- Marketing and branding. While so many in this industry complain about the perceived continual slide toward becoming a commodity, they do little to combat it. Differentiation is the key to fighting commodity perceptions and pressure on fees. A successful differentiation strategy will move your firm from competing based primarily on price to competing on non-price factors such as quality of service and final product. There are two issues that contribute to the weakness of differentiation strategies – avoidance of risk and just plain laziness. You must be intentional and willing to take risks by identifying where you are strong and where the competition is weak. Instead, we look to what others are doing and often mimic them. The result of this lazy approach is that nearly every firm in the industry is a “multi-disciplinary firm that offers cost-effective, innovative solutions.” The remedy here is to develop a true marketing function in your firm. I am not talking about hiring more proposal coordinators. I am talking about real marketing and branding talent that can work with your top leadership in developing a differentiation, branding, and promotion strategy that will transform the firm. If you want to learn more about this type of marketing, Zweig Group is launching a seminar titled Marketing and Branding for AEC Firms that will take a deep dive into this very subject.
- Growth plans. Another area that suffers from mediocrity is growth plans. Firms do not set high enough goals and then pursue those goals with an aggressive effort. Instead, we say we want to grow, but then we stay busy getting work done when the market is hot. When the market cools, we look back and wish we had done more to make that growth sustainable. I also run into firms that say they don’t want to grow for fear that it will change them into something they are not. When it comes to growth, we just don't get serious about it. The fact is, you either grow or you die. Which side of that equation do you want to be on? If you don't evolve and change in a growing way, you will certainly become somebody else – a nobody. The solution here usually starts with an authentic strategic planning process that is driven by research as opposed to philosophy. After you have a growth oriented vision and plan in place, you must work daily to execute it. Every operational decision must be done with the overall plan in mind, and the incremental steps taken that are necessary for ultimate success.
- Organizational structure. Another huge problem is firms’ organizational structure. Investment in staff in this industry is highly reactive. Furthermore, there is an inherent resistance to adding “overhead” or support staff until we are beyond crisis level. This reactive approach to building the organization breeds mediocrity. When the market is hot, we are all fighting for the same talent, often settling for any “warm body” we can get to help handle the work load. Our resistance to authentic strategic planning and organizational investment sets the table for the feast and famine cycles from which so many firms suffer. The solution here is to use the plan mentioned above to drive investment in staff and resources with particular attention toward marketing, recruiting, and IT. Those three areas are shown to drive growth in professional service firms. Research shows that firms that sustain 20 percent growth rates for three or more years all invest more in marketing, recruiting, and IT than average performing firms.
This article is from issue 1161 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.