A one-profit-center approach encourages teamwork across offices and disciplines, minimizing silos and supporting sustainable, firm-wide growth.
Architecture and engineering firms typically operate within three key dimensions: geography (where the work is performed), services (what work is performed), and business units (to whom the work is sold).
In a field where segmenting profits by these dimensions often creates unintended silos, ISG has taken a different approach – one that has scaled with our growth, reinforced our culture, and advanced firm-wide success.
Profit centers.
A profit center is a business segment tracked for its costs, revenues, and profit. Many firms adopt multiple profit centers to determine how earnings should be distributed. Small firms rarely segment this way due to scale, but as companies grow, the temptation to analyze performance by segment becomes stronger, especially with a finance and accounting team that can slice data across any of the three dimensions.
Multi-office firms often track each location’s performance. Others assess whether their architecture group outperforms their structural engineering team, or compare business units like education versus residential. While this data can be insightful, using it to guide compensation or decision-making can introduce risks.
Our story as a one profit center firm.
ISG has operated as a single profit center firm for more than 52 years. From a basement office to 16 locations and more than 580 employee-owners, that structure remained consistent even through rapid growth and acquisitions.
When we opened our second office, we considered segmenting profits. But we decided against it. As we expanded, we realized we lacked the systems to fairly allocate company-wide overhead to each office, and more importantly, we questioned the point. From the beginning, our mindset was simple: answer the phone, take the meeting, and say yes to the work, regardless of where it came from. That approach built service and client diversity, which became a core strength. What’s hot one year often isn’t the next. Flexibility and teamwork helped us thrive.
The purpose of each new office was to create opportunity for the entire firm. Project delivery often spanned multiple locations and assigning profits geographically would have discouraged the very collaboration we were trying to build.
Today, with offices across multiple states and several acquired firms, our systems can absolutely break down performance by geography, service, or market. And in limited ways, we do. Leaders need visibility. But how you use that information matters.
The risks of multiple profit centers.
Once compensation or bonuses are tied to segmented metrics, people start working the system. If you reward high utilization, people will charge as much time to projects as possible. If you reward project profitability, they’ll charge as little time as possible.
Multiple profit centers also create behavioral divides. If profits are tracked and shared by location, there’s little incentive to share leads, workload, or expertise across offices. We’ve recruited many professionals who were ready to escape that kind of siloed environment.
Traits of a multi-profit-center firm:
- Competitive. Drives strong performance in isolated units.
- Efficient. Prioritizes local goals and lean processes.
- Short-term focused. Optimizes immediate returns over firm-wide value.
Traits of a one-profit-center firm:
- Strategic. Supports long-term decision-making.
- Collaborative. Encourages communication and trust across teams.
- Integrated. Shares people, knowledge, and opportunity without hesitation.
No model is flawless. But firms with multiple profit centers must stay alert to unintended consequences. You may need to rethink profit-sharing to avoid internal competition. You may need more intentional communication to combat information hoarding. Otherwise, teams may optimize locally at the expense of the whole.
ISG has chosen the single profit center route because it aligns with our values. No one is disincentivized from sharing resources or ideas. Our only competitive focus is on ISG wins – firm-wide wins. When a new office opens, others rally around it, knowing their support won’t impact their own performance or recognition.
We believe that good behavior begets good results. Focus on doing what’s right, and the right metrics tend to follow. Our diversity across geography, services, and markets helps steady the business when external forces shift. We don’t have to chase short-term wins when we’re already playing the long game.
Scalable practices to reduce silos.
The single-profit-center model may not be for every firm, but the following practices can help reduce siloed behavior, regardless of structure:
- Align incentives with firm-wide goals. Compensate teams based on overall performance, not by office or business unit. This encourages collaboration and discourages internal competition.
- Use performance data wisely. Track segmented performance to inform decisions, but avoid using it as a basis for profit-sharing. Transparency is valuable when it drives learning, not rivalry.
- Promote cross-location and cross-discipline collaboration. Create systems that support workload sharing, joint pursuits, and knowledge transfer across offices and services.
- Invest in onboarding and integration. When opening new offices or adding services, provide support from across the firm. A rising tide lifts all boats when no one is penalized for lending a hand.
- Encourage long-term thinking. Promote strategic decision-making by reinforcing that sustained success matters more than short-term gains.
- Be intentional about communication. Guard against hoarding of information by building a culture of openness, especially where segmented structures already exist.
Silos break down when people have shared stakes in shared success.
Chad Surprenant is the chief strategy officer at ISG. Connect with him on LinkedIn.