James Harakas, the man who opened the GeoEngineers Inc. Spokane office 24 years ago, has helped form a young leadership team to carry on the business aspects of the multidiscipline engineering services provider, beyond his now imminent retirement.
April J. Smith, marketing director for the company, says that because of Harakas’ extensive experience in the Spokane market, no single person can handle the senior principal’s role.
“It takes a team behind him and him mentoring us over the last couple of years,” Smith says, noting that other Spokane-area engineering and architectural firms are facing similar challenges with ownership transitions as boomer-age principals retire.
Seattle-based GeoEngineers has 14 offices and a total staff of 300 people nationwide. The Spokane office employs 32 and occupies 8,100 square feet of leased space at 523 E. Second.
GeoEngineers’ Spokane transition team is led by geotechnical engineer Teresa Dugger and senior engineer Dave Lauder. Though Dugger and Lauder have logged a combined 28 years at the Spokane office, they’re each close to 30 years younger than Harakas, who has helped mentor them and others, implementing the succession plan.
More than half of the Spokane office staff has been with the company for longer than nine years, Dugger says.
The firm has long emphasized internal growth, she says, and retention of key employees is a vital part of the succession plan.
“We do look strongly at building from within,” Dugger says. “I can’t think of any senior engineer who was brought in from outside.”
Low turnover retains internal expertise and helps maintain a strong company culture, she says.
Harakas says another aspect that will help maintain the company’s culture is that GeoEngineers is employee owned, with 21 people in the Spokane office as current shareholders.
Companywide, two-thirds of the staff are shareholders, collectively owning more than 50 percent of the company, he says.
“Broad ownership became a goal here 20 years ago,” Harakas says. “Nobody in the company owns more than 6 percent.”
Some important functions in the Spokane office, such as business development, are being spread among a larger number of people in the office.
Five years ago, Harakas and managing principal Bruce Williams handled business development for the office.
“Business development is going out and getting the work,” Harakas says. “The intent now is to involve as many people as possible in business development.”
Harakas notes that most staff members are younger than he was when he opened the Spokane office in 1991 at the age of 44.
“Most of the staff has families with young children and different priorities,” he says. “It’s not fair to expect them to work 60 to 70 hours a week.”
With the company firmly established here, 85 percent of its work is for repeat clients, Harakas says.
“Twenty years ago, we we’re trying to get clients,” he says. “Now were trying to maintain them.”
Repeat clients include the city of Spokane, BNSF Railway Co., the Washington state Department of Ecology, and a number of American Indian tribes, school districts, and college, throughout Eastern and Central Washington, North Idaho, eastern Oregon, and western Montana.
The office has seven licensed engineers, and has rebounded this year to a prerecession total staffing level, after having dipped to 23 people, including four engineers, in 2010.
“We’re hiring companywide and locally,” Harakas says.
The office is working on about the same number of jobs now as before the recession, although revenue this year is higher, he says.
As of last week, the Spokane office was providing engineering services for 158 active projects that will take from four weeks to four years to complete, depending on the complexities and challenges of each project, he says.
Active projects include the $8.5 million NorthTown Mall partial redevelopment, the planned $15.4 million University District pedestrian bridge, and Rockwood Retirement Communities’ $40.1 million Summit Tower project.
GeoEngineers also is a member of the engineering team recently selected for the $64.3 million Riverfront Park update.
The company isn’t alone among engineering and architecture firms looking at ownership transitions here.
Gary Bernardo, principal at Spokane design firm Bernardo|Wills Architects PC, says the firm began developing its succession strategy more than 15 years ago.
“It has to be started before you think you need it,” Bernardo says.
Part of the strategy includes exposing people in the firm to business aspects of the practice that they’ve shown potential or affinity for, including insurance, human resources, and professional liability issues.
“Our preference is to just do architecture, but we have to run a business,” he says. “It’s a challenge sometimes to get people who are technically strong at their profession to become equally conversant or skilled at running the business side of things.”
A 25-person firm such as Bernardo|Wills can be a complex organization, Bernardo says.
Fortunately, he says, the practice has relatively consistent age breaks between management levels.
“We have pretty even steps of 10 to 15 years for people being groomed for ownership transition,” he says.
Bernardo, Bob Wills, and Rob Pace are current principals in the firm.
Wills is due to retire next year, Bernardo says, adding, “I’ve still got another eight to 10 years and Rob Pace will be another eight to 10 years behind me. The next tier is 10 to 12 years behind him.”
Dana Cowger, principal engineer at Spokane engineering and project management company Varela & Associates Inc., says Varela has been working on succession planning for about two years.
“We have some really capable people here,” Cowger says. “Some are 15 years younger than my partner and I. A couple are my sons who are 28 years younger.”
He says it’s time to pass business operations on to other people, but part of the challenge will be redefining his own role, as he wants to remain useful there for five more years.
Cowger has put 24 years into the company, which principal engineer Mark Varela founded in 1985.
“There’s no lack of people anxious to want to step up and have their hand at seeing if they can make a difference and run the business,” he says.
One goal of the succession plan is to maintain the company’s identity going forward.
“We’re trying not to change who Varela & Associates is,” Cowger says. “We want to make sure we have down on paper our values and who we are as individuals and as a firm.”
Harakas says that even after retiring from management, he’ll likely work with GeoEngineers into the next year wrapping up projects and aiding the transition.
Subscribe today to our free E-Newsletters!SUBSCRIBE