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STEPHANIE WARINO, from page 1
Interested in learning more
Growth (% of firms within profitability groups)
Stable Growth
Slow Growth
Declining
Fast Growth
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Very high profit
-
-
25%
8.3%
Firms with external BOD members
High profit
-
-
25%
8.3%
Average profit -
-
8.3%
12.5%
Low profit/ loss Very high profit
8.3%
-
4.2%
-
1.5%
1.5%
22%
11%
Firms without external BOD members
High profit
1.5%
1.5%
19%
6.3%
Average profit 3%
9.4%
11%
-
Low profit/ loss
3%
6.3%
3%
-
Approximately 64 percent of firms without external BOD members have high or very high profits, compared with approximately 66 percent of firms with external BOD members. Profit isn’t necessarily determined as a result of the actual opportunities that diversity of thought and new ideas that an external member might bring, so there’s a lack of significant difference in profit between firms with external BOD members versus firms without. Rather, profit is determined more by operational and organizational factors, conditions, or enablers, including the strategies you have in place for organizational structure, policies, contract, and project management. This presents a defensible case for two main actionable items: 1) Carefully and strategically assessing your organizational and operational conditions in advance of planning a period of increased growth. At a bare minimum, growth and tightening up any operational shortfalls need to happen concurrent with board changes to safeguard the long-term health and increased value of your firm. 2) External BOD members can bring more diversity of thought leading to growth. In the 2021 Principals, Partners & Owners Survey Report , 62 percent of principals also think there is a diversity issue in the industry – an increase from 59 percent in 2020. A focus on diversity, equity, and inclusion is good for culture and for business, is the right thing to do, and starts at the top and has a waterfall effect throughout your firm and the industry. Data in this article was from Zweig Group’s recently released 2021 Principals, Partners & Owners Survey Report . Meet with peers to discuss this and other important industry issues at the 2021 In-Person ElevateAEC Conference & Awards Gala, which includes the iconic black-tie awards gala celebrating the 2021 winners of the Hot Firm list, Best Firms To Work For, Marketing Excellence, Rising Stars, Top New Ventures, and the Jerry Allen Courage In Leadership awards. The limited- attendance CEO Roundtable Retreat is also a unique opportunity for AEC firm leaders to engage and interact with industry peers to discuss current issues facing firms today, explore industry trends and next practices, and confront the biggest challenges they face leading their firms. STEPHANIE WARINO is a licensed environmental professional and a strategic planning advisor with Zweig Group. Contact her at swarino@zweiggroup.com.
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THE ZWEIG LETTER AUGUST 30, 2021, ISSUE 1406
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