More Than Just a Trend

Mar 18, 1996

Client-driven organization structures for A/E/P and environmental consulting firms are built around serving particular client types. Sure— it’s a popular management trend right now to be “client directed,” or “client centered.” But don’t think these structures are a short-lived fad! They’ve been around a long time, and will be here in the future. And believe me— firms that are organized this way are completely different from those with organization structures based on disciplines (i.e., mechanical engineering, structural engineering, etc.), or geography (Western Region, Eastern Region, Chicago, St. Louis, etc.). There are a few things I am certain about. One is that a client-driven structure (i.e., one that has divisions, units, or teams dedicated to serving client groups such as airports, correctional institutions, or colleges and universities) is the way to go. But a lot of architects, engineers, planners, and scientists remain skeptical. When I say this to firms that are shrinking and losing money, it’s not hard to convince them of the wisdom of changing to a client-driven structure. Successful firms are another matter. Managers and principals in a successful firm don’t always understand why a change should be made. They see themselves making 12%, or 18%, or even 27% profits, while growing by 10%, or 20%, or 30% per year, and say, “Why change?” I usually tell them that they’re successful in spite of their structure, not because of it. Then I go on to build the following case for a client-driven structure: Understanding of the client’s business is what the client wants. Is your structure set up for the client’s benefit or for your benefit? What elements in your discipline- or geographic-based structure reinforce the idea to your client that your people are specialized in serving clients just like them? How will they get this experience if their roles are to serve any and all clients in the region, or any and all clients with a particular technical problem? Clients aren’t stupid. Those who have been around the block more than once know what it’s like to have to educate their consultants on the unique aspects of their business. It takes time, costs money, and may result in a marginal product. No client will pay you to tinker around and dabble anywhere you want. They will pay you handsomely if you can combine a strong knowledge of their business with your particular technical skills. You can’t do a decent marketing plan or forecast for an office or discipline, but you can for a client-based unit. Think about it— did you ever have to do a marketing plan, or forecast demand for “electrical engineering services” in a multi-discipline firm that serves six or eight different client types? I have done it, and let me tell you— it’s darn near impossible. You have to talk with so many different people in the organization and then try to figure out what they will be selling electrically. Contrast this with having a “health care” unit or division, that does electrical, mechanical, special communications, and structural engineering. It’s much easier for the head of that unit to do a marketing plan. He or she is aware of all of the firm’s health care work and all of their possibilities for future work as well. He or she is in touch with the market. He or she can easily identify the potential buyers of the firm’s services, figure out how to reach them with the firm’s message of unique understanding, and implement that plan. But the typical office or discipline manager could be trying to sell what they do to the whole world, since the whole world needs their services. And that’s a hard group to reach with a message, believe me— especially if you have a limited budget! Departments or offices in traditional structures will work to perpetuate themselves, even if no one needs or wants what they do. This is a big problem. Think about asbestos consulting. Wouldn’t a firm that provides asbestos consulting services to school clients— along with architecture, mechanical and electrical engineering, and other things— be more willing to cut back on asbestos-related staff when the demand is weak, than a firm with an entire, stand-alone asbestos group would? Of course they would! There’s no fiefdom to protect at that level—instead, the fiefdom is defined as a client group, not a technical discipline or geographic market, which may or may not be needed. Kind of reminds me of the old story about buggy whip makers who kept making them even though no one wanted them— they eventually went out of business. Client-driven units don’t need to do a lot of research to find out what services are hot— they automatically adapt. This is one benefit that I don’t think many folks in the A/E/P and environmental business have really considered when they talk about client-driven structures. You don’t need to spend a lot of money on market research related to what services are up-and-coming if you are focused on client types. The clients will bring their needs to you, and you can decide whether you want to get into that business or not. The client-based organization structure actually helps the firm adapt itself to the market over time. And by the way— client groups are always buying something. They just aren’t buying the same thing from year-to-year, or decade-to-decade. It’s the services that change, not the client groups!! Client-driven structures provide a clear advancement path for technical people to become project managers and entrepreneurial managers. The discipline- or geographic-oriented structure requires that people be transferred out of the unit in many cases to become a PM. That can be an obstacle to strong technical people, since their bosses may not want to lose their technical skills. Quality of work is better. The difference is not in the quality of the calculations or the drawings, it’s in how well you understand and anticipate a client’s needs. You develop this second sense by working for the same client or client types repeatedly. That’s a fact. Still not convinced? Well, you go right ahead and keep doing what you are, because my guess is you’ll eventually come around to my way of thinking. Hopefully, the time you waste between now and then won’t be too critical to your long-term success. Originally published 3/18/96

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Zweig Group, a four-time Inc. 500/5000 honoree, is the premiere authority in AEC management consulting, the go-to source for industry research, and the leading provider of customized learning and training. Zweig Group specializes in four core consulting areas: Talent, Performance, Growth, and Transition, including innovative solutions in mergers and acquisitions, strategic planning, financial management, ownership transition, executive search, business development, valuation, and more. Zweig Group exists to help AEC firms succeed in a competitive marketplace. The firm has offices in Dallas and Fayetteville, Arkansas.