An Interview with Dagmar Epsten
Our increasingly global society comes with ever-expanding ties in international business. For the largest multinational AEC firms, building a practice across continents can be a challenge; but for small- and mid-sized stateside firms, the obstacles of conducting business internationally with limited resources can seem insurmountable. One woman and her 50-person sustainable architecture/consulting firm found a way of conquering those obstacles to build a thriving global practice.
In 1991 Dagmar Epsten founded Epsten Group as a local architecture office in Atlanta. The firm grew rapidly during the second half of the 2000s due to their capabilities in sustainable design and focus on developing a global client base. By August 2015 Epsten Group had performed more than 7,500 LEED certifications in 50 countries. Using the niche of sustainable design as an entry point, they expanded their design and consulting services beyond American markets and are growing their now mid-sized firm regionally, nationally and internationally.
BOB FISHER: How did your firm, which is not the stereotypical huge multinational practice, start working globally?
DAGMAR EPSTEN: I was presenting at a conference in Oslo, Norway in 2002 and I made friends with someone from Mexico whom I felt was sort of a kindred spirit. We kept in touch and a few years later he had a LEED project, which ended up being one of the first LEED projects in Mexico. He wanted my firm to be a part of the project because of our LEED expertise, and we helped him organize the LEED documentation and interpret a lot of the technical requirements. We told him that he could easily achieve LEED Gold, which he hadn’t thought of. His company went on and achieved LEED Gold for that client. Of course, he was very happy about that.
Then something else interesting happened. We got a contract from a major client who had a lot of international work that they were subcontracting to us, and that work was in 50 different countries. Because the work was all over the world, it made sense for us to hire people from all over the world with language skills. Like right now, among our employees, there are 12 different languages spoken in the office.
BOB FISHER: How did it grow from there?
DAGMAR EPSTEN: It developed gradually. Once we had some international experience, we were more confident in pursuing more and more global work.
Developing and maintaining connections has been a big part of our growth. At some point, I connected with a colleague from Germany, and he needed help with a sustainable building. I met him here in Atlanta, and about six months later he came again to the States for a conference that I also attended, and we had breakfast together, and then they started giving us work on a project in Switzerland.
The project was pursuing LEED, because that became a more popular rating system in Europe, and they had to meet the ASHRAE 90.1 standard, which is an American standard that the people in Germany and Switzerland didn’t know very well.
So then we started getting a stream of work from this client, who had an office in Munich and an additional office in Switzerland, and we ended up getting work from both offices. I nurtured the relationship, and when I went over to Germany, which was usually once or twice a year, I would visit one or both offices. I started getting into having meetings, business meetings in German, which I hadn’t done much before. Having grown up in Germany, I had earned an architectural degree from the University of Karlsruhe in Germany, and I had also worked a bit in architectural offices and on a large construction site in Germany, but I had to almost cram to quickly get up-to-date and better versed in my technical language skills. I also had to learn more about business protocols and culture to effectively conduct business in Germany.
The bottom line is that staying in touch with people is really important. Like when I think about the person I met from Mexico who came to us for assistance with his LEED project. I had stayed in touch with him at yearly conferences that he attended in the U.S. and by email, and it was more than three years later, and that was what kick-started our international work and encouraged us to pursue more.
BOB FISHER: Were you simply responding to opportunities or was there a plan ahead of time?
DAGMAR EPSTEN: Initially, I think I was just interested in working internationally and it didn’t really matter so much where. It was more like it needed to be a good opportunity. I felt like I needed to have a good feeling about the relationship. Trusting someone and feeling you can work with them is important.
BOB FISHER: What were the biggest lessons you learned when you first started to practice internationally?
DAGMAR EPSTEN: We were very willing not to take much credit for our work. We recognized that was there was a certain amount of national pride in every country. They didn’t want someone to just come in from the United States and say, “okay we know it all, you know nothing, and of course you need our help.” It was more like they knew already a lot and just needed a little bit of support, and we were respectful and were very willing to be that support.
BOB FISHER: Is there anything different in growing relationships outside the United States, or is it fundamentally the same?
DAGMAR EPSTEN: I think it’s different. Cultures are different. You kind of have to feel your way through it. Basically I just listen to people and find out what their needs are.
BOB FISHER: How have you structured your organization to take on international work?
DAGMAR EPSTEN: The firm started growing in 2006 and 2007, thanks to a large contract. So we grew throughout the recession, and ended up hiring people that were laid off from other companies. We were the only company in Atlanta — to the best of my knowledge — that continued to look for design professionals during the recession.
We’re now over 50 people, and I would say that the critical size was right around 20 when I realized that we had to put clear structures in place. We now have three technical departments: architecture and consulting, commissioning, and certifications. We also have business development marketing, HR, accounting and other functions that report either directly to me or to our director of professional services.
As for international work, most everyone understands a piece of it as part of their regular job — for example, marketing is sometimes asked to coordinate a foreign language brochure, presentation or web page. And if you have a foreign language skill, you will be asked to help as needed. As for international business development and client relations, I have spearheaded that and have brought other people from the office in as appropriate. I traveled with one of our engineers in Brazil, and with one of our directors in the Middle East. And I have taken along my husband, who also works in my company as a writer and executive administrator, to several trips, and then he helps me with business development as well.
BOB FISHER: Do you all operate from a strategic plan?
DAGMAR EPSTEN: Yes. Our strategic plan period is three years, and we try to update it every year. The goal is to always have a current plan, and to completely overhaul it every three years. It’s a far enough horizon that we don’t get stuck in tactical decisions.
BOB FISHER: Where do you hope to go with the firm?
DAGMAR EPSTEN: The 2020 goal is to be at 20 million in revenue with a staff of 100 or more. We want to stay as small as possible while meeting our revenue goals.
BOB FISHER: How do you decide whether or not to enter a specific geographic market?
DAGMAR EPSTEN: I just think there needs to be some connection with a market, like an inquiry from there, or it could even be through an employee. We might have a personal contact or there might be unique needs in that country that align with one of our services.
We thought Brazil, for example, was one of those countries. I went to down to a Greenbuild conference in Brazil with one of our employees who is an engineer from there. We met with a number of companies and thought we would be able to get some direct work.
So far, we haven’t gotten any direct work from Brazil, only indirect work as a subcontractor. I did make some good connections there. And we’re thinking about giving one of our Brazil connections some work we discovered that they have some expertise that could be useful to us. Sometimes it’s not just that you get work, but that you develop the relationship and give others work when it makes sense.
Sometimes things come out of the blue. Recently we got work in Argentina, for example. I had previously traveled to Argentina, so I thought it was from my travels or a referral from friends there. But they just found us on the internet.
When these things happen, it’s about readiness. I was really trying to develop an opportunity in Brazil with a direct client contract and it hasn’t happened yet, but then Argentina came along, and I was like, “okay, sure, no problem.”
BOB FISHER: So you have to be very flexible.
DAGMAR EPSTEN: Yes, and very patient too. Our experience was similar in the Middle East. We worked on two subcontracts in Dubai because we are experts in LEED, energy modeling, commissioning, and building envelopes. One of these projects was built, but both projects had major difficulties due to the economic crash that also happened in the United Arab Emirates. And then someone introduced me to someone from Saudi Arabia, who was traveling here in the United States.
This individual invited me to Saudi Arabia, and I spoke at a conference and met some important people there. I had the honor of meeting Prince Al-Waleed, who later sent me a number of books written about him. But to date we have no work in Saudi Arabia.
We had a similar situation in Kuwait. I traveled there and did some business development while I was visiting Saudi Arabia, and then went a second time with one of our directors. We have gotten a number of RFPs for Kuwaiti projects, and have been promised work there, and we are ready for it, or for any other new projects in the Middle East, but nothing has materialized so far. This has been going on for about three years, and we are currently prequalified for a major corporation and on five or so proposals in Kuwait. It has taken a long time, but we think something is going to happen for us. We always think long-term when it comes to foreign markets.
We have also developed further relationships in Spain and other European countries, and are confident about continuing and expanding our work in Europe.
BOB FISHER: Can you describe your marketing strategy and approach for building international work?
DAGMAR EPSTEN: We make an effort to address people in their language, which shows our language capabilities and understanding of their culture. We have international pages on the website. When I went to the Middle East, I had business cards and brochures in Arabic. We had marketing materials in Portuguese when we traveled to Brazil, and in German when we started getting work in Germany.
BOB FISHER: How do you handle important documentation like proposals and contracts in international projects?
DAGMAR EPSTEN: I have a potential direct client in Germany for architecture. We provided qualifications and a fee proposal in German, which was the first time we prepared all of this in a language other than English. It was quite a challenge because I had to familiarize myself with the whole German delivery process for construction projects and describe our firm and the proposed process by using the language of the German processes that our client was familiar with. It was a good learning experience for me, and I also presented to the client in German and conducted a meeting with them in German.
Then we started worrying about the contract because we think it needs to be in English, but the English our foreign client contacts speak is often not good enough. We contacted the AIA, hoping they would have a German translation of a common AIA standard agreement, but they currently only offer contracts in English. We had in the past also worked with an international engineering contact, also in English.
You also have to think about the seat of jurisdiction in case there is a lawsuit. So if it was in the Middle East, for example, I would put Frankfurt or London in the contract because I wouldn’t want to go to court in the Middle East. And if your proposal and the agreement are in German, you need to consider where the seat of jurisdiction is if there is a dispute. Because if you represent yourself as being versed in a culture and language, there’s a good chance that you are going to be pulled more and more into documents that are written in the local language, and into using local procedures.
BOB FISHER: How do you deal with differences in ethical standards from one country to another?
DAGMAR EPSTEN: I have always avoided getting into situations that seemed unethical to me. You just have to remind yourself that it’s okay if you don’t have every single job and it’s okay to drop a country from consideration if you find that your ethics don’t line up.
But I think it needs to be first-hand experience to make that call. I wouldn’t just totally write off a country or culture just because you think there’s bribery or that it’s unethical or unsafe. I think it comes down to your individual situation and experience.
BOB FISHER: Have you ever had to walk away from an opportunity or a project because of an ethical issue?
DAGMAR EPSTEN: Yes, but it was in Atlanta.
BOB FISHER: I guess it just goes to show that sort of thing happens all over the world.
Are there special considerations for small firms?
DAGMAR EPSTEN: I think smaller firms can first try to gain entry into a market through a bigger company that hires them as a subcontractor. That has sometimes worked for us.
I think it’s also good for someone to bring that international mindset to the table. Maybe it’s someone with language capabilities within the company, maybe not necessarily the principal, but someone in the firm who has language skills.
They could also find a peer in that new country and uncover their gaps in their respective knowledge, and it could be mutually beneficial. The company in the other country might be able to offer something, if nothing but a specialty translation, that helps create that partnership.
BOB FISHER: Are there other lessons that firms not practicing globally now would need to know before expanding outside the United States?
DAGMAR EPSTEN: Well, in my case it was me making the first contact with potential clients. I could imagine it could also be an employee or an associate, but I think it’s good if it’s someone that can relate to people from other countries.
Like in my case, I went to Norway and I connected with someone from Mexico. That’s maybe not the obvious route, but if you go to an international event you’re going to have people from other countries. And if there is someone from your firm that is comfortable making connections to people from other countries, then there’s an opportunity to connect for business.
The other thing that worked for us is having a niche market; we had niche knowledge, and leading knowledge, too. So people came to us because we were ahead of them in LEED and energy modeling. Then they also asked us about our other specialties such as commissioning and building envelopes. Once you build those relationships and become more knowledgeable, you can also find other services and projects that bridge the continents or bridge the countries. It may no longer be so much about the technical expert knowledge; it may be about your geographic location.
Getting back to design, for example, we have a potential client in Germany who wants to build something in the States. So I went to Germany and met with them to discuss how we could help. At this point, it’s not about our expert general knowledge in LEED, energy modeling, commissioning or building envelopes, it’s about our knowledge and skill in architecture, which is after all the foundation our company was built on, and about being able to build a bridge between the two countries, and about our past success in both countries.
Other than that, I think you have to be conscious of your general safety when traveling and of your professional and legal situation, and also have a clear plan as to how you are going to get paid. Some of it is really just the basics of doing business.