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How to Return to Growth in 2010

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  1. How to Return to Growth in 2010:A Blueprint for Revenue Growth, Increased Profitability, and Operational Improvement Presented by: John Soter, Principal ZweigWhite Strategic Advisory Services

  2. Agenda • A framework for business lifecycles • Why and How companies evolve, grow, or “age” • Attributes and predictable risks at each stage of growth • 2010 Outlook – Trends and markets • Business Growth Planning Template • Revenue? Profitability? Operations? • Scenario and contingency planning Visit us at www.zweigwhite.com

  3. Business Growth and Evolution Visit us at www.zweigwhite.com

  4. Prime Stable Adolescence Bureaucracy Growing Aging Go-Go Infancy Courtship Death Business Evolution Model • 6 primary stages • Not every firm passes through all 6 • Can go forward or backward, get stuck, or die • Predictive model – attributes, needs, risks, Visit us at www.zweigwhite.com

  5. Growing Aging Growing vs. Aging Balance maintained at Prime Visit us at www.zweigwhite.com

  6. Leader Attributes • To lead = make good decisions, implement effectively • 4 leader attributes • P – Producing results • A – Administrating of the business • E – Entrepreneuring the future • I – Integrating the efforts • Expressed as PAEI, paei, pAeI, P eI, etc • capital = dominant, lower case = secondary, = absent Visit us at www.zweigwhite.com

  7. Leader Attributes • A • Focus on How – by the book • Bureaucrat, compliance & mistakes • Arrive on time, leave on time • Loves meetings, neat desk • “They’re not doing it right” • P • Focus on What needs to be done • Lone ranger, Fire fighter, task at hand • Arrives early, Leaves late • No meetings, desk is a mess • “I don’t have time” • E • Focus on Why - New Ideas - if it’s exciting • Arsonist • Arrives & leaves, “Who Knows” • Meets if has an idea, no desk • “They’re not following my priorities” • I • Focus on Who – Who said what, what does it mean • Politician • Arrive and leaves when others do • Loves meetings, Desk is large conference table • “Tell me where you want to go” Visit us at www.zweigwhite.com

  8. The Right Blend • We are a mix, develop & morph over time • PAEI is very rare, textbook manager • None are perfect, all are different, pos/neg based on stage need • Each growth stage needs unique strengths • Management team needs the right balance • Solution – work together, find common language • “Think Yiddish, act British”, mutual respect Visit us at www.zweigwhite.com

  9. Polling Question • Which styles do you rely on predominantly in your current position? P A E I Visit us at www.zweigwhite.com

  10. Growing Aging Bureaucracy pA i E Affair P Infant Mortality P E Founders Trap Death Business Evolution Stages Prime PAEI Stable PAeI Adolescence pAEi Go-Go PaEi Infancy Paei paEi Peter Pan Courtship paEi Visit us at www.zweigwhite.com

  11. Normal vs. Abnormal “Growing Pains” Visit us at www.zweigwhite.com

  12. Acquisition Considerations • Acquisitions can fuel growth & replace E • Make sure M&A growth fits the plan • Due diligence needs to include manager assessment • What will combined leaders’ styles look like? • How to rapidly blend for success • Need to focus on P for clients • While combining the A • Where is the E, and will it remain? • I is critical to effective integration • All are necessary for successful integration Visit us at www.zweigwhite.com

  13. Infancy Go-Go Adolescence Prime PAEI Prime Aging Growing Stable PAeI Stable Adolescence pAEi Bureaucracy Bureaucracy pA i Go-Go PaEi Infancy Paei Courtship paEi Death Question • At what stage is your firm? Visit us at www.zweigwhite.com

  14. 2010 Consensus Outlook Visit us at www.zweigwhite.com

  15. 2009 & 2010 Revenue Changes Estimate for firm revenue: 2009 vs. 2008 Estimate for firm revenue in 2010 vs. 2009 6.8% 7.5% 30.3% 7.5% 19.2% 21.9% 5.4% 7.9% 23.3% 9.3% 15.2% 25.8% 19.9% Source AIA Work-on-the-Boards Survey, November 2009 Visit us at www.zweigwhite.com

  16. Six Trends to Watch in 2010 • Economic Uncertainty • Unemployment and health care • ARRA and other government intervention • Mixed merger and acquisition activity • Globalization • Green building Source: 2010 AEC Industry Outlook Visit us at www.zweigwhite.com

  17. 86% - “2010 economy will not get worse” 52% - “2010 economy will be better” 2010 AEC Outlook by Market Source: 2010 AEC Industry Outlook Visit us at www.zweigwhite.com

  18. Business Planning for Growth “A problem well defined is half solved” Visit us at www.zweigwhite.com

  19. How to Compete - 2010 • Deliver highest possible quality & client satisfaction at the lowest practical cost • Balance expense management with revenue pursuit • Position for advantage • New products & services, delivery capability • Plan paths to growth • Markets, partners, M&A “You can’t change the wind, you can only change the sail” Visit us at www.zweigwhite.com

  20. Potential Current Markets New Products New Markets New Products Products Current Products and Markets Current Products New Markets Current Potential Markets Keys to Planning for 2010 and Beyond • Build muscle – effectiveness and efficiency • Possible & probable scenarios with contingency plans • Strengthen and manage tactical implementation 2010 AEC Outlook Business Trends Survey New Services to existing markets = 76% Pursue more public work = 72% Teaming = 67% New markets = 59% Visit us at www.zweigwhite.com

  21. 4 Step Business Growth Planning Process • Accumulate data • Deliberate and refine into information • Accommodate to generate knowledge • Finalize for wisdom Visit us at www.zweigwhite.com

  22. Step 1 – Accumulate • Establish your baselines honestly & objectively • What would a buyer think? • Include gap between you & peer best • Benchmarks (Growth, Profit, Util, Overhead, DSO) • and $ potential • Include client/market study • Include employee input Measure Twice, Cut Once Visit us at www.zweigwhite.com

  23. Operating Gap Analysis Peer group benchmark analysis shows magnitude of potential opportunity Figures are for illustrative purposes only, based on a $10MM Firm A B C (One time savings) D * Top Quartile from 2009 ZW Financial Performance Survey Visit us at www.zweigwhite.com

  24. KPI Peer Comparison Top Quartile from 2009 ZW Financial Performance Survey Visit us at www.zweigwhite.com

  25. Client Input • Clients can help, and they will if you ask • Market study reveals how you are perceived • Segment customers • Where are emerging & expansion opportunities • May not be able to continue with some existing clients Who are Customers • Capability matches customer need – our bread and butter • Customer needs not currently satisfied • Emerging markets • Not our business 4 2 1 3 4 ID by Needs Visit us at www.zweigwhite.com

  26. Employee Input • Involve entire firm, solicit input, gain insights • Use survey, focus groups, open polling box… • Communicate purpose to gather contributions • Craft questions to support assessment • 2 functions • Generate ideas and get points of view • Energize employees for new strategy, prepare for participation Visit us at www.zweigwhite.com

  27. Scenario Planning • Brainstorm probabilities, best case, worst case for drivers • Economy’s impact on clients • Emerging markets • Severe downturn in business, pipeline forecasts • Key personnel staffing / competency challenges • Cash Management and credit lines • Think through and create contingency plans • Set trigger points for key actions • Establish calibration cycles within Strategic window Visit us at www.zweigwhite.com

  28. Stay the Course Growth Planning –Phase 1 Base Case External Opportunity $ (New Markets + Expand Markets) Delivery Opportunity $ (New Products + New Services) Required Investment $ Strategic Agenda Risk Assessment & Contingencies Operational Improvement $ (Productivity + Cost Savings) Net $ Impact Strategic Direction Visit us at www.zweigwhite.com

  29. Step 2 - Deliberate • Individual review by team members • Review market & operational findings • Follow up as needed for clarification • Digest and prepare for team discussion • Refines scenario and contingency plans Visit us at www.zweigwhite.com

  30. Step 3 - Accommodate • Review Phase 1 findings • Assess scenario plans • Risk assessment, success probability, expected impact • Rank scenarios and prioritize risks • Outline contingency plans • Craft direction statement • Create Strategic Agenda items • Raise & address individual concerns and P.O.V. • Reach binding consensus • And commitment to direction and main agenda items Visit us at www.zweigwhite.com

  31. Step 4 – Finalize The Plan • Set driver goals for new strategy • Create implementation WBS, assign key tasks • Design accountability process • Tied to compensation • Design communication and roll out plan • Create management process • Key measures, Key check points • Recognition and recourse plans Visit us at www.zweigwhite.com

  32. Customers Stakeholders Expectations Vision Strategic Direction Tactical Plans SMART Goals Capabilities Process Design Use of Technology Training Structure Mgmt Process Reward & Recognition Income & Security Challenge & Growth Participation Retention Incentives & Rewards Implementation • Implementation must address tactical means and ends • Communicate strategy and company driver goals • Create the strategic performance environment • “Translate” Expectations, engage vs. impose • Address Capability gaps & required investments • Align reward and recognition practices Visit us at www.zweigwhite.com

  33. Vision 5 4 Value Potential 2 3 1 Value Delivery Business Growth Plan Components • Internal & Market Analysis • Vision and Mission • Driver Goals • Marketing Plan • Financial Plan • Operational Plan • Key activity accountability • Communication Plan • Implementation schedule • 1 Assessment: • Internal opportunities • Market Opportunities • 3 Align the company • Translate, engage, involve 4 Implement • 2 Strategic Direction: • Consensus on Agenda • High level Action plans 5 Achieve Vision Visit us at www.zweigwhite.com

  34. Summary • Where is your firm on Grow – Age cycle? • Assess leader attributes • 2010 Trends and market forecasts • Moderate growth prospects, good not great • Growth and Planning Template • Benchmark to ID gaps / opportunities to build/refine capabilities • Create scenarios for economic & market opportunities • Growth areas, investments, teaming, M&A • Set Strategic Direction with strong tactical focus Visit us at www.zweigwhite.com

  35. Closing Thoughts • Start or re-visit planning routines • Assess your firm’s Growth stage • How balanced is your team? • ID & Capture internal opportunities • Benchmark, grow operational capabilities • Look ahead to get to next stage • Markets, services, regions, international, teaming, M&A • Planning is journey, not event Visit us at www.zweigwhite.com

  36. Growing Aging Submitted Questions Visit us at www.zweigwhite.com

  37. Contact Information John Soter (508) 651-1559 Ext 211 jsoter@zweigwhite.com Click on the below link to purchase this webinar: http://www.zweigwhite.com/p-886-how-to-return-to-growth-in-2010-a-blueprint-for-profitability-improvement.aspx Visit us at www.zweigwhite.com