Acentech: Celebrating 30 years of employee ownership (and counting)

This week Acentech is celebrating the 30^th anniversary of its independence from Bolt Beranek and Newman (BBN) and I recently had the honor of interviewing the three primary founders – Carl Rosenberg, Eric Wood and Tom Horrall, along with Jeffrey Zapfe, Acentech’s President; Ben Markham, Director of Architectural Acoustics; and Kate Brannelly, the firm’s Strategic Marketing Officer. (The following is an edited excerpt from our hour-long conversation.)

Q: What was the origin or inspiration behind the split from Bolt Beranek and Newman?

Tom: When I first joined BBN in 1968, I learned there had been a revolt in the architectural acoustics division. Virtually all of the people in the division believed the corporate overhead, or “tax” as it was being called within the group, was too high. Most of the profits of the Architectural Acoustics and Noise Control division were being used by BBN to fund new companies that had nothing to do with acoustics or acoustical consulting. Fast forward a few decades, and BBN finally decided to form a new, wholly owned subsidiary of the architectural acoustics division with Paul Jensen as Divisional Director.  The division was named Acentech.

Eric: Yes, the group that finally left BBN had been the Acoustics and Environmental Technologies division. Paul Jensen devised the name Acentech from the first letters of each word of the division’s name.

Tom: Apparently Paul Jensen had lobbied BBN to buy Acentech himself.  Carl, Eric, and I, among others, didn’t like the idea of the company being owned privately or publicly. We thought an employee-owned structure would be the best way to go forward, and decided to approach BBN about purchasing the company. After considerable (and I would say amicable) negotiation with BBN, Acentech was purchased in 1991 by its employees, on quite favorable terms.

Carl: My recollection was that in the late ‘80s BBN had moved its corporate model to be a holding company. They set up Acentech as a wholly owned subsidiary with all its shares owned by the parent company (BBN), so that when the time for the transition came about in 1991, we were buying what was officially an existing company. 80% of the shares were transferred to the employees (approximately 9 people). Over the next few years we purchased the remaining 20% of shares from BBN. The whole process was to wrest the ownership from outside owners and bring it back to the employees, the consultants, themselves. We were willing to accept the risks. It was exciting, daunting, expensive…but in the end it worked out.

Eric: It worked out very well.

Q: Were you ever afraid of failure?

Eric: Never.

Carl: Absolutely!

Tom: The first 10 years were rather lean, as we paid BBN for the remaining 20 percent of the stock. In addition, the economy was not good, and our bottom line suffered as a result.

Carl: We had to invest all of our retirement savings to buy the company from BBN.

Eric: And we were able to do that because BBN was rather generous in their retirement plan.

Q: What prompted the expansion and growth, like the investment in Cambridge Sound Management and the R.H. Lyon Group?

Carl: We had spoken with Dick Lyon (founder of the R.H. Lyon Group) for some time. He eventually saw the advantage of folding his company into Acentech. We had an amicable marriage.

Eric: Dick did well joining us we still have some of his people on our staff today.

Carl: We’re very proud of the way that worked out. Cambridge Sound Management (CSM) was also a lesson. We felt as a consulting company we should always look for new avenues to explore and expand our capabilities. But we didn’t want a new company that drew resources away from us. We wanted to keep it separate, and yet allow for its growth. Our CSM technology was developed by Tom Horrall, and we invested in CSM, but not in any way to risk the ongoing success of our consulting practice.

Tom: There was some concern a conflict of interest might arise. At Acentech, we did quite a bit of consulting and designing of sound masking systems at that time, including offering (sound masking) equipment, could have been a conflict of interest. Having the divisions separate avoided that issue.

Jeff: We were in the sound masking business before, large systems with many amplifiers, many wires and many speakers.

Carl: Yes, but that wasn’t growing and it was time to move it over to Cambridge Sound Management. To utilize new technology. And to allow for separate growth of the two divisions. This helped CSM grow, without impeding our growth, and that worked…until it didn’t.

Tom: It worked very well, until we sold it (CSM).

Jeff: Acentech had a 50% ownership stake in CSM.

Carl: We tried other mergers over the years to see if we could expand further. It came down to the fact that consultants like being in charge and none of those other combinations seemed to catch on.

Q: Where are we now, as a company, with such a unique culture and history?

Ben: In terms of trajectory, we now (and in perpetuity) benefit from this legacy. There were decisions made at the time of the transition from BBN that Acentech still benefits from. A lot of those are cultural. For example, this notion of ownership transition that was baked into the model from the beginning. There are many companies out there that really struggle with ownership transition. We’ve wrestled with those questions, but it’s been made easier thanks to those decisions made earlier on, the longevity of the founders’ leadership, and the employee-owned company ethos. Acentech is now an ESOP, so employee ownership is even broader now than it was then. There are other things that we could talk about that are the same: a focus on quality, a client and problem-solving orientation, an innovative spirit – we continue to innovate in many ways including 3DListening®, Remote Monitoring and our soon to launch Innovation Lab.

Jeff:, With our ESOP, we are now in our third significant transition of ownership. With each transition, the ownership base got wider and wider which is exactly what we want.

Q: What about advances in technology and how they’ve changed the way we work and do business now?

Ben: Technology has, of course, improved the way we work. I’ve been at Acentech for 19 years. When I started, we had pre-printed letterhead that you had to feed into the printer. We had architectural drawings you’d have to roll out and review that were delivered. You might have weeks to respond to those drawings, which would be shipped back to the client. To me the biggest way technology has changed is the pace of design and construction. Buildings are designed faster, communication between design teams and their consultants happens quickly. During the pandemic the use of these technologies has only grown – online screen sharing, drawings updated in real time, in 3 dimensions, for example in REVIT. No more sending packages via pony express from one side of town to another. We used to have to save correspondence in file cabinets. We now have automatic filing of email correspondence that is routed to job folders in a way that is slick, organized and easily searchable.

Eric: I’ve had projects in Turkey, projects in Brazil. Communication has been instantaneous. It’s been amazing to me.

Jeff: I think it is the measurement technology. Instruments have gotten smaller and more capable. Sound level meters that used to take Herculean strength to carry can now be held in the palm of your hand. But with technology also comes data, lots and lots of data. It is so easy to collect everything, we often do which brings about its own challenges as our IT department will attest.

Ben: Technology has also influenced the things that Acentech does.Our AV or Systems group has expanded. Audiovisual systems nowadays operate on telecommunications networks, and we are designing those networks, along with other things that live on those networks like security systems. Technology has not only evolved the way we work, but what we work on and the service offerings we provide.

Kate: One of the things that always impressed me is the mentoring of consultants within Acentech. The leadership fosters a highly collaborative practice of openness, respect and team building to develop and support each consultant. It’s one of the things that makes the firm so unique.

Ben: A good team has complementary skills. We have always looked for people with diverse backgrounds – architecture, mechanical or electrical engineering, or a physics or music background. Our people look at things from different angles. This dovetails with our ongoing Equity Diversity and Inclusion efforts. Acentech has always encouraged people to innovate and to explore their passions within a supportive framework is still alive and well, and something we are leaning into even more.

Jeff: Our culture is very important. It is a culture of collegiality, sharing and mentoring. I think it was Leo Beranek who said every new hire should raise the average IQ of the company. I am proud to work with a group of very smart and very capable colleagues. The culture, the types of things we work on and the generally interesting things we do keeps people at the company for a long time. And we really value innovation, we encourage it and support it.

Kate: We are investing in strategic initiatives across the firm to grow and build our national presence. Acentech’s reputation in the Northeast is stellar. That said, we are less known elsewhere in the U.S. and we are strategically working to change that. In some ways, the pandemic has helped us feel less like a ‘local’ firm and broadened our reach.

Carl: One last thing I want to point out.  We have had successful successions of leadership (and ownership) and there is a camaraderie and respect among our employees that holds the company together, and that is great. It is something we should be very proud of and maintain.

Jeff: When Carl, Tom and Eric made the deal with BBN and set out with Acentech as an employee-owned consulting firm they set the DNA for the future. I am proud to be a part of the process that maintains and strengthens that DNA. We love it that we can control our own destiny and our ESOP helps to ensure that Acentech will carry on long into the future.