In most architectural and engineering firms the person who is “in charge” ends up that way by default, and is not a trained managing partner. They are usually the person who founded the company, or the one with the biggest book of business, or the one with the most stock. It is rarely the person best suited to the job. They are not chosen for their leadership abilities and are often someone who does not want the responsibility.
Is it any surprise that the biggest complaint employees have is – “nobody’s in charge or knows what is going on”? Unfortunately, this lack of leadership leads to scope creep, inaccurate bidding processes, chaotic day-to-day-operations, low productivity, sub-par billing rates, disgruntled employees, unmet deadlines, dissatisfied customers, poor quality control and lack of sales.
Is this your firm?
If so, you might want to consider using a managing partner to ensure the success, stability, and growth of your company. Here are some of the things a managing partner can add to your firm.
Leadership
They like the technical side of the business, and that is where they should stay. Leadership is one of the most important duties an managing partner has. It is his or her job to create, maintain and advocate for the firm’s vision, ethics, employee development/satisfaction, mission, policies, and procedures.
Remember – good employees want to work for a good leader. They will go elsewhere if a firm does not have one. Poor management and leadership are one of the biggest reasons firms have trouble attracting and keeping first-class workers. Good leaders have low employee turnover.
Strategic Planning, Growth, Expansion
Architectural and engineering firms are notorious for being poor strategic planners. If their business is growing – and many are not – it grows sporadically and haphazardly. Not much focus is put on long term objectives, concrete sales plans, solid customer service policies, and consistent expansion.
An managing partner’s job is to plan for and drive growth through a well-conceived strategy. They do this by: limiting internal/external distractions, helping employees stay on-task, communicating the vision, creating a culture of results, keeping the firm customer-centered, looking for value-added solutions to problems, effective risk management and developing new service offerings.
An Effective Management Team
Architectural and engineering firms are unique in the business world. They have multiple partners – 5 to 10 is common – who own varying percentages of stock. These partners operate within independent work groups and seldom work as a true management team. In fact, many go out of their way to avoid leadership roles and functions.
It is common for partners to want the benefits of ownership, but not the responsibilities that come with it. Too often they have ownership duties they do not perform well, or at all because they would rather be a practice partner than a managing partner. They feel their administrative/management obligations – which are part of their job – are somehow not part of their “real job.”
This puts the firm in the situation of being rudderless, becalmed and off course while having an overabundance of people with captain’s hats.
A good managing partner can provide the solution to this problem, and they will steer the firm in the right direction.
Some of the things they can do:
- Intervene on and mediate partner issues.
- Build and maintain an engaged and efficient management team.
- Spearhead, streamline and manage administrative functions, decision making, policies, and procedures.
- Facilitate communication on every level.
- Free up partners to do the work they are good at and want to do.
- Promptly and effectively deal with employee’s problems, concerns, and performance matters.
- Focus on employee (including partners) accountability, satisfaction, retention, productivity, and morale.
Financial Stewardship
A skilled managing partner will work closely with the firm’s accountant or CFO. They will use the financials as a valuable management tool by monitoring: key performance indicators, productivity, receivables, cash flow, work-in-process aging, profitability, margins, bidding accuracy, scope creep, etc.
Architectural and engineering firms typically have poorly crafted and unfair partnership agreements. They do not protect the firm from partner issues and problems, especially financially. Compensation is rarely based on merit, performance or value to the company. A managing partner’s job is to make sure all agreements are current, fair, effective, actionable and protect the future of the firm.
The managing partner will also make sure the firm is addressing succession issues. Now that baby boomer founders are retiring many firms are being bankrupted or financially hamstrung by poorly designed partnership agreements and non-existent transition plans. Unreasonably high payouts to early partners are burdening later partners or the company with excessive debt, and not enough capital to function or grow.
It is the rare architectural and engineering firm who does not need a good managing partner. The ROI is well worth it, as are the intangible benefits. A good leader can develop a talented, motivated, productive partner group all working for the growth and profitability of the company.
At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:
