Future AEC leaders are built when firms stop guarding the numbers and start teaching people how business works.
Most architects and engineers graduate from college with thousands of hours invested in learning how to design various types of buildings, bridges, roads, water systems, factories, and every other imaginable piece of our built environment. What they usually don’t graduate with is even one decent course on how a business actually works. Then we hire them, put them to work, and wonder why they don’t understand utilization, labor multipliers, cash flow, profit margins, collections, or why someone occasionally has to say “no” to buying another piece of software that no one really needs.
Whose fault is that? It certainly isn’t theirs!
We have spent decades expecting technical people to magically develop business knowledge through osmosis. It doesn’t happen. If we want architects and engineers to think like owners, we have to teach them how owners think. That takes intention, repetition, and a willingness to share information that many firm leaders still guard like our nation’s nuclear launch codes.
One of the best ways to accomplish this is through open-book management. I have been preaching this for years, and I still find firms where financial statements are treated like classified government documents. Employees are expected to improve profitability without ever seeing how profitability is measured. Imagine asking someone to lose weight but refusing to let them own a scale. It makes no sense.
Show people the numbers. Explain what they mean. Teach them how utilization and labor multipliers drive profitability, why every person hired matters, how bad overhead affects everyone, and why collecting receivables quickly is every bit as important as winning the next project. When people understand how the business makes money, they generally make better decisions. It isn’t magic. It’s education.
Another simple practice is inviting promising employees to attend board meetings or principals’ meetings as guests. Don’t let them sit there like potted plants. Give them the agenda beforehand. Encourage them to ask questions afterward. Let them see the difficult discussions that occur when leaders have to balance investments, compensation, hiring, risk, and growth.
Many younger professionals assume leadership meetings are secret gatherings where partners discuss ways to squeeze every last ounce of productivity from the staff while plotting which luxury SUV to buy next. The reality is usually far less glamorous. Most leadership teams spend their time worrying about payroll, collections, staffing shortages, insurance costs, succession planning, unhappy clients, and whether next quarter will be as good as the last one. It is hard to maintain the fantasy that ownership is one continuous vacation once you’ve actually observed the conversations.
That brings me to another unfortunate reality. There are still plenty of people inside our firms who believe business owners are naturally greedy and exploitative. Some arrive with that opinion already fully formed because their parents have taught them that at the dinner table. Others develop it because no one ever explains why business decisions get made. And while this problem may be worse in companies that employ blue collar workers to actually build things, it is still there in the professional services side as well.
Yes, there are bad owners. There are also bad architects, bad engineers, bad project managers, bad accountants, and bad clients. The existence of a few bad actors does not invalidate the entire concept of ownership. Most owners I know have personally guaranteed bank loans, skipped paychecks during recessions, invested their own money back into the business, worked weekends for decades, and accepted levels of stress most employees would reject immediately. They are not perfect, but they are usually carrying risks that few others even recognize. If your people never hear that story, they will invent one of their own.
Mentoring is another powerful tool, particularly for employees who demonstrate both communication abilities and curiosity about the business. Every firm has a handful of individuals who constantly ask why things work the way they do. Those people deserve access to experienced leaders who can explain not only what decisions were made, but why they were made.
Mentoring should include discussions about pricing, negotiations, hiring, compensation, marketing, ownership transition, acquisitions, leadership failures, and the occasional spectacular mistake. Those conversations build judgment in ways no spreadsheet or PowerPoint presentation ever will.
Of course, not everyone wants to learn the business. Some people simply want to design great projects, collect a paycheck, and go home. There is nothing wrong with that. We need outstanding design and technical professionals just as much as we need future owners. But for those who show interest, we should remove every barrier to learning.
The firms that consistently outperform their competitors are usually filled with people who understand that design and technical excellence and business excellence are partners, not enemies. Great projects require healthy firms. Healthy firms require profitable operations. Profits create opportunities to hire better people, invest in marketing and technology, survive economic downturns, reward employees, and build organizations that endure long after today’s leaders have retired.
If we truly want more business-minded architects and engineers, we need to stop complaining about what schools failed to teach them and start accepting responsibility for teaching them ourselves. It may take time, patience, and a little transparency. But it beats spending the next 20 years wondering why no one seems ready to lead the firm after we’re gone.
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Mark Zweig is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com. |
