How To Run An Operationally Efficient Organization
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Rens F. Hayes IV, P.E. is Co-Founder and Principal of H+O Structural Engineering, a firm specializing in mid- and high-rise building design. Rens is a Professional Structural Engineer and Certified Value Growth Advisor. He is a lifelong learner, constantly seeking new perspective through audiobooks and relationships. Rens received his BS and MS in Civil Engineering from Worcester Polytechnic Institute (WPI). After WPI, Rens worked for a large structural engineering firm before returning as Vice President to the family steel company, Rens Welding & Fabricating, Inc. During this time, Rens and his co-founder, Jeremiah O’Neill, launched H+O. From the very beginning, they developed a people-first organization with systems for scale.
In this interview, we discuss a wide range of topics including how to infuse your practice with financial literacy, key systems for scaling an organization,
and how to prevent burnout in the AEC industry.
Early lessons from the steel business
George Valdes: For a bit of context, I came across you on LinkedIn and I just became enamored with what you're talking about. It wasn't just about structural engineering or about those types of companies. You're really talking about organizational challenges that people face. I really resonated with that, which is why I had to reach out. For everyone else, I'd love to start at the beginning. What has been your career trajectory so far and how did you get to where you are now?
Rens Hayes: Yeah, sure. That's great. I'm glad that you picked up on the type of tone and topic that we talk about because even when we're trying to sell engineering, generally the last thing we start talking about is structural engineering. That's not what we're actually selling. We're selling problem solving to overcome people's challenges so that they can be successful. Structural engineering is the vehicle that we're able to do so, but it's always in context of solving problems to help other people be successful.
A little bit about my background—I grew up in a structural steel and miscellaneous iron company. So I actually fabricated and installed steel buildings, staircases, railings, guardrails, that sort of thing. That's what got me interested in designing buildings. As I was working in the steel shop or in the field, going through high school, I wanted to learn to design the buildings that we were building. That's how I got interested. After college, I got to work for a notable firm in the Boston area and got exposed to high-rise building design and some of the biggest and best architecture and construction firms in the country. So I really got to see how it was done at a high level and experienced that from an employee and somebody that was ambitious trying to grow their career. I got to see the positives of working in that type of environment. I also got to see the limitations and ceilings that I was perceiving as an entry-level or young, ambitious person in their career. From there, after I got my license, I felt like there was a career ceiling for me in my current role and I had the opportunity to go back to my family steel business. I actually ran that with my father for a number of years. The reason I bring that up is that it was a real pivotal, change for me. Because I got exposed to organizational strategy and business financials, I had all the information on the business at my fingertips. It was my family business and it completely changed the way I saw business. It changed how I interacted with colleagues, how I manage team members and talk to clients, and it made me much better at the day-to-day work.
The other thing I learned from being in the steel business. We went for AISC certification, which is very much like an ISO certification and you have to have a written, documented process on how you get work. Once work comes in the door, how you manage it, how you create drawings, how you check that it's fabricated correctly and how everything went on the truck to go out the door. That's really what AISC is. From my experience as an engineer, I realized 99% of engineers just know it's something that's written in the spec book and we perceive it as that means a steel company is better than another company that doesn't have it. We don't really understand what it means to be an AISC certified company. And I thought it was kind of hypocritical that we require people building the buildings to have written, documented processes on how things are done and how quality assurance and quality control is created, but we as design professionals have no such process or requirements in our field. We're highly educated. We have a degree. We worked for a few years, take a test, now we're deemed competent and we don't need any more.
So that was kind of the aha moment that I saw that as being one of the things in the industry that became a career barrier. It became a barrier for growth and created a lot of confusion and frustration within the workforce because it can lead to overwhelm. You can do things out of sequence, which drives rework. Scope creep, because you don't even know how you're providing value or what you really expected to do in designing them. If a client asks you to change a room or move a wall, is that part of the original contract or is that late in the design process? Is that creating more work that's unnecessary? Should we work the weekend to complete it? That kind of clarity. It creates a ton of frustration and chaos within an organization. Those are the things that we kind of recognize when we founded and launched H+O structural engineering.
George Valdes: That's amazing. So from the very beginning, you had already a vision for what the firm culturally was going to be about through the period of experience that you had. It just became very clear that you were trying to avoid it, to use your word, the hypocrisy in some ways of how things are currently running, some other practices
Rens Hayes: Yeah. My business partner, Jeremiah O'Neill—I worked with him at the larger firm, and around that time we had the idea of launching the firm. He actually came and worked with us at the structural steel company and we started building the business on the side. We started doing work that passively came our way, but we weren't really marketing and trying to drive work. We were actually building a business first, so we started building out the design process before we started hiring in marketing and had a website. That was a real important decision for us and milestone in our growth as leaders. It allowed us to integrate employees, put on a staff, get productive and be on the same page so that we could accelerate.
George Valdes: With your business partner, how did you distinguish your role separately from his?
Rens Hayes: How do we distinguish? I would say one, we're both very aware and open people. I would say we have complimentary skill sets. My partner, he's really an incredible engineer. When I talk about him, I always say he's the 0.1% talent out there in engineering and you would never know. He's somebody you want to hang out with, go skiing with play golf with, and you would never know how talented of an engineer in this. I'm glad that I didn't find this out until later in life that I am not as much a technical person. I'm very much like if you go on the DiSC profile, I'm like a Di all the way. Big picture thinking, visionary, I'm always trying to focus on strategy and understanding challenges and risks. Where's opportunity? How can we create value? What's the best way to communicate with someone? How do they want to communicate? We kind of naturally found our roles together but we collaborate in a lot of ways.
George Valdes: To be simplistic about it, would you say that you're more focused on the front of house? Back of house, he might be more focused on the actual day to day operations of what it means to actually execute the work. You're more focused on the external, versus, let's say, the operations-heavy side, eg. HR, and all the other stuff that needs to get done.
Rens Hayes: Good question. I probably was talking more from when we were getting going. Today how we split our roles, he is obviously a lead technical expert. He really has an expertise in kicking projects off in the right way and taking on some of the more complicating engineering tests that we get. He's amazing at just getting anything done, like when it comes to creating a design process or improving quality control, he really takes on a really high-end COO role. For me, I really take on the upfront client work in onboarding, pricing, jobs, doing proposals, and building brand awareness. All the stuff that we're doing on LinkedIn is intentional. I know a thing companies like to say is good people are hard to find. But then if you take that and flip the script, so to speak, what are we doing to attract good people to our company? If good people don't know about you, is that really good? Are people are hard to find or are you hard to find? So we really made a pivot. Marketing is one of those eight core functions that create a balanced organization. It's important for growth. I take on that kind of building—the brand awareness, keeper of the mission, vision, values, and the direction of the company.
George Valdes: That's fantastic. It's really great to hear. I think some sometimes when people are starting off in the business, it's very hard for them to define what the role should be. It seems like the openness and transparency that you have with your partners allowed you to also be reflective. By bringing up DiSC, you're also bringing up this self-awareness as to what your strengths are, which has allowed you to focus in on your core strengths and find that person, or at least recognize, "oh, my partner really compliments me on the stuff that I'm weakest in." I think that points to a vulnerability to that I appreciate because you need that vulnerability to move ahead. I think it's incredibly important.
Rens Hayes: That's well said. I totally agree and you're right. You have to be able to be self-aware and actually look at yourself objectively. I think once you get over that hurdle, it's a key attribute of any relationship. It's understanding each other's strengths and weaknesses. It's almost like you have to forgive them for their weakness and appreciate them for their strengths and try to put everyone in a position to succeed. How it was put to me one time—if you have a line and the things above the line make you happy, and you're good at the things below the line, like you can still do those, but they make you unhappy, you want to limit how much you're below the line. You never want to make that the majority of what you're doing. So it's not to say that I don't do technical stuff or design when we need to, but it's really important to kind of forgive people for their flaws or their weaknesses and appreciate them for their strengths and put them in a position to succeed.
Without alignment—rework, scope creep and burnout
George Valdes: The way I've heard about that, in a different lens, is to try to fire yourself out of certain jobs. So you try to find the best people to fit those roles, which kind of segues into my next question. It has to do with team structure for this intentional mindset you've taken to construct both your early roles. Between both of you, how has that manifested itself strategically within the business? Would you say sometimes it could be a matter of applying where you worked at before, or seeing comparables? Going back to the design process from the beginning—was there anything about trying to apply first principles or anything like that to how you designed your org? Do you think there's anything learned there?
Rens Hayes: Absolutely. I'll probably start at a higher organizational level because that's generally where I'm thinking. If you've ever heard any of my content on LinkedIn or heard me speak before I talk a lot about mission, vision, and values. There's a lot of autonomy in architecture and engineering. It create a lot of great things and gives people opportunity. It's kind of an entrepreneurial environment. It's very easy to get a job and hand that off to somebody to design the job. It's very clear that they're expected to design the job. You get a ton of deliverables. That's autonomy. There's a lot of internal reward in being given that autonomy. But what can also happen is chaos if there isn't alignment in the company. It can be fulfilling, but that can often lead to a burnout culture or a culture that has a lot of rework and scope creep. That creates overwhelm. It doesn't necessarily hurt the company though, because everyone's a salaried employee. A lot of that rework, scope creep and burnout due to the lack of alignment really falls on the individuals. They're generally accountable. They're well-educated capable professionals, so they still get the job done, but it's at their own sacrifice.
George Valdes: They're also well intentioned.
Rens Hayes: You take pride in what you do.
George Valdes: You take pride, but there's also a part where you want to please the client, right? You want to deliver the best work that you can provide because it still carries the creative aspect of it. There's a lot of personal investment within that. I think you were probably going to go to the direction of, how you structure that ultimately, right?
Rens Hayes: Yeah. What is alignment? Is that culture? Is that a mission? I would say the first thing that you have to do is find your mission, vision, and values. A mission should be a very short statement. It defines your why, your purpose. Why does this company exist? It is inspirational. As far as a vision, you're painting the picture of the company in five years. You're telling everybody where you're going. It's an aspirational goal, right? As you aspire to become a company. A very key thing in developing a vision is you write it in the present tense. So you're writing in the present tense because what you're doing collectively as a group is agreeing to start behaving and becoming that company today. The only way to get to the company that you want to be is to start acting like that company. Right? Same thing. If you want to accelerate your career and get a higher paying life, more accountability, a more responsible job, you don't become more responsible when you get the job, you have to become more responsible in order to earn the job. So the core values. Mission's your purpose. Vision's where you're going. Your core values, these are the things that really drive behavior and culture. They guide decision-making, three to five or six. I like to use the rule of three. Short brief statements. What you're trying to do is find out the three core values that drive behaviors that are necessary to create the value proposition you're selling to your client. The fourth part to the mission, vision and values is really be clear on how you deliver value.
If I use H+O Structural Engineering, for an example, our mission a better experience for our team, for our clients. We're doing a couple of things there, right? We're poking at the industry norm of burnout and all that. People are leaving because they see a career ceiling at 10 or 15 years, or working too much, or not feeling appreciated, unclear on how to grow their career. We want to create a better experience for them with a positive work environment. In engineering, I won't speak to architecture, but often the complaints about engineers is that they're rigid in how they communicate, they don't respond fast enough, generally overwhelmed so they get back to it late, or they might delay deadlines. I would say those are also symptoms of an imbalanced organization. That overwhelm. Doing things out of sequence and then doing things again, you don't have enough time in the day to think about something new or do something different. You need to delay otherwise you'll never get home at night. So our mission, "a better experience" our vision," we're gonna be a nationally recognized company." Our vision is actually like two pages and details what's our revenue? What are the type of people that we're going to be working for? Where's our revenue coming from? In what areas, what sector?Then, our values are, "embrace growth, be a partner and be responsive." And those are creating the behaviors that solve those typical complaints in structural engineering.
George Valdes: Wow. That's really clear. That's great. I can tell how thoughtful it is to build up on top of each other in a way that it provides the right guard rails. So if I were to be joining this company, I wouldn't know exactly like what you value as an owner, and what I'll be ultimately held accountable for.
Rens Hayes: Exactly, and you can lead with outcomes, right? That's the whole thing. Now we've set that framework, here's, what's important. We're creating a better experience. We want to embrace growth. We want to be a partner and we want to be responsive. The other way we phrase our value proposition. We look at architects, their investment is in the relationship they have with private developers. We generally work in the private market. So private real estate developers. That's their lifeblood, right? That's what creates their business. They need to make sure that that's successful. Development or developers, they're investing money. Sometimes other people's money. They're putting that on the line and taking risks. Their biggest fear is losing money. They need to protect their investment. Our three keys that we look at to do that is we want to meet deadlines. We want to support informed decisions. That's what leads to development success. Meet deadlines, cost effective design and then we want to support informed decisions. The worst thing I see in the design world is when developers are making blind decisions, thinking it's the best thing for them, simply because they don't have all of the decision making criteria at their fingertips. We can be responsive. We're buying in as partners. We're going to be proactive in giving them that information so that they can make the best decisions for them.
How to attract and retain A-level talent
George Valdes: I'm fascinated by how ultimately this goes down to the people that you end up looking to hire, because I'm sure you're using these values when you're interviewing. You're trying to tease out through the questions. How do I discover, in a very short amount of time that you have when you're interviewing somebody, that this person could fit those values? I'm also just wondering, there's also frameworks that you have to develop on the process side to be able to enable that as well. It's two parts, right? Let's say you could have all the mission and values and everything else, but if there's an inauthenticity to how it's actually structured from a process perspective, you could hire great people, but you can still miss the mark because you're not enabling them. So they could still lead to burn out even though all these other things are happening. You can think of it as a three stool thing or whatnot, but there's another piece to this that's also super critical. Maybe you can talk a little bit about the team side. How does that help define who you look for? And then the tooling?
Rens Hayes: I'll make one comment to that that I think is very important. Leadership. The reason mission, vision, and values typically fall and have a bad rap is like their lip service, right? They're just things that are on the wall or on the website. They're not actually utilized in how the business operates or makes decisions, the most important part of any of that. All of that is a waste of time, if the leadership is not going to make decisions that align with their mission, vision, and values. The second they start to waiver from those core values and that mission and that vision, they've lost their whole team. No one's going to use it. So it's up to the leadership to first start making decisions. We talk about mission, vision, and values all the time. Every week we talk about it. Every time somebody comes to us with a decision, we're referencing one of those terms in making that decision, because we're trying to reinforce it. The reason they're so short and brief, so that they're memorable. We almost want them to become a part of the fabric of the subconscious of our team. And same thing, if we're doing brand messaging well, our client's know those terms now. There's no better reward to me than when a client explains their work experience with our team with our own language like that. Love it. I wish I could get more of that. That's the goal. That's the ultimate part.
When it comes to hiring people, I think we should talk about the eight core functions of a business that creates a balanced organization. One of those is marketing and brand awareness. The reason we're trying to be so vocal and get out there on LinkedIn is we want to attract people that share those pain points and share this purpose, and share these values, and are excited to be a part of that culture. That's a big part of what we're doing on LinkedIn. We're trying to get the voice out there, what we're building, because we're excited about the future. If people want to be a part of that, we want them to know about us. Attract them. That in itself makes the interview process so much better because they've already vetted the company. They already know without talking to us. It's very clear and they're ready to talk to those terms. We found it very hard to use recruiters in architecture and engineering. It just seems really hard to find people that are aligned or ready to pick their head up. They're generally in that overwhelmed culture. They're worried about how to get their jobs done. They're not worried about their career and what's best for them.
George Valdes: Yeah. I've helped to hire teams in the past and you always are looking out for that person that can come in and they want to work there. They want to work with you. They want to work with the company because they've already self-selected themselves very passionately about what you're doing through whatever it is that we've done in the past to attract that. Whether from a branding perspective to your point. The tone of the interview is very materially different. You're going away from just talking a little bit about them, in some way they end up then being very curious about you and the business. They start to really dig in. Almost the best outcome is people that come in where you almost feel like they've already been working there. In the very little amount of time you've been talking to them, like you can already see them, "Oh, I know what it's going to be like to work with you, to do stand-ups with you" or whatever it is. It goes back to that kind of branding aspect we were talking about.
Rens Hayes: That's great. I would say, honestly, the hiring process and interviewing and understanding alignment and competencies, that's the biggest challenge. I think it's the biggest key to success, which is why we've invested so much time in that brand messaging and getting clear on who we are. We've spent an equal amount of time trying to refine our hiring process. We have very structured interviews. We do a three part interview and then a reference interview. We try to use the same questions in the same language so that we already are anticipating what type of answers we're looking for. It gives us an edge and much more awareness to the context of the conversation. I am not a psychologist by any means, but in the content that I've absorbed, a lot of communication gets lost in translation. You can't recall it all. So the more that we can create a process, we can get that much better feedback from an interview. We're able to be much more intentional about it.
Open book management and bonus structure
George Valdes: How does this translate over to the actual processes that you put in place for the actual execution of the work?
Rens Hayes: Thank you for asking. So when I think of a really great setup at a company, I think of three things in a bit of a triangle. There's the alignment part, that's the mission, the vision, the values, and the value proposition to the client. Now you've got to create a framework for your team to be successful. How do you deliver that value efficiently? What's step A all the way to step Z. How do you create a framework for people to be successful? The other part to that framework is you have to make sure that you're training people and then develop. So training from our perspective, actually we'll do these two terms this week, training is like developing short-term competency with the ability to deliver the work today. Development is building the awareness and the character attributes and the qualities that are going to make them successful later in their career growth. You're trying to develop the future of them. Training is for now. Development is for future growth. The third piece of this is financial literacy. Ultimately, at the end of the day, all businesses need to be profitable and they need to have cashflow.
If you don't have those, you don't have a business. If you truly believe in what you're doing as a company, to be around, to give your clients the value you're delivering, you need to make sure that you're profitable and have cashflow. It's commonplace in America, or for as long as you can remember, to hire people and try to create all of the behaviors and actions that create profit and cashflow without telling them how they impact cashflow. How The Great Game of Business correlates that is like playing football without a scoreboard. You have no clue what's going on. Every player on the field has a different role on the team, but they're aligned by the scoreboard. They're going to call a different play if it's first in 10, or third and 20, or third and two. They're going to call the best play as a team to put them in a position to succeed. So why don't we do that in business? That was a real Aha moment for us this year. We've gone through implementing The Great Game of Business. We went totally open book management. Everyone went through financial literacy training and we actually have very clear company-wide bonus structure where people can earn up to 20% of their salary based on company performance.
George Valdes: Wow. That's pretty amazing. Was there any hesitation at all when you first started to look at the open book idea internally? For something that's not very commonplace within the industry, taking that leap, did you ever feel any kind of hesitation?
Rens Hayes: There is certainly a risk to it, right? Going back to vulnerability, we're being vulnerable because you're opening people up. You're opening up the books to everybody that can put you under scrutiny. We have no doubt that we're gonna have people as we grow that really appreciate it and are excited and fulfilled by it. We're going to have people that don't quite fit the culture They may start to get frustrated with whatever their current position is or their growth path. They might leave because of that, because they think they're worth more, they can go earn more, they could go do this themselves. That to us is inevitable, right? Whether we do it or not. I think it's likely that it will happen.
Ultimately, this is kind of a stress test: what's the cost of inaction to us? We want to grow and build this fulfilling positive work environment and create a national company. To do that, we think the platform that we're creating, especially with the financial transparency, puts our team in the best position to be able to do that while maintaining the culture, maintaining the work, the better experience that we're selling to our clients. Without that connection, we're just trying to guide them blind. Once we're bigger, where Jeremiah and I don't have our pulse on the entire company, how do we make sure that everyone's aligned in creating that same thing? It means having a clear strategy and tying it to the business financials.
George Valdes: How was it received when you announced it? Did you have a sense that everyone was ultimately pretty positive, or they didn't know what that meant?
Rens Hayes: That's a really great question. I would say they're across the board. Some people are really excited to learn it. Sorry about the dog I'm working from home right now. In some cases, some people are just like, "I know what's important to us. I know how to do a good job. Is this information I really need?" There's some people that don't need it. That's fine. There's also a lot to learn from financial literacy training and business. It's completely different than personal finances, like if you manage a good budget at home, but you get a paycheck every week, and you money coming in, and you don't really have cashflow to worry about. Versus in business, you have profit and loss, you have your P and L, your income statement, and you have a balance sheet, and not just cashflow. It's possible that you can be profitable and not have any cash. I have to watch both, and be on top of accounts receivable.
The same thing with the bonus structure. We have say 10 levels to the bonus structure based on company performance. We have a minimum threshold. If we're paying everybody at our company market rate for their position and their competencies, we want to incentivize and we want to bonus them for performance above market. If we're operating at market average profit, then there is no bonus for anybody to share it because we're all compensated for market performance already, but we can do greater than that. We do operate greater than that, pretty significantly. We want to share that upside. The hope for us is that we can maintain that level of execution at a much higher level as we grow.
George Valdes: Since announcing it, how public have you made this? Is it part of your recruitment material? I'm trying to understand after announcing, are you finding that there are more candidates that are really interested in this type of culture coming to you because of it?
Rens Hayes: I would say that we have softly released it. We were waiting, we actually got down to the details of the bonus plan recently. We'd been operating with the open book and forecasting revenue with the whole team for the last six months. We didn't have the whole bonus structure really vetted. You really got to stress test that across all future possibilities. We didn't want to change it once we released it. We've got consultants and really made sure that we did it right. We just released that to our team and actually implemented that proactively for 2020. They'll receive bonuses based on that plan, and then we'll kick off the plan from day one on 2021. This is going to be a big lever that we want to pull because from our world, if you're looking for a positive work experience, engaging work, very clear expectations, career growth, opportunity, and clarity on how to do that, we want to train you to grow.
At the end of the day, we think of a business's growth is directly tied to how well you can develop leaders there. We want to help develop leaders so that they are capable of leaving and doing whatever they want to do and be successful. But we want to create the work environment and the opportunity within our company that they don't want to leave. You want to have that here. If you see us on LinkedIn, that is a message that's going out there loud and clear. We think that's gonna be our biggest lever to share. The next stage of this, an annual bonus plan, an open book, that's great, but that's all short-term value sharing. We want to make sure we're creating value long-term and increasing the growth. So we're going to actually introduce a five year bonus incentive tied to growth. A big, hairy, audacious goal. A BeeHAG. We want people tied into and excited about the future.We're going to have even more long-term incentive plans beyond that. We're just getting going on that. We think that is going to help us attract the best and brightest. We want A-level talent to come here, and that in turn is going to allow us to capture this national market in the high-rise market and really accelerate while maintaining culture and that work experience and our value proposition.
How to break through career ceilings
George Valdes: On the personal growth side, what are the ways in which that's actionable within the organization? As an example, some organizations might have one-on-ones on a weekly basis with their direct reports to be able to track really closely that progress. They'll meet with a manager and whatnot, and they'll keep a running tab of the things that they feel are personally, areas of growth for them, versus let's say, the one-year cycle review cycle that's very common, more so in the architecture industry, where all the stuff that could have accumulated and been fixed along the way, just piles up to the very end. That's one example, but are there any other tools that you use to track that growth for a person?
Rens Hayes: That's a great question. I would bring that back to the conversation about training and development. If you have a framework for how your business executes your work product—for us that's structural engineering, we design buildings, we create design drawings, we manage construction administration throughout construction—we need to identify what competencies are successful in that framework, then we need to create training that develops those competencies. That's in the short term. We like to think of onboarding at entry level and working up to a really self-sustaining project manager. We all, as professionals, like to collaborate and bounce decisions off each other, but they can really operate on their own. How do you get from A to B? You want it to be clear about that and then help each individual. Everyone has their own strengths and personalities, like we already talked about. If you can identify those early and build a training program or walk them through the training program to put them into a position where they can get to a project manager level.
To us, once you become a project manager, you really can impact how the company operates. At a project manager, you have the most face time with the most interaction with clients, and you're the one actually delivering the work product. Super important. You can really move the needle in a business. That's why we think it's so important to be open about strategy and training. When I talked about long-term career growth through, the training piece is important to be developing, but long-term career growth and breaking through that career ceiling isn't doing what you do best every day. If all you want to do is be a structural engineer, all you want to do is be an architect, there's a ceiling earning potential to that skillset. There's the outliers, right? The 0.1% talent that might be able to break that mold, but otherwise you want to start becoming. What are my weaknesses? What other competencies can I develop that help me leverage my architectural skillset or my engineering skillset to its maximum value? How do I create more of that? What other competencies? That's the part of long-term development I think that's really important, that breaks that career hurdle. It gives people opportunity for growth. At H+O, how I look at that, if we're training people in strategy, they really understand how the business works, operates, how it creates value.
We're showing them a framework. We're showing them the business's financials. We're encouraging that long-term development and sharing everything that we have learned today. We're giving them an environment and trying to stimulate their own thoughts and perspectives to contribute to the growth. Generally, a rule of thumb I like to say is once you're at a certain part of your career, say you're self-sustaining, you really run your own projects, if you have to ask somebody how you can provide more value, you probably need to go back and start building and working on yourself and become a lifelong learner. At a certain stage in career growth, you have to start bringing ideas and opportunities to the table and showing people how that's going to provide value. That's the difference. If you're waiting for somebody to tell you to take your next step, you're going to be waiting for a long time. We want to create an environment where people are always looking for opportunities to give them the confidence that they can present and then reward them for it.
George Valdes: And in any business, right? There's no shortage of things that could be improved. To be able to instill that autonomy to your team where they feel they have all the context necessary to be able to confidently propose new ideas and be able to identify what those gaps are. Especially when they have that full context of the financial literacy. That's really powerful. That creates an environment where it's not even that everyone's rowing in the same direction or anything like that, but also that people, through that experience, might find the things that they might be way more passionate about that still add value to the business. I could see in that environment where someone realizes they might have not ever been exposed to the business side of things, but once they are, it becomes a switch where they start to see their work differently and maybe start to think creatively about, "how can I address some of these other things."
At Monograph, we have a four day workweek with the explicit intention that that extra day is more for free association. Whether that's spending time with family all the way to people working on side projects. Ultimately, all the support that we provide organizationally, the hope is something sparks an idea on that extra day that they might bring back to the business. We need to have that underlying infrastructure of the context and be able to give them everything else to create that supporting environment for them to take action. Some organizations, without all that pre-work on creating that environment, you could see where people might not want to contribute because they might be afraid to. There are definitely places that operate out of a culture of fear. If there's any takeaway from this conversation, the worst thing you can do is operate out of a culture of fear.
Rens Hayes: You never want that.
George Valdes: What would you say is the ramp up time when you hire somebody? You probably have already some idea of it, but from when they first come into the door to when you feel like they're humming along on a project, what's that average time for you?
Rens Hayes: If we're talking about like an experienced professional with how we operate and all those things, we're looking at a few months. Say you're coming in as an experienced, competent person, you're probably two months getting up to speed on how we operate our systems and everything we do. You're obviously providing value in there, but we're doing a lot of training and onboarding.
George Valdes: And how long did it take you to find that person?
Rens Hayes: That's a great question. That could go back to a few conversations. When we first started, we're a small engineering firm, two people, then we get our first employee, then our second employee. It's really hard to find available talent in the Boston market. An hour drive of Boston, there might be 75 people total that may be aligned with us and maybe only like 30, 40 people that we're actually looking to hire currently. They're all working. It's going to take forever to get in touch with them and lure them towards the H+O brand. So we actually implemented a remote working environment back in 2017. We started hiring people from all over the country. So we focused on value alignment and we couldn't find anyone within driving distance. We opened it up to the country, posted in 50 major cities and had like six qualified applicants in the next day. So we anticipated that a remote work environment was going to happen over the next decade. We didn't think COVID was going to happen or happen overnight. We used it as a necessity to grow.
Without it, we weren't going to be able to innovate. We weren't going to be able to capture our vision. So it made that decision that much easier to go for it because it was a necessity. Now, if I were to be in the past, we really are just starting to get momentum with our brand.. We have a really good book of work in our local community. I would say most people in Boston know who we are. We're starting to do work elsewhere in the country. We have an 18 story tower in Philadelphia. 450,000 square foot building in Syracuse. We have buildings in North Carolina, Missouri , plenty of other cities and we actually have a new opportunity in San Diego. We're really trying to get that national brand recognition and get our mission, vision values out there. All those things. So we're looking to improve that cycle of finding the right people because it is hard. We try to look internally, rather than just say it's hard and go out with the traditional recruiter and try to send a message to every engineer in the world. We want to get our brand and our message out there and hopefully attract the right people.
George Valdes: You highlighted the point that it takes time. To find the right person and to get them to the point where they're actually running. In the business, they're actually humming along. That time. It's an investment that you're making in trying to find this person. This time that you can't get back. In a place of fear, you get higher churn rates, people turn over, you're a leaky bucket, right? Investing all this time and resources, you're never gonna hit momentum because it's just throwing bodies at the problem. In some instances, a brand can have notoriety. At least in architecture, you have a design brand that's so powerful that it can attract work and talented people, but then you just operate in such a way where you sacrifice your employees just because don't put any of these processes in place.
Rens Hayes: Yeah, that's the part we refer to as organizational imbalance. A lot of the things that we're talking about, like burnout, rework, scope creep, all of those frustrations, low career ceilings. They're not intentional, but architectural and engineering companies can grow pretty large because it's a well-educated workforce and there's a lot of autonomy and pride, right? You can hand somebody a design responsibility and they get it. They're responsible. They're capable people and they deliver it. You can grow to a hundred, 200 people with a very horizontal organizational structure, with a few people that understand how the business makes money, but having to create clarity for the rest of the team while everybody is just operating, executing work, keeping people happy, but without alignment of mission, vision, and values, that creates that chaos, that inefficiency within the organization, [and] the workforce pays the price. They're salaried professionals. Typically in our industries, they know they have to get the work done in a given calendar year or whatever the project is. They're going to make sure it gets done. Any of that inefficiency comes out of their time, not necessarily the company's budget.
When we talk about building a balanced organization, we talk about eight core areas. There's planning, leadership, sales, marketing, people, operations, finance, and legal. Most companies are strong in two or three of those areas, but they're blind to the opportunity costs of the deficiencies in the other areas. When things go wrong, they tend to see the imperfections in the two or three areas they're already good at. So when they try to improve, they try to improve at the things they're already better at than the other five or six core areas, which just create more imbalance. The key to creating a sustainable long-term company, we call that intrinsic value, which is predictable, sustainable, and transferrable value, and predictable, sustainable, and transferrable profit in revenue. It's creating balance across all eight of those things and trying to advance them equally. That's where good leadership and good organizational structures, you start to build.
You want to bring people around you that help you shore up your weak spots. It doesn't mean you personally or any one to three leaders have to be great at all eight areas, but you have to be aware of the importance of those and put people in the right spot or get consulting and coaching. Ultimately, that creates the work environment. I'm probably going too far here, but with the Great Game of Business, something I love from them is "the company is the product." The whole point of H+O Structural Engineering is we want to create a better experience. We want to create an entity that's there to support the people that put their blood, sweat, and tears into it and to support their families. We want it to always be there so that they can enjoy fulfilling career growth opportunities and it can support their life outside of H+O. It's also creating a better experience for clients, but never at the sacrifice of the team. So we want to make sure that we're protecting the value of the organization. It's always there. That's really the push to become balanced so that it can grow.
Questions from the audience
George Valdes: That's a great spot to segue into some of the questions I'm seeing here in the Q and A. Someone asked, "I'm a company of just three and this all sounds great. But it feels like too much for me to take on at once. What's your advice if I only have a handful of hours every week to build this type of work environment?"
Rens Hayes: If you can get anything right in a company, it's to start with mission, vision, and values. Something I didn't touch on in my career growth is while I was working at the steel company and started the engineering company, I became exposed to mergers and acquisitions. That is a ruthless, unbiased judgment about the value of your company. I started to become interested in how they perceived organization value. It was different than how I had thought of it before. That's where I ended up coming across Ken Sanginario of Corporate Value Metrics. He created an M&A certification program called the Certified Value Growth Advisor. I took that course. It was a week course. When I was reading all the books, and trying to improve the steel company, and start H+O Structural Engineering with Jeremiah, it's like, "where do you start? I know all this great stuff, but I feel like I'm always in the middle and get mediocre results." After taking that course, it brought total clarity that you have to create very clear mission, vision, and values first because that aligns your team. That becomes the foundation. When you make decisions, you create behaviors to deliver value. You attract people to your company. If you don't have any process, you don't have any financial clarity, say the books are still even a mess, if you have mission, vision, and values right, you're going to create a good work environment and that's going to be the foundation for further growth.
George Valdes: Something to add, the word decision comes up a lot. If you think about it, it's somewhat of an abstract sense, but it's a real sense, all you're doing every day is just making decisions and you have to think about "what are the most important decisions you can spend your time making?" Jeff Bezos talks about this a lot. For him, he sees his role as making three important decisions a year and that's going to completely change the nature of the course of the business. Typically they're irreversible decisions. Ones you can't change or it would be very difficult to change. What the mission, vision and values does as a framework is that it provides you the ability to make decisions a little bit faster. It gives you back some of that time, because then you can always go back to that as your guidepost. It helps you make decisions with more confidence because you have something that you fundamentally believe in to be true. Especially when you think about your vision as like a guidepost for decision-making. Let's say you want to go from the 3 person firm here, and you want to grow to be a business that can support 20 people in three years time or two years time. When you start to think about the decisions you're going to make, you might look at it from that lens. What does it take if I work backwards from that? What are the things, the important decisions I need to make? Maybe right now, I need to outsource certain parts of the eight core functions. You might make quicker decisions by outsourcing the things you're not very good at and finding people, outside consultancies that manage that. It just changes the way you're looking at the problem with much more clarity.
Rens Hayes: That's well said, George. In going on that vision, when you know where you're headed as a company, It makes those short-term decisions that much easier. A lot of people asked as we started, as we've grown in the business, "how hard was it to make the decision to hire an employee?" It was easy. It was necessary to hit our goal. It wasn't like, "Hey, maybe we might not have enough work." It was "if we don't start hiring people, we're never going to become the company that we want to be. So it becomes a necessity. It helps streamline."
George Valdes: Another question here. Who did you include when writing your mission? Was it just you and your partner was open to the whole team?
Rens Hayes: At the time that we did it, my partner and I did it together. I would say if you're an established organization and have a leadership team, I think it's something you want to do with your leadership team. It's kind of like you're doing annual strategic planning and this is something that you want to implement for next year or the year after like. You want to start bringing it up with that team that you would have as part of your strategic planning.
George Valdes: Do you ever iterate on that? Have you ever, since you implemented it, iterated on it any way? Tweaked it because of something that changed in the business or anything else?
Rens Hayes: We haven't to date. I'm not saying that it's ever moving. One of the early criticisms, even from people that I was trying to bounce, like mirror, what they were doing, or get feedback from just to keep stimulating our thoughts and perspectives—they were like, it's too bland, "a better experience. What does that mean?" I think the beauty of a good mission statement is what gives it meaning is how you act when you use it and how you build the company and make decisions. That's what creates a better experience. The fact that we revisit that every single week is an example of what creates a better experience, what makes that great. In that exercise, we have like a notebook of stuff that we wrote down, all the different terms, experience, value, customer service, whatever those things are. Zappos had a lot of influence on me too. Ultimately, we want to make more money. Well, what does money do? Money allows us to go to the beach, to do the things that make us happy. So happiness becomes the core thing. You want to create an environment that's fulfilling, and that's how we ended up on experience was our core word there. That's pretty broad and can have different meaning depending on how we're behaving. I like to think our vision could ultimately change, but I think our mission is pretty well anchored. I like to think of that as the one foot. You can pivot off that one foot, that's kind of our anchor.
George Valdes: That's fantastic. Another question here. "Your story has been great and I appreciate it. Have you had any regrets in the many decisions you've made?"
Rens Hayes: Regrets, I would say no. I generally try not to have regrets. I'm generally an optimistic person. I try to learn from my experience and mistakes. We've definitely had challenges in the stakes. We've had some bad hires that were really costly. There's always things that you think you could've done better, or maybe I could've been better prepared, but I would say no regrets.
George Valdes: Have you read the book, The Growth Mindset, by any chance?
Rens Hayes: I haven't. It is in my wishlist on Audible, though.
George Valdes: It's very clearly you're kind of aligned to that. It's an important point, this idea of being optimistic even in scenarios where, it can be very difficult. The mind shift is important because if you have a growth mindset, then even with your own personal challenges, you see them as opportunities to grow and learn from. It can seem kind of pie in the sky, or it's very easy to be cynical about the idea, but I think it does have a transformative effect. It's a way to manage ego in some ways, too, because you kind of are divorcing yourself. You're not punishing yourself necessarily for the mistakes you might make. You see it as this is just another opportunity for me to learn something that's going to make me better tomorrow.
Rens Hayes: That that's well said. I wish I had this perspective going back to when I played sports or something. You as a person are not defined by the mistakes that you make. You're not judged on your performance at work. That doesn't make you the person you are. What makes you who you are is your character. What kind of character do you have? Do you have the right intent? If you know, if you're keeping yourself accountable that you're true to your intent, the other stuff can sometimes be out of your control. You need to forgive yourself for that and know that you have the right intent and you're not judged as a person for it.
George Valdes: Thanks well said. I'd like to end it off with two questions for a little lightning round. So try to answer these somewhat quickly. I'll start off with an easy one. What books would you recommend right now, or podcasts that you're listening to?
Rens Hayes: What books would I recommend? Two books. I have a million books that I'd suggest. For anyone that is really just starting their journey of becoming a life-learner, I really recommend The Compound Effect by Darren Hardy. I read that six years ago. I've pretty much committed to doing some level of reading or audio for an hour to two hours a day for the last seven years. It has had a compounding effect on me as a person and my ability to think differently and improve leadership, my ability to be a father, my ability to be a husband, all those things. It's made me a much better person. I learned a lot from the perspective of investing in your own personal development through The Compound Effect. From a business book, I think if you're just looking to read a new business book, the entrepreneurial myth, The E-Myth, is a really good way to start. It highlights a lot of the flaws and the frustrations that we all run into in small business. It gives good guidance on how to fix them.
Final question: “What's the nicest thing anyone's ever done for you?”
George Valdes: Awesome. Great recommendations. the last one I like to ask is what's the nicest thing anyone's ever done for you?
Rens Hayes: Wow. That's a tough one. The nicest thing anybody's ever done for me.
George Valdes: It's a good reset question. It kind of brings it back down.
Rens Hayes: I'm thinking of all these things in business. What's the nicest thing anyone's ever done for me?
George Valdes: People answer a personal question. It's runs the gamut. We've had some very personal , answers to this. Yeah, no pressure.
Rens Hayes: Personal. I'm trying to think of the nicest thing anyone's ever done for me. I had a lot of mentors. None of us grow as individuals or into success alone. I give a lot of credit actually to my father-in-law Gil Campos. He was the one that introduced me to The Compound Effect, and the other journal was living your best year ever. That's kind of an annual reflection and goal setting process. That's when I started doing goal setting every year. That sent me off on this journey. So I think if I had to have the one moment that had the biggest impact, it was from my father-in-law and that kick in the pants to start investing in myself.
George Valdes: That's awesome. That's beautiful. Well thank you so much, Rens. This has been an awesome conversation. I think we dived into a lot of topics pretty deeply. It's great within the context of an hour. I really appreciate you for taking the time to share your journey and all the systems that you put in place within your business. It's really exciting.
Rens Hayes: Thanks George. I really appreciate you having me on. I've enjoyed the conversation a lot and love what you guys are doing at Monograph.
George Valdes: Speaking of Monograph, for those as a kind of sign off here, we are a firm management software platform that ties together your time to your projects and budgets for real time decision-making. If you'd like to try it out, it's available for free to try, on monograph.io. Thank you so much, Rens.
Rens Hayes: Thanks George. Take care.