President and CEO of Parametrix, a 100 percent employee-owned engineering, planning, and environmental sciences firm based in Seattle, Washington.
By Liisa Andreassen
Peacock joined Parametrix in 1990 as a transportation staff engineer. In 2008, he became president and CEO. Today, he’s responsible for overall company growth and profitability. He oversees company-wide operations, strategic planning, and business development activities.
“I’ve learned through the years that a simple thank you and acknowledging an employee’s commitment to our clients and company often means as much as a financial reward,” Peacock says. “That said, we don’t lose sight of making sure our employee-owners feel great about their compensation and benefits.”
A conversation with Jeff Peacock.
The Zweig Letter: What are the three to four key business performance indicators that you watch most carefully? Do you share that information with your staff?
Jeff Peacock: Our key performance indicators include utilization, sales, backlog, and contribution margin/profit. As a 100 percent ESOP employee-owned firm we are extremely transparent and have developed a variety of systems and communication channels to enable every employee access and monitoring of their individual performance metrics in real time. We also have bi-weekly “bagel breaks” in all of our offices where office, company information, and updates are routinely shared and discussed with everyone.
TZL: How far into the future are you able to reliably predict your workload and cashflow?
JP: At a company and office level we track our backlog of executed contracted work (we don’t include on-calls until we have executed task assignments). This gives us a pretty good sense of workload forecasts and we typically target eight to nine months of backlog to feel comfortable we’ll have no problem meeting our goals. At an office level, workload is typically tracked at a much more granular level where every individual employee is accounted for. Projects are often confronted with change, so the workload forecasting process can be dynamic and is routinely reviewed for everyone on a weekly basis. Depending on the nature of discipline work each employee may be engaged with, we can reliably predict their workload from one month to one year. The reason for that disparity is the nature of the work. Survey assignments, for example, are often quick burn and it’s less clear what an individual may be doing in three months. On the other hand, staff working on very large projects can confidently know what they’ll be doing 12 months out. As for cash flow, we feel confident predicting income and costs by quarter, and reasonably certain about predicting it out six to nine months.
TZL: How much time do you spend working “in the business” rather than “on the business?”
JP: This ebbs and flows, but I’m generally a pretty externally focused CEO and I spend a significant amount of time with clients and partners. I enjoy working with them and our project teams on strategy at a macro and project level. I’m engaged with multiple assignments as the principal-in-charge, which helps me stay connected with project teams as things evolve. At times, my focus may be fairly intense working “on the business.” For example, I’ve been spending a lot of time over the last year working with senior staff on employee engagement planning, assisting in the development of new technologies for water and wastewater treatment and helping launch our Integrated Watershed Management initiative. I’ve also worked with leadership and our Emerging Leaders at Parametrix (LEaP program) in the development of a comprehensive approach and plan around diversity, equity, and inclusion.
Whether we call it inside the business or on the business, I’m enthusiastic about our upcoming industry event focused on the Future of the Profession. Parametrix will be hosting its second “mini-conference” where our clients and partners can hear from industry experts and discuss how artificial intelligence, autonomous vehicles, machine learning, 5G, robotics, etc. will change our business over the next five to 10 years.
TZL: Artificial intelligence and machine learning are potential disruptors across all industries. Is your firm exploring how to incorporate these technologies into providing improved services for clients?
JP: We’re not only exploring these types of technologies, we are proactively immersing ourselves in them. One example where we’ve made significant investment is in the use of augmented and virtual reality technologies in design and construction. This helps clients and stakeholders better envision the changes and understand technical engineering concepts during design to help in decision-making.
TZL: What, if anything, are you doing to protect your firm from a potential economic slowdown in the future?
JP: The Great Recession taught us a lot. Having to tighten the firm due to forces outside our control was exceptionally difficult and something we do not want to go through again. For example, we’re approaching large projects differently now. We never want to be a firm that staffs up quickly and lays staff off quickly as workload demand changes. In the past, when we were well positioned to win that type of work, we often took a very large role in staffing and managing the projects. As the recession continued to grow and clients began cutting way back on funding projects, we found ourselves over-staffed in several areas.
As we’ve become more cautious about the economy over the last year, we’ve made a conscious effort to partner with other major partners and share the work more broadly. As a result, we’re reducing our risk by taking on less of the overall project delivery responsibilities. We may well still lead the project, but we’re spreading the risk with other firms so that in the event of a slowdown, the impact will be much less for all. The key to that working, of course, is having a suite of trusted partners who share that philosophy. We’re also constantly diversifying geographies we work in and trying to keep a balance between work disciplines.
TZL: It is often said that people leave managers, not companies. What are you doing to ensure that your line leadership are great people managers?
JP: Parametrix provides annual supervisor training to newer supervisors to ensure they have the proper tools and understanding to be successful. We encourage constant communication and conduct career assessments every six months. We also strive to acknowledge our employee’s contributions to the business and have a bonus program that managers can use throughout the year to reward outstanding performance “on the spot.” I’ve learned through the years that a simple thank you and acknowledging an employee’s commitment to our clients and company often means as much as a financial reward. That said, we don’t lose sight of making sure our employee-owners feel great about their compensation and benefits.
TZL: Does your firm work closely with any higher education institutions to gain access to the latest technology, experience, and innovation and/or recruiting to find qualified resources?
JP: We work with several universities. We have a formal internship program that often results in students returning to work at the firm for multiple years and they often find long-term employment here. We regularly participate in career fairs at local universities and colleges. Our staff is active in STEM activities, including partnerships in some innovative and exciting scholarship and formal mentoring programs within multiple states.
TZL: How often do you valuate your firm and what key metrics do you use in the process? Do you valuate using in-house staff or is it outsourced?
JP: As an ESOP, we have three internal trustees (senior employees who are not company officers) who lead the valuation process in close coordination with management and an outside valuation firm to set the share value each year. The valuator looks at a variety of company performance metrics and forecasts during the valuation process including cash, growth, the market, revenue trends, and forecasts for future years. The valuation also includes “external” factors like the overall economy and what’s happening with valuation industry trends. The overall process is exceptionally transparent, and the supporting information is shared with all employee owners at the close of the process.
TZL: Research shows that PMs are overworked, understaffed, and that many firms do not have formal training programs for PMs. What is your firm doing to support its PMs?
JP: Parametrix places an emphasis on project manager training and support. We provide formal training through [outside consultants] and we have a dedicated project delivery team to support project managers. They conduct project reviews to help identify efficiencies and share best practices with PMs. The firm also continues to invest in business management software to enhance the tools available. Parametrix recently upgraded to BST10 and through our partnership with BST, we’re collaborating on making more features available to PMs.
TZL: Diversity and inclusion is lacking. What steps are you taking to address the issue?
JP: We’re currently very focused on diversity, equity, and inclusion. We’ve been prepping for the firmwide conversation for well over a year and earlier this year we began working with an outside consultant to help us assess where the firm currently stands. We’re doing this through a company-wide survey where we established some baselines for developing improvement plans. These went well beyond simple statistics for measuring how diverse we are, but took a deep dive into understanding unconscious bias, micro-aggressions, privilege and its effect, and other related items. We’ve engaged our 2019 class of Leaders Emerging at Parametrix to work with the survey results and consultant to make recommendations to the firm’s leadership later this fall. These will include ideas that can be put into practice right away as part of our normal course of business as well as a clear plan to address longer-term needs.
We actively support outside organizations that are focused on reducing barriers to higher education and launching young professionals from diverse backgrounds into STEM careers. Parametrix was also an early adopter in partnering with a key client in launching a mentor-protégé program aimed toward supporting a new Disadvantaged Business Enterprise to better understand how to do business with large, public sector clients.
TZL: A firm’s longevity is valuable. What are you doing to encourage your staff to stick around?
JP: One of the firm’s strategic plan initiatives is “Continuously Improving as a Best Place to Work.” To support this goal, the company works to ensure competitive salaries and benefits, and career growth opportunities. We go to great lengths to link our performance with being an employee-owned company, and how that performance results in everyone benefiting. This is not only financially, but in the many things we do to give back to employees (like five extra days of paid vacation in each of the last three years). We don’t have to satisfy outside investors or a few individuals who own the firm – everything we do and give back is for the benefit of all our employee-owners. Employee-owners are encouraged to think like owners and have an active voice. We conduct regular surveys and listen to our employee-owners for opportunities to improve the workplace or business. I’m proud to share that Parametrix has recently been recognized as a Best Place to Work by Oregon Business Magazine and ranked No. 3 for Best Places to Work for all large businesses in Washington State by the Seattle Business Magazine. That’s rarified air!