Five thoughts from Mark Zweig about titles and how they are often dished out without much consideration.

Title proliferation in the A/E/P business is alive and well. While intentions may be good – to keep people happy, grant “promotions,” etc. – the more titles you have, the unhappier people will be with whatever their title is.

Titles are given easily but almost never taken away because the negative morale effects of doing so are rarely judged to be worth it.

Here are a few more thoughts on titles in A/E/P and environmental firms:

  1. Strict role definitions. Some people want you to give them very clear role definitions in terms of exactly what is in their job description versus what isn’t. Even though HR experts advocate this as proper practice, I will usually resist. I don’t like tight role definitions and never have – especially in smaller companies where individuals may be required to wear any number of different “hats” throughout the day. Plus, if someone is good at something and has a strong interest in doing it I am more likely to want to encourage that, versus discourage it.
  2. Principals and associates. The age-old debate about what the functional roles of principals and associates are is alive and well in this business. The problem is that these titles don’t denote function at all. They are status titles, usually surrounding one’s place in the ownership pecking order, so they can’t be defined that way. This is NOT to say “principal-in-charge” isn’t a functional role on a project. That person is the one who typically has the deepest/longest relationship with the client and acts as a “safety valve” to make sure that relationship is enhanced by the firm’s performance on the project-at-hand.
  3. Vice presidents. There are companies in this business where a “Vice President” title means something – i.e., typically one that may have some contracting authority limits tied to it. And then there are companies that give out lots of these titles – in some cases to people they DON’T plan on offering ownership interests to – so the title can actually take on a negative connotation inside the firm.
  4. PM roles. Rarely is “Project Manager” a full-time job function for people working in firms in this business. More often than not it’s a project assignment bestowed upon someone who has another full-time job as a studio head, team leader, department head, designer, architect, or engineer. Of course, the rarely-spoken truth is that one of the problems associated with this role is that no one – or only a very few people – actually report to the PM, which makes it difficult to really hold them accountable for project performance.
  5. New title = more pay. Some people believe – make that MOST people believe – that along with a new title they should automatically get more pay. My best advice on this one is to discourage that thinking. Perform first in the new role (if the title actually defines one; and many don’t) and THEN we’ll take a look at pay to see if it needs to be adjusted.

Mark Zweig is the chairman and CEO of ZweigWhite. Contact him with questions or comments at mzweig@zweigwhite.com.

This article first appeared in The Zweig Letter (ISSN 1068-1310), issue #1063, originally published 7/14/2014. Copyright© 2014, ZweigWhite. All rights reserved.

 

Recruiting may not be immediately seen as a great branding tool, but it is.

I’ll bet you never imagined your recruiting process could be an important brand-building tool for your firm. How can that be?

Here’s how I see it:

If you’re recruiting opportunistically (i.e., I need to hire someone to fulfill a role… right now!), the quality of candidates available will be quite limited. If you’re under time pressure, your options for selectivity will also be limited. So, what to do? My strategy is to build a “pipeline,” identifying people whom you think would fit well with your firm and gauging their skill sets and talents over time. By staying in touch on a collegial basis, you can reach out to prospective candidates that you know and have already vetted when an opening arises.

Here are some suggestions for how to do that:

  • Encourage members of your firm to participate in industry forums, professional society committees and other places where colleagues in your discipline gather. It’s a great way to see others in action, to become a friend, to talk up what you’re doing, and to gauge how satisfied (or not) they are in their present situations.
  • Develop a well-thought-out and rigorous internship program for students. If you have a strong relationship with a university from which you recruit, especially if you do some teaching or advising there, the dean or the professors will help you identify the brightest and best. I’ve been surprised and pleased by the number of students I’ve come to know over the years that have ended up at Gensler. Even more impressive are those that show up for an interview years after graduating, never having participated as an intern. When asked how they found their way to us, the answer is, “I had a really good friend in graduate school who did an internship with you and raved about the experience. I always wanted to see what the firm was all about.”
  • Spend time with vendors who call on you. Don’t treat them as a nuisance. Remember, they’re calling on other firms, too. They know who’s good and who might be unhappy where they are. Often, a word from them can send you a wonderful candidate.
  • Encourage your own staff to stay close to their friends in other firms. Make sure, of course, that your folks are really happy in your firm and proud to be a part of it, or this can backfire. Your own people should be an important part of your pipeline when it’s time to hire someone new.
  • Have a clear and written statement of your Mission, Vision and Values – what you stand for, where you’re going and what’s important in the way you work together as a firm. Make it visible. Leave a copy behind at university career day interviews. Give it to clients. It helps remind you to live up to what you declare, and clients may be working with other firms. It helps if they’re talking up what a great firm you are.

Since your brand is what other people say about you, not what you declare it to be, these are great strategies to get your stakeholders speaking positively about your firm.

Further, having a robust pipeline helps you attract and hire people who are both talented and aligned with your values. Your brand is formed by the impressions your people leave with those with whom you interact, by the quality and character of the work they do, and by their ability to do it well through collaboration with their colleagues. Shouldn’t your recruiting process – how you do it and who you’re able to bring on board – have a stronger impact on your brand than any other single thing you can do?

Edward Friedrichs, FAIA, FIIDA, is a consultant with ZweigWhite and the former CEO and president of Gensler. Contact him at efriedrichs@zweigwhite.com.

This article first appeared in The Zweig Letter (ISSN 1068-1310), issue #1063, originally published 7/14/2014. Copyright© 2014, ZweigWhite. All rights reserved.

FAYETTEVILLE, Ark. (Jul. 14, 2014) –Zweig Group today announced the 2014 Hot Firm List, an exclusive ranking of the fastest growing firms in the A/E/P and environmental consulting industry. This list represents a look at the firms in the architecture, engineering, planning and environmental industries that posted the highest percentage revenue growth and dollar revenue growth over a three-year period compared to the other entrants.

In an industry comprised of over 100,000 firms, those who have made the list have demonstrated their ability to grow, prosper and be recognized among the elite 100 fastest-growing firms. The economic recovery is well underway as firms on the list in 2014 boast an impressive median growth rate of 72 percent, up significantly from 44 percent in 2013.

“Getting on The Zweig Group Hot Firm list is a tremendous achievement,” said Mark Zweig, firm founder and CEO. “That’s especially true now the economy is doing better,” Zweig added. “The goal post is getting higher!”

The success of growing firms will be celebrated along with other Zweig Group award winners at the all new Hot Firm and A/E Industry Awards Conference. 

Known for being held in beautiful venues that change from year to year, this year’s conference on September 25-26, 2014, will take place at the Beverly Hilton in Beverly Hills, CA.  Hot Firm winners along with CEOs, managers, marketing professionals, H.R. directors, and firm principals, will gather for education, participation, networking and celebration – including a black tie dinner and reception where winners will receive awards and be acknowledged in a special ceremony. The success stories of Hot Firms will be shared at the event, along with a variety of speakers from a range of industries, guaranteed to challenge and inspire other firms to achieve even greater success. 

“It’s great to see some firms back on the list this year after a hiatus. I love seeing and celebrating with my old friends at our conference. And this year’s event in Beverly Hills will be bigger and better than ever,” Zweig said.
The top 10 winning firms were:
 

  1. WSP Global Inc. (Montreal, Quebec)
  2. Surveying And Mapping, LCC (SAM) (Austin, TX)
  3. Landpoint (Bossier City, LA) (tie)
  4. GATE, Inc. (Houston, TX) (tie)
  5. Hargrove Engineers + Constructors (Mobile, AL)
  6. DeNovo Constructors, Inc. (Chicago, IL)
  7. Westwood Professional Services (Eden Prairie, MN)
  8. Bowman Consulting (Chantilly, VA)
  9. EN Engineering, LLC (Warrenville, IL)
  10. Nova Consulting Group, Inc. (Chaska, MN)
  11. Buckland & Taylor (North Vancouver, BC)

 
Access the full list of 2014 Hot Firms here: http://www.zweigwhite.com/awards/the-zweig-letter-hot-firm-list/2014_winners.php

For more information on the Hot Firm and A/E Industry Awards Conference visit:  http://www.zweigwhite.com/conference/

Mark Zweig provides 10 tips how to treat potential new employees right.

One of the things we do at ZweigWhite is a limited amount of executive search consulting. Most people don’t really understand that. They think it means we help people get jobs – that we “place” people in companies.

Nothing could be further from the truth. The companies that hire us to find someone who can fill a critical opening aren’t interested in seeing the best of the unemployed or soon to be unemployed. They tell us that they want someone who is truly outstanding and who can make a difference in their firms.

But then when it comes to how to treat these candidates – once identified – many of these same firms stumble, fumble, and trip their way to an actual hire because they don’t understand that recruiting is selling! Here are a few of the things that companies could do better. Some of these may seem silly to you but trust me, they all contribute to a higher offer acceptance rate and start rate:

  1. Arranging for pickup and delivery of out-of-town candidates from the airport. Do you want someone you are trying to induce to make a change to get a bad cab ride – maybe one where the driver gets lost, or where the car has no air conditioning, or the cab smells from the drunk passenger who puked in it two hours before?  I don’t. I pick up or arrange for pick up.
  2. Controlling the route to and from the airport. Over 30 years ago, when I lived and worked in Memphis, I was very sensitive to this. You had two choices when it came to the airport. Go through a horrible blighted area… or take the long route through beautiful suburbs. I chose the latter.
  3. Having a video or other presentation that sells the company and the area. A nice little show can be very helpful in showing what makes the company a great place to work. I find most people working in firms cannot articulate this.
  4. Getting realtors involved EARLY in the process. They can be your best intel into what the candidate is really thinking about a potential job change. Use them!
  5. Talking to the spouse of the candidate to learn about his/her questions or concerns about a potential move. You cannot and should not ignore spouses. Get their numbers and arrange a call with them for anyone you are getting serious about trying to hire.
  6. Arranging meetings at a school or schools for parents of children with special needs. Finding a school can be a deal-breaker or a deal-maker when it comes to hiring. Probe and then HELP the candidate (and his or her family) get the information they need to put this issue to bed.
  7. Making sure the candidate is treated well during every meeting. We just had a candidate – one we actively recruited – be treated poorly by our A/E firm client. Even though it was a local interview, they ignored the time constraints the candidate told them she had for the meeting and also put her in a waiting room with other job candidates who were there actively seeking new jobs. Not the good first impression we and they wanted to create.
  8. Stop asking and obsessing about why the candidate wants to make a change. The best people may NOT want to make a change. They have been convinced by a good recruiter to take a look at your opportunity with an open mind. That doesn’t mean they are necessarily committed to leaving their current employers. Don’t make the candidate feel uncomfortable by latching onto to this topic and not letting go.
  9. Making sure that all interviews start – and end – on a high note. When you have someone who is not a great interviewer/seller, you better make sure he or she is not the first or last individual a job seeker interacts with.
  10. If an offer is to be made, not delaying that endlessly. Time is your enemy. The longer you delay making a job offer to someone you think you want to hire, the harder it will be to get him/her to accept once you do.

Last bit of advice. If you do work with an outside recruiter, do NOT cut them out of the process at any stage along the way. Some companies want to do this, but it’s a mistake. Having someone who can debrief the candidate after each and every meeting or phone call, and after an offer is extended, is invaluable to you. Use this resource! Any fees you pay won’t be different if you use the resource. Outside recruiters have a lot of experience and insights that can help you.

Mark Zweig is the chairman and CEO of ZweigWhite. Contact him with questions or comments at mzweig@zweigwhite.com.

This article first appeared in The Zweig Letter (ISSN 1068-1310), issue #1064, originally published 7/21/2014. Copyright© 2014, ZweigWhite. All rights reserved.

And since they are, follow these eight tips to improve their effectiveness.

What is a job posting? C’mon, think about it. It’s simply an advertisement. Aren’t you advertising an opening that you want to fill? And like any advertisement, you must catch the eye of the consumer. Peak their interest. Instill a call to action.

If you read the morning paper, glance at a billboard while driving, or surf the Internet, everyone and their brother is trying to direct your attention to their product or service. One thing common to all advertisements is the need to be succinct and concise. Get to the point quickly! State your case and show off your wares. The brevity and direct approach of most ads is not so much that the consumer may only have three to 5 seconds to scan your billboard ad while traveling 80 mph on the proverbial superhighway. Rather, it’s to capture the consumer’s attention, impregnate the product or service in their mind, and make them think (whether now or later), “Hey, remember me?”

So what’s the parallel with filling an open position? Again, c’mon! I gave you the answer in the first paragraph. You are advertising an open position and your ad is the position description you post on whatever medium you choose. You are attempting to entice the consumer, or should we say candidate, to consider applying for your job opening.

OK, so let’s view your ad/position description from an advertising perspective. Your target population is individuals open to considering a career move. But wait, isn’t it a select few of this total population? Sure! You only want the best available candidates to respond to your ad. So how do you attract “the best of the best” while at the same time discourage those individuals not qualified for your need? It all depends on the specifics of your position description.

In my involvement in the A/E industry, I too often have the unpleasant experience of dealing with clients who don’t or won’t invest the time required to properly develop an attractive and targeted position description. It is way too frequent the answer to, “Do you have a position description?” is “Oh, someone with a background in X, Y to Z years of experience, and a P.E.,” is for example the response for an engineer position. This puts the recruiter, whether internal HR or an external recruiting firm, in a tough position. What choice do they have other than to enhance the position description on their own? The result is the usual outline that reads like a laundry list of generic phrases that describes the “unobtainable” candidate and likely attracts the opposite of what you need.

Rest assured, there are as many opinions on what makes an attractive and productive position description as there are grains of sand in Destin, Fla. There is likely good advice to be plucked from each one of them. It’s up to you to garner the best advice that fits your requirements and culture. Following are a few tips I recommend to my clients:

  1. Do craft a written position description developed directly by or with the detailed input of the hiring manager.
  2. Do have a descriptive title that indicates the job level and type of work, for example Senior Landscape Design Architect. Don’t use ambiguous HR terminology like Architectural Associate Level II.
  3. Do include a statement about the company’s mission and culture. Don’t be reluctant to use words such as amazing, exciting, remarkable, aggressive, or passionate.
  4. Do create a list of responsibilities that succinctly answers the question, “What will I be doing day-to-day?”
  5. Do use action words at the beginning of your responsibility statements, such as: create, develop, design, review, determine, complete, communicate, or present.
  6. Don’t mix “must have” requirements or experience with preferred requirements or experience. If you believe the requirement is a “must have,” stick with it and don’t compromise. It’s OK to state if the candidate does not meet all the “must have” requirements, they need not apply.
  7. Do personalize the description by using the words “you” and “your”.
  8. Finally, do include a compensation range. Applicant surveys consistently show this is the number one item that candidates want to see in a positon description. The inclusion of the compensation range can significantly increase the responses in your targeted population range.

Keep in mind that you are advertising your opening and your ad is the position description. As a final test, put on your consumer hat. Read your ad. Would it catch your interest? Does the title and opening company statement make you want to read more? And, most importantly, do the responsibilities and requirements instill the intended call to action – submit an application?

Pat McGee is the director of executive search consulting with ZweigWhite. Contact him at pmgee@zweigwhite.com.

This article first appeared in The Zweig Letter (ISSN 1068-1310), issue #1064, originally published 7/21/2014. Copyright© 2014, ZweigWhite. All rights reserved.

Mark Zweig praises the winners of the 2014 Hot Firm List and Best Firms To Work For ranking.

With the winners of both ZweigWhite’s Best Firms To Work For and Hot Firm competitions announced (both lists are found in this very issue of The Zweig Letter), it’s great to see the excitement and joy as the principals of these firms find out they’re on one or both of our lists.

You have to be doing something right or you wouldn’t make these lists. When you consider that there are 100,000-plus design/planning/engineering/environmental consulting firms out there, being one of the best places to work or at the top of the growth stats is a real accomplishment. And it says that the marketplace is responding to your offerings – be that the employment market or clients.

That’s why I am really looking forward to being with these winners at our all-new ZweigWhite Hot Firm and A/E Industry Awards Conference this September in Beverly Hills. I get energy, ideas, and inspiration from a positive group of can-do entrepreneurs and intrapreneurs whose firms are all working to make their firms – and our world – a better place. This year we combined two events into one “super-event.” And then we decided to present even more awards at our conference. And then we got some exciting people from OUTSIDE our business, including Jonathan Ward of ICON – the creator of the absolutely coolest SUVs and hot rod cars and trucks I’ve ever seen; Greg Bentley of Bentley Systems, the leading software provider to our industry and an incredible privately held firm success story themselves; and marketing guru Michael Krauss – a guy who helped make Chips Ahoy the best known chocolate chip cookies in the world and rebrand Anderson Consulting into Accenture; and many, many more exciting speakers and panels.

We’re going to hold this event in the world-famous Beverly Hilton (the last time I was there I saw Melanie Griffith, Demi Moore, and Sharon Stone all standing together at the bar!), peppering the lobby and conference area with ICON’s vehicles and booths showcasing some of our winners’ accomplishments – as well as much, much more. We’re even planning some good giveaways this year.

2014 is shaping up to be a great year for many of the companies in this business. You are probably doing well. Our winners are doing especially well. If this sounds like fun, why not come join me and a number of other ZweigWhite principals and staff in Beverly Hills this September? You don’t have to be a winner to attend, and you might actually learn something – and have some fun! What could be bad about that?

Meanwhile – read up on this year’s winners in our special dedicated Hot Firm and Best Firms issue. Thanks and I’ll see you in September!

Mark Zweig is the chairman and CEO of ZweigWhite. Contact him with questions or comments at mzweig@zweigwhite.com.

This article first appeared in The Zweig Letter (ISSN 1068-1310), issue #1065, originally published 7/28/2014. Copyright© 2014, ZweigWhite. All rights reserved.

FAYETTEVILLE, Ark. (July 28, 2014) – Zweig Group is proud to announce the winners of the Zweig Group 2014 Marketing Excellence Awards, an award recognizing outstanding and effective marketing in the A/E/P and environmental consulting industry.  Awards were given in the categories of online marketing, internal marketing, integrated marketing, external newsletter, and special event. Entries were judged by a panel of Zweig Group marketing team members and placing was based on an evaluation of measurable positive results, creativity, quality, and implementation.

Winners will receive awards at The 2014 Zweig Group Hot Firm and A/E Industry Awards Conference on September 25-26, 2014, held at the Beverly Hilton in Beverly Hills. The top three winners in each category will have their marketing campaign on display during the conference and a People’s Choice Award will be chosen among this group of entries by conference attendees.

A/E/P and environmental consulting firms have continued to come up with new ways to inspire staff, reach out to new clients and new markets, and renew connections with existing and past clients.  The unique campaigns winning Marketing Excellence Awards this year all used fascinating, exciting and innovative methods to accomplish their desired goals.   Many of these remarkable campaigns will be featured in issues of Zweig Group’s weekly management newsletter, The Zweig Letter. 

The 2014 Marketing Excellence Award winners are as follows: 

Online Marketing

  1. SmithGroupJJR
  2. Clark Patterson Lee
  3. P.W. Grosser Consulting, Inc.

Internal Marketing

  1. ECS Carolinas, LLP
  2. Cardno
  3. ICA Engineering
  4. O’Brien & Gere
  5. Infrastructure Corporation of America (ICA)

Integrated Marketing

  1. Hickok Cole Architects
  2. Crafton Tull
  3. EYP Architecture & Engineering
  4. Barton Associates, Inc.
  5. Finley Engineering Group, Inc.

External Newsletter

  1. EDSA, Inc.
  2. Hunt, Guillot & Associates (HGA)
  3. Infrastructure Corporation of America (ICA)

Special Event

  1. Hickok Cole Architects
  2. Crafton Tull
  3. SmithGroupJJR
  4. Finley Engineering Group, Inc.
  5. O’Brien & Gere

Access the full list of Zweig Group 2014 Marketing Excellence Award Winners here: http://www.zweigwhite.com/awards/marketing-excellence-awards/2014_award_winners.php

For more information on the Hot Firm and A/E Industry Awards Conference visit:  http://www.zweigwhite.com/conference/

Mark Zweig offers five suggestions on how to stay out of trouble and in the black.

One of the greatest challenges is keeping your business profitable. It’s easiest when you’re growing. Revenue is going up faster than expenses. Under that scenario, cash may be strained but profitability is very likely.

When the growth slows, or when a large investment goes sour, profitability can evaporate quickly. Unfortunately, we in the A/E business have a bad tendency to not react quickly enough. If we’re lucky, we’ve got a business with a strong enough balance sheet to weather the storm. If not, we’re screwed.

So how do we stay out of this trouble and stay profitable instead? Here are my thoughts:

  1. Watch for danger signs. The predictive metrics are where you need to focus your attention. The majority of firms still don’t use these! Incoming web hits. New opportunities learned about. Proposals made. Sales. Backlog. Cash flow forecasting (not cash flow statement). These are the things that show you what’s going to happen versus what happened. And for those firms that insist on tracking cumulative data (such as total proposals made) and tracking it graphically versus monthly data – STOP doing this! You are misrepresenting how well you’re doing.
  2. Act on the information you receive. We all want to believe we don’t have a problem. It’s human nature. On top of it, the managers who report to you are people you want to support and it’s easy to let them do what they want. But if you want to stay profitable you have to act quickly. It takes a long time to make up losses – a very long time.
  3. You take the hit yourself. If cuts have to made, look at the top, first. Owners must be the ones to take them. Of course, dead wood and unnecessary luxuries should always be cut out first.
  4. Cut harder than you think you need to. It’s rarely enough. Unless you can cut deep enough that a profit is assured, you will possibly be facing a downward spiral of cost cutting – always too little and too late. Make is so you know, for certain, that a profit is assured.
  5. Build up a reserve. Saving for a rainy day applies to your business as well as your personal financial management. Don’t live in your line of credit. There’s no safety net then. And you will need a safety net some day; not to mention that your bank doesn’t want that line of credit to be permanent financing. Their response will be that you need more equity.

Mark Zweig is the chairman and CEO of ZweigWhite. Contact him with questions or comments at mzweig@zweigwhite.com.

This article first appeared in The Zweig Letter (ISSN 1068-1310), issue #1066, originally published 8/4/2014. Copyright© 2014, ZweigWhite. All rights reserved.

Mark Zweig reflects on the passing of a friend and employee, and offers six tips about forming a winning team.

A week ago Sunday, one of my best friends, and also the lead carpenter for design/build/development firm, Mark Zweig, Inc., Gary D. “Jack” Kidd, passed away from complications due to lymphatic cancer. It was a real shame. The guy was only 67.

Jack was one of those guys who could figure out how to do anything and never said “no.” I don’t need to remind any of you who own businesses how great it is to have someone working with you who has such a “can do” spirit. Work is more fun and that spirit can really help keep the team together and keep everyone getting a lot done. He was a third generation carpenter who dropped out of school in the 7th or 8th grade to help take care of his siblings and chronically ill mother. He worked with me for the last 10 years of his life and we had a lot of fun together. His family asked me if I would give his eulogy. I did a pretty miserable job. I’m really going to miss him!

Jack’s passing got me thinking about the importance of who is on the team and the qualities and characteristics I like in the people I surround myself with. Here are some things I look for in key people:

  1. Ability to work with others. Everything we do in both of my businesses and certainly in any A/E/P or environmental firms we work with requires a team. This is not a business of stars. Projects are complex and take lots of cooperation with other people to get them done on time and within budget, and to a high standard of excellence. These are the kinds of people I want to work with.
  2. Can-do, positive attitude. I like people who figure out how to do things versus those who say why it won’t work. Unfortunately, many technical people want to adopt the latter mindset because they think they are smart or safe to be that way. But that’s not what clients want. They want “can-do” people. I do, too. They’re just more fun to work with and will make you more successful.
  3. Can handle bad news and/or setbacks without getting crushed. There will always be bad news and negative events – but we need people who don’t let these things crush them. They have to deal with them and move on. By the same token, your managers cannot just bury their heads in the sand and avoid things because they’re negative. That’s how small problems can grow into bigger ones. I like people who confront negative events now and then move on.
  4. Flexibility and willingness to shift priorities if the situation demands it. Project-driven businesses have changing priorities. People leaving can create holes that have to be filled. New opportunities may take someone to step up to the plate. I like people who do not draw tight boxes around themselves and what they will do or not do.
  5. Trust – for me and their fellow managers/co-workers. You need people on your team who trust that you are acting in the best interests of the organization and in their best interests. These are the kinds of people I want to surround myself with; not those who don’t trust me or their other teammates.
  6. Good intentions. Some people have them. Others think only of themselves. The latter group will have problems with everyone who works for them. We cannot afford that. Project-centered businesses – if successful – tend to be overloaded and understaffed. We cannot afford any behavior that demotivates the other people on the team.

Surround yourself with the wrong people and you’ll find your attitude suffers, productivity declines, and motivation wanes. Surround yourself with good people – ones like Jack Kidd – and you’ll get a lot done and make yourself and many clients happy, too!

Mark Zweig is the chairman and CEO of ZweigWhite. Contact him with questions or comments at mzweig@zweigwhite.com.

If vertical or horizontal expansion (or both) is in the cards for you, approach with caution.

Business has been good lately in the A/E professions. Opportunities abound, yet many firms struggle with the question of if, where and how to grow their business. Expansion is tough, complicated and expensive, and the landscape is littered with firms that have struggled to diversify and expand their practices. What’s the best strategy – vertical, horizontal, or both?

Vertical expansion suggests there are other services current clients are buying that your firm could offer as a suite of services. If well integrated, each one becomes more valuable than if offered alone. Consider the number of design-related practices we often align with, formally or informally, that round out the full array of services our clients require to enhance their business performance. These include master planning, facilities management, lighting design, graphics and a host of others.

Here’s an example and a cautionary tale.

In our practice at Gensler, we defined “design” as anything that could be seen or used and requiring management over time. This included a full array of carefully integrated services. Each person, working in their area of expertise, was thoroughly briefed by colleagues working with a given client. In that way, we all knew how the client liked to work, their priorities, what they were trying to achieve, and a complete “who’s who” within the client company, so everyone understood how decisions were made and who had the authority to make them.

An example includes a manufacturing client for whom we were providing master planning for their corporate campus, conventional architectural services, renovation, interior design, showroom design (more like store planning), product design and graphic design. The graphic design was not confined to their facilities, but also included print graphics, marketing collateral, brochures, advertising copy, with a little bit of branding and identity thrown in for good measure.

We thought we were doing pretty well and invited our client (she had oversight for all of the areas we were working in) to attend the annual Detroit auto show with us. She was a real auto buff, and we thought she would enjoy tagging along and meeting some of our auto industry clients. She was thrilled and, after having a wonderful day at the show, joined us for dinner. After some light chatter about cars, she said, “You know, I’m really quite worried about our relationship.” That sent a chill up my spine.

She was concerned that as a firm we could not be truly world-class in every type of service we offered. She likened it to an ad agency that expands their business by adding areas of specialty from media buying, to print and collateral material, to branding. But the agency is only truly “world-class” in one core strength.

Gensler worked very hard to compete in each of our service areas on a stand-alone basis with firms specialized in those areas. Our “secret sauce” was that each service was truly integrated with the others to deliver more comprehensive solutions. I made that pitch to our guest but suggested she benchmark us against firms she considered “world-class” in any of the areas we offered. I said I would check back in a few months to see how our work compared.

When we spoke again, I asked how we were doing. Her response? “The work you do is terrific, but the best part is it’s well-coordinated with everything else we’re doing. It’s just too hard to manage a bunch of stand-alone firms who have no incentive to collaborate with everyone else we work with, or to really get to know us, our priorities, and our ways of working.”

The lesson about expanding vertically? Each service has to be able to stand alone, competing with the best. Then, you have to add something very special, demonstrating your added value through flawless and seamless delivery of integrated services.

Horizontal expansion refers to a new area of practice for your firm. Do you hire someone with a reputation in that specialty? Someone you think has the skills to grow a practice? Do you acquire a firm with that expertise? Is there someone already within your firm who has expressed a strong interest in pursuing healthcare, higher education, critical facilities, airports, criminal justice or something else that is new to you? Those questions apply to vertical expansion as well.

Any of these options can succeed, but each contains pitfalls. Hiring an individual means committing to building a practice to support what he or she might sell. This represents a substantial expense before the work is actually booked. But it’s hard to book the work until a team is in place. Acquiring or merging with another firm offers a potentially faster path to the market, but the A/E professions are littered with failed acquisitions and mergers when the cultures of the firms are not well integrated.

An opportunity to make all of your work better comes from a broader practice through cross learning and leverage between your practices (e.g., airports and hospitality; retail and branding and graphics). Otherwise, what have you gained by having them under one roof?

Successful expansion is not just about the ability to do the work; it’s also about defining your offering in a unique way. Without that, you’re simply a commodity. It’s hard. So, only do it if you’re prepared to expend the effort and investment to become among the very best at the areas you pursue, and can demonstrate a unique approach no one else is offering.

Perhaps both vertical and horizontal strategies are the way to do exactly that.

Edward Friedrichs, FAIA, FIIDA, is a consultant with ZweigWhite and the former CEO and president of Gensler. Contact him at efriedrichs@zweigwhite.com.

This article first appeared in The Zweig Letter (ISSN 1068-1310), issue #1067, originally published 8/11/2014. Copyright© 2014, ZweigWhite. All rights reserved.

Recent Posts

X