I was Just Thinking...
Aug 15, 1993
It’s the time of year when you can’t reach anyone on the telephone, when important decisions seem to be postponed, and when, as one CFO who participates in our ZWEIG 100 index remarked recently, firm-wide chargeability mysteriously declines. Welcome to August.
Fortunately, business doesn’t really stop this month. If it did, we’d all be in trouble. Let’s thank goodness for all the “distractions” that force us to curtail vacations, cancel long weekends, or get home late for dinner.
As I head out the door for a two-week vacation (the first in a long time), three different topics are begging to be addressed now, before it’s too late:
More on numbers— First off, I’m still amazed at how engineers, architects, and scientists are trying to run their businesses without the right numbers. There are a number of reasons why these firms don’t have the numbers they should have. For example:
Fear of what the numbers will show. It’s what I like to call the “ostrich” approach to management— “Don’t tell me I have a problem and maybe I won’t have.” I’m convinced that some firm principals really don’t want to know what their net sales are, or what their net backlog is, or how profitable each PIC’s projects are. Maybe they’re afraid it will make them look bad. As technical professionals who solve problems for a living, I’m sure that if they really did want this information, they’d find a way to get it.
Lack of understanding for why the numbers are important. I’ve had sessions with principals of firms— in one recent case, an A/E firm that has been around since the turn of the century— and they could not even tell me why it was important to have information on what they were selling and who was buying it. Until I explained it to them, they had not really considered that knowing what they were selling affected what they were going to be able to bill, what their attitudes toward new capital expenditures might be, and so on.
Concern that having the numbers will lead to unhealthy internal competition. It has been verbalized to me many times: “We don’t want any competition inside the firm. We want everyone to cooperate with each other.” An admirable goal, but an unrealistic one. Competition can be good. It can push everyone to a higher standard. Just think of what American cars would be like today were it not for the Germans and the Japanese. Healthy competition does not prohibit cooperation. It’s really quite simple— if you want cooperation, reward cooperation (tangibly), and penalize those who do not cooperate.
Take a look at the ZWEIG 100 data on page 4 of this issue. If you can’t produce the same numbers (and more) for your firm, something’s wrong. Measure and report sales, billings, backlog, and profitability on a continuous basis, and I guarantee that everyone will be more sensitive to what goes into making those numbers look good.
Why matrix doesn’t work— It seems like the phone is ringing with an increasing frequency from A/E and environmental firm CEOs and managing partners who are unhappy with the way their business is running. A theme I hear over and over is “the matrix organization structure we put in place two (or three or four or more) years ago just isn’t working.”
When you get inside these firms and interview individual staff members, they’ll tell you they don’t know who their boss is, that they are getting pulled in X different directions simultaneously (with “X” being defined as the number of principals the firm has), and that there is no way to reconcile these conflicting demands on their time. The managers will complain about endless staff meetings to schedule staff. And the project managers will tell you that every budget gets blown and they have no control over it.
There’s a concept in management called “unity of command.” It means that each and every person should have one and only one boss. It’s fundamental to a smooth-running ship. The answer is simple: Get rid of the matrix, give the PMs their own staff, and if you do multi-discipline projects, use a PM (and his or her team) to run the job from whatever the lead discipline is.
Please wake up, America, and come to your senses— Last on my mind is Rush Limbaugh, although he thankfully has very little to do with the A/E or environmental consulting industry. A recent article in Success magazine claims that Limbaugh’s audience earns an average of $55,735 per year, that 83% of them have some college education, and 20% have even gone to graduate school. His book, The Way Things Ought to Be has been on the New York Times best-seller list for over a year, and has sold more than 2.4 million copies.
On the surface, Limbaugh looks like the consummate entrepreneur. He’s into publishing, radio and T.V. broadcasting, and other ventures. But if you actually listen to him, you’ll find out he’s a flag-waving, fanatical fascist, who hates women, is against giving out condoms to help fight the spread of AIDs, is anti-environment, and generally hates everything not connected with Ronald Reagan. To top it off, in the Success article mentioned above, Limbaugh is quoted as saying, “I’ll tell you what to think.”
Believe me, I’m no liberal, but I’m convinced that this guy wants to be the first dictator of The United States of America, and frankly, I’m scared by his popularity. The worse things get economically for the middle class in this country, the more likely someone with simple answers to complex problems will get in power. Don’t forget, Mussolini made the trains run on time.
Originally published 8/15/1993
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