You Might Be Playing the Endgame If…

You Might Be Playing the Endgame If…

Grow or die. Keep growing, and you and your AE firm get to play the “Transition Game.” If you’re winning at the Transition Game, then in your thirty-to-forty-year career you’ll get to navigate one, maybe two, transitions of ownership and leadership at your firm. And when you retire, if everything is going according to plan, you’ll leave the firm confident that the next transition is well under way. 

But the Transition Game is hard. While there are a handful of design firms that can trace their lineages back to the 1850s, and maybe two dozen to the early 1900s, over two-thirds of AE and environmental consulting firms never make it past the initial ownership and leadership transition, let alone a second or third. The cold hard facts are that most design firms will sooner or later play the endgame. Not to mix too many metaphors, but I know that a few of our readers are avid chess players and are more than intimately familiar with the variety of endgame scenarios that bring a chess match to a close. When it comes to endgames for AE firms, here’s a selection of 11 of the most common ones that we see. 

You might be playing the endgame if… 

1. Your largest client texts you to say, “Stop Work Now!”: This is a killer when you’ve failed to diversify your business (despite hearing that recommendation to do so at every strategic planning meeting over the years) and instead allocated all of your resources to that one big client account. Sure, it’s a gravy train while it lasts. But when it ends (and it always does, and many times with little to no notice), it triggers a downward spiral.

2. You’ve let things go on too long: You and your leadership team are content with being an average performer. No one wants to rock the boat. And besides, things are not bad. In fact, they’re good. They’re just not…great. This endgame sneaks up on many an unsuspecting firm. The opening moves are usually two to three years of zero top-line growth. With profits consistently in single digits. But you’re still making money. And everyone seems happy. The culture of the firm is very much one of everyone gets along. Nobody wants to rock the boat. But very soon you begin to run out of options for capitalization. It’s generally too late then to crack open The Five Dysfunctions of a Team to inject energy and dynamism into the firm’s groundwater and change course to a high-profit, high-growth model. You’ve passed the tipping point…Read more