Company culture, employee engagement, and morale are often the differentiators between common and great companies.
In his book The Advantage, Patrick Lencioni presents a compelling argument that a company’s health is the differentiator between common and great companies. In the typical AEC firm, the focus is often on metrics like utilization, direct labor multiplier, and return on business development expense. The “soft stuff” like culture, employee engagement, and overall health are often overlooked.
Lencioni describes a firm that is healthy as one with “minimal politics and confusion, high degrees of morale and productivity, and very low turnover among good employees.” He asserts that:
“Turning an unhealthy company into a healthy one will create a massive competitive advantage and improved bottom line. It will also make a real difference in the lives of the people who work there. And for the leaders who spearhead those efforts, it will be one of the most meaningful and rewarding endeavors they will ever pursue.”
At SCS Engineers, I had the perfect laboratory to test Lencioni’s assertion.
In 2015, I was given the opportunity to serve as the regional manager of our Southeast Region. We had recently acquired two small firms (including my own), which became our South Florida operation, and had a legacy office in Tampa. Three distinct cultures came together under one flag. Naturally, silos began to form, and our financial performance and employee morale started to suffer, a sign we were becoming unhealthy.
I spent months getting to know our office managers and the needs of their staff and clients. Most of us agreed that we were not satisfied with our performance and we needed to do something about it.
We worked as a team to hone in and agree on our message to the staff. We kept the message straightforward, inflexible, and with clear expectations; we work hard, and work as a team. Nothing less would do. If each team member did those two things, they could always count on our support. If they were unwilling, they would quickly find that this region of SCS was not the place for them.
Now what? Having participated in SCS’ leadership development program, I turned to Bob Elliott of Transpective, who facilitated the program and remained my coach. We gathered staff in a couple of locations enabling interaction across offices to conduct personality profile workshops using DiSC and to begin formulating a strategy for the region. We discussed general mindsets and blind spots of the different personality types and how best to work with those who have a different way of processing information and the like.
That day-long workshop alone began to have immediate effects. We started viewing each other as human beings, each with a story to tell. We discovered that we weren’t very different from one another, and all of us wanted SCS and our region to be successful.
After the DiSC work, about 15 of us gathered to start working on strategies to keep the momentum going. A day later, we had some ideas but weren’t close to something that we could rally around. A subgroup continued working over the next two months and developed strategies (more like aspirational goals) that were ready to present to the rest of the group.
Our values were simply stated: “We are client-centered, teamwork focused, and we develop and challenge our staff to meet their personal goals.”
We fine-tuned the message and words after a couple of months while meeting with staff to get their input as part of the alignment process. After finalizing them, our values were always top of mind. We discussed them in virtually every meeting; they were our rallying cry. We insisted on teamwork and serving the client first. To do otherwise was to cross onto the wrong side of a proverbial line in the sand.
The results of these steps far exceeded our expectations. Four months into the process, our region was the worst performing in the company. We lost staff that didn’t believe in the direction we were going. Many were questioning why we were spending the time and money on the “soft stuff,” asking why we were not focusing solely on being more billable.
But in the remaining eight months of the year, we turned it around. We ended our year growing our net revenue by more than 30 percent and became one of the leading performers in the company. That mindset, culture, and performance success continue to this day. We have doubled our revenue in five years, which started with our mindset change. We don’t harp on utilization and the metrics many AEC firms focus on; we keep our focus on our overall health.
Company health may sound too squishy for our technical profession. It’s hard to measure and track. The results, however, can be quite visible. But be warned, it’s something we can’t take for granted, or we will backslide into old habits.
By the way, Lencioni was right. The year I focused most of my time on our transformation into a healthy region, was the most rewarding year of my career.
Eduardo Smith, P.E. is senior vice president of client success at SCS Engineers. Contact him at firstname.lastname@example.org.