Co-founder and principal at CWE (Fullerton, CA), a civil engineering, water resources, and environmental engineering firm whose experts pledge to create a better tomorrow, today.
By Liisa Andreassen Correspondent
Jason Pereira has more than 20 years of water resources and environmental engineering experience. He’s a recognized authority in stormwater management and surface water quality. As co-founder, Jason says his primary responsibility is to make sure staff eats, lives, and breathes their pledge of “Creating a Better Tomorrow, Today™” in all aspects of their work, decision-making, quality, and serving the clients and communities where they live, work, and play.
“At CWE we seek excellence and try to hire well so staff is surrounded by fellow employees that are valued for their behaviors and skills, and want to help each other to be great,” Pereira says. “We believe that a great workplace starts with stunning colleagues in an environment that fosters trust and mutual respect.”
A conversation with Jason Pereira.
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?
Jason Pereira: There are three key performance indicators that we watch closely and share with staff monthly in a town hall-style meeting so we can be nimble and make quick adjustments. The first indicator is monthly and year-to-date billings in relation to our annual target goal/projection. This helps us with the bigger picture and lets us know if we need to increase business development efforts and mine existing contracts for additional work. We also closely monitor our accounts receivables for 30, 60, and 90+ days outstanding and remind managers to follow up with clients to keep our A/R turnover below 75 days, which is typical for the A/E industry. CWE managers diligently track our running 12-month backlog and full-time equivalent staffing needs to adjust human resources and increase recruiting efforts to meet our client workload demands.
TZL: How much time do you spend working “in the business” rather than “on the business?”
JP: Too much time! With the shortage of qualified professionals in our industry, it has been a challenge to recruit qualified seller-doers. I have a grand vision for working “on the business” and can never find enough time to work on and execute those initiatives because some clients only want to work with me directly or current staff doesn’t have the experience, technical knowledge, and relationships to backfill my “in the business” role. There’s also a huge void in our industry for mid-level professionals as a result of the Great Recession. Many of the professionals that would be in the 10- to 14-year range never came back to our industry and this has created a significant human resource disruption. We have to spend more time working “in the business” mentoring so we can bring up junior level staff quickly with the expectation that they mature, act, and perform like mid-level professionals in a short timeframe.
TZL: How has COVID-19 impacted your firm’s policy on telecommuting/working remotely?
JP: Frankly, there wasn’t much of a choice. With the safer-at-home orders implemented, it was either have our teams work remotely or shut down. With our client commitments and much of our work deemed essential, we quickly adapted to the situation. While there have been some challenges and bumps in the road, we’ve learned the good, the bad, and the ugly of working remotely. The good is we can do it with a degree of success! The bad is sometimes IT challenges can hamper productivity and efficiencies. The ugly is the unknown and how long this could drag out.
TZL: When you identify a part of your business that is not pulling its weight in terms of profitability or alignment with the firm’s mission, what steps do you take, and what’s the timeline, to address the issue while minimizing impacts to the rest of the company?
JP: We do not have profit centers or unnecessary competition between services lines. However, if an individual or business group is not pulling their weight, it’s the expectation that anyone within our company live up to our core values, which includes courage. That means the courage to question actions inconsistent with our company’s core values and pledge. The timeline for rectifying the shortcoming depends on the gravity of the situation and will vary accordingly.
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: To keep a general pulse on our firm’s valuation we typically keep tabs on recent M&A activity and look for comparable firms to gauge our valuation estimates. Another tool we use is Zweig Group’s Valuation Survey data and Z-Formulas.
TZL: What financial metrics do you monitor to gauge the health of your firm?
JP: Financial metrics that are reviewed on a weekly basis are project budget versus work completed. On a monthly basis, we review work billed versus unbilled. Certain client contracts require monthly billing and others are based on completed tasks. This needs to be looked at carefully so that we can take certain actions to complete tasks ahead of scheduled dates (by end of prior month) if they are scheduled to be completed at the beginning of the month, as that part can be billed. The overall work backlog is also reviewed on a monthly basis to evaluate how much work is anticipated for the next 12 months versus our capacity and available resources for that timeframe. Above all, the overall profitability of the projects and the firm are continually reviewed and evaluated.
TZL: What unique or innovative pricing strategies have you developed, or are you developing, to combat the commoditization of engineering services?
JP: The public agency clients we work with are supposed to make professional services consultant selection based on qualifications; however, we’re finding many of them are looking at the bottom line dollar and handling selection more like a construction bid process. To avoid the commoditization of engineering services, we make a strong effort to demonstrate our value proposition and provide a compellingly better solution to solve their engineering challenge. In several instances, this has involved turning things upside down, approaching the project from a different perspective, finding creative ways to reduce the project’s capital and long-term operation and maintenance costs, and identifying and securing alternative project funding sources.
TZL: How has COVID-19 affected your business on a daily basis?
JP: COVID-19 has created a complete disruption of the daily workflow process. We’re finding that many of the things we did in the office and face-to-face are taking much longer to complete and we’re having to reinvent how we do certain things. Some of the limitations and inconveniences have included small laptop screens at home compared to the large dual monitors in the office, having quick access to team members and office resources, general collaboration, new employee onboarding and reduced business development opportunities. Fortunately, we haven’t noticed much of a slowdown in our market sectors, but some property tax funding shortfalls are expected to cause impacts over the next several years.
TZL: They say failure is a great teacher. What’s the biggest lesson you’ve had to learn the hard way?
JP: There was a three-month stretch where the workload was light and the backlog was strong, but we were waiting on numerous Notices to Proceed. We had secured an executed contract with an existing client city to prepare drainage improvement plans, but had not been issued the NTP. Being that the work was for a city we had previously completed work for and had an executed contract in hand; we estimated the risk of starting work without the NTP was very low. We immediately got our subconsultants (environmental surveys) to start work so we could gather the information needed to keep our staff busy. Five years later, the city still has not issued the NTP and we needed to pay our subconsultants for their efforts. This was an expensive lesson to never start work without a written authorization from the client, even if you have worked for them previously.
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?
JP: We are ready to name principals in their 20s or 30s if they demonstrate the exceptional ability and execution necessary to grow and maintain a book of business that contributes to the overall growth of the firm. We currently have a young manager who has exhibited exponential growth as a technical professional and is displaying business acumen beyond her years. She has successfully demonstrated the qualities necessary to be a future leader in our industry and is likely to be named a principal soon.
TZL: Diversity and inclusion are lacking. What steps are you taking to address the issue?
JP: CWE strives to maintain balance and be representative of the communities we work for and serve. We are a certified minority and disadvantaged business enterprise and have successfully maintained a diverse workforce and client composition that emulates those communities we’re located in. Our firm is composed of 38 percent females and 57 percent minorities, which mirrors Southern California. Our clients also represent similar demographics with affluent cities like Beverly Hills and Santa Monica and disadvantaged communities like San Bernardino and Long Beach. CWE hasn’t made a conscious effort to hire this way; it’s been a function of hiring the best people given the local pool of candidates.
TZL: A firm’s longevity is valuable. What are you doing to encourage your staff to stick around?
JP: With so many choices it’s easy to be tempted to go elsewhere because the grass is always greener on the other side, right? At CWE we seek excellence and try to hire well so staff is surrounded by fellow employees that are valued for their behaviors and skills, and want to help each other to be great. We believe that a great workplace starts with stunning colleagues in an environment that fosters trust and mutual respect. CWE plans and hosts fun activities throughout the year to engage people across service lines so staff get to know each other on a more personal level. Activities include picnics, laser tag, weekly breakfast gathering, potlucks, holiday parties, river clean-up events, food drives, etc. CWE also offers attractive financial and benefit perks such as performance-related bonuses for all employees, profit sharing, defined benefit plan, 401(k) match, generous vacation and sick leave packages, and medical and dental coverage for employees and their family.
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