Five Must-Have Skills for Future A/E Firm Leaders

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E.BOOK SERIES

Five Must-Have Skills for Future A/E Firm Leaders

The future of the A/E industry depends on you.

How is that for a little bit of pressure? But, the reality is that the A/E industry is at a crossroads. The Baby Boomer generation is retiring at a faster pace than mid-level professionals are rising to the leadership ranks. That puts considerable pressure on ownership/leadership succession plans and means that demand for future leaders is outstripping supply. That spells opportunity for those who can rise to the challenge of leadership.

More than just technical excellence, leading an A/E firm requires a broad-based skill set that also includes marketing, finance, human resources, and more. None of this comes to you overnight. It comes through time and experience and a well-built program for identifying and grooming future leaders. This complimentary e-book is designed to synthesize some of our most insightful and action-oriented advice for future A/E firm leaders. We’ve organized it in an easy-to-follow and logical format. You first need to understand what it takes to be a good leader in this industry. You then need to apply that understanding to creating a strategic framework, to keeping the backlog coffers full, and to making sure you turn a profit. Lastly, never forget the importance of inspiring others to lead and succeed.

We just scratch the surface here, but do hope that you find it to be useful and informative. These are unprecedented times of changing demographics in the A/E industry. Will you rise to the occasion?

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Five Must-Have Skills for Future A/E Firm Leaders E.BOOK SERIES

PART ONE: Developing Your Leadership Skills- Stretch Yourself- Know Thyself- Nine Essential Skills of Highly Effective Design Leaders

PART TWO: Building a Successful Strategy- Effective Strategic Planning- Your Firm’s Cultural Climate- Practice- vs. Business-Centered Culture- Why Business Plans Are a Waste of Time—And What You Can Do About It

PART THREE: Developing a Winning Proposal Strategy- How To Double (Or Better) Your Strike Rate With the IFBP Method - Differentiation in Your Proposals- You Have at Least Three Unique Differentiators

PART FOUR: Budgeting for Success- How to Budget for Success- Pricing to Maximize Profits- How to Increase Fees when Clients Use Price for Selection- How to Increase Operating Budget by 7%

PART FIVE: Leading Your Team- Seven-Step Strategy To Negotiate Your Contract- Delegation- Interviewing Tips- Decision-making

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Stretch YourselfMost managing partners developed their technical and leadership skills in the trenches of project design. Whether inherited or earned, those who gain the position of managing partner must play a crucial role in a firm’s continued success and growth.

Those who progress from designer, to manager, to leader, invariably must learn to stretch themselves and take on the challenge of learning new roles and developing new skills. This section will discuss this transition, and the keys to accomplishing it.

To be successful in the transition to firm management and firm leadership, you must recognize at a minimum, four points:

1. The informal atmosphere that the small firm can maintain is no longer possible for a growing firm. Or, if you are moving up through a larger firm, you must appreciate that the relationship you have enjoyed with your coworkers has radically changed. By necessity your professional relationship with them will become more formal and business-like.

2. Your management and leadership style influences the firm’s ability to attract and retain top talent. While there are examples of successful firms with autocratic (dictatorial) leadership, the trend is clearly toward a more participative management style among the most successful firms.Young professionals will only stay under the strong hand of a centralized, autocratic management style as long as it is convenient to them. As soon as they reach a certain professional and financial level, the most capable professionals will move to a more acceptable leadership environment.

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PART ONE: Developing Your Leadership Skills



3. You must become a team builder. The skills needed to build an effective team are substantially different from those required to become proficient professional designers. Some leaders have natural talent, but most have to work hard at it.

4. The key to achieving success in any business is directly related to bringing in new work—new clients. Whether or not you enjoy the marketing and sales aspects of business, you must develop your ability to manage clients, establishing and maintaining relationships with them built on trust and mutual respect. The one who “owns” the client has the clout, every time.

Know ThyselfRapid and constant changes in design and construction have created the need for assessing and redefining one’s corporate role. The continual enhancement of your own knowledge base and competencies is a must if you are to keep pace.

Career management is the process of evaluating who you are and how your skills align with the needs of the marketplace. Patricia Lee Burke, vice president of Portland-based Drake Beam Morin, offers the following seven concepts. Understanding them will help you to establish a career plan:

1. Self-Assessment–The key to managing your career is knowing yourself. Evaluating your values, interests, skills, knowledge sets, communication style and personality every five years will help to keep you on your chosen career path.Use this information throughout your career. Career consultants can also administer and interpret numerous assessments and provide valuable feedback.

2. Goal and Objective Setting–Create a career plan based on your self-assessment. Develop a list of goals you should achieve. Next make a list of objectives (i.e., to be an owner of the firm), mapping out how you can reach your goal. Objectives should have a time-frame and should be measurable and quantifiable. This process is not dissimilar to the planning of a project, with phases and time lines.

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3. Alignment of Objectives–Constantly evaluate your goals, objectives and needs. Look at how realistic they are based on your finances, your current position and how they can be accomplished. Again, this is similar to project activities such as reviewing phases or ensuring that budgets are being met and client needs are understood.

4. Market Assessment–Evaluate the needs of your present employer and the broader workplace. This will help you to understand the challenges you face as well as opportunities that arise.

5. Skill Strengthening–Investigate what skills you need to keep current in your field. Even if you have exactly what it takes, recent changes in the industry or in your firm could make your skills less valuable. Don’t become complacent. Follow the old saying, “learn something new every day.”

6. Plan, Implement and Review–Create a plan that includes a series of small steps, options, and alternatives (similar to a project schedule). Put your plan into action and review it periodically. Read business publications, network, and attend professional association meetings. Again, consider help from career consultants. They are more objective, have vast resources at their fingertips, and can identify opportunities within your given field.

7. Develop a Punch List–Those who successfully manage their career, view themselves as “internal consultants.” We are no longer a career-oriented society of workers. We are a work-oriented society of workers.

There will always be jobs, and there will always be work. Keeping abreast of what is happening elsewhere and continually sharpening your skills and knowledge are the keys to managing your career. Remember, your employer owns your job, but you own your career.

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Nine Essential Skills of Highly Effective Design LeadersIt is not easy to be the best. It requires hard work and a boldness of action that defies normal practice.

For 40 years, PSMJ has studied leading-edge architectural and engineering firms of all sizes, advising and consulting on all areas of business operations. We have discovered something that is both profound and apparent—that the most successful firms, those firms with the best practices, are fundamentally different from the average performers.

Every year, at least half of the top 10 percent of firms in our PSMJ surveys were also top performers in preceding years. This gives us the opportunity to study them and identify what makes them so successful, and size is not a criterion.

The following are the characteristics we see in the best firms, which we call our “benchmark firms.” While no firm does all the things we describe, our benchmark firms do many of them. These firms:

1. Have a purpose with a vengeance. The best firms have strong and visionary leadership, sometimes even dictatorial leadership. Although innovative and creative, these firms don’t place a particularly high value on design awards. They let their clients define quality. And they exceed promises made to clients. These firms have flat organizations with lean project teams and highly billable principals.

2. Use guerilla marketing. The top firms are proactive in their marketing: They don’t wait for RFPs. They identify the clients they want to work for and develop tough strategies to capture them. Once they have clients, they don’t let them go. Principals stay very close to their clients and endeavor to know their business better than the clients themselves. Their goal is to establish such a strong relationship with clients that they get 100 percent of their clients’ work wherever in the world it occurs.

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WHAT DOES IT TAKE TO BE A LEADER?Good followers usually don’t make good leaders. But few firms focus on defining the traits that will be necessary for its future leaders, or on developing young professionals to take a leadership role.

The following traits define good leadership within an empowering organization focused on growth. What leadership traits are most important to help achieve your goals?

• Vision.Leaders create a vision for the firm, “paints a picture” of the future that inspires and motivates others.

• Focus.Leaders spend their energy in the few critical activities that will really make a difference to clients and to the firm over the long term.

• Values. Leaders embody the personal and professional values that you want to perpetuate in your firm.

• ClientRelations.Leaders understand what provides value to clients and they motivate staff to excel in those areas. They inspire confidence and trust in clients and potential clients.



3. Build kick-butt project managers. The best firms push authority down to the lowest level. The project manager’s job is to make sure the client is ecstatic—and the firm makes at least the expected profit. These PMs stay on top of their jobs’ financials. The PMs that rise to leadership positions at benchmark firms are not just very good at managing projects—they also excel at selling all the services the firm has to offer to the client. They know their clients and exceed promises all along the way.

When problems arise, these project managers don’t hide behind their desks. They take responsibility and communicate with their clients. They do not allow for surprises later on in the project.

4. Value their people. Firms that deliver services live or die by their people. Benchmark firms recruit only the best people to work for them. And they keep these best people motivated by giving them room to grow—these firms’ leaders are most often developed from within. These firms have lower than average turnover, though not the lowest. These firms invest in their top people—they really understand that people are their most important asset, and they act like it. And they don’t tolerate non-performance.

5. Are highly profitable. Benchmark firms know that nothing else matters if the firm is not financially successful. Lump-sum contracts and incentive clauses are the way they do business. They manage cash. They keep on top of their receivables. They charge according to value provided, not cost incurred. They control costs, sacrificing neither the long term for the short, nor the short term for the long.

6. Embrace Technology. Before these firms decide to implement new technology, they make sure there is buy-in from all of the management and commitment to see it through. Management understands that adjusting to new technology can be a great frustration for many employees, and they make it their job to build support for the transition.

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These firms make sure that there is a short implementation period to set up the technology and train users. This swift transition allows for immediate payback on the technology.

7. Have an ownership transition plan in place. Benchmark firms always think about the future and have ownership transition plans in place that reward performance over loyalty. They understand that a solid plan can take up to ten years to carry out. At the same time, all employees understand what is expected of them before, during, and after the transition.

When it comes to choosing new leaders, these firms define criteria for leader selection leading to the top position. When clearly stated, the leadership selection plan lets junior employees know where they stand and what it takes to get to the next rung.

8. Consistently Benchmark. The top firms constantly benchmark their performance against well established business performance measures. They don’t just look at industry data, but also dig out the benchmarks within their

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LEADER OR MANAGER?There’s a difference between leadership and management. Firm leaders and potential successors should consider the following:

THE MANAGER THE LEADERDoes things right Does the right thingsMakes the system work better Creates a better systemExpects obedience Motivates to encourage commitmentLooks for people to get things wrong Looks for people to get things rightFocuses on the job at hand Focuses on achieving the visionLooks for short-term results Looks for long-term effectiveness



firm’s size, type of service, geographic location, marketplace, and type of clients served. They don’t just find themselves as part of an elite group of firms; they work at getting there. Also, these firms tie their reward systems directly to the achievement of these goals. They don’t reward their staff for “median” performance.

9. Lead others to accomplish strategic plans and business plans. The planning process in top firms includes all key people. Staff is allowed to offer input on how to reach measurable business goals, and they believe in the vision and purpose of the firm.

These firms allow for flexibility in their plans, as they know that unforeseen changes naturally occur. They also return to repeat the planning process by assigning smaller goals, such as six-month strategies and action plans or one-year objectives.Finally, even when these firms find themselves at the top of their field, they don’t rest—the best firms find ways to do great things even better.

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Effective Strategic Planning PSMJ studies show that 60-70 percent of A/E/C firms don’t do any form of strategic planning.

Most of the others are superficial in their planning, concentrating on budgets, schedules, and day-to-day tactics rather than defining an exciting, attainable vision for the future that will motivate their staff and lead to high achievement.

Strategic planning is the process that allows the design organization to establish its goals and objectives for the future. The normal recommendation is that this period be three years. Your firm’s principals should define a direction and purpose and ultimately a workable plan.

By arriving at a common understanding and agreement on the future of the firm, the various members of the organization can establish their necessary contributions. Each is also able to reconcile personal goals with the firm’s.

Participants in the process usually include all equity holders, major functional managers, and perhaps those senior employees who are demonstrably committed to the firm for an extended period of time. At the same time, it is usually more effective to limit attendance to no more than twenty.

Strategic sessions usually culminate in the establishment of objectives in connection with revenue, profits, employees, markets, disciplines, geographic markets, branches, clients, ownership, professional achievements, etc. There is also a definition of the firm’s strengths and weaknesses in order to capitalize on strengths and minimize the impact and importance of weaknesses.

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PART TWO: Building A

Successful Strategy



From this overall, but detailed, vision the firm can generate its specific annual operational plans: business plan, budgets, marketing plan, human resources/personnel plan, and ownership strategy.

Let’s establish an optimistic viewpoint—design professionals can establish ambitious goals and, through careful planning, achieve them. Risk and return can be appropriately balanced.

It is wise to include a knowledgeable, outside facilitator. His/her task is to draw out full participation from all involved and insure that a reasonable and balanced plan is developed—a plan that is both ambitious and achievable. Strategic planning sessions are usually divided into three (3) parts: 1. Statement and articulation of the firm’s current status. This includes a listing of the firm’s current strengths and weaknesses. Any plan must take advantage of strengths, correct weaknesses or make them irrelevant, or develop new strengths in light of always changing competitive environments.

2. Determination of specific characteristics and achievements of the firm at the end of the period covered by the plan. This is a “picture” of the organization at the end of a time period. The participants can commit to the goals because it is consistent with their individual objectives.

3. Development of a process for the achievements of the firm’s objectives. This includes the assignment of responsibilities and tasks to individuals and a process for “revisiting” the goals to make sure that their achievement is not “lost” in the pressure of daily operations.

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Here are a few of the major milestones for successful strategic planning:

• Decidewhoshouldbeinvolvedintheprocess.You’llbenefitfrom the ideas of others.

• Questioneverythingaboutthewayyoucurrentlydobusiness.

• Considerusinganoutsidefacilitator.

• Scheduletwotothreedays,off-site,wherethestrategicplanning team can work uninterrupted.

• Holdthestrategicplanningmeetinganddevisethepreliminary strategy.

• Minimizethepaperwork.Keeptheplanassimpleandeasyto grasp as possible.

• Finalizeandwritetheplan.

• Communicate.Sharetheplanwiththeentirefirm.

• Demonstrateatotalcommitmenttofollowingandsupportingthe on-going planning process.

• Scheduletwoorthreeone-daysessionsduringthenextyearfor progress checks and adjustments.

Successful firms plan regularly, then adjust, modify, update, criticize, mold and work on variations of business plans.

PLANNING IS:• Participatory• Ongoing• Criticaltoyourfirm’ssuccess

PLANNING IS NOT:• Onetime• Awrittentextbook• Elaborateorinvolved• Putinabookontheshelf

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YourFirm’sCulturalClimateThorugh more than three decades of research, PSMJ has found that design firms tend to lean toward having either a culture of empowerment or a culture of control. The empowering firms typically achieve the highest sustainable levels of rapid growth.

Most principal owners are sure they want their firms to grow. However, many owners exercise so much control over so many areas that they inhibit their people from taking the very actions necessary to create the growth they desire. On the other hand, some owners sincerely believe that they are creating empowering organizations, but haven’t aligned the firm’s values, strategies and tactics, so they’re sending mixed messages about what they expect of their people.

This is important for ownership transition because you need to define your objectives for the firm. Your position on the empowerment versus control spectrum determines whether or not you will achieve your objectives. It determines what kind of leadership the firm needs, how you will choose and develop these leaders, what kind of ownership you will encourage, how you will finance the transition, and the terms of your buy/sell agreement. So it’s extremely important for you to understand the culture that you are perpetuating, and to have an opportunity to change it if it’s not taking you where you want to go.

WhatIsEmpowerment?In an empowering culture, all individuals know that they directly influence the success of the company. They have the information they need to understand the big picture and their role in it. They know what is expected of them, they have the freedom and authority to act to achieve their objectives, and they expect to be held accountable. In the most empowered design firms, they have an ownership stake.

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CULTURALTRAITS:EMPOWERMENTVS.CONTROLIn our recent studies of design firm culture, PSMJ has discovered several measurable and monitorable traits that determine whether firms are empowered and propelled toward rapid growth, or are controlled and placing obstacles in their own way. Most firms exist somewhere between the two extremes. Understand where you are, and if you’re consistent.

Empowerment vs. Control

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CULTURAL TRAITOpenness of Financial

Information

Recognition

Ownership

Ideas Processed

What the Principals Do

Fun vs. Work

Intolerance of Non-Performers

Training

Management Style

People Hired

The CEO

EMPOWER

Staff members know financial results; each person understands how he or she contributes to profitability.

Rewards are given frequently and publicly, achievements are celebrated, people understand what behavior is being recognized.

All people are encouraged to become owners.

Everyone creates new ideas, participates in strategic planning.

Principals concentrate on leadership responsibilities, with little project involvement.

People have fun, party; the atmosphere is dynamic.

People have high expectations of themselves and others; peer pressure on non-performers is immense and they leave quickly.

Training is abundant, frequent, and for everyone; as much as 15 percent of the budget is invested in training.

Spirit of entrepreneurship and risk-taking are encouraged throughout.

New people are able to take risks and have an entrepreneurial spirit.

The CEO concentrates on strategic leadership, shares decision-making and information, trusts people to do their jobs.

CONTROL

Only the owner knows how the firm is doing.

Recognition is less frequent, often secret, and may seem arbitrary.

Owners control large shares, prohibit others from owning until they have “earned” it.

Ideas come from the top; only partners do planning.

Principals are involved in everything.

The atmosphere is serious; the focus is on productivity alone.

Non-performers last a long time; the boss makes all the personnel decisions and may be unaware of the situation.

Training is an expense to be restricted; partners decide who will benefit.

Entrepreneurship and risk-taking are allowed only at the top.

New people are good followers, easy to control.

The CEO is involved in everything, makes the decisions.


Five Must-Have Skills for Future A/E Firm Leaders E.BOOK SERIES 14

Characteristics Of Empowerment Vs. ControlAn empowerment versus a control culture defines every corner of a firm’s operations, from its legal form to its marketing, as well as a firm’s growth potential.

Practice-VersusBusiness-CenteredCultureAnother way to compare two firms’ cultures is as practice- or business-centric. A practice-centered firm tends to prioritize design first and finance second; it will tell you about its awards and its benchmarks for client satisfaction. Those are not unimportant at a business-centered firm, but such a firm puts a priority on growth.

The challenge is this; most sellers are inherently practice-centered firms, especially the ones who aren’t thinking of selling. They’re focused on the practice of architecture and engineering. Most buyers by the very nature of seeking acquisitions are business-centered firms.

Growth Potential

Form

Ownership

Culture

Atmosphere

Leadership style

Financial information

Marketing

Project delivery methods

Turnover

Buy/sell agreements

EMPOWER

High

Corporation, Limited Liability Corporation

Broad ownership

Empowering at all levels

Openness

Entrepreneurship encouraged at all levels

Shared broadly

Empowered marketers can commit resources

Team-oriented toward strong project manager

Embraced; people come and go

Stock transactions. Driven by desire to share ownership

CONTROLLING CULTURE

Low

Subchapter Corporation

Closely held

Benevolent dictatorship

Secrecy

Benevolent dictatorship

Kept secret

Must get approval, ask permission

Partner involvement; discipline-oriented departments

Discouraged. Tight non-compete agreements

Stock control. Driven by desire to protect owner retirement



Here are some examples of how such firms behave differently. The firm receives a check for $50,000, unexpectedly.

• Thebusiness-centeredbusinessdistributesittothepartners as a bonus.

• Thebusiness-centeredpracticeinvestsitinupdatingitsCAD hardware and software. • Thepractice-centeredbusinessupgradestheoffice,installing new carpeting, paint, furniture, etc.

• Thepractice-centeredpracticetakesthestaffonafieldtrip to see some of its best projects.

The firm receives an RFP from a well-known charity for a project that’s a sure-fire award winner, but, the charity’s financial condition is shaky.

• The business-centered business sends a letter telling the client the firm is unable to respond.

• Thebusiness-centeredpracticetellstheclientitcanrespond only if the client agrees to a 50 percent up-front payment.

• Thepractice-centeredbusinesstellstheclientitcanonly negotiate an agreement on a sole-source basis. • Thepractice-centeredpracticesubmitsaproposalandhopes for the best.

The business-centered buyer will likely need to exercise patience with a seller who is new to the sales process. In turn, the seller must carefully consider that its culture is unlikely to remain intact. Both sides must be prepared to accommodate the other, but also be prepared to walk away in the case of a mismatch.



Keep this in mind when you are planning any strategies—particularly ownership transition strategies—moving forward.

Why Business Plans Are a Waste ofTime—AndWhatYouCanDoAbout ItGeneral Dwight D. Eisenhower is famously known for saying “Our plans are worthless, but planning is everything.” He was one of the greatest planners in history, and yet when he planned the D-Day invasion—arguably the most complex military planning activity in the history of warfare—he knew that the plan was going to be overtaken by events almost immediately.

Eisenhower’s insight illustrates that even though the plan itself often quickly needs to be adapted, the process of planning is extremely important to an ultimate winning strategy. Too many business leaders today lose sight of this, often focusing on having the right plan, instead of on having the right planning process that really improves performance. That’s why most business plans are a total waste of time: because the planning process isn’t given its proper due.

One way to ensure that you’re paying attention to the nuts and bolts of the planning process in creating your firm’s successful business plan is to create a list of desired actions (for you and your company) before you even begin drafting. Identifying the improvements that need to be made is paramount—and the actions you end up taking will ultimately drive the numbers.

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tMOST ACQUIREES MOST ACQUIRERS u

Practice-centered Practice

Business-centered Practice

Practice-centered Business

Business-centered Business



Here are some top action steps to guide you in creating your business plan:

•Improveclient’ssatisfactionandloyalty - Send client evaluation forms to every client every three months - Have client sponsors visit all strategic clients every two months - Invite clients to attend a lunch-and-learn program

•Increasethenumberofqualityproposalopportunities - Present papers to groups at local and regional conferences - Call past clients at least every year - Become more active in local society of American Military Engineers

• Improveproposalhitrates - Develop go/no-go criteria - Teach our business development and marketing proposal classes, a strategy called IFBP (discussed on next page) to use on every proposal to improve the chance of winning - Customize proposal resumes

• Increasechargeability - Establish a target for every employee in terms of hours per year - Require employees to forecast their time for the following week, in addition to submitting timesheets and what they did the previous week - Initiate monthly conference calls with other offices to increase opportunities for work sharing

• Increasedirectlabormultiplier - Increase the billing rates for expert witness services - Require each project manager to do an earned value analysis report, every month for all jobs of over $100,000 in fees - Project manager’s performance evaluation

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TIPSFORSUCCESSReward The Right BehaviorMake sure that your recognition system actually rewards the behavior you want to encourage in your firm. If you want to encourage teamwork—but all the public recognition goes to people who are outstanding individual performers—you’re sending a confusing message about what employees actually have to do to succeed.

Empower Or Control, But Be ConsistentIf you want to create an empowering organization, make sure you’re not exercising too much control. If you want to hold onto control, make sure you’re not sending mixed messages by being empowering in some areas but not others. Most firms fall somewhere in between the two extremes. Most important is to be aware of what you’re doing: don’t create the wrong atmosphere just because you haven’t given it much thought.



How To Double (Or Better) Your StrikeRateWithTheIFBPMethod Charles Nelson AIA, LFRAIA

There is a fantastic methodology you can use to dramatically increase your proposal strike rate—some firms using it say as high as 80-90%. But to succeed you must do something very few design firms do. I’ll come to that—the methodology first.

Here’s how it works:

IssuesCritically, forget all about YOU and how great your firm is. These are CLIENT issues, not about what you want to sell to the client. To address the client’s hot button issues, you absolutely must look beyond the RFP; you need to deeply understand the client’s industry and business model in that industry—and if you don’t, find out.

Then you need to find out who the stakeholders are that can affect the client’s project. Consider them, because they are critical to project success.

“Vitally” important isn’t a list of 20 or 30 items—it’s the top 5-7; those that will make or break project success.

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PART THREE: Developing a Winning

Proposal Strategy

My definition of a stakeholder: Any person, or entity, who can directly or indirectly slow down or stop a project.



FeaturesWhat unique experience and skills does your firm have with respect to that short list of Client hot-button issues? Unique means just that—the stuff the client can’t get anywhere else. And if you think that designing 30 schools in the last 15 years makes your school-designing skills unique, start over. The competitors that matter will have just as long a list. It’s about the unique problems you solved in those designs, provided they will resonate with the school selection committee.Every hot button issue you’ve identified must correspond to something your firm has an answer for.

BenefitsIf you’ve nailed the first two points, the third is almost unnecessary—but it may not be that obvious to everybody who has a say in selection. So spell it out. Not what you can do for them—but what will be the outcome it you do. They have a very different emphasis.

And if you’ve done that, forget about the 17 trays of slides of your past projects. That’s not this client, this project.

ProofHere’s the hard part: Are you just alleging that you can solve the problems you’ve identified, or do you have proof? Very few firms have any proof, for the simple reason that they rarely, if ever, measure anything (we’re artists, we don’t look back). “Proof ” means data.

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You only have to measure one or two things, if they are things that are important to the client. Example: If you are a structural engineer that specializes in high-rise office towers, the two most important things you can measure are:

• NLA–“NetLettableArea.”It’sameasureofbuilding efficiency,anda2%or3%differenceintheNLAmeansa lot to a developer; and

• Weightofsteelperunitsoffloorarea—a measure of cost efficiency.

Every project type has “metrics that matter.” For shopping center developers, it’s the number of weeks the project will be open for pre-Christmas trading; that trumps everything else.

There are two powerful psychological aspects to measuring besides generating data to substantiate your claims to relevance:

• Becausesofewfirmsmeasureanything,yourdatawill look great because there won’t be much to compare it to.

• Critically,themerefactthatyouchosetomeasure something important to the client tells the client that you are thinking about the stuff that matters to her, and therefore she can rely on you to stay focused on it throughout the design process. You can’t put a dollar value on that kind of message.

TemplateTheProcessOnce you’ve worked your way through this methodology for one project type, or one client, save it—the next one won’t be identical, but it will be similar, and you’ll have the starting point for the next proposal.

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Here’s the template: Keep one for each project type, and for each client for whom you do multiple projects.

Besides speeding up the proposal process in the future, it will prompt you to keep measuring and recording valuable data.

Benefit: The Toughest PieceOf“IFBP”by Eric Snider, P.E.

I have just returned from facilitating a great three-day event sponsored by PSMJ. The event was the “Successful BD and Marketing” series of programs. It came home to me again and again during the program how much those of us who develop business for our firms rely on PSMJ’s critical analysis, IFBP. Issues, features, benefits, and proofs form the basis of every proposal story and presentation dialogue. It also was driven home numerous times the essential weakness in our thinking: how to relate a benefit with assurance and clarity. Allow me to elaborate.

First let’s recap the fundamentals. Whether developing a strategy for pursuit of a future client, a current proposal, or an upcoming presentation/interview, the power of IFBP is in its ability to direct your thinking toward the client instead of yourself. Every client has two or three ISSUES that are causing a project to move forward. We, either individually

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or through our firms, offer FEATURES to solve those key issues. Those features offer BENEFITS to the client in choosing us over our competitors. And we can provide PROOFS that should further convince the client that we are his best choice. And the IFBP process does not generate a random list of items. Instead, each IFBP group is a string.

That is, each issue should be addressed by at least one feature, which you can relate to a client benefit, and provide a related proof. The next “string” supports another key issue.

Now, usually we know the client well enough to list his key issues. And we certainly know our firm well enough to describe our features that directly answer the key issues. (Don’t waste your client’s time by listing features your firm has that do not address the key issues!) And usually we can back the features up with proofs (testimonials, awards, successful project schedules and budgets, etc.)

The toughest job for us is to think like the client. In the IFBP string, that means describing the BENEFIT from the client’s eyes. Too often we just restate the feature: “We feature a portal that will enable real-time checks on budget.” My suggestion is to always start your benefit statement with, “You, the client (use their name) will benefit…” By starting with “You” it forces the writer/speaker to shift the focus to the client. A caution, though: Do not follow the “You” phrase with a “because we” phrase. In the above example, “You, Madison County, will benefit because we offer a portal that will enable real-time checks on budget.” That shifts the emphasis back to you and away from the client’s issue. Instead, continue to think from the client’s perspective: “You, Madison County, will benefit by having real-time access to budget updates through our client-focused portal, assuring you the most current and accurate information, saving time and money in the process.”

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Five Reasons This Program Is Different (AND BETTER) Than All The Others

Participants learn collaboratively from each other using case studies of firms just like yours.

You really work in a TEAM with other professionals dealing with real life issues, NOT just theory.

We provide you with a “Digital Toolbox” with templates and forms to help you implement what you learn when you get back to your office.

Each seminar leader has 30+ years of experience leading successful A/E organizations.

No ivory tower theory; just practical techniques that really work.

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SEE FULL COURSE DESCRIPTION, DETAILED AGENDA, AND

REGISTRATION INFORMATION AT THE END OF YOUR E-BOOK.

http://www.psmj.com/education-events/index.cfm



Sometimes someone in the BD program suggests that “it is obvious” to the client what benefit they derive from our feature. I contend that, if the client has time to stop and think about all the features statements we make, he can likely shift our feature into a benefit, but clients must do their day jobs while also reviewing proposals or listening to presentations. So it helps the client clarify his thinking as he skims our proposal or half-listens to our presentation. Go ahead and state the obvious… after all, it is only obvious to us!

Differentiation in Your Proposalby Wally Hise

Make your document stand out from the rest of the pack.

Writing proposals is hard work! It takes a team of people to provide ideas, assemble information, create graphics, review and revise the document, and ultimately publish your submittal. After all of this effort is completed and you catch your breath, have you ever stepped back and flipped through the document with fresh eyes? Does it scream “I’m a winner” or plead “Please don’t put me at the bottom of the pile.”

Clients are finding it more difficult than ever to see tangible differences between you and your competitors. One way to put your proposal at the top is to clearly differentiate your firm in a manner specific to the project or contract you are pursuing. Many of my peers ask for a “message” in the proposal. I find that this is often nothing more than a catch phrase or tagline, repeated throughout the document. I prefer to develop a differentiation strategy.

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Areas of Potential Differentiation

People TrainingExperience Products / ServicesSystems / Processes ClientsTechnology OrganizationGeography / Location Pricing

The pinnacle of differentiation is to establish your firm as unique. I’m not suggesting that you profess to be “uniquely qualified” as many writers do. Being unique, in the purest form, means possessing a quality or qualities that that no other firm has. This is rare in our business, unless you have a proprietary technology or patented approach that can’t be copied. Instead, you will likely find a combination of attributes that, when packaged and articulated, most other firms cannot claim or match. The table lists some areas of potential differentiation that you might consider as you develop your strategy. These may fit in one of three broad categories.

What You Do – products, services, capabilities, and experience all fall under this heading. It can be a broad capability such as geotechnical engineering or landscape architecture. It might be a niche service like healthcare consulting or transit planning. Many of the things you list on your web site and show in marketing collateral belong here.

How You Do It – the way in which your firm approaches projects or accomplishes work tends to be more process oriented, and may be a way to set you apart from others. Specific tools used to track projects, approaches to managing staff and workload, and systems that enable you to deploy teams quickly are some examples.

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Who Does It – this refers to individuals and groups of people. Your technical experts may offer a valid point of uniqueness, depending on how specialized their experience is. You may employ a team of Ph.D. archeologists, or a group specializing in claims analysis. Another approach is to use lower level staff, maybe temporary employees, to provide a cost advantage.

Similarly, other items noted in the table can be helpful as you think through your differentiation. To illustrate an approach, I’ll share the example of a proposal we recently submitted to a Government client for a construction management contract. Arguably, this is a commodity service provided by many companies. It’s difficult to say that our team, inclusive of specialty subconsultants, does it better than any other firm. How can we possibly differentiate in this arena?

The fact that we have 650+ people in 18 offices throughout the region doesn’t make us stand out. Having a deep bench of staff in the required disciplines, in and of itself, isn’t unique. Neither is having staff who bring experience from all points of view—Government, consultant, and constructor. But when combined, these three features offer a compelling foundation for our proposal and approach, and could be matched by only a few firms, if they choose to package their team in a similar way. I refer to this as “relatively unique,” and sometimes that’s the best we can do. Of course, each attribute was paired with a client-oriented benefit statement to make our story even more powerful.

As our industry becomes increasingly commoditized, firms look more the same. While this trend continues, the value of differentiation can’t be overemphasized. A successful differentiation strategy will help separate your firm from the crowd, lessen price sensitivity, and articulate real value that you deliver to clients. Who wouldn’t want to read about that?

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You Have At Least Three Unique Differentiators! by Eric Snider, P.E.

When we consider what differentiates one firm from another, it is easy to get caught up in the game of straining and stretching to turn a normal run-of-the-mill service or project into something unique. As a result of the unbridled effort, we sometimes overlook the three things that set your firm apart from everyone else… and I mean everyone. Let’s consider them individually:

Your people. This may sound like a “Duh” statement. But how often have you struggled to find something unique to say in a proposal or presentation? If you can call out something unique about one of your staff that will be assigned to the client’s project, you have a true differentiator. The unique item may be a project, a degree, a certification, or some other unique aspect of the person. Call out the uniqueness several places, including in bold on the resume sheet.

Your project portfolio. Again, “Duh!” may be your reaction. Yet no one—no one!—else has your list of completed projects. And along with the completed projects list should go a sterling list of references for those projects. The idea is to flesh out what is unique about the client’s project and find one of your own that closely matches. The old truism is that engineers want you to have performed the exact same project many times and architects want you to have similar but not identical projects in your portfolio.

Your team cohesiveness and history. This one is a little less “duh” and a bit more on details. If you truly have a multi-firm team put together, show how you have worked together in the past as a strong and unique team. Those relationships and their duration will be unique items for the client to consider when weighing you against your competition.

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Of course, you must show the client why the team you have proposed provides the best value proposition. On the other side, if you have a long and successful relationship with the client organization or with key individuals in the organization, you should leverage that strength by focusing on it in your proposal or presentation. Again, the depth and levels of relationships are unique to you and your firm.

Do you have other unique differentiators? Of course, and it just takes time to “peel the onion” back to discover them and how they relate to the client’s project. But if you are looking for a good place to start, use the three discussed here—people, projects, and team—to get your creative juices flowing.

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How Does Your Proposal Hit Rate Compare to Other Firms Like Yours?by David Burstein, P.E.

Proposal rate measures the percentage of proposals awarded to the firm in relation to the total number of proposals submitted to clients (including both competitive and noncompetitive proposals). This metric provides an excellent starting point for benchmarking your firm’s business development effort. Compare your firm’s proposal hit rate with those from similar firms, based on PSMJ’s 2013 Fees & Pricing Survey.

PROPOSAL SELECTION RATE (HIT RATE)(Percentile) 25th Median 75thOverall A/E Industry 20% 36% 57%Architectural 15 30 60Architectural/Interiors 32 38 45Engineering (Prime) 20 38 57Engineering (Subconsultant) 23 35 60Engineering (Survey) NR 35 NRA/E 26 37 67Environmental 31 38 75All U.S. 21 37 75Northeast 31 38 50South 15 35 53Midwest 20 38 63Southwest 16 31 54Mountain 30 35 54West 23 45 65Canada 25 50 65Private 27 40 67Government 20 32 50Mixed 20 43 60Transportation 14 20 35Government (Buildings) 20 30 50Energy-Utilities 20 42 71Commercial (Users) 30 36 80Housing 50 75 90Healthcare 13 27 41No Specialty 20 36 55

You can now do an in-depth analysis of your firm’s hit rate to determine the underlying factors in the rate being achieved. For example, a very low hit rate might indicate that (a) your firm is doing a poor job of selecting which clients or projects to pursue, (b) your firm is not creating a substantial method of differentiating itself from your competitors, or (c) you’re not pricing its services at a competitive rate. At the other extreme, with a very high hit rate, your firm may not be pursuing enough opportunities to allow it to grow and achieve its strategic goals.



How to Budget for SuccessIn the past, A/E firms rarely would go through an annual corporate budgeting exercise to plan the upcoming year’s financial actions. All firms should prepare an annual budget and use it as a management tool to “steer the ship” in the desired direction.

A well conceived and executed budget offers many benefits:

• Providesabenchmarktomeasureachievementsand shortfalls

• Helpsthefirmsetdirectionstomeetshorttermgoals

• Providesmechanismstodeveloplongtermstrategies

• Servestochangecorporatedirection

• Allowsthefirmtoimplementstrategiestocorrectless than desirable results

The budget process is also an excellent way to foster teamwork and to obtain a “buy in” mentality of the firm’s actions and direction. Because most firms focus on maximizing their billable hours, the strategic planning tasks tend to be relegated to only a few people. Although this idea makes sense, it leaves some staff members feeling “left out” of the business process. A well-planned budget process involves everyone and provides valuable input, thus improving overall morale.

The budget also helps to set accountability for department heads, functional areas and other partners. It’s hard effectively to hold people to a budget if they don’t buy into its creation. The process helps achieve consensus and is an excellent way of educating other members to the firm’s business aspects and goals.

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PART FOUR: Budgeting for Success



The budget process should be the responsibility of the financial partner and the “controller.” If the firm is large enough, a committee consisting of the financial partner, controller, bookkeeper, and one other partner or associate should be established. Selecting an additional partner or associate allows for additional input from a different perspective. Ideally, this other partner/ associate won’t be a senior level person.

As you work through your budgeting process:

• Begintheprocessduringthe10thmonthofthefiscalyear, and plan on completing prior to the year’s end (requires utilizing actual and projected data for the current year).

• Establishacommitteeandsetupresponsibilities. Prepare a timetable with tight, reasonable deadlines. Allow the participants time in their schedules for the process.

• Don’texpectthemtodoeverythingintheeveningoron weekends.

• Prepareinputformsfordepartmentheads,personnel responsible for functional areas and all partners/ principals.

• Holdameetingtoexplaintheprocess,formsandthe timetable.

• Makethefinancialofficeravailablefor“coaching”or assisting individuals as they work through the process.

• Themanagingpartnershouldhaveadequateinputinto the process and should review responsibilities.

• Presentthefinalbudgettoownersforratification.

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PricingtoMaximizeProfitsby Frank Stasiowski, FAIAAn excerpt from TheValuePricingImperativeforDesignFirms

The best way to fight commoditization? Sit down, look your client right in the eye and say: “Of course we cost more.” Consider the fees that your firm has paid out to other professionals in the last six months. How much does your accountant charge per hour? Your outside counsel?

Maybe you contracted for some training on your building information management system. The trainer may cost you $200 per hour, plus another $50 per attendee per diem; for five trainees and eight hours, that’s $1,800 for one day—minimum. That trainer likely charges for travel as well, and maybe ancillaries like a print manual.

Architects and engineers are willing to pay good money for professional services. Why, then, is it so difficult for them to charge more for theirlicensed, professional services?

Design professionals must close the gap between their fees and those of other professionals. Fees must adequately cover training, professional development, ample profit, and future liability. The productivity improvements from BIM, 3D CAD or 4D CAD have tended to benefit the client, with lower price and speedier delivery, more than they have benefited design firms. In order to stay competitive in today’s marketplace, design professionals must price their design services according to value, not cost.

There are several ways to change the way you’ve traditionally approached pricing, including:

• Costpricing;• Paritypricing;• Sociopoliticalpricing;•Strategicpricing;• Negotiated;andfinally,• Valuepricing.

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In value pricing, price is determined partly by the value the client perceives in the service to be delivered, and partly by your cost and profit considerations.

Ramsey Fayad described true value pricing this way:

The concept of value pricing is relatively simple. Value resides in the eye of the beholder and when, in the eyes of the beholder, it is delivered, a premium may be charged. In essence, value pricing demands only a better understanding of client needs, constraints, and competitive threats.

Why then is value pricing not broadly accepted andpracticed? Because it demands shifts in attitudes,perspectives, and effort, all of which challenge the natural inertia of wanting to continue doing what has always been done.

In the professional design arena, it is typically perceived to be safer to follow clearly defined existing procedures than to adopt new and untried ones for fear of offending clients.

Any proposal that makes the project easier, safer, faster, or cheaper to achieve client objectives should include a value premium. From the client’s point of view, the extent of the value premium in question will depend on:

• Theclaritywithwhichthedesignprofessionaldefineshis or her proposed contribution.

•Theextenttowhichtheproposalappearstoreflectan understanding of current client needs.

•Theextenttowhichtheproposalconvincinglycontributes to the nominated objectives in the judgment of the client.

•Therelativeimportancetotheclientofthenominated objective(s).

Don’t fall into the commodity trap—value price your way out of it.

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HowToIncreaseFeesWhenClientsUsePriceForSelectionThe following material is for informational purposes only. Before taking action that could have legal or other important consequences, PSMJ Resources suggests you speak with a qualified professional who can provide guidance that considers your own unique circumstances.

Some clients will always select the lowest price in choosing an A/E firm. These clients will obtain quotes from several firms and pick the low hourly rate as the winner. Clients who have “purchasing agents” in control of selection, or who must approve the decision made by a selection group, are always likely to base selection on perceived prices for services.

SoHowCanYouAvoidPlayingTheCut-RateGame?First, recognize that clients who use price as the sole selection criteria cannot be converted into “relationship” clients. They will not be open to mutually supportive working arrangements.

Second, realize that you can’t possibly be a winner every time in competitions like these. Some other firm will always quote lower; there are just too many firms out there.

Cut Your Costs, Keep Your ProfitsOnce you have accepted that price will be the sole selection criteria, how do you respond (assuming you have not decided to avoid responding altogether)? The overall goal is to make your proposed prices look low, while not compromising your basic pricing.

Here are some high-leverage proposal tactics that, in a low-fee competition, will allow you to quote lower hourly rates, while keeping a higher profit potential:

• Makeyourprice(orrates)dependentuponbeingpaid50 percent of the fee up front as a retainer.

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• Makethepaymentterms10days—ratherthan30—from date of invoice (with a high late payment penalty).

• Don’tjustlimityourliability;includea“holdharmless” clause shifting responsibility to the client for design errors.

• Eliminateanyredesignthatwouldgooverconstruction budget bids. State that this will be an additional service.

• Addahigherpercentagemarkuptosubsand reimbursables.

TrySomeFixed-PriceTacticsIf you are quoting a fixed-price fee, try these scope modifications:

• Haveallprojectmeetingsatyouroffice,thuseliminating local travel time. Include any travel time as an additional service.

• Ifyoupreparezoningpermittingapplications,doitasan additional service.

• Clearlystatethatyouwilluse“provendesignsolutions,” and then reuse as much as possible from prior projects. Studies and new solutions will be additional services.

• Beveryclearinstatingthenumberofthingsyouwilldo as basic services. It’s not enough to say “monthly meetings”; you need to say “6 monthly meetings of two hours each, attended by the project manager.”

• Flattenyourhourlyratesbyloweringtheprincipalrate and raising staff rates. Clients who are price-sensitive often focus only on the highest rates.

The Best Tactic: Offer ChoicesWhat happens when the client calls and says, “You have the job, but we can’t pay a retainer”? The secret is to be prepared with pricing options. Be ready to say, “We can skip the retainer, but the fee increases by 2 percent.” Even better, if your proposal offers the choice of either a 50 percent retainer or a 2 percent additional fee, you can refer the client to that part of your proposal.

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A key to this approach is to include a standard “terms and conditions” page in your proposal, and then send it along with your price quote. Think along the lines of airline tickets or rental car agreements that print limitations on the back (although we do not necessarily recommend using 4-point type).

Does this sound like we are advocating you act like a contractor who relies on change orders? Quite frankly—yes. In low-bid situations, if you don’t strictly define what your price includes, and then charge for services beyond that price, you sacrifice profit. This applies to all businesses, not just A/E/C firms. Your other choice is simply to say “no” when asked to bid in a price-only competition. If you don’t want to limit your services or quality, this may be the more profitable way to go.

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Increase Operating Profit by 7 Percentby William Fanning

It’s simple math—if you raise your overall prices by 1 percent, your operating profit dollars increase by 7 percent. That’s 7 percent more dollars for incentives/bonuses or to invest in your firm. If you increase your fees by 2 percent, operating profit increases by 14 percent. The process continues, with each 1 percent fee increase boosting operating profit dollars by 7 percent. Is a 1 percent revenue increase reasonable? It is easier to achieve than you might imagine. While some of your clients might not agree to higher fees, a 2 percent increase for only half of your customers will achieve the overall 1 percent increase.

Need proof?Still unsure a 1 percent increase is wise? Consider these points:

• Accordingtothe2013PSMJA/EFinancialPerformance Benchmark Survey Report, the median revenue per hour for the profession is $105.03. Thus, a 1 percent increase is a mere $1.05 an hour.

• Ourdatabaseindicatesthat25percentoffirmsachieve a median of $117.18 per hour; that’s 11 percent above the median hourly fee. If 25 percent can achieve revenues 11 percent above the median, firms can afford to raise prices by 1 percent.

•Thetypicalfirmbillingmultiplieris3timeslabor.A1 percent increase would only raise your target multiplier to 3.10. Currently, the majority of all firms set their target multiplier at this level or higher, so it can be done.

Testing The MathHere is how you determine the effects on your firm:

• Determineyourcurrentrevenuesperhourbydividing your net revenues by your total direct (project) hours from your utilization report.

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• Multiplyyouraveragehourlyrevenuesby1percent,then multiply this by the total direct (project) hours.

The result is your additional dollars of operating profit, (assuming you do not increase your costs while changing your fees).

Weigh The AlternativesConsidering the benefits of this fee increase, is there any cost you could cut that would have the same impact on your profits? If cost reductions seem to be a greater challenge, then raising fees is likely a better investment of your time. Look at it another way: how much more work would you need to generate to equal the profit gain if the additional work creates the same level of profits as your current work? If increasing your prices would generate $10,000 in profits, and your existing profit margin is 10 percent, then you would need to produce an additional $100,000 in net fees to get the same dollar increase in operating profits. Would you rather put out the marketing effort to sell this much more work, or would you rather spend your time making current projects more profitable?

How you spend your time to improve your firm profitability will impact your results. Price is one of the areas where better management has a direct impact on your bottom line. But improved pricing will not happen unless you take charge in your own firm. The market is structured so that yourprice is your responsibility.

Improving the management of the pricing function in your firm is the goal of smart pricing. (Smart pricing can be defined as listening to your customer and understanding the project objectives so that you can separately price—hopefully higher—those services that are important to the client.)

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Seven-Step Strategy To Negotiate Your Contract

Many clients, as you negotiate a contract, want to immediately get to the “bottom line” - the price! It is both foolish and imprudent on your part to respond to this request. Instead, as you negotiate a contract with your client, follow these seven steps in order, making sure each step is complete before you move to the next one. Take as much time as you need.

Whenever the client asks for the price, defer until everything else is clearly understood by you and your client. Whenever possible, don’t reveal your costs, but quote a price that reflects the value of what you will accomplish.

Step 1. Define the project scope. Ask questions. Write down exactly what you will do and your client’s expectations at each part of the scope. Break the scope into segments (or tasks) so that no segment represents more than 5 percent of the total. This helps everyone understand what your firm is providing.

Step 2. Set a project schedule. Ensure that all elements of the scope are reflected in the schedule and no more.

Step 3. Identify the project team. Name each person who will work on the project and what that person will do; estimate the hours and the fees for each person, and the totals. Don’t show these figures to the client; they’re only for your estimate.

Step 4. Define work quality. Quality is somewhat subjective, but you must define some objective criteria. For example, offer three design alternatives, making it clear that the client must pay for further designs, identify codes and standards, types of computer analyses, etc.

Step 5. Discuss project risk. Whether or not you discuss this with your client, you should analyze it within your own firm. Ensure that the party (you or the client) clearly understands who is responsible for each risk element. You might, for example, be taking the risk that this project will use all your people and you’ll have to turn down other work; or perhaps you’ve never worked on a project like this before, or are assigning less experienced people to do parts of it to keep fees

PART FIVE: Leading Your Team

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low; or perhaps you need to provide for major changes in the scope once the project is under way. In any case, list each risk and determine which party has the responsibility.

Step 6. Make sure everyone understands the contract terms, specifically compensation, invoicing, change order process, payment timing, dispute resolution and indemnification.

Step 7. Quote the price. Actually quote a range for price if possible.

This seven-step process should benefit both you and the client. If possible you should establish this agenda with your client at the start of the negotiations so that you both understand the process.

This will help both of you to cover all approximate subjects (e.g., scope, schedule, etc.) that forms the basis of the price before you are forced to commit to the price itself. Starting from the price and working your way back to the scope leads to unhappy clients and unprofitable jobs.

DelegationThis concept ranks as the project manager’s main tool in the challenge to “get it all done.” It’s also, however, the most com¬mon and significant shortcoming of project managers.

Always:• Beginwithpreparationandsystematicallyplanyourown tasks and what to delegate.

• Thinkabouttheactivitiestheteammemberwillneedto do to complete an assignment.

• Specifyresponsibilities.

• Granttheteammemberenoughauthoritytocompletethe assignment.

• Becertaintheindividualhastheresourcestodothejob.

• Determineifyou’vegiventoomuchortoolittleauthority and adjust appropriately.

HOWTOGIVEEFFECTIVEFEEDBACK1. Express issues clearly. Pinpoint problems whether they are undesirable behaviors, inappropriate actions or undesirable ways of doing things. Then pinpoint proper behaviors, appropriate actions or desirable ways of doing things.

2. Avoid labels. Labels such as “lazy,” “bad attitude,” “insecure” and “not a team player” do not describe performance. They focus on personality and attitudes rather than actions.

3. Demonstrate respect. Be tough and set standards, but be fair. Avoid ego involvement issues and focus on specific expectations and goals to describe what you want to achieve.

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• Asktheindividualifyou’veprovidedenoughinformation.

• Focusonwhatthetaskis,nothowtodoit.

• Taketimetoreviewcompletedassignments.

• Thankateammemberandshowthatyounoticehigh quality work.

• Assignonepersonresponsibilityforanygivenassignment.

• Givetheindividualenoughlatitudetomakedecisions.

• Letatleastsomeportionoftheindividual’sworkstand.

• Discuss(whennecessary)substandardperformancewith a team member.

Interviewing Tips1.Organizetheinterviewprocess. One person (usually the would-be boss of the interviewee) should be responsible for orchestrating the interview.

Before the interview begins, each interviewer should receive a copy of the candidate’s resume, guidance as to the purpose of the interview, and the scheduled time for the interview. A disorganized interviewing process is a definite turn-off and may cause the candidate to decline any offer.

2. Put the candidate at ease. Remove coats, roll up sleeves. Have a cup of coffee together. Exchange small talk. The more at ease the candidate feels, the more honest the interview process will be.

3.Arrangeinterviewswithoneortwoofthefirm’sbestpeoplewhowillbepeersofthenewemployee.The purpose of this interview is to get into in-depth technical discussions. The firm’s top people will be able to assess the candidate’s technical knowledge.

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4. Avoid standard interview questions. Standard questions test how well the candidate interviews, not how good an employee he/she would be.

5. The last person to interview the candidate should be the principalofthefirmwhooverseesthegroupinterviewingthe candidate. The purpose of this interview should be to express the firm’s interest and sell the candidate on why he/she should work for the firm. This will greatly improve the odds of the person accepting an offer if it is made later.

6.Eachinterviewershouldputhis/herimpressionsinwriting(seesampleinterviewevaluationrecords).

7.Thepersonwhowillbetheapplicant’sboss(ifhe/sheishired) should collect all the interview evaluation reports anddetermineifthefirmwantstomakeanoffertothecandidate.

8.Bythetimethefirmhasdecidedtomakethecandidateanoffer,itshouldbe100percentinthesellingmode.Make the offer in person or by phone, being sure to take the time to sell the company while making the offer. Then follow it up in writing (see sample offer letter).

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Decision-makingEven though you might have had little or no training in the area of decision making, it’s a task you perform many times a day often with significant consequences. Use these four quick steps to make intelligent decisions:

1.Frame.Define the choice and determine what criteria would cause you to prefer one option over another. Think about the viewpoint from which you and others will look at the issue, and decide which aspects they might consider important.

2. Gather intelligence. Seek the knowable facts and reasonable estimates of the “unknowables.” Avoid overconfidence and the tendency to seek information that confirms your biases.

3.Cometoconclusions.Even with good data, people cannot make good decisions using seat of the pants judgment. A systematic approach leads to better decisions than do hours of haphazard thinking.

4.Learnfromfeedback. Keep track of your expectations; systematically guard against self serving explanations and review the lessons of your feedback.

J. Edward Russo and Paul J.H. Schoemaker, Decision Traps: The Ten Barriers to Brilliant Decision Making and How to Overcome Them, Doubleday, New York: 1989.

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21 MUST KNOW CONCEPTSThe demands placed on today’s project managers are growing exponentially. To remain on the cutting edge, or even maintain your competitiveness, you’ve got to learn new concepts and master both new and traditional management techniques.

Why? Today’s professional service firm has moved into the mainstream of business. The market forces that apply to IBM and Wal-Mart now apply to you. The seemingly protected world in which professional design and environmental services once worked is gone, and professional ethics and technical competence will not protect you from cutthroat competition. It’s time to move on and raise your personal bar to a new height.

Here are some of the theories that are in usage, plus some specific advice on implementing the strategies these theories pro¬mote. Included are some great reading sources.

USE THIS CHECKLIST TO START WITH THE LITTLE THINGS:Best time to call a contractor………... 7 a.m.Best time to call a client…………….. Tuesday, 8:45 a.m.Best time to run a meeting………….. 11 a.m.Best day to hold meetings…………... TuesdayBest time to do manpower planning... Monday, 8 a.m. Best day to mail invoices…………… 23rd of the month (to get paid by the 1st) Best time to open mail……………… 4:30 p.m.Best time to eat with clients………… At breakfastBest meeting format………………… Standup meetingsBest way to control meetings……….. Take meeting minutes yourselfBest position among six firms competing in a presentation………… LastBest form of contract……………….. Lump sum, with a well defined scopeBest employee………………………. One who initiates actionBest length of workday……………... 9 hours maximumBest day to avoid interruptions……... SaturdayBest time to get things done………… Before office hoursBest way to avoid conflict………….. Straight communicationBest title on a business card………… None at allBest time to fire someone…………… Monday, 9 a.m.Best project manager………………... One who instructs team daily

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40 years of helping A/E/C firms achieve business success.PSMJ Resources, Inc. is the world’s leading authority, publisher, and consultant on the effective management of architecture, engineering, and construction firms. With offices in the United States as well as the United Kingdom and Australia, PSMJ offers over 150 titles in book, audio, and video format. In addition, the company publishes several monthly periodicals and delivers dozens of seminars, roundtables, conferences, webinars, and in-house training sessions every year for A/E/C professionals around the world. PSMJ’s sought-after consulting expertise covers a range of critical business areas such as strategic planning, project management, valuation, succession planning, and mergers & acquisitions. PSMJ is also active within the community, utilizing our resources and the contacts at our fingertips within the A/E/C Industry to help those in need.

ABOUT PSMJContact Us:

For more information on how PSMJ’s Advisory Services Team can help your firm, please call or email Kim Pazera, Vice President, Consulting Services, at (617) 965-0055 or [email protected].