CEO of The Thrasher Group (Hot Firm #77 for 2016), a 350-person architecture, engineering, and survey consulting firm based in Bridgeport, West Virginia.
“By definition, a good project manager is someone who delivers. Period,” says Riley. “They become the go-to, get-it-done person and often don’t know how to say no. We are trying to do a better job of surrounding our project managers with the right support – technical staff, business development support, project accounts, etc. – so they can focus on the things at which they truly excel.”
A CONVERSATION WITH CHAD RILEY.
The Zweig Letter: The talent war in the A/E industry is here. What steps do you take to create the leadership pipeline needed to retain your top people and not lose them to other firms?
Chad Riley: It’s important to bring in quality people to backfill as leaders advance their careers and to continually fill our talent pipeline. While there’s a need to bring in mid-level professionals, we are turning our attention to growing young talent. We’ve made steps to increase our interaction with colleges and universities, so we can attract their top talent and accelerate their development. Growing people into those roles is the hallmark of what has made us successful.
TZL: As you look for talent, what position do you most need to fill in the coming year and why?
CR: Being a growth company in a growth mode, we have a need to hire in nearly every part of our business. Prioritizing those is difficult, but we evaluate using two criteria: Does this position improve our client experience and does it help us grow? We assess people in much the same way.
TZL: While plenty of firms have an ownership transition plan in place, many do not. What’s your advice for firms that have not taken steps to identify and empower the next generation of owners?
CR: I think any transition is difficult for firms. In 1983, H. Wood “Woody” Thrasher and his father, Henry A. Thrasher, formed Thrasher. Since that time, we’ve taken on shareholders, opened offices throughout the region, and most recently, Woody accepted the role of secretary of commerce for West Virginia, putting his holdings in a blind trust and naming me as CEO. I don’t think anyone could have imagined the company would be where it is today, but there was always an openness to talk about opportunities and how those different scenarios would take shape. My advice is to identify the options that are available to your company and explore them. The worst thing you can do is ignore it.
TZL: Monthly happy hours and dog-friendly offices. What do today’s CEOs need to know about today’s workforce?
CR: At the end of the day, a consulting business is all about its people. It is leadership’s responsibility to keep those people engaged and bought in. We have a culture defined by empowering our people, being accountable to one another, and prioritizing relationships – with clients and co-workers. We understand that today’s workforce wants more than a job; they prioritize community involvement and making a difference in the world, which is core to our mission of improving the communities where we live and work. People want a place where they are appreciated and empowered. It’s rare that we tell a younger staff member “no.” We give them opportunities to lead projects, dabble in business development, or explore a specialization in which they have an interest – and we recognize their efforts. Thrasher has always been a place where if you see an opportunity and you want to pursue it, we’ll support you.
TZL: Zweig Group research shows there has been a shift in business development strategies. More and more, technical staff, not marketing staff, are responsible for BD. What’s the BD formula in your firm?
CR: We’ve always had a seller-doer culture – it started with our founder. As we have expanded over time, we’ve added more rainmakers and now have a core group of business development and marketing staff. Seller-doer is the preferred way, but it’s not enough. In a growth company, your seller-doers are stretched for time, and they typically default to delivering for existing clients rather than getting new ones – which is the client experience we want. We created a business development group as an underlayment to get further ahead of opportunities than if we relied solely on seller-doers. Our business development helps leadership, project managers, and technical staff be better positioned to capture work when it comes along.
TZL: Diversifying the portfolio is never a bad thing. What are the most recent steps you’ve taken to broaden your revenue streams?
CR: Being headquartered in a state that is the size of a mid-size city, the only way we were able to grow was through diversification. As a result, for a company of our size, we are incredibly diverse in the services we provide and the markets in which we offer them. I believe that will benefit Thrasher as we expand throughout the mid-Atlantic region. Some people look at adding new services as a risk, but we see it as a stabilizing effect. To us, it comes back to our mission of improving communities and providing services based on our clients’ needs. Most recently, we’ve taken services we provide like environmental and highway design, and have stood them up as their own divisions within our business structure. Our primary diversification is now coming through expanding our geographic markets.
TZL: The list of responsibilities for project managers is seemingly endless. How do you keep your PMs from burning out? And if they crash, how do you get them back out on the road, so to speak?
CR: I cannot think of a bigger challenge for a growing company. By definition, a good project manager is someone who delivers. Period. They become the go-to, get-it-done person and often don’t know how to say no. We are trying to do a better job of surrounding our project managers with the right support – technical staff, business development support, project accounts, etc. – so they can focus on the things at which they truly excel. It’s easy for good project managers to get stuck in the mentality that they have to do everything. We must pay attention and recognize when it’s happening and help them along.
TZL: What is the role of entrepreneurship in your firm?
CR: Entrepreneurial culture in our firm is what has made us different from the competition. Our founder was incredibly entrepreneurial, and he instilled that throughout the company. It’s that spirit that keeps us sharp, continuing to improve our client experience, and inspires us to move quickly and seize on opportunities. We can’t be afraid to take a risk. We look for that spirit in the people we hire.
TZL: In the next couple of years, what A/E segments will heat up, and which ones will cool down?
CR: From a regional perspective, we expect the energy market to heat up. The industry has been rebounding over the past year and appears poised for a strong run. Predominantly driven by oil and natural gas, we see this affecting electrical distribution, petrochemical, and we hope to see it trickle through to community infrastructure and development.
TZL: With overhead rates declining over the last five years and utilization rates slowly climbing back up to pre-recession levels, how do you deal with time management policies for your project teams? Is it different for different clients?
CR: Obviously, as a consulting firm, billable time is what drives revenue, but those norms change through different stages of company growth. Regarding project teams, what is important to me is that their time is productive. I view time spent developing a new service for a client or presenting at conferences to expand our brand as initiatives that are worthwhile investments. It is looking at it from an entrepreneurial standpoint: we don’t look at the number; we look at the activity that it drives.
TZL: Measuring the effectiveness of marketing is difficult to do using hard metrics for ROI. How do you evaluate the success/failure of your firm’s marketing efforts when results could take months, or even years, to materialize? Do you track any metrics to guide your marketing plan?
CR: You know effectiveness when you see it. I believe you have to have hard metrics, but the value of marketing – especially within new markets – is so ambiguous that it’s difficult to evaluate. We pay close attention to how we allocate resources and what the results are, but it’s never going to be an exact science.
TZL: The last few years have been good for the A/E industry. Is there a downturn in the forecast, and if so, when and to what severity?
CR: Things run in cycles. We’re currently on a growth path and anticipate it to continue. However, we know things can change. What we hope to do through our current expansion is to diversify and gain experience in other markets, so when there’s an eventual downturn in one industry, we have another work pipeline. It’s because of our service diversification that we are incredibly nimble and able to react to changing markets. We serve roughly 10 different markets, and many of our employees are cross-trained to adapt.
TZL: They say failure is a great teacher. What’s the biggest lesson you’ve had to learn the hard way?
CR: Being a new CEO, I am continually learning lessons. Over the past year, I’ve learned that the speed at which you have to assess and make decisions is incredibly fast. You can only effectively do that if you are in touch with what’s going on in the company. I’ve learned that when you see something veering off course – even the slightest bit – you need to check in, raise awareness, and take action to get it back on course.
TZL: While M&A is always an option, there’s something to be said about organic growth. What are your thoughts on why and how to grow a firm?
CR: Both have their challenges; we’ve experienced both. With organic growth, we’ve learned that having the right person leading the regional office is key. If that person treats the opportunity as though they are launching their own small firm, then the likelihood of growth is way better than having someone who waits for headquarters to chart their path. With acquisitions, you have to make sure the people and culture are a good fit.
TZL: Do you use historical performance data or metrics to establish project billable hours and how does the type of contract play into determining the project budget?
CR: For our long-term markets, we have historical norms and knowledge of what is accepted in that industry. As we expand into new markets, we learn and adapt to different contract types and fee norms. We take a 360-degree view considering what the client expects, what we can do, the specific scope of work, and historical data, and then we apply all these data points into contract negotiations, so we can make sure we’re setting everyone up for success.
TZL: What’s your prediction for 2018?
CR: The talent war will continue and advances in technology will continue to change the way we deliver architectural and engineering services.
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