Hey, it’s Collin. Welcome to Engineering Echelons, a newsletter full of ideas and insights to help engineers excel at management.

Here’s what I’ve got for you this week.

• New and noteworthy news

• A management perspective to consider

• Leadership insights to delve into

• And more…

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Alright, let’s get into it.

Noteworthy Headlines

3Q2025 Construction Economics Update (McCownGordon)

Anticipated tariff cost impact by scope:

• Steel: +7%-9%

• Aluminum Panels/Extrusions: +6%-8%

• Mechanical: +4%-6%

• Electrical: +5%-7%

• Other: +<5%

• Project Average: +4%

How tariffs could reshape global manufacturing supply chains (WSJ)

Highlights:

• Six of the top 15 manufactured goods imported by the U.S. are important intermediate inputs for U.S. manufacturing supply chains and operations, including motor vehicle parts, electrical and electronic components, and nonferrous metals (excluding aluminum).

• 77% of survey respondents cited trade uncertainties as their top business challenge.

• 71% of U.S. CEOs plan to alter their supply chains over the next three to five years.

• U.S. manufacturing establishments have increased from 334,000 in 2013 to 410,000 in 2024.

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Management Perspective

Morgan Housel wrote about the difference between fees and fines in his book The Psychology of Money. This book is geared towards personal finance, but the concept of fees and fines is applicable to many parts of life. And as a leader, you should know the difference between the two.

Fees are the cost of getting something or to somewhere.

Housel uses Disneyland as an example in his book. Disneyland tickets can cost over $100 each, but you get a day filled with fun and entertainment. The $100 ticket is the fee for the experience.

Taxes are another type of fee. At various intervals, individuals and groups contribute financially to society as a whole. In return, they receive transportation infrastructure, education, water, security, and so on.

Nature is savvy to paying fees. A plant that produces fruit attracts animals who then eat that fruit and disperse the seeds elsewhere, promoting growth for that plant species. The fruit is a fee the plant has to pay in order to incentivize animals to spread its seeds.

Fines are the penalties for doing something wrong.

Parking fines are one of the first examples that typically come to mind when it comes to fines. Or speeding. Or making a late payment.

Whatever the form may take, fines are feedback, informing people that their behavior is not desirable and should be corrected.

Make the distinction clear.

Fees and fines can feel similar: you are giving something up in both cases. Leaders need to make the distinction between the two crystal clear.

If clients view your fees for additional scope as punitive, they’ll question the value you bring and may move to end the engagement.

If employees view a safety fine as just a cost of doing business, the corrective signal is lost and safety incidents are likely to occur.

Fees should feel like a fair exchange of value. There should be reasons behind them that reinforce their existence and amount.

Fines should send a clear message about behavior that needs to change. And as it's a feedback loop, the fine should occur quickly after the action. Feedback loops are most effective when the feedback is clear and swift.

The final thing to mention is that fees and fines don’t need to be purely financial. There are other forms of capital that can be used, such as time, opportunity costs, an exchange of goods, and so on. Think about how fees and fines can be structured holistically to make them most effective.

Management Insights

Ed Catmull on Steve Jobs’s leadership transformation:

“. . . Steve’s story [is] the classic Hero’s Journey. Banished for his hubris from the company he founded, he wandered through the wilderness having a series of adventures that, in the end, changed him for the better. I have much to say about Steve’s transformation and the role Pixar played in it, but for now, I will simply assert that failure made him better, wiser, and kinder.”

—

David Robertson on clarity:

“. . . in almost any business crisis, the first casualty is clarity.”

—

Rich Cohen on evil:

“One definition of evil is to fail to recognize the humanity in the other: to see a person as an object or tool, something to be put to use.”

Management Resource

How to ruin your company with one bad process (Andreessen Horowitz)

Ben Horowitz breaks down how he messed up the business budgeting process when he was CEO at Loudcloud, and how you can do better.

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Looking forward to hearing from you. See you next time.

Collin

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