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

• Something to consider

• Some insights to delve into

• And more…

First time reading? You can subscribe here.

Alright, let’s get into it.

Noteworthy Headlines

January 2025 AIA Billings Index (AIA)

Highlights:

• Project inquiries were up, design contracts were down

• “Stubborn inflation, persistently high interest rates, and labor concerns continue to weigh on the willingness of owners and developers to move ahead with construction projects.”

1Q2025 Industry Confidence Index (ENR)

Highlights:

• ENR’s Construction Industry Confidence Index rose six points between 4Q2024 and 1Q2025 to the highest rating since 1Q2022.

• Construction is more optimistic than design (scores above 50 indicate a growing market)

  • Subcontractors are the most optimistic: rating of 66, up 7 points from last quarter

  • General contractors and construction managers: rating of 61 points, up 10 points from last quarter

  • Designers are least optimistic: rating of 53, down 6 points from last quarter

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Management Perspective

With a focus on utilization rates, all overhead costs are often lumped together and then time spent on them is minimized in favor of billable hours. This is unhelpful in propelling the company forward and creating a competitive edge.

Not all overhead costs are equal. Some overhead costs are beneficial while others are wasteful. The difference lies in the return you get from each overhead effort.

Good overhead costs provide high rates of return that make you and your company more efficient, produce higher quality work, win more work, hire top talent, and reduce operating risks.

Here are some examples.

High-performance IT systems and hardware may be expensive upfront, but save money by reducing downtime, reducing cyber security risks, and minimizing unproductive staff labor hours while working on project production.

Technological investments in automation and other software require upfront costs, but can payoff over time by requiring fewer staff labor hours to deliver each subsequent project.

Targeted marketing may be more expensive than general blanket marketing efforts, but it can produce higher win rates with more favorable clients.

Recruiting is costly and time consuming, but it pays off by hiring competent professionals who can move the needle at the company.

The list goes on and on.

Bad overhead, on the other hand, provides low, no, or negative returns. This type of overhead is an ineffective use of resources and taints the word “overhead”.

After saying all of this, of course billable work is important to the continued operations of the business. But overhead items are required too.

Finding the balance between billable work and good overhead is the trick.

Management Insights

Vannevar Bush on who an engineer is:

“The engineer was not a physicist, a businessman, or an inventor, but someone who would acquire some of the skills and knowledge of each of these and be capable of successfully developing and applying new devices on the grand scale.”

—

Craig Wright on foxes and hedgehogs:

“Foxes have different strategies for different problems; they are curious and comfortable with nuance, and they can live with contradictions. Hedgehogs, on the other hand, focus on one big problem, and they reduce it to a quest for a single overarching solution.”

—

Chris Voss on what makes great negotiators:

“Great negotiators are able to question the assumptions that the rest of the involved players accept on faith or in arrogance, and thus remain more emotionally open to all possibilities, and more intellectually agile to a fluid situation.”

Management Resource

What’s the goal of the goal? (Behavioral Scientist)

Is your work supporting the mission? Sometimes we lose the forest for the trees.

This read shares examples of getting off course and how to recalibrate.

Ask: Ok, here’s the goal. But what’s the goal (point) of the goal?

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Get in Touch

Did something strike a chord? Tell me about it.

Or…

• Let me know if you’ve found something worth sharing.

• Let me know what challenges you’re having as a manager.

• Let me know what challenges you see other managers having.

Send me an email at [email protected]

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

Collin

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