Architecture, engineering, and design firms spend more than $20 billion in the U.S. alone on salaries and benefits. All too often we pay the same salary for very different levels of talent—and service.

Architecture, engineering, and design firms spend more than $20 billion in the U.S. alone on salaries and benefits. All too often we pay the same salary for very different levels of talent—and service. This amounts to gross overspending on under performers and often, significant underspending on top performers. This phenomenon creates a hidden competitive disadvantage to those firms who have not made meritocracy an important part of their culture.

Fundamentally, we define meritocracy is a system by which advancements, appointments and promotions are based on performance and exceptional competency, rather than tenure or political favoritism. Meritocracy does not tolerate deadwood. A standard of performance is established, below which (after developmental efforts have failed) employees are systematically terminated. Allan Weiss once told me that there is something worse than an undeserved lawsuit—a legion of underperforming employees. Indeed, too many organizations overspend on remediation and underspend on excellence.

What investment do you make in your top performers? This question is relevant because it is a key component to keep your firm viable and relevant now, and years from now. My concern is how the human resource actions taken today will shape your legacy.

The design professions are not inherently sustainable, which is what makes leadership is so important. Few of us believe that the coming years will be easy for architects, engineers or designers. We expect tenuous, turbulent and tough years ahead, but we also see the greatest opportunities of all time on the horizon. The future is wide open for design professionals but it is not automatically promising. It will require entrepreneurial attitudes and agile talent. In firms with both, employees often tell us that their leaders demonstrate a kind of applied brilliance. This leadership gets respect.

  • Your firm is only as good as its best talent.
  • There is a lurking talent shortage, which creates a new era in professional practice.
  • Unless it’s in your mission statement to employ underperforming staff, make a commitment to a meritocracy culture in your firm.

Yes, these are wonderful times, but not without worries. To meet the challenge, we must have design organizations staffed with real talent that understands there is a price to pay for success.

One other parting thought—there is a concept we refer to as “planned abandonment” of current human resource administrative habits. What this advocates is to jettison current behaviors and practices that are irrelevant to the firm’s future success. We recommend abandoning practices that tolerate underperformers. If you allow mediocrity, those individuals who are “eating rather than growing the pie” will define the organization to a great degree, perhaps more so than the official leaders of the firm. Stop and think about just who is the dominating influence in your firm now. Employees believe what they see, not just what they are told. If employees see leadership avoiding taking actions on the low performers, it is viewed not as compassion, but as laggard leadership.

There’s nobody in charge? This has happened in some firms today when it comes to human resource management. We must not abdicate responsibility in seeking and keeping talented, skillful staff. Navigating the roads ahead will be difficult enough even with an exceptional staff. The absence of meritocracy creates disillusionment and failure. We must find ways to mobilize employees around the firm’s vision, to then achieve alignment with, and commitment to those central values.

We must develop a leadership mind-set that embraces meritocracy as a vital force in how we improve our firms, and lives.

More and more of our best of class firms in this A/E/C industry are getting rid of obsolete tenure and experience-based human resource compensation plans, to implement reward systems that encourage the ablest people to do their best, for themselves and the firm.

Anyone who leads a design firm today soon finds that Gresham’s Law—procedure elbows substance off the leader’s desk. It need not happen. Don’t try and slow change; don’t smother innovation. As you lead, move forward with curiosity; raise standards; enforce a culture of merit; and make yourself accountable for building the sort of firm that attracts the “best and brightest” to design, as our future depends upon it.

—James P. Cramer