Surefire Ways to Kill Growth

Jul 23, 2007

Over the years, in the pages of The Zweig Letter, we’ve spent a lot of time trying to help companies grow. But the fact is many of those running and operating A/E/P and environmental firms don’t want to grow. They like the firm the way it is and don’t want new challenges to deal with. These no- and low-growth companies have owners who don’t understand that the value of their firms is directly related to size. They actually believe that they “can stay small successfully.” They liked things better “in the good old days” when the company was a lot smaller. If you are someone who wants to kill the growth in your firm and keep it from coming back, do as many of the following as you can: Have tired principals as your largest shareholders. The more burned out and discouraged your biggest shareholders are, the more likely your firm won’t grow. The employees will be disgusted with the lack of productivity at the top. The better they are, the more likely they’ll be to move on. Allow an uninspired CEO to take (and keep) the helm. This is one of the best ways to keep growth down— have Casper Milquetoast in the top job. He or she won’t be able to plot a course and inspire others to follow it. Growth will end as if by magic! View marketing as an overhead expense to be minimized. Why worry about other ways to halt growth when you can simply cut back on marketing expenses? Cutting marketing will surely put the brakes on revenue. Get completely preoccupied with profitability. This is one of the real secrets to cutting growth. Just focus on profit. That will ensure that you hold down marketing costs, recruitment expenses, hiring, acquisitions, and technology investments, all the things that make the firm grow. Forget acquisitions until all of your current problems are solved. Keep focusing on current problems— who has time for more? There’s no way an acquisition could be considered because the firm isn’t firing on all eight cylinders right now. Delegate the recruiting problem to low-level administrative staff. They’ll be sure to ask all the right questions that trip up job candidates because they see their job as keeping the bad apples out, not selling good people on why they should join the company. And there’s no better way to turn off a high-level design or technical professional or manager than to have them have to deal with a low-level admin person as their lead contact with the firm throughout the hiring process. This will certainly help keep hiring (and growth) down. Accept that 120-day average collection period as “normal for a subconsulting firm.” It’s simply unrealistic to think anyone can better this kind of collection period, right? Those firms that do interpro work and claim to have 70-day ACPs are lying, aren’t they? Don’t spend any money on IT. You believe that PDAs like BlackBerrys are just toys. This BIM thing is a fad that will pass. Who needs wireless capabilities? And each office can have its own system and do things the way it wants. It’s this kind of thinking that helps keep growth down. Adopt Draconian policies that run off your best people. Don’t allow anyone to wear anything but khakis and blue blazers to work. Make them turn in their pencil stubs to get a new one. Don’t allow anyone to decorate their cubicles— they must all be kept the same. The more of these kinds of policies you have, the better you’ll be able to hold growth down. Hire all your relatives, even if they aren’t the best individuals to do the job. Keep it in the family. That’s a good way to be sure no good people stay with the firm and make it grow. Use family members whenever you can, regardless of their qualifications. You surely won’t have to worry about growth! If you are someone who thinks growth is desirable and believes growth rate is an indicator of what the market thinks of your firm’s services, do not do any of the above! And if you do see any of these things happening in your company, point out how they are inconsistent with the firm’s need to grow. Originally published 7/23/2007

About Zweig Group

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.