Why Small Engineering Companies Should Seek Out An Experienced Business Strategist
Engineers may not have had exposure to business management courses in school and they may lack experience in running a business. In addition engineers are trained to think logically and in a linear fashion.
They rarely proceed to step two until step one is resolved. They are also uncomfortable with the unknown. Every question has to have an answer, and the answer has to stand up to all challenges.
As a result they may be at a disadvantage when confronted with business issues.
Every business, even engineering and technical businesses, is done between people and people aren’t necessarily logical or completely forthright. And business isn’t a linear activity – many things have to happen simultaneously. Nor can management wait until the answer to a question has been successfully defended; deadlines often force management to make decisions. Ask most successful CEOs and they will say one of the most difficult things they have had to learn as their responsibilities increased is how to make better and better decisions with less and less information.
When engineers establish a technical business they use an attorney to advise them on the merits of the various legal structures, the protection of intellectual property, and an accountant to advise and perhaps over see the financial recording system and filing of the required reports. When business questions arise, the engineer/owners now managers often turn first to these professionals for suggestions.
So what is the result?
Usually less-than-the-best solutions. Both professionals, the lawyer and the accountant, are trained in specific disciplines; they are not experienced business people. They are specialists; they see things from their points of view such as:
– Minimizing risk,
– Address only the question asked,
– Draw on what was done in the past,
– Focus on the client, not the competition, industry, market, or the economy, and.
– Keep their own potential liability in mind.
In addition, the method of their compensation (by the hour) makes both the professional and the business owner (s) keep time on their minds. This precludes real involvement and little effort spent on relationship building. Communication fails to address the underlying motivations. What is the business owner thinking for the future? What’s happening with key employees? Are there personal problems or agendas that could or should be addressed in the decisions?
The bottom line is that the technically skilled business owners and managers will face their most demanding challenges when company threatening problems or once-in-a-lifetime opportunities occur and more than likely they will have insufficient resources and less than optimum advisors from which to draw.
Facing this dilemma they may seek help. However, under the pressure of time, they will probably make a decision on who to use without going through the process of determining if that person is the best for them. A recommendation from someone based on a successful experience is a good starting point, but that relationship may well have had many positive influences. The parties may have known each other a long time so many of the smaller issues and concerns may have been thoroughly discussed and resolved. The advisor may have had a chance to become knowledgeable with the industry. Thoughts and plans for the future may have been carefully examined.
Again due to time pressures there may be no time to find another potential advisor or undertake an adequate due diligence on anyone, so a less-than-the-best decision will be made.
To minimize the problem, engineer owners and managers should start working now to identify the possible advisors and developing the relationship with the one or two they would call on.
As with borrowing money from a bank, the best time to do so is when you don’t need it.