What to do if your Hot Firm cools
Nov 03, 2008
The Zweig Letter Hot Firm List for 2008 is chock-full of success stories. Many are incredibly inspirational and serve as great examples of planning, execution, and character. Some Hot Firms have even been on the list many years in a row. But, right now, as I write this article, the entire economy is in a crisis. There’s a real state of uncertainty out there. No doubt, an end to the presidential election will help— it always does. But, this time is different. We’ve got a real mess on our hands. We can debate the causes and cures all day, but one thing is for certain. It can affect all of us. So what to do if your Hot Firm— one that’s been hot for a while— suddenly cools off? My first thought is this— it’s hard. It is really hard to go from high growth to little or no growth. That takes its toll on the owners’ morale and on the employees’ morale as well. Don’t underestimate how important this growth has been to everyone’s mood. Now that it has clearly been interrupted, acknowledge the effect it has been having on all of you before doing anything else. When growth stalls, retirement plans may be pushed aside, turnover increases, and valuations drop. On top of it, it’s embarrassing for some of us who are owners, people who are simply used to winning more than losing and to seeing a constantly-improving set of numbers. None of this is fun stuff! My second thought is that now is not the time to rationalize. It’s OK to try to figure out why the growth stopped but do not fall into the trap of thinking (and worse, saying!) that everyone’s growth has stopped. That is not true. There will be new firms on The Zweig Letter Hot Firm List next year who weren’t there this year as well as some repeats— the growth may have stopped for you but it will not stop for every firm! My next thought is now may be the time to really overcommunicate with your people. Tell ’em everything, good and bad, so they aren’t kept in the dark. Keeping your people uninformed about the situation and then springing negative-sounding policies, mandates, or decisions on them is not the way to keep your folks positive (and working there). Information reduces fear. My fourth thought is you should stop beating yourself up! Yes, it would have been nice if the rocket ride to the top never ended. But, how realistic is that? All good things must come to an end some time. It doesn’t mean it’s an “end” end… it’s just the end for now. My next thought is that you shouldn’t lie about it. If things have slowed down a lot, don’t tell everyone who asks that you’re “having your best year ever” unless that is absolutely true. Some people will tell you “business is great” no matter how bad it is. I used to advocate that approach myself, but today I know better and dislike that greatly! I’m not suggesting, however, that you wear your heart on your sleeve and act as if everything is black, either! While no one likes a known liar, even less enjoy spending time with “Debbie Downer!” My last thought is, “Don’t give up!” The growth can and probably will return IF you believe it’s necessary and possible, and IF you do what is required of you to bring it back. Don’t give up— fight back! Be a smarter businessperson next time you have a chance to restart the firm’s growth. Don’t make the same mistakes. Do a better job looking ahead. Don’t underestimate the importance of always finding new ways to market yourself and new services to sell. Don’t ignore danger signs when they present themselves. Be sure to invest in the things that keep you growing— marketing, hiring key people, technology, and mergers and acquisitions. This is just a temporary lull— you’ll be back! Originally published 11/03/2008
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.