Why AE Firms Must Evolve: The Growing Importance of Management Skills

Architecture and engineering firms used to be measured by headcount because output was tied to hands. That measure no longer describes the firm. Revenue and profit per person do. Management skill is what moves those numbers.

In the early 1990s, offices were full of drafting boards. After a short learning curve, designers produced a similar volume of drawings. Twice the documents meant twice the people. CAD, modeling, collaboration tools, spreadsheets, and databases turned that into a process. Calling a firm large because it has many employees is now an outdated label. The industry measures size by revenue.

Designers moved from CAD to BIM to cloud collaboration. Engineers are expected to know the design tools, the technical codes, and standards such as LEED or WELL. Each change adds a decision someone has to manage. Leadership is now part of production.

A production process that can scale

Thirty years ago the production process fit on one sheet. Today it includes software, energy codes, carbon, and standards that keep moving. Keeping up takes collaboration, research, and time that is not billed. Non-billable hours used to be treated as a failure. They are an investment with an expected return. That investment is one reason utilization has declined while revenue per employee has risen. More time is going into planning the work.

Developing people on purpose

A partner once said, in an owners' meeting about ten years ago, that he did not train staff because he wanted them to learn from mistakes the way he had. Full training programs are still young in this industry, and there is no single standard. Firms that name the need, design a program, and manage it see the return. A mentorship program is a practical start.

Managing the technology, not collecting it

Firms need to rethink, and ultimately redefine, what it means to be a CIO. It is a strategically critical role that needs the human, institutional, and political capital to make decisions and affect change. This requires a commitment to investing both human and financial resources, and the tone needs to be set at the top.

Daphne Bryant, Executive Director, American Council of Engineering Companies

Firms hesitate to spend hours that are not billed. Treating the research of technology as an investment, and then managing the adoption, is one of the management skills that grows revenue.

Project management as a firm skill

The Project Management Institute has reported that 61 percent of firms provide some project management training. A Deltek survey of the AE industry found that 49 percent of responding firms planned to invest in internal project management training. That investment often has the strongest return, because project management is where revenue is won or lost. A system can start from an outside format, be rewritten in the firm's language, and be simple enough to match the clients and the values. As the firm opens new regions, the written process is what keeps the work consistent.

Not every firm has named the revenue-per-employee shift. The ones that grow it are the ones treating management and leadership as production skills, not as overhead.