engineering our future
Viewing overhead correctly Investment in critical business functions is necessary to build a strong and growing business.
Many engineers are programed from an early age to maximize utilization and minimize any “overhead” costs. Unfortunately, that programing tends to skew our perspectives on critical business functions such as marketing, IT, human resources, and accounting over the long-term. Of course, early in your career, your value to the firm is through your engineering and technical design capability. As you advance through your career, your ability to contribute to other non-billable areas of the firm increases. Despite the importance of that expanded involvement in the business, we still tend to view those business functions negatively. Because of that early programing, we believe that being a good manager or leader means to maximize billable work and minimize overhead. The reality is that in order to build a strong and growing business, we must invest in those critical overhead functions, especially in marketing, recruiting, and IT. On the surface, the math seems simple: Focus on utilization and minimize expenditures and you will have more profit. The reality is that the math is a lot more complicated than that, especially when talking about what it takes to build a strong firm that is resilient in a variety of market conditions. Our decades of research show that the fastest-growing companies in the AEC industry invest more than their peer firms in marketing, recruiting, and IT. Those expenditures fuel growth and scalability of the firm, thus expanding the diversity and reach of the firm. Firms that grow faster than the average are also more profitable, per the research. The default business model for many AEC firms, as described above, tends to allow the firm to simply ride market waves as they come and go. The firm that grows and thrives in all market conditions has an intentional strategy, usually driven by a clear strategic plan, and they focus in all areas of the business. Viewing your overhead functions more positively in your firm will give you an edge over your competition. Look for ways to leverage those valuable resources to help you do more than just be average. The firm that is unified across all functions is the more successful firm in almost all cases.
CHAD CLINEHENS, P.E., is Zweig Group’s president and CEO. Contact him at cclinehens@zweiggroup.com.
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csengineermag.com
May 2018
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