Tom Hendrick, president and CEO of Wallace Engineering, loves his firm, his town, and an early morning run to clear his mind.
By Richard Massey
Tom Hendrick is President and CEO of Wallace Engineering, a structural and civil consulting firm founded in 1981 in Tulsa, and has grown to include offices in Kansas City, Oklahoma City, Denver and Atlanta. The staff of twenty-seven principals and over 150 people represent personnel registered as Professional Engineers in all 50 states, Puerto Rico, District of Columbia, U.S. Virgin Islands, and British Columbia, Canada. The firm has engineered well over $100 billion in construction internationally since its founding.
A University of Oklahoma graduate, Hendrick has been designing structures since 1982 and has experience with a wide array of projects. His experience includes hundreds of retail, entertainment, and educational projects throughout the United States and formerly led Wallace Engineering’s international programs in Mexico, Puerto Rico, China and South America. Hendrick was named a principal in 1992 and was later named CEO in 2002 – at the request of his fellow partners. He held that position until 2017 when he was named President and CEO. Hendrick is the first new CEO named after the firm’s Founder and Chairman of the Board, Tom Wallace.
As CEO, Tom leads the implementation of new initiatives that not only focus on growth and profit, but also the organizational health of the firm. By stressing both the “smart” and “healthy” sides of a business, Hendrick is working to prepare and position Wallace Engineering for the challenges that inevitably lie ahead.
Civil + Structural Engineer: You have been at the same firm for 30 years, a remarkable achievement. You must have had other opportunities. Why and how were you able to stay in one place all that time?
Tom Hendrick: I thought that Wallace Engineering and its culture was something special from the day I started. There may have been other opportunities outside Wallace but I never pursued them. I did consider moving to one of our other offices at one time, but in the end I could not bring myself to leave Tulsa as it is a special place.
C+S: If you have run more than 46,000 miles in your lifetime, you must be fit. How has a healthy lifestyle affected your engineering career?
TH: Running has certainly helped me stay physically fit. However, I believe running has benefitted my mental well-being even more. I began running consistently when I was in college. I found that it calmed my mind and allowed me to think more clearly so I would go for a run in the morning on days when I had tests. To this day, when I have a presentation or need to make a big decision, an early morning run still calms me so I can accomplish what is needed.
C+S: After three decades at the firm, you were named president and CEO. While you probably had a long runway leading up to that moment, there still must have been a surprise or two. What were they, and how did you meet the challenge?
TH: My first surprise came in my first year as a Principal of the firm when I was asked to lead our international work (largely in Mexico and Puerto Rico), primarily because I had taken two years of Spanish in high school! Within two weeks of being asked to take this on, I was on my way to Mexico City for project meetings. I quickly enrolled in the local community college where I completed 18 college credit hours in Spanish. I also completed a Spanish immersion program in Cuernavaca, Mexico, which allowed me to oversee and lead the largely Spanish speaking staff that the firm hired.
My second surprise was in 2002 when my fellow principals asked me to be the managing principal of the firm after our former managing principal left to start his own firm. I had never taken a business class of any kind and truthfully did not know what was needed to manage and lead an engineering firm. I was able to overcome this by getting actively involved with ACEC, learning from leaders of other firms and by reading as many books as I could on managing and leading professional service firms.
C+S: The majority of your career has been spent in Tulsa. How does it feel to have played a role in renovating some of the historic downtown buildings?
TH: I take pride in all the projects Wallace Engineering works on! Our headquarters and the many buildings surrounding our building in the Tulsa Arts District are near the top of my list. It is gratifying to know Wallace Engineering has been a big part of transforming downtown Tulsa.
C+S: The annual party by Wallace Engineering looks like a good time! The event is well marketed and well attended. Having been to plenty of them, tell us what the party means to you and your staff?
TH: This annual party has taken on a life of its own. The party is always held the Thursday before Thanksgiving. For me, our staff, our clients and many other Tulsans, it signifies the start of the holiday season. The Tulsa World newspaper once proclaimed it as one of the five best holidays parties in the city.
C+S: Wallace markets itself as a firm that operates as a whole, even though the firm has five offices, three of them in major markets outside of Oklahoma. With that in mind, where do you stand on profit centers?
TH: We have always been and I believe always will be one profit center. Wallace Engineering doesn’t operate as a series of separate offices. Each office is part of the whole, One Wallace, allowing us to bring together the individual talents required – regardless of location – to produce projects that are seamless.
C+S: Wallace has 27 principals. 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?
TH: We have not defined a required number of years or minimum book of business to become a principal of the firm. Our criterion is a bit more subjective, but does require nomination from a current principal and a majority approval by all principals of the firm.
Two of firm’s current principals became principals in their 20s and a handful became principals in their 30s. Currently four of the 27 principals are in their 30s.
C+S: Describe the challenges you encountered in building your management team over the lifetime of your leadership. Have you ever terminated or demoted long-time leaders as the firm grew?
TH: As we have grown and added principals, one challenge we are facing is to reduce the number of decision makers. All of our principals want to be involved and we must make sure that each has their voice heard, yet 27 in the leadership group is unwieldy and we are working on solutions for that. We are very fortunate that we have never had to terminate or demote any long-term leaders.
C+S: How do you promote young and new leaders as the firm grows?
TH: We have always recognized and rewarded our engineers when they become licensed. We call everyone in the office together, recognize the achievement, and give him/her a gift along with a pay increase. Also, a leader in our firm can become an Associate, a position that offers them increased benefits and which allows them to participate in some of the management decision making of the firm. A couple of our young leaders were given opportunities to open and lead new offices and eventually became principals of the firm.
C+S: In one word or phrase, what do you describe as your number one job responsibility as CEO?
TH: My number one responsibility is keeping our employees happy.
C+S: What happens to the firm if you leave tomorrow?
TH: I have a very cohesive leadership team that I started last September. We meet weekly and touch base every work day. I have no doubt someone on my leadership team could take over temporarily, until such time a new CEO could be elected.
C+S: With technology reducing the time it takes to complete design work, how do you get the AEC industry to start pricing on value instead of hours?
TH: This is a real problem in our industry and one we need to overcome. I think it is by and large an educational issue. First, we need to educate ourselves as engineers that the services we provide are important to society. And we need to educate the general public on what we do as engineers. I think the general public views engineers positively and we need to parlay that belief into the understood value of our services.
C+S: If the worker shortage continues, do you see wages increasing to encourage more talent to enter the AEC space, or will technology be used to counter the reduced workforce?
TH: I see both of these occurring. Wages are definitely starting to go up, but I don’t think we will be able to find all the personnel needed. We have to figure out ways to use technology to work smarter and more efficiently.
C+S: Engineers love being engineers, but what are you doing to instill a business culture in your firm?
TH: Wallace Engineering has always had a very open-book management style. We share how the firm is doing financially with all employees at least twice a year. Principals and associates receive financial information monthly. A current initiative we are working on is focused on the “healthy” side of the business – a business of minimal politics, minimal confusion, high morale, high productivity and low turnover.
C+S: Diversity and inclusion is lacking. What steps are you taking to address the issue?
TH: Diversity and inclusion certainly need improvement throughout our industry. We believe that for this to change all different kinds of people need to be introduced to engineering, architecture and construction at an early age. Wallace regularly supports and participates in: (1) school programs that introduce engineering principles to kids of all backgrounds; (2) women in engineering programs; and (3) reading programs to children at low-income schools.
C+S: A firm’s longevity is valuable. What are you doing to encourage your staff to stick around?
TH: We work very hard to create a great culture. We want our employees to have a career here, and we want that career to have meaning. We are spending more time talking about why we are in business (why we exist), what our core values are (how we behave) and how the different employee roles play into the success of the firm. I think if employees know the importance of their role and how they fit into the success of the company, we have a better chance of keeping them long-term. We have also recently improved our benefits to offer more health plan options, maternity and paternity benefits and time off for community involvement. I believe we have a good work-life balance that so many people desire.
Richard Massey is managing editor of Zweig Group publications. He can be reached at email@example.com.