Design firms are busy and growing at a pace we haven’t seen for many years. Competition for talent seems to be more difficult than the competition for clients and projects. This is one of those “good problems” the industry prefers.
One of today’s challenges is leadership capacity to deal with success and growth. What worked in a firm of 200 people can’t keep up in a firm of 500. You can’t manage a firm of eight offices the way you used to manage three. Decision-making slows down just when it needs to be faster and more nimble. There’s less time to develop and communicate the firm’s overall vision and strategy, just when you need a clear purpose to attract and keep the best talent.
Creative professionals like to have a seat at the table in their firms’ leadership and governance. They like to be consulted, know what’s going on, and have a voice in decisions that are important to them. Even large professional firms tend to value traditional “partnership” cultures. This often results in expanding boards, partnership groups, and committees that discuss almost any issue, large or small, and try to make decisions by consensus – when decisions are made at all.
These groups seldom work well because they have unclear roles, lack strategic focus, and are simply too big to accomplish anything very quickly. Everyone wants to be involved, and no one wants to be left out, but most leaders are frustrated with this process. Privately, they ask “Can’t somebody just make a decision?” knowing that they may be part of the problem.
Every growing organization needs to find new ways to distribute leadership and governance responsibility. This kind of change can be difficult, because it means that not everyone can be involved in everything as before. Ultimately, leaders must trust each other – give each other permission – to handle responsibilities that once belonged to the whole group.
We’re helping a number of leading AEC firms refine their leadership structures and processes to meet this challenge. The firms we advise range from 30 to more than 1500 people. We’ve conducted confidential benchmarking research among many peer firms to identify common problems, patterns, and best practices. Here are some key findings:
1. The best firms focus their boards of directors, or senior partner groups, exclusively on strategic and fiduciary responsibilities. More tactical operational decisions, including firm-wide policies and practices, are delegated to larger and more representative management committees.
2. Most firms find that work gets done most efficiently in small groups with clear purposes, qualified members, and strong leadership. Much can be accomplished by task groups that take on specific assignments, make recommendations, and then go away.
3. Successful “matrix” firms carefully balance leadership responsibility and authority among their offices, market-based practice groups, and professional disciplines. When this balance isn’t clear, the firm is often consumed with internal negotiation and can’t deliver on its true potential.
4. Financial planning, management, and reward systems must be aligned with a firm’s changing leadership and governance structure. We can’t promote one form of leadership behavior but reward something different. Perceived unfairness about money is a frequent source of conflict.
5. Great firms aspire to evolve from traditional hierarchical or “hub and spoke” organizations to more seamless networks of talent and expertise. Governance is important, but ideally it is invisible most of the time – allowing people to bring the best possible resources to clients and projects.
Without exception, firms that succeed in this process invest a lot of effort in communication, trust-building, and collaboration. This involves time and expense in getting people together, in person, to form the kinds of professional relationships that create value for the firm and its clients. It’s simple: people will not truly collaborate with people they don’t trust, and people can’t fully trust people they don’t know.
When applied correctly to a firm’s unique circumstances, these principles create a platform for future growth – and a culture of excellence and opportunity.
Clark Davis, FAIA, LEED AP is a Principal Consultant with Cameron MacAllister Group. He leads services in strategy, leadership development, and organizational change. If you are interested in learning how Clark can help your firm, contact him directly at 636-448-9227 or via email.