Newton, MA (PRWEB) October 29, 2008
Morrissey Goodale LLC is a management consulting and research firm serving the Architecture Engineering and Construction (AEC) industry. This press release outlines the steps you can take to manage the financial crisis that is affecting the industry. In particular, there are several critical areas you will need to focus on in the short-term.
If you haven't yet had your finest hour as a leader in the A/E and environmental industry, now is a good time to shine. While we know of firms that are actually thriving in this tumultuous time, it's much more likely that your company is seeing project after project grind to a halt. And it's going to get worse.
Nevertheless, you need to keep making adjustments and adapting no matter how bleak things look. To quote a client, "If everything tanks, then play taps. Until that happens, let's keep looking for ways to succeed." To weather the current financial downturn, there are several critical areas you will need to focus on in the short-term:
Stay solvent. If you have a collections process, enforce it with your accounting department and managers. If your process doesn't already include it, have your accounting department call clients ten days after a bill is sent to make sure it was received and to answer any questions your client might have. And send those invoices electronically when possible. It's faster (and "greener"). Finally, forecast cash-flow on a weekly basis-- project what cash will come in and go out over the next four- to eight-week period. This will allow you to see where you need to speed up collections and/or slow down payments to avoid dipping into your line of credit. If necessary, talk to creditors before bills are past due to persuade them to extend payments of your current bills. Reduce or stretch out debt, and build up your capital reserves as quickly as possible so you can continue to operate the business.
Press your client and project managers to report on projects that are at risk, put on hold, or cancelled. Adjust your labor costs immediately and cut discretionary spending to the bone. Understand, however, that marketing is not discretionary spending. A/E and environmental firms typically slash marketing expenditures before reducing fixed costs during hard times. However, those firms that maintain or even increase marketing activity during this slowdown will win critical market share (see "Winning Work" below) and be in a better position not only to survive, but to thrive once the business environment improves.
Strengthen your banking relationships by letting lenders know the company's financial position and determining what level of borrowing will be possible in various scenarios. Also, keep an eye on the condition of your bank's solvency. Talk with multiple banks to increase your options.
Maintain communication with your best clients. Find out what is critical to their success (or survival), and draw on every bit of expertise your firm possesses to meet their needs. Cross-selling will be critical, so educate your seller-doers on everything your firm does. If your organization structure creates barriers to cross-selling for any reason, tear it down and build a new one that rewards individuals based on firm-wide performance. Reach new clients and reinforce your firm's expertise and value to existing clients by starting a high-impact and informative e-marketing communications campaign. E-marketing is fast, cost-effective, and easily monitored and tracked.
Credit-Worthiness of Clients
Determine the credit-worthiness of your clients-- even your steadiest. Ask them how they are faring in the downturn and run credit reports on prospects with whom you are less familiar.
In this climate, your clients likely have you on a short leash; therefore, you must execute on your existing contracts. This will be even tougher than normal if your firm is in the midst of labor reductions. But regardless of whether your firm is downsizing, stabilizing, or even growing, consider simultaneously "trading up" in critical positions. While the best talent will typically remain employed with competitors during an economic downturn, you now have a much better chance of finally landing that key hire you've been looking for if you can effectively sell your firm's stability and longer-term prospects.
Labor Reduction Damage Control
If your strategy is to reduce labor and/or hours, let key managers and employees take a lead role in how that will play out-- particularly how client and project responsibilities will shift and how work hours will be reallocated. Encouraging this level of involvement will help boost productivity and foster a team spirit during a tough time.
The Health of the Leadership Team
If there is unhealthy friction within your leadership team, stamp it out. You cannot afford to hold onto anyone who puts his or her own agenda ahead of the team. Many of you will be challenged like never before in your careers. Your partners need to be able to engage in healthy debate and make good decisions fast. And they need to present a confident, unified front to the rest of the firm to keep up productivity and morale. As Benjamin Franklin once observed, "We must hang together, or we will surely hang separately."
The folks in your company are depending on you. Stay on top of current conditions, make adjustments quickly, and do the best you can.