Another year down, another year of uncertainty ahead, and another year when principals of architecture and engineering (A/E) firms will have their leadership skills stretched to the limits. Yet we still see too many A/E firm leaders allowing themselves to be fully drawn into the day-to-day aspects of their business. Since demand for your visionary and decision-making skills is at an all-time high, give yourself enough time to think about how you are going to lead your business through 2013 – a year that will be full of landmines, but opportunities as well. Start by asking yourself these five critical questions:
1. What is truly driving my business?
- Within each business unit, determine what is in your control, such as marketing, business development, collections, etc., versus what is out of your control (stimulus package, stock market, etc.). With those factors in mind, determine whether you can increase your competitiveness in specific business lines, and how.
- Find out what your clients need from you right now, and what they will need 18 months from now. Understand what they are willing to pay for, and what they plan to live without. If your firm is losing clients, find out why. Is your firm being replaced by other service providers, or are clients simply going into hibernation?
- Observe how your toughest competition is adapting to these same drivers. How are they being innovative about marketing and business development? Are they hiring key staff, unloading costs, and pursuing relationship-building as opposed to individual projects?
2. Am I hanging on too long to strategies and people that aren't working out?
- You need to be decisive in this economy. Put the right people in the right roles. Don't let fear, turf, or ego hold you back from making the moves you know need to be made for the good of the company.
- If you need to abandon a business line, do it, and do it fast. Do not support a service that is no longer valued by your clients. If there is potential upside to underperforming business units and offices, keep them on a tight leash.
3. Am I on top of the cash situation? What about senior management?
- Not only do you need to be aware of the firm's cash situation, you need to be regularly updating your senior managers as well. They need to understand the firm's cash position so they can positively influence it. Shielding managers and staff from the firm's actual financial performance will do more harm than good.
- Continue to challenge your firm's current rate of spending. Revisit your lease agreements to see if you can reduce monthly payments for office space, negotiate lower interest rates on loans and lines of credit, reduce vendor and supplier costs, and ramp up collections efforts.
- Send your invoices electronically – it saves time and it's environmentally friendly. Also, accept credit cards for payments on projects in addition to checks. It has done wonders for firms that are doing it.
4. What parts of your business need investment?
- Look at your business units as though they are part of your own investment portfolio. Which businesses would you invest in and why? Some of your businesses likely feed others, so that value must be taken into account. Develop a simple filter that allows you to compare the growth opportunities that exist within your firm's business lines. Does the business have the potential to position the firm as an industry leader? Does the business allow you to provide superior service? Does the business lead to the firm being a great place to work? Do you have a champion for the business? Does the firm, as an organization, have a passion for the business?
5. Do the employees see you as a strong leader in this uncertain time?
- All eyes are on you. You need to keep your staff engaged, confident, and busy. And to do that, you need to be engaged, confident, and busy as well. If you are not coming across that way, don't expect morale to hold up. Connect frequently with the staff; let them know where the company stands and what they can do to help the firm make the most of a bad economic situation. Tell your top performers how much you value them and why. This type of recognition can go a long way in encouraging your staff to do all they can to help the firm survive and thrive.
Don't allow yourself to get lost in the weeds in 2013. Answer the tough strategic questions honestly and take action – now. If you won't, who will?
Mark Goodale is principal with Morrissey Goodale LLC in Newton, Mass. Morrissey Goodale LLC is a management consulting and research firm that serves the AEC industry. He can be contacted at firstname.lastname@example.org.