9 characteristics that distinguish leading A/E firms

By analyzing the “benchmark firms” selected from its annual surveys, PSMJ has identified several characteristics that distinguish top performers

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August 25, 2015 |
Steven Burns

The most successful A/E firms are fundamentally different from the average performers, according to the PSMJ blog. Based on an analysis of the “benchmark firms” selected from its annual surveys, PSMJ has identified several characteristics that distinguish these top performers:

1. Have a purpose with a vengeance. The best firms have strong and visionary leadership, sometimes even dictatorial leadership. Although innovative and creative, these firms don’t place a particularly high value on design awards. They let their clients define quality.

2. Use guerilla marketing. Proactive in their marketing, these firms identify the clients they want to work for and develop tough strategies to capture them. Principals stay very close to their clients and endeavor to know their business better than the clients themselves.

3. Build kick-butt project managers. The PMs that rise to leadership positions at benchmark firms are not just very good at managing projects—they also excel at selling all the services the firm has to offer to the client. When problems arise, these project managers take responsibility and communicate with their clients.

4. Value their people. Benchmark firms recruit only the best people to work for them. And they keep these people motivated by giving them room to grow — these firms’ leaders are most often developed from within. They really understand that people are their most important asset, and they act like it.

5. Are highly profitable. Benchmark firms know that nothing else matters if the firm is not financially successful. Lump-sum contracts and incentive clauses are the way they do business. They manage cash. They keep on top of their receivables. They charge according to value provided, not cost incurred.

6. Embrace technology. Management understands that adjusting to new technology can be a great frustration for many employees and they make it their job to build support for the transition. These firms make sure that there is a short implementation period to set up the technology and train users.

7. Have an ownership transition plan in place. Benchmark firms always think about the future and have ownership transition plans in place that reward performance over loyalty. These firms define criteria for leader selection, enabling junior employees to know where they stand and what it takes to get to the next rung.

8. Consistently benchmark. The top firms constantly benchmark their performance against well-established business performance measures. They don’t just look at industry data, but also dig out the benchmarks within their firm’s size, type of service, geographic location, marketplace and type of clients served.

9. Lead others to accomplish strategic plans and business plans. All staff is allowed to offer input on how to reach measurable business goals, and they believe in the vision and purpose of the firm. These firms allow for flexibility in their plans, as they know that unforeseen changes naturally occur.

Read more from the PSMJ blog.

Steven Burns | The Business Behind Design

Steven Burns, FAIA, spent 14 years managing the firm Burns + Beyerl Architects, during that time the firm’s earnings grew at an average rate of 24% per year. After creating ArchiOffice®, the intelligent office, project management and time tracking solution for architectural firms, Steve took his management expertise to BQE Software, where he is refining their business strategy and product development.

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