Fostering success in a branch office

Nation's Business, April, 1997 by Roberta Maynard

A small number of factors determine whether a satellite office will be successful and profitable, according to a 1996 survey of 32 professional firms with 246 such offices. The survey, conducted by Zweig White & Associates, Inc., a research firm in Natick, Mass., found that successful satellite offices were:

* Usually started by the company's present owners rather than acquired from another firm.

* Most often managed by the firm's owner or principal rather than by a nonowner.

* More likely than their unsuccessful counterparts to have had a hot start--that is, the company had work in the region before opening a branch office there.

Success in satellite offices was attributed most frequently to strong leadership in the office (16 percent), a strong client relationship (16 percent), and a strong market (14 percent). Other factors frequently cited were company name recognition and having the support of home-office managers.

Conversely, the most common explanations for an office's failure were poor leadership (39 percent) and a weak market (21 percent).

The most important traits of an effective branch-office manager, according to CEOs participating in the survey, are the ability to think like a small-business entrepreneur (56 percent) and having strong marketing skills (34 percent).

The survey indicated that the ideal branch manager might be one who believes that the success or failure of the office is within his or her control and that the office would thrive even if it were not part of the parent firm.

The firms surveyed were in the architectural, engineering, and environmental-consulting businesses.