Tuesday, December 28, 2010

Three Proven Ideas for Reassuring the Client

Winning the job does not mean the marketing of the firm and the team is over. In fact, the moment of highest anxiety for the client is right after they have hired you for the job. "Did we make the right choice? Will they deliver what they promised, or what we thought they promised? Will we be able to get along with these people for the next two years?

As a Principal, you need to be sure your project teams keep the following in mind:

1. Clients always chose us for reasons other than what we think. Debrief to find out what promises were actually bought.

2. Communicate the results of the debriefing to the entire team at the project kick-off meeting.

3. Understanding the project goals is not enough. Be sure you understand how the client will evaluate your performance.

Right from the start, as a Principal, you need to give the client reassurances that they will be able to work compatibly with you during the process of delivery. Do this, and the project is sure to start off on the right path to success!

Looking for more tips and advice like this? PSMJ’s Principals Bootcamp is an information-packed seminar that will help you gain an understanding of the techniques and strategies of today’s most successful project leaders, and practical advice you can use to improve multiple aspects of your firm. You’ll also discuss how the best firm leaders are navigating the most challenging economic climate in decades, and come away with ideas and dynamic new approaches to the challenging times that your whole firm can put into action right away, to ensure success in 2011. Join us in January in Vancouver, Atlanta, or San Francisco to become a better Principal in 2011!

Wednesday, December 22, 2010

Firm Billings Rebound in November

The American Institute of Architects’ Architecture Billings Index showed a revenue increase at U.S. architecture firms in November, the second monthly increase in billings since early 2008. Business upturn is becoming more widespread, but firms remain cautious about potential 2011 improvement

The Architecture Billings Index (ABI) serves as the leading economic indicator of construction activity, and reflects the approximate 9-to-12 month lag time between architecture billings, and actual construction spending.

The index recorded a score of 52.0 for November, a three point gain from the previous month, and its strongest level since December 2007. Any score above 50 signifies growth at U.S. architecture firms, and with ABI scores above the 50 level in two of the past three months, the prospects of a sustainable recovery in design activity are enhanced. Regional revenue trends also are very encouraging. Firms in the Northeast, Midwest, and South all reported billings increases in November. The billings index for firms in the West increased 2.5 points in November, but since the index for this region remains below 50, it still reflected a modest decline from October levels.

Trends in billings by construction sector were more mixed. On the positive side, residential architecture firms report a solid increase in billings, with the index for that sector increasing to 54.3, its highest reading since mid-2007. On the negative side, the billings index for commercial/industrial firms dipped below 50 for the first time since last April. The billings index for institutional firms held steady, and has been slowly trending up for most of the year.

At the national level, economic growth remains slow. Recent employment reports show slight growth continuing in the fourth quarter. Payrolls increased an average of 105,000 nationally through October and November, only slightly better than the 82,000 average monthly increases through the first three quarters of the year. There have been modest gains in consumer spending, and retail sales have increased at about a 6 percent pace through the first ten months of the year. However, these gains may be somewhat better than they appear to be, since inflation is running at only about 1.5 percent compared to year-ago levels, and is less than 1 percent when more volatile food and energy components are taken out.

The December 1 report by the Federal Reserve Board paints a picture of the regional commercial real estate markets. According to this report, the New York, Atlanta, and Kansas City districts noted some weakening in nonresidential activity, while the Boston and Dallas districts indicated some modest improvement. Boston, Richmond, Kansas City, and Dallas expressed optimism about the near-term outlook. Both residential and commercial/industrial firms are more optimistic about business conditions over the coming year. Half of the firms in each group are expecting revenue increases in 2011, while only one quarter are expecting declines. In contrast, almost half of institutional firms are expecting revenue declines over the coming year, with only 38 percent expecting growth. Regionally, firms in the Northeast and Midwest are expecting more favorable conditions in the future, with half of the firms in each of these regions expecting growth. Almost half of firms in the West anticipate revenue declines in 2011.

Regionally the ABI breaks down as follows from October to November: West is up 48.7 from 44.3, Northeast down 51.1 from 54.5, Midwest is down 50.9 from 51.8, and South is up 50.5 from 48.6.

By market sector from September to November Residential is up 54.3 from 49.1, Commercial/Industrial is down 49.8 from 56.7, Institutional is down 49.3 from 50.8, and Mixed is up 45.8 from 43.2.

Tuesday, December 21, 2010

Do You Have a Council of Advisors?

In today’s world of AEC project management, a proven track record of “on time, on budget” work is no longer enough. Clients (and firm leaders) are expecting project managers to have an in-depth knowledge of their specific markets or sectors—a proven expert who knows the ins and outs of their work.

Yet, as you may already know, it is almost impossible to become an expert in everything. No matter how much knowledge or experience you have with a client base, project type, etc., there will always be something that you don’t know or are unsure of. Additionally, your expertise in one area of work may hinder your ability to see the bigger picture of what needs to be done to complete a successful project. An efficient PM should have an ability to synthesize the information given to them, but they don’t need to be specialists to handle the information or make decisions.

So how can you ensure that your clients are always getting expert knowledge from you without you always having to be an expert? Develop a council of advisors. Whether it is a formal group that you assemble for a specific project, or a network of contacts who are willing to offer advice within their area of expertise, forming a council of advisors (and sharing them with your clients) will show that you are willing to take the extra step to guarantee that all elements of the project are completed to the best of your ability.

How it works:

1. Assess the project. Before you can determine the members you need within your council, you must review the details of the project to determine the key areas where you may need additional input of expertise. This is your opportunity to identify any skill or knowledge gaps within your project team, and should be done before the work is won because the cost of the council should be considered when preparing the project budget. A council of advisors may be suitable for large projects or those with complex/unique concerns.

2. Assemble the council. Once you have determined the key areas where the project (and client) would benefit from the input of experts, search your network (and those of your team and firm members) to identify potential expert advisors. Stay away from consultants form outside of the industry and focus on practitioners. While their participation will likely cost money, for complex projects, the added credibility will be worth the investment.

3. Meet regularly. Schedule regular meeting with the council throughout the course of the project (i.e. quarterly; at key milestones). You may consider having advisors at the kick-off meeting. These meeting will create an opportunity for your firm (or client) to ask questions on key concerns before making critical decisions.

While a council of advisors may not be suitable for every project, expanding your team of experts for unique or complex projects will add credibility to your work and support trust with your clients

Learn more tips like this every month with our Project Management newsletter. Our subscribers get 8-pages of tips and techniques they can use to become a better and more successful project manager. PSMJ’s Project Management newsletter can instantly and dramatically improve your ability to manage projects for quality, speed, and profitability. Click here to order, e-mail customerservice@psmj.com, or call PSMJ customer service at (800) 537-7765.

Monday, December 13, 2010

Evaluate Your Schedule

At the end of every project, use this nine-question checklist to evaluate the performance of your schedule to identify the symptoms of schedule delays so you can react faster to prevent delays on future projects:

*Was the project completed on time?

* Was a realistic time schedule estimated for both the design and construction phases?

* Was enough flexibility built into the schedule? Did it clearly identify the relationship between activities and reasonable expectations for commitment of people to the team?

* Was one phase allowed to delay and put the schedule of later phases in jeopardy?

* Were design decisions made at proper times to avoid procurement and construction delays?

* Was the client advised of problems at appropriate times during all phases of the work?

* Was the client given clear information and recommendations regarding his or her responsibilities for making timely decisions and providing necessary data as required by the contract?

* Was the construction subcontractor’s adherence to the construction schedule closely monitored and the client advised if necessary?

* Were the critical time-sensitive actions identified in the schedules (such as shop drawings and submission of plans to review agencies)?

Don’t use this checklist as a way to identify who caused the schedule to slip— you don’t want to start finger pointing. Again, your goal is to resolve similar problems that may pop-up in the future.

Monday, December 6, 2010

Holidays are a Perfect Time for Recruiting

The end of the year is an ideal time for candidates to explore new opportunities— How many times during the holidays do we hear our friends and family members say that they “seriously need a career boost” in the next year?

This is a great time to show candidates that your firm can offer them better opportunities, more growth, better benefits, or whatever appeals to them. Now is the time to fill next year’s critical needs before they become too critical and you end up losing out on new business due to lack of staffing.

Though the holidays are a great time to meet potential recruits, convincing somebody to make a move during this season is challenging. I suggest using the following strategies to attract new employees in the new year:

1. Talk to your contacts about their careers and their jobs. Offer your business card and an invitation for them to stop by “just to chat” anytime they are in the neighborhood. You will be surprised at how many will follow through and meet with you—better the candidates come to you than you go searching for them!

2. Offer a sign-on bonus. People stand to lose a lot—their end-of-the-year bonus—should they change jobs before January 1. The amount can range from $1,000 to over $50,000. On the lower end of this scale, this worry can be alleviated with a sign-on that is comparable to their end-of-the-year bonus.

3. Set a start date after January. Let the candidate collect his or her bonus for the work they did in the last year. This also allows the candidate to not upset his or her life too much with making a move near the holidays when they probably already have scheduled time off, and are used to how holiday periods work at their current firm. Get an offer out now, and have them sign it.

4. Expand your holiday party list. Invite candidates that you have been speaking with to your company party. This is a terrific way to get them to meet your firm, get a feel for the people and your culture, and create professional friendships that will help them make the decision to join your firm.

Set the groundwork now, and you’ll be able to have key new staff members ready to help your firm grow next year.

Want to learn more HR trends and tips? Register for PSMJ’s upcoming A/E/C Industry Human Resources Summit. The HR Summit is a senior level HR event specifically designed to address the increasing needs and demands of senior leaders of HR, as well as other key executives who deal with the critical employee and firm issues on a daily basis. Through panel discussions and best practices presentations, you learn through examining successful real-life case studies, receive A/E/C survey results, while networking and asking your peers for their proven solutions to problems just like yours.

For more information, click here to download the program brochure or contact our Education Department at education@psmj.com or 617-965-0055.

Thursday, December 2, 2010

Architects see growing importance in taking the LEED

There was an interesting article in the Boston Business Journal the other day regarding the increasing pursuit of LEED accreditation among design professionals, both personally and in their projects. The article, titled “Architects see growing importance in taking the LEED” by Mike Hoban, stated that LEED-certified commercial buildings just surpassed 1 billion square feet globally.

“LEED certification verifies that a building was designed and built using strategies aimed at improving energy savings, water efficiency and indoor environmental quality. And although LEED has its critics, industry professionals generally recognize that being a LEED accredited professional will soon become an essential designation for those in architecture, engineering and construction.”

This milestone truly proves that this entire “green” movement is not just a fad. It’s big business, it’s the future, and it’s an opportunity to not only make a positive impact on the environment, but to make a name for yourself and your firm. If you can successfully incorporate sustainability with aesthetically pleasing design, building green can also mean success. This focus on efficiency in design is making for great competition among firms, and LEED projects are increasingly becoming the industry standard.

“I believe that smart business owners realize that sustainable design is good business,” said Bob Hoye, president and CEO of TRO Jung Brannen. “They’re increasingly interested in sustainability and can appreciate the energy savings that come with it.”

Employees with firms that focus on energy efficiency are quickly attaining LEED accreditation. The article mentions Dan Arons, co-founder and principal of Architerra. His firm consists of 15 architects, and all of them are LEED Accredited Professionals, or LEED APs. But Arons stresses that a sustainable design firm needs to be much more. “Do they have accreditation? Yes, but do they have experience doing life cycle analysis, integrating teams with diverse experience, and the expertise to help make a team be efficient at evaluating sustainability?”He said that in today’s environment, nearly all projects are fast-tracked, because “owners understand that time is money. A design team needs to be more efficient, because anything innovative takes more thinking.”

Ultimately that’s what it comes down to with almost every customer - money. Designing and constructing a building to be sustainable will most likely cost more than traditional methods. Through careful planning and design, and strategic execution, a sustainably built project will eventually save the customer money. The challenge lays in selling this notion of “green” when it costs more upfront. With knowledge, experience and proper execution, a successful firm can show the client a real return on investment in the end, and will lead them success in the future.

For further information, or to see this article in Boston Business Journal online, click the link below.


Monday, November 29, 2010

Stop Neglecting Your Staff

Most design firms have sophisticated job cost and financial reporting capabilities, as well as manpower planning and scheduling systems. Today’s firm is fully automated. However, team members complain that project managers are simply too busy to give them the time of day.

Don’t let your high-tech management systems replace personal contact with team members. A PM in the Southeast uses the “High Tough” management system. The approach is simple:

• Every day, the PM schedules an hour, usually the first hour of the day, to have an “open door.” Any team member can see the PM without appointment, and know that the PM has a full hour blocked out for the team’s individual issues.

• There are two team meetings each week. The first is the “formal” team meeting, in which the project is discussed objectively. The second is an informal “bull-session” in which the team discusses more subjective aspects of the project and team dynamics.

• The PM takes a team member to breakfast or lunch each week. In this rotating manner, the PM gives each team member a chance for some “one-on-one” time to discuss whatever is on his or her mind.

These three techniques really work, so put them into action today! To learn more tips and techniques you can use to become a better and more successful project manager, come to one of PSMJ’s upcoming Project Management Bootcamps!

PSMJ’s Project Management Bootcamp is a revolutionary training seminar like no other--through interactive case-studies, real-world examples, and proven solutions, you will foster innovation, elevate communications, increase productivity, and improve your firm's bottom line. Click here to register or call PSMJ Education Department at (800) 537-7765.

Wednesday, November 24, 2010

AIA’s Architecture Billings Index grows slightly in September, but slips in October

The American Institute of Architects’ Architecture Billings Index showed that architectural firms reported the first monthly increase in design activity in September since early 2008. While this increase showed promise of a possible turnaround in the recession, it proved to be short lived. In October, the numbers dipped back down to previous levels.

The Architecture Billings Index (ABI) serves as the leading economic indicator of construction activity, and reflects the approximate 9-to-12 month lag time between architecture billings, and actual construction spending.

The index registered a score of 50.4 for September, up from 48.2 in August. Any score above 50 signifies growth at U.S. architecture firms, and the September score is the first reading above 50 since January 2008. In October, the ABI dropped back below 50 to 48.7. Until the ABI rating remains above 50 for at least three consecutive months, there is no evidence of a strong economic upswing. The October rating means that it won’t be until around summer 2011 until things improve could really start to improve significantly for the AEC industry.

While these figures may not come as a total surprise, there is indeed light at the end of the tunnel. Inquiries for new work remain quite high at 61.7, and architecture firms located in the Northeast and Midwest reported growth in firm billings for the third month in a row in October. Business continues to improve in these two regions of the country, with both reporting their highest scores in nearly three years; 54.5 in the Northeast and 51.8 in the Midwest. Firms with commercial/industrial specialization experienced their sixth consecutive month of growth in October, and firms with an institutional specialization reported a small expansion, the first for the sector since December 2007.

On a wider scale, recently released economic reports show slight improvement of the economy in general. The GDP grew at an annual rate of 2% in the third quarter, up from 1.7% in the second. Also, employment improved in October, with businesses adding 151,000 new jobs. Despite this, construction employment remained relatively flat, and that in the architectural services sector decreased for the second month in a row in September (latest data available). It’s important to note though, that this data is not seasonally adjusted to account for the annual slowdown of the industry as winter approaches. Finally, survey panelists reported that on average 88%of their projects (on a dollar basis) have a signed design contract.

Regionally the ABI breaks down as follows from September to October: Northeast is down 54.5 from 56.7, South up 48.6 from 47.0, West down 44.3 from 44.5, and Midwest up 51.8 from 51.0.

By market sector Mixed is down 43.2 from 44.2, Commercial/Industrial is up 56.7 from 56.3, Institutional is up 50.8 from 47.9, and Residential is up 49.1 from 47.0.

Monday, November 22, 2010

Four Proactive Communication Tools That Work

Here are four of the best communication tools PSMJ recommends to help foster a great experience for your clients. Each technique is geared towards minimum effort and maximum return.

1. Client status call. For your top clients, schedule a twenty minute call each week at the same time of the day and same day of the week. Have them put it on their calendar. And, make the call like clockwork. For example, it could be Monday at 2:00 p.m. or Friday at 10:00 a.m. - never miss it. Send out a quick e-mail reminder before the meeting with a couple of agenda items. Most of the time, your client will reply back with a couple of items they want to cover. This way, a week never passes before you have covered the hot topics of the week with your clients.

2. Client sponsor. For any substantial size project, a “client sponsor” should be assigned to the project. This is usually a person at least one level above the PM. In many cases, it will be a principal or owner. It is their responsibility to actively pursue feedback from the client throughout the course of the project. The client sponsor gathers information from the client on how well the firm and the assigned PM are meeting their needs and what improvements need to be made. The PM and client sponsor should review the feedback together after each contact.

3. Action item tracking. After every call with a client and every meeting, the PM should record in one place a compilation of all the action items resulting from the encounters. Along with each action item, the PM should indicate who is responsible for each action and when the item will be completed (a "by and by"). One indicator that a team is working effectively on a project is that action items are being closed out in a timely fashion. Measure how your team is doing.

4. Client touches. Any contact with the client is referred to as a client “touch.” PSMJ is a big believer in the “two-minute” touch. Going to a ball game with your client is a great client touch, but seldom will they carve out that amount of time for you. Instead, try a few of these quick touches: send a hand written note to your client or a PDF of a technical article that is in their area of interest. Invite them to the next “lunch-and-learn” that you hold at your office.Send a link to an on-line article that was valuable to you. Send them a checklist or template that you think might help them in their work.

These four techniques work, so put them to work for you and become a much improved communicator starting today. To learn more tips and techniques you can use to become a better and more successful project manager, check out PSMJ’s Ultimate Project Management Manual.

PSMJ’s Ultimate Project Management Manual
can instantly and dramatically improve your ability to manage projects for quality, speed, and profitability. Click here to order, e-mail customerservice@psmj.com, or call PSMJ customer service at (800) 537-7765.

Thursday, August 19, 2010

Do Your Customers Taste a Rainbow?

Chicago Bulls guard Derrick Rose is a Skittles fanatic, so when the Windy City-based candymaker found out, they hooked him up.

According to this article on CNBC.com, Wrigley, the company that makes the fruit-flavored candy, brought a custom Skittles vending machine to his house and promised to keep it stocked with Skittles for at least three years.

That's not even the coolest part: Rose gets the machine and the Skittles for free. The machine holds every variety of Skittles and it tempts him, in his own voice, whenever he walks by the machine.

As the article author mentions, this is a great lesson in public relations. But it's really a great lesson in client service. Doing something special for a client who says they love you will only make them love you more.

Maybe you're not bringing a vending machine to your client's office, but there are plenty of ways you can show a client you care about them. Handwritten thank-you notes, forwarding an article you find interesting, asking about their personal life, knowing things about them that even their co-workers don't know, are just some of the ways.

What are you doing today to show your clients you love them?


Wednesday, August 18, 2010

ABI Improves, But Still Shows Decline

The American Institute of Architects' Architecture Billings Index rose almost two full points in July, but still shows a decline in demand for design services.

The July ABI rating was 47.9, up from 46.0 in June. The ABI continues its up and down rollercoaster ride as it has gone from 48.4 in April to 45.8 in May to 46.0 in June and 47.9 in July. Yet, the score reflects a continued decline in demand for design services as any score above 50 indicates an increase in billings.

As a leading economic indicator of construction activity, the ABI reflects the approximate 9- to 12-month lag time between architecture billings and construction spending. What the July ABI rating means, therefore, is that it's going to be at least spring 2011 before we even begin to see things get better in the AEC industry.

"Business conditions at design firms remain quite volatile," said AIA Chief Economist Kermit Baker. "While this recent uptick is encouraging, this state of the industry is likely to persist for a while as we continue to receive a mixed bag of feedback on the condition of the design market from improving to flat to being paralyzed by uncertainty."

As we said last month, until the ABI shows AT LEAST three consecutive months ABOVE 50, don't believe any projections that things will get better anytime soon. There's just no quantifiable data that anyone can point to with certainty that shows WHEN things will get better.

The new projects inquiry index dropped substantially from 57.7 to 53.1.

Regionally, the ABI breaks down as follows: Northeast (47.2, down from 47.7), South (47.9, up from 46.7), Midwest (46.7, up from 46.3), and West (45.2, up from 43.6). The South and West have improved for two consecutive months while the Northeast has dropped for two straight months.

By market sector, the ABI is as follows: commercial/industrial (50.4, down from 50.6), institutional (47.9, up from 45.0), multi-family residential (47.5, up from 46.5), and mixed practice (42.9, down from 44.7). Institutional is up for two straight months while commercial/industrial and mixed practice have dropped for two straight months.


Monday, August 2, 2010

No BlackBerry in Dubai?

Interesting news this morning that the United Arab Emirates will soon ban BlackBerry usage in the country.

The ban on BlackBerry e-mail, messaging and Web browsing services will extend to foreign visitors, too, which has potentially damaging repercussions on the AEC industry that has relied on the United Arab Emirates, and Dubai, in particular, for so much work in recent years.

After all, as any busy A/E firm leader will tell you, they call it a "CrackBerry" for a reason, and if you take one away from someone who uses it, it makes executives that much less productive than if they were able to read and respond to e-mails as they come in.

But you go where the business is, and if the price of doing business in Dubai is no BlackBerry then we may see a cadre of spouses sending their CrackBerry addicts to the wealthy Middle Eastern country.


Wednesday, July 21, 2010

Is the Third Wednesday of Each Month Groundhog Day?

Forgive me if you've heard this before, but there was a negligible increase in the American Institute of Architects' Architecture Billings Index last month.

Continuing it's "one step forward, two steps back, two steps forward, one step back" routine of the past three years, the June ABI rating was 46.0, up slightly from a reading of 45.8 in May. And that May numbers was a sharp decline from the 48.4 in April. The score reflects a continued decline in demand for design services (any score above 50 indicates an increase in billings).

As a leading economic indicator of construction activity, the ABI reflects the approximate 9- to 12-month lag time between architecture billings and construction spending. What the June ABI rating means, therefore, is that it's going to be at least spring 2011 before we even begin to see things get better in the AEC industry.

"The steep decline in nonresidential property values has slowed investment in new facilities," said AIA Chief Economist Kermit Baker. "Conditions at architecture firms continue to remain very soft, but we're optimistic that they will improve before the end of the year."

Until the ABI shows AT LEAST three consecutive months above 50, don't believe any projections that things will get better anytime soon. There's just no quantifiable data that anyone can point to with certainty that shows WHEN things will get better.

The new projects inquiry index did increase from 55.5 to 57.7, but as we've talked about before, that's as much a sign of more firms pursuing projects as it is there being more projects out there.

So we live in a world of speculative positivity, where people want the crystal ball to show things are going to get better. That's called wishing upon a star, and you can't plan with any certainty for 2011 that things are going to improve.

Your best course of action is to plan for this sort of topsy-turvy economy to keep middling along for the next year or so. Pursue strategic acquisitions, fill key positions, and try to prepare yourself for the upturn, whenever that may be.

Regionally, the ABI breaks down as follows: Northeast (47.7, down from 50.6), South (46.7, up from 45.9), Midwest (46.3, down from 48.5), and West (43.6, up from 42.9). By market sector, the ABI is as follows: commercial/industrial (50.6, down from 51.3), multi-family residential (46.5, down from 46.9), institutional (45.0, up from 43.4), and mixed practice (44.7, down from 46.8).


Friday, June 11, 2010

The day the music died?

Anyone who frequents Twitter (I use it to aggregate content more than anything else) has surely noticed that it has been "over capacity" several times this week.

Given the move toward social networking and away from "traditional" forms of marketing like e-mail or, for the truly daring, direct mail, I found it interesting that the Flavor of the Day, Twitter, has been clogged by too many users all week.

Would it make more sense to spend some of that intellectual capital on an under-utilized marketing channel like direct mail (the U.S. Postal Service is considering going to five days a week due to people not sending this via "snail mail")? Well, if the channels that everyone is using become overpopulated, your message is never getting out to your target audience, so why not use what's available?

Too expensive, you say? There's a concept called "target marketing" which is fuzzy to many of you seeking the widest possible audience to promote your services that you should remember when deciding to enter (or re-enter) the direct mail world.

Create your message, target your audience, and send it via the U.S. Post Office. At least you won't have to worry about it being "over capacity" and the message not getting through!


Tuesday, May 25, 2010

PSMJ Resources Inc. Announces 2010 Circle of Excellence


PSMJ Resources Inc. Announces 2010 Circle of Excellence

Newton, MA—May 25, 2010—PSMJ Resources, Inc., the premier management consulting firm for the A/E/C (architecture/engineering/construction) industries, today published the 2010 PSMJ Circle of Excellence.

The 2010 PSMJ Circle of Excellence is determined by weighting each firm’s ranking in the overall 2010 PSMJ A/E Financial Performance Benchmark Report with respect to 13 individual benchmarks. These benchmarks are indicative of performance in the various aspects of business operations, including cash flow, overhead control, business development, project performance, staff utilization, and overall profitability.

“The PSMJ Circle of Excellence is not determined by firm revenue, profitability, or sheer size – nor is it determined by any subjective criteria. The 13 benchmarks that determine the PSMJ Circle of Excellence were chosen to reflect that the firms are well-managed, have a strong client base, and are led in a responsible and sustainable manner. PSMJ believes that clients prefer to work with well-run firms because they are more likely to provide superior service and value,” explains H.E. “Dan” Daniels, PSMJ’s survey editor.

The 2010 PSMJ Circle of Excellence reflects the performance of 41 participating design firms, 36 of which have agreed thus far to have their names published.

They are as follows:

A/R/C Associates, Inc.
Atlantic Coast Consulting, Inc
Barker Rinker Seacat Architecture
Bernardin Lochmueller & Associates Inc
Brown Engineers LLC
CP&Y Inc
Cooper Zietz Consulting Engineers, Inc.
Donan Engineering Co., Inc.
Environmental Standards
Fentress Architects
Freese & Nichols Inc
Great West Engineering
H&A Architects & Engineers
Heneghan and Associates PC
HMB Professional Engineers Inc
King & King Architects LLP
Klohn Crippen Berger Ltd
Klotz Associates Inc
Larson Design Group (LDG)
Luckett & Farley Architects & Engineers
Orchard Hiltz & McCliment Inc - OHM
P2S Engineering Inc
Pfluger Associates Architects
Ready Engineering Corporation
Rogers Lovelock & Fritz Inc (RLF)
Shannon & Wilson Inc
SHP Leading Design
SPEC Services Inc
Stanley Consultants Inc
The Walter Fedy Partnership
Thomas Miller & Partners, LLC
Williams Blackstock Architects
Wright-Pierce Engineers

In addition to publishing the PSMJ Circle of Excellence, PSMJ Resources Inc. will hold its fourth conference highlighting the business practices of these outstanding firms in September 2010 in San Diego, California, and will feature as speakers the leaders in PSMJ Circle of Excellence firms.


Ed Hannan
Vice President, Publishing
PSMJ Resources, Inc.
10 Midland Ave.
Newton, MA 02458 USA
Email: ehannan@psmj.com
Phone: 617-965-0055, x 159

Now in its 30th edition, the 2010 PSMJ A/E Financial Performance Benchmark Report includes data from 203 A/E firms in the United States and Canada. The Benchmark Report provides detailed data and analysis on operating profits, overhead rates, utilization, financial ratios, marketing costs and much more.

About PSMJ Resources, Inc.
For more than 35 years, PSMJ Resources, Inc. has offered publications, educational programs, in-house training and management consulting services to A/E/C professionals worldwide. PSMJ Resources conducts more than 200 educational seminars and conferences annually, supported by major professional societies, including AIA and ACEC. Headquartered in Newton, MA, PSMJ Resources provides more than 150 titles in book and audio, and publishes three newsletters about A/E/C firm management. PSMJ Resources also produces the industry’s preeminent annual surveys on management salaries, financial performance, fees and pricing, and benchmarks for the design firm CEO. On the web: http://www.psmj.com/

Wednesday, April 21, 2010

ABI Trending Upward, Remains Negative

The American Institute of Architects' Architecture Billings Index ticked upward for the second consecutive month, posting its highest number since August 2008.

Its March rating of 46.1 rose from 44.8 the previous month and 42.1 in January. Though the number represents a continued decline in demand for design services (any score above 50 indicates an increase in billings), the March 2010 number is the highest score since August 2008.

"This is certainly an encouraging sign that we could be moving closer to a recovery phase, even though we continue to hear about mixed conditions across the country," said AIA Chief Economist Kermit Baker. "Firms are still reporting an unusual amount of variation in the level of demand for design services, from improving to poor to virtually non-existent. This increasing volatility is often a sign that overall business conditions may begin to change in the coming months."

The new projects inquiry index was 58.5, although that is a somewhat flawed statistic since it can be attributed to more firms pursuing the same projects as opposed to there actually being more projects available.

Regionally, the March ABI breaks down as follows: Midwest (50.5), Northeast (47.0), West (46.0), and South (44.4). By market sector, it breaks down thusly: multi-family residential (47.3), institutional (46.8), mixed practice (45.0), and commercial/industrial (44.7).

As a leading indicator of construction activity, the ABI reflects the approximate 9- to 12-month lag time between architecture billings and construction spending.

So the news is good, but it's too soon to say that the recession is over.


Friday, April 16, 2010

RIP, Building Design and Construction

Sad news to report this afternoon as Reed Elsevier announced today that it is closing the magazines it has not been able to sell or does not intend to keep, including Building Design + Construction. In total, Reed Elsevier will close 23 magazines.

The affected titles include many that cover the AEC space: Building Design+Construction, Chain Leader, Construction Bulletin, Construction Equipment, Consulting-Specifying Engineer, Control Engineering, Converting, Foodservice Equipment & Supplies, Graphic Arts Blue Book, Graphic Arts Monthly, HOTELS, Logistics Management, Material Handling Product News, Modern Materials Handling, Plant Engineering, Professional Builder, Professional Remodeler, Purchasing, Restaurant & Institutions, Semiconductor International, Spec Check, Supply Chain Management Review and Tradeshow Week.

The announcement comes about nine months after putting the brands published under the U.S. arm of Reed Business Information on the block again. The news was announced internally at RBI by a memo from RBI Global CEO Keith Jones.

In the memo, he wrote that RBI had successfully sold 21 magazines, representing about two-thirds of the revenues of the portfolio to be divested. But none of them were really in the AEC space (unless you count Interior Design).

In talking about the publications that will be shuttered, he wrote, "These publications have had very experienced, professional and committed teams running them in the most difficult of circumstances. However, their trading performances have been under pressure for some time and the impact of the recession and media migration in the markets for these titles is such that we cannot see our way back to profitable growth. This is very sad for all of us in the RBI community and I wish colleagues at these titles the very best for the future and thank them for their services to readers, advertisers and the company."

The news brings to a close the long saga of Reed Business Information's attempt to find a buyer for the magazines it is closing at the end of the month. We wrote nearly two years ago that it looked like McGraw-Hill (publisher of Engineering News-Record and Architectural Record, among many other publications) would buy Reed Business Information. We also wrote that Reed Elsevier wanted to divest itself of RBI in the second half of 2008, so clearly, today's announcement is the result of a long process of trying to find a buyer that, unfortunately, did not prove successful.

Among the recognizable names to AEC professionals affected by this would presumably be Building Design + Construction Editor in Chief Robert Cassidy, Dave Barista, editor in chief at Professional Builder and former managing editor at Building Design + Construction, Jay Schneider, senior editor at BD+C, and Jeff Yoders, associate editor at BD+C, among many others.

According to published reports, Reed Elsevier is not saying how many positions will be eliminated as a result of the closings. The company says it is open to discussions with potential purchasers of the intellectual property associated with any of the closed brands.

One upshot to all this is the serious negative impact it will have on AEC marketing professionals who will have that many fewer places to run their articles, position pieces, and get their firm leaders and technical professionals exposure.

It also is another sign of how significantly this recession has impacted the AEC industry since it is a lack of advertising (presumably from AEC vendors) that led to this outcome.

A sad day, indeed.

Tuesday, March 23, 2010

PBS&J in turmoil?

Hot on the heels of last week's news that PBS&J's former CEO John Zumwalt is about to receive more than $2.3 million in payments and benefits comes news that the company may be up for sale.

Zumwalt announced last month that he would resign as CEO and also step down as chairman of the company's board of directors after PBS&J's employee-owners rejected his re-election to the board at the company's annual meeting, according to a Tampa Bay Business Journal article.

The biggest chunk of the separation agreement is a $900,000 transition payment. PBS&J will make that payment to Zumwalt in 24 monthly installments, according to a filing with the Securities and Exchange Commission.

The company will also pay Zumwalt a $330,000 severance payment, payable in a lump sum. The restricted stock he holds will vest immediately and the shares of common stocks he owns in a 401(k) will be redeemed during the next open trading window, the filing said.

In addition, Zumwalt will get $946,824, the value of the accumulated benefits payable to him under the company's key employee capital accumulation plan and $16,003as compensation for accrued but unused paid time off, the filing said. He will be reimbursed $20,000 for legal fees incurred with negotiation and review of the agreement.

He agreed to make himself available to consult with the company for three months in return for a $135,000 consulting fee. If the company needs his consulting services after three months, he'll get a per diem payment of $3,000 per day.

In return, Zumwalt agreed not to compete against PBS&J for two years.

Zumwalt resigned in the midst of an internal investigation at PBSJ Corporation into alleged violation of the Foreign Corrupt Practice Act. The internal probe is focused on the PBS&J International Inc. subsidiary. Zumwalt served as president of the international subsidiary until July, according to the article.

Meanwhile, a St. Petersburg (Florida) Times article that came out this morning claims that the employee-owned firm has stopped workers from buying or selling company stock while it considers overtures from outsiders.

Investors and competitors have expressed preliminary interest in buying a stake in PBSJ Corporation or acquiring the company, chairman Robert Paulsen wrote in an e-mail to employees last week. The company has signed nondisclosure agreements with potential suitors and can't say if negotiations are taking place or with whom, he wrote.

Securities laws prohibit companies from engaging in stock transactions without disclosing information that could influence an investor's decisions to buy or sell the stock.

Employees holding more than 20 percent of PBSJ shares indicated they wanted to sell their shares when the annual "window" for stock transactions was scheduled to open March 17.

Stay tuned.


Friday, February 26, 2010

Have we reached the point when the AEC industry starts redesigning fast-food menu items?

Some people may feel that way after seeing the latest figures from the American Institute of Architects' Architecture Billings Index.

As anyone who practices in the AEC industry, or follows this space, will tell you, things have been bleak since fall 2007. Not coincidentally, the January ABI numbers mark the beginning of the third year of negative conditions, with a drop of almost three points.

The January ABI rating was 42.1, down sharply from a revised reading of 45.4 in December. (Every January, the AIA research department uses Department of Commerce statistics to re-estimate ABI data based on seasonal patterns, resulting in a recalibration of recent figures.)

The score indicates a continued decline in demand for design services as any score above 50 indicates an increase in billings. The new projects inquiry score was 52.5, down more than seven points. Regionally, the ABI breaks down as follows: Midwest 48.0, Northeast 45.7, South 41.32, West 40.5. The sector index is as follows: Multi-famliy residential (50.1), commercial/industrial (44.9), institutional (43.1), and mixed practice (40.3).

"Projects are being delayed or cancelled because lending institutions are placing unusually stringent equity requirements on new developments. This is even happening to financially sound companies with strong credit ratings," said AIA Chief Economist Kermit Baker.

The credit crunch that originally hit small AEC firms hard in 2008 and into 2009 is now hitting medium- and larger firms, as witnessed by the abrupt December closing of Boston-area architecture firm Cubellis and this week's news that Memphis architecture firm Looney Ricks Kiss has filed for bankruptcy. Fact is, banks are being very skittish about loaning money or extending credit lines right now, and it is having a direct impact on the AEC industry.

"This serious situation is being compounded by a skittish bond market, decreased tax revenues for publicly financed projects, and declining property values, all which serve as deterrents for construction activity. Until these factors are resolved, the design and construction industry-- which accounts for roughly 10 percent of GDP and is facing unemployment figures in excess of 20 percent-- will continue to face deteriorating market conditions."

Read that last sentence again. Until factors that are outside of this industry's control are settled, a profession with upwards of 20 percent unemployment will continue to suffer.

So while some folks out there espouse designing hamburgers and hot dogs, the smart AEC firm leader will continue focusing on his bottom line, managing his business effectively to survive this recession and emerge even stronger when it ends.
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