I'm Gonna Sue You!

A close friend of mine told me the other day, "You have a gift." She went on to say, "You see the worst of people's situations and you hold their hand, give them hope and help them through." This is true, but I’ve experienced some sleepless nights wondering how to help folks get out of some pretty ugly messes.

Case in point: Two partners established a firm after working together for ten years in a major practice. Unfortunately, they didn’t establish a solid understanding that went beyond the relationship they had at the big firm. In the beginning, it didn't matter. The work was good, the money flowed, the projects came. Then came the crash of 2009. The debt rose, the staff left and there was more than enough blame to go around. The partnership became acrimonious.

This is where I came in. I asked one simple question. “Where is the shareholder agreement? Maybe there are clauses that one of you could exercise to buy your way (sell your way) out.” Well...you probably know what the initial answer was. They had no shareholder agreement, no clearly defined roles and responsibilities and a team that didn’t know who or what to follow.

I am not an attorney, but I can testify to the significance of a shareholder agreement. Aside from obvious recitals and boilerplate, there are clauses than can and do address everything from roles and responsibilities, to the dissolution of shares as a result of divorce or death, to the criteria for new shareholders. It is the adjudicating document in the dissolution of a firm, and it should be drafted under the best circumstances, when clearer heads and emotions prevail. Without it, firms have imploded from unrealistic expectations and poor financial decisions.

Before implosion, it is never too late. If your firm doesn't have a shareholder agreement, seek legal counsel and get your house in order.

Believe it or not, as contentious as this situation has been, we are just weeks away from clearly defined roles and responsibilities, employment contracts and yes, a shareholder agreement. As for me....I can finally get some sleep. Until the next time that phone rings.

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.

He Threw What?

No one should tolerate bad behavior in their firm. And no owner should feel so helpless as to put up with it.

I received a call from a client, telling me an employee had thrown a desk lamp on the floor in the design studio! “Why?” I asked, although I already knew the answer would get us nowhere. I was told they were mad at someone else because they didn’t catch all of the redlines on the drawings before the final drawing set was sent to the client.

The cavalier tone in which this information was conveyed suggested that this was but one of many times the employee had exhibited poor and yes, abusive, behavior. I asked the next question to get us on track: “And you put up with it ... Why?”

“He’s a really good designer, and I don’t want to go back into the studio and manage work again.” My client, a respected leader in the architecture industry, was being held hostage in their own firm by a temper tantrum bully. Taking a deep breath, I responded, “The last time I looked, it was your name on the door. You are responsible for drawings that you produce and the service that you deliver, but, you are also responsible for the development of staff, the cultivation of a culture and the provision of a work environment that inspires design to flourish! This isn’t the play yard!”

“What should we do?” they responded. In years past, this behavior had never been discussed or documented. The fear was too great that if they began to document performance, they’d actually have to act on it, which might even include termination and the president/CEO going back to working on the floor. In fact, all that came to pass after months of discussions with the employee, and that day that went down in infamy! As furniture was broken and expletives were uttered in the studio, my client never wavered. A better designer could be found, and the best day with this designer was still not equal to the worst day they had in running the studio themselves.

If your name is on the door or you are responsible, financial or otherwise, for the performance of your firm’s work, you also have a responsibility to yourself and others to define what is expected and what is unacceptable. You are not a hostage in your own business. You must define the culture, the behavior and the expectations of your staff and your firm.

After working through this experience, my client found a better designer who motivated and mentored staff, inspired great design and cost $15K/year less. Guess what? You can, too!

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.

It’s Not Enough to Just Show Up

Many of us develop a schedule defining what conferences our firm will attend. The question is, “Do you have a conference strategy?” This is a plan, with tactics that you chose to employ, to advance your business development efforts. Plan ahead, to avoid these mistakes:

1. Choosing conferences that focus on peer group attendance
   Many of attend conferences for continuing education, networking, advertising and/or political pressure. Conferences attended for the purposes of advancing your business development efforts should be focused on groups of clients—not peers or competitors. “Fish where the fish are.” It does you no good to look for clients in a room full of peers.
2. Showing up without a game plan
   Before you ever set your foot on the convention floor, determine your purpose. Is it to make introductions, to follow up on previous conversations, or to guard your clients? Each of these are good reasons for attending a conference, but you need to understand your goal going in. If it is to meet a client, identify who they are, if possible send an email or phone call beforehand to ask if they are attending and set up a time to meet. If it is a follow up, clarify what you’d like to follow up on (i.e., the introduction of a Thought Leader or the timing of a new opportunity). If you are attending to guard your clients, arrange coffee, lunch or other activities with them to keep them with you and away from your competition. Don’t just show up looking for people and depending on spontaneous interactions.
3. Getting a booth
   Booths can be expensive. In addition to the cost of the booth, there is the cost to produce the booth and the marketing materials within the space, including “giveaways and brochures.” Staffing is another expense: you can’t have an empty booth. Determine if a booth is necessary to achieve your objective. A booth’s purpose is to increase visibility, but if your main objective is to meet a key client or clients, a booth is a poor strategic investment.
4. Failing to understand the cost vs. the ROI Conferences can be expensive, especially if they are outside your regional area. You must account for travel, subsistence and other expenses/engagements while there. Don’t ignore the conference cost. Calculate it, and then analyze the cost of that investment relative to the achievement of your objective(s).

A few weeks ago, a new client of mine said he had been attending conferences for years with nothing to show for it. When I asked for the strategy, he replied, “I’ve just showed up and tried to run into people.” Conference attendance is much like the Belmont Stakes or the Preakness. It’s not enough to just show up.

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.

Is Growth for Everyone?

Editor's Note: For more perspective on this question, check out the AIA Practice Management home page and scroll down to view the October 2012 webinar Best Practices in Business Development, presented by Karen Compton.

"Can a small firm with no plans to grow expect to survive?"

This is a wonderful question. Firm success begins with an understanding of the end game. If you are clear that your culture is to remain a small family-like firm, then embrace it and success will still be yours!

Growth is not a strategy for everyone. The monikers of your success will be in the ability to identify, cultivate, and deliver to clients who want, appreciate and respect YOUR value. So, what does this mean for staff?

1. They must be clear on the clients you service and the niche you provide. For the market sector you’re in, staff must be clear on what a client wants, needs and expects from your firm's culture.

2. They must be clear that “the buck stops with them” and more importantly, they must be empowered to take responsibility.

3. You must mentor them, not just on design, but on business. In a small firm, mentorship is key. Adopt a Shadows Program, where others can shadow not only your design decisions, but your business decisions. It is important in a small firm that everyone understands where and how you make and lose money.

4. Finally, embrace failure. Yep! I said it. Staff will make mistakes, and in a large firm you can hide. But, not in a small firm. So, create a safety net for failure—not by chastising, but by seeking what could/should have been done differently. Success is yours regardless of size.

Karen Compton, CPSM. Published in the September 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.

700+ Registered to Date for FREE Business Development Webinar October 18

From the AIA Knowledge Net resource page: "The fiscal year is almost over and as firms begin to set their sights on the New Year, we must ask ourselves, “What is our business development (sales) plan?”  With time being short and money being shorter, the new fiscal year brings with it both challenges and opportunities. The economy continues to pose challenges for many firms, but new emerging markets, new funding mechanisms and changes in policies also represent new opportunities!

Join 734 (as of Monday) registrants to get key insights into business development planning. Get more information and register here.

AIA Practice Management Free Webinar October 18: Business Development Planning

Earn 1.25 CEH through the next FREE webinar offered by AIA Practice Management Knowledge Community October 18, focusing on sales. Industry Speaks™ founder and president Karen Compton, A3K Consulting, is the presenter. Learning objectives:

1. understand the value of business development planning
2. how your business development plan supports your firm's business objectives
3. articulate the ROI in developing a sales culture
4. learn what other participants are doing (or not doing) and the BD challenges they face.

Get more information and register here.

Strategically Position Your Firm to Get More Work

Most firms are actually very good at answering all of the questions clients pose in their RFPs.  Unfortunately, that isn’t enough to win proposals on a consistent basis.  You must go two steps further In order to do that.  First, you need to clearly identify the critical, make-it-hard-to-sleep-at-night challenges facing the client for the project at hand.  Then, you must demonstrate how you are going to address those scary challenges differently and better than anyone else.  That hugely effective strategy is built upon strategic positioning.

As you address each of the RFP questions, you need to connect your answer to the bigger picture, which is pounding home how you are going to solve the client’s problems.  (Are you starting to notice a theme here?)  You also need to keep in mind how each of your competitors is likely to answer that same question.  What strengths of theirs will they tout?  What weaknesses of yours will they try to exploit?  Most importantly, how can you answer this question in a way that demonstrates how you will address the critical challenges better than anyone else?  Keep in mind it isn’t even enough to simply address those challenges.  You need to address them in a way that is different and better than everyone else.

You can’t strategically position your firm, of course, if you don’t know all you possibly can about each of your competitors.  (Too many firms don’t even know who their competitors are as they pursue proposal opportunities.)  It is also critical to start with a clear-eyed assessment of the strengths and weaknesses of your own firm—through your client’s eyes, not your own.  Then do the same kind of brutally honest assessment for each of your competitors.  Know their strengths and weaknesses almost as well as you know your own.  These assessments take real courage and honesty.  Most firms with whom I have worked have an impression of their own firm and the competition that is not at all consistent with what their clients see.

That is the start of strategic positioning.  In future blogs, I will discuss what to do with this knowledge and how to strategically position your firm in a variety of competitive scenarios.  Here is some homework to do in the meantime:  Consider Apple and Southwest Airlines.  How do these strategic geniuses position themselves against their competition?

Ken Tichacek, Founding Principal 

Think Like Your Clients LLC