Engineer to Leader Series: Does It Make Financial Sense?

In the last week I've had a number of people ask "who do you want to meet", and, in all honesty, I was very flattered to have others helping me in connecting with others I believe I can help in achieving their dreams. Of course that got me to think, out of a plethora of people reading my blog and know me, who is my target audience?

Engineers, who else! But not engineers who want to just be an engineer any more - those that strive to lead a group of engineers, or build the next Microsoft.

Hence, I introduce the "Engineer to Leader" series, which will soon be followed with a few offerings to coach and guide an engineer's first time being a manager or entrepreneur. Think of it as having an outside confidant you can go to when you don't know what to do, yet don't want those that work with you not know what you don't know.

So what do I mean by "does it make financial sense?" I've noticed with new managers who think they have the next best idea since sliced bread and jump into building the idea, or believe they should send the whole team to cutting edge training in Europe - did they think through their budget, priorities and business case before jumping in?

As a manager, here are the top 5 financial things you need to do or get access to to help you make better decisions for the people you lead in spending that next dollar or investing that next minute:

1. What's your spend budget for the year (outside of salary/benies for your team) and do you have to ask/justify using it to your boss before spending?

2. Are you a cost or profit center?

3. What are your financial goals for the year? (both your division's all the way up to corporate)

4. Is your budget restricted in any way - i.e. up to x% or $y can be used for overhead travel?

5. For opportunities to build a new product or gain a new skill, what is the business case for this investment (i.e. I spend X today but will generate Y revenue in 1,3,5 years?)

We'll talk more about determining what to "invest" in (because it is more than just spending money) in a future post.

So, are you on target to stay on budget for 2008?

What's Your Opportunity MoJo? Part 2 - MONEY!

Ok, for some (many) you are probably thinking this is about "how much can I make as fast as I can make it"?

Well, no, not really.

First, believe it or not, not everyone wants to be like Donald Trump and focus on making more and more money. However, most people want to be able to make a bit more money then they need to live "comfortably" from their point of view, and thus, buy and do what they please.

So, what do we mean when we analyze an opportunity from the money aspect?

1. What are your true monetary goals in life?
You need to first come to grips on what you realistically want. We all cannot be as fortunate as Bill Gates or Oprah, but there are many people living their dreams on much less. So, what do you need today and in your future, and are you on track? If you don't really know and don't want to do the analysis it may be worth obtaining a financial advisor to help as they can often take the "emotion" out of making financial decisions for you. I recommend Fox & Company as they are not tied to any particular financial institutuion's products to sell.

2. Will your "hourly commitment" to doing X bring you what you believe you are worth today?
Most of the time, if we are looking at new opportunities from a money perspective we try to determine if this opportunity will turn a profit of at least 20% or more of what I get today.

3. Will your "hourly commitment" to doing X bring you what you believe you will be worth in the future?
This is analyzing an educational investment - be it going to school or volunteering to do something or taking a job at a lower pay to get you somewhere bigger in the future.

4. What do I lose hourly by taking this opportunity on?
Say this is not a new job, but a new side project you want to turn into profit some day. What are you losing by taking this project on - time to invest in education? another project? free time? There is monetary value there - figure it out before making your decision.

Quick tip - Do you *really* know your hourly rate today? Most of us work more than 40 hours a week (some lucky people work less). Track the time you work over the next month and determine your real hourly rate - that may open your eyes to being open for a new opportunity.

We all should love what we do, but, if we can time box certain things and still make the same amount of money, or, open up time to have a side project and make more money, wouldn't you do so?

Up Next: Finding Your Underlying Passion