Have you lost your business 'mojo'?
Your engineering firm’s culture has a direct impact on productivity and profitability. Ensure that the culture is correct, and your business “mojo” will be on track.
What is your business culture ? Surprisingly, the answer has a direct impact on your firm’s productivity and profitability%%MDASSML%%as it relates directly to your firm’s state of mind . Unfortunately, as the personnel of engineering firms ebb and flow based on market demands and general attrition, firm personality is affected. What was once a dynamic engineering enterprise may be falling into a cultural abyss that rewards corporate politicking as opposed to chargeable revenue production.
Has your firm lost its business “ mojo ”?
Multiple offices, schizophrenic personalities
How many offices does your firm operate? Are the policies and practices between the various offices applied consistently or do you find some offices interpret corporate rules differently? Do you find that employees gravitate toward working with a particular office and, at the same time, actively avoid other offices? The reality is that engineering firms with multiple offices can be somewhat schizophrenic, where each location maintains is own unique personality .
Unfortunately, when these multiple personalities are all contained under one corporate umbrella, there is a tendency to compete within the firm for the best employees. Principals find ways to entice top-notch firm talent to work on their projects%%MDASSML%%eventually ingraining them into being de facto direct reports.
A regional engineering firm comprised of five principals had established three offices based in contiguous states, thereby allowing for a free-flow of resources between the three closely grouped offices. A single principal was responsible for each of the two satellite offices while the remaining three principals manned the home office. As long as revenues and profits remain steady, there was little intrusion into the operations of any of the three offices. The peace was broken last year causing a dramatic change in the firm’s corporate culture.
In hindsight, it was easy to see what was coming. One of the satellite offices started competing for clients in the neighboring state (much to the dismay of the principals already housed in that state) and, given the increasing work load, started assigning engineering project managers from the other offices to work on the projects. As you can imagine, this aggressive posture created havoc between the principals, but at the same time was generating new, higher levels of corporate revenue. A larger question evolved: Was it the culture of the firm to applaud higher levels of revenue, or had the principal overstepped the protective informal bounds of the other principals?
As the cultural focus on the firm had never been formalized, the end-result of these events nearly dismantled this firm. A couple of principals left in disgust (followed closely behind by some of their staff) and the valuation of the firm dropped precipitously placing in doubt whether the firm would ever recover. The lesson learned: When operating multiple offices, ensure there is a common formal understanding of both the corporate culture and the rules of engagement. By not doing so ensures discontent.
Promoting from outside
In our transient business world, it is a common practice for engineering firms to hire senior-level employees from other firms either to fill open slots or build new practice areas. Unfortunately, employee retention standards indicate that approximately 50% of all new hires are successful. The number one reason for the low retention rate is cultural fit. But how can you improve your odds?
One engineering firm has opted to slow down growth in favor of achieving nearly 100% employee retention. Their solution? Hire engineers right out of college and groom them in their corporate culture%%MDASSML%%an effort that can be done with junior employees that have not already learned “bad habits” from other firms. For this engineering firm, its practice is to only hire two new employees each year and this is only achieved after putting all the employee candidates through a series of personality and technical proficiency interviews. For them, the right fit is essential to their long-term success.
Do you hide principal disagreements from your staff or, do you look to build your case by pleading it to the rank and file? Just like divorcing parents, it is common for principal arguments to reach the ears of their staff%%MDASSML%%placing the staff in the difficult position of choosing sides.
In the engineering industry where there are numerous alternative employers to choose, uncomfortable employees, especially those with talent, may find their solution to leave you behind. The lesson is clear: leave the dirty laundry in the board room.
While this article has been focused on what not to do, it is important to understand how to get your business mojo back. The first step is to establish or reaffirm your business culture. Identify what attributes are important to you and seek to incorporate them into your business practices. Also, realize that “one size” does not fit all.
Some firms find a militaristic approach best suits their cultural requirements where employees are directed to perform inline with strict process oversight. Conversely, other firms may opt for a looser environment that rewards creative thought and blurs the lines between owners, managers, and staff. Either extreme (and variations in between) is fine%%MDASSML%%it is representative of the types of employees that are necessary to operate your corporate culture .
However, with every cultural type comes the rationalization that merging two cultures is not without peril. Although not an engineering merger, the highly publicized merger between Electronic Data Systems and Hewlett-Packard represents perhaps one of the most visible examples of trying to bring together two vastly different cultural types. Although the business aspect of the merger makes sense, the real value outcomes will be debated for many years.
Have you lost your business mojo? If you find yourself dreading going to your office, the answer may be associated with your corporate culture. As a principal seek to formalize your corporate culture and adopt practices that reward its implementation. Before long you’ll have your business mojo back!
Dawson is the managing director of LTV Dynamics and has 27 years of management consulting experience. He is a frequent lecturer to international entrepreneurial businesses and has clients in the United States, Russia, China, Mongolia, and Latvia. He can be reached at BLDawson@LTVdynamics.com
Annual Salary Survey
After almost a decade of uncertainty, the confidence of plant floor managers is soaring. Even with a number of challenges and while implementing new technologies, there is a renewed sense of optimism among plant managers about their business and their future.
The respondents to the 2014 Plant Engineering Salary Survey come from throughout the U.S. and serve a variety of industries, but they are uniform in their optimism about manufacturing. This year’s survey found 79% consider manufacturing a secure career. That’s up from 75% in 2013 and significantly higher than the 63% figure when Plant Engineering first started asking that question a decade ago.