A culture of performance

October 2007 » Feature Articles
Develop an organization that fuels performance across all levels, reinforcing and ultimately achieving your firm’s strategic goals.
Mike Zmugg

Develop an organization that fuels performance across all levels, reinforcing—and ultimately achieving—your firm’s strategic goals.

These days, civil engineering firms are under increased pressure to improve firm-wide performance, produce results, and ultimately grow the bottom-line. As the competitive landscape changes, key markets soften, and the already tight labor pool shrinks, these pressures are felt even stronger and become much more difficult to achieve. AEC and environmental consulting firms face a unique challenge that leaders in most other industries never have to deal with—growing the bottom-line and fueling performance when the only products are their people.

For example, compare two types of companies—one a manufacturing company, the other a civil engineering firm—both trying to achieve a 15-percent growth in profitability during the next fiscal year. The manufacturer can achieve this growth in a number of ways: lower the cost of the goods used for production, increase efficiency by investing in advanced machinery and equipment, or simply sell the product to the consumer at a higher price per unit. While this is an overly simplistic view, the point is that the manufacturer has a number of available ways to increase profitability, most of which are clearly quantifiable and measurable.

Unlike a manufacturing firm, a civil engineering firm does not rely on machinery, plants, or equipment to produce the goods it sells. It relies on the knowledge and skills of its people, from principal to technician, to produce everything that goes out the door. As a result, the key way for the civil engineering firm to increase profitability is to motivate its employees to produce the best work possible in the most efficient manner possible. In other words, increase utilization and increase the firm’s multiplier—both of which hinge upon employee motivation, performance, and retention. This is a much more difficult and daunting task than the manufacturer faces, and it is something that civil engineering firms have struggled with for a long time.

So, how do firms effectively motivate their staff and fuel performance? What is the critical element needed to create a competitive advantage? The answer is culture.

Culture is one of the driving forces behind the long-term growth and success of any engineering firm. It influences decisions that every member of a firm makes. Culture motivates employees to go that "extra mile" for clients, inspires rising stars to think and act like (and eventually become) shareholders, and fosters the teamwork needed to maintain the highest standards of quality for every project that goes out the door. Culture ultimately impacts how people throughout an organization behave.

Every engineering firm has its own culture. It is the one thing that no competitor can replicate, and it is often what differentiates a great firm from a good one. At its core, culture is the common set of goals and values that the people within a firm believe to be important—and how they should be achieved.

Culture is not innate; it is dynamic and should be carefully observed and managed by a firm’s leaders. Some of the most successful engineering firms give themselves a competitive advantage because they align the firm’s culture with its key strategic objectives. These firms have created a culture that motivates every member to achieve the firm’s vision and goals across geography, practice area, and job function. Through systems, structure, and leadership, these firms have created an environment where employees understand that individual success directly contributes to firm success and, just as importantly, the firm’s success directly contributes to the individual’s success.

Creating a culture of performance
Successful firms that have created a "culture of performance" typically have the following five things in common:
1) They regularly monitor the firm’s cultural environment.
2) They have developed a clear strategic plan that is communicated throughout the company.
3) Systems are aligned to advance strategic goals.
4) The firm’s structure facilitates achievement of these goals.
5) The leadership team reinforces the cultural ideals through their actions and behavior.

Each of these five points is necessary for developing a high-performance culture, but they are not sufficient on their own. If, for example, there is no strategic plan, then employees will not know what they are working toward. If the firm is trying to advance a culture of teamwork and collaboration but the principals are constantly engaged in turf battles, then that tone will trickle down throughout the organization. A closer look at each of these components provides insight on how to create a culture of performance.

Monitor the pulse of employees—Creating a culture of performance first requires a solid understanding of the current cultural environment. Seek out the core values, beliefs, behaviors, and goals held by all members within your firm. Anonymous employee surveys, one-on-one meetings with staff, and employee focus groups are some of the tools available that help provide an understanding of the culture. They also help provide insight into the strengths and limitations associated with that culture. Often, firm leaders are shocked once they discover employees’ perceptions. Unless you monitor the pulse of employees, it is extremely difficult to understand their motivations, goals, and perceptions in order to fuel their performance.

Develop a clear strategic plan and communicate it—The strategic plan is the roadmap that charts the course for a firm’s future. Most engineering firms understand the importance of it and engage in some form of strategic planning at least once every few years, if not annually. However, once the plan is developed, the vision is created, and the strategic goals are identified, many firm leaders fail to communicate the plan to their employees. This is one of the biggest mistakes a company can make. Everyone within the firm should know the strategic vision and goals so that they may then understand how to help the firm achieve them. Communicate the plan to everyone in the firm. After all, the purpose of a strategic plan is to get the entire firm moving in the same direction.

Design systems to advance the strategy—People systems are critical to the success of an engineering firm. These are the programs that motivate, recognize, reward, and perpetuate outstanding performance. They are also the programs that, when gone awry, can de-motivate employees, discourage performance, and increase unwanted turnover. Incentive compensation programs, benefits programs, professional development and training programs, performance appraisals, staff recognition, and recruitment programs are all examples of people systems commonly found in engineering firms but too often taken for granted. These are the systems that should align an individual’s success with the firm’s success. All of these systems can be—and should be—designed to support, motivate, and encourage employees to act in ways that advance the firm’s strategic goals.

Create a structure that supports the strategy—An organization’s structure can make a tremendous impact on its success. It provides the framework that helps keep a firm organized. It is how employees, management, and even clients maneuver within a firm. There are many types of organizational structures and there is no one-size-fits-all solution. An organization with too many layers of hierarchy can stifle responsiveness and creativity, yet one with too few can result in confusion and chaos. Each firm must structure its organization in a way that works with its needs so that it supports, rather than suppresses, firm goals.

Leadership sets the tone—Ultimately, the leadership team sets the tone for the rest of the firm. The behaviors and actions of the top level of leadership are watched and usually emulated by the rest of the staff. Therefore, it is pivotal that the firm’s top management not only agree on the goals, values, and vision of the firm but also reinforce them consistently through their actions and behavior. Too often, firm leaders forget that they play a large role in shaping the culture of the firm, yet wonder why their employees don’t perform to their full potential.

While every firm has a culture, few civil engineering firms use culture as a key strategic source of competitive advantage. Developing a culture of performance will fuel your firm’s growth and success and, inevitably, increase your bottom line.

Michael Zmugg, a consultant based in ZwiegWhite’s San Francisco office, assists companies in achieving strategic business objectives by addressing human resources issues. He can be contacted at mzmugg@zweigwhite.com.


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