Engineering Inc - September/October 2017 - 20

Items to include on the list range from higher compensation
and better bonuses to enabling the firm to open more offices or
acquire other companies, which may create additional leadership
roles.
Many employees will also need training to fully understand
what the financial statements are showing them, she adds. The
training should cover accounting terminology, financial management and tax policies, along with how these can impact the success
of the firm.
"When firms share information, they have much more
engaged employees," Jewell says. "It's difficult to hold people
accountable if you don't give them the tools and information they
need to manage their projects."

DOUBLE DOWN ON PROGRAM MANAGEMENT
Disciplined program management can be the difference
between achieving the desired profit potential of a contract
and watching margins dissolve unexpectedly. "A strong
program management culture and approach that gives us
flexibility and agility really helps drive accountability,"
Kemp says.
One key metric is how quickly clients pay based on milestones
and deliverables. Commercial software applications can apply this
level of oversight, but some firms, including POWER Engineers,
have developed their own programs for real-time reporting of project status.

"Good clients realize that firms need to be paid for the work done
within a reasonable time of it being completed versus dragging you
along." Kemp says, "When clients see where projects stand along the
way, they're likely to pay their invoices more quickly."
POWER Engineers has Power360, a program management application, which it makes available to clients who want to monitor their
internal performance, Kemp adds.

RETHINK PRICING STRATEGIES
Time and materials contracts have long been a mainstay
of the engineering industry, but experts say this venerable
model is due for a change. Engineering firms should consider moving to value-based pricing, which has the potential to attract higher margin work. "Clients today are more
open to innovative approaches that will lessen their risk and reduce
the overall construction schedule and costs or long-term operating
expenses-and they're now more willing to pay for it," says Gerry
Salontai, president of the Salontai Consulting Group.
However, this requires resolve, especially when competing against
firms with low time and materials bids. "If you focus on long-term
client relationships and use those deep relationships to have conversations about pricing, you'll increase your chances for signing valuebased contracts," Salontai says.
This involves pursuing projects with potentially high-value
prospects, and understanding their goals and requirements for the
project. This can head off misunderstandings that ultimately cause

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