If you follow our work, you may know that I’m reluctant to speak of recessions. I find the prognosticators all too predictable, chicken little types seeking attention and a stage. And I’ve long thought too that recessions might just be self-fulfilling prophecies – the result of our collective anxiety and hand-wringing.
That said, we must pay attention to the real-world uncertainty we face today. The stock market is off, interest rates are up, and the dollar has weakened. Trade wars on many fronts may rapidly reshape global supply chains – and global trade philosophy. In the AEC space, construction material costs are rising, professional talent remains scarce, and the needs for infrastructure (at all levels) greatly exceed both budgets and bandwidth. Private and public sector client organizations alike are spooked in the present, concerned with the future, and momentarily uneasy about their decisions. A few projects have been paused, slow-rolled, or rethought.
So, now what?
Professional firm executives that we’re working with today – most of whom remain quite optimistic – are now focused primarily on a few important things:
Business Results: many engineering, architecture, and planning firms have been on quite a roll since the great recession of 2008-2010. The COVID year did set some back, others not so much. In a strong business environment, professional firms generally prosper, but in uncertain (or declining) markets these same firms can deleverage in unhealthy ways. Firm leaders now must closely watch their basics (utilization, multiplier, overhead) to protect and preserve results on both the top and bottom line.
Record of Success: Like ourselves, most leaders we know have been blessed – with many more career years up than down. Sometimes our continued success feels more like a given, an expectation, an entitlement. Of course, it’s not –there is no guarantee of future prosperity. Most take their role in firm stewardship quite seriously, and a little paranoia here is healthy (pushing back on the organization’s sense of security and complacency). Add in a bias for action, change, and continuous improvement – and the odds of success increase – a lot.
Future Portfolio Strength: Every client firm in our own system today is sitting on a strong backlog of projects – often a year’s worth or more. (And let’s be honest – there are days we feel that the last thing we need is another new project). But the idea that just a little slow down in incoming might not be so bad – is itself a dangerous course. Very few existing opportunities are infallibly secure, and if things get worse, some of these could be pulled. More insidious, a gentle slow-down in the rate of replacement of future work (hardly noticeable at first glance) could erode backlog significantly – before anyone notices. (Slipping from fourteen months of inventory to nine is not a good thing). Now is the time for all hands to work closely with clients on the issues that matter. Grow the business! Smart executives are watching this very closely.
A Strong Team – A Players: If one can’t affect the levers above – good solid business hygiene, project effectiveness and efficiency, client satisfaction and loyalty, staff engagement and collaboration –– then layoffs probably aren’t far behind. Underutilized professionals are costly, and they’re quite visible in a firm trending down. These choices are never easy; key people are the heart and soul of the successful firm, and there usually aren’t a lot of extras around. To avoid the pain of hard choices with staff requires swifter action now to bolster project and operational performance. Beyond that, knowing who your best ones are, making sure they know that too, and working to ensure that all are doing all they can – for their own success and for the team – is absolutely critical. It’s that simple.
So, let’s be honest with one another. We know what actions to take. We know what to do.
Taking action. What does that look like? For starters, here are three suggestions:
1) Conduct a Comprehensive Organization Performance Assessment – and do it now. We employ a multi-tool, multi-perspective approach to gather input from managers, staff, and clients – and to analyze operational performance at both the project and enterprise level. We look at markets and marketing, staff and staffing, client satisfaction and portfolios, financial benchmarking and bottom-line results. And we do that whole thing – comprehensive, candid, and can-do – in 60 days.
2) Create a short term 90-Day Power Play Accelerated Strategies and Action Agenda – (and usually with a companion six-month or year-long plan to follow). An assessment isn’t worth much if it’s not followed by action – so this step naturally flows from the first. You can strengthen your operations with real action now – to solidify and safeguard current success, maintain positive momentum, and capture new opportunities. Think revenue growth, utilization, multiplier, overhead rate, collection period, voluntary turnover rate, and profitability. The basic stuff. Measure. Manage. Master.
3) Partner for Extraordinary Success – competent, seasoned executives can do a lot internally, of course, but we specialize in pumping up that success to new levels. So, we don’t just pontificate – through our assessments, visioning sessions, or action agenda innovation. Beyond these, we help client organizations to pursue and capture real, sustained business success. We routinely act as strategic advisor, organization project manager, executive accountability coach, and as a catalyst for action, execution, and implementation. We work with those who desire extraordinary professional firm results – and then together we get it done. (And that’s why we’re hired by more than half of our clients to assist over multiple, consecutive years).
Now, right now, is the right time to get going. Before things become more uncertain, more unstable, crazier still. Before it’s too late. It’s time now to jump in, take action, make progress. To make your already good – better still. To reach for more – safe, stable, sustainable success.
For your extraordinary success.
Let’s talk – this week.
