A strong relationship between any two A/E firm offices resembles a healthy marriage. The branches can count on each other, yet each owns its share of responsibility.
Both sides must show honesty, a willingness to partake in profit or loss, and a desire to “take care” of each other. Most of all, for the relationship to work, the partners must be willing to talk— about everything. They must express their concerns and agree on solutions.
Such cooperation can generate new energy so that, especially when the partners are working on the same project, their combined capacities will exceed what they thought possible. For the mutual benefit of any two offices (one the “contracting office,” the second the “support office,”*) working on the same project, we offer these guidelines:
• Define the relationship. Does the contracting office simply need to borrow staff from the support office? Or does it want to delegate a specific piece of the project to that office? For any project, the partners must establish the relationship as one or the other. Whatever the decision, each office must clearly understand its own function and responsibility. Be especially wary of interoffice arrangements that involve both kinds of relationships on the same project; these have historically led to problems in quality and accountability.
• Establish loyalty. Create a situation where the support office devotes its loyalty as much to the contracting office as to its own clients. Make the support office feel valued, an essential part of the team. You can do this by direct compensation—simply paying the support office for its best services. Or you can do it by evaluation—through which the support office manager stands to gain financially. Use the form below, “Evaluation of Intercompany Cooperation,” as your guide
• Agree on the split of profits. If the support office is lending personnel, then the contracting office and support office should split—approximately equally—the gross profit on those personnel. Conversely, if the support office takes on the responsibility—and risk—for a defined job element, it should get most of the gross profit for that element.
• In a dispute, favor the contracting office. If the two offices find themselves in conflict, then, all other things being equal, resolve the dispute in favor of the contracting office (ultimately, in favor of the client).
• When it’s all over, talk. At the end of the project, the contracting office should formally evaluate the support office’s performance. As in a good marriage, if the partners communicate, they’ll see farther down the road and find ways to get there.
Note: * The “contracting office” could, in fact, be a support office, and the “support office” could be the home office.
How ever your projects are organized, managing branch offices can present complex challenges that require keen risk assessment coupled with proven solutions.
This article is an excerpt from the complimentary ebook Branch Office Optimization Strategies, a clear and concise overview—direct from PSMJ’s A/E industry experts – on what it really takes to open and grow a branch office.
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