Will 2012 be the start of the long-awaited economic turnaround? The signs are encouraging, but we heard similar optimism this time last year. Yet many A/E firms have good reason to be hopeful, as their business prospects have already taken a significant upward turn.
However, the outlook for firms that largely serve state and local governments is less rosy, to be sure. Budget cuts at the state and local levels are projected to increase by 40% in fiscal 2012, according to one analysis. Federal infrastructure spending is expected to increase this coming year, but many firms will experience the opposite effect as the stimulus and base realignment programs wind down.
In any case, it's a good time to reevaluate your business development process. From my perspective, most A/E firms continue to do business development as usual despite dramatic shifts in the marketplace resulting from the financial crisis. Here are five valuable changes to consider in 2012:
1. Look deeper into clients' evolving needs. Over the past two years I've interviewed many of my clients' clients and I've seen a couple of important trends emerge from those conversations: (1) their needs have changed dramatically (or at least their ability to meet those needs financially) and (2) their A/E service providers are talking to them less since project funding has declined.
There's your golden opportunity--emerging, unmet needs and fewer competitors vying to meet them. I know, there's that little detail about their having little money to spend on A/E services. But even if the investment of your time with clients doesn't yield a short-term return, it may well pay generous dividends down the road. At the very least, don't ignore your own clients. Some of them are getting more attention from your competitors, the impact of which will be felt once the money starts flowing again.
But even if you're talking with clients, you may be overlooking opportunities to help. Besides the constraint of limited budgets, these emerging needs (financial, operational, planning, etc.) may not match your normal scope of services. It's time to get creative. Consider ways to repackage your services to better fit clients' needs. Partner with other experts where needed. Explore different models for compensation.
2. Systematize relationship building. Everyone in this business seems to understand the crucial value of relationships in building successful, sustainable companies. But surprisingly few firms have adopted a formal, consistent approach to initiating and maintaining these relationships. Firms that have relational BD strategies and key account programs in place can dramatically increase sales success, client retention, profit, and revenue growth.
Start this effort in the sales prospecting stage, with a shift from merely chasing projects to identifying clients with long-term relationship potential (or more likely, some combination of the two). Determine the traits that define desirable clients and screen prospects accordingly. Then follow a sales process that is more relational than transactional in nature, with an emphasis on serving rather than selling.
For existing clients, implement some kind of key account program if you haven't already. Or strengthen the one you have in place. At a minimum, this should include the top 20% or so of your clients that produce 80% of your revenue (if the proportion is much less than 20%, then you really need to be doing this!). You might consider determining where in the "client relationship life cycle" each of your significant clients sit, and define an action plan for each to try to move them to the next level.
3. Commit to never wasting a client's time. Most of what is done during the sales stage is decidedly skewed toward the seller's interest rather than the buyer. We all recognize this when we're in the buyer's role, but somehow become desensitized to it when thrust into the sales role. By default, we tend to act like salespeople, adopting some of the very practices and motivations we detest as buyers.
Enough! The best way to distinguish your firm during the sales process is not by selling, but by serving. This includes avoiding the usual self-serving sales calls that offer little of value to clients. I advocate never making a sales call without presenting your "entree," something of value (usually specific information or advice) in exchange for the client's time. Strive to consistently apply the Golden Rule to how you conduct the sales process.
4. Step up your marketing. In the mad rush to embrace social media, A/E firms have largely overlooked what makes social media work--valuable content. Simply having "access" via the internet means little if you don't have something to garner the attention and interest of a devoted audience. That's why, if you're like the average firm in our business, your marketing plan for 2012 needs to describe how you are going to substantially improve your creation and use of content.
You'll see this trend reflected in the top marketing tactics identified by a consensus of several recent studies. Assess your own marketing strategy relative to these tactics and determine how to improve significantly in at least a few of these this coming year. Your biggest challenge will probably be generating enough good content to support these tactics. This earlier post offers some suggestions; use the adjoining search bar to look for ideas relative to specific tactics.
5. Do fewer, better proposals. The first part of this advice may not apply to your firm, but most firms, in my experience, would benefit by being more disciplined in which proposal opportunities they pursue. The volume approach practiced by many A/E firms clearly doesn't work. It reduces the win rate and drains valuable staff time from more productive BD activities. This previous post describes some steps for reining in the "proposal monster."
Every firm can do better proposals and, to be frank, most are quite mediocre at it. Of course, the best way to improve your chances is to position your firm with the client before the RFP comes out. Then there are two ways that stand out in distinguishing your proposal from virtually everyone else's--(1) making it truly client focused and (2) designing it to be skimmable. The latter assumes that what's skimmable is at a minimum your proposal's core theme and key messages. Again, I've written much more on this topic that you can locate by using the search bar.
So, five business development goals for 2012 that every firm should find applicable--and valuable. Whatever your firm's prospects are for the coming year, these are ripe opportunities to get the jump on the competition and enhance your success in the new year.
For the project team to achieve maximum performance, every member should feel he or she is working directly for the client. This connects the employee to the firm's mission, which is to serve clients, not the project manager. Studies in a variety of industries indicate that team performance improves when team members feel a direct connection to the customer. And my own experiences as a manager and consultant bear this out.
If you are a PM, you likely are the firm's best source of information about the clients whose projects you lead. That means you assume responsibility for creating at least a vicarious connection between your team and the client through open and frequent communication. Some keys for making this happen:
Help the team understand both the project and the client. Project team members should have a sense of what the client is like on a personal basis. What motivates him, what constitutes a win for him, what are his biases, what are his hot buttons, what kind of personality does he have? This puts a face on the client, which can make a huge difference in drawing out the service orientation of the team.
Provide the context for all individual assignments. Teams perform more effectively when everyone can see the big picture and how their individual efforts contribute to the whole. Understanding the context of their respective responsibilities better enables team members to add value to their work. Given limited instructions, the worker can only do what he or she was directed to do. But with a broader perspective of the project, client, and other team member roles, that same worker is better equipped to find ways to enhance his or her contribution.
Keep team members informed of progress, changes, and client feedback. As crucial as it is to provide clear direction at the start of the project or individual assignment, it is equally important to keep the team up to date throughout the project. This acknowledges the reality of the dynamic, evolving relationship you typically have with clients, with expectations and demands subject to change as new situations and information develop. You should fully engage the team in responding to such changes. Any feedback from the client, especially that regarding team performance, should also be promptly passed on to the team.
Sometimes keeping this blog going is a chore. Like recently, when I've been so busy that I just couldn't keep my commitment to post weekly. I understand why so many fellow bloggers have let their blogs atrophy in recent months.
But then I get a few reminders that some people do value what I share in this space. Like being awarded the Golden Valuable Content Award for 2011 by a panel of British marketing consultants. Or the Google Analytics reports indicating that readership continues to climb. Or the periodic thanks from readers who appreciate my attempts at posting helpful content.
So I'll keep at it, and my workload is settling down such that I should be able to resume my regular weekly schedule. But alas, rather than posting something new today, this is the time of year when I recognize the most popular posts over the past 12 months. Perhaps you missed some of them, or may even find it worthwhile to read them again.
1. 10 Top Tips on ... Leadership. No business advice is in more demand than how to be a better leader. It's no simple role, but that doesn't prevent me from trying to compress everything I've learned about leadership into just ten tips. Do these few things well and I'm confident you'll experience greater success as a leader.
2. What Is Your Proposal's Core Theme? The best proposals have a story to tell. That's the proposal theme, a central narrative that presents the key benefits your firm has to offer. You'll be hard pressed to discern a theme in most technical service proposals. That's your opportunity!
3. Does Service Excellence Pay? The feedback suggest that A/E firms generally fall short of delivering great service to their clients. So is it worth the extra effort to try to out-serve your competition? The research indicates the answer is a resounding yes.
4. Why Employees Leave. The economy has slowed voluntary turnover. But as business improves, the talent shortage in our industry will be evident again and employee retention will be paramount. You should be aware of what the research says about why employees leave.
5. Assessing Your Firm's Culture. Corporate culture exerts a powerful influence on how things get done within your firm. Ignore it at your peril, especially if you're looking to change and grow. Here's a relatively simple template to evaluate your firm's culture.
6. Taming the Proposal Monster. Most A/E firms submit (and lose) too many proposals. The economy has only made this condition worse. Your business development resources are too valuable to waste on excessive losing proposal efforts.
7. Why Incentives Don't Work. Most attempts to motivate better employee performance in our business are misguided. Traditional "incentives" have been shown in several studies to be ineffective in affecting behavior. This post, and the associated video, explain why.
8. Fortifying Your Firm's "Strategic Foundations." Culture, values, mission, and vision are generally undervalued. Most firm leaders consider these important to have, but rarely name them among their most strategic assets. But the research indicates otherwise. Some key questions to ask.
9. Why Technical Professionals Aren't Persuasive. Everyone has to sell something to succeed in business and life. But technical professionals seem particularly challenged to be persuasive. This post offers reasons why. You might also be interested in how to be more persuasive.
10. Preparing for Another Possible Downturn. As noted in the introduction, I tend reserve my optimism for what improvements firms can make themselves versus what the market forecasts indicate. This post offers several ideas for strengthening your firm's market position regardless of whether external conditions take a positive turn or not.
My first real post in this space, in June 2008, was entitled "Collaboration as Competitive Advantage." I posited that most firms in our industry had not mastered collaboration across disciplines and with outside parties. One piece of evidence: High rework rates that would spell disaster in most businesses. I felt strongly then, and still do, that someone could capitalize on this shortcoming and market an effective collaborative approach as a distinctive, high-value offering to clients.
I was reminded of this as I prepared to work with still another client struggling with poor coordination, communication, and alignment between different corporate functions. I will be doing some training for this client on the "skills for collaborative success," which provides a convenient excuse to write about it here.
A simple definition of collaboration is "collective effort to achieve mutual objectives." But true collaboration involves more than simply working together with others to accomplish common goals. The principle of synergy should apply, where collaboration enables people to achieve substantially more together than the sum of their individual efforts.
The A/E industry is increasingly moving toward more collaborative project delivery processes. One example is the growth of design-build. The next wave may be Integrated Project Delivery. These approaches hold great promise for providing better solutions to our clients in less time and at lower cost. But before we can excel at collaboration with outside parties I suggest we need figure out how to do it better internally.
In either case, here are some recommendations for strengthening your competency at collaboration:
Align performance goals. Different members of a team often have different, even competing, goals for the same project. So your first step is to bring some alignment to the team's goals. Start by identifying common objectives that everyone can agree upon (e.g., meeting client requirements). Then work outward, first with goals where there is minimal difference (or perhaps simply different perceptions), moving toward those that are less aligned. In some cases, complete alignment may not be possible, but you should at least determine how such differences can be accommodated. Eliminate as many conflicting goals as possible.
Define steps for maintaining open communication. One of the biggest mistakes in this area is to assume adequate communication will take place without giving it specific attention. It's best to try to schedule all routine communications so that a discipline can be developed around this activity. Then identify situations or milestones that trigger the need for additional communication. Mutually define individual or group preferences for communication (e.g., email or phone, time of day, how discussions will be documented).
Clarify roles and responsibilities. People who regularly work together often assume they know who's responsible for what when, in fact, it hasn't been clearly established. I've worked with different departments within a firm, with clients and consultants who've worked together for years, and design-build teams that have completed previous projects together--and have consistently found gaps in understanding roles and responsibilities. If your team has never reviewed this in detail, let me advise you to do so.
Agree on lines of authority and the approach to decision making. Combining teams of different departments or different firms sometimes leaves questions about who has authority in various scenarios. If there is a design change, who precisely needs to buy off on that? If you're communicating with the media or the public on behalf of the project, whose approval is needed? Clarity on decision making is important, of course, not just in terms of who's involved, but how and when decisions can be made in timely fashion to avoid delays or interruptions.
Commit to resolving conflicts promptly. Differences are one of the qualities that make teams strong. But differences can lead to conflict, which if left unresolved, can erode trust, productivity, and collaborative success. When conflict inevitably arises, start by trying to understand each party's position, needs, and motivations. Be sensitive to the emotional context, trying to depersonalize the disagreement as much as possible. Before compromising between the two positions (which equates to a partial defeat for both sides), seek a satisfactory third alternative. Engage a third party to mediate if necessary.
Celebrate mutual successes together. Be sure to acknowledge and celebrate meeting collective goals. As they say in sports, winning is the best way to overcome differences and struggles among teammates. Plus celebrating success provides positive reinforcement for doing things the right way.
Will 2012 be the start of the long-awaited economic turnaround? The signs are encouraging, but we heard similar optimism this time last year. Yet many A/E firms have good reason to be hopeful, as their business prospects have already taken a significant upward turn.
