Set to music from The Beverly Hillbillies: Let me tell a little story about a man named Jed, a poor engineer, barely kept his family fed. And then one day when designing to buy food, in the front door walked a really sharp dude. Young engineer, that is. P.E., superstar.So the first thing you know old Jed had a friend. He could see some day that there would be an end. He didn’t get selfish and he didn’t act rude, and the engineer was the start of a really great crew….Enough of The Beverly Hillbillies. I want to talk about what you need to do if you want to keep those people who could make it on their own. It seems to be a worthwhile topic in light of the difficulty so many firms are having today with recruiting. To stem the tide of bleeding, so to speak.Jed Dawson wanted to have a good firm. Being an inquisitive fellow, he asked his peers and competitors (the ones he bumped into at ASCE meetings and state CEC meetings) what they thought was important to creating the type of work environment good people want to stay in. But unfortunately, Jed didn’t get the answers he expected. Here’s some of the bad advice he got:“Your people really won’t care about ownership. All they care about is how much money they earn this year.” I hear more small firm sole proprietors say this, and I completely disagree with them. Ownership is a career goal for 90% of the professionals I speak with in this industry. It’s just the way things are done. In fact, many times people care more about whether or not they are owners than what they’ll make this year. It’s that important! “The most important draw for design professionals is to have really great projects to work on.” Again, I disagree. When I hear this statement, I try to get owners to think about what kind of firm they have, not just what kind of projects they’re working on. It’s all about the environment of the firm for 90% of the folks in this business. A good firm is a good place to be, since a rising tide lifts all ships. Conversely, many of the most well-known design firms are horrible places to work! The “name” designer does a little work and then hogs the limelight. Everyone else is treated like dirt. But the projects sure are impressive! That only goes so far today because people have a lot more choices. “Engineering firms shouldn’t grow beyond 25 people anyway.” Statements like this really kill me! I totally disagree. I don’t perceive any particular size that a firm can’t grow beyond. What’s critical is being organized to support whatever size you are and want to be. But that’s something you can control, not some inherent limit imposed by dark forces. There is no size limit. But there may be limits on what you can do based on how you do things! “Your people would never understand the financial stuff if you did share it with them.” I have already beaten this misconception to death is previous issues of The Zweig Letter. It’s ridiculous. I can’t believe that a bunch of people with IQs in the top 2% or 3% (or higher) can’t understand a financial statement if we go to some trouble to teach them. And they need to understand this stuff if you are ever going to be able to retire and move on. “Get your children working for you. My son (daughter, daughter in-law, or son in-law) is competent, and everyone here knows he (or she) doesn’t get any special favors from me.” Occasionally, we see super-talented sons or daughters taking over the firms created by their parents and becoming wildly successful. But more often than not, Junior does not have the gumption, personality, or wisdom that Senior had. Either way, there’s nothing the other employees want more than to see that person fail. And is that what you want to offer your kids? I hope not. “You don’t want to create too many owners because you’ll lose control.” Hogwash! Control is based on what you do and how you do it. It is not based strictly on stock ownership (unless you are a manager right out of Dilbert.) And anyway, what’s wrong with a bunch of owners? As long as you establish the ground rules before they purchase stock, how can you go wrong? You can’t. There’s no reason you have to call all owners together to make minor purchasing decisions, to fire someone, or to stop working on a job for a deadbeat client. Ownership does not mean equality. It does mean a share of the profits and a vote for the people who will serve on the board of directors. Thankfully, Jed was wise and didn’t heed any of this advice. Ten years later, when he had 200 employees and owned 43% of a company worth $12 million, he chuckled to himself . Then he dropped off his deposit at the bank.Originally published 3/20/2000
About Zweig Group
Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training. Zweig Group exists to help AEC firms succeed in a complicated and challenging marketplace through services that include: Mergers & Acquisitions, Strategic Planning, Valuation, Executive Search, Board of Director Services, Ownership Transition, Marketing & Branding, and Business Development Training. The firm has offices in Dallas and Fayetteville, Arkansas.
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