CEO of Caldwell Associates, a firm that’s not afraid to fail, and that’s strong enough to pick up and keep going.
By Liisa Andreassen
A seventh-generation Pensacolian, Caldwell, or Miller 3 as he’s known around the office, is CEO at Caldwell Associates. He enjoys discussions about building business and educating other local businesses on how to create and develop value and the metrics associated with a culture of owner mentality within an organization.
“Our priority is our team and culture because that’s what drives the quality of our work,” Caldwell says. “We have never and will never be a firm that hires and fires based on sudden increases in workload. If that means we pass on projects, then we’re OK with that.”
A conversation with H. Miller Caldwell, III.
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?
H. Miller Caldwell, III: It really depends on the type of project and how we’ve negotiated the fee. The metric we use the most is net service revenue or NSR/FTE. We also keep a close eye on utilization, however you can have great utilization, but not produce anything on a per project basis. To ensure we stay on track and are productive, time wise, we complete monthly project status reports to assess time spent versus the percentage of the job complete. Our younger staff has developed widgets on our accounting/project management dashboards to allow all team members access to real time data – this allows for better decision-making. It’s critical to give project teams access to information that will help them and the organization be successful.
TZL: How much time do you spend working “in the business” rather than “on the business?”
MC: Since becoming CEO, this has been my greatest challenge. We’re in the process of training members which will allow me to focus more “on the business” rather than “in the business.” There was a time when I really didn’t know what that meant. Being a business owner and growing a firm is not the same as producing and running projects. They’re different skill sets. For example, delegating to team members is now on my to-do list. The industry is changing and so is the way businesses operate, but that doesn’t happen overnight. It’s an evolutionary process. We’re in the process of transitioning our business model to a more holistic and horizontal organization. Right now, I’m at about a 50/50 split, but working toward 70/30 by year end. Eventually, I’ll align more with the 80/20 rule.
TZL: What role does your family play in your career? Are work and family separate, or is there overlap?
MC: Caldwell’s roots are grounded in being a family business. There’s always been an overlap in the line between family and business and I’m proud of that. At one point, I thought it could hold back growth, but I now realize that family connection has carried throughout our organization. It has made us stronger and more engaged. I grew up in this business and learned about true work ethic. At the age of 10, my first job was with Caldwell running blueprints. I learned what owning a business was about and that, although you can’t ever truly get away from it, you have to make time for your family.
My wife and I are a blended family of four kids. We have two boys and two girls ranging in age from 12 to 15. In our community, we’re affectionately known as the “Brady Bunch.” We’re working parents with demanding jobs. It’s easy to lose sight of what’s really important sometimes. I coach my kids’ sports teams and try to attend their events. As they have gotten older and more spread out, and my job has become more demanding, it’s more difficult but we do our best to balance it all. When there is an overlap, I hope my kids learn from my actions and hope it helps them to appreciate what we have. The bottom line? We always make an effort to be together as a family and put work away. In the office we say, “If things aren’t good culturally and internally, then our external work won’t be good either.” The same goes for family.
TZL: What, if anything, are you doing to protect your firm from a potential economic slowdown in the future?
MC: I think about this often. I’ve lived through two economic slowdowns, so I think the question is not if, but when. Our priority is our team and culture because that’s what drives the quality of our work. We have never and will never be a firm that hires and fires based on sudden increases in workload. If that means we pass on projects, then we’re OK with that. I believe that big swings in staff lead to a poor culture and that will ultimately lead to higher turnover and inconsistent work quality. In order to manage that, we run incredibly lean as a function of NSR/FTE to ensure that when slowdowns happen we can handle them more effectively.
During the interview process we try to be open and honest about how we work and let people know that there are times when overtime is needed. Some people don’t like that, but others thrive on it. We have to make sure we are communicating what it’s like to work within our team to ensure we’re making a strong hire. We’ve also implemented a doer-seller model for business development so everyone is engaged in all aspects of the business.
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?
MC: I’ve seen this time and time again. We’re investing a lot in training and employee engagement to ensure that our managers have strong leadership and communication skills. We’ve implemented “Management by Strengths” with a local company where we all take a survey to determine our communication styles. They also assist with employee engagement surveys and training. With all this, we’re working to transition to a more horizontal, multi-team based organization that allows younger team members to speak out when managers or anyone else is not living our culture. This model is a more collaborative one for all our team members and gets away from the PM or principal at the top. In the long run, a well-rounded team of people that includes a variety of strengths is what benefits the client and the business.
TZL: How are you balancing investment in the next generation – which is at an all-time high – with rewards for tenured staff?
MC: This has always been a challenge, but seems heightened as investments in development have increased and the gap between the older and younger generation widens. The people just aren’t there. In Pensacola, like many other areas, it’s getting more and more difficult to do. We’re very limited in the talent that we can recruit because younger generations are set on larger cities where there’s more potential for high-profile projects. As we continue to feel pricing pressures, the vertical organizations of the past just can’t fit the business model any longer. To stay competitive with younger talent as well as tenured staff, our horizontal organization allows us to do that. There are no clean vertical lines of management and this type of fluid and amorphic structure seems attractive to the next generation. We are lucky to have diversity of age and experience and our tenured staff understands and is supportive of this newer methodology. We also have to balance all this fluidity with structured knowledge transfer and mentorship and that is where rewarding our tenured staff comes in. This new structure also has us rethinking rewards and bonuses and how that occurs.
TZL: Is change management a topic regularly addressed by the leadership at your firm? If so, elaborate.
MC: Progress can’t happen without change. As I’ve mentioned, we think organizations need a paradigm shift in thinking about how they’re structured and run. Caldwell (or any business for that matter) is a living organism that must respond, evolve, and change with the environment. Our new grassroots effort to rethink the organizations and allow everyone to be a part of it has been critical. In our last biannual retreat, we addressed this very issue. We had two teams that volunteered to look at and present our new structure as well as how that blended with our quality assurance/quality control plans. Team A took research and graphics to define how we work and ultimately how we want to work in this new way. Team B took process, standards, and quality control.
TZL: They say failure is a great teacher. What’s the biggest lesson you’ve had to learn the hard way?
MC: We have to try new things and sometimes those things fail. I believe in failing, but failing quickly. We need to have the mental fortitude to pick up and keep going. As a coach, I tell the kids that you will always learn and grow more from losing than you ever will from winning. Responding to winning is easy; it’s responding to failure and defeat that’s difficult.
If I had to pick one lesson I learned the hard way it would be: Do what you know and do the small things right. Focus on value creation for the clients and not on quick exponential growth. In this day and age, we forget about truly building something with all the overnight tech unicorns. The Jack Welch curve is tried and true, and built something that had value.
During the economic expansion in the mid-2000s, it seemed like the growth would never stop. We wanted to grow too. We started a construction company and a development company where we could do our own projects. This took an enormous amount of time and spread us thin. We were focused on growth for the sake of growth and not value creation. Thankfully, we realized it prior to the Great Recession and got back to basics, but not before sacrificing a lot of time and money.
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?
MC: We grapple with this daily. We need to be leaner and more agile with better processes. We’ve invested heavily in having all staff attend project management and leadership training. It helps everyone to understand the fundamentals of the business and how it operates. If we do that right, then they will know how better to move through projects and assist each other.
TZL: In one word or phrase, what do you describe as your number one job responsibility as CEO?
MC: Vision and culture.
TZL: What happens to the firm if you leave tomorrow?
MC: My team understands the business, the metrics, and how to lead people. We want to make a difference and that difference is not just me. It’s much bigger than me, and we need to work together as a team to ensure that knowledge transfer is occurring and allowing all of us to grow and learn. We continue to invest heavily in training and education, and need to expand our mentorships in cross-functional teams. I know my team would do great things.