Next-gen leadership in engineering firms

Mar 26, 2019
Succession planning Professional services Architecture & engineering Business strategy

As today’s Boomer-age management team members and engineering firm owners plan or start their retirement, they may be growing worried about who’s going to pick up the roles they’re relinquishing. In my conversations with the leadership teams of engineering firms, there’s an often-expressed concern that the younger generations—such as Millennials and Generation Z—are less interested in a management role than their older colleagues were.

Some also say that if they do find someone interested in a management role, it can be hard to keep them around.

And that’s posing a problem for today’s leaders who want to be able to fund a comfortable retirement partly through the sale of their stake in the firm, and also to see their life’s work continue to prosper.

Here’s how this problem is manifesting itself in today’s engineering firms:

What’s holding back young engineers?

We find four main reasons why it can be hard to persuade engineers in their 20s and 30s from getting onto a track that leads to management and possible co-ownership:

Quality of life: Many younger people are concerned about quality of life and work/life balance. They may see the firm’s leaders working long, unpredictable hours, and not want that trade-off. That’s particularly the case if a slow economy means that the slim profits to be shared by management team members may put their total compensation at only a slight premium compared to their more junior colleagues, who do not have a stake in the business. Junior professionals may also find that the buy-in amount is high, compared to the benefits they expect to receive.

Current owners waiting for a better deal: We have seen partners in some engineering firms delaying retirement during economic stagnation in hopes of a turnaround that will mean higher revenues, shoring up lost or reduced income over the past several years. This leaves fewer opportunities for younger professionals to move up.

Lack of longevity: Members of younger generations, who are of an age to step into management’s shoes, often don’t stay with one firm long enough to build experience in management. They’re less inclined to have just one employer for life, more likely to keep trying new experiences. This means they often don’t have the in-depth knowledge and personal connections about the firm’s clients, previous work done for those clients, and the abilities of the firm’s people, in order to manage work effectively and bring in new business.

Delayed too long: Some of the management team members may take the view that leadership roles come only with time, after paying one’s dues. For their part, younger members of the firm wanting leadership roles may feel they should not have to wait—and may leave to seek greater opportunities elsewhere.

Solutions involve technology and culture

Many of these challenges are found in all organizations, but they are particularly strong in engineering firms. So too, the solutions are specific to the culture of engineering firms.

Bake leadership skills into the job early: Many engineers start out with the focus on being competent, technically skilled ’doers.’ They gradually move up to becoming a senior technical lead, with their strength being their technical knowledge and project management skills. For many, it’s a major cultural shift to get good at working strategically with clients and winning new work. It’s an even bigger cultural step to think about the larger firm-wide issues such as project profitability, staffing and issues around finance and human resources.

This means that it’s a good idea to bake those considerations into the training and mentoring that firms offer, right from the start of that person’s career. Rather than focus simply on the technical aspects of a project, the senior leadership should encourage those less senior to think about project costs, how to manage those costs, and how to look for other client needs that the firm can satisfy.

If employees start to think of the larger business issues early in their careers, it will not be such a huge step if they are asked to take on a more senior leadership role. And once given a taste of working on strategic issues, they may be more inclined to move into leadership.

Knowledge management that works: Many firms are concerned about how to retain the wide range of knowledge held by senior members of the firm: anything from the location of an underground tank at a client’s property, to knowing the most influential members of the local municipal council. Once these members of the firm retire, that knowledge may be lost.

Fortunately, there is a growing array of knowledge management (KM) solutions available. Firms need to work hard at capturing the know-how of senior members of the firm. This includes having the right technology available, developing a culture in which the data in the system is kept up to date, and providing effective ways to make sure that valuable knowledge is not lost when a member of the firm leaves.

This KM solution must be built with the needs and habits of all generations in mind. For example, reports indicate that it’s becoming less common for Millennials to seek answers through search engines, but rather take a peer-to-peer approach such as posting questions to discussion boards. Members of the firm should be surveyed to find out how they like to learn and build their skills.

Developing an attractive package: Attracting and retaining skilled employees goes well beyond a competitive pay packet and desirable benefits. Making leadership attractive to people who would consider themselves Millennials or Generation Z means finding out what they value, and then doing what you can to provide that.

Many people in this age range value quality of life and the ability to fit other aspects of their lives into their work life. This often revolves around flexibility—perhaps allowing someone to work a long workday and then take part of another day off. Or it might mean the ability to work remotely—from home or a nearby coffee shop.

Some workers like the idea of frequent travel as part of their job. Others prefer to be able to get home every night so they can take care of family responsibilities—maybe caring for young children, or aging parents.

Attracting and retaining a diverse workforce, including substantial female representation, depends on the firm’s ability to determine what each member of the firm values, and then helping them get it.

Three keys to successful implementation

There are three key aspects to making this happen:

One is having the policies and practices, as well as culture, set up in a way that values results rather than just putting in the hours. It might involve a firm in which an employee would be told what needs to be done by which deadline. In doing so, it is the employee’s responsibility to direct their behaviour to meet their obligations.

The second aspect to flexibility is technological—which can involve cloud-based interfaces so that an employee can access and work on project documents from any place. It should provide due attention to client confidentiality and data security.

Third, communication is key. This can include making sure that current employees know what possibilities are open to them in such areas as when and where they get their work done. It also must include conveying the firm’s distinctive culture to potential employees—and not just in interviews with potential hires, but through the firm’s social media channels and website that give examples of employees benefiting from the firm’s culture and policies.

Helping to ensure a smooth succession between generations, for an engineering firm, involves finding out what the younger generation is looking for in a career, and then finding ways through technology and cultural changes, to make that possible.

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