Thursday, July 8, 2021

As a Leader, How Are You Investing Your Time Helping Others Succeed?

How do you define the success of a leader? Individual accomplishments are certainly
important, but shouldn't team performance be the primary measure? Indeed, leaders have a special opportunity to multiply their impact through the efforts of those they lead. Yet many unfortunately focus far more attention on their own efforts than those of the people under their charge.

Often, this misplaced emphasis is actively, if inadvertently, promoted by the firms that employ these leaders. For example, I've worked with several A/E firms that expect senior leaders to maintain high personal chargeability rates. These leaders are often commended for their heavy project involvement even as their business unit, office, or department languishes from their inattention.

I once was participating in a monthly managers call for a midsized engineering firm when the president began criticizing one of the branch managers for his low personal chargeability. "Wait a minute," I interrupted, "John's office has the highest utilization in the company, eight points over their budgeted goal. What difference does his utilization make?" After a prolonged pause, the president admitted he was focusing on the wrong thing.

Knowing John's tendencies as a leader, I suspected his office was outperforming the others in large part because of his lower utilization, or more specifically, how he spent time helping his people succeed. His example illustrates one of my most valued pieces of leadership advice—what I call the Time Investment Principle.

The essence of the Time Investment Principle is that leaders multiply their impact on the organization by investing time helping others be more productive and effective (see the diagram below). As a leader, if you spend your time simply "doing the work," your impact is measured only by your individual contribution. If, on the other hand, you divert time from doing the work to helping others do their part more effectively, your impact is multiplied.

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So how could you better apply the Time Investment Principle as a leader? Here are a few suggestions:

Appropriately distribute work assignments between yourself and your team. I know senior leaders who busy themselves largely with routine project work that could be delegated to junior staff. Clearly, they would be better served to unload much of that work so they could devote more time to being an effective leader—including boosting their team's capability to perform the work. What if the project work you do is highly specialized and not easily delegated? Well, perhaps you don't have the time available to serve as a real leader (there is a certain time commitment required!). Or maybe your firm needs to hire someone who can share part of that workload.

Dedicate a specific portion of your time to invest in your team. Your role as an engaged leader helping others succeed is too important to consign to leftover time. As with project work, you should determine how much time is needed to effectively lead your team and then budget and schedule it. Treat it you would project time. If there's a conflict, don't just drop it, reschedule it! And beware of overloading your calendar with tasks that are less important than your leadership responsibilities or that could be performed by others.

Start your day by helping others prepare for theirs. When I was serving in various regional and corporate leadership roles, my office was a snare. Go in there and I found myself easily entrapped by the lure of my task list, paperwork, emails, voicemails, inbox, and incessant interruptions. Sound familiar? What I learned was that one of the best ways to assure I spent time investing in others was to do so at the start of each day—before I stepped into my office. I would compile a list of people to talk to the day before, then the following morning spend a little time helping them get ready to make the most of their day.

Commit to coaching and mentoring others. Some people need a little guidance, others need more hands-on instruction and encouragement. Those of us who are sports fans recognize the benefits of good coaching, but rarely consider such an approach as leaders in our respective firms. But coaching holds tremendous potential for improving performance both on the field and in the office. Whereas coaching is more real-time, on-the-job with a performance focus, mentoring fills the need for more offline, career-oriented counseling.

Measure your success through the growth of others. An important leadership function is helping others grow and improve. This not only enables you to get the organizational results you need in the short term, but to build capability for sustained success. As a leader, your performance metrics should be largely centered on what your team accomplishes. The usual lagging financial metrics are useful, but I'd recommend adding some leading indicators such as specific behaviors, measurable improvements, and intermediate milestones. Of course, use these to celebrate success with your team.

My description of the Time Investment Principle may seem, well, a little too time intensive for some. But that's not usually the case. You should allocate your time for others in proportion to the dynamics of your particular leadership role. That includes determining what time investments in which people would likely yield the greatest benefits to the team's performance, and how much time you can reasonably devote (after optimizing the distribution of work assignments).

The main point is that leaders at all levels need to be wise in how they allocate their time, being careful to reserve adequate time to invest in enabling their team to succeed. Like any investment, you have to give up some now (in this case, your time) to reap a substantial return down the road (that is, increased future capability and productivity). But in my experience, you don't have to wait long for some ROI to be realized. Usually, the benefits start becoming evident within only a few weeks. It's worth the investment!


Monday, July 5, 2021

How to Close the Knowing-Doing Gap

I have a client with a common problem: The firm has implemented a sophisticated quality management system but many people aren't following it. Sound familiar?

Substitute any number of corporate activities and directives—from making sales calls to implementing strategy to filling out time sheets—and in all likelihood your firm has experienced the same problem. Employees aren't doing the things they're expected to do. They know what to do, they're capable of doing it, they're even motivated to do it in some cases. But it's still not happening.

Stanford professors Jeff Pfeffer and Bob Sutton call this predicament "the knowing-doing gap" in their popular book by the same title. They conclude—and I would concur—that the biggest difference between companies is not what they know, but how well they're able to put what they know into action. Best practice insights are a commodity these days, but implementation acumen is a rarity.

I'm a strong advocate for the use of positive reinforcement and other strategies from behavioral science in managing performance. Let's apply that wisdom now to the challenge of getting things done. Most firms take a familiar path in trying to solve problems like my client has. They step up the pressure, tweak the process, reassign responsibilities, do more training, modify goals.

These steps are all antecedents, things that come before and set the stage for action (or behavior). Antecedents are important, but they're not effective in sustaining behaviors over time. Unfortunately, most managers rely almost exclusively on antecedents in trying to change behavior. There's a better way. Let me outline some key steps in closing the knowing-doing gap in your firm:

Define the specific desired results. Sometimes firms launch initiatives without clear objectives. For example, if you implement a new quality process, what do you hope to accomplish? Improve quality? That in itself is not a very helpful goal (by the way, most quality programs fail to significantly improve quality). How much improvement do you expect? In what specific areas? How will you measure it?

I don't think I need to review here the qualities of SMART goals. You're undoubtedly familiar with the concept. Yet I'm surprised how many firms I've witnessed investing substantial time and money in various strategic efforts that lack explicit performance goals. That makes it much harder to change behaviors. Which do you think works better: Ask an employee to work harder or tell her specifically what more needs to be done? Review your goals and see if they meet the SMART criteria.

Seek to understand why. If people aren't doing what they should, start by exploring the reasons for this. Certain antecedents may be a factor, but you need to consider the consequences of behaviors as well. While positive reinforcement is a powerful motivator, it's important to recognize that it can work both for you and against you. If workers aren't doing what is desired, that contrary behavior is undoubtedly being reinforced in some way.

For example, failing to do a quality review saves time, is easier, may give one the sense of fitting in with their fellow noncompliant colleagues, or could even earn a compliment for finishing the work on schedule. These individuals may not be aware that these consequences are influencing their actions, but you can uncover likely sources of influence through some inductive reasoning and asking good questions. Once you have a better understanding of why people do what they do, you're able to take more effective steps to support behavior change.

Address antecedent shortcomings, but don't stop there. We're all accustomed to the usual fixes—new or revised programs, policies, procedures, action plans, tools, reorganizations, trainings, etc. These can all be part of the solution, but usually are insufficient in closing the knowing-doing gap. Sometimes the "fixes" even exacerbate the problem of inaction.

The important question is always: How do these steps help people do what needs to be done? Be persistent in pursuing the answer to that question. Most "structural" solutions to organizational problems are incomplete. New processes, of course, can only be effective when followed. Technology investments require a corresponding change in how people do their work. Training rarely is effective unless reinforced over time.

Changing behaviors is almost always part of the solution. And it's usually the hardest part. So let's talk about that next...

Identify specific behaviors needed to achieve your desired results. This requires a step called pinpointing, determining those few behaviors that are most critical to achieving your desired results. Don't get overly ambitious. This is the problem with most corporate initiatives—like implementing a quality management system—where firms try to tackle too much behavior change at one time.

A better approach is to phase in change, guided by staged objectives. Don't attempt full compliance to your quality procedures at first, for example. Instead, pick perhaps 3-5 pinpointed behaviors that will have the biggest impact on quality (or whatever your goal is). Once those behaviors become commonplace, then add a few more and so on.

Use effective metrics. There are two types of measurement associated with pinpointing solutions: (1) leading indicators that typically measure behavior and (2) trailing indicators that measure results. Obviously, the later is far more common in business. But measuring behavior enables you to better evaluate your progress and to target course corrections where needed.

How do you measure behavior? There are two primary ways—counting and judging. Counting, of course, is more objective and should be preferred where possible. Having identified pinpointed behaviors, such as completing a discipline-specific technical reviews for all multidisciplinary projects, you can then count how often that occurs when it is called for.

For behaviors that don't lend themselves to counting, you should consider judging. Because it is subjective, this kind of measurement should come from more than one person. For example, you could have project managers anonymously grade how well department heads support them in getting buy-in from technical staff for the firm's new quality process. The composite grades could then be tracked over time to look for improvement.

Metrics work best when oriented towards providing positive reinforcement. Unfortunately, many firms use metrics for negative reinforcement. Whenever you have the choice, choose to measure desired behaviors versus problem ones, then favor rewards over punishments. Rewards, by the way, need not be material; compliments and recognition go a long way.

Provide regular feedback and reinforcement. Imagine your favorite college football coach giving instructions to his team on how to conduct the prescribed practice drills. Yet in this case, he sends them off to practice on their own while he goes to his office. "You can come to my office if you have questions," he tells them, "But I'll wait to give you feedback until after the game on Saturday."

Obviously he wouldn't last long in the coaching profession, because that approach clearly would not succeed in getting top performance from the team. But did you notice the familiar ring to that illustration? It's how most business managers direct their teams. "Here's what you need to do. Let me know if questions come up. I'll give you feedback only after you've finished (if at all)."

If you're going to provide effective feedback and reinforcement, you need to periodically observe the pinpointed behaviors. The more frequently, the better. Too busy for that? Maybe you should reassess how you allocate your time if you serve the role of manager. The manager's first priority, in my opinion, is helping the team succeed.

What's the difference between feedback and reinforcement? Feedback is sharing information that enables one to adjust their performance. Measurement can be an effective tool for providing feedback. Reinforcement involves creating or leveraging consequences that cause behavior (in this case, the desired behaviors) to increase.

Any solution that involves changing behaviors should include these steps. To review, these are the key questions you should address in closing the knowing-doing gap:

  • What are the desired results?
  • What's motivating people either to comply or not?
  • What are the few vital behaviors needed to produce those results?
  • How will we measure progress toward both the pinpointed results and behaviors?
  • How will we provide performance feedback?
  • How will we reinforce the pinpointed behaviors?

If you'd like to learn more about this approach to closing the knowing-doing gap and inspiring better performance, check out related articles by Aubrey Daniels and his associates at this website. I also found his book Bringing Out the Best in People extremely valuable.


Monday, May 24, 2021

My Best Piece of Communication Advice

Communication is arguably the most important skill in your professional and personal life. Various studies confirm that conclusion. Communication connects people, enabling us to work together, build relationships, and understand each other. Thus it's a shame we don't make it more of a priority in the A/E profession.

We readily acknowledge that most technical professionals lack strong communication skills, but invest little in trying to remedy the problem. Communication breakdowns can be costly, resulting in lost business, unhappy clients, misunderstandings, mistakes, budget and schedule overruns, poor quality work, coworker conflicts, and staff turnover—to name a few. Why do we accept these shortcomings as normative?

We can do better, and real improvement is not necessarily that difficult to achieve. In fact, my best piece of communication advice is relatively simple.

Communication Is a Partnership

I liken it to a completed forward pass in football. The quarterback must accurately deliver the ball and the receiver must catch it. Both parties have to do their part. An on-target pass that is dropped by the receiver produces the same result as a pass thrown well out of the receiver's reach. Quarterback is considered the most important role on the team, but his passes have to be caught for him to have success.

So it is in communication. When we describe someone as a "good communicator," we're almost always talking about the one who delivers the message. Often we're referring to their eloquence, their tone, their choice of words, the content of their message. But no matter how well we might judge the delivery of the message, it must be received as intended for it to accomplish its purpose. Communication is a partnership.

We Usually Focus on the Wrong Thing

There is a tendency to think that if our message contains the right information, we've done our part as "communicators." But the most important part of good communication is not the message sent. It is the message received.

I once traveled to Dallas to do some safety training for one of my clients. But when I arrived there with the corporate safety director, no one in that office knew we were coming. There were no scheduled training sessions, no in-field safety observations arranged. The safety director was quite perturbed. "I sent the branch manager an email with all the information they needed!" he said.

"But did you receive any confirmation that he received your email?" I asked. No, he hadn't. The safety director was accurate in saying the email contained all the necessary information. But recipient never saw it (turns out the subject line was misleading, the latest in an extended conversation that eventually changed topic). It doesn't matter how well you composed your email when no one reads it!

My example is perhaps a bit extreme, but the problem is very common in our workplaces: People assuming they "communicated" simply because they sent a message. Perhaps their message was read or heard, but it wasn't understood by their audience as intended. Same problem. Ultimately, your audience determines the success of your communications.

What Matters Most in Communication

Thus I offer the best advice I can think of when it comes to communication:

Focus first on how your message will be received,                          not on how it is sent.

This simple advice can help you avoid a lot of communication breakdowns. Thought you made a strong case to the client for your proposed solution? Unfortunately, it was buried in a lot of nonessential text that the client was only skimming through. Thought you explained to staff why the PTO policy had to be changed? Unfortunately, you failed to consider the context of two previous policy changes that left them feeling their opinions didn't matter.

To return to the earlier illustration of a forward pass, the imperative is to make your messages more catchable. Perhaps it hits the receiver's hands, but is delivered too hard. Or it hits the receiver between the numbers, but defenders block his view. Or is thrown too far in front of him considering his speed is compromised by poor field conditions.

You must design and deliver your messages with your audience in mind. Here are some helpful tips for making your messages more catchable:

Know your audience. All communication passes through filters constructed of such things as emotions, experiences, personality, values, expertise, interests, and vocabulary. Construct your message for your audience, not for yourself. And address the issues that matter most to them.

Don't say more than is necessary. Get to the point! To use an old journalistic standard: Don't bury the lede (meaning don't obscure your main points by immersing them in unnecessary details). We do this on a regular basis, apparently presuming that more detail strengthens our messages. But in fact, more information given typically results in less information received.

Make written messages skimmable. Obviously, this is particularly important for longer documents such as reports or proposals. People aren't reading word for word; they're skimming—more than ever before. If you're not making your documents (or longer emails) skimmable, you've lost message control.

Don't address sensitive or controversial topics in emails. These are better delivered live, so you can adjust your message to the feedback you're receiving. Better still, spend time listening to your audience before trying to get your message across. Show that you care about their concerns.

Minimize jargon. The technical terms we like to use tend to exclude those who don't have a similar background. Jargon doesn't make you look as smart as being able to describe these terms in everyday language that's inclusive of your whole audience.

If it's important, repeat it repeatedly. You can obviously overdo this, but the most successful leaders and professionals have learned that overcommunicating is smart practice in an overcommunicated world. Use multiple communication channels in increase the likelihood that your message will be received.

Confirm that your message is received as you intended it. You cannot conclude that your message was communicated successfully until you have evidence that it was received as planned. This confirmation isn't as simple as "Did you get my message?" but should include feedback that indicates they understood it and responded to it as you wanted them to.


Monday, April 19, 2021

Selling and the Service Continuum

The fundamental purpose of your business is to serve. You serve your clients and their constituents, and ultimately society at large. It's not pure altruism since you are well compensated for your service, but it's a high calling nonetheless. Every member of your firm should understand that he or she is in the business of serving others.

It's ironic, then, that you begin building relationships with prospective clients through a practice that's widely considered to be inherently selfish—selling. You may argue that self interest is not your intent, but your actions speak louder. When you spend most of the time in a sales call talking about yourself and your firm, that's rightfully perceived as self serving. Same when your marketing activities scream, "Look at us! Aren't we something." And when your proposals devote more space to touting your qualifications than telling the story of how you will help the client succeed, that hardly captures the spirit of service.

Do I sound a bit extreme? You would be correct to point out that my examples are common practice, something clients probably expect and therefore aren't likely to view as improper in any way. But my point isn't about impropriety; it's about ineffectiveness. Selling may be the norm, but most people hate being sold. If you're looking for an edge in the competition for new business, let me suggest you return to your core purpose...serving instead of selling.

People buy because they have needs, so helping them meet those needs would seem to be the most natural response. But sellers have needs too, and unfortunately those needs typically drive the sales process. The good news is that meeting client needs is the best way to meet your own. Serve clients well and you'll make more sales and keep more clients after the sale.

This basic philosophy is captured in the following diagram depicting what I call the Service Continuum. Rather than divide your interactions with clients into two phases—(1) selling before contract award and (2) doing the work afterwards—the Service Continuum suggests that there's only one fundamental activity. That's identifying and satisfying client needs, the essence of service. The primary difference between before and after contract is that you're getting compensated after the sale. So you have to scale your serving accordingly in the pre-contract stage. 

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What are we talking about in the uncompensated phase? Basic consultation: Helping clients characterize needs, identify potential solutions, and define the project strategy (which you hope to implement under contract). The key to making the Service Continuum really work for you is getting involved early when you can have the greatest influence over shaping the project. But serving prospective clients is the better approach at any stage in the process, compared to traditional selling.

Let me respond to a common concern about this approach: "You're suggesting giving our consulting expertise away for nothing, which helps devalue our services." My experience has been quite the opposite. When you demonstrate your expertise rather than just talk about it, it's perceived value grows in the client's mind (assuming you're good at what you do!). Your help likely prompts a sense of reciprocity, increasing the odds that the client will select you. If you've been truly helpful, it becomes less likely that the client will want to switch to someone else who's been less helpful (or not helpful at all).

The value of the Service Continuum has been well demonstrated, both in our industry and in others. So why is it not routinely employed? Because it's more work. It can be hard to get some clients to receive your offer to help. Doing a good job at it requires an investment of time. Many have no doubt have been burned by prospective clients who took advantage of their help but then hired someone else.

But the more your competitors resign themselves to traditional selling because of these perceived drawbacks, the better for you. That makes it easier to distinguish your firm from the rest by serving during the sales process. If the Service Continuum isn't your current approach, let me encourage you to give it a try. If you believe you are already serving sales prospects, consider how you might serve them even better. One thing I've learned is that serving ultimately serves you back.

So let me leave you with this reminder: Serve, don't sell. Show, don't tell. Try it, you'll do well.


Wednesday, March 31, 2021

Deliver Client Business Outcomes, Not Just Technical Solutions

What constitutes a successful A/E project? Is it a sound technical solution? On-time, on-budget delivery? Quality work products? A satisfied client? Certainly, all of these things are important to project success. But they are a means to an end, not an end in themselves.

Ultimately, a successful project is one that delivers specific outcomes that enable client success. As I noted in my previous article in this space, A/E professionals too often view project outcomes through the lens of their completed scope of work, not the client's realization of value or return on investment—which may occur months or even years after the A/E project scope is finished.

So a successful project is not a completed set of high-quality construction documents, for example. It is a constructed facility that fully meets expectations, enabling the achievement of client business outcomes. I'm using the term business in the generic sense here, meaning the client's overall mission or purpose. There are few clients that exist primarily to conduct A/E projects; rather these projects are a means to fulfill their primary purpose.

It is that primary purpose to which we must focus our efforts as A/E professionals if we want our work to be as highly valued as it deserves. In the end, clients hire us to deliver outcomes, not solutions. Of course, that may be nowhere apparent in the requested scope of work. It is up to us to make the connection—both externally and internally—between our work and the client's ultimate business outcomes.

This starts with better aligning our perspective with that of our clients. Consider the diagram below: From the typical A/E professional's perspective, we're prone to seeing the project as a technical problem requiring people with specific technical expertise to produce the right technical solution. And clients are inclined to see our role much the same—as technical practitioners skilled at technical solutions.

Unfortunately, that's not how most clients view the project overall. They are more concerned about the business impacts associated with the technical problem, and they want a solution that facilitates the attainment of needed business outcomes. The dilemma is finding a solution provider that can address both the technical and business elements of the project in integrated fashion.


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That's your firm's opportunity to stand out from the crowd. Learn to diagnose client problems from a broader perspective—addressing not only the technical issues, but business and people concerns as well. Build a diverse team that can bring together not only different skill sets, but different mindsets (see below). Create an integrated solution that considers strategic and people outcomes, enabling the fuller realization of the client's return on investment.

Strategic Thinking and Client Outcomes

This all makes perfect sense (to me, at least!). There is abundant evidence that business-to-business customers of all stripes prioritize buying outcomes rather than solutions, even though formally they may be procuring the latter. The scope of work for delivering business outcomes—at least initially—may not look significantly different from what you are providing today. But the results will be different—better diagnosis, better collaboration, better solutions.

So how do you get there? In my experience, it's not as simple as agreeing on the goal and developing a plan. Business solutions require a different way of thinking than technical solutions. It's the difference between strategic thinking and analytical (or tactical) thinking. Our industry is predominated by the latter, because we need strong analytical skills to excel in providing technical solutions. But we do our clients and ourselves a disservice if we're not focused on what those solutions ultimately achieve.

To connect our solutions to business outcomes requires strategic thinking. And this doesn't come naturally for many technical professionals. What is strategic thinking? One definition is "a multifaceted approach to thinking backwards from a desired outcome and determining the best course of action to achieve that end result." It's big picture, goal-driven, integrative, and business-oriented.

But strategic thinking isn't all about looking to the horizon. It combines both the visionary attributes noted above and the analytical strengths of our technically-minded majority, as illustrated below (adapted from TidalShift):

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In this model, there are two stages of strategic thinking: (1) divergent (or creative) thinking and (2) convergent (or critical) thinking. The first stage is where many technical professionals struggle—the expansive, big picture thinking that explores different perspectives and possibilities before converging on a preferred strategy. Yet our convergent thinking abilities are critically needed to transform vision into results, if we push ourselves to keep the business outcomes always in view.

How Do You Position Your Firm to Deliver Business Outcomes?

Most of the RFPs and work orders we receive from clients would seem to refute my core premise that they really want outcomes rather than solutions. These are typically limited to our usual scope of services. This is where the pushback understandably comes from most technical professionals. Indeed, A/E firms can be quite successful simply by doing a competent job of providing technical services and solutions. Why should you shift your focus to client business outcomes?

Well, in a competitive environment, you should always be looking for an edge. I think this is a potential big one—aligning your business with what matters most to clients. The fact is that we already make substantial contributions to our clients' success; we just don't tend to take or receive credit for them. So what can your firm do to be recognized as an important business value creator?

Reassess your core business purpose. Are you a B2B or B4B company? The linked article references a new trend spreading across the business landscape. Enlightened companies are transitioning from a B2B business model (providing products and services to other businesses) to a B4B model (focused on helping clients succeed). It's not just a subtle shift in terms, but a substantial change in focus. What about your firm?

Learn what matters most for your clients. What defines their success? How do they measure it? What are their business goals? What are their core values? Don't just settle for scope, schedule, and budget. Understand specifically what business outcomes the client seeks to accomplish through the project you're working on. Let these guide your project strategy. Make these outcomes explicit in your external and internal conversations and correspondence regarding the project.

Build your corporate competencies relative to delivering client business outcomes. Most A/E firms don't naturally gravitate toward an outcomes-driven approach to their work. Changing this will require significant effort. You will need to modify how you market, sell, and deliver your services. You'll need a revised project planning process. You'll likely want to reconsider how you staff projects, bundle services, select subcontractors, manage client relations. Eventually, you may decide you need to add new services or forge new alliances.

Promote more cross-disciplinary collaboration. The quickest way to strengthen the divergent thinking that helps you better align your projects with client outcomes is to diversify the team, at least in the planning stages. Give special attention to including those who are more big picture-oriented, who know the client best, who understand the client's business, who are more empathetic (sensitive to the human side of the work), who are results driven. You may even want to invite some who have no technical background at all.

Broaden your engagement with the client. If your interactions with the client are limited only to the project scope of work, you'll obviously find it difficult to add value elsewhere. Unfortunately, many technical professionals are prone to "stay in their lane," rarely engaging the client about non-project issues (that's the convergent mindset referenced earlier). It can help to introduce other individuals in the firm (perhaps in a project principal or client service manager role) who are more conversant in other matters of importance with the client. Sharing relevant content is another way to broaden client engagement.

Measure project success according to client outcomes. It matters little that you offered a solid technical solution, finished on schedule, and stayed within budget if the resulting implementation fell short of achieving what the client needed. Consider, for example, the environmental firm that saved the client $50,000 on laboratory analytical expenses only to cost them $200,000 in lost revenue because the cost savings required extending the schedule.

This is the kind of result that happens all too often when technical professionals focus on their scope of work rather than the client's business outcomes. Is your firm providing services "2" the client or actively working "4" their success? The difference can ultimately impact both the client's and your firm's success over the long term.


Wednesday, February 24, 2021

5 Steps to Creating Added Value for Your Clients

Value creation is one of the prominent themes in the business literature. That makes perfect sense. The more value businesses deliver to their customers, the more value is returned in the form of revenue growth, higher profits, strong backlog, customer loyalty, etc. Indeed, the success of any business depends upon its ability to create value for its customers.

Oddly, however, this issue is rarely discussed in the A/E industry. I've been party to countless strategic planning workshops, business development meetings, proposal strategy sessions, and project planning meetings over the course of my 45 years in this business and could probably count on my fingers the number of times value creation was discussed at all.

The evidence is clear: Value drives competitive advantage. As A/E firms grapple with the challenge of differentiating themselves from their competitors and fighting the trend of commoditization, why haven't they given more attention to how to grow client value? I don't have an easy answer. But I suspect it starts with how our industry thinks about our work.

We focus more on technical solutions than business solutions (although our solutions do ultimately deliver business results). We describe our work more in terms of the services we provide and the tasks we perform than the outcomes our efforts achieve. There's a disconnect between what we tend to emphasize and the true value of what we provide to clients. Thus our work is arguably undervalued by clients when compared to that of other professional service providers (for example, we have a lower profit and labor multiplier).

So what are some meaningful steps your firm could take toward creating greater value for your clients? Let me suggest the following to get you started:

Step 1. Cultivate your strategic thinking. As with any significant transition, becoming a better value creator will for most in our profession involve a change in thinking. As noted above, this will require thinking differently about our work, specifically in linking our technical solutions to client business results. This is a challenge for many in our profession, especially those with engineering or scientific backgrounds, because of their natural bent toward analytical thinking.

Now let me be clear, the analytical mindset is critical to success in our business. But it is also limiting. Most A/E firms that are serious about value creation would benefit from having more strategic thinking on their project teams. Consider the different tendencies and points of emphasis among analytical and strategic thinkers as highlighted in the table below:

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The big difference is the tendency to zoom in to focus on details versus zooming out to see the bigger picture. Within that larger frame are the nontechnical, business-oriented issues to which A/E professionals often give too little attention—yet where added value is usually found. How do you cultivate your strategic thinking? A few tips:

  • Set time aside for strategic thinking. Making the switch between analytical, detail-oriented thinking and big-picture, strategically-oriented thinking requires some scheduled time and intentionality.
  • Seek out different perspectives. You can talk to others who tend to have different ideas from your own, or you can go online and look for the same thing.
  • Get all your facts and data together. I've observed that while we tend to do the deep dive into technical data related to a project, we often come up short in information about the more strategic aspects of the project.
  • Explore both the technical and nontechnical issues. It's critically important to give adequate attention to the nontechnical components of the project, which to the client are typically more important. I'll offer a framework for exploring these issues below.
  • Confront your biases and blind spots. We all have them, and they can cloud our ability to see the possibilities for creating greater project value.

The quickest way to boost your firm's strategic thinking is active collaboration between analytical and strategic thinkers. Invite to your project planning and strategy development process individuals whose main contributions will not be technical, but strategic and big picture.

Step 2. Align Your Perspective with the Client's. One essential tenet of value creation is that value is defined by the recipient, not the provider. Thus asking the client the right questions and listening carefully for insight is crucial. But there's more to seeing things as the client sees them than merely asking good questions. You want to try to look through a similar frame of reference.

One simple technique I've used for years to move in this direction is to diagnose client needs at three levels—strategic, technical, and people. That's not to imply that clients see their needs at those three levels, but they do tend to see them more broadly than most technical professionals do. Whereas we might be inclined to see a technical problem in need of a technical solution, the client is more likely to see a technical problem that has business impacts and requires a solution that delivers business results.

Analyzing needs at three levels helps us better understand the strategic and people impacts and develop solutions that better address the broader scope of those impacts. This approach, in my experience, has repeatedly proven effective in creating added value.

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Step 3. Let Outcomes Drive Your Project Strategy. As Peter Drucker wisely noted years ago, customers don't really buy products or services; they buy what those products or services do for them. Likewise, studies by Arizona State University and the MIT Sloan School of Management both came to essentially the same conclusion—buyers buy outcomes, not solutions. Is it any different for buyers of our services? I don't think so.

Yet how often do client outcomes truly drive your project strategy development? Isn't that what the project is all about? If you make outcomes the centerpiece of your project, you'll be among the minority who step into the "value zone." Successful projects aren't defined primarily by a competent technical scope completed on time and on budget, but on the delivery of desired outcomes.

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To facilitate this approach, I recommend two key questions to frame your project strategy: (1) What does success look like? (Outcomes) and (2) How will we deliver that? (Strategy). Be sure to address those questions in that order. I also suggest breaking down client outcomes at the same levels as client needs—strategic, technical, people. Inclined to think this is merely an academic exercise? I've seen this process shape many successful projects, as well as win several large contracts based upon a more broad-based project strategy.

Step 4. Prioritize the Client Experience (CX). Several years ago, a survey of over 500 A/E firm clients posed this question: "If you consider that we provide you value in two ways and that together they equal 100 percent, how would you [the client] divide the value you receive between our technical skills (what we do) and our client-service skills (how we do it)?"

The answer? Clients said it was 50/50. In other words, they value the experience you deliver just as much as the expertise you deliver. Does your firm work just as hard on delighting clients as you do on turning out proficient technical scopes of work? Most firms don't. This provides you with an excellent opportunity to add differential value.

For most firms, this means being more intentional and structured with regards to the client experience. The norm in our business seems to be "good people doing the right thing for the client." We rely on individual client-skills competency rather than shared standards and practices. The results are predictably inconsistent, as this competency varies widely among the typical firm's project and client managers.

A significant step towards greater structure is to "benchmark expectations." This involves mutually identifying at the start of a project what will constitute a great working relationship between your firm and the client. I've developed a tool called the Client Service Planner, which has been used by many firms. It guides a conversation that explores various aspects of the working relationship—things that are often assumed rather than confirmed.

In my experience troubleshooting problems between clients and consultants, I've found that the most common cause for the breakdown is a failure to understand what the client really expected regarding how the two parties would work together. Beware of making assumptions about this, which often happens. Instead, benchmark shared expectations.

Step 5. Stay Engaged Until the ROI Is Realized. When is value consummated? When the client realizes a return on their investment. That happens when the desired outcomes are achieved. Here's the interesting thing: The real value of a project is usually not created when the typical A/E scope of work is completed. At that point, the client has perhaps a concept drawing, design documents, or a report. ROI doesn't occur until later, when something is constructed and put into operation, or a recommendation is successfully implemented.

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This creates an interesting challenge for the A/E firm committed to value creation. What should you do about the gap that often exists between your work and the client's ROI? Stay engaged, whether under contract or not. It's well worth the typically small amount of time required to maintain a meaningful role in the project. It could determine the client's perception of the value you provided.

I've seen too many situations where a firm wasn't involved during the construction phase, for example, and things went sideways, often without the firm's knowledge. Sometimes the design firm was at fault. Other times it was a matter of the firm not being there to defend itself. Sometimes it was simply a misunderstanding that could have been resolved if the firm had been invited to the discussion. The point is that checking out between the conclusion of your scope of work and the client's ROI puts the ultimate value you create at greater risk.

Instead, you might pursue continued involvement as follows:

  • Keep abreast of project progress. Follow the course of the project through to ultimate completion and track how well things are proceeding at any given stage.
  • Check in with the client at critical junctures. Contact the client at points when difficulties or uncertainties are most likely to occur, and certainly when you become aware of a problem. Demonstrate your continuing interest and concern for the client's success.
  • Offer your help as appropriate. When the opportunity arises to answer questions or help resolve a problem—and you can do so without incurring significant costs or liability without a contract—communicate your willingness to help. Even better, persuade the client to contract with you for low-cost support services beyond your initial scope of work.
  • Confirm the client is satisfied with the end result. How the client views your contribution to the project is defined in large part by how well the completed project meets expected outcomes. Don't settle for a client debriefing only when your work is done; follow up again at the end of the project.

No one creates additional value for clients by simply doing what they were asked to do. You have to go beyond what was expected. The steps described above can help you substantially exceed client expectations without requiring a lot of additional effort. It's more about a mindset change—a focus on success outcomes rather than technical solutions. I'm convinced that greater emphasis on value creation is a ripe opportunity for ambitious A/E firms to differentiate themselves from their competitors and to attract more loyal clients.

Friday, January 29, 2021

The Problem with Qualifications-Based Selection

The A/E profession has fought long and hard for qualifications-based selection. It was formally
established by Congress in 1972 with passage of the Brooks Act, which required federal agencies to procure A/E services based on qualifications rather than price. Forty-six states have since passed their own version of this law, while QBS practices have also filtered down to numerous local governments, institutions, and even private sector organizations.

QBS is a remarkable achievement for our industry. I know of no other professional services sector that has such government protection from the inherent forces of the marketplace (i.e., the commoditization of undifferentiated providers). Perhaps that's part of my reservation about it. Whatever you think of the merits of QBS, I think it wise to recognize its shortcomings and adjust your competitive strategy accordingly. What follows are some of the issues I see with it:

QBS shifts the focus from the buyer to the seller. Perhaps the most popular sales advice is to focus on the customer. Yet QBS-guided RFPs consistently suggest that the focus be on your firm. They ask you to provide an overview of your firm, describe your relevant qualifications, highlight the project team's experience, offer a breakdown of your staffing mix, etc. Oddly, these RFPs often ignore or downplay the most client-centered qualifications, such as: How well you understand the client's needs, how you will deliver the business outcomes the client desires, or how you will craft a strong working relationship.

Regardless of what the RFP says, I'm convinced that clients ultimately act according to their own self interest. All buyers do. "It's all about us, not you" is Secret #1 in former client Gary Coover's book Secrets of the Selection Committee. But that reality is not reflected in most RFPs. This is not to suggest that clients intentionally circumvent their own selection process to get the result they want. But the human factor is unavoidable, no matter how objective the client tries to make the process.

It's difficult to objectively differentiate between firms on qualifications alone. For any given solicitation, the likelihood is that there are several competitors that are fully qualified to perform the work. Is the firm with the stronger resume necessarily the best choice? Often not. There can be a number of factors not addressed in the RFP—such as greater familiarity with the project, an existing relationship with the client, proximity to the site, or the client's preference for working with a smaller or larger firm—that favor a firm with lesser credentials. Even when the RFP lists evaluation criteria and assigns points to each, the actual process of determining those point totals is inherently subjective, especially among firms that are all fully capable of doing the work.

Unfortunately, most firms follow the RFP's lead and assume they must win the job primarily based on their qualifications. Rather than focusing on providing a strong value proposition that resonates with the client, they devote far more space to hyping themselves. If they could view their self-indulgence through the eyes of the client, they would recognize how little difference there usually is between their qualifications and those of their competitors.

Qualifications are the proof, not the product. Clients aren't selecting your firm because of what you've done for others, but what they believe you will do for them. Ultimately, they're deciding which firm offers the best value proposition. Huh, what? When did you ever see an RFP that asked for your value proposition? Yet every buying decision is predicated on the perceived value received. And that value is embedded in the delivered outcomes.

Your qualifications are merely the evidence that you can deliver those outcomes. But QBS rarely frames the procurement process in those terms. And too many firms miss the point, passively responding to the RFP's emphasis on qualifications without ever considering what the client is really buying. Of course, this presents a golden opportunity for those of us who take the initiative to go beyond the RFP and offer the client a compelling value proposition.

QBS isn't the solution for our commoditization problem. A few years ago, ACEC surveyed engineering firm leaders about the growing commoditization of our industry. Respondents indicated that they believed it was a substantial threat to their business. When asked what they thought was the best strategy for combating commoditization, they responded—by more than 2-to-1 over any other option—that our firms needed to educate lawmakers and clients to enforce and expand QBS rules.

Missing from the list of recommended anti-commoditization strategies? Stop acting like a commodity! Commoditization is a market-driven consequence of failing to differentiate. Ironically, QBS procurements often seduce firms into trying to construct competitive advantage out of what is typically a nondifferentiator—their attempt to demonstrate superior qualifications. QBS helps protect us from the consequence of lack of differentiation, but does nothing about (and often exacerbates) the root cause.

Despite my criticisms of qualifications-based selection, I must admit that I've benefited greatly from it as a business development and proposal professional for many years. That's because I typically run counter to the direction that most of my competitors take. While they're faithfully responding to the letter of the RFP, I'm responding to what the RFP doesn't say (while still complying with it, of course). While they're focused on showcasing their strengths and qualifications, I'm featuring our value proposition—solution + outcomes + benefits—offering our qualifications as proof we can deliver. While they're writing about their past successes, I'm writing the story of the client's future success.

And I want to encourage you to do the same. That's the primary reason for this article, not to critique but to inspire. QBS is only an impediment when you try to make it your competitive advantage. Focus on the client's interests instead and watch your win rate soar.