November 29, 2015

ACEC Engineering Magazine: Engineering Companies Depends on Organic Growth...and Your Leadership Stinks

The September/October 2015 Issue of ACEC's Engineering Magazine has an article entitled "Successful Firm Growth Starts With Cultivating Leadership". (The article was written by Douglas Reed.) The article offered what I thought were some key insights into securing the future growth of an engineering company, and what makes growing and engineering company different from growing a business like a manufacturer. Here are a couple of quotes from the article I wanted to share:

"When looking to expand their operations, many firms immediately seek out acquisitions...An acquisition is risky since a firm is essentially purchasing intellectual capital, as opposed to a manufacturing plant. Since these are people, not machines, many acquisitions fail or under perform because firms are not ready for the people adaption needed."

I've personally seen the truth of this quote demonstrated over and over again. I'll watch one of my large competitors gobble up one of my smaller competitors. After the merger, I see the top talent at the acquired company leave because of a clash in company cultures or a failure on the part of the purchasing firm to really take care of their new employees. The purchasing company is left with some desktop computers and a storeroom of old project files that are cataloged or indexed. Everyone loses in this scenario.

Because acquisitions are so tricky in the engineering industry, organic growth becomes even more important. The article continues with this important concept:

"The key to a firm's successful growth starts with growing its leadership...This can be particularly challenging in an engineering environment. Leaders typically began their careers as engineers and worked their way up the corporate ladder. While many go to business school to learn to be more effective leaders, the vast majority learn as they go, imitating their superiors, who themselves are often not students of business science. This approach is limiting and doesn't necessarily foster excellence. It requires leaders to have natural leadership skills rather than providing an ongoing opportunity to develop them...Too many firms struggle because, while their leaders are excellent engineers, they have a difficult time handling balance sheets, developing market strategies, or mentoring the next generation of leaders."

This quote almost brings me to tears. Finally another individual recognizes the painful truth about many surveyors and engineers that own (or like me: help to run) surveying or engineering companies. We may be people with great technical skills, but our people skills and business skills often stink. This is another pattern I've seen over and over again during my career. I can't tell you how many times I've watched a good employees walk out the door of a company led by a civil engineer or surveyor who doesn't know how to lead or motivate their team. Once again, everyone in this situation suffers. The company, the company's clients, and the employee.

I'm trying not to make this same mistake myself. I've been reading (and listening) to everything I can about business strategy, business management, and the leadership of talented professionals. I can't even begin to tell you how much I've learned in the last 3 or 4 years that has helped me be a better manager and land surveyor. I want to talk more about this topic in the future, and in the next few days I'll try to post a list of free online learning resources that have helped me be a better businessman.

Landon