The Female Effect: A Business Case Study by Rae Anne Rushing
In August 2020, Consulting – Specifying Engineering published the MEP Giants list recognizing the top 100 North American mechanical, electrical and plumbing (MEP) engineering companies based upon revenue. Ranked at #85, Rushing made the cut for the first time in 2019, reporting $17.2 million. Rushing was one of two companies representing the northwest and Seattle. Co-founded in 2006 by myself, Rae Anne Rushing, P.E. CEO, and my partner, Scott Rushing, P.E., Rushing has seen an average of 35% growth year-over-year. This article is a business case study of rapid, managed growth over the last 14 years in our industry and that growth’s intrinsic connection to female leadership inclusion, which I call The Female Effect. This occurs when we believe in the intrinsic value of women in engineering, which builds momentum, creates a culture of inclusion and diversity where everyone feels valued, and enhances a business’s financial success.
As a new firm in 2006, we were tasked with establishing our brand and client base. After twenty years in business, name recognition of the co-founders helped to quickly establish a book of private development business. We quickly ramped up to a $4.5 million revenue business by end of 2008, at which point our services were established: mechanical, electrical, plumbing/fire protection, energy services, lighting design, sustainability consulting, and commissioning services.
The middle of 2009-brought recession realities, and we made the difficult decision to lay off 15 people. As challenging the Great Recession of 2007 through 2009 was for the company, this economic event is largely responsible for the specific market Rushing currently works in today.
We did not find it necessary to conduct layoffs again until March 2020 when Seattle went into a “stay at home” order due to the novel coronavirus pandemic. Our leadership team transitioned our staff of almost 100 employees to a 100% work from home (WFH) structure. As with most of our industry, we accomplished this in less than a week starting from a company policy that was not WFH friendly. Our work in-office culture is born from the idea that collaboration and creativity are best and most effectively experienced in person with a team or community. As of writing this case study (six months later), we are still 100% WFH.
This case study examines The Female Effect and how having a female at the top during a crisis, as was our case in 2009, availed us the diverse thinking that allowed us to pivot our business into markets that would eventually sustain us through the next business cycle in Seattle.
The Female Effect
Let us talk about women in our industry, specifically, women mechanical and electrical engineers in the design and construction industry. The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) and The Institute of Electrical and Electronics Engineers (IEEE) membership in 2019 included 9.1% and 11% women, respectively.
As an active member of ASHRAE since 1987 myself, I have observed the stagnant growth of female membership in our industry. While IEEE reports a somewhat larger percentage of women members, their membership includes women engineers in the software and electronics industry, as well as electrical engineers doing power engineering in the design and construction industry. My observations over the last 30 years apply to both mechanical and electrical disciplines in our industry: women are few and far between.
Based on figures in the August 2020 Consulting – Specifying Engineering MEP Giants article, top MEP companies are reporting an average female workforce of 17%. This is fantastic and encouraging! At Rushing that gender diversity figure is doubled with 35% of the company’s workforce identifying as female. The female effect depends on not only diversity but also inclusion. Diversity is being asked to the party, inclusion is being asked to dance. I am proud to report not only the gender diversity statistics of our company but also the inclusion statistics: our ownership team is 51% female; and the management team is 46% female.
When speculating about our success in retaining women engineers at Rushing I am confident that including women in the management of our business is a strong factor. When speculating about our success in attracting women engineers at Rushing I am confident that my presence as a role model in an owner position has afforded us the luxury of receiving the top female resumes from across the country. In the competitive Seattle market, and in an industry with a shortage of talent, attracting, hiring and retaining this top talent has allowed Rushing to scale relatively quickly. I present my observations as I have had the time at this point in my career to fully incubate, study, and now report on what I like to call The Female Effect in which the intrinsic value of women in engineering, builds momentum, creates a culture of inclusion and diversity where everyone feels valued, and enhances a business’s success.
Research about the realities of gender inclusion and diversity on the business financial outcomes is conflicting: Does diversity bring better product, create higher productivity through better community experience, or improve problem solving through alternative thinking? Does inclusion increase profitability and revenue? Is attrition lower? Are new markets and clients available to the company?
In February 2019, the Harvard Business Review published the article: When Gender Diversity Makes Firms More Productive. The research concludes that gender diversity makes a difference when people believe in the intrinsic value of it. When this occurs, companies and industries can reap the benefits, but not until their belief in the intrinsic value of gender diversity and inclusion translates into hiring, developing and retaining more women. In order to reap the rewards of the female effect companies must walk-the-walk of gender diversity and inclusion, not just pay it lip service. No more excuses.
I cite this article because I agree with this subtle but important fact. Rushing is a great example of the self-fulfilling cycle and the results speak for themselves: scalability, increasing revenue, and increasing profits.
What are the nuts and bolts of attracting and retaining women engineers beyond the standard Class A company benefits?
- Cultivate culture. Culture is a garden that needs tending. Weeds must be addressed timely and consistently. Do what you say, walk your talk. Double standards at any level will work against this effort. One of the best markers of a “stable” culture is a low attrition rate (less than 10%). Happy employees will stay and be engaged in any economy. When scaling a company organically, engaged employees may be one of the trickiest aspects to control—culture is a way of addressing this.
- Solicit employee feedback. Being a professional service means our employees are as valuable to the company as our clients. We want to hear from them. Companies such as Culture Amp offer enterprise-wide platforms that measure critical components of a company’s cultural health by surveying employees across factors including engagement, performance and retention. Realtime feedback helps leaders and managers intervene early when critical engagement or cultural issues arise. Building a feedback loop will support a culture of continuous learning and transparency and will lead to an engaged and productive workforce.
Implement an external audit for accountability on equity. Consider a third-party audit to assess your equity efforts. The JUST Label, International Living Building Institute and GEN Certification are gold standard options for intersectional equity in the U.S. workforce. These organizations assess companies’ diversity and inclusion efforts, identify areas for improvement and advise on next steps to ensure leadership is provided with the true results of diversity programs financially supported by the company. Learn what works in your own microenvironment to fine tune and accelerate the process. Keep your company accountable to the first bullet—the culture you are cultivating.
- Promote talent. Our industry traditionally undervalues and underestimates the power of having a diverse leadership team because we do not have many examples or experiences that show us the intrinsic value. My mentors were male in our industry. This provided discouraging moments in the last 30 years that led me to question whether I wanted to stay in our industry. Women need to see other women in the lead so they can see equity exists. This thing, The Female Effect, feeds on itself, and, when rapidly scaling a company, accessing every available talented engineer is key. We need to open our arms and welcome women into the MEP design and construction industry completely, which, again, depends on culture.
- Develop leaders. Scaling a company fast and organically requires leadership development in a new way. When Rushing was 11 years old and scaling from 65 to 100 people things got tricky. Long-time staff were not developing fast enough to keep up with our leadership demands. So, we invested time and money in a high-quality cutting-edge advisor and coach that matched our brand values and implemented Harvard University’s Immunity to Change transformation framework. This adaptive leadership performance model uncovers the “hidden” resistance to change in nearly every organization, and, unlike traditional workshops and training, it fosters rigorous engagement across the company, from senior leaders to individual contributors. Building a developmental culture is anchored in the following premise: What if we built and fostered a culture where people stopped covering and hiding behind their weaknesses and internal barriers to change and deeply engaged? How could we “unlock” the true potential of our team and organization? Our consultant has worked with our staff over the last three years to develop leaders and promote group synergy and working structures which has resulted in our profits more than doubling while scaling 35% per year. Let me say this again: our profits more than doubled while scaling 35% per year. This investment was critical to maintaining our momentum and reaching the next level.
When we believe in the intrinsic value of women in engineering, momentum builds, and a culture of inclusion and diversity becomes a place where everyone feels valued—this is The Female Effect. At Rushing, this belief is felt as soon as you walk into our office, or when our team shows up to a meeting. Our clients often comment on our space and culture being completely different from other engineering firms. This “vibe” is intentional and in alignment with our brand and scope of services. We want to stand out and we do. This avails us the opportunity to perform and succeed. Rushing has believed in the power of the female effect and thus been able to fully harvest the potential of all our engineers and scale and profit.
Rushing performance in 2019 yielded another record year for revenue and profits. Our profitability continues to be three times the national average for our business type in the United States and our projections for 2020 will maintain our average 35% growth. How much does The Female Effect play a part? I offer this case study for your consideration.