Rolling Rally Highlights

Jul 12, 2004

A couple weeks ago, a motley group of A/E firm principals and I went on a 700+ mile ride on two-lane roads through some beautiful countryside in New Hampshire, Vermont, and just a little bit of Maine. There was good riding, good food, and good fellowship all around. We had a few problems but nothing serious. Aside from a failed relay in Tom Novellino’s BMW (or B. M. “trouble u” as some of us like to call them!) that kept it from starting, and the time I nearly lost Chuck Hollingsworth’s rented Harley Road King Classic when the front end washed out in the soft mud parking lot of the inn on our second night (Chuck is CEO of Engineering and Environmental Consultants, Inc. (Tucson, AZ)— I traded my vastly superior 2003 Goldwing GL1800 with him for a piece), we had no mechanical or rider mishaps. We all made it back from our ride safe and unharmed. While we all had a great time, we also managed to get some work done. Our meeting on the second day was an intense personal discussion amongst all of the participants on a wide-ranging set of topics. I thought it might be interesting to our readers to hear just a smattering of what we talked about that day: Recognizing star employees without pissing everyone else off isn’t easy. This is an area that virtually everyone is concerned with. And there are no simple solutions to this problem. No one has enough stars or does all for them that they’d like to. But bonus plans can backfire— especially those where someone is publicly singled out in front of the group to receive a special reward. One of the managers in the firms represented at our meeting told a story where one of their second-tier managers gave a special bonus to a new employee in front of everyone else that was not well-received. And free dinners and babysitters, while undoubtedly nice gestures, can be perceived as the boss overplaying the benevolent dictator role. Not everyone in this business buys into open-book management. While more owners are accepting the notion that their employees are intelligent people who want to be kept informed on how the business is doing (after all, their futures are tied to it!), not all believe that the benefits of sharing financial information fully outweigh the costs. One of the principals in our group cited a recent example where he had his competitor’s financials in hand, courtesy of one of his disgruntled employees. This owner, while not particularly fearful of it himself, had other partners who never wanted anyone to see their own financials. You have to have your personal plan and not everyone can have or will have the same exit strategy. The fact is that none of the firms represented at our ride can entirely divorce the business planning process and the ownership transition/ leadership transition processes from the principals’ own personal plans. The two are hopelessly intertwined. Responsible principals learn to balance their needs versus those of the firm. They make appropriate decisions on where to allocate resources in the firm as well as how and when to get out of the company. Not every firm needs multiple offices. All of us agreed that adding additional offices greatly complicates the businesses. Some firms— those that have such a niche that so few other providers can offer— may be able to get away without having multiple offices. Other firms that do everything for everyone in a particular geographic area are pretty much forced into opening new offices at some point if they want to keep growing. And the dirty secret is that not everyone wants to keep growing. At the same time, most principals (and certainly those in our group) agreed that to admit that is foolish as it will undoubtedly send a bad signal out to the rest of the employees. It’s a quagmire, for sure! Organization structure— one size doesn’t fit all! Some firms work better with each office or department serving as a profit center, and other firms work better with each discipline or client type being a profit center. What structure is best depends on a whole host of factors, including— but not limited to— what the firm’s overall strategy is, what services it provides, and what kinds of clients it serves…not to mention the firm’s history and culture (those things are much harder to get away from than you might think!). There are people who own small firms that make a lot of money. But small firms cannot count on growth if they don’t specialize. And as mentioned above, everyone recognizes that growth is essential if you want to retain good people today. There are just too many options for the best folks to compromise their careers and hitch their wagon to a sinking star. Most people I see who don’t want to grow their firms end up with no one working for them at some point. If it happens earlier than the owner wanted it to, they may have a problem! You will never get everything fixed in your firm before you go buy another. It seems like just about every CEO is facing this issue. They want to do strategic acquisitions to keep their firms growing, and yet many of their principals and other employees cannot understand how they could be considering such a thing when there are many other problems that have yet to be solved. We all agreed— if solving all internal problems is a pre-condition to acquiring another company, forget acquiring! The real role of HR people is to recruit. All those in the room agreed that in general, HR people de-emphasize the importance of recruiting and instead tend to concentrate more on liability matters, benefits, and other aspects of their role. Everyone needed more help with recruiting key difference-makers— whether the problem was their location in a smaller city in the Deep South, or that they wanted to grow at a faster rate, or that they just weren’t seeing the top-level job candidates who could take the firm into new areas. Harleys may look cool, be reliable, and have great resale value, but they still don’t go like a good Japanese or German bike. Before I get a rash of hate mail from our Harley-riding readers, I will tell you that I appreciate the nostalgic feeling one gets with two huge pistons going up and down and an uneven firing crank. The galloping lope of a Harley V-twin is the closest thing I’ve come to riding a two-wheeled horse. And some of them are as pretty as can be. On the other hand, why someone would pay that kind of money for what is essentially 1939 technology, when you can buy something with an engine that is 30% larger and has 6 cylinders, ABS, linked brakes, electronically adjustable suspension, six-CD changer, integrated helmet-to-helmet communications, electric reverse, and a power trunk for the same or less money, I will never understand. Different strokes for different folks, I guess! Originally published 7/12/2004

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.