Missed our webinar, "From Training to Transformation"? No problem. Here are some key takeaways. You’ll find a link to the on-demand recording below.
PSMJ’s Senior Consultant and Director, David Burstein, notes that a 0.1 increase in net labor multiplier could generate approximately $600,000 in additional annual profit for a typical 100-person firm.
Here's how to get there. These tips are based on PSMJ’s comprehensive research of over 100 AEC firms correlating PM practices with actual profitability and client satisfaction.
Tip 1: Create Management Plans for EVERY Project
The little guy (that $22,000 project) needs attention, too (a written management plan). It shouldn’t be more than a short list of tasks, with responsibilities, due dates, and budgets for each. Share these plans with your project managers so they can use them actively—not just to check a box.
Tip 2: Rethink the Project Management Manual
Surprising but true: 75% of large firms invest heavily in PM manuals, but only 25% use them regularly. The PSMJ research shows no correlation between PM manuals and project success. Instead of investing in PM manuals, invest in more PM training.
Tip 3: Implement Financial Controls on All $100K+ Projects
Use earned value management or estimate-to-complete analysis throughout the entire project lifecycle, not just when problems emerge. The best-performing firms use both methods consistently.
Tip 4: Approach Scope Management Strategically
Excellent scope management strengthens client relationships rather than hurting them. The key is being strategic, not reactive, when handling scope creep using proven methodologies.
Tip 5: Make Principals Review Project Budget Performance as Much as Labor Utilization
Successful project budgets can result in more profit in comparison to improving labor utilization. This shift can be crucial for your firm.
Tip 6: Staff Projects for Quality, Not Just Completion
Profit results from projects that are staffed adequately. You do not want to be the firm that cuts corners due to short staffing and the need to meet a deadline. Do not sacrifice quality performance.
Tip 7: Formal PM Training AND Implementation
Training is crucial. However, although 60-80% of attendees of the training leave with new knowledge, most fail to implement it. The magic happens in implementation and ongoing accountability.
Tip 8: Clearly Identify Who Shouldn't Manage Projects
Not everyone is cut out for project management. Make conscious decisions about who gets PM responsibilities rather than defaulting on seniority or availability.
Tip 9: Establish Regular, Consistent Status Reviews
Create systematic accountability structures with formal review processes focused on monitoring the status of projects. Internal and client reviews are imperative to consistently growing.
Tip 10: Train Beyond Project Managers
The highest-performing firms train business unit leaders and create dedicated Project Management Officer roles. Cultural transformation requires leadership commitment beyond the initial investment.
Quick Health Check
Rate your firm on these indicators on a scale of 0 to 10. If you score below 7 out of 10 on any of them, you're likely leaving significant profits on the table:
• ALL projects have written PM plans
• Principals review project budgets as much as labor utilization
• Projects are adequately staffed vs. perpetually "super busy"
• Minimum two days of formal PM training required
• Clear identification of who should not manage projects
• Regular status reviews occur consistently
The Bottom Line
While your competitors debate whether to invest in PM improvements, evidence-based leaders are already capturing:
• Greater client retention
• More sole-source selections
• Reduced business development costs
• Dramatically improved project profitability
The question isn't whether you can afford to invest in a strong PM culture; it's whether you can afford not to.
Watch the on-demand recording here: From Training to Transformation.
This is content from the PSMJ Newsletter, exclusive to PSMJ PRO Members. PSMJ PRO is the fastest-growing network of AEC firm leaders. Not a PRO Member? Try a 50-day trial (no credit card required). You can request a trial here: https://www.psmj.com/50daylite