Since the Great Recession, most business leaders have been fixated on growth – and for good reason.  But even when the ‘going is good’, much of that growth was (and still is) doing damage and putting leadership teams and organizations at risk – especially those in professional services.

Our current growth model is a problem and won’t serve us well going forward either.

Greater scale is what’s needed to build our business to win today and over the long-term.  

Growth vs Scale

Business growth and scale are often confused.  

Business growth can simply be an increase in revenue.  Most often this requires an increase in expenses to support and sustain the new growth.  For us in professional services, that support is typically in the form of hiring additional employee talent to produce the new work.

Business scale is different.  It is a process of increasing revenue with little to no increase in expenses while maintaining high quality.  Scaling a product-based business is typically easier than a service-based business (see link below for more on ‘productizing’ our services).

The Problem with Growth

In general, service firms have a “one-to-many” distributed influence approach to growth.  

To progress professionally and generate profit, key individuals must take on increasing levels of responsibility and be leveraged over more clients and more staff.  As teams build-out, the “one” becomes more standardized and has less day-to-day interactions with clients and non-direct-report members of the team by design. This limiting connection, however, is becoming more problematic (more on that later in this series).

At the same time, each “one” often carries the burden of at least two roles as “doer-seller”, “principal-manager”, or “manager-service provider”.  The problem, especially today, is that our best talent is disproportionately burdened by this model. Workloads for most are skyrocketing, clients are demanding more, budgets are tighter, there’s less new talent, and there’s less time to fully engage and develop the talent we have.

“Even though much of the work is getting done and profits are high for most today, this is not “scale”.”

–Peter C. Atherton

Even though much of the work is getting done and profits are high for most today, this is not “scale”.  Operating in this mode is not sustainable and there is a cost – near-term to talent and culture, and longer-term to production in terms of talent burnout and disengagement and the bottom-line in addressing talent loss and service quality gaps.

The Need for Scale

Developing talent takes investment and time, and cost-effectively adding experienced talent is a challenge – unless you are truly doing something special to attract them (more on that later too).  

Relying solely on more of the same is not a credible strategy for today and won’t prepare us for a future trending more toward the amount of “value produced” than “time-spent”.  Increasing our ability to scale will be more critical to successfully competing and profiting.

For most firms, now is the time to adjust your strategic planning and invest.  

As leaders, we can’t confuse the good market conditions of recent days with doing what’s right and needed to win moving forward.

Designing for Scale

Scaling your business moving forward is likely to include the following elements:

• Integrating new technology
• Process innovation
• Productization
• Leveraging of the gig economy
• Value escalation
• Transformational thinking
• In-demand branding

Re-opening your strategic plan or reconsidering its implementation in light of these elements is an important first step if you’ve not already done so.

Investing in next-level leadership and management development will also be critical to achieving success at greater scale.

Part 2 of this series focuses on growing our people to help scale our business.  Part 3 focuses on what it takes to build a brand designed to attract and save us time and money while increasing loyalty and retention.  

To your winning,

PS – Are you a leader who wants to take your engineering, architecture, or construction-related firm to the next level?  Learn more and apply to become part of The AEC Leadership Mastermind.

PSS – Do you want to learn how to excel and prevent burnout in you and your organization?  Check out relevant and important chapters of my book “Reversing Burnout” for FREE by clicking HERE.

Check out too the AEC Leadership Today Podcast designed exclusively for leaders who want to stay relevant and effective and help their firms grow and prosper during all times >>  HERE!