The Engineering Business Cycle: Lessons Learned on How To Avoid Common Operations Mistakes

After 5 years in being in business now we’ve gone through the pain of trying to get work in the door, getting too much work in the door, not performing to the level at which we need to perform, not being able to win work, and then seeing work coming in with almost no effort at all. There are many other experiences we’ve had over the years, but last year (2012) was a very tough year in the “you reap what you sow” department. We spent a lot of time putting together proposals with the end result being very few selections. It was a lot of work for very little return and it required some digging down deep to keep pushing forward as well as thinking about all the valuable lessons to be learned. After going through it all and talking with clients, I thought about the engineering community and business experience as a cycle.

Engineering Cycle

  1. Become flavor of the month and everything you touch is gold, i.e. you win everything.
  2. You suddenly have a lot of work, but you fear hiring too many people so you hesitate and go with your existing team
  3. It takes a little time, but you realize you’re beyond your capacity, but it’s too late to hire and you miss a deadline or two and/or someone was not managed as well as they should have been and you have a problem project.
  4. Clients pick up on your “busy-ness” and suddenly everything you touch is rotten, i.e. you win nothing.
  5. Your backlog starts winding down and you start to panic going after everything in sight, but you weren’t out marketing like you should have been developing relationships rather than chasing RFP’s.
  6. The next flavor of the month becomes overwhelmed and the memory of your “busy-ness” is forgotten by the clients and your available again so you start winning work.

Clearly this is not something that happens to everyone (some of you out there navigated your way around the pitfalls), but I’d love to hear from you if you have experienced it.  Going through the cycle at least once, you can see the clear steps to avoiding many of the pitfalls:

  1. When you have the backlog, hire the talent you need and have less fear.
  2. When everyone is working hard, don’t stop meeting with clients (don’t get too busy).  Build relationships and take advantage of the fact that you don’t need to win work today.  In other words, you can be less desperate and more focused on hearing the client’s challenges and needs, especially their long term needs.  This also will allow you to present possible solutions without worrying if it becomes a job.  That last part will help you become a trusted adviser for your client.
  3. Good project management and operations management are the key to successful delivery of projects.  In the end, the rewards of doing it right (future work) far outweigh any short-term benefits (trying to ignore the worry of winning future work to keep staff busy).

Just one of the many lessons learned while being a business owner.  Many more to come I’m sure.