AE Works finds balance between freedom, responsibility

 

When AE Works President Michael Cherock gets invited to business meetings, he says he’s often the oddball executive in the room. His unique perspective comes from his years on Navy submarines.

“My captain used to say ‘The boat doesn’t turn around. If you forgot something, or something doesn’t work, you’re not going to go back and get it,’” Cherock says. “You have to be very innovative in getting things to work.”

But as the person who operated the boat’s nuclear power plant, he also had an appreciation for process.

Today, he sees correlations between submarines and his business with a balance between entrepreneurism and professional management.

“Not that we were selling anything, of course. We were just going out, sailing underwater, chasing bad guys,” Cherock says.

“But in that culture — you were it. You had to make things work. You had to get things that broke, fixed. You had to do it. And you lived — you ate dinner, you slept, everything was right there. Your whole world was inside that boat.”

Balancing it out

A natural entrepreneur, Cherock founded several companies. However, AE Works, which offers architecture and engineering consulting services, is more his life’s work.

He started the company in his basement in 2007. The firm has grown every year and was on the Inc. 5000 list in both 2014 and 2015.

“We were very entrepreneurial from the beginning, but kind of loosely run. The culture has been that we focus on results only,” he says. “And it has presented some scale issues; buy-in and alignment come into play as you grow, like in any business.”

Cherock says he’s not a professional manager who easily implements processes and discipline. Instead, he’s an innovator — “a guy just running around, causing fires.”

“One of my weaknesses as an entrepreneur is I devalue that,” he says. “I’m a disciplined guy. I get up the same time every day. I work out. But when I look at businesses, I’m like ‘Whew, we should have a one-page handbook that says: Don’t be an a**hole.’”

Cherock says he’s come a long way to realize the need for balance.

Professionally managed companies gain market share and then start to lose their position because they lack entrepreneurial spirit, he says.

“We’re the opposite. We’re trying to bring in some of that discipline,” Cherock says.

For profit, for good

Cherock’s entrepreneurism, however, led AE Works to become a B Corp, or benefit corporation.

B Corps must meet rigorous standards of social and environmental performance, accountability and transparency. Cherock says a triple bottom line company makes decisions that aren’t only for fiduciary benefit.

Many businesses put together a company picnic or create a corporate social responsibility committee.

“As a CEO—as an entrepreneur—I look at that as small ball. I get bored with stuff like that,” Cherock says. “What we look to do as a company is to have more impact.”

That impact comes from the wellness of the staff — whether it’s their overall health and personal well-being or learning experiences and career goal planning — and being a positive force in the community.

Visitors often mention that AE Works operates like a tech company.

Cherock uses Peter Senge’s words to explain it: As a business you’ve got to be profitable — it’s like oxygen for business — but unfortunately, businesses act as if breathing is their only purpose.

Cherock decided to become a B Corp with input from his employees.

“As I gathered that data and listened to my staff, I knew that there had to be more to the company than just coming in, designing buildings, getting paid and going home,” he says.

Overcoming skeptics

Some employees are more closely aligned, but Cherock says the business model is legitimized through internal communication and processes.

AE Works has chiefs such as chief design officer, as well as a social chair and eco chair. There’s a dual hierarchy of technical and cultural leaders; cultural warriors and associates aligned to the triple bottom line model to help build momentum.

Everything at AE Works is a project, he says. So today, the company creates social projects under the categories of fun, fit and forward, as well as eco projects that focus on footprint, governance and knowledge.

For example, employees participate in Canstruction, where architectural firms build structures out of food cans. Cherock says AE Works donated those cans afterwards and involved both a customer and contractor.

Cherock meets many CEOs who are skeptical about the triple bottom line model because in the end, any business still has to be profitable.

His response is that if your company has human beings, it’s triple bottom line. People have good and bad days, and there’s social and eco capital in play.

“Everyone else can act like it doesn’t exist. You can treat your people like robots. That’s your call,” he says. “We don’t do that.

“We recognize it, and we believe from a value proposition perspective, as a pure business sense, it’s the right move. It’s not only consistent with our values. It’s good business.”

You also have to remember that you’re a human being, too.

“I think a lot of CEOs forget they are,” Cherock says. “They get so caught up in what’s happening — and it’s easy to — they forget that they’ve got a heartbeat.”