A Crisis of Inaction

Sep 09, 2002

If you ask me, one of the biggest factors contributing to poor financial performance, bad morale, and confusion about direction and purpose in A/E/P and environmental firms today is inaction from the company’s management. I’m not just talking about inaction on ostensibly important matters like who stays and who goes, or what markets the firm should spend its marketing dollars on. Those are huge— obviously. But I am also talking about inaction on matters as simple as getting the toilet fixed in stall number three of the women’s first floor bathroom in the Tuscaloosa office. Or not replacing a burnt out light bulb in the firm’s exterior sign so “ABC & Associates” looks like “ABC Associates” at night when you drive by at 50 mph because it cost $82 to get the sign guy out and no one knows who is authorized to do it. Or not passing along the results of the firm’s business planning retreat until nine weeks after it was over so every principal can give his or her two cents on the wording of the document that will be communicating it. It is this kind of paralysis that gets everyone upset and makes everyone— owners and employees alike— feel powerless. It also strikes at why we have problems holding almost anyone in the firm accountable for the performance of their areas. No one is really in control. Other people have to approve everything. Other people have veto rights over everything. If this situation sounds familiar, here’s my advice: Have your BOD elect a CEO every year. Make sure it’s someone who will act and be willing to take the heat if others don’t like the decisions he or she makes. Note— this is not necessarily the most senior person in the principal ranks, though it would be naïve to think that the amount of stock someone holds is not going to be a factor. One more point— I don’t think you should elect someone different every year or two or three just to give others a chance to see how they do at the job. As long as someone is doing a good job and wants the job, they should probably stay in it. Let the CEO do his or her job. If you want to hold someone in the top job accountable for results, then get out of his or her way. If, on the other hand, you want to join hands and discuss every decision with everyone at a certain level in the firm, expect that the person in the top job is going to become demotivated by that. Have a very clear organization structure that defines the reporting relationships for every single individual in the firm. Make sure that everyone reports to only one person (this is called “unity of command”). When everyone knows whom he or she reports to, they know whose approval is necessary. When they don’t know whom they report to they will take the decision to multiple people in the organization for fear of displeasing someone at a higher level than theirs. Stop using committees to come up with plans or to be responsible for decisions and instead assign those rights to individuals. It doesn’t mean that there’s no place for a committee— there certainly is— but have the final decision rest in the hands of a person. And don’t have a lot of standing committees, either. Putting a group of people together with a specific charge for a defined time period is one thing. That’s an ad hoc committee. Making them a standing committee is something else entirely. Commit to the idea that you have to act fast. Speed everything up. Every decision should be made faster, and if it’s bad, make a new one. Get your priorities straight. Is a perfect decision on what toaster oven to buy more valuable than having a toaster oven— any toaster oven— that works? I think not! Speed of response is something to be valued in itself. Don’t put your owners or principals smack dab in the middle of every decision. Some companies have principals make every call, review every time sheet, approve every expenditure. And this can become a bottleneck. Can some of these things be done via policy? Can some of these calls be delegated? I think a lot more of them could be if the principals were secure enough to let go a little bit. Originally published 9/09/2002.

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Zweig Group, a four-time Inc. 500/5000 honoree, is the premiere authority in AEC management consulting, the go-to source for industry research, and the leading provider of customized learning and training. Zweig Group specializes in four core consulting areas: Talent, Performance, Growth, and Transition, including innovative solutions in mergers and acquisitions, strategic planning, financial management, ownership transition, executive search, business development, valuation, and more. Zweig Group exists to help AEC firms succeed in a competitive marketplace. The firm has offices in Dallas and Fayetteville, Arkansas.