Maintaining cultural continuity in regional offices

September 2006 » Columns » BEYOND WORDS
For William S. Lucarelli, P.L.S, of Clough Harbour & Associates LLP, maintaining company culture across regional boundaries has been one of the trickiest issues, and remains the most critical.
William S. Lucarelli, P.L.S

FIRM STATS
Firm name:
Clough Harbour & Associates LLP
City and state of headquarters: Albany, N.Y.
Number of regional offices: 27
Total number of employees: 600
Year firm was established: 1952
Total billings for last fiscal year: $89.8 million

So you’re opening a new office. Congratulations! Successfully entering new geographic markets is one of the most rewarding and challenging experiences of managing a growing engineering firm. I’ve been fortunate to oversee Clough Harbour’s regional office expansion efforts for more than 15 years, and I’ve rejoiced in seeing start-up operations grow into multi-million dollar offices. However, it hasn’t been easy. We’ve faced staffing shortages, regional economic downturns, and numerous other issues. But, of all the challenges I’ve come across, maintaining our culture across regional boundaries has been one of the trickiest issues, and remains the most critical.

Culture is one of those "soft" issues that can get overlooked when undergoing geographic expansion. If there is one thing I’ve learned, it’s that you must address cultural transfer both before and after the office is opened. If you are entering a new region via a merger or acquisition, this is even more critical.

What exactly is corporate culture? If you ask 50 people, you’ll probably get 50 different answers. But I think everyone would agree that to be successful, all employees, no matter where they are located, must share the same business practices, values, and behavioral patterns. This is the essence of a company culture.

Choosing a business model

It sounds like common sense: A multi-office firm’s business model must reflect its overall culture. Does yours? Specifically, should you set your offices up as cost or profit centers? This has a huge impact on ensuring cultural continuity. In our case, we had to undergo some unintentional experimentation to get to where we wanted to go. Here’s a little background.

In addition to the usual themes of quality, client service, and teamwork, one of the central elements of our culture is practice building; that is, we encourage our staff to build their own "practices," most of which are within vertical markets. This tends to build client trust and loyalty, which in turn contributes to the long-term health of an office, and ultimately of the entire firm.

When we opened our first regional offices, we set them up as cost centers to eliminate the risks inherent with running remote profit centers. In our cost-center model, all staff, expenses, revenues, and profits are monitored at the company-wide divisional level (as opposed to the regional office level).

Unfortunately, we discovered that we were incurring high costs, and it was difficult to quantify the success of our investments. After some debate, we switched to the profit-center model. What we didn’t anticipate was the cultural impact.

Since our culture rewards practice building, our project managers (PMs) continued to "sell" our full-service approach, just as they had under the cost-center model. The difference was that under the profit-center setup, our PMs felt they had to use local staff on all facets of their projects to generate local revenue, even if those staff didn’t have the necessary skills or experience. The result was rework, underperforming projects, and unhappy clients—definitely not elements of our culture.

Needless to say, we’ve returned to the cost-center model, even though it takes more time and effort to manage than the profit-center model. Consequently, the essential element of our culture that encourages practice building is alive and well, without the adverse client-service consequences of the profit-center model.

Communicating values

Culture is all about values. No business can survive, much less differentiate itself from its competition, without ensuring that its values are uniform throughout the organization. Constant reinforcement through regular communication from senior management is an integral part of this effort.

We’ve found that regular visits to each of our offices boost both morale and productivity. In addition, our administrative support groups understand the importance of creating internal programs and communications with global implications in mind.

We also value fun. Our human resources staff takes a global view of this; they not only work with the people in our headquarters to organize employee activities, but they also make an effort to reach out to every office and assist local staff in organizing trips to sporting events, inter-office wellness competitions, and other events that bring the entire company together.

Identifying behavior patterns

Ideally, everyone’s actions, no matter where they work, should ultimately support the entire firm, not just a single office or organizational group. For that reason, no behavior pattern is as destructive as the manifestation of the "us-versus-them" syndrome. Once that mentality starts, it’s very hard to control without taking extreme measures.

We’ve taken both tangible and philosophical approaches to make sure we behave as one company. For example, we eliminated the term "branch office" from our vocabulary a long time ago. We’ve taken other measures too, such as holding regional meetings in each office and inviting all regional staff to major company events such as our semi-annual breakfast meetings. We have not totally eliminated the us-versus-them mentality, but we’ve been very successful in minimizing it.
Technology has also made it possible for us to create a single environment across all of our regions. Our intranet is tied into our accounting and human resources information systems so project and staff data is available to everyone. We’ve also implemented a universal customer relationship management solution, and practical but flexible CADD standards have been developed so that our technical staff is on the same page.

Bottom line: it’s up to us as managers to ensure that culture is communicated uniformly throughout our firms. Choose the right business practices and invest in the time and technology necessary to ensure success. Then watch the new doors open—both literally and figuratively.

William S. Lucarelli, P.L.S., COO and director of the Special & Technical Services Division for Clough Harbour & Associates, Albany, N.Y., oversees human resources, information technology, reprographics, and regional offices, as well as Construction Inspection & Construction Services, Geotechnical Engineering, Technology Solutions, and Survey. He can be contacted at wlucarelli@cha-llp.com.


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