I spent a happy afternoon last week benchmarking Weber Thompson against the PSMJ national financial metric survey. I realize that might not sound like fun to a lot of people, but I keep it in perspective. There are a lot of people here at WT who get super excited when they figure out the shoreline overlay codes. To me, spreadsheets seem like a snap in comparison.
While I probably didn’t need to go as deep into the survey as I did, I am really happy with the results. We keep a pretty tight rein on our financials (it helps having an MBA as a partner, and someone who questions that MBA constantly as another partner), but I had been concerned this year as a few projects found themselves not performing financially to our normal targets.
You see, 2019 marks the seventh year that Weber Thompson has been part of the PSMJ’s Circle of Excellence. PSMJ Resources, Inc. is a company that surveys architecture and engineering companies, and compiles financial information on a wide variety of subjects (salaries, financial performance, fees, budgeting, etc). Every year they recognize the “Circle of Excellence to highlight successfully managed firms that demonstrate outstanding achievements in areas such as profitability, overhead management, cash flow, productivity …” This year we are one in 72 firms in the nation chosen; and one in 22 firms named a Platinum Award Winner. We’re pretty proud.
As I stated, we have been in this circle seven times, so we could become complacent and sit on our laurels. We try not to, but my concern about not getting another cheesy plaque from PSMJ for my desk heightened my attention. Hence the happy afternoon.
Every month, we track a number of KPIs (Key Performance Indicators). These are the ones everyone says to track: Net Direct Labor Multiplier, Revenue Factor, Utilization Rate, etc. But this was the first time I had ever gone through the entire survey and tracked our firm against all the metrics. I was in the weeds on the Professional Development Expenses to Total Staff Ratio, feeling a bit bogged down, but rallied with Total Staff to Accounting Staff, mostly because we run a very tight ship here, administratively speaking, and my numbers looked comparatively awesome.
This investment in time is something I would recommend every firm to do. No matter how much spreadsheets and accounting jargon might intimidate you, it really isn’t hard. If you have the survey, the calculations are there, and you can benchmark yourself against companies throughout the nation. Even better, sign up to take the survey. They do a lot of the benchmarking for you and you get a huge discount for about two hours’ worth of work.
The thing is, numbers tell a story. At the end of my happy afternoon, I understood where we were solid, and what shifts might need to be made as this country looks down the barrel of a potential recession. It might have taken a full afternoon for me to understand the prose, but the story was there, you just need to dig for it.
Elizabeth Holland, MBA, LEED AP is a Principal at Weber Thompson. She does not work for the PSMJ, but if they want to give her a year’s subscription to their newsletter for free, she wouldn’t say no.