Get everyone selling!

Screen Shot 2016-10-11 at 9.22.31 AMYour entire staff can sell the firm, and don’t forget, there’s no such thing as a completely internal role that doesn’t affect the brand.

When it comes to business development, professional service firms typically have extremely tight parameters on who in the firm should be empowered to sell. Historically, this industry has suffered from the illusion that those who sell must be good at two things: projects and golf. Those parameters – in addition to the one where you must be a flaming extrovert – greatly inhibit a firm’s ability to sell work. The fact is that every person in your firm affects the brand and thus affects your ability to generate new business.

Although it is important to train and motivate those who interact with clients on a daily basis, it goes far beyond that small group. The firms that make marketing and sales a part of the culture, involving everyone on staff, can greatly outperform their peers. You see, everyone from the person who answers the phone all the way up to the CEO has a profound impact on how your firm is perceived. Those perceptions drive the brand and greatly influence your competitiveness. You are fooling yourself if you think that your glossiest, high-level licensed professionals can single-handedly shape a client’s perception of working with your firm. To expand the effectiveness of sales, you should consider these steps:

  • Assess where you are. This could involve several methods, all aimed at painting a picture of how you are perceived by your clients. The common approaches include a client survey and internal tests of your people. An initial client survey should be conducted by a third-party and should gather information on how well your firm is living up to the client service promise you are making. Ongoing client feedback can then be gathered using internal people or tools. Additionally, internal assessments need to be made to analyze the service delivery quality on things such as phone answering, speed, and ease of reaching people. Internal assessments could include things like a secret caller program where you assess how easy it is to contact people your clients are calling. You will likely be shocked at the information gathered here.
  • Define where you want to go. Having a strong and compelling mission and vision are more than just buzzwords in a strategic plan. If they are articulated correctly, they can be a powerful driving force that the entire firm can get behind to produce real results. The key to success here is everyone in the firm must know what they are. Additionally, they must understand the benefit and importance of their participation in that pursuit. When the entire firm is energized to grow and build the business, they all can see their role in the plan.
  • Start being the firm you want to be. Take the good, the bad, and the ugly of the self-assessments and be intentional about correcting the deficiencies. Train everyone in the firm to reflect the desired brand attributes in their respective roles. All employees need to understand that no matter what their role, they ultimately affect the way the firm is perceived by clients and thus how the firm prospers or declines. There is no such thing as a completely internal role that does not affect the brand. Tell all employees that growth and selling is everyone’s job and make sure they have the proper tools and training to execute that mission.

Too many firms have too few people thinking about selling services and growing the firm. An entire company that is focused on projecting a unified and clear brand is a company that will sell more work. A company that is aligned with their clients’ perceptions and constantly working to improve service in every category is a company that will thrive in good times and bad. Good luck!

Chad Clinehens is Zweig Group’s executive vice president. Contact him at

This article is from issue 1168 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here to subscribe or get a free trial of The Zweig Letter.

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

Shedding the negative energy

Screen Shot 2016-03-11 at 8.21.14 AMAnyone who knows me can tell you I’m about as “New Age” as the 1930 Model A Ford sitting in my garage awaiting its flathead V-8 transplant. That said, there really is something to the idea of shedding your negative energy.

I’ve been through a hard summer. Won’t bore you with the details. We all have our individual stories to tell and I’m sure some of our readers have it much harder/worse than I do. But when you get negative it makes you think about how to turn things around. Here are some tactics that I use – good times and bad – to keep the positive energy flowing:

  • Let go of your resentments. Don’t let anyone have that power over you. No matter what someone has done to you stop obsessing over it and move on. That said, don’t be stupid and put yourself in the same position to let history repeat itself.
  • Let go of your enemies. We all have them. People we don’t like for one reason or another. In some cases we’d actually like to see them suffer. Not good. Not helpful to you one bit. Stop devoting any energy to negative thinking about these people.
  • Smile more. Force yourself to do it. It is interesting how when you just smile and greet people in a store such as Wal-Mart (yes – I live in Arkansas – we can even get haircuts there), how people react to you. Some don’t react but many return the smile or pleasantry. And everyone feels better – most importantly YOU!
  • Pick your employees carefully. Who you have working with you does make a big difference. Negative, “can’t do,” and angry/hostile/bitter people are a cancer that will spread. I have seen it time and time again – the damage these people do is never worth their contribution. Shed yourself from it.
  • Pick your friends carefully. Associating with winners and people who have successfully overcome obstacles in their lives will help you feel better. They will encourage you rather than discourage you. That is helpful – especially compared to those who are suffering and want to see you feeling bad, too. Misery loves company, as they say.
  • Do something positive. It could be as simple as cleaning out your garage or attic that you have been procrastinating on, or starting a simple exercise regimen three days a week. But accomplishing something – no matter how small – will help you think more positively.
  • Change your diet. You are what you eat. If you eat healthy food, you’ll feel better. When you feel better you’ll be more positive. There really is a link here. That isn’t saying a big ol’ steak and baked potato are bad – but maybe you should lay off the donuts.
  • Have some time to reflect. This could be your morning workout, evening walk with the dog, or a 300-mile motorcycle ride. Solitary activity where you can disconnect, even if briefly, from the electronic tether, will help increase your positive energy.

Some think there is only so much positive energy to go around. I disagree. I think it is unlimited. But it is up to you. You get what you put out – good or bad. It’s time to shed the negative and get back to the positive – because it is in YOUR best interests to do so!

Mark Zweig is Zweig Group’s founder and CEO. Contact him at

This article is from issue 1168 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here to subscribe or get a free trial of The Zweig Letter.

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

Paid time off. Really?

Red umbrella fly out from crowds of black umbrellas

When recruiting big talent, don’t let little details in the benefits package get in the way of making a winning offer.

I’m amazed at the need that exists out there for great talent. Firms in the design industry seem to be ramping up on bigger and better projects all over the country. Every firm that we speak with has a tremendous need for gifted engineers, architects, environmental consultants, and planners. Given the current state of affairs it always surprises me when a client, who desperately needs to hire excellent people, is willing to draw a line in the sand on benefits that could easily be modified to attract and hire top candidates.

I’m reminded of a recent situation with one of our clients. They asked us to find a good project engineer for their growing site development practice. They are in a competitive part of the country when it comes to engineers, and we told them they would probably have to pull out all the stops to bring someone on board. We found a great young woman who works for a competitor in the same local market as our client. She had all the skills required to do the job, and for all intents and purposes would have been an excellent choice.

But there was one problem.

Our client focused on the fact that this candidate received five weeks of PTO, and they only wanted to offer her three weeks of PTO to start because, “That’s just how they did things.” This scenario may sound familiar to some of you reading this. We see this situation all too often. It could be PTO, the employee cost of health care, remote working possibilities, etc.

In the design industry, we deal with a finite number of human resource options. When great candidates are sitting in front of you, work hard to not only sell them on your firm and the opportunities that exist there, but also help them overcome any objections that may come up. Some things can be fixed and some cannot.

Another issue that came up with our client was that they compared this candidate’s situation to a family member of one of the principals who was seeking a job moving from one company to another in a totally different industry where the supply of workers was plentiful. He said, “She was willing to take a cut in vacation time to work at the new firm!” We acknowledged this but had to remind our client that his family member was looking for a job, and this good project engineer was at her firm for more than a decade and was not currently looking for work. Big difference!

At Zweig Group we deal with candidates that are not actively looking, and this raises the bar in the recruitment process because firms have to remember that you can’t just throw any old offer out there and expect it to be accepted because your company is so great. You have to take into consideration any leverage that the candidate may hold based on their current work situation.

Now, if this project engineer came to us and was looking for new opportunities, then this conversation and negotiation and hiring process may be different. But, that’s not the case.

We told our client that if this engineer checks off all of the boxes for them based on the current need they should move forward and make an offer. We didn’t want them getting hung up on the PTO issue. You should always make room for negotiation in every offer you make. And, you should take stock of all benefits the candidate currently has so that you can structure your offer correctly.

Whether it’s an extra week of vacation, student loan payments, health care co-pays, or timing of the first salary review, it should all be up for negotiation. You just have to figure out a way to make it work. It may sound daunting, but it’s not. The more you get creative with your offers, the better chance you have of landing that great talent.

Randy Wilburn is director of executive search at Zweig Group. Contact him at

This article is from issue 1167 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here to subscribe or get a free trial of The Zweig Letter.

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

Whose hero are you?

C8063AC75FMy Dad, Fred Zweig, died on August 16. He was born in 1920 – lived a long and, for the most part, happy life. He grew up poor in St. Louis. His mom was married five times, so he was bounced around from place-to-place as a kid. But he was smart and curious. Read everything he could get his hands on. Taught himself to do everything.

His first “real” job was taking cars apart in a junkyard. Later he worked in a stove factory. He eventually became a shop steward there. When WWII broke out he tried to enlist. They wouldn’t let him in because of his eyesight. By early ‘43 they changed their mind. He enlisted and then went to Officer’s Candidate school. Became a 1st Lt. in the 6th Armored Division under Patton. He fought in Belgium, Germany, Luxembourg, and elsewhere in Europe. Barely survived some terrible battles and got his Silver Star for gallantry in action.

After the war he married my Mom, started selling advertising and quickly became a real life “mad man” of advertising. We had a modern architect-designed house my parents built in the late ‘40s. He had a white ‘56 Jaguar with red leather. We got a new Country Squire Wagon in ‘57 and a new “wide track” Pontiac Catalina convertible in 1960. By the mid-‘60s my Dad had grown disillusioned with advertising and moved into broader-based management consulting.

“You can’t solve all their problems with just marketing,” he used to tell me.

He then devoted more time to his other passion – helping people unleash their full potential to live their lives to the fullest. He believed that a repressed fear of death held people back more than any other thing, and that the fear had to be confronted for them to be able to make decisions and act. He preached this gospel up until the very end.

While this is probably all more than any of you need to know about my Dad, he served as a great example for me on how to live life. “Critics be damned,” he never worried about money (even when he should have!), and instead followed his passions and instincts to live according to his own standard. My brothers and sister and I all benefited from that example. We are his legacy.

So the moral of the story is this: Whose hero are you? What are you doing to further mankind? How are you giving back? What kind of example are you setting? Whether it’s your children – or your employees – the bottom line is the same. You CAN make a difference in the lives of others. The choices you make – how you spend your time and who you spend it with – will determine your ultimate success or failure as a professional – and as a person. We all have to do something – make it something great, something worth doing – and you’re bound to create a wake of goodwill behind you.

MARK ZWEIG is Zweig Group’s founder and CEO. Contact him at

This article is from issue 1167 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here to subscribe or get a free trial of The Zweig Letter.

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone


Business Concept: Close-up the Acquisition button on the keyboard and have Lime, Green color button isolate black keyboardWhile the numbers behind failure are staggering, when you look at the characteristics of successful M&A transactions, the math is pretty simple.

M&A transactions can fall apart for dozens – maybe even hundreds – of good reasons. There are obstacles and challenges every step of the way from starting the process until closing. No checklist could map all of the uniquely frustrating ways that deal-making can turn from exhilarating to infuriating. When you think of the individuality of every buyer and seller, not to mention all of the personalities involved and the emotions invested in the process, it sometimes seems like a miracle that transactions ever get to the closing table at all! I may not be able to list all the elements of failed M&A transactions, but I can say with confidence that all of the successful deals I’ve been involved with have had three basic characteristics.

  1. Communication. Communication skills are critical in explaining your business, your management style, the value drivers of your company, and in building the relationship with the other side. Clear, straightforward communication lets you confront issues and discuss challenges head-on. M&A is about being transparent in your motives and your goals, in addition to talking through the problems, not avoiding them.
  2. Building trust. I tell all of my clients to talk about whatever they want on the first call, but to focus the whole time on whether they trust the person on the other end of the phone. My (rather scientific) litmus test is to ask my client – buyer or seller – if they’d leave their dog in the care of the person they’re speaking with. If something in your gut is giving you pause about the person you’re dealing with, the deal almost always falls apart. The opposite may not necessarily be true – you may trust many of the individuals you speak with during the M&A process, but there’s only one party to the transaction – but I have yet to work on a deal in which my client says that they do not trust the person they are dealing with. M&A cannot be an adversarial process – it’s about building a trusting relationship and teaming up to create a brighter future for everyone involved.
    Lack of trust is expensive. Waiting to share information, or sharing information a bit at a time, just extends the time before the parties can understand if they are in the same ballpark in terms of value. Excessive due diligence – beyond what is reasonable to confirm what you thought when you made the offer in the first place – takes up the time of expensive people.
  3. Accepting risk. Successful deals negotiate risk transfer and identify the real value drivers early on in the process.
    I can’t tell you how many deals fall apart because one side has rejected any iota of risk. Buyers that are unwilling to accept standard business risks find themselves overpaying for firms that don’t need to be acquired. In the real world, key clients and star employees can walk out the door. Competitors can win work you thought you’d be able to get. These things happen. By the same token, selling your firm doesn’t absolve you of all of the stresses of running a business once you sign on the dotted line. You’re still on the hook for plenty of the risks and liabilities associated with your business. Sellers are paid a nice chunk of money on the belief that they are handing over a business that can generate future cash flow. Reps and warranties, earnouts, and employment agreement are reasonable requests from buyers to mitigate these cash flow risks from being different than represented.

I’m sure there are many more characteristics of successful M&A deals, but these seem to be found in deals of all sizes and when working with buyers and sellers. Email me with some of the other “tried and true” characteristics you’ve found in the market – we’d love to hear from you!

Jamie Claire Kiser is Zweig Group’s director of M&A services. Contact her at

This article is from issue 1166 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here to subscribe or get a free trial of The Zweig Letter.

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

Set them free

Open the LockArbitrary or unduly bureaucratic rules demotivate employees, impose unnecessary constraints, and can even spark an office rebellion.

Years ago, I started work at a new office where I had two administrative assistants supporting me. One late afternoon in my first week, I walked out of my office to go speak with a colleague and noticed one of the assistants sitting at his desk with a notebook at the ready. He was just sitting there. I asked him what he was doing and he told me he was waiting for me to go home.

I was dumbfounded. In a very caring, but not-so-subtle manner, I ran him out of the office and told him to never do that again. He was not allowed to simply wait for me to leave. If he was done with his work for the day, he could leave at any time, even if it was before the end of the “normal” business day.

  • Tell your employees to go home. Your employees have lives outside of the firm. Encourage them to attend life events, such as evening classes, youth sporting events, or midday school events. If their personal life is in order, chances are their work life will fall into place.
  • Make your expectations explicit. Let your employees know what is expected of them, so there’s no guessing. According to Zweig Group’s Policies, Procedures, and Benefits Survey, 97 percent of firms had a policy manual, so use that space to make your expectations clear. Make your policy manual electronic, so anyone can refer to it at any time.

The culture of that organization had been such that you were expected to stay at the office until after the boss went home. If your boss left at 6 p.m., you left at 6:15. When you left at 6:15, those under you left at 6:30. And so on. The idea was that “you never know when the boss might need something.” Crazy!

The same went for the morning. If the boss normally showed up at 7 a.m., you showed up at 6:30 to prepare for the questions he may have when he arrived. Likewise, those working for you showed up at 6 to be ready for your questions. Utter insanity.

All of this meant that if you were at the bottom of the ladder, your day began before 6 a.m. and ended sometime after 6:30 p.m. It’s hard to motivate younger professionals when they’re caught in an accordion time trap.

  • “Normal” hours for your business need not be restrictive. Just because your office is open from 8 a.m. to 5 p.m. doesn’t mean everyone needs to be there the entire time. As long as someone is available to handle calls from clients, you’ve got it covered. It’s okay to have flexible schedules.
  • Try to understand what your employees do to support you. You may be surprised at the things they will do to keep you looking good.

In another office, I watched a department manager direct her salaried employees to remain at their desks until 5:30 p.m. every day. She thought they had been leaving too early each day. In reality, her team members worked hard every day and they were exhausted by the end of the normal business day.

So these outstanding engineers and project managers did what others might do when pushed too hard under arbitrary rules. They rebelled.

At 5 p.m., when people from the other departments were heading home, they put away their work and sat there. Some stared at the walls of their cubicles. Others read books. The lucky ones with windows simply stared out of them until 5:30 p.m. At exactly 5:30, they left the office.

This game of defiance lasted for about two weeks until the department manager’s boss called her into his office and taught her about the inverse relationship between arbitrary rules and productivity.

  • Set them free. Holding your employees captive in the office until some magical point in time does not make them want to produce better results. There will be times when you need to put in 14-16 hour days to get a job done, but most days shouldn’t be that way, so don’t needlessly burn out your employees.

I once had a boss whose office was two time zones behind mine. He expected me to be in my office until he left at the end of the day “just in case he needed to reach me.” I was supposed to wait for his call (that may never come) until after 7 p.m.

I somewhat sarcastically reminded him that there was this really cool invention created by Motorola decades ago, called the cellular telephone. And I didn’t need to be in my office to use it!

Since I was 2,786 miles away from him, he really had no idea if I was in my office or not.  Surprisingly, he pushed back on my suggestion that he call me on my cell phone and not my office line. Eventually, he relented and began calling my cell phone whenever he couldn’t reach me in my office.

  • Unhook the tether. Provide your employees with a cell phone. According to Zweig Group’s 2016 Cell Phone & Mobile Devices Survey, 96.5 percent of respondents stated they use a cell phone for work-related business, yet less than 15 percent of partners and principals and only 10 percent of project managers are provided one by their firm.

Don’t think you have any arbitrary rules? Ask your employees. They’ll tell you exactly what those “unwritten” rules are and which ones need to go away.

Bill Murphey is Zweig Group’s director of education. Contact him at

This article is from issue 1166 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here to subscribe or get a free trial of The Zweig Letter.

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

Nothing but net

Scoring the winning points at a basketball gameIf the recent case of NBA superstar Kevin Durant can teach us anything, it’s that the recruitment of rare talent takes an equally rare effort.

The NBA free agency period that recently unfolded was quite the spectacle. Even the most marginal of the league’s talents got huge paydays. But the biggest headline this offseason was the signing of forward Kevin Durant by the Golden State Warriors. His move to California helped crystallize the fact that good talent is hard to find, but when it is, it should be chased with reckless abandon. Plenty of teams did just that, but only one claimed the prize.

Everyone put on their best presentation to persuade one of the most talented players on earth to join them. The Boston Celtics even had Tom Brady, the four-time Super Bowl QB of the New England Patriots, meet with Durant in an all-out effort to bring him to Beantown. Durant and his agent spent the July 4th weekend at a private home in the posh Hamptons, where they fielded several meetings and conference calls with a variety of teams. When the process was over, the Golden State Warriors emerged as the winner of the “Kevin Durant Sweepstakes.”

The Durant recruitment process is like what we see in the design industry all the time – a lot of firms going after a finite supply of great talent. Finding it is not easy and requires a concerted effort by everyone involved in the recruitment process. Firms always have to put their best foot forward and to know exactly what it wants.

Here are some key takeaways from the Durant recruitment process that design firms can learn from:

  • When trying to hire, you always want to put your best people on the job. Your hiring managers should be able to represent the organization not just from a discipline and technical standpoint, but also a cultural standpoint as well. This approach will speak volumes to anyone that you’re recruiting.
  • In the 11th hour, the Warriors brought in NBA Hall of Famer Jerry West to speak to Durant. According to sources involved in the process, West said a few things to Durant that made a difference. West talked about what it means to win championships and what it’s like to be part of a team with great players. A good hiring manager will help a candidate understand what they’re getting themselves into and why joining their firm will help the individual grow from a personal and professional perspective.
  • Every NBA team in the process had a plan for how they were going to approach Durant. Recruiting good candidates requires you to have a strong plan in place to ensure you answer any question or concerns that the candidate has so they can make an informed decision. Firms should highlight the great projects they are working on. You want to help the candidate visualize how they will fit into the grand scheme of things within your organization. A clear articulation of how the candidate can advance within the firm is also necessary.
  • Firms should also consider having some of its most talented employees come in and meet with prospective candidates. They can articulate their experience and help sell the company at the peer level. Most teams that went after Durant had some of their current players in the room to speak to him about life on the team from their perspective. This approach helps a candidate to envision what life would be like working for the firm. The Warriors went the extra distance by flying in Stephen Curry, Draymond Green, Klay Thompson, and Andre Iguodala – all of them 2015 NBA champs. According to Durant, this level of attention to detail in the recruitment process made the difference for him and led to him joining the Warriors.

You may not be in the market to recruit one of the best players in the world, but you can take a few things away from the process. Take stock of how your firm recruits and see if there are any modifications that could improve the candidate experience. If there are, make the adjustments. And don’t be afraid to go big.

Every candidate that you recruit needs to be treated with the utmost care and should have a clear understanding of the benefits of joining your firm. If you take the stance that you are doing them a favor by meeting with and interviewing them, you run the risk of alienating your firm from someone who could be a real asset. It never hurts to put your best foot forward at all times, especially in the recruitment process. You never know, you may be interviewing the next MVP, I mean CEO, of your firm.

Randy Wilburn is director of executive search at Zweig Group. Contact him at

This article is from issue 1164 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here to subscribe or get a free trial of The Zweig Letter.

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

The problem with HR gatekeepers

Screen Shot 2016-05-24 at 9.04.19 AMI love human resources people. Believe it or not, I was one of them once. I even authored the only hardcover book published on the topic for the A/E industry, Human Resources Management: The Complete Guidebook for Design Firms, published nearly three decades ago by John Wiley & Sons.

HR people can do a lot of good for their employers. They help with new employee integration, create and manage training programs, help keep employ benefits high and costs low, draft policies, and try to keep you from being sued. That said, HR people can be a real problem when they see themselves as gatekeepers with the task of keeping bad people OUT of the organizations they work for.

What I’m talking about is making HR – or rather making the wrong HR person – the first point of contact for all matters recruiting-related in your firm. When you have someone whose entire recruitment orientation revolves around keeping the bad people out vs. getting more good people to come in, they will kill your growth. And that‎’s very bad.

Growth is related to profitability. Rapidly growing firms (20 percent or more annually), are significantly more profitable than average firms (they make about 70 percent more profit). They are also better places to work because they create more new jobs for their employees.

These HR gatekeepers kill growth for one reason. There are never enough qualified people who will jump through all the hoops they create to support a growing company. Think about it. Do you think the BEST people out there would be willing to give a presentation on their skills to a potential employer? It’s been asked.

Or would the BEST people be willing to fill out a lengthy on-line job application and provide four references when they haven’t even decided to leave their current employers? I see this regularly.

Or would the best people be willing to suffer through a 70-question phone screening interview? ‎Seen it, even recently.

The BEST people – the ones you should be trying to hire – are not unemployed and desperate and dependent on you. It’s the other way around. They have a million options. They want to be sold on why they should consider working for you instead of the dozens – or hundreds – or even thousands of other companies out there in this business.

Don’t assume HR gatekeepers are necessarily the best way to hire people. You need HR people – particularly line staff – who are adept at making good people feel at home from the moment they speak to them on the phone through every visit they make to your office. In this way you will always have choices among good people to hire when you decide you have a need.

Don’t dismiss my advice here. This is a much bigger deal than most companies realize!

Mark Zweig is Zweig Group’s founder and CEO. Contact him at

This article is from issue 1163 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here to subscribe or get a free trial of The Zweig Letter.

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

Why is your firm for sale?

Screen Shot 2016-07-20 at 12.22.12 PMIf you figure out the answer to that all-important question on the front end, you’ll have a great chance of closing on the right M&A deal.

One of the key responsibilities of any business owner is to lead their firm on a path for solid, sustainable growth – and to be open to evolving as the market demands and opportunities arise. Steady growth can mean organic growth – expansion by developing your own resources, or inorganic growth – expansion through M&A. But in order to convince someone else to join your firm, you need to be able to clearly communicate the vision you have for what the future could be like if the firms join forces.

Failing to communicate the vision and the strategic fit is a common misstep that does not apply just to buyers. Too often, we hear sellers that do not really know what they bring to the table. It is very hard to pitch a firm to a prospective buyer when we have no idea what we are “selling.” Is it capability? Expertise? A niche? Why this particular buyer? Why are they interesting to the seller? The selling company’s CEO needs to be able to effectively explain to potential buyers why the future would be better for the buyer if they combined entities. Establishing the reason for the conversation and aligning each firm on why this decision makes sense can help both sides ease the tension that inevitably comes from exposing your business to the scrutiny of an outsider, and can help keep the focus on the future, not just on the past.

One of the first questions that potential buyers ask us when we contact them on behalf of sellers is the motivation for the sale. Buyers want to understand what the seller wants – is it a retirement strategy? A growth play? Is the seller tired of the day-to-day of running the business? Do we need “big firm” resources to go from average to spectacular? The answer to this question is an important one, and one that potential buyers will assume an answer to before the first conversation. Managing the answer to that question requires some introspection, and often some coaching from a consultant or trusted advisor as well.

Regardless of the firm’s current performance, unless the potential buyer can get excited about the future of the firm and the ability to add value to the buyer’s clients, employees, and capacities, you will be hard pressed to close a deal that isn’t perceived as a “turn-around” attempt. Strategic buyers can bring an open mind to the table and can get excited about how the firms may be able to work together. But they should not be expected to fill in all the pieces themselves. Instead, buyers should be ready to answer what they do exceptionally well, how they can take that model and apply it to other companies, and why the employees and clients of the seller would be happy to be part of the buyer’s enterprise.

Leaders of both firms need to talk constantly, respond immediately, and remember throughout the process the “big idea” that got them talking in the first place. That “big idea” – the overarching value proposition that drove the decision to pursue M&A – can be a link that binds firms when the negotiation gets tough.

Jamie Claire Kiser is Zweig Group’s director of M&A services. Contact her at

This article is from issue 1163 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here to subscribe or get a free trial of The Zweig Letter.


Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

2016 Principals, Partners & Owners Survey: The stress & long hours taken on by firm owners does not go unrewarded

Zweig Group just released the 2016 Principals, Partners and Owners of Architectural, Engineering, Planning and Environmental Consulting Firms Survey. Over the past 30 years, this publication has picked the brains of some of the industry’s top talent and gleaned interesting insights from how they run their businesses to how they view the industry today.  As always, some interesting statistics were derived from the responses of the seventy-five principals and partners who contributed to the survey. Ninety-five percent of respondents were owners in their firm and over half of them owned at least 25% of their firm.  That is a considerable amount of ownership when you think about the net service revenue (NSR) of the firms represented, whose mean and median NSR were $9,004,000 and $4,100,000, respectively.

These are professionals who have devoted their life to the industry and who have most certainly taken their licks along the way.  In the 2014 Principals, Partners and Owners Survey, only 4% of respondents thought there was any possibility that they could be laid off in the coming year.  This year, that number was up to 12%.  Though this has been a profitable few years for A/E/P firms, the outlook for the next few years is somewhat uncertain.  Blame it on the election year or general economic trends, but owners of A/E/P firms are well aware of the implications of underperformance. Though only 12% took a pay cut last year, the median pay cut for a principal was 25% of their base salary.  Now that is a significant reduction in income!

We also found that most principals (76%) were generally pleased with their careers and had met or exceeded their career goals.  In fact, even more (82%) would recommend the career path to a friend or family member.  But becoming an owner in a firm is not an easy thing to do!  Most owners must have 10 years of industry experience, be with their firm for five years and have both a bachelor’s degree and professional licensure.  And that is just the beginning.  Nineteen percent of respondents said they had to purchase a minimum amount of shares to become a principal.   The median ‘minimum amount’ of shares to be purchased was 2% (which could be a considerable sum of money!).  Twenty-two percent said they received at least some shares through incentive programs and 49% said they had to borrow money to purchase stock or an ownership percentage in their firm.  A quarter of respondents borrowed money from their firm at an average rate of 3% over five years.

What does the typical day of an owner look like?  Are they spending more time managing the firm, marketing and developing business, or providing technical design support?  An interesting discrepancy we found was that principals in firms with a declining growth rate over three-years were only spending 7% of their days on marketing and business development.  These same owners felt like they should be spending closer to 40% of their days on marketing and business development.  This is a large gap and represents the importance of proper marketing and business development initiatives at the ownership level.  In comparison, owners in fast growth firms are spending over 20% of their day on marketing and business development initiatives.

The stress and long hours taken on by firm owners does not go unrewarded, though.  The average base salary of a firm owner was near $140,000 with 22% of that base being awarded as an additional bonus, and another 28% being distributed as a shareholder distribution.  This brings the total compensation for an A/E/P firm owner up to around $200,000.  Not too bad for a year’s work!

Zweig Groups 2016 Financial Performance Survey found that the median utilization rate, or chargeability rate, for A/E/P firms was 60%.  This is calculated by taking the firms direct labor costs and dividing them by total labor.  Chargeability is a metric that is often used to determine how effective a firm is at using its labor resources. For an owner, frequently the most effective use of their time is spent working on projects that are not directly billable.  We found that most owners were less than 20% chargeable.  Firm management, marketing and leadership activities were the highest priority, non-chargeable functions that respondents cited as daily activities.  Though hourly billing rates decreased this year from 2015, the average billing rate for a principal was still $178 per hour.  Environmental consulting firms had the highest median billing rate at $218, while single discipline engineering had the lowest median rate at $143 per hour.

Being an owner in an A/E/P firm certainly has its perks, but it is also a job that comes with lots of additional challenges.  To an extent, you are in charge of your employees’ well-being, their families’ well-being, and you are exposed to the volatility of the market.  When business is good owners are making great money, but they are also having to really put in the extra effort to make sure their firm is performing.  When times are not so good, as an owner, you are still responsible for the firm and its employees.  These are only some of the challenges that principals, partners and owners face.  But when it comes to job satisfaction most owners cite that it is both financially and emotionally rewarding.  If you are thinking about becoming an owner in a firm or starting your own, this is publication is a must read!

Click here to learn more about the 2016 Principals, Partners, & Owners Survey:



Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

Collect your money

3OEXFDXO6KThe subject never gets old and you can’t talk about it enough. Collecting money. Architects and engineers are horrible at it!

There are several reasons for this problem, including:

  1. ‎Poor self-image. If you don’t think you deserve to get paid – guess what? You won’t get paid! That applies to so many architects and engineers who willingly take the abuse from bad clients who mistreat them. As someone who is a real estate developer myself I can tell you 80-90 days to pay a professional service provider is NOT normal. I feel bad if we take 30 days to pay ours. You should not work for a client and expect to be treated poorly! You deserve to be treated well!
  2. Can’t get bills out. Some firms simply won’t send bills out. A geotech we have used, for example, has sent us some bills as long as eight months after the service was provided. We have to call them and ask them to bill us. Sorry, but that’s ridiculous! Should never happen. Your clients should not be calling you asking for an invoice. And the longer you wait to bill – the less likely you’ll ever collect. Hire someone if you have to and get the damn bills out.
  3. Won’t use “good cop/bad cop.” The actual people who are the front-line service providers (i.e., principals and PMs), should not be the ones asking the client to pay them unless there’s a problem related to what they did. This is the domain of the F&A people (finance and accounting). Use them for it! Protect the relationship from awkwardness by putting your accounting folks out there to do your dirty work. They don’t mind. They really just want to get paid so the firm can pay its bills!
  4. Won’t follow proven, established procedures. There’s a science to this stuff. We have written a million articles on it as have many others. Do certain things and you’ll get paid faster. Don’t do those things and you won’t get paid. Don’t over-complicate it and don’t act like you are the first firm in the world to deal with this problem. You aren’t! There’s a process you need to follow. Your bills need to look a certain way. Certain things should generally happen at certain times. And by the way – don’t let any principal who wants to stop the process stop it. That’s bull.

This week’s issue is all about our Hot Firms and Best Firms to Work For. ‎These companies are generally much better business people than the norm for our industry. Look at how they do things. Copy. Repeat. And then maybe we can all be partying together at next year’s Black Tie Dinner and our Hot Firm Conference and A/E Industry Awards Conference (we’re at the Arizona Biltmore in Scottsdale this year!).

Meanwhile, collect your money!!

Mark Zweig is Zweig Group’s founder and CEO. Contact him at

This article is from issue 1162 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here to subscribe or get a free trial of The Zweig Letter.

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

Are you in a marketing rut?

Postcard-MockUp_3Take a good hard look at your firm and what it’s saying to the world. If things appear stale, it’s because they are. Fix it or lose out.

Here are ten signs it’s time to make a change:

  1. Your marketing plan has been updated every year, but almost nothing has changed since 2007.
  2. Your social media strategy consists of the following:
    • Your boss routinely asks you how many Facebook followers the company page has and each new one is celebrated.
    • You haven’t had the time or inspiration to post anything on Twitter in a couple months, but it’s on the schedule for next week.
    • The most exciting thing on your Facebook is a picture of the company BBQ from the 4th of July – it even has a picture of Kathy from accounting eating some ribs that Bob made.
  3. Your firm’s president still thinks SEO is “one of those useless trendy marketing acronyms.”
  4. You only have one target audience and it’s mostly repeat clients.
  5. You’re very excited to start designing the firm’s Christmas card – in June!
  6. All of your press releases focus on new hires, except one from that time three years ago when a bridge project you were affiliated with was finally finished after 10 months of delays.
  7. You’ve been planning a website update for the past three years, but no one from the management team can decide if your firm’s name should be changed to a five letter acronym or keep all the last names of the founding partners in full.
  8. The professional photographer you used to take pictures of projects for your brochure has since retired and now lives in Pensacola.
  9. All of your graphic design work is done in MS Paint.
  10. Your prospective client list still contains the names from a tradeshow you attended in 2008.

If things are going well for you, and they probably are, you might be feeling that a shake-up or change would be unwise. But if you’re guilty of one or more of the above, it might be time to reevaluate your marketing plan, budget and staff. Change, invest, and re-invigorate yourself before it’s too late.

If you’re like much of the industry, 70 percent or more of your work comes from repeat clients. It’s a precarious position to be in. Would you like to ride your current wave of prosperity until you crash on the shore during the next market downturn? New firms are entering the market every day and old firms are finding new ways to innovate and market themselves. Don’t sit still and get comfortable with the same marketing methods and the same clients. It’s a matter of when, not if, you will get beaten by the competition.

Want some help? Contact me, or check out our upcoming A/E/C Business Development Training | Becoming a Better Seller Seminar  November 10 in Atlanta, GA.

We also have the 2016 Marketing Survey of A/E/P and environmental consulting firms. 1446739392-Msurveycover_web

A Guide To and Samples of Press Releases 

Christina Zweig is Zweig Group’s director of research and marketing. Contact her at

This article is from issue 1165 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here to subscribe or get a free trial of The Zweig Letter.

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

Crisis mode

Screen Shot 2016-07-13 at 1.06.13 PMA good communication plan is vital when things don’t go your way, so put a little thought into who’s going to do the talking when people start asking questions.

Not a day goes by that you can’t find a story about a company trying to explain why something went wrong with their product or services.

Oftentimes, the stories are about something related to the company’s performance. Chipotle recently had issues with food safety at its restaurants. Macy’s and other department stores reported less than expected earnings. Lululemon, the fitness wear company, had complaints about the sheerness of its fabric.

How a company responds to a crisis can literally make or break it. Take too long to get your message out and people think you’re hiding something from them. That lack of communication can lead to mistrust in your company and in your leadership abilities, and that’s not good for business.

Hopefully, any incident involving your company is minor, but should it cause a death or serious injury, or a catastrophic financial loss, expect to be flooded with questions from your employees, the media, and the community. Consider these truisms: sex sells; if it bleeds it leads. For a major happening, expect to be the lead story, online and in local and national newspapers.

How you handle a crisis will say a lot about you and you’re A/E/P firm. Even minor issues can become large problems if not handled correctly and within a reasonable amount of time.

When handling a crisis, consider several things:

  • Bad news never gets better with age. Holding onto bad news in the hopes that your client or the community will forget or overlook an incident is not a recipe for success. Let your firm, your clients, and any other stakeholders know what has happened, so they can respond appropriately and in a timely manner. As a military commander, I gave all of my direct reports a “When to Wake Me Up” list. This helped my subordinates understand which events I deemed critical. If something occurred and it was on the list, they needed to call me immediately. If not, they could wait until the morning.
  • First reports are always wrong. You may have heard this expression before. Rarely will anyone have all the facts within the first few minutes. Be deliberate and methodical in your fact-gathering and avoid guessing until a preponderance of the evidence is available. If asked for an immediate comment, leave yourself some wiggle room for when you have to correct your first report. “Based on what we know at this time, we believe …”
  • “No comment” is no comment. Never give up an opportunity to tell your story. If asked for a comment when you’re not ready to provide a formal statement, there’s no harm in responding with a placeholder such as, “Our first priority is to ensure the safety of our community as we continue to gather information about this incident. We will provide more details as we conduct our investigation.”
  • Stay in your lane. A friend of mine, a retired Navy pilot and former Blue Angel demonstration team member, was recently asked for his assessment of the cause of a fatal accident involving a Blue Angel pilot and his aircraft. Rather than speculating about causes, my friend wisely refrained from venturing into an area for which he had no first-hand information. He deflected the question with a simple answer: “I’d rather not make guesses on what happened. I’ll let the accident investigation team finish their work and then we’ll all have a better idea of what happened.” Avoid spreading rumors while a formal investigation is underway.

I recommend preparing your firm for the day that will, hopefully, never come. Having an already developed crisis communication plan will make the process go as smoothly as it could possibly go.

  • Designate a public relations representative within your firm. Large firms may have a designated spokesperson, but too often it’s someone in the human resources or marketing departments who has never received formal training on how to handle anything more than a simple press release. Small firms should appoint someone to fill the role on an as-needed basis. In either case, your designated spokesperson must have unfettered access to your firm’s senior leaders. They are the voice of the firm, so they better have access to as much information as possible.
  • Take a proactive approach. Get out in front of the situation and let your stakeholders know you’re actively working to resolve the issue.
  • Coordinate and communicate. When handling a crisis event, bring all stakeholders together to share the currently available information. That way, everyone hears the same information at the same time. As an event progresses, you can always trim down the number of people required for each update meeting. For major events, consider setting a recurring meeting every four to six hours.
  • Attend a media training class. As with any training program, be cautious when choosing your media consultant. Some consultants are great, while others spout theory and lack the experience of crisis communication when a fatality or other significant event is involved. You’ll do your firm a disservice by sending an untrained spokesperson to face highly trained media.

Hopefully, you won’t ever have to handle a major occurrence, but chances are you’ll have to address some relatively minor ones. Having a plan in place will help you work through the event and can make the process a little less stressful.

Bill Murphey is Zweig Group’s director of education. Contact him at

This article is from issue 1162 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here to subscribe or get a free trial of The Zweig Letter.

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

The everything firm

1667As with most things in life, there is a point of diminishing returns when it comes to going after new work in the AEC industry. This is especially true when times are good, as they are now for many firms. Lots of opportunity does not mean that firms need to be going after everything that comes their way. It means they can now be choosier and more strategic about the work they pursue. Many firms are doing more proposals and interviews than ever, yet they have not increased the size of their marketing and business development support staff proportionately. This is leading to decreased win rates as evidenced by the industry average dropping from 33 percent to 22 percent over the past year.

Going after everything limits the creativity and customization on proposals, interviews, and other business development support activities that set you apart from the competition. I see many firms doing two to three times the proposals they did just three years ago, but without any increase in marketing staff. Thus, higher probability and higher profit potential are being cannibalized by lower probability and lower contribution. Furthermore, the obsession with new work can erode your relationships and focus on older, established clients and the untapped opportunities with them. Here are a few simple business management techniques firms can employ to fight the tendency to go after lots of new work at the expense of better contracts and established clients.

  1. Be more strategic in every pursuit. Firms need to be strategic about what clients they pursue and who in the firm is tasked with leading those pursuits. This speaks to the need for annual marketing plans that outline what markets the team will pursue, what specific clients, and who in the client organizations the firm will target for development. When firms come to the realization that they are going after too much work and not getting the returns they want, oftentimes the knee-jerk reaction is to implement a go/no-go process or further complicating the one they may already have. Go/no-go processes can be helpful but they need to be very simple and most are not.
    Relying on a long form of if/then statements can limit the one activity that you rely on for growth – the acquisition of new work. Go/no-go processes should focus on adherence to the marketing plan. If proper attention and strategic planning were put into the marketing plan, then decision making for what to pursue becomes easier. At the end of the day, all firms need to be thinking in terms of return on investment: What returns can we reasonably expect compared to the investment needed for each individual client and pursuit?
  1. It’s about matchmaking. When considering what clients to target, pursue those clients that have similar values to your firm. Are you a firm with ambitious growth plans that is trying to create the best place to work for your employees? Then an ideal target client could be all the municipalities that are the more ambitious and dynamic when it comes to attracting residents and investing in the infrastructure that attracts families and businesses. Those shared values can really improve your ability to develop a meaningful relationship and thus your chances of winning work. Also, match your people to the clients in these organizations. Make sure the people tasked with developing relationships have similar values, backgrounds, and other features that drive relationships. This is still all about relationships for many firms!
  1. Don’t forget your core clients. The euphoria of winning a new client can sometimes eclipse our focus on existing clients. Winning new clients and entering new markets is critical for every firm in the industry. However, we must always consider the opportunity for growth with existing clients as well. Most firms do not fully exploit the opportunities with their existing clients. That established relationship is gold and that could easily offer additional work or may offer another part of your company an opportunity to do work. This is called cross-selling; the action or practice of selling an additional service to an existing client. To be effective at cross-selling, your people must be fully educated on all of your services and have the incentive to sell those services even though it may not directly benefit them or their team. It takes an intentional and intense focus to provide the level of client service needed to both existing clients and new clients.

The bottom line is firms need to be more strategic in their pursuits. This is an age old problem. Firms go after everything and do better when times are good, and then decline when the market sours. Being more strategic and resisting the tendency to go after everything is the first step in diversifying the firm and setting it up to be more resilient in any market. Furthermore, being more strategic allows the firm to be more profitable as they focus more resources on the pursuits that have a higher potential for being profitable and have a higher probability of winning. Integrating an ROI (Return on Investment) mindset in your culture can revolutionize your pursuit of work and have a dramatic impact on the future of the firm. Stop being the everything firm and start being more strategic in your pursuits today.

Enjoy this advice? Subscribe to The Zweig Letter, Zweig Group’s Weekly management publication:

Want more in-person advice? Check out our upcoming seminars here.

Or contact Chad Clinehens, Zweig Group’s executive vice president for individual consulting opportunities. Contact him at

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

Lessons from Lucinda

876NVLPYMFWhat did I learn about running an A/E/P firm from a 62-year old former British equestrian Olympian? Quite a lot, as it turns out.

I recently had the opportunity to ride in a two-day clinic with Lucinda Green, a British equestrian and journalist who competes in eventing. She is most well-known for winning the Badminton Horse Trials a record six times, on six different horses, and she also took home team silver at the 1984 Olympic Games in Los Angeles.

Just as in business, in horseback riding you are never done learning. I try to keep myself educated through reading, watching others ride, and occasional visits to my coach. When I heard that Lucinda Green, the star of one of my favorite computer games from my youth, an Olympian, and one of the best jumping instructors in the world, was coming to a friend’s farm in Starkville, Mississippi, I couldn’t pass up the opportunity to ride with her.

Lucinda Green did not disappoint. Like any good coach she was tough and clear about areas that needed improvement, but also encouraging of each rider’s individual strengths. Her unique and clearly defined philosophies about riding left me with a lot to think about in my riding, and had some clear parallels to running a successful business.

Cross country is one phase in the equestrian sport of eventing.  For this phase, a horse and rider gallop at speed over 20 or more solid obstacles. Penalties are incurred for stops or fly-bys, for circling, and for going over an optimum time.  You need to quick, brave, agile, and most importantly accurate, in order to succeed in this sport.  Due to the high speed of travel and solid nature of the jumps, mistakes can have disastrous consequences in this sport.

So what does this have to do with the A/E Industry?  An A/E Firm is a lot like a horse – it weighs a lot more than you do, it has a mind of its own, and it’s responsible for carrying you through a variety of situations. You can hold the reins and try to dictate every single step, but sooner or later you will encounter some unexpected terrain and your horse may falter. No matter how strong your arms are, you will never be able to control every movement of your horse. In fact, the act of trying will only set you up for trouble. The last thing you want is a power struggle with a 1,000-pound animal on your way into a solid four-foot fence. Do you want a power struggle with your firm in the face of disaster? Absolutely not.  Every person in your firm has an important job to do, but they also have free will. You can harness this free will by empowering your people to use their own creativity and energy, or you can try to micromanage every aspect of every person’s job.

As a rider you can use your body to get your horse pointed in the right direction, then the rest is up to them. As a firm leader, you have to get your firm headed in the right direction, but you certainly can’t work on every part of every project.  You definitely can’t run the company, sell more work, answer the phones, and do all the accounting!

Lucinda stressed the importance of the rider’s “aids” or parts of their body that they can use to influence their horse.  These same parts directly relate to managing your firm.

A rider’s eyes are for intention. You always have to focus on where you are going next or your horse won’t know where to go.  Without intention and focus, the rest of your body can’t do its job properly.  As a firm leader, you have to have a clear and established vision. Your number one job is not to put your stamp on every project, but rather to set the trajectory for where you are going next.

A rider’s legs move a horse forward and also help with steering. As a firm leader it’s your job to create energy in your firm that will move it forward. A positive culture, enthusiasm, creativity, all these things will create new opportunities for your firm and be extremely valuable to surviving hardships.

A rider’s hands are for steering and putting the brakes on when necessary. Lucinda stressed that it’s OK to slow your horse down when faced with a complex or narrow obstacle that demands a lot of accuracy, but you can never stop the forward motion of your horse’s legs. Stopping the forward energy of your horse usually results in crashing a fence.  As a firm leader you can never let your firm come to a standstill. It always has to grow and move in a focused direction.

Some other lessons I learned from Lucinda Green:

  • Prepare for the worst. Many A/E/P firm leaders think playing it safe means moving very slowly, taking a long time to make decisions, and never pursuing growth. In situations such as a bad project, a rough economy, or policy changes – all of which are inevitable, by the way, no matter how safe you play it – you need to giddy up and get the heck out of there, not lollygag.
  • Take small risks every day. Lucinda stressed how important it is to create tiny challenges for your horse to overcome, building on each achievement. Firm leaders need to take risks to grow.
  • Embrace the ugliness. Your horse has to learn from its own mistakes sometimes. You can point your horse at the fence and encourage it to go over, but where it puts its feet has to be its own choice. If you give your horse enough opportunities to position itself, it will learn and start jumping better and more accurately. As a firm leader, you have to let people make some choices for themselves and learn from the results. They will get quicker, smarter, and better able to do their jobs as a result.

Christina Zweig is Zweig Group’s director of research and marketing. Contact her at

This article is from issue 1161 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here to subscribe or get a free trial of The Zweig Letter.

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

The romanticism of mediocrity

Screen Shot 2016-06-28 at 9.45.27 AMFirms like to talk about growth, but fear of risk, and even laziness, contribute to lackluster marketing and timid strategic plans.

If asked to offer words that describe your firm, would you use ordinary, average, middle-of-the-road, uninspired, undistinguished, indifferent, unexceptional, unexciting, unremarkable, run-of-the-mill, pedestrian, prosaic, lackluster, forgettable, and amateur? Of course not. You would use words or phrases like superior, innovative, progressive, top-quality, great place to work, fun, experts, and so forth. The unfortunate reality is that our approach to business does not match what we say. Here are several areas that stick out to me as suffering the most from this over-glorification of being average.

  • Marketing and branding. While so many in this industry complain about the perceived continual slide toward becoming a commodity, they do little to combat it. Differentiation is the key to fighting commodity perceptions and pressure on fees. A successful differentiation strategy will move your firm from competing based primarily on price to competing on non-price factors such as quality of service and final product. There are two issues that contribute to the weakness of differentiation strategies – avoidance of risk and just plain laziness.

    You must be intentional and willing to take risks by identifying where you are strong and where the competition is weak. Instead, we look to what others are doing and often mimic them. The result of this lazy approach is that nearly every firm in the industry is a “multi-disciplinary firm that offers cost-effective, innovative solutions.” The remedy here is to develop a true marketing function in your firm. I am not talking about hiring more proposal coordinators. I am talking about real marketing and branding talent that can work with your top leadership in developing a differentiation, branding, and promotion strategy that will transform the firm. If you want to learn more about this type of marketing, Zweig Group is launching a seminar titled Marketing and Branding for AEC Firms that will take a deep dive into this very subject.

  • Growth plans. Another area that suffers from mediocrity is growth plans. Firms do not set high enough goals and then pursue those goals with an aggressive effort. Instead, we say we want to grow, but then we stay busy getting work done when the market is hot. When the market cools, we look back and wish we had done more to make that growth sustainable. I also run into firms that say they don’t want to grow for fear that it will change them into something they are not. When it comes to growth, we just don’t get serious about it. The fact is, you either grow or you die. Which side of that equation do you want to be on? If you don’t evolve and change in a growing way, you will certainly become somebody else – a nobody.

    The solution here usually starts with an authentic strategic planning process that is driven by research as opposed to philosophy. After you have a growth oriented vision and plan in place, you must work daily to execute it. Every operational decision must be done with the overall plan in mind, and the incremental steps taken that are necessary for ultimate success.

  • Organizational structure. Another huge problem is firms’ organizational structure. Investment in staff in this industry is highly reactive. Furthermore, there is an inherent resistance to adding “overhead” or support staff until we are beyond crisis level. This reactive approach to building the organization breeds mediocrity. When the market is hot, we are all fighting for the same talent, often settling for any “warm body” we can get to help handle the work load. Our resistance to authentic strategic planning and organizational investment sets the table for the feast and famine cycles from which so many firms suffer. The solution here is to use the plan mentioned above to drive investment in staff and resources with particular attention toward marketing, recruiting, and IT. Those three areas are shown to drive growth in professional service firms. Research shows that firms that sustain 20 percent growth rates for three or more years all invest more in marketing, recruiting, and IT than average performing firms.

The idealistic notion we have of ourselves combined with the resistance to change contributes to the romanticism of mediocrity. Nobody wants to be average, but that is the playground of the majority. The tendencies of your peers spell opportunity for you if you can simply spend the needed time to become more than just mediocre. To outperform the market, you must take extraordinary measures and look different in everything you do and say. Make long-term oriented investments in marketing, recruiting, and IT to set the stage for becoming a firm of the future versus a firm of the past. The dangerous romanticism of mediocrity shields us from the reality that we are allowing the market to dictate our success. Create your market and create your success with intensive planning and investments, and start celebrating true achievements.

Chad Clinehens is Zweig Group’s executive vice president. Contact him at

This article is from issue 1161 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

Old recruiting habits slowing you down? 

Screen Shot 2016-06-22 at 9.15.48 AMDemanding a resume is a good way to scare off potential hires, but your chances improve if you pick up the phone and sell your firm.

One of the biggest challenges facing the AEC industry is old interviewing habits. As a recruiter working in this industry we see it all, and one of the biggest mistakes is the importance that hiring managers place on seeing a resume. If I’ve heard it once, I’ve heard it a million times: “I just need to see a resume.” It’s an age-old refrain from a bygone era – before LinkedIn and online recruiting changed the game. It’s one of the most frustrating aspects that my recruiting team faces.

As recruiters, we take the time to learn about the candidate and create an informative profile that we present to our client. This candidate profile covers the basic information that any hiring manager would need to determine if someone is suitable to work at their firm. Sometimes we get so much information that the only thing missing is the candidate’s blood type. While I may be exaggerating a little, I think you get the idea. If you are a hiring manager and you are one of those people that always needs to see a resume, you should worry about the future of recruiting. I don’t believe you will be able to keep up over time with the change in technology and procedures.

Here are three things that you can start doing to make sure you don’t get left in the recruiting past:

  1. When a recruiter sends you a candidate that looks or sounds good to you, ask them to arrange a phone call with the candidate ASAP. Time is of the essence in the AEC industry, and if a good recruiter finds a potential candidate, you may not have a large window of opportunity. I always tell my clients that it doesn’t cost anything to have a 15- to 30-minute phone conversation with someone that may be a fit for their organization. Requiring a resume before you talk to someone can hurt you in the long run.
  2. Please consider where the candidate’s mindset is. A person that is not actively looking for a job may be more inclined to have a conversation with a hiring manager. In their mind, it’s not a major commitment, and it may be worth checking out the competition up close and personal. As a hiring manager, you must use this rationale to your advantage. If you start making candidates, or potential candidates, jump through too many hurdles, you will lose them.
  3. You have to “Sell the Sh#&” out of your firm. Don’t sit back and make the candidate do all the talking. Yes, of course, you want to hear about them and their background and expertise, but you also want to make the candidate aware of why your firm is the best place in town to work. Asking a candidate that’s “not actively looking” why they want to leave their firm is a mistake and a waste of time. You should help them understand why your company is great and what you do to help your team members grow and get better at their jobs. Nowadays, personal and professional development programs are a fundamental component of firms that are growing. Growing companies are attractive to candidates. Nobody wants to be in the same place five years from now, even if the pay is good.

I recognize that some of this advice may sound foreign to you, but I’m encouraging you to throw out the old way of recruiting great talent and try to implement some of these practices. Trust me. They work. And if you get stuck somewhere in the process, give me a call or shoot me an email and we will try to get you unstuck.

Randy Wilburn is director of executive search at Zweig Group. Contact him at, or 479.856.6171.

This article is from issue 1160 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

When a key person jumps ship

photo-1446540830250-e2076f9e6917It happens to all of us at some point. Maybe we have even done it ourselves. What I am talking about‎ is when a key person quits unexpectedly – they jump ship.

It could be a critical office manager in a remote location. It could be your CFO who has been there 20 years. Or it might be one your “rising star” younger employees – someone you have mentored and promoted. ‎The bottom line is they tell you they are going to leave. What matters now is how YOU react to the situation. Here are my thoughts:

  1. Recognize the emotions you could be having and get them under control. You may feel a sense of betrayal. ‎Do not succumb to the temptation to assassinate the character of the person who is leaving! Many principals and managers of A/E firms seem to do this. They are obviously proud of their companies and it’s hard for them to understand why someone would leave so it must be the employee’s fault. Not good. Many times the person leaving – if it is upsetting – is someone who was perceived by others to be a good employee or coworker. You will unnecessarily cause internal ill-will if you trash this individual. Stay calm!
  2. Communicate with your employees. Tell them what happened, what you know, and that you wish the person who is leaving the best of luck.
  3. Communicate with your clients.
  4. Take action. Just because it didn’t work out doesn’t mean you shouldn’t try again. ‎And don’t let any grass grow under your feet. Try to look inside the company first for your replacement person if you can. The best candidate may be right in front of your nose.
  5. Stay positive. More than anything else, being positive – not letting your feelings of rejection take hold – is critical. Not everyone is the same and not every situation is perceived the same way by different people. Do some self-examination of what went wrong – pay heed to what you learn so you don’t repeat the same mistakes – and move on. Maybe what seems bad now will seem good later. It often works out that way – IF you can stay positive!

Mark Zweig is Zweig Group’s founder and CEO. Contact him at

This article is from issue 1160 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

Unplanned events

Screen Shot 2016-05-18 at 9.35.39 AMAs the bumper sticker says, “Shit Happens.” Unfortunately, it rarely occurs at the ideal time. Problems crop up that you didn’t anticipate – health problems, a parent dies, a key employee quits, divorce, IRS audits – there are many bad things that CAN and DO happen that are not within your control.

What you can control is your response to these things. That’s what I want to talk about today.

  1. Stay calm. ‎Cool heads prevail. If you get emotional you cannot think properly and you won’t get the reaction you want from others. Don’t let that happen to you.
  1. Start by figuring out what your desired outcome is. Whatever happened has happened. Now what do you want to happen next? That’s what you need to know or it probably won’t happen.
  2. Write down your ideas and options. I do it all in my phone. You may do it on a notebook. Or you could do it on‎ your computer. Don’t be too judgmental too early. You want ideas here.
  1. Make a decision. Ideas and options are great but you have to make a decision. Maybe some of these have a lower risk of failure than others. Or maybe some have a very low cost if they do fail. These may be some of the first things you want to try.
  1. Take action!‎ Nothing good happens until you make it happen. You have to take action. All the positive thinking, ideas and options won’t do you any good without action. It is only through action that you will rebuild your confidence.
  1. See if you achieve your desired outcome. Evaluation to determine success or failure is crucial to your ultimate success or failure in how you dealt with the problem.
  1. If you aren’t happy with the decision, make a new decision‎. This is what my dad calls “decide-act.”
  1. Repeat steps 5, 6, and 7 until you achieve your desired outcome.
  1. If things don’t work out, remember that this, too, shall pass. Nothing is permanent. Everything is temporary. You will get through whatever it is you’re going through. That’s life! Nothing good, or bad, lasts forever.

Mark Zweig is Zweig Group’s founder and CEO. Contact him at

This article is from issue 1159 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

A sneak peek of the 2016 Financial Performance Survey

Screen Shot 2016-08-24 at 11.23.54 AMZweig Group’s 2016 Financial Performance Survey of Architecture, Engineering, and Environmental Consulting Firms, gives firm leaders a clear view into industry trends and financial metrics that can help firms effectively manage their resources. The best way to do this is with a strong understanding of their firms’ financial position and accounting activities.

According to survey results, since 2010, firms’ pre-tax, pre-bonus profit as a percentage of gross revenue has risen each year. This year, firms’ pre-tax, pre-bonus profit rose from 9.1% to 9.9% of gross revenue.  As a percent of net service revenue (NSR), pre-tax, pre-bonus profit rose from 10.7% to 12.8%.  Firms are profitable! 2015 was a great growth year for firms, providing ample opportunity for leaders to invest in their firms.

The efficiency of firms’ labor continues to improve.  Net service revenue per employee reached a 10-year high and has continued the convincing upward trend.  In 2015 NSR/FTE was $133,605.  This year that number reached $137,113.  With improvements in technology and staffing software, firms are continuing to find ways to make more money with the staff they have.  This trend is real! If your firm’s revenue per employee is not moving in an upward trend, you need to take a good look at your operations.

Overhead rates decreased this year with a median of 165.5%.  As expected, high profit firms led the way with reduced overhead rates around 140% over the last three years.  Another way to look at overhead is a metric called the breakeven multiplier.  It indicates how much money the firm has to generate per dollar of direct labor to cover their overhead costs.  We found that fast growth firms have a lower multiplier (2.55), indicating they are more efficient at generating revenue than other growth categories.

Lower interest rates across the US have provided opportunities for investment and firms seem to be taking advantage of the low-cost capital.  Interest bearing debt to EBITDA rates have increased since 2013 and continued to rise this year with a median rate of 0.4.  This is a notable increase because EBITDA margin on NSR also grew again this year with a median margin of 14.3%.

Backlogs remained relatively consistent with a median of 6.5 months.  Very high profit and fast growth firms have more work in their back pocket than the other profit and growth categories, showing that they are continuing to push their marketing efforts and are winning jobs.  Both very high profit and fast growth firms had a median backlog of 8.7 months.

An interesting stat that we have been watching is the cost of group insurance plans.  Counter to the national trends of increasing overall healthcare costs, we have found that firms’ median group healthcare costs as a percentage of total costs are slightly decreasing year over year.  We have found that many firms are moving to lower cost, high-deductible plans and many are utilizing health reimbursement arrangements and health savings accounts to reduce their out-of-pocket exposure to rising costs.

Bonuses as a percentage of total costs rose significantly.  Since 2012-2015 these costs ranged from 3.0% – 4.8%.  The 2016 survey found that firms spent a median of 8.0% of their total costs on bonuses.  This did not come as a surprise to researchers as pre-tax, pre-bonus profits per employee skyrocketed to $19,671.

The 2016 Financial Performance Survey shows how firms performed on nearly 100 indicators. Each measure is described in detail so you can better understand the implications of being excessively high or low on any one measure. Firms can use this to target internal initiatives, investment opportunities and improvement efforts to match their best performing peers, or simply to determine if their metrics are moving in the right direction.

FPSurveyCover-2016Always remember that to be average is acceptable, but not optimal.  To quote the great John Wooden, “Success comes from knowing that you did your best to become the best that you are capable of becoming.” Use this year’s Financial Performance Survey to identify opportunities, set goals and develop the action plans to meet those goals.


Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone