Friday, June 22, 2018

Is Differentiation Really Worth Pursuing?

Differentiation is a popular business topic. And an elusive goal for professional service firms. Many firms have invested substantial amounts of time and money in the pursuit of differentiation, but arguably few have achieved success. Indeed, some experts are skeptical that differentiation in professional services is realistic.

For example, in his article "The Myth of Differentiation," consultant Mike Schultz writes, "Much as firms might hear otherwise, being different isn't much of a factor in winning or keeping clients. Often, the 'we're different' message affects them negatively." He mentions performing a quick Google search on the phrase "unique consulting firm." It yielded almost 4,000 web pages. For this reason, claims of distinction are understandably dismissed by most clients.

Bruce Marcus is another skeptic. He writes, "Professional service marketers talk of differentiation, which, frankly, is baying at the moon...differentiation is overrated, and is perhaps, like branding, a myth." He questions the ability of professional service firms to claim distinction given the nature of the business. "You can't say, 'Our firm gets better mileage' [an objective differentiator]. But neither can you say, 'We do better audits.' Or, 'We write better briefs' [meaningless subjective claims]." Few professional firms can offer evidence to support their differentiating messages.

On at least one point, I must agree with the skeptics: Saying you're different doesn't accomplish anything. And this is the extent to which most A/E firms have pursued differentiation. They make unsubstantiated claims of being different. Almost everyone does. So why should we think that clients take such marketing messages seriously?

In a study by Suzanne Lowe, 81% of professional service firms reported that they sought differentiation as part of their marketing strategy. But she found that "a majority thought of differentiation as simply an exercise in image enhancement." The differentiation tactics most commonly used also tended to be among the least effective. (I refer to a few of these in an earlier post entitled "The Deceptive Distinctives.") Generally, the most common "differentiators" are also the easiest to implement.

By contrast, Lowe found, "The reality is that when it comes to differentiation, the more complex and organizationally deep the differentiation strategy is, the more competitively potent it is." That reminds me of an interview with Dell Computers CEO Michael Dell that I read years ago. He was talking openly about the manufacturing and distribution strategies that had given his company the edge on its competitors. The interviewer asked if he was concerned that the competition might steal their business model, given his candor. "They can't do it," he replied, noting that the real difference was rooted deep in Dell's organizational culture.

"The strongest competitive advantage," writes Dena Waggoner in the Encyclopedia of Management, "is a strategy that cannot be imitated by other companies." That's real differentiation. So what does this mean for your firm? Is differentiation worth pursuing? Is it even achievable?

To be honest, probably not for the average A/E firm. Few firms have the management fortitude to create a truly distinctive company. It's hard work. It has to be. If differentiation was easy, then everyone would be doing it and succeeding. Which means, of course, they wouldn't ultimately be successful at it because all their competitors would be doing it too.
Does this mean that differentiation is beyond your firm's reach? Not necessarily. 

Differentiation in our business is largely relational rather than positional. Developing a reputation in the marketplace as a notable firm can be very useful. But success in our business is really forged at the relationship level. If you want to be distinctive, excel at building lasting, mutually profitable relationships. Out-serve the competition, client by client by client. Then leverage those strong relationships to create new ones.

For the truly dedicated, I believe there is the potential for carving out a place of marketplace distinction. Some have suggested that your best opportunity for differentiation is in how you do business development. Selling in our business is still largely transactional and seller-oriented. Flip the script with a buyer-centered approach and you will stand out from the crowd. But can you maintain that difference after the sale?

Focusing on value creation, particularly in connecting your work to delivering business results, is another ripe opportunity. This is a subject that is oddly little discussed in our industry. If you can demonstrate an understanding of and ability to deliver business solutions, clients will take notice. A/E firms often tout their commitment to helping clients be successful, but there's commonly a big gap between their technical focus and the client's business objectives.

Any of these differentiation strategies must be rooted in your firm's culture, because the real difference isn't in what you say, or even in what you strive to do. It's in what you routinely do because of who you are as a firm. When you can translate your firm's cultural strengths and practices into value for the client, that's a good base for true differentiation. It's not easy to achieve. But it's even harder for others to replicate.

Monday, June 11, 2018

Create Client Value Through Better Collaboration

Imagine you're a client who recently hired an engineering consulting firm to solve a challenging problem. Your selection was made in large part because of the firm's deep bench of experts with relevant experience. But as the project progresses, you realize that the firm's project manager is doing almost all of the work of characterizing the problem and defining the solution. The project team serves only to perform related work assignments devised by the PM.

This scenario is unfortunately not all that uncommon in the A/E industry. Too often firms tout the breadth of their expertise but give clients only a small sample of it when it comes to problem solving and design development. This might be expected on smaller projects, but more complex multidisciplinary projects call for collaboration—something that many firms frankly neglect.

The A/E/C industry has been fairly characterized as "fragmented, inefficient, and adversarial because each [project partner] is responsible for its own silo of work and attempts to maximize their individual profit in the areas of their own expertise." This has led to several efforts to try to improve collaboration among parties, including Integrated Project Delivery, which attempts to force better cooperation by sharing legal risks.

But the problem of fragmentation isn't limited to work between design and construction firms. It's estimated that half of construction change orders are due to coordination errors during design. Undoubtedly, disciplinary silos existing within many A/E firms contribute to this problem. These silos also rob clients of the integrated problem solving and solution development they should expect from the multidisciplinary firms they hire.

So here's a potential competitive advantage that too few are talking about—creating added client value through better collaboration. Clients deserve better, and it's fairly simple to deliver it by more effectively pooling the intellectual and manpower assets you have in your firm, or your extended project team. Let me suggest some opportunities for improvement:

Collaboration through project planning. It's surprising how little real project planning I observe among the A/E firms I consult. This is where collaboration should begin. The best planning starts with a broad, multidimensional view of the project—vision, goals, critical success factors, concerns, opportunities. Too often firms rush to defining scope, schedule, and budget before really understanding what outcomes the project is supposed to achieve.

To kick off an effective planning process, assemble a group with diverse backgrounds and perspectives. Involve all of the key disciplines that will ultimately contribute to the project. Develop an integrated plan up front to help avoid the common disconnects and blind spots that occur when disciplines are only engaged in linear fashion over the course of the project.

Collaboration between project phases. Speaking of our linear approach, have you ever considered how much better our solutions might be if we involved planners, designers, builders, and operators in all stages of the project? Might our plans be more practical, our designs more constructable, our facilities more operator friendly? The evidence suggests there's a good deal more value we could deliver with better collaboration.

I can anticipate the counter-arguments—too expensive to involve so many, too many cooks in the kitchen, too impractical to get all those parties together, etc. Those are legitimate concerns. But what about the unrealized benefits of greater collaboration? Fewer coordination errors, better solutions, better business results, higher value delivered to clients.

Collaboration within the project team. We could probably all agree that members of the project team are expected to collaborate. But in my experience, that's often not happening. The project manager (and perhaps a project engineer or architect) call the shots and the rest of the team simply performs their respective tasks as directed.

Beyond the collective intelligence, there are other benefits of engaging team members in collaboration. It produces higher quality. People take more ownership of their work when they have more say. They can see more opportunities to improve their work product when they better understand the bigger picture. It increases employee engagement, which yields multiple performance advantages. There are reasons we have historically worked in teams; perhaps we can take better advantage of those strengths.

Collaboration between experts and nonexperts. A/E firms have a tendency to compartmentalize work based on respective areas of expertise. For example, electrical design is left to electrical engineers. Makes perfect sense, doesn't it? Maybe not. Is it possible that a nonexpert could help electrical engineers come up with a better design?

Indeed, this has happened in multiple technological fields, and the trend is growing. Steve Jobs wasn't an engineer, but was the force behind most of Apple's most popular innovations. Elon Musk founded PayPal, then served as head of product design at Tesla, and now is CEO of SpaceX, which is sending rockets into space. Organizations from NASA to Dell have ushered in the crowdsourcing phenomenon, where people with all kinds of backgrounds are invited to weigh in on some of their most challenging technical issues.

Technology pioneer Naveen Jain writes that nonexperts are often better at technical breakthroughs because (1) they're free from the myopic thinking that limits innovative thinking among many experts and (2) they have the ready access to abundant information that opens up new realms of thinking. Accordingly, technology companies are increasingly engaging nonexperts in technical problem solving and product development.

Are there not similar opportunities within our industry? Aren't we also prone to myopic thinking? Can we not benefit from asking more "dumb questions" that lead to fresh insights? Wouldn't it be helpful to partner with those who are better at recognizing the human dimensions of the technical problems we tackle? In fact, I've personally witnessed such breakthroughs coming from nonexperts.

Value creation, even in the technical fields, is not just about technical expertise. When we bring diverse people together to collaborate on our client's challenges, we create added value. Shouldn't we be doing this more often? I'd love to hear what you think.

Wednesday, May 30, 2018

Creating Skimmable Proposal Content

Making your proposals skimmable and easy to navigate is the competitive advantage that no one is talking about. Yet the A/E professionals I talk to broadly agree on two things: (1) that clients don't read but skim their proposals and (2) that their proposals aren't very skimmable. Feedback from clients concurs. So what needs to be done is pretty clear.

What's not so clear, apparently, is how. That's what this post is about. I'd like to share several strategies I've found effective in helping technical professionals set their proposals apart by making them more readable and user friendly:

Set aggressive page limits. A key constraint to creating skimmable proposals is the prevalent verbosity in our profession. I could offer guidelines on writing shorter sentences (15-20 words is recommended) or shorter paragraphs (3-6 sentences or about 150 words). But the best way to combat wordiness is to limit the number of pages. Clients are increasingly setting page limits. For most proposals, 30 pages, excluding appendices and forms, should suffice.

Create a detailed content outline before writing starts. Poor writing usually results from a thinking problem. Even in a profession filled with smart people, when we write without first planning what needs to be said, we can end up looking pretty dumb on paper. The first step to better writing is to return to what you were taught in high school—outlining.

I advocate preparing a detailed content outline, not simply a "structural outline" that organizes your topics and sections. Start by identifying specifically what you need to say before determining how. The steps below will help, as will the following sample:

Do the "two-minute drill" to define your key messages. Imagine you only had two minutes to verbally summarize the essence of your proposal. What would you absolutely have to say in that time to make your best case for being selected? That's a good starting point for identifying your proposal's overall theme and key messages.

Your proposal theme is the basic story that you want to tell. It should be the client's story—how you envision making their project a success—not your firm's story. Yes, the RFP asks you to describe your qualifications and experience. But these are a means to an end (a successful project), not the focus of your proposal. From that story should emerge 3-5 key messages that will be prominently featured in your proposal.

List supporting points for each of your key messages. Your proposal outline starts by listing your key messages. These should be clear, compelling, and verifiable. So what additional information do you need to share to bolster your key messages? List all points that come to mind; you'll pare your list in the next step.

At this point, no sentences allowed, only bullet points. When you start by writing sentences without knowing where you're going, it often leads to the rambling wordiness characteristic of technical proposals. Using bullet points also speeds the creative process, because you can focus more on what needs to be said than how you're going to say it.

Organize supporting points based on importance. Assign each point listed to one of the following categories: (1) what you must say, (2) what you should say, and (3) what you could say. Put the points in the first category at the top of the list, then the second and the third—then eliminate most points that fall in the third category. This approach embraces the journalistic standard of the "inverted pyramid" where the most important information is placed first, followed by less important information in descending order. The inverted pyramid facilitates skimming.

Write the proposal narrative building out your outline. With a detailed content outline, you will find it much easier to write a more clear and compelling proposal narrative (this also greatly facilitates better writing as a team). The key thing here is not to diverge much from your outline. This is like a building where the structural components are still visible after final construction. Your outline should help you properly feature your most important messages (your structural elements). Don't let them get buried in the text!

Use my secret weapon: Boldface inline headings. (< example here!) This is one of the simplest techniques to improve skimmability. Chances are you've skimmed portions of this article based on the boldface highlights. These headings also comprise important structural elements (key points) that hold the narrative together. When I rewrite someone else's draft, I start by creating boldface inline headings. Everything flows from these points. Use this method to help improve the writing of a colleague who failed to outline first.

Try drawing it before writing about it. Figures, graphs, and simple tables greatly aid skimmability. They can also help your writing because of the thought process involved in converting a complex idea or work flow into an easy-to-understand graphic. I generally try to have at least one graphic element per page. This is not an arbitrary standard. The point is to avoid making the reviewer have to read to find the most critical points in your proposal story.

Make sure your graphic elements are easy on the eyes. Many I see are either too complex or have been reduced to too small a scale (often from CADD drawings) to be very helpful. Remember, these should improve skimmability, not serve as speed bumps!

By the way, the process described above is recommended for all your documents. When we overhauled how we did proposals at my former firm—making them more skimmable and easy to use—we started to get a few complaints from clients that our reports didn't measure up. So we applied the same concepts to all our work products. You can't go wrong making things easier for the client, can you?