The Habit of Generosity

I have a client firm that is relatively small. It has 16 people and does transportation work in the metropolitan area. Each year, the firm completes performance evaluations in order to provide employees with much needed feedback—what they are doing well, what they could improve upon and how their career can develop and progress. In prosperous years, this small firm would distribute bonuses to its employees—not because of its largess, but as a means of retaining staff.

Whether the acknowledgement is monetary—in the form of benefits, bonuses or incentive compensation, or non monetary—such as additional days off, training /educational opportunities, casual Fridays, breakfast days or flex-schedules, effective firms have retention strategies to keep their intellectual capital (otherwise known as staff) happy. Why? The cost of turnover is too great, especially for smaller firms.

In recent years, almost all the CFOs I’ve spoken to have had to take a hard look at the cost of their benefits packages. In some cases, they’ve taken on increased premiums while offsetting with higher co-pays, partial contributions by employees or benefits for employees only. Many have also sought ways to reward and retain employees through non-monetary benefits. There is no right or wrong answer in terms of what to offer. My only observation is this: Firms that have figured out the correlation between satisfied employees and productivity are the same firms that have low turn-over rates, high productivity and profits.

The habit of generosity is one to acquire, and share!

Karen Compton, CPSM. Karen Compton is principal of A3K Consulting (Glendale, CA), a business development and strategic planning firm specializing in the architecture, engineering and construction industries. Ms. Compton is also the founder of Industry Speaks™, a web-based business-to-business portal that connects AEC firms with experienced consultants, provides peer reviews of consultants, reports on key industry trends, and publishes expert reviews of professional courses and books. Contact her at kcompton@a3kconsulting.com.

The "Messy" Path to Leadership

In Euclidean geometry, "The shortest path between two points is a straight line." You may know the concept, "the path of least resistance."

These ideas work well in many areas, but if you're navigating an upward career path toward executive leadership, you may be well advised to take a longer, messier path that comes with some challenges. Here's why:

• The distance between points A to B is short, and limiting. When you apply a linear approach to your career trajectory, you coast in your comfort zone. Let's say you started your career as a marketing intern, and through years of hard work you eventually land in a VP of Marketing position. But, your experience is mono-focused and limited only to marketing, possibly within the same company, so your next logical career step is Chief Marketing Officer (CMO) - that's it.
• The path of least resistance is also the path of least opportunity. Advancing toward executive leadership roles doesn't have to be difficult, but you must be willing to stretch outside your comfort zone to build experiences, gain exposure and broaden your sphere of influence. In doing so, you gain new skills, develop key relationships and add to your credibility as a value-added leader - all factors in creative new opportunities.

How to navigate the "messy" path to leadership
To effectively lead in today's challenging economy, executives need strategic insight and organizational awareness, coupled with critical skills like communication and relationship management. These qualities are developed through diverse career experiences that force you to move from one area of expertise to another - for example, from marketing to finance or operations.

Messy doesn't necessarily mean haphazard. You can be strategic and intentional about your non-linear approach to the C-suite when you:

• Clarify where you want to eventually end up. Where do you want to be in your career five to ten years from now? Knowing the end result you want to achieve helps you strategize opportunities that may be a good fit for your growth path.
• Identify success patterns. Most corporate CEOs have a non-linear career trajectory despite having a very specific sweet spot in a certain area. According to Forbes, 30 percent of Fortune 500 CEOs have a foundation in finance, though few advanced to the C-suite directly from the area. Instead, CEOs have a range of experience in a variety of areas -- from finance and accounting to marketing and operations -- that gives them strategic insight and the ability to understand the financial implications of their decisions.
• Seek assignments that stretch you. Actively seek projects that elevate your diverse skills and align with your career goals. Look in areas outside your usual comfort zone. If you're in engineering, seek assignments in operations that might leverage your existing skills, but that also present learning opportunities and exposure to other departments.
• Build relationships. Conduct informational interviews with people in departments outside of your own. The intent is to both learn more about the areas of expertise that are new to you, and develop relationships with key people of influence within the organization.

While the path to the C-suite isn't always clearly marked, you can be assured that organizations place high value on leaders who can communicate a strategic vision and deliver results, and that can only happen when you have a breadth of experience and knowledge that comes from taking the messy, non-linear path to leadership.

Charmaine McClarie, executive coach and keynote speaker. Reprinted by permission of The McClarie Group. Charmaine McClarie has helped thousands of executives lead highly successful organizational and career transformations in a variety of Fortune 500 companies, including, Starbucks, Humana, Adobe, The GAP Inc., Hewlett-Packard, Johnson & Johnson and Tate & Lyle. Contact her at charmaine@mcclariegroup.com.

"I Can't Find Any People!"

Before I start, I confess that that what I am about to espouse is more anecdotal then evidential. So, here goes, and I'll start with a question: Where are all the people?

For the last several months, some of our clients have been trying to find trained design and business professionals for some very exciting leadership roles. Truth be told: they can't find people, and it is not for lack of effort. National searches have ended with candidates that are a poor cultural fit (but technically qualified). Several different agencies have been engaged to find a candidate that could easily have been found seven years ago. What happened?

CNN Money recently reported that the labor force has shrunk to a level not seen in 35 years. In August, the labor participation rate -- the percentage of people over 16 who either have a job or are actively searching for one -- fell to 63.2%. That means there are now 90.5 million Americans who don't work and are not counted as part of the labor force. The last time it was that low was in August of 1978.

For the population as a whole, numerous reasons have been cited for this occurrence--retirement of the baby boomers, fewer students who also work or a lack of "good jobs". According to AIA Chief Economist, Kermit Baker, the AIA doesn't track labor participation rates for architects. The government tracks architecture firms in its payroll survey, but doesn’t track the profession in its household survey. As a result, in design and construction, we can only collect anecdotal evidence.

Retirement, consolidation of practices, unwillingness of younger generations to assume leadership roles, the lack of transparency to achieve promotion, frustrations, high stress, low pay, long hours and not enough flexible time remain among the most common reasons for leaving the profession.

A study conducted by the Royal British Institute of Architects cited some of these reasons in their 2003 study of 174 women who left the profession. While they could equally apply to men and women, one thing is sure: We need to offer compelling reasons to lure people back to the profession, or our ability to deliver creative design into the future will be limited.

Karen Compton, CPSM. Karen Compton is principal of A3K Consulting (Glendale, CA), a business development and strategic planning firm specializing in the architecture, engineering and construction industries. Ms. Compton is also the founder of Industry Speaks™, a web-based business-to-business portal that connects AEC firms with experienced consultants, provides peer reviews of consultants, reports on key industry trends, and publishes expert reviews of professional courses and books. Contact her at kcompton@a3kconsulting.com.

I'm Outta Here!

We've all felt under appreciated, overworked or unrecognized for our work. But, what is the impact on a small practice? One of my colleagues learned the hard way. For more than 10 years, a dedicated employee had worked within the practice for a salary and a medical allowance. The firm owner's perspective was, "I'm giving her a job."

Much has changed since 2009. The economy is slowly recovering, and employees have options. But the real issue is this: as practices, we don't sell or make widgets. We sell ideas. As a result, it is necessary to invest in the intellectual capital that truly is the product of the design and construction industry.

When this dedicated employee gave notice, the response was, "I wish you had come to me before [now]!" But, the truth was, she had. She had made it clear that while she enjoyed her job and the projects she worked on, the promise of benefits or leadership roles no longer "paid the bills." The road to quitting is often marked with signs owners elect to ignore. Grumbling about working overtime, not being recognized or even thanked can lead to a final exit.

No one should put up with a bad employee. Conversely, no one should take advantage of a good one. Aside from the obvious problems of trying to find another dedicated, trusted, hardworking architect, there are more subtle impacts on the firm's morale and its standing in the industry, a loss of efficiency and an exodus that may follow as others sense greener pastures elsewhere.

As a small firm owner, listen to your staff. Understand their pain points and frustrations. You may not be able to afford full benefits, but figure out what tradeoffs you are willing and able to make. Days off? Flex time? How about even a simple thank you? What was sad in all of this, is when I stopped to figure out what this employee wanted. It was a small price to pay for ten years of trusted service, and the potential for many more years of contributions to the firm.

Karen Compton, CPSM. Karen Compton is principal of A3K Consulting (Glendale, CA), a business development and strategic planning firm specializing in the architecture, engineering and construction industries. Ms. Compton is also the founder of Industry Speaks™, a web-based business-to-business portal that connects AEC firms with experienced consultants, provides peer reviews of consultants, reports on key industry trends, and publishes expert reviews of professional courses and books. Contact her at kcompton@a3kconsulting.com.

Did You See It?

I love the Food Network®. Last night Priscilla Yeh of Great Neck, New York, battled to become the Executive Chef at Travertina Restaurant in Chicago. This would be a sleeper of a story except...Priscilla Yeh is a former architect. After the Great Recession of 2008, Priscilla left the industry and entered culinary school.

This begs the question: Just what is the labor participation rate of architects in the United States? CNN Money recently reported that the labor force has shrunk to a level not seen in 35 years. In August, the labor participation rate - the percentage of people over 16 who either have a job or are actively searching for one - fell to 63.2%. That means there are now 90.5 million Americans who don't work and are not counted as part of the labor force. The last time it was that low was in August 1978.

Priscilla Yeh’s story is a sad example of how this is playing out across the country. Unfortunately, there are no statistics available that track the labor participation rate of architects. We can only explore this issue anecdotally. But, here is the real loss: not only did we lose a talented designer to another profession, we lost important intellectual capital. After almost ten years in her career, having worked with "New York City School Construction Authority" and "... on several projects including housing, nursing homes, recreation centers and office spaces,” she walked away from it all.

Where is our lesson? The Great Recession affected us all very deeply and in some permanent, indelible ways. However, we must find ways to retain creative professionals who have invested time and effort in the industry - our intellectual capital. As for Priscilla...she won! She is now the Executive Chef for Travertina. Our loss, but the culinary world's gain!

Karen Compton, CPSM. Karen Compton is principal of A3K Consulting (Glendale, CA), a business development and strategic planning firm specializing in the architecture, engineering and construction industries. Ms. Compton is also the founder of Industry Speaks™, a web-based business-to-business portal that connects AEC firms with experienced consultants, provides peer reviews of consultants, reports on key industry trends, and publishes expert reviews of professional courses and books. Contact her at kcompton@a3kconsulting.com.

Where Does Your Time Go?

Small firms are often overwhelmed by the task of focusing time and attention on everything from building their business to servicing their clients and even developing new markets. How can small firms gain perspective and use time effectively?

The most common metric used to determine the distribution of time is utilization, defined as the amount of billable time spent on project work. Small firm architects, engineers and practitioners are in business to deliver the design and construction goals and objectives of our clients. Our utilization, or billable time, may be as high as 63% (or more) depending upon the level of staff person, size of the project, demands of the client organization, and complexity of the project. A senior project manager may be 100% billable to a project, while a principal may only be 32%. What’s important is that your organization has utilization goals for each staff member, because utilization effects profitability. Unbillable time is charged to overhead which comes out of the firm’s profits.

For that small firm (less than 5 people) with 63% billable time, the 37% of staff time remaining needs to provide the firm with a high return on investment. As much as 20% should be invested in the development of new business, with the remaining 17% invested in management and administration.

What constitutes “development of new business”?

• Meeting with potential clients, sub-consultants and teaming partners
• Understanding and defining where project opportunities are
• Identifying new targets (projects)
• Networking
• Breakfast and coffee meetings
• Client-focused events
• Preparing proposals
• Creating new opportunities

How should time be invested in management and administration? The obvious things are: AP/AR, collecting on outstanding accounts, staff development and coordination meetings. Often overlooked is advance planning to accommodate peak demand without permanently increasing overhead. Invest in finding other sources (independent contractors, consultants or part-time resources) that can support staffing demands so that they are already identified when such a situation occurs. An investment in finding people is just as valuable as an investment in finding work, but it’s hard to do when billable time takes priority. Take the time to look for intellectual capital before you need it.

Analyze how you spend billable and unbillable time, establish goals for utilization and track your performance. These are the first steps to becoming the profitable firm you’d like to be . . . no matter the size.

Boy, Did I Get in Trouble!

Last month, I was interviewed by an alumnae publication about the challenges that women face in the engineering industry. In my remarks, I commented that women continue to struggle with demands of family, aging parents and the challenge to succeed in a profession that is still male dominated. Well, let the hate male roll! One of my followers commented that this line of thinking was "old", "outdated" and just plain wrong.

Here is what is wrong: I've spent 15 years in a profession that I truly love: design and construction. According to the British Architect's Journal that published the first Women in Architecture survey, though 40% of all architecture students are women, less than 16% of all registered architects in the United States are women. What's more, less than 1% are African American. Why? In several surveys over the last ten years, the cited issues remain unchanged: career paths seemed to slow after motherhood, lack of family flexible work environments, no work-life balance, poor career progression, etc.

Here is what is outdated: In an industry of creative and collaborative thinkers who can develop IPD and are driven by and through technologies such as BIM, REVIT and cell phones, we can't reverse the exodus of women and young professionals leaving design/construction firms because of the issues cited above.

While I "got in trouble" with a few followers, change can't come without discussion and disagreement. Where do you stand? Do you see the number of women in the profession declining? More importantly, what do you feel we can do as an industry to change the paradigm?

Karen Compton, CPSM. Karen Compton is principal of A3K Consulting (Glendale, CA), a business development and strategic planning firm specializing in the architecture, engineering and construction industries. Ms. Compton is also the founder of Industry Speaks™, a web-based business-to-business portal that connects AEC firms with experienced consultants, provides peer reviews of consultants, reports on key industry trends, and publishes expert reviews of professional courses and books. Contact her at kcompton@a3kconsulting.com.

Women Leading the Way - SMPS Panel January 16

The Society for Marketing Professional Services, Los Angeles Chapter event this Wednesday will be moderated by Industry Speaks™ founder Karen Compton, CPSM.
Panelists are Lydia Kennard, President, KDG Construction Consulting and Former Executive Director, Los Angeles World Airports; Martha Welborne, Executive Director, Countywide Planning, Metro; Miriam Mulder, City Architect, City of Santa Monica; and Janet-Marie Smith, Senior VP of Planning & Development.

Schedule:
7:30am – 8:00am Networking and Registration
8:00am – 8:15am Breakfast
8:15am – 9:30am Program

Mistake: 'All in the Family'

Over my career, I’ve had the opportunity to work with firms of all sizes, from start-up architecture practices to 100-year-old construction management firms. In each case, the client has asked me to help them take their business to the next level, on terms they define. Often, it is through an organic growth strategy. No growth can take place, though, until a company identifies business practices to take advantage of or to improve.

In a service industry, the largest challenges are in hiring and managing people to deliver what we promise to our clients. It should be no surprise that here we will find a common mistake: hiring a friend or family member.

To be clear, I am not against friends or family. What I am against is hiring people that are not qualified to fulfill roles which they are required to perform. I’ve had clients who hired sisters, brothers, children, in-laws, wives and husbands, who over time become ex-wives, ex-husbands and siblings that “tattle” to mom about what is going on in the business. To be fair, close friends and family reflect something that the person off the street doesn’t: trust. For the person off the street, trust is an earned value. But too often, trust outweighs the need for qualifications to fulfill roles from President to COO to Director of Business Development.

At some point, trust and qualifications collide. This is where acrimony and terminations crop up. What’s the lesson to be learned? “Don’t hire family”? No: that would be too shortsighted. Rather, my advice is to hire within the skills you require for long and sustained growth.

Just because your sister is unemployed and has a degree in Sociology doesn’t mean she should become your CFO. Because as your firm develops a client base, repeats work and delivers on its technical excellence in engineering, she will be unable to keep pace and understand the requirements of AP/AR, accounting and cash management. The same can be true of any individual poorly aligned with the roles they are required to play.

Don't make this mistake. Friends and family in whom you place great trust may play long and sustainable roles in your organization in less volatile positions such as administration. In the end, it will save you and your firm losses in productivity, efficiency and morale that cannot be sustained in a challenging and global economy.

Karen Compton, CPSM. Karen Compton is principal of A3K Consulting (Glendale, CA), a business development and strategic planning firm specializing in the architecture, engineering and construction industries. Ms. Compton is also the founder of Industry Speaks™, a web-based business-to-business portal that connects AEC firms with experienced consultants, provides peer reviews of consultants, reports on key industry trends, and publishes expert reviews of professional courses and books. Contact her at kcompton@a3kconsulting.com.

Recordkeeping Roulette: Credentials Management - Licenses, Professional Affiliations, Continuing Education

What record keeping method are you using to stay on track with your license renewals, your continuing education, and maybe even your professional memberships in AIA, NSPE, ASLA, IIDA? Are you shuffling spreadsheets and file folders? Do you as a Principal of your firm assume responsibility for credentials management, or do you delegate the task? Do you rely on membership benefits within a professional affiliation to record your continuing education on a transcript?

Typical methods of record keeping have unlimited potential for failure: "My basement flooded and all my records were destroyed”; "I lost my job and I was forced to leave all my records behind and I have no access to the files”; or "I didn't receive my renewal postcard because the state licensing board data base failed".

"To be blunt, if you can't provide the proof of attendance, then (from my auditing standpoint) you were not in attendance," says Tony Whitt, Continuing Education Coordinator at the Texas Board of Architectural Examiners, quoted in his column, "CE Documentation" in the June 2012 biannual Licensing News.

Licensed design/construction professionals are able to increase their firm’s productivity and efficiency by adopting systems that allow them to accurately track reporting requirements such as credentialing. In adopting this approach, firms can increase their value by focusing on projects and clients. That translates into a healthier bottom line!

Lexi Selvig, CDT, President, LS Credentialing Services LLC, is a registered consultant on Industry Speaks™. She can be reached at lexi@aecredentialing.com.

The Road Well-Traveled (Is One With a Map)

My husband likes to take car trips. I hate them. I get sick. During our 20 years of marriage, I’ve had to learn how to take a road trip and not get sick. I’ve figured out that I need to know how long we’ll drive, when we will stop, when we’ll eat, and when I’ll get to sleep. If I don’t get to stretch, eat, or sleep, my husband can look forward to me being sick the entire time.

My reaction to a car trip without a schedule is a great analogy of what it’s like to run a practice without a Strategic Plan. The employees are the ones who end up sick (and tired), the partners are the ones who want to stop, and the owner is the one who gets no sleep. Why should your firm have a Strategic Plan? You wouldn’t get in a car and take a road trip without a map, so why run a practice without a plan?

A Strategic Plan is a valuable tool that maps your practice’s journey from present to future. It defines new opportunities and new markets, and it honestly addresses challenges and opportunities in management, operations, service delivery, sales and leadership. Without a Strategic Plan, you end up wherever the wind may take you.

Here are three important rules for developing an effective Strategic Plan:

• Be honest. Strategic Planning, done well, examines all of your practice’s functional areas and develops plans, tactics, and strategies to achieve long and short-term business goals. It will fail if the participants are less than honest with themselves and others about the firm’s opportunities and challenges. Ask for honest comments and observations, and receive them without judgment or criticism. While all points of view can’t be reflected in a focused strategic plan, all must be heard in order to have buy-in to the final plan.

• Focus on the journey, not the destination. The value in Strategic Planning is not in the document that you produce. It is in the dialogue, discourse, and consensus that builds toward the direction you are headed. Don’t spend nine months trying to write the perfect document. Instead, spend two days mapping out the best journey based upon a clear destination (i.e., buy, sell, develop leadership, add markets, add services, eliminate services, etc.).

• Define accountability. The best plan means nothing unless there is accountability. Don’t leave the table without defining accountability and actions for various components of the plan. This is often difficult, but without it, passengers along for the trip are likely to get sick—sick of promises not kept and goals not achieved.

Today’s competitive firms are strategic, thoughtful, and deliberate. Gone are the days where “winging it” could get you on the right road to your destination. Today, winging it is likely to send you coasting down an uneven side road, while others who have planned their trip enjoy a road well-traveled.

Karen Compton, CPSM. Published in the November 2012 issue of Professional Services Management Journal. Karen Compton is principal of A3K Consulting (Glendale, CA), a business development and strategic planning firm specializing in the architecture, engineering and construction industries. Ms. Compton is also the founder of Industry Speaks™, a web-based business-to-business portal that connects AEC firms with experienced consultants, provides peer reviews of consultants, reports on key industry trends, and publishes expert reviews of professional courses and books. Contact her at kcompton@a3kconsulting.com.

What's Your Value?

Every time I ask that question, someone wants to quantify their business ‘worth.” But, your firm’s business worth is an extension of its value.  To determine value from the client’s point of view, ask yourself, “What is unique about my firm?” HINT: It’s not the people! In a service business such as architecture, engineering or construction, we all have people.  Everyone says that.  In which case, it is not true.

For A3K Consulting, the unique attribute is our process.  The process that we take our clients through to discover and define who and what they are and the future of their business and its leadership is unique.  It has been defined by some as, “tough”, others have said it that at its conclusion, it offered “clarify and direction.”

That’s our story.  What’s yours?  Challenge your firm to define what is unique about them. In doing so, you’ll define your value and increase your worth.

Karen Compton

Industry Speaks