Why Some Large Firms Miss Out

Apr 13, 1998

I just got back from a business planning retreat one of our Atlanta-based clients held at The Highlands Inn in Highlands, North Carolina. Highlands is an absolutely idyllic small-town setting. It’s like something from another era— very picturesque. But I did feel a little cut off— they had only one phone at the Inn, a tired “princess” model in an alcove off the lobby! The mayor, who looked just like Colonel Sanders, came over during dinner one night to greet us. He heard we were in town and volunteered to give us a personal tour of their water treatment plant. We passed, but appreciated the gesture. In any event, during one brainstorming session, we discussed ideas for new wacky benefits the firm could provide employees to make it a better place for attracting Generation X staffers. We also discussed new, non-traditional service areas they could get into. When this part of our agenda was done, one of the participants asked why more large firms aren’t doing some of these things. It was a really good question. With all the opportunities out there to do things better or to cash in on a new service, why aren’t more big firms taking advantage of the situation? Here are my thoughts: Too many of their owners and senior managers have already achieved their goals. In a mature company, with multiple owners, it is very typical to find that half or more of these people have already achieved or exceeded their career goals. Once this happens, they become more worried about preserving what they have and less concerned with building the firm. So no is action taken on opportunities that pop up. They have a narrow idea of what their firms will do. If all they think of themselves as is “engineers,” they might consider doing architecture or planning. But management consulting? Information technology? Executive search? Temporary help? Often, the reaction is: “these things aren’t traditionally done by engineering firms, so why would we consider it?” They look at the world through their own eyes. Most owners and managers of large firms in our industry are in their 50s and 60s. There are a few in their 30s and 40s, but they are the minority. Many 50- and 60-year-olds can’t understand why it’s important to have Internet access at every computer (they may not even use a computer!). They can’t see why flexible work hours are important (their spouses stayed home raising the kids so they could work constantly). They don’t see why casual dress is a benefit (heck, they wore a suit their entire working life and couldn’t even take their coat off in the office!) When you cannot see the plusses in a policy change, it’s hard to see why you should even consider it. They have to make a certain profit goal or the entire ownership transition plan falls apart. This is so common. Larger firms usually have been around a while. They often have lots of owners. These owners need to be able to make their stock payments. The stock payments drive the bonus distributions. Or, there are owners who want out or who already have retired and the firm can’t afford to buy their stock back. As a result, many times these firms become shortsighted. They don’t invest in new service areas, locations, or equipment that will make them more successful. “Defer all expenses” becomes the accountants’ mantra. They think “unconventional” equates to “unprofessional.” I cannot tell you how many times I have been in conversations with larger firms about using process marketing (as opposed to personal selling), or allowing employees to steal office supplies (they’ll do it anyway), or recruiting directly from a competitor (that’s what you want when you run an ad, right?), or about doing strategic planning as consultants to their clients (or providing other new non-technical services), and the reaction was that these things are “unprofessional.” I say it’s unprofessional to be close-minded, to not do what you should be doing so the firm is successful. So there you are— just a few of the reasons why some larger firms will miss out on the opportunities that could make them more competitive. This will mean lots of opportunities for smaller and midsize firms that don’t have these issues to deal with. Originally published 4/13/1998

About Zweig Group

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.