September 28, 2020
“…AND THERE ARE WEEKS WHEN DECADES HAPPEN…” REFLECTIONS ON CEO WEEK
We had two goals for our inaugural Virtual Reality/Augmented Reality (VR/AR) CEO Week. The first was to provide a forum for CEOs to meaningfully connect, engage, learn, and have fun with their peers at a time when they cannot safely do so physically. The second was to allow them to experience VR/AR technology so that they could see its potential in running their businesses during and beyond the pandemic. Based on the CEO feedback that we have received, we’re encouraged that we achieved those goals and more.
We’re thankful to those CEOs who chose to explore this completely new format with us. Their participation created a unique forum that allowed for rich and deep conversations between peers, a renewal of old acquaintances, and the beginning of new relationships between CEOs (the latter was amazing and rewarding to watch unfold as real relationships were being built in VR). Here are just some of the highlights:
- Most CEOs experienced THREE DISTINCT PHASES as they explored the VR world over the week. The first was, “Wow, this is so cool,” as they initially experienced the VR environment. (One CEO commented on how wearing the Oculus headset made him so much cooler in the eyes of his son.) The second was, “Here is how I think I could use this at my firm.” (CEOs are ALWAYS thinking about how to improve their firms.) The third was, “I can’t believe I’m having these meaningful conversations with my peers like this!” The last was both rewarding and fun to observe as the CEOs fully embraced the 3-D experience. Freed from the limitations of Zoom, Teams, and Webex, they interacted with their peers in a way they had never imagined possible without being together in person. Read the reactions of the CEOs to the VR technology here.
- And as always, when industry CEOs get together, there was plenty of fun. The VR environment offered an abundance of opportunities for extracurricular activities before, during, and after the meetings. Some CEOs climbed to the summit of Mount Everest Some took a tour of the rebuilding of Notre Dame. Some got a workout trying to best each other in the fully immersive 3-D boxing game Creed. From throwing virtual footballs across the room to each other, to creating and exploring 3-D objects like Starbucks coffee cups and elephants (“the elephant in the room”), to exploring 3-D models of the Roman Coliseum (very cool) together, to getting their first photos taken in VR (that’s a wild experience) with their peers under the seals of their alma maters, these CEOs thoroughly enjoyed the opportunity to get together, blow off some steam, and have fun. Given the strain they’ve been under for the last six months, the timing could not have been better.
- Beyond the fun the CEOs embraced the opportunity to engage and share. Using the Lean Coffee format of our annual CEO event – which this September was to focus, ironically, on the theme of innovation on the campus of MIT– the CEOs moved through 3 – 5 discussion topics around a particular New Reality theme each day of the week. Every day they were in discussions with a new group of peers.
- Welcome to the New Reality. The week kicked off with CEOs discussing the impacts of the pandemic on their businesses and end markets. Common to all five CEO breakout groups were conversations around how to maintain and strengthen firm culture in a remote working environment. Additional conversations involved new techniques to connect with clients, the challenges to managing remotely (this was a HUGE topic), Zoom and Teams fatigue, impacts on end-markets, the future of travel, concerns about the outlook for 2021, and the pleasant surprise (for some) of being awash in cash.
- Bigger than the pandemic? was Tuesday’s theme where CEOs discussed industry trends and disruptors that are being either accelerated or supplanted by the pandemic. Some of the topics covered included diversity and inclusion, virtual business models, threats from AI/machine learning, how firms are using the unprecedented levels of cash on their balance sheets, and the diminished need for office space.
- Innovating in uncertain times was Wednesday’s theme. Discussions included: techniques to foster innovation, applications of cutting-edge technology, forced/reactive innovation as a result of the pandemic, the emergence of the hybrid tech/engineering model, embedding innovation champions within business lines, and the CEO’s unique role in encouraging and rewarding innovation.
- Thursday’s theme was Preparing next-generation leaders to lead in the New Reality. Discussions ranged from whether the New Reality requires a different type of CEO with new skills compared to the pre-pandemic world to how to get line-of-sight on rising leaders when working remotely. Concerns were expressed about how numerous CEO succession plans have been disrupted and delayed while the clock continues to tick. It was awesome to see the more seasoned CEOs offer support and advice to the cohort of CEOs who took the top job at their firm in 2020, either immediately before or during the pandemic. This exchange of knowledge is such a powerful feature of the VR environment.
- Some of the most poignant discussions took place on Friday. The theme of the day was What about YOU? Is it even lonelier at the top for today’s CEO? CEOs shared the techniques they’ve used to connect with and engage their employees through the multiple phases of the pandemic. They discussed the solemn responsibility they feel for the health and well-being of all of their employees. They shared the immense importance of empathy as a leadership trait in 2020. They listened as their peers described how they conducted emotional town halls and one-on-one discussions about social justice over the last several months. They shared tips and suggestions to stay motivated and focused, and to reenergize and self-restore. And they spoke about the importance of projecting optimism and positivity through all of the challenges of 2020— even on those days when they are feeling neither optimistic nor positive themselves. 2020 has challenged CEOs like never before and they seized the opportunity to share with and support their peers.
- Plus/Delta wins again. We got a ton of feedback from attendees on pluses— i.e., what they want more of in the next VR/AR CEO Week (including expanding VR offerings to their leadership teams and managers (done!), more 3-D models, even more time for discussions, more examples of how to apply the technology to their businesses and more cocktail time!)— and deltas— i.e., changes/additions to improve the next CEO Week (including private one-on-one conversations and opening/closing large-group plenary sessions).
- CEO VR/AR Community News and Updates. We’re planning our next VR/AR CEO Week for mid-January. Click here to be placed on the wait list. For updates on our CEO VR/AR Community, click here. VRCampus— our customized VR/AR meeting and exploration space for CEOs— is available 24/7 for CEOs to hone their VR/AR skills, collaborate with their teams, experiment with VR/AR applications for their firms and meet with clients, vendors, and potential hires.
A frothy fourth quarter lies ahead for industry M&A. Buyers flush with cash are looking to snap up quality firms to help them navigate 2021 and beyond. Sellers are eager to get deals closed before this year’s tax rates expire. Join us for our 4th Quarter livestream U.S M&A Symposium on October 22nd and 23rd. Register live for one or both days to have the option to connect with buyers, sellers, and investors. Or choose to purchase the session recordings after the Symposium.
Deals are down 9% over last year’s record pace. However, after freezing over in the spring, the M&A market is red hot again. We’re thankful that our clients have trusted us to help them navigate and close 13 transactions this year, making us the #1 M&A advisor to the A/E & environmental consulting industry. Contact any of our M&A team to see how we can help you achieve your strategic goals through M&A.
Once again, I’ve used the Lenin quote for the title of this week’s message. Seems apt for the times we are in and for the week that was.
To see last week’s “Word on the Street” report click here>
FOUR FACTORS TO WATCH
1. FAST Act Continuing Resolution
While hopes for Congress to pass a modern, multi-year surface transportation bill are all but dashed for now, extension of the FAST Act, set to expire on Wednesday, could bring state and local governments much needed relief from the massive economic implications caused by the pandemic. Last week, the House passed its continuing resolution, including the FAST Act extension, which is expected to clear the Senate and be signed by the President by the end of the month. Of particular interest to state DOTs is that a proposed extension is for one year, with an additional $13.6 billion added to the Highway Trust Fund.
According to AASHTO, the FAST Act extension within the CR provides:
- Obligation limitation through December 11, estimated to be $9.1 billion for the Federal-aid Highway Program.
- An extension of FAST Act funding and provisions from FY 2020 to all of FY 2021, including contract authority formula apportionments to states.
- A $10.4 billion general fund transfer to the HTF’s Highway Account and a $3.2 billion transfer to the Mass Transit Account.
- A $14 billion general fund transfer to the Airport and Airway Trust Fund, making up for the aviation excise tax holiday included in the $2 trillion CARES Act passed in March.
- Suspension of the Rostenkowski fiscal solvency test for the Mass Transit Account for FY 2021. Without suspending that “test” – crafted by the late Rep. Dan Rostenkowski (D), who served as chairman of the House Ways and Means Committee in the 1980s – significant reductions in transit obligation funds would occur in FY 2021.
- An increase to the “multimodal cap” within the U.S. Department of Transportation’s Infrastructure for Rebuilding America or INFRA discretionary grant program from $500 million to $600 million.
- An extension of 2017 and 2018 Better Utilizing Investments to Leverage Development or BUILD grant program obligation deadlines through September 30, 2021.
2. COVID-19 Case Numbers
While daily cases gradually declined from mid-July through mid-September, the last two weeks indicate the return to a slow incline, and the virus is reportedly mutating, according to a new study. The study did not find that mutations of the virus have made it more lethal or changed its effects, but it may be becoming easier to catch, according to the Washington Post. The U.S. is now averaging roughly 43,000 new cases per day, a 16% increase from a week ago.
Daily totals now average below 1,000 a day, dipping as low as 81 less than a week ago. However, as children return to school with full-time and part-time schedules, another spike in cases could be on its way.
3. Jobless Claims
The number of first-time jobless claims was slightly higher than expected last week as the labor market continues its tenuous recovery. According to the US Labor Department, initial jobless claims for the week ending Sept. 19 totaled 870,000, a slight increase from the 860,000 jobless claims recorded the previous week. Last week, New York and Georgia reported the largest week-over-week increases in initial claims. New York’s number jumped by more than 9,000 Georgia’s rose by more than 6,000.
Sources: Department of Labor; CNBC
4. Vaccine Developments
Researchers have reported good news from an early clinical trial of the coronavirus vaccine being developed by Beth Israel Deaconess Medical Center and Johnson & Johnson. Early results from a Phase 1/2a clinical trial show it was well tolerated and even one dose appeared to produce a strong immune response in almost all of the 800 participants. Results indicate that 99% of the participants age 18 to 55 had developed antibodies against the virus 29 days after getting vaccinated. Most of the side effects were mild and resolved after a couple of days. The vaccine may require only a single shot (more work must be done to confirm whether immune responses will last without requiring a second shot) and is ready for a third and final phase clinical trial. Johnson & Johnson will recruit 60,000 participants to take part in the next trial, making it the largest clinical trial of a coronavirus vaccine to date. If the vaccine is shown to be effective with one dose, it will have an advantage over those being developed by Moderna and Pfizer, which will be split into two injections about a month apart. In addition, the Johnson & Johnson vaccine does not need to be frozen and can remain stable at refrigerated temperatures for up to three months. Other vaccines currently in late stage clinical trials must remain frozen and will depend on a dwindling supply of dry ice for shipping and transportation.
National Institute of Allergy and Infectious Diseases director, Dr. Anthony Fauci, says Covid-19 vaccinations could start as early as November or December but says it may be late 2021 before things are back to “normal.”
Virtual Reality (VR) + Augmented Reality (AR)
Solutions and Events
Our VR + AR solutions are designed to help your firm navigate your New Reality. In addition, we host VR/AR learning and networking events for A/E & Environmental firm CEOs.
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Despite COVID-19, the shortage of capable A/E professionals remains the fundamental constraint to sustainable, profitable growth. And with a vaccine still months away, the challenge to find, hire, and onboard great people has only gotten tougher. One of the A/E industry’s top recruiters, Lisa Elster, shares her secrets for remote recruiting in the New Reality in this timely, insightful, and COMPLIMENTARY webinar.
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