Firms in this business are quickly sorting themselves into two categories – those that are doing better than ever post-COVID-19, and those that are doing worse.
Fall of 2020 is an interesting time. It seems to me that the firms in this business are quickly sorting themselves into two categories – those that are doing better than ever post-COVID-19, and those that are doing worse.
What is separating these companies? They are both in the same business. Shouldn’t external market conditions affect them each in the same way? Not necessarily. How each firm’s management is responding to the crisis is determining the direction they will go – that being up – or down.
I’m really most interested in the firms that are going up right now. What are their management teams doing that is making them succeed? There are some marked differences between the firms that are doing well from the others, and I would learn from their example and apply what they are doing to my own A/E firm. And here are my observations about THOSE companies:
- Management has figured out how to manage a remote workforce. This has to be number one before anything else. This means you have to be able to get the work done without getting everyone together and keep everyone motivated and feeling like they are a part of the company in the meantime. It’s not easy. This takes both the technology and the awareness that people not in an office need a lot more communication and personal attention to keep going productively.
- Management has a plan of attack. The firm has a business plan that it is following. Everyone has had a chance to give input to it in the best cases but even if not, everyone knows that the plan exists and what the plan is, and is working together to follow it. The business plan is now more crucial than ever! It is not just an academic exercise.
- Management is optimistic. Some see opportunities in the current situation that weren’t there before. These opportunities exist to upgrade their office space more affordably, hire new people, and/or push into new market sectors they weren’t in previously, or buy other firms with financial/cash flow problems and/or owners who want to get out. These opportunities are all there and they are taking advantage of them.
- Management has greatly increased their communication with their employees. More calls, texts, emails, Zoom meetings – also more information in their open-book management reports. And as I already stated, they are doing more sharing and making more references to the firm’s business plan. This communication is not borne from a lack of trust for the people, either. It is because management knows people are isolated and fearful, and they want to alleviate as much of that thinking as they can.
- Management is in close contact with the firm’s clients. This is SO important!! What are the clients thinking now? What are they going through? What are their plans? What help do they need? How are they doing as individuals? Firms doing well today are NOT taking their clients for granted and assuming they know everything about what their clients are going through, or what those clients are doing to address their problems.
- Management is investing in their existing people. That means training, training, and more training in all aspects of the business, project management, communications and social awareness skills, and technical and business software use. Did I say that training investments for the most successful companies during this time are going up? Yes, I did!
- Management is aggressively recruiting new people to diversify their capabilities. Now is the time to upgrade or get new talent to join your firm. People are unsettled and worried about their futures. Some – not all – will be more receptive to appeals from new employers that they think are more solid or doing better than the firms they work in today. You want to find those people and talk to them to see if they (and you) would be better off together than you are apart. This is a unique opportunity for staff upgrading, and the best firms get it. They aren’t waiting on the sidelines.
- Management is increasing their marketing spending. I sound like a broken record here. But the reason is so many A/E firms are cutting their marketing spending now because their revenues are down, and while they may get you some short-term savings, it is the very worst thing you can do if you want to do well in the future. The most successful firms are spending more and doing more to promote themselves now, perfectly timed because most of their competitors are fearful and cutting back.
- Management is NOT holding up on ownership transition plans. Again, the firms managed by fearful principals are putting their transition plans on hold because they want to hold on to their precious cash. I get it. But how motivational is that going to be for those newer partners or principals getting into ownership? They could be thinking, “This is a horrible place to invest my money in,” because “you’ll never get it back.” Not the way you want anyone to think – especially your best up-and-comers.
Times like these are always interesting to me because they quickly sort out the firms into one of two categories. Those that are fearful and scared and pulling back – limiting their opportunities to do better and setting the stage for future decline (by far and away the larger group). And then those that see the world differently and see opportunities all around them. I don’t know about you, but I would rather be a part of the latter group!
Mark Zweig is Zweig Group’s chairman and founder. Contact him at email@example.com.