Keeping the Morale Up

Feb 09, 1998

The longer I am involved with this industry the more aware I am of how critical the collective and individual morale of a firm’s employees is to its continued ability to function successfully. Let’s face it— the difference between a high performance enterprise and one that just muddles along has a lot to do with how many hours the salaried people, on average, put in. It’s much easier to make money with a 77% company-wide utilization rate than it is with a 63% company-wide utilization rate. One way to get your numbers up to 77% is to have all the salaried people working overtime— probably averaging something on the order of 10 overtime hours per week. The overhead is covered in the first 40; the next 10 are highly profitable. The math for this equation is really pretty simple. As logical as this is, very few A/E/P and environmental firms can sustain this type of effort from their staff. The morale in these companies just isn’t that good. People don’t feel like being there. They do what’s necessary to keep their jobs, but that’s about it. Here are some of the things we find frequently dragging down the morale of firms in this business: Poor profitability. Poor profitability leads to poor morale, which results in more poor profitability. It’s hard to break the cycle. It may take drastic action to reduce expenses to such a low point that the firm can’t help but make a decent profit, even if only for the short term. But this step may be necessary to give everyone the encouragement that they need to know the firm is still viable. Then, and only then, can longer-term, sustained profitability be properly addressed. Lack of work. No rocket science here. It has always been the case in this industry. If backlog gets too low, people get nervous. They think the worst. Morale slips. Jobs get overworked and budgets get blown because everyone wants to appear busy. You have to build backlog or your ability to make a profit on the work you already have on the books declines. Inadequate information technology and support. This is especially frustrating for younger, more technologically versed staff. But it’s also upsetting to anyone who relies on these tools to get their job done. If an employee comes from a setting where they have a computer with internet access, e-mail, and on-line reports, and goes to a place that has some but not all of these things, it’s a big blow to their morale. Ditto if they have a computer with something such as a CD-ROM drive that isn’t working properly and there’s no one or no budget to get it fixed. Perceived bureaucracy. Just about all design and technical people hate having to go through unnecessary steps to get something simple done. Things like 10-page performance appraisal forms, or 6-page project initiation forms, or weekly meetings that last 5 hours on every Monday to talk about the coming week’s work schedule. It drives them crazy! Yet often, as a firm grows and becomes more chaotic, the response of the managers is to create these kinds of unnecessary bureaucratic procedures and processes. Many times, the downside (in terms of impact to morale) these things create is worse than the problem they were supposed to solve! High staff turnover. Whenever a firm experiences this, it hurts morale. This is another factor— like poor profits or a weak backlog— that are both a symptom and a cause of the problem! Even if the firm is losing the people it doesn’t mind losing, the average person in the halls thinks that it’s bad for the company, and the public perception outside the firm will probably be the same. The result is poor morale. Greedy owners. This is really high on the list of demotivators and morale busters. Nothing’s worse for morale than for employees to believe that their sweat just bought the owner’s (or owners’) new vacation house. This is especially harmful to morale if the owners flaunt it, like parking their three new Mercedes in the only reserved parking spaces in the lot. The negative impact to morale is further compounded if the owners are perceived as kind of lazy, and not working very hard. Negative leadership. If the leadership (in most cases, this is synonymous with ownership) is negative (not upbeat about the firm and its future), then you’re going to have morale problems with the troops. It is the responsibility of the leaders of the firm to go forth with a company line that does not waver. It has to go something like this: “We will overcome any obstacle put in front of us. Nothing will bring us (the company) down.” If they can’t say this with a straight face, staff morale will suffer. And they sure can’t go around bad-mouthing the company’s quality of service or staff, or lack of future for one reason or another, without spreading the cancer and hurting morale (and profits). Lack of vision. Once again, the leaders or owners of the firm have to be able to paint the picture for where the firm is going, and this has to be more than saying, “Keep doing what we do and make a profit.” Growth is implicit and must be part of the equation. But there has to be more to it than that. Every person employed by the organization has to feel that they are doing something worthwhile that helps people. If they can’t say this, morale will suffer! Management tolerance of poor performance. Always a problem in this industry. We are such nice people that we hate to confront non-performers. And as a result, we get our best people (the high performers) upset with us because they don’t think we, as the leaders, are doing the job we are paid to do. Although there are a few firms where the owners and managers are so critical that no one ever rises, these companies are in the minority. Most are way too far down the continuum of being nice to everyone all the time, protecting everyone regardless of their offenses or crimes. When this is the regular culture in the firm, you are going to suffer some morale impacts in people you can’t afford to demotivate. If you think morale is low in your firm, look at the list above to see what the cause is. Then, instead of wringing your hands or saying a prayer, get out of your chair and do something to turn the situation around. That’ll make you feel good and help your bank account, all at the same time! Originally published 2/09/1998

About Zweig Group

Zweig Group, a four-time Inc. 500/5000 honoree, is the premiere authority in AEC management consulting, the go-to source for industry research, and the leading provider of customized learning and training. Zweig Group specializes in four core consulting areas: Talent, Performance, Growth, and Transition, including innovative solutions in mergers and acquisitions, strategic planning, financial management, ownership transition, executive search, business development, valuation, and more. Zweig Group exists to help AEC firms succeed in a competitive marketplace. The firm has offices in Dallas and Fayetteville, Arkansas.