Keeping a one-company firm

Jun 16, 2008

Too many leaders of firms in our business (and others) screw up their companies when they forget what the business is. It is one living system— a whole— not a collection of disconnected parts. That connection of all can be emphasized or separateness can be reinforced. More companies seem to pursue separateness. You can see it in how they do things. For example, treating each unit as a separate profit center is one way to build in “separateness.” The people in those units stop working to help the other guy because they aren’t paid to do so. And, any firm-wide efforts or initiatives that would make life better for all become hard, if not impossible, to implement. Arguments about what unit is the biggest beneficiary or what unit bears a disproportionate cost typically crop up. Organization of accounting information is another area that can reinforce separateness. If, for example, the company management says, “We are, first and foremost, one company”— yet reports all numbers based on Detroit, Cleveland, and Poughkeepsie, no matter what is said, the people in those geographic areas will do what is best for their area. That’s how the scorecard is kept. Business planning meetings. If you want wholeness, you cannot have separate business plans and planning sessions for each location or department in the company. Many companies in our business do this. The problem is it simply does not reinforce the idea that you are all one company. Instead, it appears as if you are a disconnected collection of parts, each doing its own thing independent of the others. Company parties. Many companies have different Christmas parties, for example, for each of their locations. This absolutely reinforces the idea that you are not one company, and instead a collection of loosely affiliated states. Different brands or names. Many firms in our business fall into this trap when they buy or merge with other, smaller firms. This is another situation that reinforces the notion you are more than one company and not a whole. Different compensation schemes. So many A/E and environmental firms have different “deals” for different people in the company. Someone gets paid X percent of the profits of her unit. Someone else gets an extra $50K if his threshold sales goals are met. Another person makes a bigger bonus than someone else because the entire bonus plan is subjective. This is just disastrous for any firm that is trying to create a single company and always a bad idea. The point of all of this is think big picture. “Divide and conquer” is not a viable long-term strategy. A changing world will require— more than ever— a one-company firm! Originally published 6/16/2008

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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.