In Best Practices in Strategic Planning for A/E Firms, we begin by providing you with the results of a survey that PSMJ did with 75 firms on how they conduct strategic planning. Next, we provide you with some information on what we have gleaned from the survey. We have mined the data to figure out what works and what doesn’t work in strategic planning. Then, to help you conduct better strategic planning at your firm, we talk specifically about some things that we have learned over the many years we have been engaged in strategic planning with architecture and engineering firms. We wrap up with some recommendations on best practices in strategic planning. Our goal is to provide new insight into how your firm can maximize your strategic planning efforts for success in 2016.

1. By David Burstein, P.E.
PSMJ Resources, Inc.
Best
Practices in
Strategic
Planning for
A/E Firms

2. INTRODUCTION
In Best Practices in Strategic Planning for A/E Firms, we begin
by providing you with the results of a survey that we did with 75 firms
on how they conduct strategic planning.
Next, we provide you with some information on what we have gleaned
from the survey. We have mined the data to figure out what works and
what doesn’t work in strategic planning.
Then, to help you conduct better strategic planning at your firm, we
talk specifically about some things that we have learned over the many
years we have been engaged in strategic planning with architecture and
engineering firms.
We wrap up with some recommendations on best practices in strategic
planning.
We hope that you find this report helpful in your strategic planning.
For more information and additional resources, please contact us at
617-965-0055 or www.psmj.com.
2

3. I. How do A/E firms conduct strategic planning? 4
II. What works? What doesn’t? 12
III. How to improve strategic planning at your firm. 17
Copyright ©2016 by PSMJ Resources, Inc.®
All rights reserved. No part of this publication may be reproduced or transmitted in
any form or by any means, electronic or mechanical, including photocopying and
recording, or by any information storage or retrieval system without the prior written
permission of the publisher.
PSMJ Resources Inc.’s material is protected by copyright. It is illegal under Federal
law to make copies or faxes of the publication without permission—even for internal
use. Violators risk criminal penalties and damages up to $100,000 per offense.
PSMJ Resources, Inc. will pay a reward of up to $1,000 for actionable evidence of
illegal copying or faxing.
PSMJ Resources, Inc.®
10 Midland Avenue, Newton, MA 02458
Phone: 617-965-0055 Fax: 617-965-5152
Email: customerservice@psmj.com
www.psmj.com
CONTENTS
3

4. Below is the breakdown of firms that participated in the survey by firm size. You can
see that we have a pretty representative group. While the majority came from firms with
between 25 and 100 employees, these 75 firms represent a good cross-section of the
sizes of firms you see in the A/E industry.
I. How Do A/E Firms Conduct Strategic
Planning?
4
Participants represented a wide range of firm sizes.
We’ll begin by sharing with you the results of a survey of 75 firms that PSMJ
conducted on A/E firms’ strategic planning practices.

5. 5
The largest percentage of participants came from architecture
firms.
Participants
represented a wide
range of practice
areas.
We found that in this particular
group, 39% of participants came
from architecture firms, followed
closely behind by 33% from
engineering primes and 31% from
engineering subs. Then it drops to
19% from interior design, and so
on. Again, a pretty good cross-
section of different types of firms.
We then asked firms
how often they do
strategic planning
retreats.
We found that the most common
response was every 3-5 years (25%).
Other (45%) is a whole hodgepodge
of time frames—the biggest category
being every year. Only 8% of firms
said they have never done a strategic
planning retreat.
Firms vary greatly in terms of how frequently they have
strategic planning retreats.

6. 6
There are two things that
most firms do to prioritize.
We asked participants what kind of
preparation they do prior to a retreat.
We found that the majority (81%) did some
form of financial benchmarking, which
provides an idea of what metrics they need
to work on. Unless you do some kind of
benchmarking, it is difficult to prioritize
what your financial issues are and what you
need to look at the hardest.
Secondly, firms are likely to survey
retreat participants on key issues (73%).
When we work with firms, we survey on a
variety of key issues we tend to see in
strategic planning, and ask them to rate
them on a scale of 1-5. We look for the 5 to
10 that have the highest rating. Again, this
is a great way to prioritize what you do
during the retreat.
There are other things that not as many
firms do, such as getting input from clients
regarding performance and employee
satisfaction/engagement surveys. These are
both very important!
Most strategic planning
retreats primarily use an
internal facilitator.
When we asked firms who facilitates
retreats, the majority (34%) said “we
always use an internal facilitator,”
followed closely by “we usually
facilitate it internally, but sometimes
use an external facilitator.” Not as
many firms primarily use only an
external facilitator. Not exactly the
right way to do it, but most firms
primarily use an internal facilitator.
Focus the agenda of your planning retreat on key issues.

7. 7
We asked if firms use an
external facilitator,
what kind of expertise
did they have.
We found that most firms use “an
expert consultant specializing in the
A/E/C industry who also facilitates
the meeting” (61%).
A second group (35%) said they “use
a local facilitator who understands
strategic planning but is not an expert
in the A/E/C industry.” That is okay,
if you feel you have enough expertise
and breath of perspective that you
don’t need inside information about
the A/E/C industry, and only need
facilitation.
And then a few firms said they get
input from an A/E/C expert who does
not facilitate the meeting.
We then asked firms
how satisfied they were
with the facilitation of
their retreats.
We found that the vast majority were
either somewhat satisfied (51%) or
very satisfied (44%) with their
retreats. Only 6% were not very
satisfied.

8. 8
We then asked firms
who they invited to
their strategic planning
retreats.
No surprise here that the number
one response was shareholders: 72%
firms invite shareholders to the
retreat. This is followed by the CFO
(52%), other staff managers (49%),
and non-shareholder line managers
(42%). Meanwhile, 39% of firms
invited rising young stars and HR
directors.
Next, we asked firms if
they have a formal
retreat, how long they
typically lasted.
The most common response was
two days (33%). Some do strategic
planning retreats for a day and a half
(25%), and some for one day (26%).
A few go to three days or more and
a few last less than one day. Two
days is what we have found in 90%
of firms that we work with.
From our experience, 1 ½ -2 days is
the right amount of time for most
firms. This amount of time allows
you to get into strategic issues in
sufficient depth but it’s not so long
that it takes too much time away
from running the company.
However, very large firms often
require more time or multiple
sessions.

9. 9
We then asked firms
about how often they
held formal strategic
planning retreats.
We found that most firms hold
retreats every 4-5 years (41%),
followed closely by 2-3 years
(39%). In general, it seems that
firms go for a time horizon of
anywhere from 2-5 years. In our
strategic planning retreats, we find
3-5 years is what our clients prefer
as well.
We also asked firms how
many hours they invest
in developing a strategic
plan.
That includes preparation time, time
spent at the retreat, and time after the
retreat documenting the plan. Most
firms spend 20-50 hours (39%). Some
spent 50-100 hours (20%) and some
spent less than 20 hours (17%). Fewer
firms spent outside that range
developing a strategic plan. So it
seems most firms invest 20-100 hours.

10. 10
Next, we asked if firms
shared the result of their
strategic planning retreat
with staff.
Interestingly, almost half of firms
(48%) provide almost all of the
information to all employees. That is
higher than I would have guessed, but
we believe that, with the exception of a
small amount of truly confidential
information in the strategic plan, the
majority of that information should be
shared with all employees.
And then another 39% provides a
select portion of information. Only a
very small percentage provide no
information to all employees. So this is
pretty consistent with our observations
that you should provide information to
employees. Your employees want to
know your firm’s strategic goals to see
if they align with their personal goals.
We also asked how
often the firm’s most
recent Strategic Plan is
used by the leadership
team.
Almost half (49%) of firms said
frequently, which is really good.
Another 47% said they sometimes
used it. Only 4% said they never use
it, which is pretty good.
The idea of strategic planning is not
that it’s an event that happens every
five years and produces a strategic
plan that goes on the shelf and
gathers dust for five years.
Your Strategic Plan should be
document that is actually used by the
senior leadership team.

11. 11
Most firms report that strategic planning has contributed to a
shared vision and improved their firm’s performance.
We then asked firms how
well strategic planning
contributed to a shared
vision among firm
leaders.
A shared vision among firm leaders is a
very important objective of strategic
planning. It gets all the leaders aligned
towards the same strategic goals.
What we saw was that almost half of
participants said that their strategic
plan has been quite helpful in
developing a shared vision. And
another 29% said that it has been
somewhat helpful but they still have a
problem with shared vision. Only 17%
said that as a result of strategic
planning they now have a strongly
shared vision. And only 7% said they
continue to struggle.
And finally, we were
interested in how strategic
planning improved
performance.
What we found was that 25% of
participants said that strategic planning
has achieved major improvements in
performance. And 65% reported that
strategic planning has achieved some
improvement in performance. Only 10%
of firms said they have achieved little or
no improvement in performance. And so
you can see that 90% have seen some if
not major improvements in performance
from strategic planning.

12. II. What Works? What Doesn’t?
12
The first portion of this report provides you with the demographics and results of
the survey on how A/E firms conduct strategic planning. To identify the best
practices, we did some mining of this data. We first compared various strategic
planning practices with how well these practices contributed to a shared vision
among the firm’s leaders. We then compared the reported strategic planning
practices with the degree of improvement in their firm’s performance. The
results are very interesting and sometimes counterintuitive. You will see from
these results that the most common practices aren’t always the best.
We’ve compared survey participants strategic planning (SP)
practices to the results they achieved.

13. 13
FirmsThat Plan Every Year (or More) Have a More Aligned
Strategic Vision
We looked at how the
frequency of strategic
planning retreats
contributes to a shared
vision.
We broke the 75 participants into
groups based on how often they held
a strategic planning retreat. We found
that firms that conduct strategic
planning every year or more achieve
the highest rating in terms of how
well strategic planning contributes to
a shared vision among firm leaders.
So if you want a strategic plan that
really gets your senior leaders
aligned, have a retreat every year or
more.
We then looked at how
the frequency of
strategic planning
retreats improves
performance.
We looked at that same grouping, and
asked how has the frequency of
strategic planning improved
participating firms’ performance.
Again we found that the highest level
of performance improvement is
achieved by firms that have retreats
every year or more. Meanwhile, firms
that have strategic planning retreats
less than every five years achieve the
lowest level of performance
improvement, in fact significantly
lower.
…AndThey Achieve Better Performance

14. 14
Longer Retreats Contribute More to a Share Vision
We looked at how the
duration of strategic
planning retreats
contributes to a shared
vision.
When we rated how duration
contributes to shared vision, we found
that firms with strategic planning
retreats that last 3 days or more
achieve the highest rating in terms of
how well strategic planning
contributes to a shared vision among
firm leaders. You can see that there is
a steady progression here: The longer
the retreat the more strategic planning
contributes to a shared vision among
firm leaders.
We then looked at how
the duration of
strategic planning
retreats improves
performance.
Here, we get a completely different
answer. Whereas in the previous
chart you can see that longer retreats
contribute more to shared vision,
this isn’t the case in terms of
improving firm performance. What
this shows is that firms see only
some improvement in firm
performance, with the optimum
being with retreats that last 2 days.
…But Not So Much to Firm Performance

15. 15
Spend Enough Time – But Don’t Get Carried Away
We then looked at how
time invested in strategic
planning correlated with
improved performance.
What we can see here is that there is a
plateau at 50-100 hours. Firms that
spend less that 50 hours in strategic
planning achieve a significantly lower
level of improved performance than
firms that invest more than 50 hours.
What’s interesting is that firms that
spend over 400 hours do not achieve
significantly more organizational
improvement than firms that spent 50-
100 hours or 100-400 hours in strategic
planning.
So the tipping point in terms of time
spent seems to be at 50 hours. You need
to spend the 50 hours, but really not a
whole lot more than that. It’s how well
you spend the time that matters.
We also looked at shared
vison and improved
performance in terms of
who is invited to the
retreat.
We found one thing that really jumps
out: The highest bars on both shared
vision and improved performance are
for firms who invite rising stars to the
strategic planning retreat. That is really
interesting because most firms, as
indicated in a previous chart, do not
include rising stars. This data show that
firms that invite rising stars achieve
better shared vision and improved
performance than firms that don’t invite
rising stars.
Be Sure to Include Some Rising Stars

16. 16
Be Sure to Get Input About Employee Engagement
We then looked at shared
vison and improved
performance in terms of all
the various inputs.
We looked at the impact of input from
financial benchmarking, clients,
employees, and retreat participants. We
found that firms obtaining input about
employee engagement achieved the
highest ratings for both shared vision and
improved performance. Interestingly, only
a third of the firms surveyed get employee
engagement input.
We also looked at what
type of facilitator gets
the best results.
Interestingly, we found that the
highest level of satisfaction with the
facilitation of the retreat is achieved
by firms that always use an external
facilitator. And that actually is a
small percentage of firms. They are
followed closely by firms that usually
facilitate retreats internally but
sometimes use a external facilitator.
The level of satisfaction was lowest
for firms that always use an internal
facilitator. The message here is at
least sometimes you should use a
external facilitator for your retreat.
Consider Using an Outside Facilitator

17. III. How to Improve Strategic Planning
at Your Firm
17
In this section, we’ll discuss…
The difference
between long-term
strategic planning
and annual business
planning
The strategic
planning process –
and how to simplify
it
What kind of
information you
should collect prior
to the retreat
How to prioritize
your agenda
How to facilitate the
retreat effectively
How to follow up to
be sure you achieve
your strategic goals
In this section, we provide some specific recommendations that will
help you improve your firm’s strategic planning. Some are based
on the results of this survey; others are based on PSMJ’s 40 year
history of helping A/E/C firms with strategic planning.

18. 18
Long-term Strategic Planning vs. Annual Business Planning

19. 19
A Long-Term Strategic Goal is Aspirational
This Generates a Series of Short-term Operational Plans

20. 20
Cascade Effect of Strategic Planning
You Can Simplify This Process Into
4 Basic Steps
When firms conduct strategic
planning, there is a cascade
effect.
There are some really necessary pieces
that firms need to achieve. Obviously,
the big one is vision: What is our
company going to look like 3-5 years
out? I am also a firm believer in
purpose: What are we about? Why do
we exist? Are we design, practice, or
business-driven? Also critical are:
What are our core values? What guides
us? What makes us tick? Your values
will guide you as you go toward your
vision to achieve your purpose.
What follows these high-level ideas of
vision, purpose, and values are the
mechanics of crafting your plan. So it
goes from high levels to the specific
detail level, the accountable, responsible
items to get done. This involves writing
goals, objectives, the strategies (what)
to achieve, then the tactics (how) and
finally the actions (who/when) needed
to get things done.

21. 21
SetYour Priorities Based on…
You Can Then Prioritize the Most Important Issues Using a
SWOT Analysis or Similar Format
Strengths
• Sound ownership transition process
in place
• Strong growth in recent years
• Consistent financial performance
• Low non-labor overhead structure
Opportunities
• Move clients from “satisfied” to “raving
fans”
• Improve profitability by reducing net
revenue deficit
• Improve cash flow by reducing trade
collection days
• Expanding into new locations
Weaknesses
• Tolerance of poor performance
• Perceived lack of meritocracy in
promotions
• No culture of accountability
Threats
• Leadership transition
• Unintended consequences of
reorganization

22. 22
DecideWhich Topics Are Most Important
PSMJ has developed what we call “The
Strategic Planning Wheel” to illustrate
how all the elements of a strategic plan fit
together.
Based on your prioritization of topics, you
can decide which ones to tackle at this
year’s retreat and which ones to put off
until future years.
An example is shown below.

23. 23
Facilitating the retreat can be tricky. Here are some
suggestions to make it a bit easier.
UseThese 3 Tests to Evaluate the Viability of Strategic
InitiativesThat Are Proposed
1. One person can’t be both the facilitator and a contributor. Be sure these
roles are handled by different people.
2. The best ideas often come from those who don’t speak up. If you let a
vocal few dominate the conversation, you may miss out on these ideas.
So get everyone involved by using “nominal group technique” in which
you ask everyone to write down their answer to a question, then call on
each person to read their answer.
3. Make sure every discussion ends with an action plan that includes what
will be done, who will be responsible and when it will be completed.
4. Before leaving the retreat, get everyone to commit to accomplishing their
activities by their agreed upon dates.

24. 24
Establishing Linkage
An Example of Linkage

25. 25
How Long Should the Process Take?
But It’s Not Over When It’s Over!
Don’t leave the retreat without setting up a series of scheduled
meetings to review the status of each person’s action items.
These should generally be held every 2 to 4 months, depending on
the amount of activity scheduled for that period. To be sure
everyone attends, have each retreat participant put the scheduled
update meetings onto their calendars before leaving the retreat.
And be sure to establish agreed upon consequences for those who
miss their deadlines. For example, one firm elected to impose a
“late fee” of $100 for anyone who misses a deadline. All the late
fees were then donated to the firm’s charity.

26. ABOUT PSMJ
Over 40 years of helping
A/E/C firms achieve
business success.
PSMJ Resources, Inc. is the world’s leading
authority, publisher, and consultant on
the effective management of architecture,
engineering, and construction firms.
With offices in the United States as well as
the United Kingdom and Australia, PSMJ
offers over 150 titles in book, audio, and video
format.
In addition, the company publishes several
monthly periodicals and delivers dozens of
seminars, roundtables, conferences, webinars,
and in-house training sessions every year for
A/E/C professionals around the world.
PSMJ’s sought-after consulting expertise
covers a range of critical business areas such
as strategic planning, project management,
valuation, succession planning, and mergers &
acquisitions.
PSMJ is also active within the community,
utilizing our resources and the contacts at our
fingertips within the A/E/C Industry to help
those in need.
WHAT
ARE YOUR
BIGGEST
STRATEGIC
PLANNING
CHALLENGES?
Speak with one of our
Strategic Planning experts