Satellite Offices

Sep 26, 1994

I have tremendous respect for any A/E/P or environmental firm that has learned to successfully manage a network of satellite or branch offices. It's not easy. There's no question that having multiple offices greatly complicates this business, as any CEO knows. How can you keep control over the work quality put out by a branch? How much rope should you give the manager? Too much, and he might hang himself. Not enough, and he can blame you for failure. What do you do to make sure the people in the remote offices feel like they are a part of the overall company? How can a typical branch be competitive when it has the overhead of a big firm, but the locally-based capability of a small firm? All these issues and many more require constant attention by top management. Here are some things that are important to the successful management of branch offices: The office manager has to buy into the firm's culture. It helps if the manager has actually worked at the headquarters at one time or another, but that's not always possible. Local market knowledge is probably essential to the ability of a satellite office to sell its own work, which means the manager probably hasn't worked at headquarters. But you can bring the manager back to the headquarters office frequently. Your principals can go out to see him. And you can include him as an active participant in the overall business planning process. Get a manager who assumes responsibility for generating the work for his office. The last thing you want is a manager who sees his role as caretaker of an office that is a consumer of man-hour budgets on projects sold by others. If that's the way it works, why have that office? This mentality prohibits success. Track sales and profits by office. Don't let those who claim this causes unhealthy competition keep you from holding people accountable for performance. Usually, those opposed to this kind of measurement are the ones who aren't carrying their weight. Link up electronically and have appropriate policies that reinforce the use of underutilized staff, no matter where they are located. This is essential to moving work between offices, a requirement for profitability. Not being linked electronically virtually ensures quality and production efficiency problems from work that is divided up or passed back and forth. And even though each office must create its own work, there may be times that a peak needs shaving or a valley needs filling. One way to do that is move people. Underutilized staff should be used in any role they can fill, even if it's not the highest or best use of their capabilities, and even if they are not ideally qualified for the job, as long as quality doesn't suffer. Don't ignore the little things that demotivate satellite office managers and their employees. By "little things," I am talking about the common practice of not including branch office employees in the internal company newsletter, or putting the headquarters office address in big bold letters and the satellite office addresses in little tiny letters on all "corporate" marketing pieces that are supposed to be useful to branch offices. Another thing that upsets satellite offices is when they get the hand-me-down surveying equipment or clapped-out company cars as that stuff is replaced with new equipment in the main office-- a big demotivator! Confront any office manager who uses animosity toward corporate as his primary motivational tactic. Office managers who rally their troops by focusing on the internal enemy called "corporate" or "headquarters" cannot be tolerated, no matter what. While this tactic does work, sometimes for quite a while, the divisiveness it creates can eventually tear a company apart. I can't tell you how many times I have seen this culture in a satellite office lead to an eventual coup attempt or separation of the office from the rest of the company. Allocate corporate overhead to the satellites. On one hand, I can see why satellite office managers gripe about their corporate overhead allocations. The typical remote office has a hard time competing with similar-sized, locally owned operations that have lower overhead. And the support these satellites get from corporate isn't always fantastic, nor are the benefits of what corporate is doing effectively sold to the satellite office managers. But on the other hand, the costs of operating a multi-office business are real. And in many cases, if the satellite was to independently contract for all the services it gets from the home office, the total costs would be even higher than they are under the allocation. Firms that do not allocate overhead often have the problem of branch offices that think they are more profitable than they really are. Then, when they don't get the share of the profits they feel they deserve at bonus time (based on an inflated profit figure), it just fuels their animosity toward the home office. No doubt, the headaches of running a multi-office A/E/P or environmental firm are real. But the ability to do so is essential for the principals of most firms in this business to achieve their goals. Originally published 9/26/1994

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