Katie:
Welcome to the AEC Marketing for Principles podcast. This show is designed as a conversation between sales and marketing principles to address trends, challenges, and best practices that are driving growth for professional service firms. Through our collection of discussions with subject matter experts, industry legends, and leaders, we aim to share thoughts and practical tips with our listeners that you can use for growing your AEC brands. Hosted by me, Katie Cash, senior vice president at SmartEgies, the AEC growth consulting firm that’s been developing smart business strategies for design and construction firms since 2008. Hi, everyone. Welcome to the AEC Marketing for Principles podcast. Katie Cash here. And as you know, this season, we’re talking about impact.
Katie:
And today, I’m excited to have Mark Zweig here. For those of you that may be under a rock, Mark is the founder and chairman of the Zweig Group, which is touted as being the premier authority in AEC Management Consulting. I mean, the premier one. They are the go to source for industry research, if you’re looking for that. They’re also the leading provider of customized learning and training, and they really specialize in 4 key areas. So today, we’re gonna be talking a little bit about their consulting area around talent, performance, growth, and transitions. And diving into a little bit around mergers and acquisitions, strategic planning, the dreaded financial management conversation, ownership transition, executive search, business development, valuation, and so on and so forth. You can tell that Mark is gonna wealth of knowledge.
Katie:
But first, let’s get to know our person of impact today. Mark, if you don’t mind, I mean, your resume speaks volumes of your varied interest. Right? I mean, you’re the typical entrepreneurial that can’t seem to decide what they wanna be when they grow up. So you’re a teacher. You’re a author. You’re a speaker. You consult. You also podcast, which is fun, and I know you’re a motorcycle enthusiast.
Katie:
So
Judy:
just share a
Katie:
little bit about our journey and get everybody excited for this turbocharged chat we’re gonna have.
Mark Zweig:
Hey. I’m also an owner of a motorcycle manufacturing company.
Katie:
I mean, taller. Could you have the time? I
Judy:
think we call that serial entrepreneur.
Mark Zweig:
Yeah. I think you said it, Katie, trying to decide what I wanna do when I grow up. And I’m afraid the, the meter is getting closer to running out, but, on my time, but no, I don’t know that my story’s all that unique. I started out of grad school. I worked for a couple, I got my MBA. I worked for a couple, I started out in a consulting firm that served contractors, developers, and architects, and engineers, and I gravitated to the AE side. And then it got recruited and worked for 2 different AE firms, became an owner in one of those when I was, like, 26.
Katie:
That’s nice.
Mark Zweig:
That range. Anyway, so I worked for a a consulting firm. And then shortly after that, went out on my own. I was the editor of a newsletter for our industry, and it had been writing for it for a number of years. So and I got involved in some professional societies. 1 was PSMA, Professional Services Management Association. Eventually, that got merged in with SMPS. And I was the chairman of that at one point at the board of PSMA 1 year.
Mark Zweig:
But anyway, so, yeah, basically, we saw our business as doing anything that helped the businesses of architects and engineers. And so that was cast a pretty wide net and got into all the things that you talked about there. And I think sort of fundamental in it all was practicing what we preached, running our own business, the way we advocated other people run their business. And we were twice on the Inc 500 list in the nineties. We sold the company in 2004. Private equity, they ruined it. In 2009, it was taken over by its lender. They called me back in 2010, bought it back in 2012, and sold it back again.
Mark Zweig:
Got back on the Inc list in 2013, and then sold it back to the employees in 2018. And the company, made it to the Inc 5,000 list again in, this year, in 2024. But Mhmm. I’m really not actively involved with the company at this point, and as far as any Mhmm. Sort of day to day operations go. But, of course, I talk with people over there every every day practically about one thing or another. But
Katie:
Oh, I’m sure you’re still looped in in the part of the fabric of that organization. You may not know this, Mark, but Judy, who, you know, is my my partner in strategy joining us in today’s conversation, you were actually part of the inspiration behind her vision for Smart Achieve. Yeah. So it’s like meeting the celebrity here, having us talking. So, Judy, I know you’ve had the opportunity to talk with lots of CEOs across AEC firms throughout your journey. What do you feel like Mark’s contribution to the industry has really been? Like, let’s celebrate that point.
Judy:
Well, I think the biggest thing Mark did was that he never hired me. So despite the
Katie:
number of
Judy:
guys I tried.
Katie:
It was
Judy:
interesting. I tried and tried and tried, but I think that, you know, those paths never crossed. But, actually, I admired you so much, Mark, very early in my career. I had this wonderful opportunity to work for some real visionary entrepreneurs in my time, and Zweig was the brand that I went to for business intelligence. That is just what I did. And there were a few times where you, I think, tried to expand into Atlanta and I all 25 years of myself would throw my resume into the pot, but obviously grossly underqualified for the job at the time. It’s me, girl. Yeah.
Mark Zweig:
Yeah. I was unaware of that, Judy. You should have made me. I’m sure.
Judy:
So I just said, you know what? All I’m gonna do is just keep doing what I’m gonna do and take his advice and try to apply it in my role. And what do you know? 2007 rolls around and I become a mother and I decide maybe this is the time that I bet on myself and take the the Mark Zweig page out of the book and see if I can’t teach some architects and engineers how to grow their business.
Mark Zweig:
And I was just gonna say, I was really impressed with you when we talked to you at one of the companies that I was working with in Atlanta here some years back.
Judy:
Well, now you know why. I’ve been listening to your advice my whole career. So
Mark Zweig:
Seemed like your program was really a good one for what you were doing for firms, and and you could point with some real evidence to how you were helping them. It was You
Judy:
know, Mark, the biggest difference between you and me is that you can math and I cannot. So I put all of my energy in just that one lane of marketing, business development, communications. And I think one of the things that I learned from you very on is know what your superpower is and do it well and do it consistently. And I think that was great advice very early on in my career is to recognize that other people are going to have stronger voices when it comes to matters of the p and l. But my voice is gonna be very strong when it comes to how do you expand share of wallet with existing customers? How do you grow new revenue streams with strangers? And I’ve pretty much stayed in my lane, and I think that was very much inspired by by you and the advice that you gave. So thank you for that.
Mark Zweig:
Thanks. I can’t say that’s necessarily advice I followed myself. Although I would have said,
Katie:
it is the way
Judy:
you are quite the serial entrepreneur. You just are good at lots of things. That’s all. I’m just good at, like, a few things.
Mark Zweig:
It is the way to be most successful financially, I think, is just do one thing and get really, really good at it. Yeah. Because you’re focused on that. But, no, I was impressed because you had some real tangible evidence of what your programs were doing for firms in this industry. And I, to me, that was a lot more substantive than a lot of marketing people I see in our business, frankly.
Judy:
Yeah. Well, I was raised with the mindset that marketing in our industry is really there to support one thing and that’s sales. Yeah. So at the end of the day, you gotta sell a project. They gotta sell a client to give you a project or you really don’t have, like, everything else doesn’t matter. Right? So unless you have projects to do, you really don’t have anything to do. And so really aligning our marketing program, just realizing that AEC marketing usually happens at the bottom of the funnel, close to the top of purchase, takes the shape of procurement. So typically, there’s a sales initiated ask that puts marketing in into motion in our industry and just recognizing, well, the customer journey starts way before that.
Judy:
And why isn’t marketing in that conversation? And just really pushing the value of marketers in our industry to the top of the funnel. And really, you inspired that primary research, content, publishing. Those are all the right things to do. And, Katie, getting back to your question, what makes Mark different than every other CEO? Well, that’s not fair. I have some pretty awesome CEOs that I work with that are very, very much visionary and aligned with this, but he gets marketing. Yeah. That’s the thing. He got content marketing before content marketing was a thing.
Judy:
Like, I remember getting the surveys and it’s like, hey. Take 3 hours to fill this out and you get a free copy of the survey. And I thought, what a deal. Let me do it.
Mark Zweig:
That’s the truth.
Judy:
But, you
Mark Zweig:
know, it’s 9
Judy:
it’s 1996. What else am I gonna do?
Mark Zweig:
We did put out a lot of information early on. I started with a newsletter that was just look it was courier font, 2 pages, and it looked like the Kiplinger report, which at one time was the largest circulation newsletter anywhere.
Katie:
Yeah.
Mark Zweig:
And just put information out, whatever was on my mind, whatever I thought would be helpful to people, and started with 500 people for free and then got it to 23100. And then we decided to turn it into a paid newsletter after my non compete ran out with the one that I worked with. And as soon as we did, it was we got 500 subscribers and they paid it, $200 a piece. It was a $100,000 came in the mail, and it was just
Judy:
Pushing out content. I mean, it’s crazy.
Katie:
That’s what it was.
Mark Zweig:
It’s your content.
Katie:
Well
Mark Zweig:
it should content or not, we could debate, but it was content.
Katie:
Anybody listening doesn’t get the content we’re talking about if you go online. This is zweigroup.com. There’s lots of insights there. You can participate in these surveys, save some cash on the back end. So that’s great. So I don’t disagree that content is awesome. Content fuels a lot of campaigns that we’re running today. Judy, I agree.
Katie:
If we don’t have a project, we don’t really have anything else. But you and I both know most of the conversations we’re having with our clients right now is really around staff recruitment and retention because the demand is there and they don’t have the capacity to meet the demand. So, Mark, I know you and your team and certainly your background, you’ve got lots of thoughts around the talent war and everything that’s going on there. Can you maybe share your perspective on what you’re seeing as it relates to this the idea of the talent war? Are we still in it? Are they still winning? How long is it gonna last? Yeah. Who is they? Well, you know what I mean?
Mark Zweig:
I mean, look, I wrote a book on human resources management for this business going back to 1990, And it was published by Wiley, but, that was a big part of it was recruiting and retention. It, my sort of thought process is HR is totally misdirected. Most HR people are worried about minimizing liability as their priority, and then top management hates them. And then you couple that with so many of them see their role as one of the employee ombudsman, which is basically we’re representing employees against management. And you got a really bad recipe there. So my whole take on it was recruiting’s gotta be the cornerstone of HR. We’re out there. We supply the talent to management that they need to grow this business.
Mark Zweig:
And so yeah. I mean, yes, we’re still in a talent war. Yes. Probably, the entire industry is probably understaffed by 15 or 20%. Yes. Most companies could do a much better job. They still too many of them are stuck with this sort of notion that their interviewing and recruiting process is more about keeping bad people out than it is getting good people in. And so that’s a problem.
Mark Zweig:
They’re not selling enough. They’re not really selling their company. And then on top of it, a lot of these companies aren’t really a great place to work. So many of them don’t have a viable internal ownership transition plan. They’re very stratified and have these, to me, which are absurd, rigid job descriptions and pay ranges. You’re an engineer 3. You could make up to $82,412 a year. That’d be an engineer 4.
Mark Zweig:
You need 6.8 years of experience, and it’s just those aren’t good places for motivated people to work. So, yeah, I think there’s too much stratification. There’s too much bureaucracy, not enough selling, not enough commitment to the idea that you’re really not gonna be a good employer. You’re really not gonna attract top talent. If you don’t come to grips with the fact that you’ve gotta be committed to growth, that’s probably the single most important thing when you come right down to it. And so a lot of companies still believe the bullshit that we can stay small successfully or some other nonsense like that. Good luck with sustaining that for very long if you really wanna have good people. I mean, I know a lot of people who did it.
Mark Zweig:
Yeah. They made money. They had a great living, and then eventually, everybody quits, and they’re 78 years old, and they’re tired, and they get cancer, and they die. It’s just
Katie:
I mean, just sugarcoat it for us, Mark. Just sugarcoat it very well. You know you
Mark Zweig:
know it’s true, though. Okay? I mean, honestly. So you gotta really be committed to growth. And then, you know, there’s a lot of others things that I think would be helpful to these companies to better be able to recruit better talent. And, you know, those things include open book management, not enough companies practice that.
Judy:
Right.
Mark Zweig:
Changing changing their bonus programs to be one that pays the money out much more frequently than once a year. It really having an engaging business planning process that everybody participates in. I think there’s a lot of stuff that companies can do that would make their workplaces more attractive to highly skilled talent?
Katie:
Well, my husband’s an engineer, and and he comes from a engineering firm whose leadership, I think, must have read a lot of your content or subscribed to your thought process because they did do a lot of open book management and all those cases. And what I think it also afforded them the ability to do is internal succession planning by Osmos, because they were just always part of that conversation. They understood the business of engineering just as much as they understood the practice of engineering, which is not always taught in school. Right. And I think that’s, that’s
Judy:
why I say never He’d never taught in school.
Katie:
Yeah. Yeah.
Mark Zweig:
You’re right.
Katie:
Trying to change parts of it. So No. But, okay. So one thing I think we often hear, you know, we’re often working with the technical professionals, the architects, the engineers, the contractors, trying to help them sell the story on why their organization is a great place to work. Right? And everybody feels like they are great. And you’re like, no, honey. Your baby’s ugly. It ain’t great.
Katie:
No. Let let’s be real here. Let’s sell them a a realistic story. What’s the best way to do that? How do you communicate that it’s not a sweatshop, but it is a sweatshop because I need you to get your utilization up, and you gotta get this project done, and it’s gotta go to permitting next week. And how do you do that? How do you balance that?
Mark Zweig:
How how do I balance the demands of the job with trying to make it look like it’s a good job or what?
Judy:
Yeah. Yeah. To get people to say yes to you.
Mark Zweig:
I mean, look. Honestly, again, I think you’ve gotta be a company that sheds the bureaucracy so you can really reward the most motivated people. And look, like it or not, hours make a difference. Okay? Everybody wants to say, well, it’s not how much you work. It’s how much you get done. Bullshit. Give me 2 people. 1 of them works 60 hours a week.
Mark Zweig:
1 works 35, and they’re both motivated, quote, unquote. I’ll take the 60 hour a week one. They’re more engaged. They’re committed. So but I need to pay them really, really well so they feel like it’s worth it. And the only way I’m gonna be able to do that is if I got this rapidly growing revenue stream and have a great brand that allows us to charge high prices, which then in turn allows us to pay everybody better and create real opportunities for people. If I don’t really create real opportunities and it’s just like, yeah, get in line, get your PE. And 20 years from now, old Joe will retire.
Mark Zweig:
And when you’re 50, we’ll let you buy a little bit of ownership. And then when you’re 58, we’ll have you start selling that back or whatever. It’s not very exciting. Or you work your ass off, but somebody else over here doesn’t, and you’re both gonna make about the same amount of money at the end of the year. I mean
Katie:
Well, and I think the other thing, the unspoken thing that happens in that growth is you transition from being a doer to a doer seller, and you have no idea how you’re supposed to sell or how you factor that into Right. Day. So, Judy, I’m going to to you on the topic of recruitment, retention, kind of this whole idea. What did what does the marketing communications team need to be doing?
Mark Zweig:
Oh, as far as recruit recruiting goes, they are really need to be actively involved in it.
Judy:
Forty minute. Yeah.
Mark Zweig:
I always had, like, a document back in the old days that I could flip around, and I could go through all our growth in history and what makes us different. And I had it very well summarized for people, and they could take that with them. And, again, I mean, to me, the recruiting needs to be a lot more selling. Where are we going with this company? What’s the vision? Do we have a real purpose, or does it sound like some kind of bullshit that we’re gonna be we’ll be a highly qualified, multidisciplinary firm that serves a wide range of public and private clients or some other nonsense like that. Okay? It’s gotta be something pithy that really means something. And so we’ve got a purpose. We’ve got a vision. We’re trying to go here.
Mark Zweig:
In 10 years, this is where we wanna be. And this is all the stuff that makes us different. And this is why you wanna be part of it, but we don’t want you unless you’re willing to work your ass off, but you wanna make twice what everybody else does. There’s my formula right there. Okay? That’s what I’m gonna be selling to get really good people. And there’s still people out there who’ll work like that. I met a contractor president of a contracting company that was, who’s only been in the role for 36 months. And it started out his owner is a guy I know who’s one of the wealthiest people here in the state.
Mark Zweig:
And in any case, he bought a $7,000,000 contracting business, merged it with a $6,000,000 company they bought and grew it to a $100,000,000 in 36 months. Okay. And when he took over as president, he was 29 years old. But the guy he works for says, I just want people that’ll work their ass off like me. He’s 75 years old, the owner. He goes to work every day, gets there at 5:30 AM, and he’s already a billionaire. And I’m like, what motivates you? He’s like, I just love making deals. That’s I don’t golf.
Katie:
I
Mark Zweig:
don’t I make deals. I just want some young, hungry people. I don’t care what their background is. Okay? So I sent them 3 of my students that were like that. And I said, look. You can go to work somewhere. You can work 40 hours a week. You’re probably gonna start out at 65, 70, 75 k with your degree when you get out of school here at at the Walton College, or you you can go somewhere and work 80 hours a week.
Mark Zweig:
And in probably 2 years, you’re gonna be making a 150 k. Which one do you want? And if they said the latter, then those are the people I sent to them. And so they’ve got 3 of these people working for them now that came from me. They know what to expect. They’re not being sold this story of work life balance. Not to say that can’t come at some point, but not early in your career. Not if you really wanna be successful. And so, yeah, I mean, I think marketing can help tell that story.
Mark Zweig:
I don’t know what else you can say. A good brand attracts people. A good brand makes people come out of the woodwork. Good people wanna work there. Miyamoto International is a great example of that, leading earthquake engineering firm in the world, and they don’t have a hard time hiring structural engineers. People wanna work there. Their mission is to save lives and make the world a better place, And it’s real. And the founder’s out in the field, and he’s in Afghanistan, and he’s in Haiti, and he’s in in Ukraine out there pulling bodies out of rubble.
Mark Zweig:
So it’s not bullshit. It’s real. And people wanna be part of something like that. So marketing is getting the word out on what they’re doing, and then, boom, good people flock to the company. And and it’s a different game from ABC and Associates, another alphabet soup company out there plodding along. We’re a good place to work. We’re like a family.
Judy:
Absolutely, Katie. I think the other thing is, is that when we work with companies that are trying to build this employer brand and lots and lots of recruiting campaigns these days, The thing that some companies miss is, what is your ideal candidate profile? And and some of them are that 75 year old that says, I just want someone who wants to work, that is into what they do and they just wanna work. Whereas others might have passion points around the cause or the ambition behind the firm. But I think that’s a big step that companies miss. They’re like, I need a senior electrical engineer in x y z city. Well, stop for a moment and ask yourself, what does that audience need to be interested? A lot of times, companies are selling value propositions that are only valuable to them, and they don’t they’re not valuable to who they’re trying to recruit. And once we unlock the secret sauce of, oh, highly motivated people, that this buyer persona of a highly motivated top performer who’s not looking for a job, considering a move, typically, we encourage companies to be very factual about that. And a great example of this, Katie, is you and I recently had kind of an out of body experience because we had a civil engineering firm in Arizona that was recruiting their next CEO.
Judy:
They had this amazing CEO announced her retirement. So we launched like a multi channel, multi month campaign recruiting this ideal CEO, and it included, like, videos of their board saying what they’re looking for in their next CEO. It included videos of the department, employees, their staff saying, this is what we’re looking for in our next leader. It included a lot of information, but you know what else it included? It also included, by the way, you’re gonna make in the top 10% of earners in this business.
Katie:
Yeah.
Judy:
And I guarantee you, when you are a CEO candidate that’s living in Nashville, Tennessee and not looking for a job, I would suggest you lead with the you’ll earn the top 10%. Because if you’re a gen xer and maybe you have a calculated runway until retirement, that’s probably gonna rank high. Yeah. Regardless of what your passion is, I salute those who have real I mean, we our industry is just full of really good humans, but just getting really real about what will it take to make this ideal candidate say yes. Sometimes it’s a hybrid workforce or workplace. Sometimes it’s, hey, we want you to work 80 hours a week, but we really don’t care what hours they take place. We’re aware that happens as long as it happens. You know? So it’s finding that right fit culture, but the compensation cannot be underestimated.
Judy:
There are just too many opportunities. Our industry is full of the STEM kids. They’re like the smartest kids in school that grew up to be the smartest adults on Earth. They have ample high earning opportunities. And they And yet You need the math. And they math. Right? They know how to do the math. So, like, these companies that want to say, hey, I want someone really, really good, and I wanna get them as cheap as possible, probably not gonna be competitive today.
Mark Zweig:
It it’s amazing to me. I mean, I remember years ago, I got a call from a client who’s a friend of mine. I’ve known him forever since I was a little kid. And he’s like, I’m gonna need to find a new HVAC project manager, somebody with a really strong healthcare background. And so I’m like, okay, well, what do you wanna pay? Well, I wanna pay, at the time it was like 75,000. You know, it’s like 35 years ago or something. I go, 75,000. I go, where’d you come up with that number? Well, that’s what all our the 6 other ones we have made, but none of them is good enough.
Mark Zweig:
So we need somebody better than the people we have, that we’re gonna pay what we’re paying these people. I mean, it just made no sense. And I said to him, I’m like, what? You’re already paying that. You don’t have what you want. What makes you think that suddenly, this next one is gonna be even better for the same money? I mean, it makes no sense at all. So yeah.
Judy:
Well, you know, and society would have us believe that people care less about money than they do work life balance. But I will tell you right now, with supply and demand as it is for talent, you have to have both. You have to have a great place to work and you have to pay top dollar if you want the best people. Because why would they come work for you? If they’re the best, why would they sacrifice quality of life or compensation? It makes no sense.
Mark Zweig:
Yeah. No. You’re right. But I mean, still, you guys have to admit there’s a lot I mean, that was very progressive, the way that company was recruiting the CEO. A lot of companies out there, they’re still fixated on the idea of, like, why do you wanna make a change? I didn’t say I wanted to make a change.
Judy:
Exactly. Okay. You called me, dude.
Mark Zweig:
But that’s the first thing, because even if somebody you’re dealing with understands that not everybody they talk to does.
Judy:
Right.
Katie:
They don’t
Mark Zweig:
understand that that’s not the way to do it, but just the preoccupation with that, it’s just like, you don’t understand. This is a short, unsupply market we’re in here. You can’t act like that anymore.
Katie:
I wanna pivot just a little bit. We’re talking a lot about recruitment, retention. I think we’re all talking about this unicorn Pegasus of a technical person that wants to work really hard, super dedicated. Mark, we just read one of your recent insight articles about the difference between being a processor and a top performer. We all want those top performers. So for our listeners that maybe haven’t read the insights piece, can you talk a little bit more about these 2 parties?
Mark Zweig:
Yeah.
Katie:
They play in organizations and maybe some of the the red flags, the beige flags to look for when you’re surveying your staff members and what to consider.
Mark Zweig:
Well, I think to start with the processors, there are people who are in the job. They show up every day. They put the time in, and they do all the steps that they’re supposed to do in the job that they, quote, fill the role. But when it comes right down to it, they don’t get very good results. And I just find a lot of people like that out there, and I have to run into it, whether they’re the financial manager, the marketing person, the HR person, a project manager, a department head, there’s just tons of people like that. And they’re filling the space. They do a good enough job that you can’t necessarily justify firing them unless you’re some kind of a monster. And at the same time, you don’t have anybody better to replace them.
Mark Zweig:
So I think there’s a lot of people out there like that in roles in our companies, and they really hold us back. We’re hesitant to deal with them because they do do the job to a certain level, but it’s not to the level that they really make an impact on the company. And one of the reasons we have that is because we don’t practice what I call supply side human resources management, to steal a, a term from a past president. And that is where you just ramp up recruiting volumes so high that you have constantly are bringing people through that you think could be good. And then you won’t tolerate mediocrity out of your existing staff. But part of the reason why they tolerate so much mediocrity is they don’t have anybody better to replace them with. Okay? So if you ramp up the supply line, you then deal with your existing people differently than if you don’t do that. So, yeah, I think it’s a big problem.
Katie:
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Katie:
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Judy:
Yeah. It’s almost like a hostage situation. Right? Like Yes. The Welch grid says that you have every company has these terrorists. They’re high performers, but at every cost or at any cost. And long term, they really end up hurting your organization.
Mark Zweig:
That’s another thing.
Judy:
Yeah. It’s like, as an owner, like, what do you do? They’re a high performer. I’ve gotta be able to keep operating, and you turn a blind eye. And, eventually, those things typically don’t work out. I I think it’s really powerful in your article, Mark, that you, like, call out examples of it’s the CFO that doesn’t get the best banking terms. It’s the marketing coordinator that has a less than 20% hit rate. It’s people who are getting the job, quote unquote, done, but they’re not excelling at anything that helps your business. And there’s a difference.
Judy:
I think as an employer now
Mark Zweig:
Mhmm.
Judy:
The biggest difference in my career now as one that was in charge of other people and their families and making sure that they have a place to come to work every day and it’s secure is understanding that, like, the people you want on your team are those who are going to take an ownership role in the outcomes of your business, whether they’re owners or not. And those people are just made that way, in my opinion. I think they’re just made that way. I don’t think I taught Katie Cash how to do that. I think she’s just made that way. And so this new generation of leaders coming out of school and, you know, teaching this semester at Georgia Tech, I have these 9 amazing, brilliant students in building construction, taking construction marketing. And every single one of them is hungry to be a leader. Every single one of them wants to own their own construction company.
Judy:
Every single one of them is up for the challenge to work 80 hours a week. Every single one of them elected to take my class, and it’s not required. So it’s just interesting to see how these people are wired.
Mark Zweig:
They are out there, but I think we ruined some of those people. I agree with you. We hire good ones. We can’t take mediocre ones and make them into rock. But we can take rock stars and turn them into mediocre ones.
Katie:
For sure.
Mark Zweig:
What’s nice, you said it, that we have some of the greatest people in the world in this business, and it’s true. I’m not real fond of the whole AEC moniker, although it’s been completely embraced by my company.
Judy:
I’m I’m just
Mark Zweig:
because I see What
Judy:
would you call it?
Mark Zweig:
I see the AE side as totally different from the c side. I mean, I own a construction company. Okay? I had a general contractor’s license with a unlimited license, and it’s such a different animal. Coming out of the AE side, we were totally unequipped for the ethics of the construction side. I’ll just say that. It’s totally different. But we’re so damn nice and kind and good that it’s really hard for us to deal with people who perform at a certain level, but not go beyond it. I mean, you know, this is true.
Mark Zweig:
It’s just the culture of the so many firms in this industry. We don’t really have high expectations and make high demands. Like, well, I wanna do this. Okay. People kinda define their own jobs, how much they wanna work, whatever. And we’re all like, okay. That’s fine. Whereas a lot of other industries just don’t function like that.
Mark Zweig:
They’re a lot more dog eat dog. Maybe the construction side is more like that than the AE side. I don’t know.
Judy:
Well, I certainly think that the industry had struggled when there was ample supply. When we had if you look back at, like, 2008, we had a whole generation of graduates leave the industry because there were no jobs.
Mark Zweig:
Yeah.
Katie:
If there was ever a time to cut
Judy:
the fad and skill up
Mark Zweig:
You did it.
Judy:
That would have been the time to do it. And Right. People prioritize loyalty, and they prioritized mediocrity or whatever. I don’t know that they knew they were doing that, but if there was ever an opportunity to make some smart business decisions around human capital, that would have been it. But now I think it’s legit that it’s you can’t find even the mediocre people. You can’t find the mediocre people. So I think that companies now are stuck with what they have unless they’re one of those really progressive companies that kinda nail the employer brand. And
Katie:
Yeah.
Judy:
They built premium brands that can demand a premium. I mean, like, look at Gensler. I don’t think Gensler is, like, cutting their prices. Right? I mean, I think that they could probably demand the best of the best. I don’t I can’t imagine brands like that are reaching out to people and people are saying, no, I’m not interested. I mean, you take that conversation. Why? Because of the strength of their brand, even if you’re not interested.
Mark Zweig:
That’s so true. I mean, that’s why I was saying that you gotta have the brand in order to be able to justify the prices, which then allow you to really get good people. And it’s all intertwined. Most people think of marketing and they go, oh, marketing. You know, that’s all about promotion. But marketing is a lot broader than that. I mean, really, it touches everything the business does. It’s like, what’s its mission? What’s its vision? I mean, that’s influenced by marketing.
Judy:
I mean, I like to say marketing’s only job is to create demand for the brand. Yeah. Whether it’s creating demand to be an employer employee at that brand, creating demand for that brand to service your next project. Whatever it is, marketing’s job is to create that demand. Sales’ job is to close on that demand. And I think that our industry likes to stick marketing at the bottom of the funnel and say, sit tight. Our queue’s coming. And we’re the only industry in the world that allows that just just that way of thinking.
Mark Zweig:
If we can afford it, we’ll spend some money on marketing. That’s another one I want. Yeah. It’s so true. You’re right on with that. I mean, sales, business development is a subset of marketing, not vice versa.
Judy:
It’s totally different skill sets too. Right?
Mark Zweig:
If the marketing really does its job, the selling is really easy. The best illustration of that, I used to talk about this in my classes. Some years back, there was an entity. It was called NUMI. It was New United Motor Manufacturing, Inc. It was a joint venture of Chevy and Toyota, well, GM and Toyota. And this was a plant, and it was in the United States and they turned out 2 cars. They turned out the Chevy Nova and the Toyota Corolla, which were the same car or the Geo Prism and the Toyota Corolla.
Mark Zweig:
Same car, different labels stuck on it, coming out of the same plant. Okay? Mhmm. Toyotas, they sold like 5 or 6 times as many of them, and they sold at a higher price than the General Motors variant. Alright? Which didn’t sell as many and sold at a lower price. Why is that? Toyota has a better brand. It’s you buy a Chevy, expect it to be worthless in 5 years. You buy a Toyota in 5 years, it’s still gonna be good. Even though they were the same.
Mark Zweig:
Yeah. So the brand is a huge thing. It’s greatly misunderstood in our industry. And, yeah, the marketing, you gotta overspend on marketing to create the brand that makes it easy to sell and makes it easy to recruit people and makes it easy to get high prices. Yeah. That’s the other thing. If you look at how much money firms spend, and sometimes it’s interesting if they’re organized around market sector, I’ll never forget this. That was I was at a HOK dinner for a departing CFO who was a friend of mine.
Mark Zweig:
This goes back like 18, 19 years ago. And we’re sitting at this dinner and I’m sitting next to Jerry Sinkoff, who at the time was the chairman of HOK. And Jerry is somebody that like my sister knew. It goes long history. I grew up in Saint Louis. But, anyway, so I’m talking to Jerry, and he’s like, if you look at HOK across all our market sectors and they did health care, and they did corporate office buildings, and they did higher ed, and they did sports facilities. He goes, if you look at all our market sectors, which one has the highest profitability? Sports. Which one has the highest marketing overhead? Sports.
Mark Zweig:
And you guys, it’s just clear. I mean, you gotta spend money on marketing to create the brand that drives the demand that allows you to charge the price.
Katie:
And
Judy:
Yeah. And they still live that to this day. I don’t know how long ago that was.
Mark Zweig:
That’s 20 years ago. 19, 20 years ago.
Judy:
They’re one of the best in the business in terms of positioning their brand for premium. And even few seasons ago, Katie had Bill Johnson on the podcast who leads their sports division and talk about power of the brand. He tells the story about how they won the Mercedes Benz Stadium here in Atlanta.
Katie:
Yep.
Judy:
And for the listeners that are listening today that didn’t catch that episode, it’s definitely worth to listen. But the truth is, and he says this in this episode, Mark, is that they no go ed it. They no go ed Mercedes Benz. It took Arthur Blank making a call saying, we need HOK in this competition. Talk about power of brand. I mean, kudos, HOK. And and shout out to our good friend, Sarah Keane, who was just with us at the conference last week in Texas. But the other thing about HOK is Sarah is the youngest marketing principal in the firm.
Judy:
They have these centers of excellence and marketing is one of them. And she is a marketer who is a principal at an architectural firm that’s the caliber of HOK. So I think that those who think that marketing as snake oil needs to just take a look at the most powerful brands in the industry, whether it’s Kimley Horn when it comes to engineer civil engineering at Gensler, HOK, Nelson Worldwide. These firms, marketing is not overhead. Marketing is a revenue driver. And the way they run their organizations speak volumes to why they’re being successful.
Mark Zweig:
Yeah. I call it an off balance sheet investment. I mean, it doesn’t show up there, but, I mean and if you really take it I know, Katie, we’re doing all the talking over here, Judy and me.
Judy:
I know. You’re talking fine. This is
Katie:
this is make you make my life easy, so go for it.
Mark Zweig:
You wanted you wanted to tie into m and a. Okay? Which I’m really glad that you brought that up early on. Yeah. Because here’s where it all comes together. Alright? We spend the money. We got really strong marketing. We create the brand. Right? We drives our revenue growth.
Mark Zweig:
We makes it easier to recruit people, allows us to get higher prices, makes selling easy and less personal relationship dependent, which is a huge thing for the company to be sustainable. Huge. We know that. And a lot of people are like, relationships are everything. Bullshit. They aren’t everything. Believe me, in the old days, ch 2 m Hill got jobs because they were CH 2M Hill. That’s why they got the call.
Mark Zweig:
Alright? Because everybody knew they were good at what they did. They didn’t know who they were gonna get. So that’s crap. Okay? But when you tie it all into m and a, so I’ve worked in m and a for a long time in this business. I mean, really going back, like, 30 plus years, and did a lot of it in a lot of different kinds of firms, buying, selling, due diligence, negotiating, whatever. And today, we’ve got all these financial people out there. And whenever you start talking about buying or selling their money, well, let’s talk about your multiples of EBIT. What are we at? 6 times EBIT, 8 times historic EBIT? I’m like, bullshit.
Mark Zweig:
I don’t even wanna hear that. It doesn’t mean a damn thing. What the real value is, what’s the revenue growth rate, and how good is the brand? All right. I don’t wanna hear about historic EBIT. We’re growing 20, 30 percent a year. What are we worth? We’re worth whatever somebody’s gonna pay us for it. Stop giving me these number jocks that don’t understand business on a fundamental level because the potential of that thing that’s growing at this rapid rate and has a great brand is huge. It’s not a function.
Mark Zweig:
You know, I talk multiples of Ebay. Let’s talk about 20 year steady state companies that plod along and grow at 3% a year and make a 10% profit. Okay. Now I’ll talk multiple of Ebay with you.
Katie:
Well, even if you have those financial multiplier, Mark, what Judy and I find on the end of the stick is now you’ve got these firms that have merged, and they wanna get rid of the brand that has the brand equity. And we’re like, that’s stupid.
Judy:
And then You just bought that brand. Why would you hate that? I know. Yeah.
Mark Zweig:
But it’s so, so true.
Judy:
Like, you overcome the ego hurdle of selling your company, but now you don’t wanna maximize your return. What is that about?
Mark Zweig:
What’s the ego of the buyer is what you know? Yeah. There there’s the ego coming out at their end that they wanna dominate and have their brand even if it killed the value of the business. I mean, if you look at other industries, my brother was the chairman of WPP Group. They have a group of their companies. It was a 100 and some odd companies. They’re the largest owner. They were the largest seller of ad agencies in the world. I don’t know if they still are.
Mark Zweig:
But they kept the brands of everybody they bought. They never changed it to that WPP. It’s like, why aren’t we buying it then?
Judy:
So they had, like, a Procter and Gamble model. They had independent brands. They had 2 channels.
Mark Zweig:
They ended up with 3 when he left, they had something like 360 companies. Okay. All including a few architecture firms, by the way, which blew his mind when they bought those. He called me up one day. He’s like, what is wrong with these people? I just got a business plan for the year that calls for a loss because the year hasn’t even started.
Judy:
How can they do that?
Mark Zweig:
Like, welcome to my world, brother.
Judy:
We might
Katie:
wanna do a second episode with you, Mark, on the topic of architects that do branding.
Mark Zweig:
But yeah. I mean, it really does all tie together because the brand then makes you more valuable and allows you to sort of transcend the normal bounds of valuation that the number jocks with MBAs wanna force into the equation. You know, allows you to break free of them.
Katie:
Well, as promised, this was gonna be a turbocharged super fun conversation. I don’t think you held back. I think
Judy:
No shortage of opinions and congratulations for being the first to curse on our podcast. Very distinguished stars there. I think I don’t think you’re the first.
Mark Zweig:
Did spare the f bombs. That’s a rule on our podcast. So that we had somebody last week, we didn’t stop them.
Judy:
We’re not gonna edit any of it up. You are who you are.
Katie:
I do wanna give both of you, like, an opportunity maybe for some, like, final thoughts, closing remarks as we wrap up the show, and then I’ll do, like, a a final close close.
Judy:
I’ll go. Truly a pleasure to have you here. Thank you. I sincerely did get a lot of wisdom from you earlier in my career and continue to follow you on social media and read your insights. I think that it’s a great service to our industry. I do love our industry and everyone in it, whether they’re number jocks or they’re true blue designers that don’t know when to quit designing. What drives me is being able to bring the business conversation and value to that crowd. What I’ve learned is that they’re usually looked to as the one that has the answer.
Judy:
And when it comes to business matters, they don’t have the answer. But they’re not quick to, like, let everybody know they don’t have the answer. So our clients make room for us to have those conversations with them and help their businesses grow. And I think that’s credibility that we, as marketers, we have to earn. And once we earn it, it’s just such a rewarding career. And I think that there were pioneers in our industry, you were certainly one of them, that paved the career path for nontechnical leaders in our industry. Because we’re a $1,000,000,000,000 industry that it’s big business. And we don’t have a lot of big business thinkers still today in the industry.
Judy:
So thank you for being that pioneer and continuing to serve the industry along with all your other hobbies. I really appreciate you being here today.
Mark Zweig:
Very sweetie. You’ve probably given me far more credit than I deserve, but I really appreciate it. It’s nice. And I agree with a lot of your thoughts on the industry, and there are great people in it. And you can get them to listen. I do think, though, that whether it’s marketing or it’s management consultants or whatever, we really and I think you understand this, Judy, is we can’t just talk in cliches and bullshit and buzzwords and jump on programs. It kills our credibility with these people. We’ve gotta be, like, direct and honest and clear communicators that make sense, that people can understand and minimize the jargon.
Mark Zweig:
I just think it makes us a lot more credible, better able to sort of break through their prejudices and preconceived notions about what we do and what expertise or value that we have. I mean, we do serve a do it yourself industry where people are generally wanna try to do things themselves. It’s sort of their nature. And so we we gotta break through there and establish credibility by being helpful and by demonstrating that this stuff actually works. The biggest problem with all the branding and efforts and is it sort of flies in the face of the way people wanna do marketing today, which is measuring everything quantitatively. We put that out. We got so many shares of it. Our our website gets so many visits, and people spend so much time on the pages, and everything is quantified.
Mark Zweig:
And some of this stuff, you just freaking can’t quantify, and you can’t justify it tangibly in some tangible way other than you’ve gotta, at some point, take a leap of faith. And if I keep spending money on this stuff, then eventually it breaks through. And lo and behold, then I’ve got this flywheel effect that makes it hard to kill.
Judy:
Yeah. And we maintain our optimism because every day, we are just working for some really open minded people. I mean, if you’re a company that hires smart AGs, you’re not one of those that doesn’t get it. I mean, we’re not inexpensive, and we take a lot of your time. So they we are blessed to have just some really forward thinking clients. And just today, I had a 82 year old architect that should’ve retired a long time ago, could’ve retired a long time ago, but doesn’t want to because he loves what he does, sent me an a note and said, hey, this article we published, it has generated this inquiry from a local architect that that’s looking for a national expert on this major project in their hometown. And he said the funnel is working. And I thought, this is why I get up in the morning because it’s just like George Harry was my first client, and he was 83 years old.
Judy:
And I taught him how to blog. And I mean, his first blog post, it was like 10,000 words. I’m not even kidding. It was a novel. It’s hysterical. But what? He even in his, like, latest chapter of his career, was still learning new things. And that’s why he was George Heery. So I do appreciate the segment of our industry that’s willing to say, hey, this business and marketing thing that every other industry, limit.
Judy:
It’s unbelievable what we can do. You’re right. I mean,
Katie:
we used
Judy:
to say, like, helping these companies is like shooting fish in a barrel. Right. That’s
Mark Zweig:
not that part of
Judy:
I think Katie says goat roping exercise. Isn’t that a pure phrase, Katie?
Mark Zweig:
That sounds harder than shooting fish in a barrel. It’s shooting fish in a barrel’s pretty easy, but I don’t know about goat groping, but, no. And the other thing is like, you just alluded to it. They really appreciate it because these businesses are so important to them. Their whole identity is wrapped up in the business that they either run or have created.
Katie:
Yeah. I mean, it’s their professional and personal reputation attached to all of this.
Mark Zweig:
It really is. And so it’s that’s why we can have such an impact on that, and it’s so valuable for them. And they do appreciate it when it works. You’re right.
Katie:
Yeah. Yeah. It’s gotta work.
Judy:
It’s gotta work. Yeah. First, that’s the golden rule marketers. The ish has to work. Like, no matter how creative you are, how pretty it looks, how much thought you put into it, it has to convert. If it doesn’t convert new business, it’s just spending money. I mean, that’s
Katie:
And know when to stop. Like, turn it off. Yeah.
Mark Zweig:
That’s true. There’s no doubt about it.
Katie:
Well, as promised, this was a great conversation. Mark and Judy, thank you both for joining us on today’s podcast. I hope all of our listeners can take a few tips here and learn how to be smarter marketers, smarter business owners moving forward. And until next time, we appreciate it.
Mark Zweig:
Thanks, guys.
Katie:
AEC Marketing for Principles is presented by SmartGies, the AEC growth consulting firm that has been developing smart business strategies for design and construction firms since 2008. The show is hosted by me, Katie Cash, senior VP at SmartEgies. I would love to hear from you. If you have a question, a guest request, or a topic request for a future episode, send an email or a voice memo to podcast at smartergies.com. And if you’re looking for past episodes, be sure to visit our podcast page at smartergies.com/podcast. We hope you’ll tell your friends and colleagues about our show and be sure to subscribe so you don’t miss out on future episodes. Thanks for listening.