President and CEO of Ghafari (Hot Firm #54 for 2017), a 550-person multi-discipline firm based in Dearborn, Michigan.
By Liisa Andreassen
“I would describe myself as a people person and am elated to see colleagues develop into mature leaders – whether in the technical disciplines or in management,” Hammer says. “Most of my career has been fun.”
A CONVERSATION WITH KI HAMMER.
The Zweig Letter: Diversity and inclusion is lacking. What steps are you taking to address the issue?
Ki Hammer: We’ve always been diverse. Our culture is open and welcoming – it’s just who we are. It’s evident when you look around while walking through our buildings. There are 10 languages spoken here. Our mantra is to “embrace it and live it.”
TZL: Do you tie compensation to performance for your top leaders?
KH: Yes. We have a list of metrics that we use depending on the position. It’s always tied to company results first and then some of the following: division profitability, individual performance for new sales, revenue and new markets and long-term performance – annual and rolling metrics.
TZL: Do you share base salary or bonus amounts with your entire staff?
KH: We have a bonus program for the general staff. It’s discretionary and bonuses are paid almost every year. Manager bonuses are a percentage of their salary based on performance and for staff, each manager is awarded a pool of dollars, predicated on certain factors, and with oversight from HR the manager decides how to distribute it.
TZL: How many years of experience – or large enough book of business – is enough to become a principal in your firm? Are you naming principals in their 20s or 30s?
KH: We look for at least 10 years of experience to be a principal. In fact, we just named several associates in their 30s. All were internal and had been with us for four to 10 years. We consider some of the following: interpersonal skills, ability to embrace and promote change, commitment to the company, and technical skills combined with leadership capabilities.
TZL: When did you have the most fun running your firm, and what were the hallmarks of that time in your professional life?
KH: My career has never been static. I enjoy what I do and bring that enthusiasm to the table on a regular basis. I love seeing the energy around new ideas and implementation of new technologies and methodologies. I would describe myself as a people person and am elated to see colleagues develop into mature leaders – whether in the technical disciplines or in management. Most of my career has been fun.
TZL: In one word or phrase, what do you describe as your number one job responsibility as CEO?
TZL: What happens to the firm if you leave tomorrow?
KH: Deliberate succession planning has always been a priority for me. While many of us like to think we are immortal, the reality that something could happen to us exists. We have been diligent in identifying colleagues for key positions in the case, for whatever reason, a vacancy happens, they would be able to assume new/additional responsibilities.
TZL: With technology reducing the time it takes to complete design work, how do you get the AEC industry to start pricing on value instead of hours?
KH: Unfortunately, a lot of work in the AEC industry has been commoditized. We have to continue to partner with our clients and educate them on the expertise and level of service. We have also been promoting a different delivery method – integrated project delivery.
TZL: Engineers love being engineers, but what are you doing to instill a business culture in your firm?
KH: We share key metrics with the executives, managers, and business development people. We review our sales targets, margins, and overhead on a regular schedule. I personally spend time in this area (as an accountant by background, it’s in my blood). In addition, we are formalizing a financial education program for the associates.
TZL: The seller-doer model is very successful, but with growth you need to adapt to new models. What is your program?
KH: We have a hybrid model – seller/doer and dedicated BD people. For example, with government contracts, it’s much more a pure BD model. With existing clients that have consistent work, we focus on the seller/doer model. The seller/doer can be adapted to the market. For procurement, we use BD, but for tech-making decisions, we use seller/doer.
TZL: Benefits are evolving. Are you offering any new ones due to the changing demographic?
KH: Our benefits are robust. We’ve added certain elective benefits such as accident insurance and other healthcare add-ons. We work to keep the cost sharing below market and encourage healthy activities. For example, we participated in a weight loss challenge called, “Win by Losing” and had 25 percent participation. Collectively, 680 pounds were lost over a 10-week period.
TZL: How are the tariffs impacting your business and that of your clients?
KH: It’s still to be determined how it will affect clients. It’s still not well defined. We’re observing and waiting to see what happens.
TZL: Are you currently pursuing the R&D tax credit?
KH: Yes. It’s a fair amount of work and somewhat costly to pursue, but it’s worth it. Pursuing it depends on the types of projects. Each company has to examine their work/needs/expertise to determine the ROI.