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Value per employee

Understanding this is essential in your ability to grow your firm and successfully execute your strategy. Ideas and execution

In Zweig Group’s 2020 Valuation Report of AEC Firms , yearly trends for the value per employee ratio were analyzed to better understand the market. As one of the least volatile value ratios calculated by Zweig Group, the value per employee ratio is a quick way for firms to assess their relative value. Value per employee has steadily increased over the last five years, reaching an all-time high in 2020. Since 2007, value per employee has undergone an average annual increase of almost 4.5 percent. Amann Group.......................................10 BC Consultants.......................................8 Jeff Katz Architecture............................10 JQ.........................................................10 LandDesign.............................................8 Ramsay Burgin Smith. ..........................10 SCA Architecture............................10, 12 Schaefer Engineering, Inc........................6 Vasquez Marshall Architects..................10 Ware Malcomb........................................4 Participate in a survey and save 50 percent on any Zweig Group research publication. F I R M I N D E X MO R E A R T I C L E S xz MARK ZWEIG: We are all in the consulting business! Page 3 xz Exceed expectations: Diane Bicknese Page 6 xz STEPHEN LUCY: Impeach! Page 9 xz LINDSAY YOUNG: Leaders need to rest Page 11

A s a strategist, an engineer, and a physicist, I’m interested in the intersection of ideas, problem solving, and execution. We work with companies every day to define their purpose, which is a key driver of success at the core of an organization’s strategy. High-growth firms have a purpose that plays two important roles. It enables companies to redefine their playing field and allows them to reshape their value proposition. What is a purpose, though? A purpose is an idea, a belief in the way the world or our company could or should be. Therefore, our success depends on spreading and propagating that idea. How does that happen? Our friend and reference point for this conversation is going to be something you may have run across before, the law of diffusion of innovation developed by Everett Rogers (shown in the graph on the next page). The theory behind this idea is that it is path dependent and each category of adopters of an idea/innovation influences the next. This naturally leads to an interesting conversation on network theory, but we will save that for another article. The main problem most people do not realize is the difference in psychographics (attitudes, aspirations, and other motivational factors) between the types of individuals that make up each category. For any idea to be successful, you must cross what Geoffrey Moore defined as “The Chasm.” In other words, you need somewhere between 15 percent and 18 percent acceptance of the idea in a population before it takes hold and you gain acceptance by the majority. At that transition, how we communicate to the innovators and early adopters is vastly different from how we communicate and the actions we take once we move into the majority. To solve this problem, we have to delve into the psychology a little. For those who have been following me for a while, you didn’t think we would get through this topic without reference to neuroscience or psychology, did you? A great reference on this topic is Robert Cialdini’s book Influence: The Psychology of Persuasion which covers six principals of persuasion: reciprocity, scarcity, liking, authority, social proof, and commitment/consistency. While several of these factors are at play, the two that are most descriptive in how we can communicate to each of these groups are scarcity and social proof. Innovators and early adopters are excited about ideas that others don’t know about yet or the status of being “the first” while the majority are looking for something that has been tested. They will be more critical of the ideas and perhaps messengers unless you can show some proof of concept or evidence of success. Communication plays a vital role, as we’ve discussed. Your message should fit with where your audience is on this distribution. Putting

Phil Keil

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