Developing the Next Generation of Leaders (Part 1)

Our industry is facing a substantial talent drain in the next 10 years. More than one-third of our workforce is over 50 years old, with perhaps 15-20% approaching retirement. Undoubtedly those statistics impact the ranks of firm owners and managers the hardest. Are we prepared to pass the torch of leadership to the next generation?

I have encountered few firms that have any kind of formal leadership development process in place. Ownership transition is a hot topic in our industry, but firm principals seem less focused on the equally daunting challenge of leadership transition. The time to make this a priority is now, even in a weak economy. Leadership transition is only one reason why your firm should have a structured process for developing new leadership:

• Besides the need for future leaders, most firms lack adequate "leadership bandwidth" to effectively meet the growing challenges throughout their organization.

• A strong leadership development program is a valuable asset in recruiting and retaining top talent. The younger generations generally want to advance at a quicker pace than us Baby Boomers did--and they'll need to given the aforementioned demographics.

• A formal leadership development program provides an excellent forum to reinforce and clarify corporate values and priorities. This is important in building a sustainable firm culture and enduring competitive advantage.

So where to start? Let me suggest a basic framework for thinking about leadership development and some important do's and don't's.

A Three-Pronged Approach

Leadership development is a complex undertaking and long-term commitment. You can't develop leaders by simply sending them to a seminar or promoting them into a management position. I recommend a comprehensive three-pronged approach:

• Choose the right people
• Establish a formal process
• Create a supportive culture

Over the next three blog posts, I'm going to offer some advice for each of these, drawing on my experience helping firms create leadership development programs.

#1. Choosing the Right People

Clearly one of our problems has been elevating people to leadership roles because of their technical credentials rather than their leadership skills. The best potential leaders in your firm may not be the strongest technically. They may even come from a nontechnical background. Indeed, the number of A/E firm principals without a technical background more than doubled from 2000 to 2005 according to a survey by ZwiegWhite.

So what traits should you be looking for? Following are the ones that I believe matter most:

Welcomes the leadership challenge. There are too many reluctant leaders in our business. We need leaders who will embrace the challenges and commitment required, including the prospect of giving up some (or most) of the technical aspects of their work.

Strong people skills. Taking initiative and making good decisions are obviously important leadership traits. But keep in mind that leaders cannot succeed without the active, willing involvement of others. Leaders must have the ability to effectively engage people in getting things done.

Change agent. The ability to implement positive change is an imperative for leaders. We don't need leaders to maintain the status quo, which unfortunately is what many of our supposed leaders do. Change is mandatory for growth, improvement, and innovation--and aren't these the ingredients of real success?

Thinks like an owner. This implies many things, from having an entrepreneurial spirit to being willing to take on tough challenges. It also refers to the ability to lay aside personal agendas for the good of the company. Unfortunately, this trait is not as common among principals and other managers as you might expect.

Focused and disciplined. Effective management of time and attention is among the most critical leadership skills. We have limited reserves of both. Strong leaders exhibit a tremendous ability to focus their efforts on what matters most and to maintain that focus over the long term.

Continuous learner. Some senior members in our ranks are too smart for their own good. They no longer have the drive to learn new things, or to open their minds to different ideas and approaches. They make poor leaders. Good leaders are constantly seeking better ways of doing things, hence they never stop learning.

Makes others better. An effective leader is best judged by the impact he or she has on others. Leaders inspire, mentor, and hold accountable. They recognize that helping others improve requires a substantial amount of their time. The best leaders are passionate about helping others grow and perform at their best.

Some things to avoid. In seeking to identify leadership potential within your firm, the following will help you avoid the common mistakes that other firms make:

Don't place too much weight on seniority. Pick the best people regardless of age, seniority, or technical credentials (unless those credentials are essential to that specific leadership role).

Don't fail to seek input from those who work mostly closely with leader candidates. Sometimes corporate managers have an incomplete picture of how well a candidate interacts with or is regarded by his or her closest colleagues.

Don't limit choices to people who are like the firm's current leaders. There is value in broadening your leadership bandwidth with different perspectives and abilities.

Don't overlook lackluster results because the candidate is likable. There are many who can "talk the talk" but don't "walk the walk."

Don't forget that everyone is watching. Be sure to communicate to staff what is expected of leaders, and then act consistently with those expectations.

Having selected the best candidates, now what? In my next post, I'll discuss some ways to build a formal leadership development program. Stay tuned.

Now Is the Time to Gain Market Share

The AIA Architectural Billings Index took another dip in June. "It appears as though we may not have yet reached the bottom of this construction downturn," said AIA Chief Economist Kermit Baker. Consulting firm FMI also predicts a continued decline in building construction dragging into 2010, with a slightly improved forecast for nonbuilding construction.

So now seems the opportune time to gain market share. What? You heard me right. There have always been companies that emerged stronger than ever from even the worst economic downturns. Why can't your firm be one of them?

It starts with your outlook. You won't get there while hunkered down in survival mode trying to weather the storm with all your paddles pulled into the boat. That's where many A/E firms are today. Others, by virture of their fortunate market placement, are getting by just fine by holding to the status quo. That won't get you there either.

Instead, you need to go on the offensive. Take advantage of the fact that most of your competitors are playing defense these days. Sure, your firm probably faces all the same external difficulties that they do. But you don't have to internalize the problems. The truly successful firms will keep punching even after taking some heavy body blows.

It usually requires a change in strategy. Two or three years ago, most firms could claim they were growth oriented because they were growing. But the results in many cases were misleading. To explain, let me suggest four primary growth strategies:

• Growth share. The firm maintains it's share of the market which grows because the market is growing. All boats rise with the tide. This is where most A/E firms have been for the past several years. Of course, the tide has been falling recently and most boats with it.

• Market share. The firm grows because it increases its portion of the market, meaning it takes someone else's share. The robust M&A activity in recent years illustrates this strategy. But few firms are able to organically grow their market share.

• Market diversification. The firm grows because it expands into new markets or services. Usually this is a variant of the growth share strategy, because the new market is an expanding one. Much less common is market diversification that involves taking competitors' market share.

• Market creation. The firm develops a new product or service that responds to an unmet need, in effect creating a new market. This is rare in our industry, but is a distinctly advantaged market position--at least temporarily until the competition catches on.

So what does this mean? In a recession, the obvious growth strategy (if your firm is pursuing growth) is market share. This will be new territory for the vast majority of firms, but the opportunity is ripe. Why? Because most firms (at least in most markets) are currently in a defensive posture. They are waiting for signs of an upturn before venturing out of their bunkers. Many have trimmed staff, cut marketing budgets, pulled back from clients who don't have any work, and removed the word "growth" from their vocabulary.

Now's your time to take advantage. Some suggestions:

Think long term. It's hard to think about tomorrow's feast when you're hungry today. But there is a season to plant and a season to harvest. Now is planting time, in others' fields that they have left fallow. Begin shifting focus to the long-term payoff. By the way, this is one of the best ways to energize staff in the grip of recessionary blues.

Find new ways to help clients. We're prone to take a transactional approach to business development. Where's the next project? When is the RFP coming out? Now more than ever, you need to turn to a more relational approach to building your business. Stop focusing on your own firm's needs and start concentrating on clients' evolving needs. Then offer your help. Dig deep; think outside the box of your usual scope of services. Partner with other firms if you need to. Clients don't have the money? Fit your scope to their budget, offer a discount, or do it for free. It's an investment.

Step up your marketing. When many firms are cutting marketing staff and expenses, it's the perfect time to buck the trend. A study by McGraw Hill found that companies that increased advertising in the 1981-82 recession averaged a 275% increase in sales in the subsequent two years, while companies that cut advertising only experienced 19% growth. In our industry there are better marketing strategies than advertising, but the general principle holds true. Orient your marketing to helping clients with good advice, helpful information, and useful resources. You'll not find a better time to raise your profile in the marketplace.

Track what's happening with your competitors. As firms are retrenching, new openings are being created. Pay particular attention to the loss of key personnel. This can crack the door open to clients who were previously tied to certain competitors. In some cases, offices are closing, service lines are being shut down, sales territories are shrinking. These developments all can be leveraged to your firm's advantage.

Make strategic hires. A couple years ago one of our biggest concerns was the shortage of talent in our industry. That problem has gotten a reprieve in this severe recession. People are on the move, and there may not be a better time to hire for many years to come. I know, it's hard to hire when you're short on work. But in some cases, it's worth biting the bullet. Be actively searching for good people even if you can't afford them. The opportunity may be too good to pass on.

Present Less, Engage More

Writing is one-way communication. But presentations should never be. With your audience in the room, why would you talk at them rather than converse with them?

There are various reasons, including:

• You think you have to. You were asked to make a "presentation." Doesn't that mean you talk, they listen? Not necessarily (see below).

• Habit. Like most of us, you didn't even consider the alternative of taking a different approach than what you normally do. It's much easier to follow the rote process.

• You're focused on what you have to say rather than how it will be received. That's the fundamental flaw with most presentations. They're speaker-driven rather than audience-driven.

• You tend to perform rather than connect. That's the way presentation skills are often taught. It becomes acting rather than interacting.

• Oh, and the PowerPoint thing. People seem to love to hate PowerPoint. But it's not the software's fault. It's a great tool! The problem is how people use it.

There's ample evidence that communication vastly improves when people engage, when there's a conversation. The other party is more attentive, there is better comprehension and retention, and persuasion is significantly enhanced. So when there's a lot resting on your presentation, it's best to present less and engage more. How? A few suggestions:

Ask questions. This is the quickest way to break form with the traditional one-way presentation. Plan to include questions at critical junctures in your talk. Use questions that help illustrate your point or provoke thought on a particular issue. Questions can also help you better understand where your audience is coming from. That way you can more specifically tailor your presentation to your audience.

I have used questions in shortlist presentations for many years with great success. In the typical scenario, the client asks for a 20- to 30-minute presentation followed by questions and answers. Most A/E firms mindlessly oblige, forcing their team members into a role that few excel at--formal presentations. When clients are looking for chemistry and comfort, that hardly seems the right formula.

So I coach teams to request permission to ask the client a few questions in the course of their presentation (that request has only been denied once in 18 years). We insert a question or two at key transitions in the presentation. That encourages a more informal dialogue that engages the client, clarifies what the client is looking for, and puts our team more at ease. This approach better enables the formation of chemistry and comfort.

Have the audience do something. People learn more and are more persuaded by doing than by listening. So audience involvement is recommended. There are a number of ways to do this. Have them perform a little exercise or self-assessment, talk to the person beside them about a particular topic, or simply raise their hands in response to a poll question. Be creative. This is also a good approach with large audiences where inviting dialogue is more difficult.

Plan on no more than one slide every four minutes. This is a rule of thumb a veteran trainer shared with me years ago and it works! Whenever I try to cheat the rule by adding a few more slides ("Oh, this slide will only take 10 seconds."), I get in trouble with time. So how does this increase engagement? If you're spending less than four minutes per slide, you're not engaging enough. Then see points #1 and #2 above.

Put PowerPoint aside occasionally. While effective slides can be powerful visual aids, they can also tend to isolate you from the audience. Your slides should never be the focus of your presentation; the audience is. Turning off the PowerPoint occasionally, and perhaps using a flipchart or white board instead, can help return your attention to where it belongs and promote better dialogue.

I once traveled five hours to do project management training, then discovered when I arrived that I had left my briefcase by the door at home. No laptop, no PowerPoint, no notes. Fortunately, I had emailed a handout to the client in advance, and I always carry my easel and flipchart in the trunk of my car. So that's what I used. There was great interaction and energy, and several commented (being familiar with me as a trainer) that it was the best session I had ever done.

So did I permanently ditch the PowerPoint? No, and I still tend to over-rely on it at times. But it reinforced an important truth: The more we converse, the better we communicate. Keep that in mind the next time you're asked to make an important presentation. Present less, engage more.

Getting the Most Out of Trade Shows

Participating in trade shows and conferences is an important—if sometimes overrated—component of an effective marketing strategy. I say “overrated” because many firms get enthused by how many contacts they make while failing to really evaluate the results (which are often meager).

It’s also true that many trade shows have diminished in value in recent years as attendance has declined and fewer client decision makers are coming. The current recession certainly hasn't helped this trend. Nevertheless, done right, trade show participation can yield results worthy of its significant cost. Here are a few tips for maximizing your investment in trade shows:

Define your purpose. Many folks assume the reason for exhibiting is obvious—generate new leads. But there is much more potentially at play: Strengthening existing client relationships, learning about emerging client needs and trends, helping clients (more on this below), branding your firm. And don’t overlook the opportunity to recruit. For the larger, more general trade shows where all your competitors are present, I think a recruiting focus is a great way to differentiate your firm (plus there’s a big pool of potential employees there). Bottom line: Make sure everyone who works the booth knows what they’re there for.

Clarify your message. I used to inconspicuously hang around competitor booths to listen to how they presented their firm. There was a consistent trend. When someone asked, “So what does your firm do?” the standard answer was, “Oh, about everything” or some other variant of "we're a full-service firm." Ugh! Claiming to do everything says nothing. Now most of these firms had distinctive messages on their booths or in their literature, and sometimes it was pretty good. But the people working the booth were poorly prepared to describe what their firm was all about. I recommend coaching everyone on how to present the firm in those first few seconds. The message should be relatively consistent.

Better still; quickly shift the focus to the prospective client. I hate sales pitching in general and find it particularly aggravating at trade shows. I suspect clients feel the same way. Trade shows seem to give some license to pitch to the max, and the faster the better. Once the folks in the booth have provided a very brief, distinctive introduction to your firm, they should turn attention to the client: “So what kind of challenges is your company facing?” Or something like that.

Encourage the self-discovery approach. One of the best ways to get your folks to think more strategically about their approach in the booth is to ask them to wander around to the other booths to listen and observe. What approaches do they like? What don’t they like? Chances are they’ll see a little of themselves out there and they’ll better understand what needs to change and how to do it better.

Turn your trade show booth into a strategy center. Equip your space with a laptop computer, printer, flip chart and easel, and small table and chairs. Invite people in—not to look at glossy brochures and listen to you expound about your firm’s services—but to brainstorm ideas and solutions to their problems. I’ve found this an effective strategy, especially at the meatier conferences where decision makers are really looking for ideas. How to get started? Write some notes on the flip chart, making it look used. Then ask questions to draw prospects into the discussion: “We were talking to a guy who had this problem…have you dealt with this at your facility?”

Qualify leads. You don’t need to go to the expense of a trade show just to produce a list of prospects to call. Google is a cheaper alternative. With the opportunity to talk face-to-face with prospective clients, your firm’s representatives should be urged to determine who warrants follow-up. Even better, have the prospect expecting (hopefully, even looking forward to) a follow-up call or visit. Reps who might be doing such follow-up should have their calendars available to schedule calls or meetings, if possible.

As a general rule, don’t exhibit unless you’re speaking. Most people attend for the sessions, not the exhibits. But a booth provides a great forum for follow-up to a presentation or other visible role in the conference. Unless your firm has that visibility, I question the value of paying for exhibit space. Keep in mind that some people attending a trade show can meet just about as many people without a booth, and it’s a lot cheaper (usually). Again, I used to hang around my competitors’ exhibits to figure out who I should be talking to.

Assign the right people. A common mistake is to use trade show exhibits as a training ground for younger technical staff or to assign marketing personnel who don’t know how to engage a client in meaningful conversation. If there’s good reason to include such folks, make sure they’re teamed with more experienced, qualified individuals.

Showcase something that stands out. I’m amused how often firms rely on giveaways and other gimmicks to drive traffic to their booth. Why not have something distinctive to say? I know, easier said than done. Yet perhaps no other forum—where you’re surrounded by your competitors—better points out the need to differentiate your company. But that’s a topic for another post!