The Business Side-Will the Real Company Please Stand Up?
March 1, 2007
In this column, I will address two issues faced by mid- to large-sized companies that contract surveying and engineering services. The first issue is one of perception--in reality, are there two companies operating under a single company name? One as perceived by the owner(s), and the “real” company as perceived by the employees? The second issue is something I call the “Old Company Syndrome.”
Will the Real Company Please Stand Up?Do you remember the old television show “To Tell the Truth”? In this game show, three different people would present themselves as a particular person, and a panel had to guess which two were impostors and which one was telling the truth. At the climax, the host would ask, “Will the real _____ please stand up?” Different people stood up until only the real person remained standing. It was great fun in a much simpler world.
One episode featured a land surveyor. The panel had to guess which one of the people was the real surveyor. Sometimes I like to ask land surveying companies, “Will the real company please stand up?” In some firms, the scenario exists of not knowing what the real company is; the boss gives commands and expects all the employees to be following along in lock-step. The truth is, if the boss would look over his shoulder, he would find out that no one follows his lead, but the real work of the company proceeds as directed by other employees or managers. This can be categorized as unsuccessful delegation of duties.
How do I know this is happening? By talking to the employees of companies at conventions, seminars and meetings. I sometimes ask why they are not sharing this information with the owners or managers. The most common reply is, “They will not listen or talk with me.” Or worse yet, “They don’t care.”
How do you address this problem or find out if it exists in your company? You explore what your employees are really thinking by having yearly interviews or one–on-one meetings on a regular basis. In many larger companies, owners want to turn over the responsibility of the employees to the human resources department. While this department may keep you from getting sued or having to interact with your employees, it will have little effect in helping you develop a company that runs like a well-oiled machine, turning out jobs, satisfying clients, and--most importantly--making money.
When you meet with employees, ask open-ended questions and make sure you are doing more listening than talking. Don’t sit behind your big fancy desk; join the employee in a more comfortable setting, maybe the company conference room. Most importantly, act on their suggestions. I remember meeting with some of my party chiefs and asking what they needed to do their jobs. For the second year in a row, they requested an ice machine in the office so they did not have to stop at the ice house each morning. The third year I met with them to ask the standard questions, and one party chief told me I was wasting his time. He had told me for two years what they needed and I did nothing to solve the problem. By sundown, we had an ice machine. Most employees want to be part of the system and improve their performance. It is up to you to become part of their company. Your company is your employees!
Old Company SyndromeThe day you start in business you are working toward what I call “Old Company Syndrome.” Recently, a friend called to complain about the cost of his business insurance. He told me he remembered reading in my book about Old Company Syndrome and thought it would never happen to him. But the larger a firm becomes and the longer the company is in business, this syndrome creeps into every aspect of the business--from higher wages to insurance, retirement plans that need funding and layers of management never dreamed of when the company was founded.
While surfing the Internet, I found a report of a city meeting that included bids for the surveying of a road bypass for a mid-sized city in Alabama. Four companies had turned in their prices. Three were surveying companies that I was familiar with and the fourth was a much larger design firm with many offices throughout the southern states. The three surveying firms turned in very similar bids, but the large firm’s price was more than double that of the smaller firms. The surveyor who estimated the cost for the larger firm most likely had similar hours, but had to include the overhead and management of a much larger (and possibly older) company. For the survey work, the city selected the lowest price.
At the same meeting, the city chose the larger firm to perform a planning study for the project at three times the cost of the survey work, and did not take the low bid. Surely it would have been in the best interest of the larger firm to do the survey work for the job as well. I know of many large firms that have hired a well-known surveyor to run their survey department with expectations that the person will bring in more survey work. After a short period of time, the surveyor moves on because he can’t overcome the overhead rate of the larger company, which sometimes charges three or four times the hourly rate paid to the employees. The surveying marketplace will not stand this kind of overhead rate; it never has and never will.
I never understand why larger companies will not set up a separate profit center for surveying services; it is in their best interest to control the survey work. But they can’t seem to resist charging the overhead of all their management and large offices. Overhead of four times raw wages may work for environmental and design work selected by qualifications, but never for surveying services.
I am sure any company that has been in business for 20 years or so could reduce its overhead by studying overhead costs.
Stand and DeliverWhen a mid- to large-sized surveying company conducts an internal business review, management may be surprised by the issues that have crept in the back door. In this situation, responding to employee needs and concerns will go a long way toward re-establishing an effectively functioning company. In addition, companies that have been around for a while should regularly re-evaluate their pricing and costs to be sure they can maintain a competitive edge.
I am currently revising my publication, Surveyors and Engineers Small Business Handbook, and will notify readers when it has been updated. The 1988 edition is still available at www.landsurveys.com under the "Surveying Office" surveying books category.