I just came back from a management retreat with a client we first worked for a couple of years back. They are what I would call a mid-sized firm in a large metro area. And let me tell you, these people have literally re-written the book on what’s possible to accomplish, financial results-wise, in an A/E/P or environmental firm environment.So you can fully appreciate the story, let me first tell you a little more about this company. But please, don’t call to ask me who or where they are— I won’t tell you! Anyway, this firm routinely makes a 25-30% profit and grows by 20% a year. Their effective multiplier is 3.18 and their company-wide utilization is 71%. And they are always in a nice cash position. But don’t get the wrong idea— these guys are working for everyday clients just like everyone else. They just get better results. How do they do it? I wish I could say it’s a mystery. But it’s not. These guys simply take what they know works and apply it every day. Here are some examples:Business planning: Their management mantra is real simple: if you say you are going to do something, do it. That’s it. No excuses. The owners and managers like to talk a lot about what they call “dedication versus commitment.” The way they see it, if you ate bacon and eggs this morning, the chicken was dedicated to egg laying, but the pig was 100% committed! Rarely have I been in a firm that did everything they said they were going to do. But these guys do! It is almost a militaristic determination to execute the plan. Work in process (WIP) and accounts receivable write-offs: Not tolerated. That’s all you can say. No one is authorized to write-off WIP or accounts receivable, for that matter. And the president just hates to do it, so he rarely ever does. Yet they don’t allow their staff utilization to slip, either. Fall below 70% company-wide and action will be taken. The commitment to a profit is almost scary! Project budgets: Once again, the attitude of this company is that you will do the job within budget— no excuses tolerated. To hear them explain it, they are trying to do their employees a favor. They don’t want to see them working overtime or killing themselves, when, if their job were done within budget, it wouldn’t have been necessary. Client maintenance: The PIC role is taken seriously at this firm. If you are the PIC on a project, you are supposed to know that the client is satisfied. If a client is upset about something and calls the president, the president will chew out the PIC. The reason— he never should have gotten that call. Management style: I would characterize the overall management style in this outfit as “in your face.” If a criticism needs to be levied, it will be, in plain language with no sugar coating. These guys are not afraid or embarrassed about confronting non-performance in any staff member. Marketing: If you say you are going to make cold calls, then do so. If you say you are going to get more names in existing client organizations to sell to, then do it. Once again, the hard-nosed approach pays off with a consistent sales effort. Attitude toward growth: Grow, but never at the expense of profits. Having high profits makes it possible to pay everyone well, to keep up to date technology-wise, and to keep out of the line of credit. Therefore, making a profit every month is essential. Also, the president of this firm will not (as he puts it) “concede December.” There’s no reason they can’t make a profit in December— it’s just another month as far as he is concerned. Can just anyone make it in a firm like this? Nope. Some might find the self-discipline required to survive in this company a tad oppressive. Others might not like the way it feels to have someone in your face all the time. And most people just don’t do what they say they are going to do. But for those who are self-disciplined, who can tolerate criticism without being crushed by it, and who do what they say they will, it could be utopia. And like the Marines, these people don’t want everyone— they just want a few good men (and women) who are committed to a “company comes first” philosophy. Originally published 5/11/1998
About Zweig Group
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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