advisory services. But re-building this particular unit has been an incredible opportunity. I have experience with the entrepreneurship/new venture development concept through my education, and this role has positioned me to utilize a unique skill set I acquired during my MBA. Understanding business structure, how value is built and harvested, and how to communicate these phenomena to clients has been a fun ride. Of course, learning from the firm’s founder, Mark Zweig, on how to handle the variety of clientele and navigate each project independently has been one of the biggest growth areas for me. We have a great team here and can bounce ideas off so many in our leadership team that no project can stump us.

I will say that one area we are building from scratch is a service line to help firms with compensation assessments and benchmarking. We saw a need and have responded. We collect immense amounts of data from the industry and are learning how to repurpose the information to fit our clients’ needs. This particular service is an offshoot of ownership transition consulting. Owner compensation and incentives are key drivers of the success of these plans. Noticing the need to understand compensation profiles at that level, and then realizing we have dense data on all technical and non-technical positions, gave us the opportunity to deliver a one-of-a-kind service for AEC firms. We have built a team of talented staff, allowing us to take this service to our clients. Look for more on this in 2020.

TZL: When we talk about ownership transition, we’re oftentimes talking about an owner, or owners, handing off a company they worked many years to build. Blood, sweat, and tears. Talk about the emotional component of ownership transition.

WS: You can’t underestimate the emotional component of these transitions. It’s on both sides of the coin. Selling and buying in this space is hyper charged with anxiety. As advisors, all we can do is roll out the numbers, facilitate discussions, develop goals, and generate targets and milestones for these teams to track against. You can’t make anyone do anything for which they are unprepared. Knowing that Zweig Group has given 110 percent to a project is all we can do. For firm owners, the best policy in these situations is to be honest with themselves and be honest with their peers. When you add unnecessary secrecy, mistruths, and confusion to an already hyperactive environment, the results can only be difficult.

Some clients are on a fact-finding mission to create that long-term plan, and others are up against a wall or, more appropriately, a clock. The mysterious founder transition is one that requires special attention. These companies are their children, their identity, their purpose, and the definition of their persona. Entire lives – social, economic, and routine – have been built around that role. Being conscious of all these facets is critical when you are planning to detach someone from their identity. Take time to develop the plan. Respect the people, both incoming and outgoing, and keep communication open.

TZL: As an OT advisor with a proven background in financial modeling and benchmarking, what do you bring to the table when a client calls?

WS: I had a call the other day and the gentleman asked, “Have you ever worked on one of these that didn’t work?” And I thought, “Hell yes!” Sometimes I feel like a paramedic/ phycologist showing up at the scene of a crime. But seriously, when you are looking at ownership transition, you need a team that is experienced and has been through this before. I feel very confident in my ability and our team’s depth to deliver results. A lot of this confidence comes from my years of experience and my ability to develop sound financial models.

Here at Zweig Group, we do track what is normal and acceptable during a transition. We monitor financial performance and understand how metrics and ratios dictate the viability of a plan. As I said before, we can roll out the numbers and present a transaction, the impact it will have on cash flow, and the obligation for incoming staff, but it is the people and their decisions – both prior to the engagement and during the engagement – that truly control the transition and its viability.

My minor in college was anthropology. The most impactful study I remember was by a guy named Bronislaw Malinowski. He studied Pacific island culture and a trade phenomenon called the Kula ring. Though this was not an economics course or financial theory, it was a primary case study for me in the concept of transitioning ownership. The cultural components studied, though unique in nature, still had very fundamental rules for any exchange. “The right of participation in Kula exchange is not automatic; one has to ‘buy’ one’s way into it through participating in various lower spheres of exchange. The relationship between giver-receiver is always asymmetrical: the former is higher in status.”

TZL: From your vantage point, what’s the biggest pitfall when it comes to ownership transition?

WS: These are the biggest pitfalls:

  • Time: Transitions take time and require planning in advance.
  • Communication: You need honest, open communication leading up to and throughout the transition. Not just with the people involved in the transition, but with the next level down so that they can help communicate change to a broader audience.
  • Profits (or lack thereof): A portion, and perhaps even the vast majority, of payouts come from profits generated through the business, so running a successful, efficient firm is key.
  • Leadership and business development training/mentoring: The next level of leaders needs to be competent and comfortable running a business and leading their peers.
  • Role definition: People need to know what they are expected to do, and their peers need to know what to expect of them so that everyone is pulling their perceived weight.

TZL: How do you gain the trust of your clients?

WS: Listening to them and letting them know that they aren’t alone in the endeavor. For many, it is uncharted territory and they just need assurance from a third party that what they are doing is normal or reasonable. I also think that being consistent with our messaging and delivering accuracy with the numbers is critical to developing trust. One thing that helps us is our brand recognition. Zweig Group has been around for 30-plus years and many clients and customers know that our products and services will live up to a certain standard. That is a great first step in developing trust, but then it comes down to listening and helping them execute on the actions and goals they need to move their project forward.

TZL: Before joining Zweig Group, you were at Anheuser-Busch InBev for four years, ending up as an analyst for a $2.5 billion category. What did you learn at AB Inbev that has served you well in your current role?

WS: I learned a lot. I had a good grasp on data analysis before, but I honed my technical skills in Excel and improved my understanding of database management. I also learned a great deal about the retail environment and how pricing, product placement, and product assortment all impact consumer behavior. A considerable amount of Zweig Group’s revenue comes through online product sales. Making sure our messaging and product portfolio are communicating what we offer is a continual process.

I also learned about the need for younger staff to see career advancement. That is one of the most often cited areas of improvement for architecture and engineering firms. Staff want to see themselves contributing in the future and want to know what their role in the firm will be in two, five, or 20 years. Ownership transition is an opportunity to help leaders develop plans and communicate opportunity to their staff so that they don’t feel like they are up against a ceiling three years into their career.

About Zweig Group

Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training. Zweig Group exists to help AEC firms succeed in a complicated and challenging marketplace through services that include: Mergers & Acquisitions, Strategic Planning, Valuation, Executive Search, Board of Director Services, Ownership Transition, Marketing & Branding, and Business Development Training. The firm has offices in Dallas and Fayetteville, Arkansas.