2013

January 2013 » Columns » LEADERSHIP
Ed Friedrichs, FAIA, FIIDA

My traveling has ended for a couple of weeks for the holidays – always a good time to ponder the New Year. It's easier for me to do than for those of you who have firms to run and mouths to feed. Hey, wait a minute; how will my wife and I put food on our plates? Not unless I help you and my clients figure out some better ways to dive into today's great ocean of uncertainty.

As of this writing, there is no resolution to the "fiscal cliff." Whether there is or not, the economy is still "burning" while the proverbial "Neros" in the Congress and White House continue to play the fiddle. Don't count on a miraculous economic recovery under any scenario. At least for the coming year, I suspect many people in this country will continue to be under- or unemployed. Fewer people working means less taxes being paid and more people on welfare or unemployment. Taxing people who make more than $250,000 won't make a dent.

So what's your strategy? Take a look at American businesses. The stock market hasn't continued to rise because of any moves made by our government. Businesses have leaned out their organizations, continued to automate processes to displace labor, and dramatically improved their cash positions. Most have done quite well in the last couple of years. For architects and engineers, I can think of no more appropriate strategies.

It has never been, nor will it be this coming year, a good strategy to continue to pay underutilized people in your firm. Everyone should be working at an optimum level. If you expect to survive, let alone thrive, you have to face this issue squarely.

Have your receivables crept up? I've spoken with a few firms where "crept" is not the appropriate descriptor. Too many firms are willing to accept a client's response that he or she doesn't have the money. Not acceptable! If factual, negotiate an interest-bearing note with tangible collateral at a rate that makes it clear that your firm is a reluctant lender who would prefer to be the lender of last resort. You won't move your firm forward if you're borrowing money to cover your receivables.

It often has been said that "cash is king." As this year unfolds, you need to build cash for any number of reasons. This means you must remain profitable and you must improve your cash flow. Why is this important? In order to hire a new key person who is going to help you grow your business; to invest in technology or training to improve your productivity and place yourself in the forefront of, particularly, BIM applications; or to facilitate a merger with or acquisition of another firm where the two of you together are able to deliver a higher level of service to your clients than either of you alone.

For me, this year's "must read" is "Great by Choice: Uncertainty, Chaos and Luck —€“ Why Some Thrive Despite Them All" by Jim Collins and Morten Hansen. It was written for today's times, which are both uncertain and chaotic. The authors are quite clear that luck comes in two guises – good and bad. Both offer opportunity. Their clear message is that discipline and relentless preparation allow you to be able to take positive advantage of either.

Various politicians over the years starting with John F. Kennedy in 1959 have referred to two Chinese characters that represent Crisis and Opportunity, two sides of the same coin, really. I think this is what Collins and Hansen are talking about.

I can think of no better word than discipline to describe the requisite leadership style for now and the future. Another marvelous holiday read is "American Icon: Allan Mulally and the Fight to Save Ford Motor Company" by Bryce Hoffman. This heroic tale of rescuing Ford from the same threats and conditions facing GM and Chrysler to a thriving, successful, and profitable business without going through bankruptcy describes perfectly the leadership style for today.

Aside from Mulally's sheer business focus and courage, he was relentless about the quality of the products Ford made. The lesson for us as architects and engineers is the same: To be successful this year and beyond, we must continue to shape our services to respond to what our clients both want and need. The most successful firms that I'm working with now have taken that mission to heart, carefully focusing their service offering to be something their clients not only need and want, but can't live without and can't find from anyone else.

This is how I'm facing 2013.

Ed Friedrichs, FAIA, FIIDA, is a consultant with ZweigWhite and the former CEO and president of Gensler. Contact him at efriedrichs@zweigwhite.com.

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