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FROM THE FOUNDER
Challenge the status quo
Entrepreneurship is all about seeing and doing things differently from everyone else, so maybe you should be more questioning of the status quo.
W hen it comes to business – more specifically the AEC business – there are certain things that people say or do that are rarely ever questioned. We just do them because they are generally accepted as good practice and “normal.” The problem is entrepreneurship is all about seeing and doing things differently from everyone else. So maybe you should be a little more questioning of the status quo.
Mark Zweig
Here are a few of these common management practices that just don’t get questioned often enough in my opinion: ■ “Bonuses should be paid out annually.” Why is that? If you do any research on it you will find that higher frequency is better. It’s better to tie payments more closely to performance. Objectors to higher frequency of payment will say the amounts won’t be large enough. So what? I would rather have people see them go up and down and come to the realization that more is better so they work to make every month good. ■ “The way to make this company profitable is to get our utilization rate up to X percent so we will stress utilization rate.” This belief is so commonly held it will be hard to change. But my experience
is that if all you do is push utilization, you will get it. But the price you will pay is budgets will be overrun and labor multiplier will erode. You can’t just push utilization without also tracking labor multiplier. That’s why I am a fan of revenue factor – utilization times multiplier, or net service revenue divided by total labor. ■ “Managers should do annual performance appraisals for each of their employees.” Who says these do anything for you? More frequent feedback, both positive and negative, is far more effective in terms of guiding behaviors than a formal once a year appraisal that both the managers and employees alike dread. Not to mention the fact that these appraisals rarely
See MARK ZWEIG , page 6
THE ZWEIG LETTER JUNE 17, 2024, ISSUE 1542
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