I spend more of my billable time helping A/E/P and environmental consulting firms with their business planning than anything else. Most firm owners want to do more with their businesses, to be more successful. But whether they define “success” as growing their revenues, increasing their profits, becoming better known in their markets, or getting control over their lives, the bottom line is the same—they’ll have to change the way they do things. But as obvious as that may seem to some of you, I can tell you that effecting change in many of these companies is really hard work.Here are some of the obstacles to change that I typically see:The belief of management that anyone in management has veto rights with respect to the change. This is very common in second-generation firms that do not have a strong CEO/managing partner. Oftentimes, it is a reflection of the fact that at one time the firm did have a strong leader— the founder— and the second generation always resented that person’s ability to dictate firm direction or policy. Or, the second tier (now the ones in control) became dependent on that strong leader, and simply never learned how to make a decision and let the chips fall where they may. It’s almost always one of these two situations that has led up to the current condition. In either case, it paralyzes the firm and leads to a no-growth, no-risk posture of management. Nothing changes because any change is bound to affect someone in a negative way. There’s no way to resolve conflict because no one can (or will) make a decision and say “tough” to the others. The desire of management to get all employees to agree with the change. I don’t know where this idea of management ever came from. I guess it’s just an extension of my first point above. In some firms, the leadership is so weak that any employee who wants to can stop the firm from making changes. Usually, these firms have poor morale and higher turnover (in large part due to the weak leadership), and this, coupled with a lack of investment in recruiting capabilities, results in management’s fear to tell an employee, “This is the way it’s going to be— stay if you will support that, leave if you won’t.” I usually end up telling these firms that it’s management’s job to manage, and they should make the best decision that they can. Make it a good decision, one that’s right for the company, not just themselves. Then let it go. And I tell the employees that if they don’t like the way management manages, either vote in a new board of directors (if they can), or go to work somewhere else. No time devoted to communicating the logic of why the change will be made. Management, particularly in technical firms, is often anxious to get through this “B.S.” and get back to the real work of the firm (project work). Therefore they don’t spend any time explaining to the rest of the firm the whys and wherefores of their decisions. They often think that their people aren’t smart enough or don’t know enough about business to understand. And, in A/E/P and environmental firms, they’re usually wrong. We employ intelligent people and our business is relatively simple. The “hand-in-the-cookie-jar” syndrome. One reason change initiatives fail is that management, deep down inside, feels that they are somehow screwing the employees. They feel as if they will be perceived as having “their hand in the cookie jar” if they change the bonus plan, or revise the accounting so it impacts having offices as profit centers, or whatever. So, their guilt keeps them from doing what might truly be best for the firm in the long haul. Inability to make any sacrifice. Many change initiatives are attempts to get the firm growing again. Growth comes at the expense of short-term profits. That’s the way it works. You spend money on marketing, on recruiting, on new employees, on computers, on lawyers, and on consultants, to buy companies, to buy stock, to build up a cash reserve, to pay off debt, or whatever. It all costs. Don’t spend the money and you won’t grow. That means someone may get less in bonuses this year— employees or shareholders, or both. It’s O.K. if the longer term gain will benefit them in a bigger way. Once again, leadership needs to spend time communicating the vision and why it’s good for everyone to make a sacrifice to get to the promised land. Unwillingness to confront the problem. Always a problem in this industry. We think of ourselves as “nice,” and we don’t get ugly with those who fight change for personal, selfish reasons. Consultants instead of “insultants.” You can’t be a change agent if you are afraid to step on some toes. I got upset with a minority shareholder of a firm at a retreat we were conducting for them recently. After two grueling days of discussion and coming to some significant philosophical agreement with their top managers on a new direction to take, this guy, on the last morning of the session, when we were supposed to be making nitty gritty implementation decisions, decided to challenge the whole direction once again. An important fact was that he missed the bulk of the previous day due to some project-related issue; now he didn’t mind making the other 16 people there go over everything one more time so he could be convinced. When I told them, “Next year, don’t have me back if you are going to allow people to come and go,” he reminded me that they “were paying me.” The implication being that I was supposed to sit down, shut up and do what I was told (let him run us off course and fail to complete the plan). I told him I wasn’t an order-taker, and that it was a waste of their money to go through all of this again. The point is, we did get past it, even though I didn’t enjoy the confrontation and I’m sure he didn’t either. We would have failed if I had allowed this guy to sidetrack us. But most consultants would have been afraid that upsetting this guy (who incidentally, is respected in the firm) could cost them their client, and that would have hurt the outcome dearly. If you do hire outside help, get someone who can afford to lose you as a client.No question about it, change is never easy. But sometimes, just getting the leaders talking about it philosophically can help set the stage to actually do it. Originally published 11/08/1997
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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