Industry Speaks: AIA PMKC

Showing posts with label AIA PMKC. Show all posts

Thursday, May 30, 2013

Never Stop Learning!

There are many challenges associated with developing and managing a small firm: staffing, getting work, doing good work, getting paid. A major challenge, but a necessary goal while managing all the rest, is to keep learning.

One of my clients recently admitted he hadn’t remained current on his continuing education. Moreover, the education he had received was on design, code compliance and accessibility. As a firm owner, principal and partner, your continuing education must not only cover topics that drive your professional career (i.e., design), it must also address the ever evolving and challenging aspects of practice management.

Practice management, today, is far more complex. As a service-based industry, we sell intellectual capital: ideas and solutions for real world problems. That said, the “personnel” issues of the 1980s have become the human resources, benefits, compensation, state regulation, federal regulation, performance, and other requirements of the 2010s. The former “computer” department has morphed into complex data and information management, as well as hardware, software, intellectual property rights and phone, electronic and internet communications. These are just two examples! The increasing complexity of management systems and the speed at which they operate affect all aspects of practice management, including business development, finance, and operations.

Let’s face it, very few of us enjoy practice management. But it is the business of architecture and engineering that allows us to continue to practice every day. Well-managed firms achieve their business objectives, attract and retain employees and provide opportunities for the continued exchange of ideas. The AIA Practice Management Knowledge Community is one of many sources that provide free or low cost continuing education on these topics. If you have resources to recommend, post your comments and thoughts!

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.

Tuesday, May 21, 2013

Alternative Delivery: The Small Firm Challenge

Man! What a tough crowd. I had 50 minutes to impart "wisdom of the ages" (that's a lot of years) on the subject of business development best practices. While the feedback was largely positive, one person wrote in saying I didn’t spend enough time addressing business development and alternative project delivery. Ok!

Alternative Delivery, let me count the ways:

Group One

Design-Build
Design-Build-Operate
Design-Build-Operate and Maintain
Lease-Leaseback

Group Two

LEAN Construction
Integrated Project Delivery (IPD)

Each one of these methods requires a slightly different business development strategy. For simplicity, we're going to put them into two groups, as shown above. Now, let's talk strategy.

In traditional design-bid-build pursuits, architects pursue client and try to develop design teams to fulfill client facility needs. The game changes, to say the least, when the delivery method changes. Clients who seek to deliver projects through any of the methods in Group One shift the architects’ pursuit from the client to the contractor who is likely to lead the pursuit. As a result, architects need to develop strategic relationships with general contractors adept at delivering various building types from student services buildings to parking structures. Further, it becomes incumbent upon the architect to demonstrate (to the contractor) some previous design-build experience or some previous experience with the contractor in order to be able to have a seat at the table. No small order.

This is made even more complicated by end-user clients who seek to deliver buildings via LEAN or IPD. LEAN and IPD delivery require not only early involvement of the entire team, but collective versus individual responsibility for the design and construction of the project. Moreover, they use technology and tools such as BIM or Rivet to model the input and generate everything from schedules, to materials schedules, to costs (over-simplified, but you get the point). Talk about a BD game changer!

Under the latter scenario, architects must be able to accept the collective risk (and reward) and demonstrate their ability to utilize BIM or Rivet. For a mid-sized to large firm this is easy. For a small practice, it's an unacceptable risk.

So what do you do? Andy Warhol said, “They always say time changes things, but you actually have to change them yourself.”

First, define the type(s) of clients that you want to work with and understand their preference in delivery methods.
Second, adapt your business development strategy to who will be leading the effort. You may find that you now have to market to GCs as much as you do to your end user client.
Third, know your value proposition. If you've never done a design-build project and don’t have a "story to tell" with a contractor, adjust your expectations and your messaging to focus on your strengths.

Finally, if IPD or LEAN are in your future, learn the technologies and manage your collective risk accordingly. This is no longer about just your firm, it is about the delivery team.

Got more questions? Send them along to me at kcompton@a3kconsulting.com. And for more information, see the AIA PMKC webinar Wisdom of the Ages: Best Practices in Business Development Part 2. This popular series and other resources are available on A3K Consulting's "Inform" webpage.

Thursday, May 16, 2013

Up in Arms Over Design Build

I love responding to questions. It is a great way to check the pulse of the industry, and diagnose where "pain points" are developing. No month offered more evidence of this than April (following the webinar!) Design-build questions seemed to be left, right and center. Here are some of the toughest questions, and some of my simplest answers.

Your assumed definition of design-build is too narrow and short changes the potential opportunities that it can bring to design firms. Have you never seen design-build done in a way that actually serves the design community's interest?

I didn't have enough time to cover all design-build methods (in our webinar) so I started with the most basic definition, which is narrow. Perhaps DB-BD could be a topic for a future course, but let me answer your question. I have seen design-build serve the community interest, when the client and the contractor are on the same page. In design-build, the driver isn't (typically) the architect, it is largely the GC. This is where I believe IPD or LEAN make it more interesting, because the interests of the project not the individuals are put forth from the beginning--sacrificing nothing.

Notwithstanding design-build, what can you tell us about the integrated project delivery as a market?

I am a curmudgeon! Integrated project delivery isn't a market, it's a vehicle by which projects are delivered. There are client types that prefer IPD--healthcare, higher education for example. But, it isn't a market sector per say. That said, if that is your interest, you are likely in pursuit of a more sophisticated, collaborative client with resources and the desire to utilize technology as a means of delivering their facility. These transcend a market type.

Got more questions? Send them along to me at kcompton@a3kconsulting.com. And for more information, see the AIA PMKC webinar Wisdom of the Ages: Best Practices in Business Development Part 2. This popular series and other resources are available on A3K Consulting's "Inform" webpage.

Thursday, May 9, 2013

What's Your Problem? - Part 3

We all have problems. By sharing them, we can all learn. Here are more challenges and questions from the AEC community!

How does a firm address the one "bad project" with clients?

Let's face it. If your doors have been open any period of time, you’ve had one bad client. What is most important is to not ignore it. Address it with your future clients directly. I work with a design firm whose client sought legal recourse for owner-directed changes that they could no longer afford to pay. A mediator agreed that money was owed, but they were unable to reach a settlement. Rather than go to court, and have it tried in the court of public opinion, the firm decided it was no longer in their interest (time and money) to pursue a course of action. I think we can agree this ended badly.

What made the situation palatable was the fact that they developed a proactive communication plan to reach their client base and discuss the situation. Denial is what hurts. Admit what the issues were, and tell clients how you are prepared to resolve them now.

Is it better to define markets by project type or client type?

This is a great question! The answer is by client type and the reason is this: Clients have behaviors, project types don’t.

Look at it this way: if I asked Nike® what their target demographic is for $125 tennis shoes, they would tell me something like "youth 18-32 years of age, whose parents have a disposable income of $X and play or watch sports," let’s say. From that information, they define the marketing approach. They don’t look at who is buying low top tennis shoes and then go after them. You must first know your client, their business and their values. Their taste in tennis shoes (and project types) is likely to change.

How do you measure - or DO YOU or SHOULD YOU measure - business development metrics against project metrics in terms of whether or not the project was a success based on mismanagement or reluctance to bill for add services or over design and use all your fee thus the project looked really bad financially....I guess how to define success of a project against the metrics associated with getting the project and WHAT can you learn from that for the future?

If you were here, I’d squeeze you! You MUST always assess project performance for two reasons:

To determine if this is a project type that you can do (given the team and client relationship).
To determine if it works within the process in which you design.

Failure to examine either factor will result in good business development dollars wasted in pursuit of projects that will eventually lose money for the firm or tarnish its reputation. This is a perfect example of where to use the BD ROI equation. If your fees are low and your BD dollars are high, you need to re-evaluate.

If your firm has a tendency to over design and can’t bill for it, then in such markets as K-12 what is your end game—philanthropy or business? This is why it is important to include your BD professional in discussions about project types that are both strengths and weaknesses of the firm.

Got more questions? Send them along to me at kcompton@a3kconsulting.com. And for more information, see the AIA PMKC webinar Wisdom of the Ages: Best Practices in Business Development Part 2. This popular series and other resources are available on A3K Consulting's "Inform" webpage.

Tuesday, May 7, 2013

Posted: Question and Answer Log, AIA PMKC Effective Business Development Webinar

AIA Practice Management Knowledge Communities has posted the question and answer log which followed Part 2 of the Effective Business Development webinar series.

Scroll down within this link to view the pdf of followup questions and answers on business development ranging from commoditization to integrated project delivery.

Thursday, May 2, 2013

What's Your Problem? - Part 2

We all have problems. By sharing them, we can all learn. Here are more challenges and questions from the AEC community:

Any advice for Business Development in a firm as it looks towards a transition in ownership?

Do a business plan. Transition is a tough time and it is not quick. We have two clients in various stages of transition (three years out and five years out). We completed business plans for each in order to help them define the “new firm,” its brand and management. We also identified the leadership development that will need to take place during that time horizon.

Transition is often a time to change or expand markets. For your firm, then, there must be a business development or sales plan that attempts to bridge the experience and history of the "old" firm with its new market focus and client commitments going forward. New and emerging leaders must be part of the strategy and the client meetings.

Finally, it is important to develop a marketing and public relations plan that articulates the "new brand" and firm direction so that clients aren't afraid of the transition and what it means to them.

The completed plans will take time to implement; you will also need time buy out shares and develop and transition leaders. Because of the time and effort involved in transition, don’t be averse to having a consultant help you.

How can firms leverage other staff to develop business for their firm? How can a firm mentor employees to also be business developers as they work on projects and in their communities?

Business development is not an action. It is a culture. The organization must build the framework of a BD culture which includes making BD a part of everyone’s role and responsibility—and make sure to include the administrative assistants. I think the easiest thing to do is to develop small and achievable goals for low- and emerging-level staff such as networking with peer-to-peer groups to find out what others are doing. But, there has to be a top down program in order for it to work, otherwise everyone is doing their own, uncoordinated thing.

Does branding have an increasingly important role?

IF what you mean by branding is the PROMISE that comes along with the work of your firm—excellence, service delivery, collaboration, cost effective—YES. If you mean logos and slogan—NO. Unfortunately, about five years ago the word “branding” started mean everything from the logo to the graphics on your web page. A real BRAND is the promise that comes along with the name. If the firm’s brand (its PROMISE) is weak, then your sales strategy will struggle unless or until it is resolved.

Got more questions? Send them along to me at kcompton@a3kconsulting.com. And for more information, see the AIA PMKC webinar Wisdom of the Ages: Best Practices in Business Development Part 2. This popular series and other resources are available on A3K Consulting's "Inform" webpage.

Tuesday, April 30, 2013

What's Your Problem?

On this blog, I've been sharing lessons learned from clients’ mistakes, in the hope that they won’t become your mistakes. We can learn a lot from others’ mistakes, and we can learn just as much from others' questions. So, I've chosen to share my answers to some of the more frequent questions asked of me in the last few months. Enjoy!

Do you have suggestions for business development plans for small (1-5 person) firms?

Keep it simple. Know your value, know your competition and know your client. Public clients manage their risk by limiting their “small firms” selections. Sad, but true. You must make a compelling case.

Next, establish a budget. It’s easy to “throw good money after bad” in the pursuit of work. But, just like with your household budget, you need to set boundaries.

Finally, develop business where you have relationships. It is hard to go head to head against a larger firm(s) when you have no relationship with the client. Put your collective heads together and make a short-list of end-users, peers and partners with whom you could develop work.

For a smaller firm (15+/-), given a choice between pursuing governmental or institutional clients who open RPFs to everyone with no filter verses pursuing private clients who invite respondents, which would you choose to pursue?

Okay. You’re trying to bait me! The answer depends on your experience and portfolio. What I think you want to ask me is: “Who has less competition?” The private sector does, generally. But, an educated institutional or public client could use a QBS to reduce competition just as easily. It's important to look at your experience and determine if you have a value proposition to compete no matter what market you choose.

For more information, see the AIA PMKC webinar Wisdom of the Ages: Best Practices in Business Development Part 2. This popular series and other resources are available on A3K Consulting's "Inform" webpage.