As I write this, I have just returned from The Zweig LetterHot Firm 2001 Conference and Celebration in San Francisco. Some things never change. The airports and planes seemed just as crowded as ever, and United lost my luggage only to bring it to me completely soaked a day later. So it’s business as usual with the airlines!We had a great conference. Although my “Zweinac the Magnificent” bit (my take-off on Johnny Carson’s Carnac) was a bit flat, most of the sessions were really well received. But I will let the rest of our Zweig Letter staff tell you about that. I wanted to cover my observations of the attendees at this event— many of whom represented Hot Firm winners (although that is not a requirement to attend). Here’s some of what I saw and heard:People are concerned about the economy. There was quite a bit of discussion from both attendees and presenters about the economy and the impact of the events of September 11th on our business and our individual firms. Generally, the consensus was that things are still looking pretty good for most of the firms that were there. It’s hard to put a bunch of entrepreneurial firm builders in one spot and not see a lot of optimism. That’s part of what makes this a unique event! That said, these people are concerned about the future, and they’re not going to wait long if it appears that cuts need to be made. Firms are still struggling to get good people. Sure, with all the economic gloom and doom, and the fact that some firms aren’t waiting around to rack up big losses before they take action, the people shortage is easing somewhat. But the fact is, firms are still struggling to find the key people, the difference-makers, for certain slots. And although most attendees said that they thought entry-level people were going to be easier to find, many firms are keeping the best young folks when cuts need to be made. Cutting only from the bottom was a concern, however. Another concern expressed was how to keep morale up in bad times. The hardest-hit markets include commercial office space and telecom. The best markets right now appear to be health care, K-12 education, and college and university work. Other stuff is in between. Many of the larger firms seem to be doing a pretty good job making up for declines in one area of their business with growth in others, so they are able to keep things moving along pretty well. Tough times calls for more aggressive personal selling. I heard this theme repeatedly. Now more than ever, firms need to have people who can sell. Many don’t have enough of these people, as large portions of their staff have never even seen a recession in their adult lives. One note of caution, however: If you want to employ professional salespeople, you had better think about who is going to manage them. I find that very few companies are equipped to do this! Growth is still important to growing firms. I didn’t hear anyone say they would be happy with no growth in 2001-2002. The consensus may be against growth for growth’s sake, but the consensus also includes the notion that, if you don’t grow, you cannot take care of your best people. That reason alone justifies why growth has to be a part of your plan for the future. Of course, everyone is concerned about profitability, and my guess is that growth goals will be toned down some to make sure that some semblance of profitability is maintained. And profits have been hurt, by the way. My best guess is that when the next editions of our various financial surveys come out, the typical firm will end up taking a hit for a third to a half of their profits from last year. But only time will tell….We had a lot of attendees from growing firms pair up with each other over the course of the two-day affair. In the end, I always come away from this event feeling energized and hopeful. And we can all use some of that right now!Originally published 10/29/2001.
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Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training. Zweig Group exists to help AEC firms succeed in a complicated and challenging marketplace through services that include: Mergers & Acquisitions, Strategic Planning, Valuation, Executive Search, Board of Director Services, Ownership Transition, Marketing & Branding, and Business Development Training. The firm has offices in Dallas and Fayetteville, Arkansas.
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