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Real Estate Freese and Nichols: For engineers, a smooth shift to new CEO

Freese and Nichols: For engineers, a smooth shift to new CEO

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Freese and Nichols

4050 International Parkway

Suite 200

Fort Worth 76109

817-735-7226

www.freese.com

Professional consulting services: engineering,

environmental science, planning, construction services,

program management and architecture

Founded: 1894

2016 Sales: $128 million

Employees: 633

Local employees: 258

Brian Coltharp became CEO of Freese and Nichols on Jan. 1, succeeding Robert F. “Bob” Pence in a transition that looked like it might have been planned by engineers.

Well, they are engineers.

Coltharp was Freese and Nichols’ chief operating officer for 2016 and has spent his entire professional career with the firm. He earned a degree in civil engineering at the University of Texas in Arlington.

“Graduated from UTA on a Saturday afternoon; I started at Freese and Nichols the next Monday,” Coltharp, 48, said in a recent interview. “Haven’t had a day off since.” That was in 1992.

He’s probably joking about the time off, but with the almost fanatical loyalty of Freese and Nichols employees, maybe not.

Coltharp survived an extensive and intensive internal selection process to become only the seventh president in the company’s 122-year history. “I like to think that’s stability,” Pence said.

Pence himself succeeded Bob Herchert, who was president and CEO from 1990 to 2001. Herchert, who previously served as Fort Worth city manager, was the first non-engineer to lead the company, and Pence credits him with modeling the transition process. Pence served as CEO from January 2002 until last New Year’s Day.

Under Pence’s leadership, Freese and Nichols nearly doubled its workforce and more than tripled its annual revenue. The company also added services in urban planning, oil and natural gas and coastal engineering.

“I’m going to tell you, he [Herchert] brought to this company real management, and we needed that,” Pence said. “We had the engineering down; we didn’t have the management down. He got us on the Baldrige journey.”

Freese and Nichols won the prestigious Malcolm Baldrige National Quality Award in 2010 under Pence, the first engineering firm to do so. The award was established by Congress in 1987 to raise awareness of quality management and to recognize U.S. companies that have implemented successful quality management systems.

But Herchert had started the company on a process of succession planning as he prepared to step down, leading first to Pence’s selection and then to Coltharp’s.

Freese and Nichols isn’t a family-owned company – it’s an S corporation – but it looks, feels and acts like a family business. It is owned by about 10 percent of the staff, with another 10 percent considered to be associates. Within that group is a board of directors.

Coltharp likes building things, but he didn’t have any family role model for engineering.

“My father had a lumber business when I was growing up, so I always worked at that,” Coltharp said. “I was always around things being built and construction and all that kind of stuff. What’s an industry that I can be around construction, because I like to see things built? Civil engineering was the answer for that. That’s really how I got into engineering.”

Freese and Nichols can trace its history to 1891, when Minnesota engineer John Blackstock Hawley moved to Fort Worth to help the city with its first water system plan. In 1894, Hawley hung out his shingle, becoming the first independent consulting engineer in Texas in water and sewer work. Simon Wilke Freese went to work for Hawley in 1922 and Marvin C. Nichols joined in 1927.

Freese and Nichols is proud of its culture and that was a central concern in selecting a new CEO. The company is not hesitant to bring in outsiders if there is a need for a specific skill or for someone in a specific geographic area, in part because it is also proud of its internal training. But it also is not afraid of promoting internally, and that is the goal wherever possible.

As the company began planning for a CEO transition, it’s seven-member selection committee interviewed all the owners to find out what they thought was most important. “The top one was our culture,” Pence said. The odds of protecting that are much greater with an internal hire than with an external one.

The transition selection process from Herchert to Pence took about a year, which everyone agrees was too long, although the results proved the time was well spent, and apparently those competing for the job believed the process was fair.

There were four candidates when Pence competed. “And we’re all still here,” he said.

Pence began thinking about finding his successor after a decade as CEO.

“When it came time, we announced, ‘OK, I’m going to step down on this date; we’re going to start the process.’ We started this process really in August of [2015], and we had an answer by December,” Pence said. They announced Coltharp’s selection as the next CEO in February 2016.

Candidates to succeed Pence had nominated themselves, and there were five in all. The four who were not selected are still with the company nearly a year later, which, Pence notes, “is not a common event. Usually, you will lose a couple of people. We’ve got people who are just committed to this company. They were all disappointed; don’t get me wrong.” But, he said, the candidates all trusted the process.

“I think a lot of it is our culture, too,” Coltharp said. “Those people who were candidates? We’ve all come up through the company together, so we’ve all worked together for 25 years. We know each other.”

Pence says the process was somewhat accelerated because Ron Lemons, COO from 2002 to 2015, wanted to step down. He’s now a senior vice president in Freese and Nichols’ Water Practice.

Coltharp became COO, giving him a “chance to see how everything works at the C level. He put together a great plan going forward; he’s doing a great job,” Pence said.

It wasn’t planned that way, Coltharp noted, but having the overlap worked out well. “It has been good just being here with Bob and all his experience,” Coltharp said.

After all, it is in the culture.


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