Market sector-based organization structures

Seven good reasons to look at implementing a market sector-based organization structure in your firm.

I have long been an advocate of market sector-based organization structures. Susie Peden introduced me to the idea of market sector-based organization structures when I was working at Carter & Burgess’s Fort Worth headquarters back in 1986. We hired her away from another local firm, Freese and Nichols, as our marketing manager and she immediately had a positive impact.

At that time, Carter & Burgess was way too dependent on land development-related work and needed to quickly diversify into other market sectors, including transportation, aviation, U.S. Postal facilities, U.S. Army Corps of Engineers, industrial, etc. In her first weeks on the job, Susie came up with a new scheme to do that, and organized all of our marketing efforts along market sector lines. She created a unique graphic icon to represent each sector and then developed market sector-based marketing and promotion plans for each, working with someone as a lead technical or design professional from one of our three offices and many discipline-based departments.

The results were fantastic. Over time, the line (production) organization reflected the client-facing, market sector-based marketing structure. And while there were most certainly a few hiccups along the way, such as assigning the wrong person to head up a particular sector, or defining a sector that didn’t really have buyers with common wants and needs, the firm became very successful, growing over a couple decades from what was then a 250-person company into a more than 3,000 person company that was eventually acquired by publicly-traded megafirm Jacobs. And while we at Zweig Group (then Zweig White) worked with Carter & Burgess over about 15 years to help them recruit hundreds of people and buy a number of other companies, I credit the market sector-based marketing approach with being fundamental to their incredible success.

So, here we are near the end of 2021, and there are STILL companies in the AEC business that don’t understand why they probably shouldn’t just operate as geographic and/or discipline-based firms. While it is hard to understand the resistance of some firm owners to this idea, I do understand that not everyone has the same perspective that I have acquired after studying and working with literally thousands of firms in this business over the last 40 years. So here are some good reasons to look at implementing a market sector-based organization structure:

1. Clients predominantly hire AEC firms based on their experience working with other similar organizations to their own. I think most people in this business will accept this statement as the truth. If not, why do so many RFPs and RFQs ask for that kind of information? Clients don’t want their professional service providers learning about their business or industry on the client’s dime. Clients know that service providers that have worked with the same issues and problems they are facing are bound to do a better job for them. So that is a huge factor in deciding who they work with.
2. It makes it easy to identify who you are trying to market to. If you define a market sector as a group of clients with common wants and needs, then to figure out who you are trying to reach all you have to do is find every one of those organizations within whatever is a reasonable geographic proximity to your firm (in some cases that could be a specific city and in other cases it could be the entire world), and identify everyone in those organizations who could hire you or influence the decision to hire you. Now you know exactly who you are trying to reach, and can design a program to reach them using a variety of tactics.
3. You can do marketing and promotion plans for each market sector that are customized to the sector. Everyone clearly doesn’t want the same thing. That’s why you are marketing this way. You can use unique colors, logos, different media, show different things in photos, highlight market sector-based research done by you or from secondary research sources, talk about different kinds of problems solved or opportunities capitalized on, put the spotlight on different people in your organization, and much more. Working on a marketing plan for a single sector is much, much easier than for the firm overall. Just ask anyone who has done it.
4. You will not end up with individual offices or departments accidentally competing with each other for the same project. This can happen and does happen in firms where their geographic offices or technical disciplines are profit centers and treated largely as stand-alone small companies. And when it does occur, it looks bad and is damaging to your reputation. No one can afford that.
5. It better facilitates selling all of your service lines to a single client. Because the same person is responsible for a multi-discipline/multi-location group of people who can do it all for a client, you don’t have the problem of having to buy someone else’s services internally to sell to “your” client, nor the risk that that group won’t perform to the standards you feel will be acceptable to that client. This is a large and recurring problem with firms in our industry.
6. You will be better able to apply the best talent to the client’s projects no matter where those people may be physically housed in your company. If someone is located in an office 500 miles away you can more easily use that talent when they are part of the same business unit you are in. This, again, is critical. It improves the quality of work that you do for your clients and helps make the company more efficient and more profitable.
7. You create more than one good job for your business- and marketing-oriented design and technical professionals to go into. Instead of people striving to become office managers or department heads, market sector leader jobs are some of the most powerful roles in the company. These jobs allow design and technical professionals to build specialized businesses under the auspices of the primary company, and have well-rounded and gratifying roles in the business where they can be recognized for what they accomplish. Everyone wins.

So there are seven good reasons to implement a market sector-based structure in your firm. I could probably come up with seven more, but how much more justification do you need to take out a clean sheet of paper and try to figure out if this idea could work in your firm?

Mark Zweig is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.