NSCA hosts an excellent education conference for owners and executives every year. I attended last year and was impressed not only by the content and presenters, but by the excellent networking. The attendees are primarily integration companies, but there are also several Rental-Stagers and manufacturers. The important thing is that the business lessons apply to everyone. So if you have been looking to improve your executive IQ but prefer to be around people that understand your business - then the NSCA Business & Leadership Conference is the place to be.

There is a stellar lineup of presenters and topics and I am very humbled to be included. I am looking forward to attending and should you decide to come - be prepared to take a lot of notes. There are generally 200-250 executives at this event and they all share your business concerns and passions. The event will be in Palm Beach, Florida. I hope to see you there.

From time to time InfoComm commissions important research and then makes it available to the public. This past fall Acclaro Growth Partners looked into trends in building automation, sustainability, and the role of IT in construction projects for the coming decade. 

Building Automation - Opportunities and Challenges for the Audiovisual Industry

I was able to preview this report and believe that it holds important insights for anyone in the AV industry. You can purchase it at the InfoComm Store.

It's only five months away - June 5-11
For 2010 I am President of InfoComm International. This is the third of four years of being an elected officer. The President's year is highlighted by our annual conference and exhibition. We will be back in Las Vegas and expect a bigger show than ever. For the past five years I have taught at InfoComm and even with presidential duties I will take time to share what I am learning in the field. I have two courses this year:

The Systems Integration Business Survival Kit
and
The Rental & Staging Business Survival Kit

Both classes will present real challenges and applied solutions for their respective audiences. We will start with financial metric analysis, weigh the pros and cons of organizational structures, and show how key processes affect profit. In addition we will debunk some long-held assumptions about inventory management, proposal development, and business development.

I will be writing more about the show as the year progresses, but in the meantime you can check out the show website here. Registration begins in February.

By now we all remember what to do in a Recession. We rethink our revenue projections and adjust operations accordingly. For many companies that means holding the line on expenses and reducing headcount through attrition and layoffs. But one of two things typically happens next:


It is easy to forget how hard you had to work when the company was growing. Companies can go for years in a growth curve and when a downturn comes they don't know how to react. The solution is to build a scalable business that can accept upturns and downturns in stride.

Entrepreneurs typically do not like to plan for downturns. It's all about grow, grow, grow. So the first time that scalability becomes part of the discussion, it is out of necessity and often too late. I find that integrators and stagers need to be more scalable in their proposal process than anywhere else.

Scalability in Proposal Development
As many of us have learned, the number of proposals we have to generate to win business may actually go up in a Recession. A best practice I endorse is the use of estimating engineers or teams to ensure the efficacy of proposals. So scalability lesson number 1 is that management (ie: GM's, Sales Managers and Engineering Managers) must evaluate business opportunities before committing valuable resources towards pursuing the job.

Case in point: More and more projects have become bid-contract work instead of design-build work. (The Staging equivalent is the price shopping courtesy bid from a production manager versus a no-bid relationship project from a regular customer.) Firms that use their design-build bid process on contract/consultant specification jobs will often spend more money on building the proposal than they stand to make if they win the job. The scalable solution is to have a bid process that matches the type of project:

A.     Fast Track projects apply pre-engineered solutions with no programming, stock flow drawings, and a simple site survey. These are the "hang and bangs." Fast Track orders should yield the highest gross profit of any job - assuming you stick with the basics and don't use engineering resources. If you can really move fast and install within ten business days, customers will pay a premium over design-build.
B.     Design-Build projects require a site survey, design engineering, wiring diagrams, rack elevations, and programming. The integrator is responsible for designing the system and specifying the products. You may have to lower equipment margins to remain competitive in the market, but profitability is really dependent on managing your use of labor resources. The longer the lead time, the lower the price. Be sure to protect your design until you are awarded the job.
C.     Consultant or Contractor Bid Projects start with a bid spec and require an engineering review (not design) on the integrator's part. Sales staff may not always recognize that the opportunity they have uncovered is a bid project. The biggest mistake an integrator can make is to think they can win the job by applying their design engineering services to that proposal. Your vetted document will probably just support the low bidder.
D.     Consulting Opportunities come to integrators all the time, but because they are so used to giving away proposal development they don't know how to monetize the opportunity. One of the best things an integrator can do is learn how to value their design and estimating services. They may not want to compete with Design Consultants, but they will learn what their services are worth. To that end, management will definitely want to put an end to designing contract bids for 12% gross profit!

The scalable company will be able to generate all the proposals it needs to secure the business that will keep it afloat. In lean times, you can maximize valuable engineering resources. In busy times, you can be more selective about which projects you chase. The key is management oversight in the application of the scaled resource. Smaller firms will quickly learn that they either need to do either Design-build or Bid work, but not both. Large firms will segment their resources to avoid over-engineering bid jobs or under-engineering design-build.

Outsourcing as a Scalable Solution
I cannot close this without talking about outsourcing. Many companies pride themselves on using only staff to execute projects and while I applaud their commitment - it doesn't work well in volatile economies. Companies - integrators or stagers - should be outsourcing some portion of labor or services most of the time. If they are not, they run the risk of absorbing a lot of staff burden in lean times. My best practice recommendation is to sacrifice a small portion of your profit during busy periods by planning on using sub-contractors on a regular basis. This practice will teach your team how to manage the ups and downs and will help you preserve profit in slower times.

Scalable companies adjust more quickly and with less loss of profit when the economy tanks. They also thrive in the many spurts of business that seem to come until recovery kicks in full time. Scalable means they can wait to hire fulltime personnel longer and will perhaps find the better candidate instead of the one that was available. Don't overbuild, adjust your operation dynamically with scalable business solutions.

Tom Stimson is celebrating over twenty-five years in the communications technology industry.  As a Consultant, Tom helps companies determine their next goal and then execute the plan that takes them there. For more information visit the website.