CEO Roundtable: Engineering Excellence in 2022 and Beyond

Engineered Systems assembled a roster of engineering leaders to discuss present and future challenges in the magazine’s annual CEO Roundtable Q&A.

From labor shortages and supply chain disruptions to COVID-19 and more, the engineering industry has endured a great deal of uncertainty the last several years. Here, Engineered Systems has assembled a roster of mechanical engineering leaders to discuss these challenges and more in the magazine’s annual CEO Roundtable Q&A.

Darin Anderson: I’m the chairman and CEO for Salas O’Brien, an international engineering firm with offices across North America. We provide an integrated suite of solutions across many disciplines to clients worldwide. We are also a fast-growing firm and have expanded since 2006 from a single office in California to where we are today with 50-plus offices and more than 1,300 team members.

Keith Esarey: I am the president of McClure Engineering, a mechanical, electrical, and plumbing (MEP) design firm focused on partnering with institutional clients and campuses. The firm was established in 1953 and has been dedicated to developing innovative solutions to unique engineering problems ever since.

I have been with McClure Engineering for approximately 25 years. I began my career here as a mechanical engineer designing HVAC projects. My responsibilities continued to grow, and I eventually became a principal (partner) in 2001 and took over as president in 2018.

Rick Hombsch: I’m HGA’s engineering market sector leader. HGA is a national interdisciplinary design firm committed to making a positive, lasting impact for its clients and communities through research-based, holistic solutions. With more than 800 team members, the practice spans multiple markets, including corporate, cultural, education, local and federal government, health care, and science and technology.

Tucker Matthews: I am co-founder and principal of New Ridge Engineering PLLC. I was born and raised in Richmond, Virginia, and currently reside in Mooresville, North Carolina, with my wife. While earning my mechanical engineering degree from Virginia Commonwealth University (go Rams!), I began my career as an intern at an MEP engineering firm. At this firm, I met my future business partners, and we went on to found New Ridge Engineering one year ago.

New Ridge Engineering is a relatively new but quickly growing MEP engineering firm, specializing in health care facilities, laboratories, cleanrooms, and central utility plants. We enjoy complex projects and serve clients throughout the U.S. from our home offices in Virginia, North Carolina, and Kansas.

We strive to be the ideal engineering firm for talented engineers to work for. This means investing in and developing our engineers while recognizing that work is just one part of our employees’ lives. This set of values has attracted an outstanding group of remarkable individuals to work at New Ridge Engineering, which ensures our clients have nothing but the best engineers serving their needs. We are proud of the growth and accomplishments we have experienced since our company’s birth and are very excited to see what lies in our company’s bright future.

Barbara Hattemer McCrary: I’m president of HHB Engineers P.C. I’m a professional engineer, graduating with bachelor's and master’s degrees in mechanical engineering from the University of Alabama in 2003 and 2006, respectively. I became majority shareholder and president of HHB in 2014. HHB Engineers is a consulting engineering firm specializing in the design of mechanical systems (HVAC, plumbing, fire protection, etc.) in the building construction industry.

The majority of the firm's work focuses on building renovations, but we also work on new construction projects. Most projects have construction costs of approximately $100 million or less. We usually have a staff of six to eight at any given time, consisting of professional engineers, engineering graduates, engineers in training (EITs), drafters, and administrative staff.

Anderson: Salas O’Brien was extremely well prepared for the pandemic. Because of our rapid growth and distributed leadership model, the company was already doing so much using digital tools. Although the pandemic moved the firm further down that path, and there was, of course, some uncertainty in the first half of 2020, the company did not experience a disruption.

The pandemic did not change who the firm is or give our team a different culture. Difficult circumstances don’t change who you are. However, the pandemic did give us an opportunity to really shine — embracing flexibility, managing for results, bringing passion to all we do, lifting each other up, sharing knowledge, collaborating seamlessly across the company, and aligning our financial rewards.

Obviously, the firm did experience some challenges, and, as someone who loves to meet every single team member in person as often as I can, I really missed being able to see our team and meet new folks.

Esarey: Well, to begin, positive is not a word I would ever associate with COVID-19. As a firm, I think we've generally handled the pandemic as well as could be expected. We were very fortunate to have elements in place early, positioning us to have a leg up on the mass disruption.

There was certainly a fair amount of scrambling early on as uncertainty overwhelmed our clients. Projects were being put on hold or canceled in what seemed to be every day or two. However, we were able to work with our client partners, who were unquestionably as shaken as we were, and, through these partnerships, help them navigate the early waters.

We also spent a lot of time throughout (not only those early days but for the year to come) consulting/discussing how buildings’ HVAC systems can be used/modified to put owners/facility managers in the best possible position to keep their buildings as safe as possible.

And, we've also spent an inordinate amount of time focused on keeping our employees both safe (first priority) and engaged (second priority). As an organization, we've embraced that both elements are critical as we focus on the long-term health and stability of our employees and their families.

We were challenged with balancing in-office policies, remote work, and on-site protocols for each client — that alone is a full-time job. As a consulting firm, we work with a number of clients. We recognize we're guests of each of those clients as we visit their sites. It’s our responsibility to understand and respect their current policies and to ensure our employees follow these policies whenever they visit those sites.

As we began working remotely, we really had to ramp-up communication about what we were doing as an organization, including how we were making decisions and communicating the values and priorities we used. The goal is never to surprise our employees — our people had enough uncertainty in their lives. We knew that the clearer we could be, the more our staff could remove that particular stressor from their lives. We have committed ourselves to continue to do our best to continue these efforts even as we have returned to the office.

Employee development/growth is crucial in the best of times, and, with the stress of COVID-19, things just got more difficult, which means we have to be more intentional in everything we do around employee development.

While we've always maintained a training and development path for our employees, historically, much of our technical training occurs spontaneously, deriving from projects with more experienced engineers when solving problems or sharing ideas with other talented team members. While that still happens remotely, there is plenty to be said about the impact of proximity when you have a quick question or are exposed to a new concept.

So much of how our people learn the softer skills of engineering (how to communicate, react to issues, get out in front of a problem, etc.) comes from working with more accomplished professionals and learning behaviors. Those opportunities haven’t been the same over the past two years. Remote meetings, limiting the number of people on-site, etc. — it all means you must find other opportunities to work on and learn those skills.

The result was that we had to learn to be more deliberate. This involves identifying and communicating where an individual is in his or her career development, what growth looks like, and why we are doing what we do in order to help individuals realize their potential. These are critical functions that not only enable individuals to grow but, in today’s world, keep employees engaged. If there is any good that has come out of this experience, it’s that it has made us become more deliberate in developing and communicating these paths.

Hombsch: First, the positives: As a truly integrated architectural/engineering firm, we quickly figured out a way to effectively work together in a virtual environment, particularly after the initial shock to everyone’s normal day-to-day operations. This was accomplished through our strong engineering leadership, collaborative nature, and incredible IT department, which provided us with the tools to do the work and streamline effective collaboration amongst HGA’s pool of engineers across 11 offices nationwide. The virtual world also provided us with great flexibility in allocating the right resources to our projects, independent of geography.

Second, the negatives: The loss of personal interactions has been one of the biggest negatives of the pandemic. As we integrate new employees and continue to build our current engineering team, mentoring, coaching, ambient learning, and casual interactions, usually a big part of staff development, have taken a hit. It has been very hard during this pandemic to effectively maintain our development programs. This is a focus for our engineering team in 2022, along with strong attention to individual and team health.

Matthews: With change, there comes opportunity; and the COVID-19 pandemic brought no shortage of either to our industry. The pandemic forced engineering firms to transition their workforces from in-person to remote almost overnight. While many thought this change would bring a decrease in productivity and a lack of employee engagement, it quickly became apparent that many people thrived in and preferred a remote setting. At New Ridge Engineering, we chose to see this as an opportunity. The pandemic acted as a large-scale proof of concept for a fully remote engineering firm, which allowed us to confidently launch our firm in March 2021. As for a negative impact I believe we have all experienced, the pandemic has made it more challenging to have valuable face-to-face time with our clients (Teams and Zoom don’t count).

McCrary: First, the negatives: As president/CEO, I had to make some tough decisions early in the pandemic. The construction industry was deemed essential, and we were not set up to work remotely in the beginning, but, given the risk of contracting COVID due to in-person office work, I had to make the decision to shut down in-person work for two months. I knew we would miss deadlines, a lot of them in the beginning, but we had to protect the health of our staff. We had a couple of clients who did not understand, but, thankfully, most did. The collaborative nature of our work lends itself far better to in-person discussions than not, which was a challenge. We adapted the best we could, but during the first few months of the pandemic, in particular, we struggled to keep up with our workload, which actually increased during the pandemic. Our transition to full remote work for nearly two months (while our office was shut down) also caused us to take a financial hit due to the nuts and bolts of the IT needs of remote offices as well as needs that arose to help mitigate COVID spread when we returned to the office in mid-May of 2020.

And, the positives: One positive is the increased interest in high-quality HVAC systems and design. Ventilation design/quantity and air distribution design have made their way into the mainstream conversation. We've been pleased to be able to help a lot of clients, old and new, navigate through what that means for their existing facilities and buildings currently in development.

Anderson: Salas O’Brien has always had an almost unbelievably high retention rate. That continues to be true, but that doesn’t mean we take it for granted.

What we’re doing to address this is to continue to emphasize what has always made us successful: Salas O’Brien is a place of unlimited opportunity for every team member. For those with the passion and skills to succeed, there will never be any limits to what you can achieve here. We are always looking for ways to get that message and reputation as an employer out to an even bigger audience.

People today use the phrase “Great Resignation,” and I suppose there is something in that. But, I think what we’re really seeing is the “Great Reshuffle,” where talent is flowing to organizations where they feel appreciated and have the opportunities they need to succeed. That is the kind of organization Salas O’Brien is and, I hope, always will be.

Esarey: Experienced workers are hard to come by — it's just a tight market. Historically, we have generally been considered an employer of choice due to a very employee-focused culture, but it's tough to find good talent. We are not in a high-churn industry (i.e., IT), so we just don’t see that kind of turnover. Couple that with an overall shortage in good, talented professionals, and it is a challenge to even find qualified people.

This is not a short-term problem brought on by the pandemic. We have lived with a tight labor market for a while, and finding top talent has been difficult as long as I have been in this industry. As a result, we must manage our workload based on a reasonable expectation of the talented individuals we have working for us and not based on the number of projects we aspire to win. I don’t see any other way to make it work. Companies that can’t manage their workloads in this way will burn out their employees and not survive long term. Those that do will have a significant advantage recruiting, developing, and retaining the best talent.

One way we have adjusted is by focusing on developing and investing in entry-level positions — building the talent pool to support growth. Retention is critical. Employees represent a significant investment in both time and money. It's essential that you maintain a quality work environment and clearly outline paths for individual growth and development. And technical training is only half the challenge. Companies like ours have strong cultural identities — both to our employees and our long-term partner-clients. New employees need to buy into these cultures and grow within that framework.

Hombsch: HGA’s engineering team has grown to nearly 200 engineers in 2021, and our workload is very strong as we enter 2022. We’ve hired 42 engineers in the last year, which reflects the quality and cutting-edge nature of our work. We have at least 15 open positions currently within our engineering group. Our leadership team understands that attracting and retaining talent in a very active market is an extremely important part of our strategy for 2022. We need to take good care of our people. Our biggest challenges in terms of recruiting continue to be specialists. As we focus more on technical specialists in specific disciplines, or experts in certain project types, we are finding a limited talent pool. We also have an interest in exploring and expanding diverse partnerships with other engineering firms to bolster local involvement in national projects and support BIPOC [black, indigenous, and people of color] businesses in the region. This could be a lever to ease some stress on our staff while also learning from and sharing with others.

Matthews: Due to the remote nature of our firm, we have been able to search for engineering talent nationally without requiring job candidates to relocate. Additionally, without the overhead burden of maintaining physical office space, we can remain extremely competitive in the market while offering excellent compensation. We’ve had amazing engineers leave in-person jobs at established firms to work remotely for New Ridge Engineering over the past year, and this organizational structure is one of the keys to our successes in hiring. As we continue to expand, we will be looking for independent and motivated MEP engineers to join our team.

McCrary: We are bringing on a couple of new recent engineering graduates in 2022. One already started in mid-January, with the other starting after spring graduation. Our challenge has been finding engineers with experience in our field who can immediately jump in. We are always on the lookout for experienced engineers but, ultimately, have taken the path of hiring fresh graduates and training them.

Anderson: We do so much in so many markets that it’s tough to narrow it to just one project. However, I’m really excited by the work our team is doing at Princeton University. Simply stated, Princeton has set out to achieve carbon neutrality by its 300^th anniversary in 2046, and we are helping the school make progress toward this extensive undertaking by designing one of the largest closed-loop geo-exchange systems in the U.S., plus thermal energy storage tanks supporting 9 million square feet of building space.

Hombsch: In HGA’s history, we’ve collaborated on some large legacy, almost once-in-a-lifetime projects that provided an opportunity to develop and expand on the innovative practices we now use all the time: integrated project delivery, lean processes, prefabrication, virtual reality (VR) integration, research, state-of-the-art technology integration, and more. We’re excited to be incorporating many of these practices on some very large signature projects in all our market sectors — health care, science and technology, public corporate, and higher education.

Matthews: We are excited to continue serving our fertility and health care clients. Over the past year, we have played a major role in helping our clients adapt to supply chain issues challenging the construction industry. As we navigate this constantly changing landscape, we will continue bridging the gap between engineering design and procurement to help our clients meet construction targets.

McCrary: There are too many to pick just one. We have several historic preservation projects we are involved in that are a part of or related to the Civil Rights Trail that we are excited about. Several are in the Birmingham National Civil Rights Monument District, while others are in Montgomery and Selma, Alabama. Also in Montgomery, we have construction beginning on the renovation of the Alabama Shakespeare Festival, a nationally renowned performing arts center, which will undergo a major HVAC replacement project that includes ventilation upgrades. We are happy to be a part of this venue’s reopening with state-of-the-art HVAC systems as they welcome back crowds into their facility. We also continue our work with the University of Alabama and are excited to be working on the Smart Communities and Innovation Building. This is a public/private/research partnership in advancing research and operations in the electric vehicle market.

Anderson: Salas O’Brien’s culture is the same today as it was five years ago, and I hope that continues to be the same, not just five years from now but 50 years from now. See above regarding being a place of unlimited opportunity.

In terms of raw numbers, we have grown substantially since 2017, adding 1,000 team members, many offices, and significant revenue. I expect to add another 1,000 team members in the next five years through continuing to pursue our steady, methodical growth process. Our approach is to find highly talented, passionate individuals and teams who will strengthen us, create more opportunities, and deliver innovative solutions to our clients.

We want to be the most respected engineering firm in the world, but we are not growing for growth’s sake or to achieve an arbitrary or specific financial target.

Esarey: From a big picture perspective, many of the challenges are the same — they just feel like they've been amplified.

We have always had to work with a tight labor market with respect to engineers and other design professionals. The pandemic only amplified an already existing problem. As a result, it's critical to focus on the growth and development of our team members — not only because our own growth and development depend on it, but it's probably the No. 1 factor in retention.

Treating our clients as partners and focusing on delivery and follow-through has always been core to our success. In today’s world, our clients have many more pressures placed upon them, either due to budget constraints as a result of inflation, their own staffing issues, or having to manage the same issues related to the pandemic on their campuses that we all have in our businesses. What they are looking for are individuals who are much more focused on being partners rather than consultants.

Energy conservation and sustainability has always been a big piece of who we are. The difference now is that more clients are including those values in their decision process than ever before.

There is a feel that, for a number of years, we have been in a "buyers" market for technical services — I would say this is a holdover from our experiences in 2008-2009. There is a feel that we are inching toward getting that balance back, that responsiveness. Follow-through is becoming more important for a lot more people rather than simply pushing down costs.

Hombsch: HGA has expanded the business over the last five years through both market sector-based growth and strategic acquisitions. Growth in our sectors has allowed us to expand and diversify our engineering leadership team, making us more market-focused, stronger as a group, and more nimble. Acquisitions have been expertise-based and expanded our sphere of influence in the science and technology market along with the engineering market, specifically focusing on energy consulting and commissioning services. Recently, our engineering team has added key hires in fire protection engineering and technology services. This will continue to expand HGA’s diverse expertise and the value proposition to our clients as experts in various systems, technologies, and markets. We will continue to use these same thought processes and strategies to move forward as a company.

Matthews: Five years ago, most of us at New Ridge Engineering were working at an MEP branch office of a large engineering firm. A lot of things have changed over the past five years, with the existence of New Ridge Engineering being one of them. In the next five years, we hope to expand into more markets outside of health care while forging new relationships within the health care industry. Our commitment to our employees to strive to be the best engineering firm to work for will never change, nor will our commitment to our clients to provide the highest level of engineering services we possibly can.

McCrary: Today, we are able to be more selective in deciding which projects to tackle versus five years ago. Five years ago, we were still climbing our way back out of the Great Recession. It hit us the hardest in 2013-2014. We are excited to have the quality of work we do now and a large number of repeat clients, including large public universities, such as the University of Alabama and Auburn University, several federal agencies, and a large Air Force Base located near our office in central Alabama.

The future is hard to predict, especially now, as we're still in the midst of the pandemic. For our firm, I hope, in five years, we are continuing to do the things we love, which are challenging projects. I hope the industry continues on its current course toward a heightened importance on quality ventilation and HVAC design of buildings.

Anderson: I’m not in the business of making predictions, so I’ve picked a word that is fully within my control, as it is in everyone’s. That word is opportunity. As a company, we have the opportunity to continue our steady growth and to share the benefits of that growth with our team through our employee ownership model. That word equally applies to the companies who will join us through mergers and acquisitions (M&As). We only pursue partnerships where we truly see the opportunity together to be way better than what we would have experienced separately.

And, to engineers and other technical folks out there, I’ll say this: In terms of the opportunity that you have to grow professionally, there is no better place for you than Salas O’Brien and no better year than 2022 to join our team.

Esarey: Exhaustion. If I had to pick a single word to describe the climate right now, it would be exhaustion. We are moving into our third year of the pandemic, and it is still impacting us, our clients, and our employees on a daily basis. (Whether it’s adjusting to evolving client policies, employee pressures related to quarantines/daycare, or simply scheduling a meeting with a client — it just seems to be a constant drag on how we work and live.) The stress on the workers, not only due to changes and impact to our projects but also their personal lives, is apparent. They're doing everything they can, but you can just see it grind them down.

My second word, if I may, is deliberate. If my goal is to be more optimistic and look at what we need to focus on for 2022, I lean toward deliberate. We have learned a lot in the past two years, particularly about how the stressors from the pandemic plus a red-hot market impact how we used to work and grow. In order to be successful, it’s critical that we become more intentional (I will call it deliberate) about how we understand what is important to us, what we need to do, and how we can accomplish things, like communication, employee growth, maintaining strong company community, and culture, that reflect our values. What used to occur more organically seems to require more intention.

Hombsch: Execute. You are only as good as your last project. This speaks to everything above: recruiting and retaining talent, taking care of your team, collaborating with other firms, continuing to grow the business, etc. Your workforce is you.

Matthews: Happy. This applies to both our employees and our clients. We strive to be a highly desirable firm to work for, which allows us to employ top engineering talent, in turn, ensuring that our clients have the best engineers serving their needs.

McCrary: Resilience. The pandemic has taught us that we have to be prepared and agile when new challenging situations arise. We are still grappling with running a business in a pandemic, including having over half of our staff sick or quarantining during the Omicron surge in January. We are far more prepared for situations like that now than two years ago when the pandemic started but are continuing to adapt and find new ways to optimize work in these challenging times.

Hombsch: The market values the work of engineers right now. If you are looking for an opportunity, find a firm winning good work and delivering exceptional results. Most importantly, find one that treats its employees well.

Matthews: Don’t work yourself to death; life is too short. Take pride in maintaining a healthy work-life balance and seek out opportunities that support your will to do so.

McCrary: Always be willing to learn. The pandemic has challenged the way we think about a lot of things in life, but also in how we design and operate buildings. Learning also takes getting out in the field and seeing, watching, and doing. Be deliberate about it, go to job sites, and watch the construction process. Don’t rely on existing drawings — go look, see, and measure. This will make you a much better engineer.