Wednesday, August 12, 2009


In a survey this week to 284 CEO members of the DESIGN PROFESSIONALS LEADERSHIP ROUNDTABLE (LinkedIn Group), 39% said things will be BETTER by 12/31, 48% said things will be ABOUT THE SAME, and unlike 3 months ago only 11% think things will be WORSE by year end (2% no opinion)….This is a dramatic POSITIVE shift in sentiment likely based on the suddenly rapid increase in the number of PROPOSAL opportunities seen across the US in the past 3-4 months by most AEC firms. Whatever you think things will be like in 5 months, here is some PSMJ advice to ponder right now as you approach year end STRATEGIC PLANNING for your firm.

If you think things will be BETTER by 12/31 you should:

1. Upgrade your staff IMMEDIATELY stealing every great person you can from everywhere BEFORE the industry gets going again. Including PARTNERS and PRINCIPALS from other firms
2. Make that ACQUISITION you’ve been debating about….do it NOW while prices are still low
3. Lock in a 5-10 year commitment from your bank on your Line of Credit INTEREST RATE before rates goes through the roof
4. Lock in your space lease rate for 10 years
5. TRAIN all your people NOW on Project Management while things are still somewhat slow so EVERYONE is in prime form as things get busier

If you think things will be ABOUT THE SAME by 12/31 you should:

1. Get even more PERSONAL with past clients being certain that you PERSONALLY telephone them just to stay in touch
2. INVENT new consulting ‘products’ to help your clients with other aspects of their business
3. Expand GEOGRAPHICALLY but slowly….taking what you do locally very well to a new place….pay attention to your HIT RATE as you expand
4. Focus on CHARGEABILITY and YOUR MULTIPLIER making everyone chargeable….get rid of non-chargeable people
5. Enhance your proposals even more adding MORE VALUE to each proposed task…Do NOT cut price…ADD VALUE…

If you think that things will get WORSE by 12/31

1. Go immediately to a 4 day work week cutting compensation by 20% and rotating to teams days off on Monday and Friday so your office is ALWAYS open
2. Contract out all non-billable activities like accounting and eliminate staff in those categories saving all fringe benefit costs
3. SELL the company now before things get worse
4. Increase your bank Line of Credit now using historically better financials than you’ll have at year end
5. Terminate ALL non billable PRINCIPALS….after all…they cost the firm the most to keep…

Whatever you think the industry condition will be by 12/31/09, there is one CERTAINTY….Things will probably NEVER be like they were in 2007 again….Our whole AEC industry is about to be re-invented with new and younger people at the controls, with new technology emerging to the forefront like BIM and use of SOCIAL NETWORKS, and constant BLACKBERRY communications 24/7 ….all shaping an industry going through MASSIVE baby boomer driven re-capitalization over the next decade.

What will emerge will be a leaner and completely different profession made up of global joint ventures, huge consolidators (AECOM and STANTEC), tiny specialists able to deliver all over the world, linked experts working at home, private/public partnerships, new players, and younger more agile clients eager to embrace everything new……all of this at a time that America faces insurmountable deficits, crumbling infrastructure and an exploding non English population growth….

Who will emerge as the NEW FIRMS and NEW LEADERS in our industry ??? BOLD RISK TAKING will be needed and historically that does not come from older more mature firms or owners….Try to remember the names of the top design firms of the 1980’s that no longer exist if you can….Real change comes from the naïve boundless energy of younger more energetic entrepreneurs who know no better than to take a risk and start up….

The biggest challenge facing CEO’s right now is to UNLEASH the young…..and SHED the old… a time when business is down…..but the world has always faced this dilemma …hasn’t it ???

Do you have the courage to do it in your firm ???


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