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was an element that could differentiate them from the oth- ers. Also cited as key values were longevity, at 57 percent, breadth of coverage, at 50 percent, and risk management support, at 36 percent. Some surveyed firms voiced concerns that lack of under- writing expertise, market overcapacity, and unsustainable pricing levels might ultimately lead to a “shakeout,” with some insurers leaving the market altogether. While that might happen down the road, it’s not in the forecast for the near future. “It’s a good time to be an architect or an engineer, so it’s a good time to be an insurer of architects and engineers,” Knise says. organization, and swift action to stop the bleeding. JUNE JEWELL is the president of AEC Business Solutions . Learn more about how to improve your firm’s financial performance at AECBusiness.com. that already believes in your firm’s mission, follows established processes and embraces use of systems may get the best results. In addition I recommend that you: ❚ ❚ Conduct a business assessment to determine primary issues ❚ ❚ Get one-on-one feedback from staff ❚ ❚ Schedule regular meetings by firm leaders to all remote offices ❚ ❚ Include group leaders in regular corporate leadership meet- ings ❚ ❚ Evaluate whether organizational structure and compensation practices are encouraging desired behaviors In some cases, you may try everything possible and discover that a group, team, or office is just not working out. So how do you know when to cut the cord? Obviously you want to try everything possible to turn things around, especially if you have made a large investment in them, and have a lot of talented staff that you could lose. The final decision must be based on whether management believes that the team’s results will improve, as well as whether the team is contributing to or detracting from the overall company strategy. If after all of these steps have been taken over a reasonable period of time, and results have not improved, then there may be no other option than to replace key staff or close an office altogether. The key is to make improvements quickly rather than let problems fester and deteriorate. Real improvement can be made with clear communication, determination to instill accountability at every level of the “The key is to make improvements quickly rather than let problems fester and deteriorate.”

JUNE JEWELL, from page 5

share staff, cross-sell, or provide work to other offices or groups when measured primarily on their own performance. It is also common for bonus plans to be given on a discretionary basis which promotes individual performance over the best interests of the firm. Another problem is failure of individual teams to follow company processes and use systems. These groups develop their own processes, use spreadsheets to manage projects, and don’t embrace the company strategy and vision. Silos form and remote offices are often referred to as “fiefdoms.” This is usually the opposite of the desired culture, and stems from a lack of training and oversight, as well as failure to hold staff accountable for performance and not adhering to company policies. This can have a substantial impact on profitability and limit the ability for your company to grow and thrive. “If you have groups that struggle to be profitable, have high turnover, or don’t embrace your firm’s culture, it can be difficult to pinpoint what the issues are and get them on track.” These issues are especially evident when another firm has been acquired, and has completely different systems, processes and values from the corporate office. It can take a lot of time and effort to integrate a completely new company into your mainstream business practices. And when resources are tight to begin with, this is an area that is often not given enough attention. If possible, moving a key executive to a new office can have the best results. Bringing the discipline, values, and knowledge of company practices to a new office or group is challenging, and having someone there from the beginning

INSURANCE, from page 8

issues for the surveyed firms include evolving project deliv- ery methods like design-build and public-private partner- ships; innovation; and international exposures. In a competitive market, insurers tout their claims service, and among surveyed firms, 79 percent said claims service “These are all significant insurance companies that are seeing A/E professional liability as an add-on line of business. It’s considered a good place to make money.”

Cyber insurance Cybercrime is not a huge issue at this point for A/Es. It seems to be a bigger issue for retailers, banks, online businesses, and law firms. Having said that, all businesses are targets and we have had A/E clients who have been victims of cyber extortion, (send us bitcoin and we’ll give you your files back), and computer fraud (where someone copied their keystrokes and used their PIN to withdraw money from their bank account). Also, we are seeing clients of A/E firms wanting their A/Es to purchase and maintain so-called cyber/network security insurance. This will eventually drive demand for the coverage. — Dan Knise

THE ZWEIG LETTER April 18, 2016, ISSUE 1148

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