1. You are President of Kimley-Horn and Associates (KHA), an employee owned engineering consulting firm, and one of the country’s largest, with 1,500 professional and support staff in 59 offices nationwide. You were ranked 19th on Engineering News Record list of “Top 100 Pure Design Firms” and 39th on its overall list of Top 500 consulting engineering firms; and also ranked 1st and 2nd on ENR’s list of the top 25 in the U.S. for multi-unit residential and retail design. The past few years have been difficult for the engineering and design industry with many firms struggling and reporting declines in revenue. What can you attribute to your firm’s stability in light of the economic downturn?
There is no question that the past few years have handed us the most difficult economic environment our firm has ever faced. We, like many other firms, have contracted in size as a result. However, while we have lost billings and staff, there are several aspects of our organization that have grown in stability during these difficult times. I’ll mention three: geographic and client diversity, strong focus on business principles and a healthy ownership transition plan.
We are intentional about having broad geographic diversity across the United States. This has served us well as the economies of different states have fluctuated at different times. The Florida market was one of the first to experience the economic downturn, even as markets in some states continued to expand. Today, we are seeing some markets begin to rebound while others continue to languish; geographic diversity continues to serve us well. In a similar manner, we strive for diversity across four client types: private development clients, divided by local and national; and government clients, divided by local and state or federal. As with geographic diversity, spreading our expertise across different client types has allowed us to shift focus to those markets that show the greatest opportunity, and reduce the risk of having all our business in one sector.
We often refer to ourselves as a business based practice. We enjoy practicing our profession, whether that is engineering, planning, environmental science or any of the other services we provide, but we never lose focus on the fact that we are a business.
Lastly, our culture includes a strong tradition and practice of ownership transition. This has allowed us to remain privately held while many of our competitors have felt the need to look for other sources of capital to further their ownership transition.
2. Within KHA you have created a corporate culture and environment that many firms strive to replicate and in fact, the company has been recognized by FORTUNE Magazine as one of their “Top 100 Best Places to Work” for six years running. How does your exceptional commitment to your employees fuel your success? Can you discuss how you have created your corporate infrastructure around ‘practice builders’ and your role in supporting their efforts to grow the business?
Our core purpose as a firm is to provide an environment for our people to flourish. Kimley-Horn is organized around our practice builders, that group of employees working directly with our clients. In many ways, we can be thought of as one firm made up of many smaller firms or practices, supported by one administrative structure. Perhaps it is a model not unlike many law firms. The role of our management and administrative staff is to support our practice builders as they serve their clients. This model encourages an entrepreneurial culture. Unlike many organizations, a practice builder does not have to move away from serving clients in order to advance in the firm. In fact, approximately half of our Principals continue to serve clients on a daily basis.
Our culture gives our staff tremendous control over their own future; as long as they work within our core values (honesty, integrity and ethics; exceptional client service; high expectations; sharing and caring; and sustained profitability) practice builders are free to develop their business in their areas of greatest interest. This freedom is reflected in the results for employee satisfaction surveys such as the one upon which the FORTUNE Magazine Best Places to Work list is largely based.
3. Unlike many consulting engineering firms, KHA operates as a single profit center vs. a network of competing offices and operating units. How does this facilitate an improved client experience while motivating your project managers and internal support staff?
We believe that a structure of multiple profit centers creates silos, with each group motivated to place their group’s performance ahead of the overall firm’s performance. We establish goals for each operating unit, but we only track profit for the firm as a whole. It is our experience that this approach increases efficiency, as we are not tracking charges between groups. It also increases teamwork and collaboration across the entire organization. We often shift resources to wherever the client needs are the greatest, regardless of location, which also allows us to balance our staff and workload across the firm. Operating as one profit center makes this easy. We also encourage staff to make decisions “one level up:” as an individual, make decisions that are in the best interest of your group; as a group, do what is in the best interest of the region; as a region, make decisions that are in the best interest of the firm. At the end of the day, we are one team, working toward one common goal.
4. KHA ranked in the top 10 in Engineering News Record’s 2009 Top 100 Green Design Firms. Not marketing hype, this award recognizes those firms based on a percentage of projects that were registered and actively seeking certification by a third party such as the U.S. Green Building Council. Moving forward, will there be a growing market for sustainable design and do you believe environmental impact has found a permanent position in the development of projects?
We believe that the concepts of sustainable design and reduced environmental impact are here to stay. That said, the recent market conditions have moved construction costs to the forefront, challenging the economics of some sustainable design components. Many consumers are looking for sustainable design concepts in their communities, offices and retail establishments, so the concept is not going away.
5. From your home base in West Palm Beach, as President of KHA, you oversee the firm’s operations which generated $350 million in professional fees in 2009. How much time to you spend on the road meeting with staff, researching new business opportunities, analyzing conditions and keeping pace with local public and private-sector market demands?
Because we are a professional services firm, the only resource we have to sell is the expertise of our people. Relationships, both internally across our staff and externally with our clients, are the key to our success. I tend to travel three days a week, four out of every five weeks. Internal travel includes informal meetings and relationship building brown bags with staff, training sessions with newer and more junior staff, and meetings to assist in the overall operations of the firm. My external travel is usually focused on meeting with clients to thank them for their confidence in KHA and to explore ways that we can improve the service that we provide.
6. In addition to your corporate role, you and your wife of 23 years, Lisa, live in Jupiter and are raising three sons. You are a member of the American Society of Civil Engineers, the Florida Engineering Society, a Trustee of the Florida Engineering Foundation, and Chairman of Clemson University’s Civil Engineering Department Advisory Board. With all of this, you somehow find time for recreation and your love of Clemson football. For all Clemson Tiger fans, the most important question remains to be answered. How will Clemson perform on the field without C.J. Spiller? Looking ahead to a difficult schedule facing Auburn, Miami, Georgia Tech and Florida State, what are your projections for your team this season?
Well, I have to be honest and tell you that I held off responding to this question until after the game against Auburn. Although we lost a close one, I was pleased with Clemson’s performance. We have certainly lost the speed that CJ brought to the team, but the “new storm” looked pretty good. We have some tough competition ahead of us this year, but this early in the season you have to remain positive! Regardless of this year’s performance, I will forever remember the feeling of going away to college and, as a freshman, watching our team win the National Championship.
More about John C. Atz, P.E.
John C. Atz, P.E. is the President of Kimley-Horn and Associates, Inc. (KHA). From his base in West Palm Beach, John oversees the firm’s operations, which generated $350 million in professional fees in 2009.
John joined Kimley-Horn in 1987, shortly after receiving his bachelor’s and master’s degree in civil engineering from Clemson University. While in practice John provided transportation and land development services to many clients, including Disney Development Company, General Growth Properties, Publix, Home Depot, and Wal-Mart.
In addition to his role as President, John has several corporate roles. He is a member of the Board of Directors, corporate Management Committee, and corporate Strategy Committee that addresses long-term issues associated with Kimley-Horn’s overall growth plans. He is also a former member of KHA’s Retirement Plan Committee that now manages the firm’s $300 million retirement portfolio.
John and his wife of 23 years, Lisa, live in Jupiter, Florida with their three sons. His oldest son is at the University of Central Florida and his other two are in high school and middle school. He is a member of the American Society of Civil Engineers, the Florida Engineering Society, a Trustee of the Florida Engineering Foundation, and Chairman of Clemson University’s Civil Engineering Department Advisory Board. He also is a 2004 graduate of the inaugural class of the Florida Engineering Society/Florida Institute of Consulting Engineers Leadership Institute. John and his family are members of the Jupiter First Church where he finds time to volunteer with their Web Ministry.
