Keeping the Growth Alive
Sep 16, 2002
I am sitting here this morning, in our Natick office, staring at my computer. I need to write a talk for our upcoming Zweig Letter Hot Firm 2002 Conference and Celebration in Boston. I am supposed to talk about how firms can keep the growth alive. And one thing keeps coming to me as a theme— you have to want it (growth) or it will not happen (not in this economy!). For whatever reason— call it religion or science or something we just don’t understand— your intentions can directly lead to certain outcomes. It applies to your business and your personal life. And as it relates to your design or environmental firm you have to want to grow— and want it bad— or subconsciously you will work against it. And while this statement applies to the leaders of the firm it also applies to everyone else working there. You are either on the pro-growth team or you are on the other side. So working from that premise— you have to want to grow for it to happen— that leads one to think about how to sell the benefits of that growth to the individuals in the company. You gotta keep selling the reasons why growth is good. Here are 14 reasons to grow: Salaries go up. Look at our salary surveys or those produced elsewhere. In almost any position category or firm type, the larger the firm, the higher the base pay (of course there are still exceptions in individual firms). Stock values go up. If you look at our valuation survey, there’s less variability in value as a function of revenue than there is in value as a multiple of book value or in value as a multiple of profits. All other factors remaining the same (profit percentage, cash flow, assets vs. liabilities), if you grow the revenues you’ll grow the value of the firm’s stock. Project size and complexity goes up. Bigger companies get bigger contracts to do larger projects. Clients want firms with diverse capabilities, plenty of staff, and a strong balance sheet to do their major work. Client quality goes up. It only makes sense that as the firm gets larger it can be more selective about who it works for. Opportunities for people to learn new things come faster. When firms grow they often move existing employees into jobs that they aren’t necessarily qualified for. That’s good for the individuals if they want to learn. The firm can have greater diversity in work. The bigger the company is, the more specialties and markets it can pursue, and through that diversity comes resilience. Employees stay interested. Employees who are part of a company that is exciting and dynamic are much more likely to be motivated at work and stay on the job. The owners stay interested. Owners who are challenged and feel that their investment is performing better than what they could get elsewhere will stay with the firm. Profitability improves. The facts are that growing companies are more profitable— not less— than flat companies. And it only makes sense. Revenues rise faster than costs in a growing company whereas in a flat firm costs creep up that erode the bottom line. Bonuses go up. The more profitable the firm is, the larger the bonuses they pay out to everyone (employees and owners alike). Employees may have more options on where they work. If the growth includes new geographical office locations, just having some options for where people can work may help keep those good people working in the company vs. leaving. The company gets more attention. Growing companies may get awards like our Hot Firm award or the Inc. 500 recognition that ZweigWhite was fortunate enough to receive twice in our history, and these things are good for PR. High-quality employees are more likely to seek out the firm. The word gets out on who is hiring, what companies have the good projects, and what firms are exciting places to work at. Support staff improves. The larger the firm gets, the better accounting, marketing, IT, human resources, and administrative support it can afford. Originally published 9/16/2002.
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.