Reflecting back on all of the A/E and environmental consulting firms that we came in contact with during 1992, one thought comes to mind. By and large, our industry’s management expertise has significantly improved. The bottom line— I am really proud of the way many of our clients are doing business today. This fact caused us to reevaluate our annual tradition of listing the “Bests” and “Worsts” of the year for 1992. Three or four years ago— maybe even as little as two years— it wasn’t uncommon for us to go into a company (in some cases fairly sizable ones) and see some absolutely absurd things being done. Here are a few real-life examples from the past: Five layers of management in a 21-person architectural department, with a full-time scheduler in addition to the department head. No follow up after an invoice was sent, and not sending second copies of the bill or reflecting what was previously billed but not paid up on any subsequent invoices. Three new Jaguars for the principals of a firm right after they told their staff there would be no bonuses that year. Charging each profit center 17¢ a piece for every single project description sheet they used, and accounting for all of this through an elaborate computerized MIS. Throwing out all unsolicited resumes that came in the mail because they weren’t in response to an ad. Paying $20,000 in annual overtime compensation to one technician while three others with the same background were only 60% billable. Having a drafting supervisor who didn’t draw and who managed only two production staff. Though the bulk of our consulting revenues come from identifying and solving problems, this year we spent more time in esoteric issues— the “fun” stuff like business planning, mergers and acquisitions, and organization restructuring. Even the smaller firms that aren’t supposed to have sophisticated management surprised us with what they’ve learned. The owners and managers of the A/E and environmental consulting firms in business today have proved that they are flexible, open-minded to new ideas, and willing to do what it takes to succeed, in spite of some pretty tough external environmental conditions. Some of the common philosophies driving this success include: Organization structure: A streamlined Board of Directors with less meetings and less focus on the details of the business; reduction in the number of management layers; accountability for everyone; clearly defined roles; separation of ownership from management responsibilities; and less use of committees were all common themes of 1992. Communications: More willingness to share firm-wide financial performance data, taking the mystery out of whether or not the firm is making money; more visits from the CEO to satellite offices; more scheduled conference calls and meetings between unit managers to discuss staffing, marketing, and scheduling issues; better staff performance appraisals; and more “management by wandering around” were all evidence of a newfound appreciation for better communications. Marketing: Focussing on developing clients versus projects; concentration on getting big jobs versus smaller ones; more creative proposals and presentations; a renewed emphasis on the benefits of selecting a firm versus what it has done previously for everyone else; more use of specialized campaigns to reach targeted market sectors; and more widespread use of computerized marketing databases were all common in 1992. Human Resources: Hiring the right person in the first place; less tolerance for non-performance; greater variability in individual staff members’ raises; more frequent bonus distributions; and heavy cost containment in employee benefits were some common themes in 1992. Quality: More emphasis on doing the job right the first time versus after-the-fact checking; more attempts to build rapport between designers and contractors through partnering; more emphasis and investment in staff training; a rebirth of the Principal-in-Charge role; and increased management attention to quality have again put this issue into focus. Automation: Dismantling of mainframe computer systems and their elaborate requirements (including support staff, maintenance agreements, and costly software updates); networked PCs on every desk; laptop computers and portable printers: CADD for all projects; voice mail message systems (with a receptionist to answer the phone); and car phones are all examples of how to increase staff productivity through automation. Acquisitions: Low cost, low cash investment acquisitions of smaller firms; a willingness to sell pieces of the business that aren’t performing; and more mergers to expand geographic and service markets were all common in 1992. With this kind of smart management becoming the norm as opposed to the exception, there’s no doubt that we are about to enter a new period of prosperity for our industry that could take us into the 21st century and beyond. I’m thankful to be in a position where I can see it coming! Originally published 12/15/1992
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.
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