The 10th annual The Zweig Letter Hot Firm Conference is about to take place in Las Vegas. There will be untold celebrating (what happens in Vegas stays there, remember) from this year’s winners. But, what about the thousands of firms that used to be on the fast track of high growth that aren’t anymore? How can you resuscitate a once-hot firm that has cooled off?Let me start by telling you that there’s not one thing that will turn things around. It’s many. Nor will these tactics work in every situation. Some firms will simply never be able to reestablish their high growth. The magic could be gone forever. But, the solid majority of firms will benefit from doing the following:Make an increased investment in marketing. Do a little research project. Go back 10 or 20 years in your firm’s history and plot marketing expenses as a percentage of your net service revenue. Then, show revenue growth rate for each of those years. Do you see a pattern? I would not be surprised if a panic-inspired reduction in marketing expenses in 2006, 2007 or 2008 has led to a corresponding drop in revenue. Ramp it back up for a least a year and see what starts coming back. Pay out a percentage of your profits to everyone in the firm. There’s nothing that gets everyone fired up again more than being cut in on the action. Everyone enjoys a piece of the profit pie. And, stop being constrained by your past practices and pay it out monthly, instead of once a year. Change your stock valuation method. Maybe you need to stop using book value or multiples of profit as an internal stock valuation formula and instead use a percentage of revenue for some or all of it. This will, without question, encourage your owners to grow the firm because their personal holdings will be worth more. Move out a few duds. It’s always good for morale to get rid of those who don’t do what they should be doing. Recharge the growth engine by taking your foot off the brakes. Key people in charge of critical units need to perform, period. Non-performers are a drag on the spirits of everyone and you cannot afford that when you are trying to start growing again. Bring on a few new key people. Breathe life into the company by replacing the duds you canned with some new, motivated, capable people who will do their jobs. Getting these jobs filled with the right people is a critical priority if you want the firm to grow again. Be positive at the leadership level. It will never happen for you if you, as the leaders, are negative about your prospects to get the firm growing again. You must have a vision for growth that you can share. It has to be believable and you have to sell it to everyone in the company. Start something new. Get into a new service. Get into a new geographic region. Get into a new business. Do something new that has the potential to be a lot more than it starts out to be. None of these seven actions will serve as a magic wand that immediately creates growth, yet each can contribute to it. What are you waiting for?Originally published 10/26/2009
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.
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