Since I’ve become the manager of an engineering company, I’ve learned many things, but I will divide them into the following three categories.
- Business Management
- Client Management
- Project Management
As a manager, you’re responsible for making the business grow (or not grow!). This means you need to track work progress and make sure time is being spent well. Quality and timeliness issues affect the business prospects of the unit, thus it is important that appropriate checking, reviewing and testing is performed. I like to look at the following things:
- Work in Progress (WIP): Most consultant software products track WIP, and I would imagine it’s a valuable tracking mechanism outside of consulting as well. It is simply a statement of the number of hours charged to a project compared to the total budgeted. It is NOT a measure of whether time was spent efficiently, only whether it was charged to a project.
- Utilization Rate: This is a measure of the chargeability of employees. It is a simple ratio of an employee’s chargeable time versus total time (i.e. 40 hours). Since the major cost to a consulting company is salaries, breaking it down to percentage of chargeable time focuses on the most important variable. It gives you an idea whether the invoices sent out in a given month are enough to cover salaries. In my bridge engineering company, I need about 75%, over the whole year per employee, to be reasonably profitable.
Although I am active in only one of many different sectors of the engineering industry, I can safely say that engineering is a business of relationships. And it’s the manager’s job to maintain the relationships with clients.
I believe this is the single most important part of an engineering manager’s job – managing client relationships. For our consulting practice, the number and strength of client relationships are the single biggest factor to the bottom line. Even for engineers that are not consultants, the relationships projects have with their stakeholders are central to successful projects.
Although I am speaking from the perspective of a manager of an engineering unit rather than a manager of specific projects, it is important for an engineering manager to have at least a passing knowledge of project management.
The funny thing about this area is that when I look back at the managers that I’ve worked for in my career, and how projects were managed, I conclude that project management in the engineering business is virtually non-existent. Usually a project manager is assigned to a project and they will quickly tell you that it is their job to make sure the project is completed on time, on budget, and with high quality deliverables. But an entire industry exists in the subject of project management and us engineers, who are in control of the biggest projects out there, don’t utilize it even close to the extent that we should.
An engineering manager should have a project management system that includes:
- Cost and Schedule variances
- Earned Value (or Budgeted Cost of Work Performed)
- Formal Quality Control/Management
The Project Management Body of Knowledge (PMBOK) developed by the Project Management Institute (PMI) is the standard for project management. It includes 10 “knowledge areas” of which I’ve listed three above. The engineering manager should know what the profession of project management entails so they can ensure the project managers under their supervision are fully competent, and that the right information is passed from project manager to unit manager.