Transcript- Howard Wertheimer Explains it All: 2022 Planning, Winning Top Talent, Hybrid Work Environments, and Diversity and Inclusion.

[00:00:16] Katie Cash: Hi, everyone. I am really excited about today’s guest. Today we have a gentleman that really needs no introduction, but let me just give you a few pointers. So he has specific expertise in the area of higher education. He is a highly sought after speaker consultant and advisor who works with local, regional, national AEC firms across the country to help them advance their business and organizational performance. He started his career out as an architect where he spent 21 years at a very prestigious design firm, Lord Aeck Sargent. And he was a partner there and a principal who focused exclusively around the ideas of technically sophisticated facilities, sustainably designed facilities, particularly for college and university. From the time period of around 2006 to 2019, he served as the AVP for capital planning and space management over at the Georgia Institute of technology, where he had strategic oversight for campus, master planning, landscape, master planning, historic preservation, and of course, Campus wide sustainability initiatives.

[00:01:27] And he also helped curation of public art. During the time at Georgia tech, he got to provide leadership over a $1.5 billion sustainable capital investment program that led one of the most environmentally advanced educational and research facilities on any university campus. You guys might’ve seen it. You might’ve been there The Kendeda Building. And also most recently he served as the executive vice president chief operating officer for the Piedmont park Conservancy, which was a nonprofit that worked in collaboration with the city of Atlanta oversee and stewardship, operational finances, you know, procedures, programs, and really the overall performance of the Conservancy. He’s also a fellow of the American Institute of Architects. And today spend some of his time as an adjunct faculty member at Kennesaw State University School of Architecture. Now that’s all great. But today he’s really reached the peak of his career as he sits here today with us as a guest on the AEC Marketing for Principal s. And if you haven’t guessed already, of course, we’re talking about none other than Howard Wertheimer. So thank you so much for joining us and spending some time with us today.

[00:02:37] Howard Wertheimer: Katie, I’m glad to be here.

[00:02:39] Katie Cash: I hope that introduction wasn’t too much for you, but you have quite a wealth of knowledge, lots of, you know, insights and information, a great deal of experience that Judy and I feel very strongly that our listeners are either going to be able to relate to, or certainly learn from. So we are excited to pick your brain on a number of topics. As we sit here today, you know, we’re going into the fall. And a lot of our clients are starting to think about end of year planning. And they’re taking a look at their business. You know, they’re looking at revenues and pricing models and whether or not it’s time to adjust those, a lot of them are looking at staffing models and yeah. You know, do they bring their teams back in office full time? Do they, you know, stay remote? Do they look at a hybrid? Should they, you know, look at negotiating new lease rates with their office property managers. And of course, they’re looking at end of year budgets and trying to make a plan for 2022.

[00:03:35] So in all of your experience and design and construction, I think you’d probably agree. We’ve never been in this type of situation before where everything looks completely different year after year. So what do you feel those executives, the principals that are starting their end of year planning should be thinking about and what should they be considering as they look to 2022?

[00:03:57] Howard Wertheimer: I think one of the big things, you know, I’ve spoken to a number of firms around the country and everybody is concerned about backlog. The backlog is the backbone. It. You know, anyone in this industry and without clients and without sort of being able to point to those future revenue streams, it’s hard to predict what your staffing models might be.

[00:04:19] Certainly with new coming, we thought we were coming out of COVID that might be changing as we speak. And I, you know, firms are rethinking how they’re going to position themselves with their staffing. Uh, you mentioned. People will be looking at their leases, you know, whether they come due end of this year or next year, you know, might they compress some of their real estate assets to do accomplish what they’re doing, but in less square feet, reduce that overhead.

[00:04:48] And maybe there’s an opportunity to reduce the human capital overhead as well. I think people are enjoying a hybrid work. Working remotely. And you know, the fact of the matter is the AEC industry works in the hybrid model already and has been doing that for decades, you know, unless you’re an integrated engineering architecture firm. The architects may be located in one office, structural engineer and another landscape architect, somewhere else, MVP engineers, somewhere else, civil engineers, and everybody’s communicating electronically. And that model has now parlayed into how individual design firms are working through this integrated platform, leveraging technology in ways that they didn’t think were possible.

[00:05:39] Katie Cash: I think you’re absolutely right. You know, I think a lot of firms have been working in, in hybrid, whether they realized it or not. They, they’ve got the technology infrastructure in place that allows them to continue to provide great service and collaborate across teams across disciplines, certainly across time zones.

[00:05:56] But one thing I’m curious of your opinion on, we are hearing in the news and just throughout the industry, that there are some brands, some pretty major brands that are really mandating that everybody come back to the office full time. And what we’re hearing about those brands is that there’s a number of them that are losing their talent, just because people have gotten accustomed to being able to work from home and have some flexibility. So do you have any advice for the principals and the leadership? That’s really trying to evaluate, you know, how they handle staffing models and what are some of those critical things they should think about in terms of, you know, going back to work or, you know, how they staff up or down for project backlog?

[00:06:41] Howard Wertheimer: No, I think that, you know, through this hybrid model that. Yeah, operating under for the past 16 months or so people can work asynchronously, which means the Workday gets extended. So rather than working eight, 8:00 AM to 6:00 PM. Now people are working 8:00 AM to midnight, but there’s overlap in there. So I think there’s more efficiency. I don’t have any hard data to prove that, but I know for me personally, and folks I’ve spoken to, you know, they like taking a two hour break in the middle of the day to take care of personal or family matters. And then they’ll work at, you know, eight or 9:00 PM for a couple of hours to make up that time.

[00:07:28] So people I think have learned to work smarter. I think trust is an important area. In these conversations with any organization, but you know, if you look at Other models, such as the film industry you know, where they assemble a team to work on a project, and then they disperse once, once that project is done.

[00:07:50] So they’re not carrying any overhead of the personnel costs, they’re not carrying any purse, any overhead related to, uh, Acquisitions or lease costs real estate. And then when they work on the next project, they assembled the team that they want to work with. And I think as people, if companies and brands are looking to bring people back on a full-time basis, there will be attrition associated with that.

[00:08:15] And I would imagine those are some very talented people have. Who would welcome the opportunity to stay engaged in the profession at a very high level, but have the flexibility.

[00:08:25] And where people work really shouldn’t matter. to do that in the comfort of their home or wherever they might be.

[00:08:33] Judy Sparks: Howard, you and I have talked about this innovative model that the film industry uses in the past. And, you know, after our conversation, I started really thinking about that and how what we are seeing as the younger Professionals that are coming out of architecture school, their idea of what full-time employment looks like is a little bit different than maybe when you or I came out of school. So this idea of this gig economy where, you know, talent can pick and choose what projects they work on and those owners and firms can choose the talent that is well suited for their project. It’s, it’s a new idea, but it’s really not. Like you said, other industries use it all the time, but I’m just wondering do the fees in architecture, support that model? What are your thoughts about, so you’re saving on one hand, overhead and, and other expenses, but do you feel that firms are going to have to pay more to assemble that dream team on a project basis?

[00:09:35] Howard Wertheimer: I do not, you know, I think, you know, in fact, you know, the fees, I’m not sure they will change dramatically. They haven’t changed in, in quite some time, but I think the margins will be improved by being able to. Yeah, assemble the team that you want that has a subject matter expertise to get the work done in a timely manner. So you’re not carrying extra burden with staff and real estate. And I think there’s an inherent nature of. So the human psychology that particularly in our industry, that people really wake up every morning to do a great job. And, you know, they will go above and beyond the call of duty to get that work done.

[00:10:23] There may not be all nighters as there once were in our industry, but there will be long hours and yeah. Those contracts and those fees get negotiated with this contract staff, if you will. You know, when I was in private practice there was a group of, you know, design firms in Atlanta, uh, where we’re using the same computer platform.

[00:10:47] And when the work would ebb and flow, we would loan people out to other firms and it was a great way to keep qualified staff, obviously, you know, in downturns in the economy, if you can’t keep everybody, it’s a nice little you know, opportunity to maintain those relationships that you spent so many years training and developing, and then they get experienced at another company and then they come back refreshed and ready to go.

[00:11:16] Obviously. Again, I’ve spoken to a bunch of firms around the country and, you know, people have had several waves of layoffs because the uncertainty of certain owners, might put a project on pause and people gear up for a project and, they’re put at risk. So all of a sudden they have to let people go. But meanwhile, they have, hundreds of thousands of square feet of vacant space that they’re paying rent on.

[00:11:45] Judy Sparks: Interesting. So how does this work on when we’re in a current economy where the such a talent shortage and every client we talked to these days are asking us, Hey, can we use marketing tactics for recruiting? We’re doing more and more these days with social media campaigns and thought leadership pieces that are really geared towards that employer brand because there is a talent war in our industry, and we don’t see that ending in the foreseeable future. What can firms do while being innovative with their pricing and staffing models to also win at this talent?

[00:12:23] Howard Wertheimer: I think one big thing is to think beyond your geographic borders, sometimes people are, feel anchored to a particular locale and of where they can recruit from. I remember reading, you know, several months ago. That the state of Hawaii was trying to entice people to come work there to keep their economy vibrant, because they relied so much on tourism.

[00:12:50] Well, people weren’t traveling during the pandemic and they would attract maybe people in the tech industry or maybe in the AEC industry to come work in Hawaii for two months. So they’re paying rent, they’re buying food or they’re keeping the economy vibrant. And I think having flexibility and where people work really shouldn’t matter. You know, as long as you have trusting relationships, it’s hard to do that right out of the gate with someone you’ve never worked with before. But if people have an existing relationship and there’s trust and respect there, it can work extraordinarily well.

[00:13:27] Judy Sparks: So on that note of flexibility, you mentioned earlier, the work model has changed. And, and I’ve talked about this a lot on the podcast. Here at Smartegies we call it work life integration, you know, where you’re living and you’re working right. Interchangeably throughout the day and what we have found in our own firm. And a lot of our clients have found is if you allow that flexibility to occur and it becomes just a normal part of your culture, that you actually get more productivity out of people, because you’re saying I trust you that you’re going to get your work done. You’re going to get it done at a high level.

[00:13:58] And you’re reward for that. As you get to adult on your terms, you know, you get to go to your child’s school function in the middle of the day, and that’s perfectly acceptable and you’re going to come home and get the work done when your life allows the work to be done, but you’re not going to miss that deadline and it’s going to be completed at a high level.

[00:14:17] So flexibility has become a real key component. You know, as you know, a lot of the principles of in our industry are sort of approaching the Sunsets of their careers and they didn’t grow up this way. And so some of the older principals that have their names on the doors and maybe their, you know, first-generation leadership and they’re about to transition this is a big pivot for those leaders. What advice do you have for them?

[00:14:43] Howard Wertheimer: That’s a really good point. We see it all across the country, you know, where these founding partners are transitioning out. So how do they transition ownership? How do they transition leadership? And those are two distinctly different buckets of that leadership genre and yeah, I think those founding principles they’re working asynchronously. Everybody has a smartphone these days. So no matter where you are people are attentive and responsive, so they may not, they’ll respond to an email at 10 o’clock at night while they’re on vacation at the beach with their family. So I think it’s already happening, but perhaps unknowingly. And I think that model can easily forge ahead with this new generation of younger people entering the profession and those who are mid career, who might be transitioning into that ownership position within a firm. So I think there’s a lot of flexibility that already exists and how that gets adapted to a particular organization will depend on those principles, perspectives and understanding of the workplace.

[00:15:56] Judy Sparks: So I want to flip it head a little bit and talk about it from the owner side. So on the private sector side, where we’re telling principals, Hey, you need to really have a flexible mindset in terms of where you hire talent going beyond your geographic boundaries, allowing people to work when they, when they can work at their optimum times that work with their life. So on the owner side, does that mean that owners should be also flexible about hiring talent? If we’re going to do everything electronically, doesn’t matter if a Georgia tech hires a firm that’s in Atlanta, physically, and I know the answer to this because you were when you were there the leader of, of bringing national and international talent to Atlanta and coupling it with our local talent, but most owners don’t think like that. So what would you say to those institutional owners about having an open mindset in terms of being flexible about where the firm is that you’re working with and how you’re executing projects on the owner side?

[00:17:01] Howard Wertheimer: It’s critically important to be open-minded, obviously being in Atlanta, Georgia, people can fly almost from anywhere in the world directly to Atlanta. So it was a very appealing know place for folks outside of Georgia to come and do work. Yeah. The notion of partnering with local firms, I think is important because there’s a knowledge transfer that occurs with that.

[00:17:24] And now all of a sudden through that knowledge transfer, that knowledge now exists in Atlanta so that those firms can help other clients based on the knowledge that they learned and got mentored from, perhaps. Firms, but I think from an owner perspective, you know, if the team meets to meet at two o’clock on Thursday afternoon, everybody meets at two o’clock on Thursday afternoon. It’s not a problem. I don’t think, you know, having face-to-face is critical. It is better because you can read body language, but I think people are adapting to the different technology platforms to have virtual meetings. And it works reasonably well. You know, interviews that I’ve been involved in, in seeing interviews happen virtually.

[00:18:14] And you know, again, you can’t see everybody’s eyes as clearly as you could in a room, you can’t see their body language, but you can get a pretty good feel for the chemistry in the room and, and what’s being communicated

[00:18:29] Judy Sparks: So with the flexibility and technology, Available to our industry firms can now compete for projects outside of what they might’ve thought of originally as their service footprint. So if they have the credentials to work in a, in a state, that’s not where they’re physically located. They now can compete with firms just like they were there locally. On the flip side those firms who have kind of counted on being the local firm and having that advantage of, saying, Hey, I’m here, I’m just down the street. Did they, do they lose their advantage? With this new competitive landscape becoming more virtual?

[00:19:08] Howard Wertheimer: I don’t think so. Depending where one is in the journey of a project. Obviously during the planning programming design, you know, that might be a little bit easier to do virtually than construction. Sometimes you do have to lay eyes on a construction site.

[00:19:25] Judy Sparks: Ya i would think so. You have to be there physically to build.

[00:19:28] Howard Wertheimer: Absolutely. So having the local talent on the ground, Is really critical. I remember, you know, 10 years ago I was working on a project when I was at Georgia tech and Georgia tech had recruited a researcher and he was in San Diego and we did all of the programming with him over the computer. Yeah. And that was presumed. We may have used Skype or some other platform and, you know, we had meetings, we, he saw me, I saw him, we’d exchange emails with information and it worked out extraordinarily well. So yeah, I think the other benefit to the hybrid model is, staff don’t have to commute.

[00:20:16] So all of a sudden they pick up depending on where they live in proximity to their workplace, whether as an owner or a consultant, they may pick up an hour or an hour and a half a day, and they’re not buying gas. So they’re reducing their carbon footprint. They’re reducing their expenses. There are pros and cons to both models, but I think that we will continue to adapt, but I think people really liked the flexibility of, uh, as an owner and as a consultant to be able to be in this hybrid model.

[00:20:52] Judy Sparks: You know, it’s funny, it’s Atlanta’s famous for our traffic and I think an unintended consequences of COVID and working remotely is it’s really helped our transportation issue. Don’t you think it’s getting people out of their cars?

[00:21:08] Howard Wertheimer: You know, and if you remember a number of years ago in Atlanta, there was a bridge that collapsed in 85 and it was, so it was on interstate 85, a main north south artery into and out of the city and people adapted, they changed their transportation modes rapidly. They started carpooling. They might work remotely a couple of days a week. They might take mass transit and you know, that behavioral shift was not just short term for many people. And now there’s a behavioral shift associated with the pandemic. And I suspect that will have a long life, uh, going forward.

[00:21:52] Katie Cash: Howard I’d like to go back to something you said a little bit earlier, that I think is, is also one of those other shifts that’s happening, but you are, you were talking a little bit ago just about the mentorship and the knowledge transfer that you witnessed during your time at Georgia tech. When you had project teams that consisted of national experts, you know, partnered with a local firm and just kind of how they jelled and kind of came together, bringing the best of both worlds to your project, to your campus. And today, one of the shifts that we’re seeing is around this topic of diversity and inclusion and owners, whether they’re public sector or private sector are specifying in their projects, you have certain levels of minority participation, whether it’s a percentage or the number of vendors and suppliers that need to be part of a particular project.

[00:22:41] And I’d love to get your insight on maybe the right way to approach those types of partnerships and how do you do it at speed? Because a lot of times these RFPs come out and they’re trying to. Uh, team rather quickly. And then, you know, how do you do it at scale so that you have a fulfilling partnership moving forward?

[00:23:02] Howard Wertheimer: Yeah, that’s a great question. It is a challenge though for me, when I was you know, as the owner of Georgia tech, I would go to conferences around the country and I would make. A point to go through the expo hall and talk to all the vendors to see who’s there. Introduce myself to them you know, see each other at breaks, coffee breaks, lunch breaks, and talk. And I did this when I was in private practice as well. But the notion was to develop relationships. So, you know, as an owner, I might see, a vendor there and say, Hey, you know, you’ve got to do some really nice work why don’t, you consider coming and visiting Georgia tech and, I can introduce you to some other people. Most universities are complex owner organization, so it’s not just one person where relationships need to be. So I think that’s critically important when I was in private practice, same thing I rather have a piece of pie than no pie at all.

[00:24:03] So I was out there talking to others. Yeah, design professionals to see how we might be able to collaborate where we bring a certain level of expertise to the table and they have a certain level of expertise to the table. Again based in Atlanta, we can fly almost anywhere in the world direct, so I was doing work in Virginia and Ohio and Michigan and Tennessee and Florida.

[00:24:28] And, because I developed relationships with other design firms that may not have certain skill sets that we had, and we were able to mentor them and over time they might not need us. And that’s okay. I think it it’s good for the profession that we raised the level of expertise and knowledge. I think folks in our industry are lifelong learners. And I think these are opportunities to mentor firms and individuals so that they develop skill sets because I’m not going to stop learning. So I’m going to continue learning new things. But now other people have a portfolio of experiences that they can now sell, perhaps with me as playing a more minor role or maybe not needing me at all. And that’s okay.

[00:25:18] Judy Sparks: So Howard pivot the conversation a little bit. I was recently on a PSMJ webinar and we had Bill Hinsley on a recent episode from PSMJ that talked about seller-doers and it was said in those conversations that innovation typically occurs after a crisis. The best innovations come as a result of a crisis. And I really feel that, and I’ve said this a number of times on the podcast that, well, COVID-19 and the global pandemic has definitely presented its challenges and have as changed humanity forever. in some ways for our industry, Just sort of rear ended us into the future. Cause we had a lot of things that we were already doing. And like you said, we didn’t even realize we were doing them right. Working remotely and doing things do programming through, you know, Skype or, but it’s become a mainstream behavioral change in our industry. And one of the things that. Surfaced post COVID is this idea of having meaningful diversity and inclusion inside of these professional practices and, what does that look like? What does it mean for the profession of architecture? And then I know it’s a big conversation in the industry of higher education, from your perspective as a former, private sector practitioner and now consultant and having been on the owner seat looking through that lens, what is your just sort of overall thoughts about, diversity and inclusion and how our industry can do better?

[00:26:57] Howard Wertheimer: Yeah. I mean, that’s a really yeah. Big issue. I’ve seen firms where they have diverse members of their company, but they may not be owners of the company. And I think the problem really lies in the K-12 platform. And this is where an organization like AIA or the association of general contractors and other professional organizations can do some mentorship and reaching out to the K-12 platform too. Young people who might not have appropriate role models you know, introduce him to what architecture and engineering and construction and program management is all about because they may not have those uh, mentors or individuals in their lives. So, I know more and more schools of architecture have, uh, opportunities for K-12, you know, kids to come in and spend, basically, you know, spend a week at, building models and working with design professionals. I know AIA has done a lot of outreach to the K-12 schools going and talking to them where they have folks who are can be mentors. And they are people that look like themselves. Uh, so they can now see that, oh, there’s someone that looks like me. Who is an architect or an engineer or contractor and an owner of these companies.

[00:28:32] And that’s what I aspire to be because those models may not currently exist in their lives. So now all of a sudden they can see themselves growing into this profession, entering this industry and have a very meaningful and fulfilling career.

[00:28:48] Judy Sparks: I think that we definitely have a long way to go, but I, for one, I’m excited that the conversation is happening at the level that it’s happening and I’m hopeful for the future. So pivoting again, another trending topic it’s interesting we have a talent war going on. We have a shortage of, of students coming into the profession there’s this whole intersection about diversity and inclusion and doing that the right way. And they’re, they all sort of intersect because At the end of the day, it’s really about growing and retaining that, top talent to be able to continue to contribute to the built environment. And these days with the talent war as it is, what we’re seeing a lot of is firms, because they’re inhibited by their ability to recruit, they can only do as much work as they have people to do it. They’re buying firms. I mean, the M&A activity during the pandemic has been astonishing. And I think that’ll continue to happen.

[00:29:52] What are your thoughts about these firms that are saying, Hey, we can’t grow without more people and we can’t hire them one at a time, so let’s just go buy this 50 person firm, and it’s happening all the time. And it’s quite a sellers market right now. People are getting top dollar.

[00:30:07] So what are your thoughts on that?

[00:30:10] Howard Wertheimer: We talked earlier about. Founding partners who are transitioning out. And in some cases they’re looking at a merger and an acquisition as their exit strategy to try to get some financial windfall out of the 30 or 40 years that they put into building their, their companies.

[00:30:30] I think growing and attracting and retaining top talent is always a challenge. When I was doing the hiring, when I was in private practice, I never hired anyone for a project. And I would always tell young people and seasoned people don’t come work for me for a project because projects will all end. I’m looking for long-term mutually beneficial relationships that, you know, the chemistry is right. Their skill sets are what is needed and we can grow together. I think the merger and acquisition piece, architecture and engineering firms, the margins are, you know, fairly low and too do that at a bigger scale, without changing the business model, the margins will still be pretty low. And then all of a sudden you have more overhead. And when the economy tanks, which it will do at some point in time, Future, what do you do with all of that staff and all of those real estate assets that you’ve acquired?

[00:31:35] So I think being smart about a merger and an acquisition is critically important. Why would you do that? Is it the right cultural fit or is it just a business transition? A business transaction. And I think those are questions. Yeah. I’ve been involved in those conversations you know, in the past and sometimes it’s appealing and sometimes it’s not. And if people are going to consider doing that, it has to be a win-win and people need to look at all the blind spots and not get too enamored by the short-term appeal of what. The opportunity is being offered. And, you know, might this be in three years, five years, seven years, or even 10 years, as you know, this merger happens you know, we spend most of our waking hours working and you want to make sure that it’s an enjoyable and prosperous and fun experience.

[00:32:35] Judy Sparks: Well, Howard you’re definitely a wealth of knowledge and one of the things Katie said in her intro is that you’re, you’re embarking on some new new ventures both in the world of academia, as well as private practice. So take a few minutes and tell our listeners what you’re up to now.

[00:32:53] Howard Wertheimer: I’ve been doing consulting with some architecture, firms, engineering, landscape architecture construction companies, program management folks, real estate folks, you know, owner organizations to try to help better position them as they sort of move forward and, strategize about how to win work.

[00:33:14] What does it take to be a seller doer, having been one myself, having been the owner, what does it take to develop winning proposals to at least get to the short list? And then once you get to the short list, how to take that to the next level, to turn that shortlist into a win. So I think there’s a number of things that, I can bring to the table to help folks and to help advance, their businesses, you know, help them be more successful.

[00:33:44] Hopefully help them be more profitable and maybe do things smarter so that it doesn’t cost as much as it did in the past to get to that finish line.

[00:33:55] Judy Sparks: Well, Howard, I personally can attest to your effectiveness, you and I recently collaborated on a project for a common client and successfully delivered a win on a major project.

[00:34:07] And that was such a great experience. I am looking forward to continuing this relationship with you. In fact, listeners, we have exciting news. Howard and I are coming together to put on a workshop this fall to help you plan for 2022. So more details. Okay. Of that are forthcoming to make sure that you are in the know be sure to go to Smartegies social media platforms.

[00:34:31] We are on Facebook as well as LinkedIn, or you can go to our website and sign up for a newsletter cause I know that you won’t want to miss our fall workshop, but in the meantime, Howard how does one get in touch with.

[00:34:45] Howard Wertheimer: So the best way to reach me is by email. My email address is werth, [email protected].

[00:34:55] So it’s [email protected].

[00:35:00] Katie Cash: And Howard, it has definitely been worth our time this morning, talking with you. So thank you for sharing all of your knowledge. I can’t wait to see what Judy and you do together with the fall workshop. I can’t thank you enough because this has been really enlightening and, and hopefully all of our listeners have found it helpful.

[00:35:19] Howard Wertheimer: Well, thank you, Katie. So I didn’t share all of my knowledge and this conversation. I’ve just shared a little of around, the edges.

[00:35:26] Judy Sparks: It’s the cliff notes.

[00:35:27] Katie Cash: Perfect. Well, thanks everyone for listening. And we will see you next time.