A lack of speed is a big problem for too many A/E firms. You all really need to pick up the pace!
When I was young, I had a need for speed. I was always looking to go faster. At the age of 12, I learned I could reach down and pull the governor on my three-horsepower Sears mini bike, and it would go a whole lot faster. I put on a set of straight pipes and rejetted the carburetors on my Honda CB160 when I was 13, and it went faster. I tried (and ultimately failed) to put a 283 Chevy V8 in my first car, a 1950 Ford, at age 16 so it would go faster.
It just went on from there, as I owned many popular pony and muscle cars in my youth. I was always cranking up distributors to advance the timing, opening up exhausts, changing carburetors and pulling off restrictive air cleaners to make my cars go faster. After finishing grad school, I traded my mobile home for a CBX Honda, a six-cylinder bike with 105 horsepower. As I got older, I got into V8-powered BMWs and Porsche 911 coupes. I owned a heavily-modified 1972 Kawasaki H2 750 two-stroke (known as a “widow maker”) for years. We put hopped up V8s in everything, from my restored 1930 Model A Ford, to my 1935 Ford pickup, and even into my 1951 Nash Statesman, increasing its horsepower from 85 to 434. One of my last company cars at Zweig Group was a 2016 Cadillac CTS-V that had 640 supercharged horsepower and would do a quarter mile in the high 11s. My current daily driver is a 22-year-old 6.75 liter V8 turbocharged Rolls Royce Silver Spur.
We discovered that many of our architecture and engineering clients liked speed, too. Eventually, Zweig Group (then known as Zweig White) started having CEO retreats at racing schools. We did formula cars and Dodge Vipers at Skip Barber, Winston Cup cars with Richard Petty, and motorcycle road racing with Freddie Spencer. More recently, we did a supercar driving experience on a race track.
But we aren’t here to talk about cars and motorcycles. We are instead here to talk about how to make A/E firms more successful. And I can tell you that a lack of speed is a big problem in the A/E firms I have worked for and with over the years. You all really need to pick up the pace!
What do I mean by that? Here are my thoughts:
- A lack of speed to fill jobs. Why are A/E firms so slow to fill their job openings? Not filling key roles quickly can impact client service, revenue, and profitability, and contribute to staff burnout. Time to fill jobs needs to be tracked and reported, and reduced as much as possible to avoid these kinds of problems.
- A lack of speed in billing. As hard as it is to believe, there are still small firms out there that don’t bill their clients throughout the month. Instead they wait until the end of the month to send clients bills, which is crazy. They also commonly spend days and sometimes weeks reviewing draft bills before sending them, which also hurts their cash flow. Billing has to be sped up!
- A lack of speed in collecting money that’s owed. Why so many cash-strapped A/E firms act as if their clients can pay whenever they feel like it is beyond me. Ninety days is NOT normal nor is it OK. Any firm that tolerates this kind of nonsense will need so much more working capital than those that don’t, and it’s commonly the reason companies in our business need huge accounts receivable (AR) lines of credit because they don’t do a good job collecting money owed to them just so they can stay in business. It’s crazy!
- A lack of speed to perform the month-end closing. Why A/E firms take weeks or months to close out a month is beyond me. It should be done quickly and within days of the period ending so you can tell whether or not you made any money. Stop making excuses and speed it up!
- A lack of speed in making bonus payments. Most firms wait until year-end to pay out any bonus money to their owners and staff. That is crazy! It is widely accepted that paying bonuses sooner to connect behaviors to results is much better. I prefer monthly bonus payments. My fallback, if I can’t get a firm to do that, is quarterly bonus payments. Paying out bonuses annually is too slow!
- A lack of speed in returning phone calls and emails. This is number one in my book, and the easiest thing anyone in this business can do. Being fast to respond is always appreciated by people inside and outside of the company. It shows the other people you think they are important. Speed it up and stop making excuses.
- A lack of speed in dealing with problems in the field. This is almost always a common complaint about A/E firms from clients and contractors. Time is money. And the sooner you deal with problems, the less likely they will mushroom out of control. Pick up the pace and improve your firm’s performance.
- A lack of speed to perform cost cutting. A/E firms are notoriously bad about cost-cutting. Billings can be down and backlogs low, and the pipeline can be too thin, and yet we still wait too long to cut costs. As a result, we dig huge financial holes that may take years to get out of all because we do not act when it is clear that we need to. I have seen A/E firms put out of business because of their lack of speed in decision making.
- A lack of speed in dealing with employee performance problems. You cannot wait until annual review time to confront performance and attitude problems with employees, yet procrastination and wishful thinking on the part of A/E firm managers rule the day in so many firms. The sooner you deal with performance problems in your employees, the better. One bad apple can spoil the whole bunch, so pick up the pace!
- A lack of speed in communicating everything. Whether it is the open-book management report that goes out to all, or getting word out after a critical project meeting about changes that will affect everyone else on the design team who wasn’t at the meeting, or providing notifications about policy or benefit changes, time is your enemy! Speed up!
I could go on here, but I, too, have to speed this up. It’s time to take a quick shower and get on with my day!
Mark Zweig is Zweig Group’s chairman and founder. Contact him at firstname.lastname@example.org.Click here to read this week's issue of The Zweig Letter!