In the new year, remember that we're responsible for creating our own luck. You can start by focusing on these five things.
While I am no longer an owner in an AEC firm (other than the design/build/development company I have with my wife, which is down to owning only a single commercial center), I spent more than 40 years in this industry and keep my eye on it closely.
Here are the things I would be focusing on in my firm in 2022 if I still was an owner in one:
- People. It’s a cliche, but people are everything in a professional service business (well, almost everything – people, brand, and reputation!). I would be working on how to keep making my business a better place to work – a more caring place, a place with real opportunities, a place that constantly reinforces the idea that good people can build a career there without feeling like they are compromising their opportunities, standards, or personal ethics to work there. That is a big, big challenge. Money is part of it – and that won’t be there if the firm isn’t profitable – but it certainly isn’t all of it. Flexibility in when and where one works is critical. A real sense of purpose for the business is crucial. And lots and lots of feedback for people is essential. I also firmly believe there is no way to have real trust between employees and management if you are not an open-book management company.
- Costs. Everything is going up in price. That is going to strain profitability. But profits are essential if you want to provide real opportunities and rewards for your people. So costs have to be managed very closely. One of the bigger costs is office space. Don’t have too much of it. Another is overhead staff. Don’t let that get out of control. Firms in this business have a tendency to add too many non-billable staff when things are going well. I have seen it forever. Don’t do it. Work on your processes and systems so that it takes FEWER people to run the place. Get rid of all unnecessary steps in everything. Simplify. And cut back on meetings because they absolutely destroy your productive capacity and hurt morale at the same time.
- Marketing. You may not think you need to do this because business is booming, but marketing is critical for your firm to be positioned to do well when things aren’t so great. It will also help you earn higher fees which is critical to your profitability. Do the brand building you should be doing. Do more original research. Build your client database. Make use of all social media platforms. Work on visibility – better project signage, office signage, company clothing, company vehicles, etc. – because these things will help you be top of mind for your clients and potential clients. Focus on responsiveness and making your firm easier than any other to deal with. That’s why I use the bank I use. That’s why I buy so much from Amazon. That’s why I buy cars from two specific dealerships. That’s why I use the attorneys I use. I’m not unique – a lot of busy people feel the same way and act accordingly.
- Technology. Anything you can do to make things easier will cut down on the number of non-billable staff you need to run your business and help facilitate working remotely and getting the best people for the project working on what they should be focusing on. Reduce complexity. Reduce involvement of people in decisions that they don’t need to be involved in. Make it possible to find information quickly and painlessly. Your business will be greatly impacted by these things.
- Transition. A lack of transition planning kills a lot more firms in this business than we may want to admit. It’s because it is a slow death that we don’t always recognize the cause of it. The founders/major owners won’t get out of the way. They stay too long and suck too much out of the company. They slowly run off the best people because they won’t pass the baton. Don’t be like that. The sooner you start, the better. If you don’t have good people to pass the reins over to, get some now. And please – for heaven’s sake – do a financial model that shows how much capital will be exiting the firm looking ahead each year. Not doing this is irresponsible. And finally, keep your ears open to sell the firm to someone else who WILL invest in it to keep it successful. Sometimes an external sale is the best thing for your people, not the worst.
I could most definitely go on here but won’t. Good luck in 2022 – but perhaps more importantly, remember that we create our own luck every day!
Mark Zweig is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.
Click here to read this week's issue of The Zweig Letter for free!