Monday, May 25, 2009

Go After the Inarticulate Need

Clients may be spending less, but they are still looking for solutions. The question is: Are you offering the solutions they're looking for? There may be high-margin, sole-source work right under your nose. But your clients aren't asking you to provide these services. In fact, they might not even know what to ask for. It's the golden opportunity of the inarticulate need.

One of the classic examples was the introduction of the minivan. Hal Sperlich, who championed the idea, initially approached his employer Ford about it. They declined, in part because they lacked market data showing that people were looking for such a vehicle. Sperlich ended up at Chrysler, which was willing to take the chance--and the minivan was largely credited with reviving that troubled company. Now Chrysler is back in distress, lacking that untapped opportunity that saved them in the 1980s.

Undoubtedly your clients have needs that they don't fully understand. To a large degree, problems are defined by the available solutions. Several years ago, everyone recognized the need for better treatment technologies. Then some began to focus on revising upstream processes and inputs to reduce the need for treatment. Later, the emphasis shifted to reevaluating treatment standards in light of actual risk, particularly with regard to hazardous wastes.

With each development in thinking, the inarticulate need surfaced and the market responded with a new set of services. As the client came to better understand the need, and as the number of solution providers increased, the value of those services generally declined. But inevitably someone would uncover another unrecognized need, and the industry would go through another cycle of invigoration as new services emerged in response.

The current recession has shaken the business world and created new challenges that may not be fully understood, or even acknowledged yet. This opens new possibilities for your firm, if you're willing to venture outside the box. Uncovering your clients' inarticulate needs isn't easy, but it can be immensely rewarding. Some suggestions:

Don't be a hammer in search of a nail. The typical sales approach focuses on finding opportunities for existing services. Thus it biases your investigation of client needs. If you really want to understand the client's issues, especially inarticulate ones, you must probe for problems outside the realm of your normal services.

Ask feeling questions. The inarticulate need is often first manifested in emotions. The client may feel frustrated, perplexed, discouraged, overwhelmed, resigned--and not have yet connected those feelings to the root cause. Unearthing that connection doesn't necessarily require expertise in psychology, just a willingness to ask good questions and listen carefully. So once you've explored the more objective issues with the client, carefully pose questions about how he or she feels about the situation. The emotional context can help you better define what the real issues are. Plus those feelings can create a greater sense of urgency to do something about the problem.

Brainstorm with the client. The beauty of brainstorming is the freedom to generate ideas uncritically. Often the inarticulate need is hidden by "the way we've always done things." Your role is to help the client escape limited thinking and explore new perspectives. Again, you need to avoid limiting the alternatives considered to only those matching your expertise. If you need additional expertise to fully address the client's needs, pull it from elsewhere in your firm or partner with another firm.

Examine the less obvious impacts of change. We are all interested in how current economic, political, and technological changes affect our business. A better question is how these changes impact our clients. Help your client anticipate the new needs and opportunities that will result from the new realities we face. Better still, look for the hidden impacts, those that your competitors are missing. This involves looking beyond technical issues and examining the associated consequences of those issues. It is those consequences that often present the greatest challenges to our clients, and addressing them may not require venturing as far from your core competencies as you might imagine.

Monday, May 18, 2009

Getting Your Phone Calls Returned

There's a good reason you don't like making cold calls: You've been on the other end of those calls. Americans are united in their dislike of unsolicited sales calls, hence the Do Not Call Registry. So how are you supposed to initiate a conversation with a prospective new client?

In this economy, I can imagine that clients are more tired than ever of hearing from A/E firms who "just want to introduce" themselves. That's all the more reason not to answer the phone. Of course, even before the current recession, it was getting increasingly difficult to reach prospects (or even some of our own clients!). Most seem to rarely answer the phone. Then we're left to leave the oft-neglected voice mail message, hoping against hope that the prospect might return our call.

It's a persistent aggravation for those of us trying to generate some new business in tough times. How can we get more of our phone calls returned, not only from prospects but from busy clients who might be able to use more of our help? A few suggestions:

Give the client a good reason to call you back. It's pretty simple, when you think about it. If the client sees a clear benefit in returning your call, he or she most likely will. The reason most of our sales calls aren't returned is we haven't defined the benefit to the client. When the initial message is essentially, "I'd like to introduce you to our firm," let me ask you, would you return that call? Probably not. You have to do better, and explain why there's value for the client in calling you back. Which leads to my next point...

Never call completely cold. A cold call is purely driven by the seller's needs. The seller doesn't know what the potential customer needs, but he knows he needs to make a sale. So he calls on prospects that hold some vague promise of having a use for his product or services. That self-serving motive, devoid of any connection to our real needs, is probably the main reason we hate getting such calls. So do clients.

That means you need to make a preliminary determination of the prospect's needs before calling. That's called "warming the call." Networking and internet research are the two best ways to learn what needs a prospect has. As a general rule, I avoid calling a prospect when I lack either information about needs or a referral. I advise my clients to do the same.

Be as specific as possible. It's hardly compelling to leave a message simply stating, "I understand you might be needing some help designing a new automated control system for your plant." That only describes a benefit if the client doesn't know any firms that do that kind of work, and what are the chances of that? A better message: "We recently worked for a client that added an automated control system for a plant very similar to yours. They were able to reduce costs by 45% from the original estimate by doing some innovative things. If you'd like to hear more about that, please give me a call."

Yeah, coming up with a good reason for the client to return your call (what I call your "entree") isn't easy. But it works. It requires more work up front. So you can make 20 shotgun calls to prospects and maybe get 3-4 to return your call. Or you can offer your entree to 5 prospects and get 3-4 to return your call. Which seems the better strategy? By the way, your chances of eventually making a sale are substantially increased when you take the more client-focused approach, starting with that initial contact.

Make it easy to return your call. Think of the things that frustrate you when someone leaves you a voice message, and make sure you don't repeat any of the same mistakes. These include not speaking clearly, making it hard for the prospect to catch your name. Or saying your phone number too quickly to write it down. And then the prospect can't get through should he or she call. Here are some suggestions to avoid such frustrations:
  • State your name and phone number at both the start and end of your message. That means the prospect doesn't have to listen to your whole message again to get the phone number. Give this information slowly and clearly, spelling your name if there's a chance of confusion.
  • Tell the prospect how best to reach you. You don't want to play phone tag with someone you don't know well. If you offer your cell phone number and invite a call after hours if this is more convenient for the prospect, then you're hinting that you consider the call important.

  • Let the prospect know that the call will be brief. For example: "I can explain in 10 minutes and then you can decide if there's value in our meeting to discuss the matter further."

If you were referred, state up front why the referral was made. I would advise that you still offer your entree and not simply drop a name. The real value of the referral is when the prospect trusts the one who referred you as having the prospect's interest at heart. So don't let the referring party down; explain why he or she thought the prospect would benefit from talking to you.

Always try to schedule the next meeting or communication. One of the simplest ways to minimize this problem of unreturned calls is, when you're meeting or talking with the client, (1) establish the basis for the next conversation and (2), if possible, schedule it. Otherwise, you may well find yourself in the same predicament--competing for the client's time and attention--when the next contact comes around. If the client won't commit to a next time, that probably tells you something about the likelihood of the relationship developing much further. It could be a sign that your next call won't be returned either.

Monday, May 11, 2009

Does Recovery Mean Business as Usual?

After many months of increasingly gloomy economic news, we're now hearing stories that the decline is nearing an end. A growing chorus of experts (the same ones who did not foresee this recession) are saying we will hit bottom later this year. Then the recovery will begin in earnest.

In the past, recoveries following recessions always took us to new heights in terms of prosperity, and usually rather quickly. There are few such rosy predictions this time. The vast majority of economists think this will be a long, slow rebound, with more than a few troubling uncertainties in its path.

For example, what happens when most of the stimulus funding ends next year? Will the economy be strong enough to stand on its own? What about all the other bad debt? We've focused on the subprime mess, but there are other losses (prime mortgages, credit cards, commercial real estate, to name a few) still to come. How much will the continued increase in unemployment stifle economic growth?

But for all you optimists out there, let's assume that recovery proceeds as anticipated. Does that mean a return to business as usual? I think not. This recession, more than any I've experienced in my 35 years in our profession, has been a wake-up call. I don't expect most businesses or agencies to emerge unchanged, and that includes our clients. They will be more frugal, more demanding, more risk averse, more results oriented. This will create new challenges, and new opportunities, for A/E service providers.

I certainly don't have any credentials when it comes to predicting the future, but below are some ways I suspect our business will be changed, in the next few years at least:

  • Clients will be more cost conscious. This is perhaps stating the obvious, but there are several factors at work here. The aforementioned uncertainty surrounding this recovery is one cause. There is also the humbling consequences of past profligacy that recently visited many companies and government agencies. These clients are revamping their policies, practices, and systems, including how they do business with vendors. Expect more pricing pressure and more onerous contracts and purchasing requirements.

  • Some clients will seek closer alliances; others will hold us at arm's length. These differences have long existed, of course. But the roles are likely to change in coming months. Some clients will close ranks, working with fewer providers (and probably squeezing fees in the process). Others will adopt more dispassionate procurement systems focused on getting more value for the dollar and showing less favor for existing relationships.

  • Firms that master customer focus will fare best. This is another truism that has long been with us but will gain strength in the near future. As clients look for better value, they will find it among those firms that best serve them. That means creating exceptional customer experiences, providing business value (not just technical solutions), and organizing our operations around target clients and markets.

  • The best firms will capitalize on the short-term labor surplus. We know from demographics that the current availability of talent won't last long. Return of economic stability in the A/E business will also mark the return of the talent shortage. So smart firms are casting the net now while the fishing's good, even if they don't presently have the work. They know it will pay off big later.

  • Improved productivity will finally become a management priority. Productivity in the AEC industry has trailed other industries over the last 25 years, and few have seemed concerned about it. I think the convergence of the above factors (and others) will change that. Savvy firms will respond to client calls for more value for the dollar by implementing more efficient delivery processes. We've had the technology to do this for some time, but have struggled to reshape human activity to take full advantage of it. Emerging market demands will help at least the better firms finally get over the hump.

Whether these predictions come true or not, I'm confident that it won't be business as usual. This presents both threat and opportunity to your firm. So what is your firm doing to retool for the new normal? I'd be interested in hearing what you think will change coming out of this recession and what your firm is doing about it.

Monday, May 4, 2009

Success, For a Change

Studies indicate that approximately 70% of organizational change initiatives fail. That means we've all experienced it. And while it can be constructive to review the reasons for failure, I'm devoting this post to looking at one of the rare exceptions. Of all the change efforts I've been involved in, this one was easily the most successful.

The scenario: My former employer was a midsized, national environmental services firm with a stellar reputation and an impressive client list (they've since merged with another company). One day our largest client rocked our world by threatening to fire us if we had another safety incident at one of their sites. It wasn't that we were particularly bad at safety; the incidents of concern involved our subcontractors, not our staff. But we clearly had not made safety performance a priority. Now it was, with $30 million in annual revenue at stake.

Thus a broad-based safety initiative was launched. Let's examine the key steps we took in the context of the four stages of organizational change discussed in my previous post:

Stage 1. Edict: As I noted in the earlier post, not establishing a compelling reason for change is one of the most common causes of failure. This particular change effort got off to a strong start because we had a strong Edict--through no credit of our own!
  • External forces pushed us into change. The best Edict typically comes from the outside. When a top client forcefully delivers the Edict ("do this or else"), that will get most people's attention. It's advisable to leverage external factors to form the mandate for change whenever you can.

  • Executive management reinforced the Edict with bold action. Within two weeks of formally launching our safety initiative, the president of our firm fired two people for gross neglect of our safety standards. A few weeks later a collision with a slow-moving train at one of our sites (thankfully no one was hurt) precipitated another termination. These actions sent shock waves through the organization, leaving little doubt that we were serious about our commitment to improve safety performance.

  • Pressure was placed on middle management to uphold the objectives of our initiative. Another key reason why change efforts fail is lack of middle management support. Our middle managers where given specific safety objectives, and noncompliers had to answer to the president. Given what was at stake, there was little tolerance for willful neglect of the new safety measures.

Stage 2. Effort: Like most firms in our business, we had elaborate safety policies and procedures. But they needed an upgrade and heightened awareness and enforcement.

  • We hired an experienced safety director to lead the effort. To that point, our health and safety coordination had been ably handled by one of our former environmental scientists who had been promoted into the role. But he lacked the experience and credibility to take us to the next level. This was a critical addition to our management team, giving health and safety executive management level attention.

  • We developed the organization to support local coordination and enforcement. Change initiatives are impossible to run effectively from a distance. The change must be taking place at the local level with local oversight. Regional operations managers (I was one at the start of the initiative) shared responsibility for this. But we also appointed health and safety coordinators at each location to support and track our progress.

  • We overhauled our systems and procedures. Before you construct a building, you lay the foundation. That's the purpose of your infrastructure, consisting of policies, procedures, tools, resources, and organizational structure. Companies often err in attempting to encourage new behaviors while leaving the old infrastructure in place. That only reinforces the status quo.

Stage 3. Ethic. A forceful Edict and well-designed Effort help shorten the track to the Ethic stage. This stage takes root when people begin to see the value of the changes you've been making. Some things we did to promote the transition to Ethic and beyond:

  • Safety became a regular part of our "corporate conversation." If it matters, people tend to talk about it. If after a time it's rarely mentioned, people assume it wasn't all that important. Thus we attempted to infuse safety into every conversation. All meetings and conference calls were preceded by a "safety minute." Every day on site started with a "safety tailgate meeting." We knew the practice was beginning to take hold when it became practically impossible to start a meeting, call, or task without mentioning safety, lest someone remind you of the omission.

  • We implemented a behavior-based safety process. Once again, I must give credit to our largest client who pushed us to this level. The principles of behavior-based safety get to the heart of why people do what they do and how to motivate them to change behaviors. A key part of this effort was regular, formal observation and feedback, monitoring the presence of "targeted safe behaviors" and providing on-the-job coaching. We also provided rewards for safe performance. By the way, a similar process can be used (and I would encourage it) for any type of change effort, not just safety.

  • Safety goals were built into every employee's performance appraisal. As our field safety performance dramatically improved, we switched emphasis to the office where ergonomic injuries became our most common recordable incidents. Thus every employee shared a responsibility for improving our safety practices, both in and out of the office. Achieving safety-related goals were directly tied to salary actions.

  • Safety was increasingly stressed as a personal benefit, not primarily a corporate one. A crucial threshold in behavior change is when people see the personal advantages of the change. Our president was particularly effective in communicating the message that safety was important because our people were important. That sentiment was added to our core values statement. As a community that cared for one another, we emphasized watching out for our coworkers to ensure that they worked safely--for their own benefit, not simply to meet company safety goals.

Stage 4. Ethos. When the new ways of doing things become the natural ways of doing things, you've reached the highest level--Ethos. It is no longer merely what you do; it becomes who you are. Our safety initiative eventually reached this level, as evidenced by the following:

  • Safety became embedded in our corporate culture. It was no longer another set of activities that were added to our work; safe performance was now characteristic of our work. The two were inseparable. That's not to say we didn't continue to have occasional problems; but these were now the exception.

  • Furthermore, employees were now taking their safety practices home. Increasingly our conversation shifted from talking just about work situations to sharing how we were being more safe at home. That was consistent with the now established value of safety: It wasn't about the company; it was about our people. And their safety mattered both on the job and off the job.

The results. From 1999 through 2003, our OSHA Recordable Incident Rate dropped from 3.86 to 1.00, well below the industry average of 1.7. Other metrics also improved substantially to levels that bettered industry standards, most showing regular annual improvement. We could justifiably claim that our safety process had exceeded that of the client who initially told us we had to get our act together.

Hopefully you've found this example helpful, regardless of what kind of changes your firm needs to make. The specifics may differ, but the basic principles of this successful initiative apply to most any change effort. Yes, it can be done. But it takes tough, sustained effort, and focused management attention. Think you're ready?

Friday, May 1, 2009

The Extreme Marketing Makeover Toolkit

Back in January I posted an article here entitled "The Extreme Marketing Makeover." That post later evolved into a conference session, and I'm currently developing it into a workshop. It draws from the very best business development strategies I have discovered (and personally used) over the years. But as the title suggests, these strategies are hardly routine in our industry.

If you'd like to learn more about them, I'm offering a free resource I think you'll find helpful. It's called The Extreme Marketing Makeover Toolkit and it's circulating through the ranks of A/E firms across the country. I created it as a follow-up to the conference session and also sent it to folks on my mailing list. It contains links to articles and other resources that describe how to apply the ten steps of the Extreme Marketing Makeover. If you'd like to receive it, email me at