Accountability

The Blessing and the Curse of Being So Busy

The Architecture and Engineering industry is busier right now than it has been in a long time. This is great for your firm – right? I talk with at least 5 to 10 A&E firm CEOs a week, and their results are surprisingly mixed. While it is obviously a booming market for services, being busy does not necessarily translate into high employee performance, recruiting success or project profitability. How Can you Position Your Firm for Success in this Market? Every economic market provides us opportunities and obstacles, yet many firms run on autopilot, assuming that the dynamics of making money and growing are the same in up or down economies. This approach assumes that the opportunities will be obvious and take care of themselves, and that is not usually the case. To be successful in a fast-paced business climate, it’s imperative to position your people, strategies and decisions to recognize opportunities when they present themselves, and be agile enough to move quickly to take advantage of them. Likewise, we need to prepare for an inevitable future downshift and availability of work, and the hidden opportunities … Continued

Tolerating Mediocrity – What is the Cost?

  When we close our eyes and dream of the ideal business and team of employees, we imagine a world where there are no conflicts, everyone is a top performer, and we never have to give negative feedback. Not all employees are created equal But the reality is that not all employees are created equal. We all start out hiring people because we believe they are a good fit, have the right skill sets and experience, and we like them. I am assuming this since most of us don’t hire people we don’t like. After we hire them, we start to give them assignments, and within a few months, realize they are everything we hoped they would be, or not. This is the critical point in an employee’s tenure with us that often determines how the rest of their employment will go. If we accept a lower level of quality, attitude or competence than we need or expect, we set ourselves up for mediocrity with the employee. The worst part is – the primary problem is what we are not doing rather than what we … Continued

Why Accountability is NOT a Dirty Word

I was meeting with an engineering client recently that was explaining his firm’s culture. He said, “Accountability is a dirty word around here. We don’t measure anyone or have any consequences because we don’t like to punish people.” That statement stopped me in my tracks. No accountability at all? In fact, this large firm (over 500 employees) has no measurements at the individual level. They don’’t even have measurements at the business unit level. The only financial information that is published or reviewed is at the firm level. This caused me to step back and think about how hard it might be to work there. Certainly, there were top performers, mediocre performers and some team members that were bottom performers. But they have no way to figure that out, decide who to bonus or promote, or even figure out who to let go. I believe this is a detriment to the firm, the top performing employees, and even the clients. I had to ask a few questions: Question: Do you want to be the best you can be? Answer: Yes, of course. Question: How do … Continued

6 Steps to Find the Lost Dollars in Your A&E Firm

In my book Find the Lost Dollars: 6 Steps to Increase Profits in Architecture, Engineering, and Environmental Firms, I conclude with a final chapter that outlines the six steps that can guide you towards increasing your firm’s profitability. This article will summarize that chapter, as well as give you some success principles for ensuring that desired changes and improvements do not lose their momentum and die before being implemented. Change is inevitable and necessary in all businesses. If you are not able to adapt to changes in the economy, marketing, technology, and availability of human resources, you will find your profits dwindling, and your ability to retain your most talented employees diminished. So then why do 70% or more of most change initiatives fail? I argue that the foremost reason that A&E firms fail to grow and improve business operations is lack of a detailed strategy and plan to improve. This article will summarize the six steps that can help you start to identify and implement business improvement initiatives to help you find and recover the lost dollars in your business. 1. Calculate your metrics … Continued

Top Ten Reasons Change Initiatives Fail

    Over and over again I have seen major change initiatives fail. In fact, studies show that over 70% of most internal initiatives fail to meet stakeholder expectations. Whether it is implementing a new system, a merger or acquisition, business process improvement, opening a new office or pursuing a new direction, these major internal projects meant to help the company grow, improve, and thrive are derailed due to issues that could have been planned for, but weren’t. The cost of these failed initiatives, beyond the obvious inability of the business to grow and flourish, is hard dollars and time invested and lost. Hard costs include outright purchases of software, products, travel and outside services. There is also investment of time of employees and leadership wasted or misused. But there are also many “soft” costs such as lost confidence in leadership, missed opportunities or loss of competitive advantage. These costs can ultimately far exceed the tangible measurable expenses. In working with clients through the six steps to increase profitability outlined in my blog and detailed in my book, Find the Lost Dollars: 6 Steps to … Continued

5 Ways to Increase Accountability in Your A&E Firm

If there is one issue that I have heard repeatedly in working with A&E firms over the last 27 years, it is the difficulty of getting employees to fully accept responsibility – to be held accountable for their actions and performance. This issue goes so deep, that some business owners shy away from putting policies in place for fear that they won’t be able to get their employees to follow them. This practice often has the negative consequence of inconsistent quality control, compromised employee safety, and reduced project profitability. Another very damaging and frustrating result of not enforcing company policies is the constant frustration felt by your compliant managers and employees. When employees are consistently showing up for work late, not following company processes, or not responding to requests in a timely matter, it has a detrimental effect on every one of your employees. This frustration flows down to the lowest levels, resulting in a decrease in confidence in leadership, and creating dissent among those employees who are behaving well and following the rules. What is accountability and what isn’t it? Webster’s Dictionary defines accountability … Continued

Time is Money: Improve Your Employee Time Management

Time is more valuable than money. You can get more money, but you cannot get more time.  ~Jim Rohn, American Speaker and Author In a professional services business, the expression “time is money” is truly accurate. Your employees’ time is the greatest asset your business has. It needs to be managed with great care, as if each hour of their time is a valuable piece of inventory. Certainly, if you were selling diamonds for a living, you would build a secure storage facility, get armed guards, and buy insurance to protect this valuable asset. However, most firms do not protect their greatest asset—employee time—with this level of care. Employee time is often the most ignored asset in the company. Employees are notorious for complaining about having to do timesheets and often look at it as a cumbersome requirement. I regularly hear that firm principals, even ones who are highly billable, are the biggest violators of the firm policies, and cause the accounting department extra work and little support in trying to get employees to submit timesheets on time. Employee Time Management is Critical to Your … Continued

How to Get the Most Value from Investing in AEC Project Management Training

There is a growing trend in the Architecture, Engineering and Construction industries to train project managers (PMs). Reasons include the obvious goal of improved performance – both qualitative and financial. Other reasons are grounded in the many challenges faced by firms today to grow and retain staff, and develop future leaders for eventual leadership transition.  There are many different forms of “Project Management Training” being offered in the AEC industry: online training, classes, seminars, bootcamps, etc. Most of what’s offered to your project leaders and management teams is being grouped into this overall bucket of “Project Management Training” but it isn’t all the same and won’t all add the most value to your firm. Project Management Training is a broad term so when you are looking to purchase or sign up for training, it is important for you to first determine what skills you are looking to teach your staff and to understand the different types of training on the market. Not all training is focused on the same skills – some courses teach technical Project Management skills and others will teach Business Management skills. What is it you want to accomplish? What do your managers need to … Continued

Holding Project Managers Accountable for Profitability

While most A&E firms expect their project managers (PMs) to deliver profitable projects, many have not put the appropriate measures in place to ensure that it happens. Accountability at the PM level is often vague and unstructured, which can lead to several different consequences – but not the ones we want! Part of this issue has to do with the many responsibilities given to PMs, and a lack of true visibility into what they are really doing every day. This leads to PMs being given many tasks and little guidance as to how to be successful. The other big challenge is measuring results. The majority of firms that we work with are not tracking individual performance, or worse, failing to implement consequences even if it is being measured. This has the unwanted effect of grouping good and poor performers together, and the less desired result of passive aggressive behavior on both the PM’s part and the firm’s leadership. Common Practices that Undermine Profitability Goals The following are practices that I often see in many A&E firms that undermine their ability to achieve profitability goals. If … Continued

How Accountable Learning Can Improve Financial Results

    In looking where to invest limited dollars these days, it is critical that every penny spent provides a return on investment (ROI) above what other investments could deliver. Every dollar spent on one part of the business takes away investment in another. Each employee hired must contribute to the bottom line of the business, and measuring how they contribute can be a difficult yet critical aspect of successful business management. Improvement in employee skills can provide a significant improvement in profitability if combined with a program of business management improvement and learning methodology that ensures that the employee is employing their new skills on the job. Profitability by Project Manager can be measured – yet many firms don’t track individual performance, or teach project managers the skills necessary to deliver profitable jobs. Where money gets lost is often elusive – it is often in many small places every day. From poor estimates, to scope creep – not recovering contract extras – to poor control over subcontractors– money gets lost in many phases of the project lifecycle. What is missing in many cases is … Continued

Using Four Metrics to Analyze Performance of a Professional Services Firm

Sometimes the day to day demands of running a professional services business can be overwhelming, especially for creative and technical entrepreneurs and project managers that do not have a financial background. Trying to stay on top of administrative responsibilities, hiring and managing staff, and keeping clients happy can make it difficult to really understand how the firm is performing. Many leaders also struggle to understand and analyze reports and financial statements, and determine where to focus their attention to ensure success. While there are many important metrics and reports that you can look at each month to gauge your company’s health and profitability, you can get a pretty good understanding of the performance of the business by looking at just four metrics – the Win Rate, Utilization Rate, Project Profit Margin, and the Average Collection Period (or Days Sales Outstanding). By looking at just these four key performance indicators, you can simplify the process of analyzing how projects are being executed and managed, and help your project managers and leaders focus their attention where it will get the most benefit Win Rate The Win Rate … Continued