Reduce the costs of your staff meetings

You are probably thinking that I am going to suggest that you buy donut 'holes' for meetings instead of donuts because they are cheaper. Not this time. I was recently cc'd on an email from a CEO client of mine who called for a staff meeting in several days' time with everyone in his 2o-person firm. On the surface, this would not seem to be out of the ordinary - but this CEO doesn't have scheduled staff meetings because he is rarely in the office so when he calls an ad hoc meeting, it's an event. So what is the cost of this meeting and more importantly, how and why is it more expensive than it needs to be?

This CEO never includes an agenda or even a topic for his meetings. So what happens? People talk...and talk...and talk. What is the meeting about? Are we in some sort of financial trouble? Are we being bought? Sold? Merged? Is someone leaving? Who is it? The amount of lost time that the staff spends on speculating about the topic of the meeting amounts to several times the actual time spent in the meeting.

The simplest way to avoid creating an opportunity for staff to chat idly about what may or may not happen in a meeting is to explain in one sentence why you are having the meeting and what the participants in the meeting will come away with at the end. Be as specific as possible. Treat it as you would treat a meeting with a client.

Use some of the money you save in staff time to buy donuts for the meeting!

All the best,

Frank A. Stasiowski, FAIA

Become a valued member of a community

A/E firms are generally solicited for help through specific project requests - but how good are you at recognizing and addressing the clients' unmet needs?

If you're smart, you are taking the time to get to know your clients when you are presented with specific project requests. You use what you learn to both idenfity their unrequested needs and to communicate the unique value of your skills.

You need also to work this process from the other end: take the time to connect with targeted groups of your prospects, bring out their unmet needs and communicate the value of your skills to set up specific project requests.

When you work both sides of this process, you become recognized not as a vendor of services to your clients, but as a relevant and valued member of the community. As a profession, our tendency is to look at our fixed institutional position then to find needs to serve within it -rather than looking at the needs of our core clients and adjusting our position to serve them. We need to leverage our position as valued member of the community and learn to communicate to clients that we are inseparable from their cultural and social structures.

There are A/E firms doing this sucessfully right now. Identify them and copy their tactics and strategies.

All the best,

Frank A. Stasiowski, FAIA

Get your financial house in order

The 2007 PSMJ A/E Financial Performance Survey came back from the printer last week and I spent part of the weekend reviewing Dan Daniels' findings.

All in all, things are looking good for the A/E industry - growth, revenue, and profits are all up over last year - people are busier and utilization (chargeability) is higher - so it seems that people are working more efficiently.

Having said that, we're still shooting ourselves in our feet on basic business practices that we ought to have figured out a little better by now. To wit:

The current ratio -current assets divided by current liabilities - improved a little this year as some firms used profits to strengthen their balance sheets , but at 1.75 it is still woefully behind most other industries.

Accounts receivable and work-in-process measurements continue to reflect poor billing and collection techniques (67 and 22 days, respectively). Why are A/E firms so weak on converting work into cash? Do you think your auto mechanic would wait 22 days to bill you? Better yet, would she or he wait 67 days to to get paid?

And then there is the direct labor multiplier...granted, this year's median target multiplier has finally budged to 3.10 from 3.0 where it seemed to be stuck forever. If A/E firms are ever going to break the "profit-loss-profit-loss" cycle they need to start charging more for their services. Is there a better time to do this than now - when demand is high? If we are ever going to sustain profitability levels that are more independent of the business cycle, we've got to start charging more for our services.

Can't be bothered with the "accounting details"? Fine, but go find someone who can - they'll more than pay for themselves in improved financial performance for your firm.

If you are curious about the A/E Financial Performance Survey, download a free CEO Snapshot at http://www.psmj.com/publishing/survey/.

Have a great week,

Frank