What it’s Going to Take in 1997

Dec 16, 1996

We’re in the throes of our annual business planning process here at ZWA. You know the routine— get everyone together, have an office party and a holiday dinner at a nice restaurant and spend a couple of days going over what everyone will have to do this year to make 1997 better than 1996. Don’t get me wrong. 1996 was a great year. We grew more than 40%, we made the Inc. 500 for the second year in a row, and we had some real success on consulting projects of all types and sizes. I couldn’t be happier. But to sustain that success, it’s going to take a renewed commitment to the principles our company was founded on. Since we practice what we preach, and our business is much like that of our readers (primarily selling time), I thought I’d share with you what I told our people at the kickoff of our retreat. This is what it’s going to take in 1997: New products and services. We need more to stick on our “shelves” if we are going to grow. Once a client likes you and trusts you, and likes to work with you, you need to capitalize on that by having lots to offer them. This is how you drive down marketing costs as a percentage of revenues and strengthen client relationships— they won’t need to go anywhere else. A continued commitment to serving existing clients. No business can find new clients fast enough to sustain a high growth rate. That means you have to take care of the current clients as a first priority. They should get the best people to do whatever they need done, not be used as a training ground for new people. Communicate with them constantly and return their phone calls promptly. They should be recognized by the receptionist/switchboard operator every time they call. They should never be taken for granted because you’re dealing with demands from a new client. Continued attention to the bottom line. I am not one of those people who thinks a business can cut its way to profitability. That’s like dipping into your principal, as far as I am concerned. But I will also tell you that every business needs to make a profit every year if it’s going to survive. This means, in addition to making the investments that bring us a brighter future, we have to keep a close watch on expenses so they don’t get out of hand. The biggest item on the expense line is labor. We can’t let staffing get out of hand. There are other items that have to be watched closely, too, including insurance costs, benefits, and marketing expenses. If any of these get too far out of whack, and the company can’t make hay when it should, they’ll be like a debt the firm has to pay out of future profits. And I hate debt! Heavy work ethic. We need our people to put in the hours necessary to get things done on schedule every time. This means they will be making personal sacrifices. We, too, as the owners of the business need to make sacrifices in order to create a climate where people want to work. To me, that means setting a good example by our own work habits; paying people what they are worth, not just what it takes to get them to work for you; not being stingy with benefits and other goodies; and creating an atmosphere of trust by sharing data on the financial condition of the business with everyone. Principals and associates who are turned on. Let’s face it: If the leaders of the company cannot get excited about the possibilities of the enterprise, how in the world will they be able to excite the rest of the employees? It won’t happen. Enthusiasm is contagious. There has to be a sense of wonder for what could be to get people pulling together. You better really like this business. If not, get out of it and find something less demanding. Good cash flow. No business can survive and prosper if it only shows paper profits. Those profits are only truly realized when you get the cash in hand. Clients pay their bills when they like you and trust you. But no client will pay if we don’t send them a bill, if we sit on work-in-process and hold it until next month or the month after. And another thing— clients don’t pay statements. They pay bills or invoices. Just because we want good cash flow, and want to stay out of our line of credit, it doesn’t mean we can justify not paying someone we owe money to in a timely manner. We’re obligated to always pay bills on time. There’s no excuse for not doing so. And becoming known as a “slow pay company” is not only embarrassing if you are known in the local community, it’s bad business. We all get a certain amount of business based on our reputation in a market sector or geographic area. Bad news travels fast. Creative marketing. I’m bored with most of the marketing messages I get bombarded with. There’s so much advertising on radio, TV, in magazines, in newspapers, in the mailbox, that I just ignore most of it. I don’t think the people we are trying to reach with our message are any different from me. They, too, are bored and turned off by most of the messages they receive. The only way I know to break through the boredom is to constantly do something new or different from the rest of the people who do what we do. Our readers are in the same predicament. Too many are doing the same old stuff they always did, marketing-wise— making more proposals, hiring business developers who are supposed to get out and sell, and wasting a lot of money on expensive brochures. Just imagine another industry that works like we do— one made up of a zillion small firms, all of which are doing the same old thing over and over, and most of which expect the new year to bring a better result. Kind of goofy, huh? I could think of other things it will take to succeed in 1997, but these are the main ones. I have a few things that are not requirements for us to have another good year. These include a continued boom economy (we are responsible for being successful in spite of adverse economic conditions that may arise); changes in government (we don’t want special treatment from the government— we just don’t want unnecessary barriers thrown at us); wholesale changes in our staff (no firm can afford to throw out everyone who is a little slow to keep up with the new version of the business); or major “home runs” in the form of super hot new employees, offices, or products (we aren’t looking to get rich quick, and I’m content to hit a single 9 out of 10 times at bat). Are you ready for 1997? Have you shared with your troops what it’s going to take in the year ahead? And if not, why not? Originally published 12/16/1996

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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.