Wednesday, August 11, 2010

Bungled Business Relationships

Strong relationships are critical to sustained success in professional services. I doubt there's any disagreement on that point. Yet the business of relationship building receives little formal attention in the average A/E firm. Could this present an opportunity for your firm to stake out a key competitive advantage? I think so.

Last week I shared a few
tips for building better business relationships. This week I'd like to outline some reasons why firms often struggle with this. Let me suggest that you discuss these with your colleagues. Ask: Which of these beset us the most in our relationships? What do we need to do to overcome these problems? I think you'll find this a productive dialogue.

So what keeps firms from having better relationships with their clients and other crucial stakeholders?

Emphasis on projects rather than people.
Technical professionals are prone to giving the bulk of their attention to technical matters. Many of them are less comfortable with the more unpredictable, subjective, and emotional realm of human affairs. It shows. In one survey, only 13% of clients gave their A/E service providers an "A" grade for the "people side" of a project (e.g., project management, communication, responsiveness). By contrast, 31% of clients assigned the top grade for technical ability.

This project focus is also evident in how we pursue new business. Most firms concentrate their efforts on reining in individual projects rather than building relationships. In another study, prospective clients said that only 35% of professional service sellers showed concern for them as people, but 66% managed to demonstrate their competency in their respective fields. Relationships, of course, are rooted in a feeling of mutual concern and interest.

Misplaced focus on friendship.
When clients become friends, that can be a wonderful thing. But don't make the mistake of thinking that the goal of every client relationship is to develop a friendship. Not every client wants to be your friend. Plus focusing on friendship can distract you from what matters most in an effective business relationship.

What's the difference? In a friendship, the primary benefit is the relationship itself. The two parties simply enjoy spending time together, usually as a result of their common interests and personal affinity. In a business relationship, the primary benefit is the business value gained from the association. A loyal client needn't be a personal friend; your contributions to his or her success is reward enough.

Sometimes professionals mistake the trappings of friendship for the delivery of business value. The fact that a client enjoys spending time with you doesn't necessarily confirm that you are excelling in meeting business needs.

One small engineering firm I worked with derived over 80% of their revenue from a single client contact with whom the principals enjoyed a close personal friendship. But they neglected taking care of business, which included building the relationship with other decision makers in the client's organization. When reorganization changed the dynamics of those relationships, the firm lost nearly all of that revenue and was forced to seek a merger with another firm.

The tyranny of the urgent. Relationship building takes time, and many A/E firms find it difficult to commit the time needed. The primary culprit is the pull of urgency. Most of our work is schedule driven, yet many of the deadlines driving our momentary priorities materialize at the last minute. Thus we resign the bulk of our time to "fighting fires" rather than tending to critically important but nonurgent matters.

So relationships suffer. I've written about this dilemma in previous posts (check out the following: [1] [2] [3]). The bottom line is that you need to allot time specifically for tending to important relationships and guard this time against the intrusion of urgent-yet-less-important tasks. Which leads to my next point...

Lack of a relationship strategy. You'd think something as important as relationships would deserve a structured, disciplined approach. Isn't that what we normally do when we need consistent, replicable results? But I've yet to work with a firm that really had a formal relationship strategy. Is your firm the exception? Would you like it to be?

In my mind, there are four relationship phases that each warrant a specific approach: (1) screening for relationships, (2) initiating relationships (in the sales process), (3) building relationships (after contract award), and (4) managing ongoing relationships. I touched on the first phase in my last post. I plan to go into it and the other three phases in more detail in upcoming posts.

Limited interpersonal skills. Technical professionals often admit their shortcomings in the "touchy-feely" aspects of the business. Most times I think the confession is more an excuse for lacking the commitment to work on interpersonal skills than the inability to do so. I've met very few people in this business who I thought fundamentally lacked the ability to develop adequate people skills. More commonly, it's a problem of downplaying the value of these skills.

Granted, relationships demand some nuanced abilities that don't come naturally for many of us. But we can go a long way toward compensating for this innate weakness by simply committing to care. Genuine concern for others covers many a deficiency in interpersonal competence.

So how do you go about tackling such deficiencies in your firm? Training can be helpful, but don't expect that alone to change behaviors. A better approach is to learn by doing. This takes us back to the previous point--a disciplined approach to building and tending relationships. Outline a general course of action, tailor it to specific clients, go do it, then review and revise as appropriate.

Be sure to structure regular in-house meetings into your process so that your relationship managers can share their successes and challenges, and hold each other accountable. That kind of feedback and encouragement can go a long way in strengthening relationship skills.

Clearly, this is worth making it a operational priority, and all the more if your competitors aren't doing it. Ready to begin? Stay tuned.

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