CEO and president of SEH (St. Paul, MN), a firm that’s simplifying the world’s complex challenges by designing better places, engineering clean water, and renewing infrastructure.
By Liisa Andreassen
Ott joined SEH as CEO and president in May 2019. He’s had a long career in the engineering industry spanning more than 30 years of leading people and delivering complex projects, nationally and internationally.
“At SEH, people come first,” Ott says. “When you meet an SEH employee, you’re meeting an owner of our company. Our welcoming culture is built around being an employee-owned firm – all of our employees are shareholders, and this builds a deep culture of pride and support.”
A conversation with David Ott.
The Zweig Letter: Your online bio quotes you: “Leadership is motivating people to contribute their best ideas and efforts to achieve a shared vision.” Can you give me an example or two of how you’ve recently carried this out?
David Ott: When you believe in your employees and you trust them to do what’s best, the organization moves ahead quickly. We strive to put responsibility on our employees, and provide them with the tools to grow. One example of this is that in response to the disruption caused by COVID-19 earlier this year, we formed a cross-company Tiger Team to look at our sales pipeline and sales structure in a new way. We pulled together staff from different regions and practices, got them together, told them to challenge our current assumptions, and then got out of their way. This group has been looking at our clients and our processes in a new light, coming up with new and different strategies to effectively win work in this new virtual environment and turbulent economy. As a result, we closed our fiscal year with record new contracts, despite impacts from COVID-19.
TZL: How has COVID-19 impacted your firm’s policy on telecommuting/working remotely?
DO: Prior to COVID-19, SEH offered the opportunity to telecommute, though few people were working remotely. As a result of the pandemic, we are nearly 100 percent working remotely. We’re successfully delivering projects. Our employees have the flexibility they need to manage work and home. And, we’ve improved our ability to be connected with each other and clients across geographic boundaries. In a pulse survey conducted after two months of our employees working remotely, more than 50 percent indicated they would like to continue working remotely post-pandemic. Given our team’s success, we are modifying our remote work policies to provide more guidance for supervisors to manage remote teams, improved technology to handle heavy design software, and more specific equipment/home office allocations for remote working. In addition, we’re carefully considering the cultural impacts of a large portion of the employees working at home, and putting in place measures for our teams to stay connected and engaged.
TZL: How much time do you spend working “in the business” rather than “on the business?”
DO: Working in the business allows me to strengthen connections with clients and stay abreast of growing or declining market or client sectors. This drives profit and growth. Working on the business is where I can guide the company to respond to future challenges and opportunities. It’s this delicate balance between in the business and on the business that moves our company forward. As CEO, I strive to spend the majority of my time “on the business,” but I prioritize one aspect of working “in the business,” which is development of staff.
TZL: Trust is crucial. How do you earn the trust of your clients?
DO: Delivering what you promise and living our core values is how we earn and keep the trust of our clients. Some of our clients have been with us for nearly 90 years. Many of our clients are responsible for the safety and well-being of their residents – safe roads and bridges, clean water, sound infrastructure, and improved quality of life. It’s paramount to their success that we uphold and deliver what they expect. They deserve our best every day. That’s how you build trust.
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?
DO: As an ESOP firm, SEH’s stock is professionally appraised by an outside firm each year to establish its fair market value. This outside valuation includes comparing SEH to other firms in the industry and uses multiple industry-standard methodologies to determine the fair market value of SEH.
The opportunity to reward our employees annually through the valuation and the ESOP program is essential to employee retention, and for creating success and security for our employees. As a result of the ESOP, our employees are able to realize, on average, 97 percent of their annual income in retirement.
TZL: SEH has been recognized many times as a best place to work. What are the main factors that account for this honor?
DO: At SEH, people come first. When you meet an SEH employee, you’re meeting an owner of our company. Our welcoming culture is built around being an employee-owned firm – all of our employees are shareholders, and this builds a deep culture of pride and support. Our employee owners join together in a shared passion in furthering our core purpose: Building a Better World for All of Us®. Our daily work is reflective in the complexity of projects involving multiple SEH disciplines supporting our public and private clients with their infrastructure needs. We have a shared vision to make a difference in areas such as clean water, safe and improved transportation systems, infrastructure that stands the test of time, and buildings that enhance the civic environment. Contributing to the honor of being named a best place to work includes the opportunity to grow one’s career. With established career tracks and a guide to gain the competencies to advance, our employees have access to multiple professional development opportunities to gain skills and experiences. To foster this environment where employee owners work together to achieve our vision and advance their careers, we focus on strengthening the employee and supervisor relationship. Through our leadership development series, we provide our supervisors with the resources and training to help create an inclusive and supportive workplace where our employees can do their best.
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?
DO: SEH prides itself on developing our project managers as they’re vital to successful project delivery, creating effective project teams, communicating with stakeholders, and gaining and keeping the trust of our clients. This requires a multipronged approach of formal and informal training and development, including in-house training and external programs. Prior to assignment, our project managers complete a certification program; we then continue supporting our PMs with annual professional development opportunities. We are continually looking for ways to streamline the tasks that PMs must perform. For instance, we’ve deployed new software to ease the tasks of multi-office plan set reviews, and for collecting, tracking, and responding to comments and RFIs. We’ve developed online financial reporting to provide the PMs timely and accurate data on hours and dollars spent on their projects, and tools to help them forecast future expenditures. Since the pandemic started, we’ve held training brown-bag sessions to help them manage stakeholder engagement in a virtual environment, including tips and hints for hosting video conference calls both small and large.
TZL: In one word or phrase, what do you describe as your number one job responsibility as CEO?
DO: Creating success and security for SHE employee owners, now and in the future.
TZL: A firm’s longevity is valuable. What are you doing to encourage your staff to stick around?
DO: We create an environment where our employees feel welcomed, believe they are valued, have the support they need, have opportunity, and know they make a difference in helping SEH achieve its goals. We recognize our employee owners have choices. We work to ensure that SEH is the “employer of choice” whether it is to join our company or stay with our company. As an employee-owned company, our owners (the shareholders) have a greater sense of connectedness to each other to achieve SEH’s goals as 100 percent of our profits are distributed back to our employee-owners. We also know it’s incumbent on us as leaders to create an environment where our employees have the flexibility to balance the responsibilities of home with those at work. While our retention rate is above industry standard during a tight labor market, creating an environment where our employee owners can be their best remains a top priority.
TZL: Are you seeking any financial assistance during the pandemic?
DO: No. SEH has a strong cash balance and a solid backlog.
TZL: You’ve dedicated your career to improving infrastructure. When did you first realize you wanted to do this and why?
DO: In my childhood, I realized that I had a knack for mathematics and a desire to build things. In high school, as I explored potential careers, I realized that engineering the built environment allowed me to apply these skills and preferences, and done right could improve society’s well-being. I obtained a bachelor’s degree in civil engineering to further my positioning for this. After serving a rewarding tour as a submarine officer in the U.S. Navy, I realized I wanted to be more directly contributing to the improvement of our civic infrastructure, and resigned my commission to join a small firm focused on cleaning up hazardous waste sites. Since then, I have continuously looked for positions to directly impact our built and natural environment in a positive way.
TZL: Diversity and inclusion are lacking. What steps are you taking to address the issue?
DO: Inclusion is one of our core values – all of our employee-owners should feel welcome. While we have made some progress in this area, there is still room for improvement. Important to creating a more diverse, equitable, and inclusive environment is to first embrace our responsibility to be an active part of the solution. And, second to recognize that acts are more important that words – we need to take action, not just discuss the issue. Three years ago, we launched a Women in STEM Employee Resource Group, which continues to grow in its outreach and attendance, and a new ERG focused on inclusion and diversity launched late in 2020. Our in-house supervisor learning and development series helps our managers recognize and challenge their own biases. And, our recruitment efforts deliberately reach out to under-represented communities to increase our candidate pool. As our company grows, we seek talent to help us reflect the communities in which we live and work.