"Dedicated to helping architects and engineers earn the profits they deserve for their creative efforts"

Welcome to the March Edition of the AEC Managing Partner newsletter. 

Well it certainly seems that I got some people's attention with my February Newsletter.  A few readers were annoyed that I referred to them as "underachieving".  Clearly my intention is never to annoy my readers -- but on the other hand, I am grateful that I have their attention. 

Other readers blame their failures on the economy and completely discount all five of the reasons laid out in The Top Ten Reasons Your Firm is Underachieving Part-1".  They blame the economy for all of their current economic woes.  Their strategy is summarized as it can't possibly be my fault -- we just need to hold on until times get better. 

While the economy certainly has had a devastating impact on our industry, the fact remains that many (or most) firms were woefully unprepared for the downturn.  To quote Warren Buffet "When the tide goes out, you can see who is swimming naked".  The go-go years that preceded the crash gave many firms a false sense of security.  They truly believed that the good times would last forever and neglected the core strategies that l have summarized in my February Newsletter.

Undaunted by the feedback, I am happy to give you part 2 of "The Top Ten Reasons Your Firm is Underachieving".  Hopefully this will calm their sensitivity to underachieving.

In this Issue:

1. Top Ten Reasons Your Firm is Underachieving - Part 2

2. Cash Flow and Collections Webinar - Immediate Download

3. Becht Engineering named best firm to work for in New Jersey

4. Tech Tip of the Month -- keeping tabs on the competition

5. The Benefits of In-House Training Vs. Public Seminars

5. Incentive Compensation and Bonus Survey - Immediate Download

Top Ten Reasons Your Firm is Underachieving - Part 2

5. A Lack of Planning

The strategic plan for many firms can be described as follows:

a. Bring in as much work as we can

b. Do our best to create a great design and satisfy the client

c. Hope that we make some money

This strategy may keep a company afloat during prosperous times, but when the tide goes out you are left there without a plan for weathering the tough times.  With the help of an outside facilitator, the most successful firms take time every year to develop or update a strategic plan that:

a. Assesses their strengths, weaknesses, opportunities and threats

b. Outlines what the company will look like in 3 to 5 years, including markets served, services offered, revenues and profits

c. Prepares an action plan where key members of the firm commit to follow-up on the plan

4. Not Communicating with the Staff

All too often I work with firms where the partners are not communicating with the staff on the plan for transforming the firm into something more than exists today.  Given this vacuum of communication, the staff is left to assume there is no plan at all.  The most successful firms articulate their plans to the staff, so every employee can be a pro-active participant in helping to achieve the company's goals.

3. You are Locked Into Long-Term Commitments

When times were good, many firms opened branch offices, expanded their existing offices, leased new equipment and so on..  Now that the employees have been laid off and other overhead has been cut to a workable minimum, you may be left with too much office space and equipment.  Unfortunately there is no easy solution to this.  While it is worth a try, it is unlikely your landlord will reduce your rent or take back space.  The best you may be able to do is to sublease space and perhaps sell or donate unused computer equipment.

2. You Are Not Recognized as a Market Leader in Your Design Specialty
Despite all of your fine work your firm is not recognized as the expert.  This allows firms that have created a better reputation to reach down and win projects that should be yours.  It is unlikely the better reputation firm will best serve the client's needs.  However they have created the perception in the clients mind that they will do a better job. 

The fact that your competition is recognized as the expert did not happen by accident.  Most clients cannot tell the difference between good design and great design.  Your competition created the perception of expertise through a well thought out plan that includes a compelling marketing message and interesting website, professional marketing materials and a well executed campaign. There is no reason you cannot do the same.  But remember that this is no time to be humble.

1. You Did not Reinvest in the Company

When times were good, many firms did not have a plan to reinvest the profits into the company.  Most, if not all, of the profits were taken out of the company for the benefit of the owners, or to avoid double taxation.  Now that the good times are nothing but a warm memory, the company is left starved for cash and unable to invest in the needed technology, training and marketing.  To make matters even worse, line of credit have been reduced or eliminated during the credit crunch.  When times get better, be sure to allocate 1/3 of your profits for reinvestment in the company.

Dramatically Improving Cash Flow and Collections Webinar - Available for Immediate Download

In good economic times, collecting money on a timely basis can be an extraordinary challenge.  In tough economic times, it can seem near impossible.  Over the last 25 years in the A/E industry, I have personally developed a comprehensive system to dramatically reduce any company's outstanding accounts receivable.  This system is not some untested theoretical exercise - it has been implemented at dozens of firms over the years with outstanding results.

Our recent Webinar, Dramatically Improving Cash Flow and Collections is now available on CD.  This fast moving 70 minute Webinar, will show you how to dramatically reduce your accounts receivable and put more money in your bank account where it belongs.

For more information visit: http://www.aecmanagementsolutions.com/products/item7.cfm

Becht Engineering Named Company of the Year

Becht Engineering, a long-time client of AEC Management Solutions, Inc., has been named the Company of the Year by NJBIZ Magazine.

The NJBIZ Business of the Year Awards were created to honor businesses for their outstanding contributions to the New Jersey business community. The awards recognize an elite group of businesses and business leaders who have proven themselves to be shining stars of New Jersey

Read more: http://tinyurl.com/y8v86kh

Tech Tip of the Month

Several months ago I came across a great tool that can help you to keep tabs on your competitors. The tool is a website monitoring service that will monitor and notify you of any changes to a web page.

ChangeDetection.com provides page change monitoring and notification services to internet users worldwide. Anyone can use the service to monitor any website page for changes. Just fill in a simple form below, and they create a change log for the page and alert you by email when they detect a change in the page text. The service allows for a certain level of customization and best of all it's free.

Check it out for yourself: http://www.changedetection.com/

Benefits of In-House Project Management Training

 vs. Public Seminars

As a provider of public seminars and in-house training, I recognize there are merits to each method -- but at the end of the day, I must come down on the side of In-house Training as the most effective method of delivering information.  At public seminars you have the advantage of networking with other firms.  They are usually held at resort locations, so it provides an extra incentive for getting away from the office.  But that is where the public seminar advantage ends. 

Here are some of the reasons I favor in-house project management training over public seminars:

You Use Your Company's Project Reports and Data

There is simply no better way to learn about project management than by using your firm's project data.  In a public seminar you are reduced to using generic project reports that has no relevance to how your company operates

Twice the Learning in Half the Time
At a public seminar you are thrown in with firms ranging from sole proprietors to 2,000 person mega-firms.  In this format much time is wasted listening to strategies that have no relevance to your company.

Everyone Learns the Same Project Management Strategies

Every one of the attendees will learn the same project management strategies from the same instructor.  There will be no reliance on a few attendees teaching the rest of your staff

Save on Tuition

In-house seminars are much more cost effective than sending attendees out of house.  For the price of sending 3 employees to a seminar, your entire project management staff can attend the same training.

Save on Travel Expenses

When the seminar comes to you, there are no airfare, hotels, meals, taxis or other expenses to pay for.

Less Loss of Billable Hours

When the seminar comes to you there is no wasted time for travel.  This means no loss of billable time to overhead activities.

More Time Devoted to Solving Your Company's Challenges

Without the distraction of resort locations and solving another company's project management issues, all of the time is devoted to your company and solving your most challenging problems.

AEC Management Solutions. Inc. provides in-house training solutions.

Project Management for 20%+ Profit

Axium's Ajera for 20%+ Profit

Incentive Compensation and Bonus Benchmark Survey

Incentive Compensation is the proven key to employee motivation, increased productivity and dramatically improved profits.  This 249 page benchmark survey will answer all of your questions about how you compare to other firms in the A/E Industry.

Are you allocating too many or too few dollars to your incentive plan?

How does the competition compare?

How do firms of similar size compare?

How do firms headquartered in my region compare?

How do firms with office in my region compare?

How do firms with active projects on my region compare?

How do firms in my discipline compare?

All of these questions plus more are answered in the 249 page benchmark survey!

Plus over 70 selected firm case studies of architecture, engineering, environmental, interior design and landscape architecture firms.

Now Available for Immediate Download:  http://tinyurl.com/yz6pzs9

Want to Reprint an Article from AEC Managing Partner?

As a publisher of a print or web-based publication, you are hereby granted the right to reprint any article contained in this newsletter with the following provisions

1) The words "By Herbert M. Cannon" must be included immediately following the article title.

2) The following "resource box" is included following or preceding each article.

Herbert M. Cannon, President of AEC Management Solutions, Inc. and Publisher of AEC Managing Partner Newsletter, is a management consultant, seminar provider and speaker exclusive to the A/E Industry. He is available to speak at company meetings and conferences.  For more information, contact Herb via e-mail hcannon@aecmanagementsolutions.com. Or visit his website at www.aecmanagementsolutions.com

3) You quickly notify us of any publication, either in print or on the Internet. Notification may be made via e-mail at hcannon@aecmanagementsolutions.com

4) You send us a hard copy of any printed publication in which one Herb's articles appear. Printed issues may be sent to 183 Higgins Road Matawan, NJ 07747

I am looking for guest writers for my monthly newsletter. I you have an idea for an article, please send an e-mail to hcannon@aecmanagementsolutions.com

I hope to see everyone at one of my seminars or speaking engagements.

Regards,
Herbert M. Cannon
Herbert M. Cannon

hcannon@aecmanagementsolutions.com