5 Ways PMs Can Demonstrate Leadership

1. Be well-read. Reading provides you with an important skill for today’s manager: the ability to see linkages between unrelated events.

2. Improve your language skills. You are increasingly called upon to express yourself in reports, letters, presentations, and interviews. Look up words you don’t understand, and fine-tune your grammar skills.

3. Be politically effective. Make contacts and take responsibility for letting people know your skills. Good politicking is a skill, not a vice.

4. Watch other people. Notice how to interpret their facial expressions. You can’t afford to miss the clues that indicate dissatisfaction, boredom, anger, or contentment.

5. Cope with your work problems. Symptoms of an inability to cope include: long-term recurrence of the same problems; replacement of one problem with another; disposing of problems instead of learning from them; dealing with problems through anger; and needing other people to deal with your problems.


Learn more tips for becoming a better PM team leader with the world's most successful project managers by attending PSMJ's A/E/C Project Management Bootcamp. This Bootcamp is a revolutionary training 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.

PSMJ's A/E/C Project Management Bootcamp can instantly and dramatically improve your ability to manage projects for quality, speed, and profitability. Click here to order or contact PSMJ Education Department at education@psmj.com or (800) 537-7765.

Collecting Effective Client Feedback

Increasing a firm’s value to their clients improves client loyalty, referrals, profitability, marketing, staff performance and retention, and reduces liability. Improving this value involves tracking client preferences and managing the refinement of staff processes accordingly. This is best accomplished by collecting client feedback to produce actionable data. But knowing how and when to collect the most helpful data is a strategy that eludes most firms.

The ultimate challenge of gathering effective feedback is to make the survey comprehensive while also concise. The system we have developed over the last decade distills the basic survey questions to seven. They are divided into two categories: Deliverables (the client’s perceptions on WHAT the design firm produced) and Relationships (feedback on HOW the firm’s process worked).

Increasing your value to your clients involves measuring your value to your clients and using those metrics to manage improvement. If your firm is not using feedback to measure client value you are missing a valuable chance to better communicate and understand your client. XL insurance, a leading provider of professional liability insurance for design firms, has determined that 8 out of 10 lawsuits against designers stem from poor communication and understanding between design firms and their clients.

Need help gathering client feedback? PSMJ can help! PSMJ, in partnership with DesignFacilitator (founded by the author of this article, Mike Phillips, AIA), has developed a cost-effective survey program to measure client perception and satisfaction that yield rich, highly useful information for the success of your firm, the PSMJ Premier Award for Client Satisfaction. The Premier Award is the A/E/C industry's first client-focused accolade and honors firms that consistently provide their clients with top quality communications, impressive performance, and cost-effective solutions.

By entering this award program, you will get independent, confidential feedback from up to 40 of your most important clients. Additionally, if you win, you will have the winning advantage of marketing your firm as award-winning in client satisfaction. And at only $595, it is a great opportunity to jump-start a client feedback initiative and prove the importance this information has for your firm. You will even receive a customized consultation session to review and help interpret your results with a client feedback expert from DesignFacilitator. With a deal like that, how can you pass up this valuable opportunity to gain a significant advantage in today’s highly competitive marketplace!

Mega-leap Your Competition

If you can get clients to respond to questions on long-term needs, you can position your firm for serious success. In order to “mega-leap” way ahead of your competition, consider the following steps:

1. Ask clients about specific ideas that will give them clear and quantitative benefits.

2. Be ready to demonstrate the improvement in a low-risk fashion to the client.

3. Lead clients to picture their own future through:

• Education — making certain the client understands all the options and why yours is the best.
• Partnering — joining with the client as a team member to ensure “buy-in” and teamwork.
• Visioning — working closely with the client in the beginning to develop a long-term vision that is exciting, motivational, and rewarding.


Corner the business

As a result of researching an expanding market, one Midwest firm realized that most of its potential clients were interested in the idea of getting things done faster. When meeting with these clients, the firm offered to work toward decreasing the total cycle-time of a project by at least 33 percent.

Of the 75 surveyed decision-makers, 20 responded with a “let’s try to do it” attitude. After all, if the firm failed to achieve a 33 percent reduction and completed the project in 20 percent to 25 percent less time, this would still be a leap over present performance.

Thanks to their aggressive and timely approach, the firm closed a dozen contracts in 14 months in very competitive situations.


Beat ’em to the punch

Clients want to buy a major benefit faster, cheaper, or better, but often are not sure of the details. It’s up to the architects or engineers to identify, refine, and respond to that need with a mega-leap benefit and systems to achieve it. So don’t wait to react during periods of heavy competition. Decide early how you can outperform your rivals, go out swinging, and land some business!

Learn more about how to get ahead of your competition and really integrate your firm into your client’s long term plan. Join PSMJ this spring for our Business Development for A/E/C Firms Seminar, coming to 6 locations across North America. Get the tools and confidence you need to succeed in bringing in more work for the firm – register today!

8 Quality Control Tips Every PM Should Know

No matter how well your projects are managed, some errors and omissions will occur. You must therefore have a way to identify and correct them before the design is released to clients, subcontractors, or the operating staff. This is the purpose of a quality control (QC) program. Before problems occur on your next project, implement these 8 tips to prevent as many QC issues as possible.

1. Encourage those actually doing the work, not just principals, to stamp or seal documents. Responsibility and initial quality rise with the signing of plans.

2. Adopt a formal checking system, instead of relying on the experience of individuals.

3. Build into a project’s schedule and budget the time and costs of review by individual(s) not involved with the initial design. A good rule of thumb is 3-5% for the cost of QC checks.

4. Have a final design review after all documents are prepared. Late changes can have a major impact upon quality. But, don’t let that be your only review.

5. Get people to job sites as a continual training process. This is especially important for designers and drafters working on details.

6. Make sure cost estimates are accurate. Develop in-house expertise, use an outside expert cost estimator when necessary and continually update and check the cost of items with suppliers and contractors.

7. Schedule post construction design reviews between site inspector and designer.

8. Don’t allow field decisions to be made under pressure. Here’s the rule: “No critical decisions in a vacuum by the PM”; bring your supervisor into the decision.


Learn more about the quality control responsibilities of a PM by attending PSMJ's A/E/C Project Management Bootcamp. This Bootcamp is a revolutionary training 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.

PSMJ is now accepting registrations for our Spring 2012 A/E/C Project Management Bootcamp series - instantly and dramatically improve your ability to manage projects for quality, speed, and profitability with PSMJ’s two-day intensive PM training seminar. Click here to order or contact PSMJ Education Department at education@psmj.com or (800) 537-7765.

Pace of Billings Decline Slows in October

The American Institute Architects’ Architecture Billings Index reported another decline in the month of October. The small spike in billings over the summer has proven to be short lived, and it appears that work will continue to decline, although it seems to be a slower pace than in September.

The Architecture Billings Index (ABI) serves as the leading economic indicator of construction activity, and reflects the approximate 9-12 month lag time between architecture billings, and actual construction spending. The monthly ABI scores are centered around 50, with scores above 50 indicating an aggregate increase in billings, and scores below 50 indicating a decline.

The ABI registered a score of 49.4 in October; slightly higher than the 46.9 registered in September, but still a decline and a significant drop from the increase of 51.4 posted in August. While billings remain low, and the value of new design contracts fell this month, inquiries into new projects remain strong.

Since billings by sector and by firm specialization are reported as rolling three-month totals, there were some bright spots in October despite the overall downturn. Firms in the Northeast reported gains in billings for the second month in a row, along with firms with residential and commercial/industrial specialization.

An ambiguous jobs picture

Nonfarm payroll employment grew modestly in October, adding 80,000 new jobs. However, construction employment declined by 20,000 during the month - essentially offsetting the gains seen in September. Also, architectural services employment declined by 1,500 in September (the most recent data available). Architectural services employment is not seasonally adjusted, and it’s likely that firms are shedding temporary summer employees, as their highest payrolls of the year thus far were reported in June, July, and August.

One promising sign is that more businesses seem to be hiring. The U.S. Bureau of Labor Statistics Job Opening and Labor Turnover Survey for September indicated an increase of 300,000 job postings from August, to a total of 3.4 million. This represents an overall increase of 38% since the official end of the recession in 2009. The first estimate of the GDP for the third quarter of 2011 shows a growth rate of 2.5%, a great improvement over the 1.3% rate shown in the second quarter. A major contributor to this was an increase in personal consumption and consumer confidence, and an increase of discretionary spending on goods and services.

Statistics

By region, the ABI breaks down as follows from September to October: Northeast is up 51.7 from 50.8, Midwest is down 47.7 from 51.0, West is down 43.5 from 46.7, and South is up 49.1 from 47.3.

By market sector: Commercial/Industrial is up 53.5 from 52.4, Mixed is down 42.0 from 50.0, Institutional is down 47.3 from 48.0, and Residential is up 51.3 from 46.4.


This month, Work-on-the-Boards participants are saying:

• Things are still very slow in the public markets, and some smaller firms have gone out of business. But the private market seems to be picking up, and there is a general sense that there may be some light at the end of the tunnel
— 31-person firm in the West, institutional specialization

• Very small projects have been picking up, and there are newly proposed projects being considered, indicating that some construction work will continue.
— 6-person firm in the Northeast, commercial/industrial specialization

• Business is still very weak in central east coastal Florida. Things seem to be improving, but clients are slow to move forward.
— 2-person firm in the South, residential specialization

• Things seem to have slowed in our region. There is less state spending on capital projects, corporate spending is mixed but generally slowing, and higher education is somewhat mixed.
— 116-person firm in the Midwest, institutional specialization

How to Strategically Plan Your Marketing

Strategic planning allows your firm to establish its goals and objectives for the future. PSMJ has found that planning works well only when you bring your firm’s key managers directly into the process. In this way, you base your plan on critical input from a variety of perspectives and ensure a high degree of commitment from all those who participate.

To develop a thorough and workable plan, you need to include all operational elements of your organization: finance, project delivery, human resources, ownership/leadership transition— and marketing.


Whom do you want as clients?

The first marketing question to answer during a planning session is “What kind of clients do we want to serve?” Establish specific criteria that define which clients warrant the investment of your marketing and proposal resources.

Put another way, which owners do you really want to have as clients? We call these “Quality Clients.” For example, during a recent strategic planning session we facilitated, participants concluded that their quality clients must:

• pay their bills promptly,
• not select design firms solely based on low price,
• have significant ongoing need for our service,
• appreciate the benefits of a long-term relationship, and
• conduct their business in an ethical manner.


Market with leverage

After you decide on these criteria, subject your existing client list to them. Clients who fail to meet all the Quality Client criteria are appropriated zero marketing and proposal investment in your overhead budget. Next, subject potential new clients to the Quality Client criteria—and either include or exclude them from the marketing plan based on how they measure up.

We are not saying you should refuse to work for clients who fail to meet all these criteria—only that you should invest no marketing or proposal efforts in those clients. If you do take work from them, make it on your terms, not theirs.

Once you have developed your list of existing and potential Quality Clients, decide which of them should be designated as “Strategic Clients”—and target them as your highest priority.


Make a matrix

The next step in developing a marketing plan is to prepare a matrix of clients and services offered. If yours is a multi-office firm, you can create a similar matrix for each office.

Learn more about how to stretch your marketing dollars and get better quality clients (something everyone in the firm should know!) - join PSMJ this spring for our Business Development for A/E/C Firms seminar, coming to 6 locations across North America. Get the tools and confidence you need to succeed in bringing in more work for the firm – register today!

20 Musts of A Successful Presentation

Frank Stasiowski, FAIA, founder of PSMJ Resources, Inc., offers the following “cardinal rules” for creating a surefire presentation:

1. Plan, structure, dry run, and analyze presentations before inflicting them on potential clients.
2. Research clients and their projects thoroughly before outlining your presentation.
3. Determine early on who the decision makers are.
4. Select the presentation team carefully. No one should be on the team if he/she cannot make a significant contribution to the presentation.
5. Relate everything possible in the presentation to the client’s interests and the specific project.
6. Come up with at least one “competitive differential” or unique selling proposition for your firm.
7. Thoroughly prepare all audiovisuals and written media.
8. Check out the presentation room in advance of the interview whenever possible.
9. Find out the composition of the interview committee.
10. Dress appropriately.
11. Ensure a good introduction to the client interview team by preparing it yourself.
12. Strive for honesty.
13. Be brief. Be aware of time constraints and make your important points within the allotted time.
14. Encourage discussion and participation by all present.
15. Anticipate questions and have a plan for answering them.
16. Have one member of your team act as a recorder during the presentation to note important points and questions raised by the panel.
17. Use examples and case histories.
18. Prepare for contingencies and emergencies. Stay flexible throughout the presentation.
19. Remember: clients have every reason to relate the way you handle an interview to how you would handle their project.
20. Close by politely asking for the job.

Learn more about how to make successful presentations to ensure you win the job every time at PSMJ’s Winning Proposals and Presentations seminar. Our last 2 seminars in 2011 are still open and being held in Atlanta December 1-2 and in Las Vegas December 8-9. Get the tools and confidence you need to succeed in bringing in more work for the firm – register today!

6 Common Project Management Practices of the Most Successful A/E/C Firms

Throughout the course of teaching PSMJ’s PM Bootcamps, PSMJ consultants have identified the activities and approaches firms have taken which have led to success, and have developed an understanding of what lower-performing firms can do to change and put themselves on track for greater success.


Here are the 6 common best practices of the most successful firms:

1. Everyone is actively involved in business development. Everyone should take an active role in pursuing business development opportunities. Although it may be difficult or intimidating for most PMs to pursue getting new business, they should be tapping into their best resources for more work—current and past clients.

2. PMs champion proposal development. Once a proposal opportunity has been identified, the PM should become a key participant in, if not champion of, the entire process. PMs should have a key role in the development and negotiation of scope. This will ensure that the PM buys into and takes ownership of the scope and related fee. If involved in the proposal phase, the PM will have the opportunity to hear directly from the client what their project goals are.

3. PMs have a well-written project scope that can be converted into a detailed task outline for the work. This practice is essential for realistic budgeting, scheduling, easier negotiating, and to serve as a yardstick to monitor the progress of the project against the resources spent to date.

4. Have a strategic kick-off meeting. A well-developed strategic kick-off meeting allows the entire project team to understand the project and their responsibilities, scopes, budgets, schedules, and risks—and to contribute their own knowledge. If you can get the client to attend, and we strongly encourage that, it will allow the team to identify all client critical goals—and discuss client responsibilities as well.

5. Have a formal method to track the progress of projects. This method to assess real progress—not just expended resources—can be scaled according to project size and complexity. PSMJ prefers the Earned Value Method.

6. Have regular PM/principal status review meetings. All PMs at every level need frequent opportunities to step back and brainstorm with a client sponsor to keep their projects on track. My experience suggests you will always benefit from a focused hour of principal-level attention on your project.


Benchmark your current project management practices against these six areas of focus and see how you might improve.

Learn more tips on becoming a better PM team leader with the world's most successful project managers by attending PSMJ's A/E/C Project Management Bootcamp. This Bootcamp is a revolutionary training 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.

PSMJ is now accepting registrations for our Spring 2012 A/E/C Project Management Bootcamp series - instantly and dramatically improve your ability to manage projects for quality, speed, and profitability with PSMJ’s two-day intensive PM training seminar. Click here to register or contact PSMJ Education Department at education@psmj.com or (800) 537-7765.

Construction jobs, spending show little 1- or 12-month change; wage gains slow

Seasonally adjusted nonfarm payroll employment increased by 80,000 (0.1%) in October and 1.5 million (1.2%) over 12 months, while the unemployment rate dipped to 9.0% (8.5%, not seasonally adjusted), the Bureau of Labor Statistics (BLS) reported on Friday. Seasonally adjusted construction employment fell by 20,000 (0.4%) to 5,525,000, and up only 13,000 (0.2%) from a year ago. The unemployment rate for former construction workers fell to 13.7%, not seasonally adjusted, from 17.3% in October 2010. (BLS does not report seasonally adjusted rates by industry.) The fact that unemployment fell sharply over the year despite a very small increase in employment suggests that workers are leaving the industry to take work elsewhere, return to school or training, or drop out of the labor force—all ominous indicators for future recruitment. Among the five BLS construction employment categories, nonresidential building posted the strongest year-over-year results: a monthly drop of 0.7% and a gain of 1.6% over 12 months. Heavy and civil engineering construction employment rose 0.4% and 0.7%, respectively; residential building, 0.6% and 0.6%; residential specialty trade contractors, 1.0% and 0; and nonresidential specialty trades fell 1.0% and 1.1%.

Construction spending in September totaled $787 billion at a seasonally adjusted annual rate, up 0.2% from the revised August total but 1.3% below the September 2010 mark, the Census Bureau reported on Tuesday. Census lowered its estimates for August and July by $13 billion and $15 billion, respectively, mainly because it reduced estimates for residential improvements. Public construction spending dropped 0.6% for the month and 9.2% year-over-year, with mixed results for the two dominant categories: highway and street construction climbed 1.4% in September but fell 6.3% from a year earlier, while public educational construction slid 0.9% and 5.2%, respectively. Private nonresidential construction gained 0.3% and 7.4%. In descending order of current size, 1- and 12-month percentage changes were: power (including oil and gas fields and pipelines), -0.6% and 26%; commercial (retail, warehouse and farm), -1.6% and 9.5%; manufacturing (including data centers), -0.4% and 4.1%; and private health care (hospitals, medical office buildings and special care facilities), 3.5% and -2.6%. Private residential construction edged up 0.9% and 0.1%, with new single-family, 0.5% and -0.1%; improvements to existing single- and multifamily, 1.4% and -0.6%; and new multifamily, 0.2% and 6.5%.

The employment cost index for private industry—a measure of wages and benefits—increased 2.1% from September 2010 to September 2011, BLS reported on October 28. The index increased 1.0% for construction, less than for any other industry and down from 1.2% between June 2010 and June 2011. The index for wages and salaries alone went up just 0.7% for construction vs. 1.7% for all private industry.

The National Highway Construction Cost Index—an average of all accepted bids by state highway agencies, adjusted for project types, rose from 1.05 in March to 1.07 (2%) in June, the Federal Highway Administration reported on Monday. The June level was 21% below the most recent peak of 1.35 in September 2008.

New orders for U.S. manufactured goods (excluding semiconductor manufacturing) rose for the third straight month in September, by 0.3%, seasonally adjusted, the Census Bureau reported on Thursday. Orders for construction materials and supplies fell 1.8% in September and 1.7% in August. Construction machinery orders rose 2.4% and 4.7%.

Economic activity in the nonmanufacturing sector grew in October for the 23rd consecutive month, according to a survey of purchasing executives that the Institute for Supply Management released on Thursday. Eight sectors reported growth and eight, including construction reported contraction. Relatively few commodity price movements were reported. Items relevant to construction that were reported up in price included freight charges, lighting supplies, oil products, plywood, polyvinyl chloride (PVC) products and steel products; items that were down included copper and fuel. Purchasing executives at manufacturing firms, in a survey released on Tuesday, reported aluminum products, copper and steel and both up and down in price; titanium dioxide as up and diesel as down. However, the Energy Information Administration reported on Monday that the national average retail price of diesel fuel rose for the third straight week, by 6.7 cents per gallon to $3.89, 82 cents (27%) higher than a year ago.

Rapidly rising production of oil, natural gas and natural gas liquids from shale formations in Pennsylvania, North Dakota, Texas and other states is spurring several categories of construction. The formations require construction of access roads, drilling pads, storage tanks and service buildings. Many of the fields are in lightly populated areas, and the influx of construction, mining and transportation workers is spurring local demand for motel, retail and residential construction. “In response [to a shortage of pipeline capacity in North Dakota], companies are building rail terminals,” the Wall Street Journal reported on Wednesday. On the Gulf Coast, “energy companies…are planning or have already begun building…projects to liquefy and export gas as they seek to capitalize on growing demand for liquid-gas imports,” especially from Asia, the Journal reported on October 27. BG Group PLC “is now seeking permits to convert a facility in Lake Charles, Louisiana, to export gas. Freeport LNG Development LP has teamed with Macquarie Group to export [liquefied natural gas] from a Texas facility” and Cheniere Energy Partners LP plans to begin “construction of a $6 billion facility in Cameron Parish, La., next year.”

Three Keys to Increasing Cross-Selling

Many firms place greater emphasis on pursuing new clients than cross-selling. Yet, capturing new clients is costly and lengthy in comparison with cross-selling, especially in today’s highly competitive market. Why not use a change or consolidation effort to refocus staff on the importance of cross-selling? Here are three tips that can help to increase cross-selling and produce faster business development results:


1. Make it a priority. Sounds simple enough, but if a firm’s recognition and reward systems give greater emphasis to finding new clients, then that’s what employees will think is most important. Talk it up. Give recognition for cross-selling. Make it clear in routine meetings that cross-selling is a priority, and do some of it yourself. Set an example at the executive or principal level, and employees will believe it’s important. Identifying where cross-selling opportunities exist and creating a tally of those opportunities can also help.

2. Train employees. One of the main reasons why many employees don’t cross-sell work is that they’re reluctant to discuss a service that’s outside their area of technical expertise (not to mention employees that have been with a company for years and still don’t know the full range of services the company provides!). Employees don’t need to be experts in every discipline, but they would benefit from some education on the basics, such as the services the firm provides, issues these services address, how the services are provided, buzz words to look for and say, and how to introduce the client to your in-house expert when they find a specific opportunity. This can be done at brown bag lunch forums that create great internal dialog among the practice areas.

3. Provide experience. Create opportunities for employees to work on projects outside their normal practice. This provides two benefits: they’ll be better equipped to cross-sell, and over time it will give the firm greater flexibility to address the ebb and flow of workload across the firm’s practice areas. A consolidated office may be a natural catalyst for this.


Just remember that YOU are the best sales tool your firm has. To learn more about how to cross-sell and bring in business, join PSMJ this fall for our Winning Proposals and Presentations seminar, coming to 5 locations across North America. Get the tools and confidence you need to succeed in bringing in more work for the firm – register today!

Do your potential successors fit this bill? If not, move on!

The retirement wave has officially begun in the A/E industry. Since 2007, the percentage of employee turnover attributable to retirement or health issues has almost doubled. Yet the number of principals who have prepared ownership or leadership transition plans has actually dropped since 2007. If you are one of the 60 percent of principals who have no plans, you need to start evaluating your potential successors to ensure they will carry on the name and reputation of your firm long after you’ve retired.


Think about the people who are your obvious successors and decide whether these criteria describe them:

• Vision. Leaders create a vision for the firm and the future that inspires and motivates others.

• Focus. Leaders spend their energy in the few directions that will really make a difference to clients and to the firm over the long term.

• Values. Leaders embody the personal and professional values that you want to perpetuate in your firm.

• Client relations. Leaders understand what matters to clients and they motivate staff to excel in those areas. They inspire confidence in clients and potential clients.

• Empowerment. Leaders coach employees, help them grow personally and professionally, and encourage them to think and act like entrepreneurs within the boundaries of their responsibilities.

• Achievement. Leaders get things done, maximizing their own performance and constantly looking for ways to maximize the performance of the firm.

• Quality. Leaders strive to continuously improve the quality of their own work and the work of others in the firm, to satisfy and delight clients.

• Optimism. Leaders are positive about the future, and they don’t let obstacles deter them from accomplishing their goals. Their optimism is contagious.

• Teamwork. Leaders enjoy working with, and through, people. They look for opportunities to praise the efforts of others on the team. People like to work with them, and choose them as role models.

• Flexibility. Leaders perceive when their style or approach is not working in a particular situation and they’re not afraid to change to get the results they desire.

• Management. Leaders understand the systems and procedures that make your firm operate as a business. They know how to use these systems to maximize your performance and your profitability.

These traits are a great starting point, but you can take your evaluation of potential successors beyond this step. Come to PSMJ’s Ownership Transition Roundtable, November 8-9, in San Diego, CA for more advice on how to select your future successors and successfully turn your firm over to their capable hands.

Residential Construction Continues to Struggle

A sluggish economy, a soft job market, a large inventory of foreclosed homes, the threat of additional foreclosures, and difficulty in obtaining financing for both potential homebuyers and for builders continue to act as a drag on the housing market. In spite of these factors, some glimmers of hope have appeared recently. Housing starts rose 15% in September from August. Much of that gain was due to ever volatile multifamily starts. Single-family starts at worst are bouncing around a bottom of about 420,000 units. Meanwhile, single-family permits are holding their own at 417,000. The National Association of Home Builders (NAHB) October Housing Market Index (HMI) rose from 14 to 18, the highest it has been since a reading of 22 in May of last year. Particularly heartening was that the HMI for the West jumped from 12 to 21, its highest reading since August 2007. The HMI for the South was up from 15 to 19. Together, the West and the South account for roughly three-quarters of national housing starts.

Lower long-term interest rates from the Federal Reserve’s Operation Twist will provide a mild lift to the housing market, although tight lending standards remain a problem. If the national economy produces at least 100,000 net new jobs per month (at an annual rate) as we fully expect, the housing market will begin to trend upward and build some positive momentum. Regardless, the outlook for multifamily housing projects looks bright in the near term as vacancy rates fall and rents rise.

New residential construction spending has been inching upward for the past three months. In August, it advanced 1.3% to $128.7 billion, its highest level since February. The forecast is for residential construction spending to fall 6.0% in 2011 and then rise 2.1% in 2012 and 7.3% in 2013.

Clinard Engineering Associates merges with Alfred Benesch & Company

PSMJ initiates transaction and advises Clinard Engineering Associates

As of October 3, 2011, Clinard Engineering Associates of Nashville, Tennessee has joined forces with Alfred Benesch & Company, a leading multi-discipline design firm serving a wide range of client markets. With offices in Nashville and Chattanooga, Clinard is a transportation engineering firm that specializes in civil, structural, and environmental engineering services.

By merging with Benesch, Clinard is now part of a multi-faceted engineering team with a network of offices from Pennsylvania to Colorado. The combined firm now has more than 380 employees located throughout ten states including Colorado, Illinois, Iowa, Kansas, Michigan, Nebraska, Ohio, Pennsylvania, Tennessee and Wisconsin.

“When you have the right firms merging together for the right reasons, you will realize growth opportunities that neither firm would have accomplished on their own” states PSMJ Consultant Bradford Wilson, CMA. Wilson, the lead consultant on this engagement, went on to state “Geographic expansion is the top reason that firms choose to grow through acquisition and we’re confident that this transaction will reap rewards for years to come.”

This transaction is one of many that have made 2011 a year of significant transaction activity in the A/E industry. According to PSMJ’s transaction tracking, there have been 156 mergers or acquisitions in the industry in the first three quarters of the year and PSMJ is forecasting that pace to continue bringing the year’s total to pre-recession levels of 200+ transactions. “But, the number of transactions doesn’t tell the entire story.” stated Gregory Hart, PSMJ Consultant, when discussing M&A transaction activity. “The size and nature of deals today is quite different from what we saw before the economic meltdown. This is still a very risk-averse environment and the transactions reflect that.”

To keep tabs on the latest M&A news from the A/E industry and transactions like this one, subscribe to the M&A Insider— PSMJ’s free weekly e-news on the latest transactions and the tips you need for successful M&A strategy. Learn more by visiting http://www.psmj.com/mergers-and-acquisitions.html.

After Upturn, Architecture Billings Fall Again

The American Institute of Architects’ Architecture Billings Index once again showed decline in the month of September. While there was a slight improvement in August, the trend proved to be short-lived and it seems the industry is back to the decline we saw for the four months prior to that. Not only was there a drop in billings at architecture firms around the country, there was a decrease in average backlog.

The Architecture Billings Index (ABI) serves as the leading economic indicator of construction activity, and reflects the approximate 9-12 month lag time between architecture billings, and actual construction spending. The monthly ABI scores are centered around 50, with scores above 50 indicating an aggregate increase in billings, and scores below 50 indicating a decline.

The ABI registered a score of 46.9 for the month of September, a significant drop from the 51.4 posted in August. While the average number of billings declined on a national level overall, there were some regions that did show increase in firm activity. Regional billings scores are computed as rolling three-month moving averages, and recent numbers showed enough strength to boost scores for firms in the Northeast and Midwest into positive territory. Scores for firms in the South and West continued to show relatively steep declines.

Billings levels by firms’ specialization were also mixed last month. Commercial/Industrial firms reported reasonable improvement in September; the ninth straight month of billings gains from mid-2010 through the first quarter of 2011. However, residential and institutional firms once again reported a decline.

Unfortunately, backlogs at architecture firms around the country took a slight hit as well. They decreased from 4.4 months at the end of the second quarter, to 4.2 months in the third quarter. This means that firms can keep current employees working for an average of 4.2 months now without signing onto any new projects. While it might seem like a safety net, a continued decline in backlog and billings could be very detrimental to firms’ revenue stream in just a few months.

Economy remains in slow gear

The broader economy continues to show only modest growth. Just over 100,000 jobs were added in September, bringing the total added for the first nine months of the year to just over one million. That is well below the number required to generate healthy growth in the economy, and, as such, the national unemployment rate is up from 9.0 percent in January to 9.1 percent in September.

Construction employment saw an increase of 26,000 positions in September, the second strongest number of the year. However, only 53,000 positions in this sector have been added since the beginning of the year, or fewer than 6,000 per month. Architecture firms have added only 1,200 positions since January, to a current workforce of just over 153,000 in August, the most recent figures available.

Statistics

By region, the ABI breaks down as follows from July* to September: Northeast is up 50.8 from 46.4, South is up 47.3 from 46.9, West is up 46.7 from 46.6, and Midwest is up 51.0 from 44.9.

By market sector: Commercial/Industrial is up 52.4 from 47.9, Residential is up 46.4 from 44.7, Institutional is up 48.0 from 47.2, and Mixed is up 50.0 from 47.1.

*Data was not available for the month of August


This month, participants in the AIA Work-on-the-Boards panel were asked to comment on the current status of these downsized architectural staff:

• We specialize in residential and have stayed in business doing multifamily, as the single-family residential market is dead. Firms that held on with government work are now slowing down significantly.
—7-person firm in the West, residential specialization

• RFPs have dropped to first-quarter levels. Some projects already under contract have been slow to get the owner to agree to finalize and send out to bid.
—4-person firm in the Northeast, mixed specialization

• Our office interiors and retail work for large corporate clients are strong, but government, education, etc., are very weak.
—60-person firm in the South, commercial/industrial specialization

• Larger companies are going after local work instead of their typical national work, so smaller companies are having a struggle to get work. We typically have been doing 90 percent national work and 10 percent local. It is now 90 percent local and 10 percent national.
—50-person firm in the Midwest, commercial/industrial specialization

Stop Being Too Busy to Market! How to gain more exposure for yourself and your firm

We work in a unique industry – selling services is completely different from selling products. When consumers buy products, they consider the reputation of the manufacturer, but, most likely, have no knowledge of the individuals who are employed by that company.

Yet, when a client commissions us for professional services, our firm’s reputation gets us to the short-list, and the personalities and the reputations of our people win us the work.

Unlike products that can be sampled before purchasing, services cannot be tested, leaving clients to imagine what it would be like to work with the person/firm who delivers the service. This is where you come in!

Sooner or later, all professionals must market, if you want to advance your careers – there is no such thing as being too busy serving one client to market to another. Here are some ways you can gain exposure for your firm and promote the success of your own career:

- Write an article and get it placed in a local media outlet
- Speak at your local business association, chamber of commerce, or networking meeting
- Create a client-oriented monthly e-newsletter or webinar series
- Hold seminars and workshops for clients in your office (i.e. lunch-and-learns)
- Create a client-resource web site
- Get involved in social networking: create a blog or Facebook page for your firm to share firm information and news with clients
- E-mail relevant news and information to clients
- Collect and harness the power of client testimonials

Just remember that lack of time is not a valid reason to pass on career and business development activities. The small things you can do every day will yield positive results, if you make the time investment to do them well.

To learn more about how to raise the reputations and industry presence of your firm’s best assets (its people!), join PSMJ this fall for our Winning Proposals and Presentations seminar, coming to 5 locations across North America. Get the tools and confidence you need to succeed in bringing in more work for the firm – register today!

How to Gain Your Client’s Trust

In the present economy, clients only do business with firms they trust. And, with overhead dollars so tightly controlled, you must leverage every dollar you spend developing new business. So, here’s the challenge: what can you do to gain a client’s trust in the most cost-effective way?

Here are six of the most important qualities to demonstrate to build trust with your client:

1. You must prove your skill, competence, and experience in being part of a team.
2. You must prove you have “bench strength,” overall resources, an easily understandable organizational structure, and financial stability.
3. You must prove you have a solid reputation with other client partners who have collaborated with you.
4. You must take the time to understand your clients’ overall financial constraints on each project.
5. You must commit to building relationships with all client stakeholders that are integral to project success.
6. You must thoroughly consider all alternatives, and achieve results in a timely manner.


In contrast, here are six ways to quickly sink the relationship:

1. Be late on a deliverable
2. Give an excuse for being late on a deliverable
3. Be slow to return their call
4. Give an excuse why you were slow to return their call
5. Ask for an unexpected change order
6. Give an excuse for waiting to ask for additional money


Get the picture? Remember, excuses only satisfy those who make them. Don’t do it. If you make a mistake, own it. The game is trust. It’s hard to gain it. It’s easy to lose it.

For more tips on how to mitigate risks with great project management skills, attend PSMJ's A/E/C Project Management Bootcamp, the world's most successful PM training program in the industry! This Bootcamp is a revolutionary training 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.

PSMJ's A/E/C Project Management Bootcamp can instantly and dramatically improve your ability to manage projects for quality, speed, and profitability. Click here to order or contact PSMJ Education Department at education@psmj.com or (800) 537-7765.

Focus on Your Clients’ Real Issues

When people begin to strategize about proposal opportunities, they tend to focus on their own firm’s strengths and how they can sell those strengths to the client.

In other words, they end up making a great case for features for which the client has little interest while ignoring the client’s most important issues. This is a formula for spending lots of money on a losing proposal.

The first step in developing a winning proposal strategy is to find out what the clients’ real issues are. Fortunately, it isn’t hard to do. During your pre-proposal interview with the client, just ask these two questions:

1. What is your vision for a successful project?

2. What are your greatest fears about this project?


Also, remember that most clients aren’t a single person. So you need to ask those two questions of each individual on the selection committee or, if they don’t have a formal selection committee, each individual who is influential in making the buying decision.

Once you have figured out the clients’ real issues, your next step is to develop a strategy that will convince the client representatives that your firm will address their hopes and fears better than anyone else. And if you can’t convince yourself that you are the best choice to address those issues, you should probably save your time and money and pass on the opportunity.

To learn more about how to make a more targeted proposal that accurately addresses your clients’ true concerns and increase your proposal hit rate, join PSMJ this fall for our Winning Proposals and Presentations seminar, coming to 5 locations across North America. Get the tools and confidence you need to succeed in bringing in more work for the firm – register today!

PSMJ Resources Inc. Announces 2011 Award Winners at Breakthrough 2012 Conference in Chicago

Awards were given to 54 top A/E industry firms for outstanding financial and customer service performance

PSMJ Resources, Inc., the premier management consulting firm for the A/E/C (architecture/engineering/construction) industries, distributed its annual PSMJ Circle of Excellence and Premier Award for Client Satisfaction Awards for 2011. PSMJ Resources will formally recognize these 2011 Award Winners at its Breakthrough 2012 Conference in Chicago, Illinois.

2011 Circle of Excellence
The 2011 PSMJ Circle of Excellence is determined by weighting each firm’s ranking in the overall 2011 PSMJ A/E Financial Performance Benchmark Survey 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 2011 PSMJ Circle of Excellence reflects the performance of 48 participating design firms, 45 of which have agreed to have their names published:

A/R/C Associates, Inc.
Alfred Benesch & Company
Atlantic Coast Consulting, Inc.
Aviation Alliance Inc
Bison Engineering Inc
Callidus Engineering
Clark Dietz Inc
Commonwealth Engineers Inc
Cooper Zietz Engineers, Inc.
Design Engineers
Dietz & Company Architects Inc
Drake Haglan & Associates
Environmental Standards
Falk PLI Engineering & Surveying
FEH Associates, Inc.
Fentress Architects
Freese and Nichols, Inc.
GBBN Architects
Geosyntec Consultants, Inc.
Greeley and Hansen, LLC.
Hart Design Group Ltd
Hunt Engineers, Architects & Land Surveyors, P.C.
Johnson Braund Design Group Inc
Jones & DeMille Engineering
K S Ware & Associates LLC (KSWA)
Kadrmas, Lee & Jackson, Inc
Kleinschmidt Associates
Klohn Crippen Berger Ltd.
Larson Design Group
LPAS
MPE Engineering Ltd
P2S Engineering Inc
RLF
Robert Peccia & Associates
Rogers Ford LC
Rowland & Broughton Architecture
SPEC Services Inc
Stelling Engineers, INC
Straticom Planning Associates Inc
Tectonic Engineering & Surveying Consultants P.C.
Thomas Miller & Partners, LLC
TSP Inc.
Ward Scott Veron Architects Inc
Wightman Jones, Inc.
Wright-Pierce Engineers


Premier Award for Client Satisfaction
The Premier Award for Client Satisfaction, presented in partnership with DesignFacilitator, honors A/E/C firms that provide their clients with top quality communications, impressive performance, and cost effective solutions. In its second year, the Premier Award participants included several dozen firms from the United States and Canada, many with international offices, making this a truly global competition. The firms ranged in size from 15 to over 3,000 employees, and included architects, engineers, geo-scientists, environmental consultants, and others - creating a diverse cross-section of professional services. Eight firms were selected as stand-out winners:

Albert A. Webb Associates
Atlantic Coast Consulting, Inc.
Burns & McDonnell
Eramosa Engineering Inc.
Fentress Architects
NTM Engineering, Inc.
Site Solutions, Inc.
Sunrise Engineering, Inc.

Three of these firms, Burns & McDonnell, Eramosa Engineering, Inc., and Sunrise Engineering, Inc., also won the Premier Award last year, making them back-to-back repeat winners. In addition, seven honorable mention awards were given to those firms who were ranked at the top of each individual category. In addition to winning the Premier Award, Fentress Architects was recognized at the top of the Most Helpful category, while Atlantic Coast Consulting, Inc. was recognized as having the Best Overall Value. Furthermore, Burns & McDonnell took home top honors in both the Most Responsive and Best at Managing Budgets categories. The remaining three honorable mentions were awarded to:

Geo-Hydro Engineers, Inc.: Highest Quality category
Hart & Hickman PC: Most Accurate category
Petra Geotechnical: Best at Managing Schedules category


The Trinity Award
One firm, Atlantic Coast Consulting, was awarded PSMJ’s 1st Annual Trinity Award, given to the firm(s) that win all three of PSMJ’s awards in the same year: Circle of Excellence, Premier Award for Client Satisfaction, and the A/E/C Best Employer to Work For. The Trinity Award celebrates the extraordinary achievement of excelling at the triple threat of success: highly profitable financial performance, high marks for client satisfaction, and having engaged and fulfilled employees – all leading to a truly successful A/E/C firm in the industry.


Breakthrough 2012
Breakthrough 2012 is an annual conference where A/E/C firm leaders learn directly from their colleagues who have proven their success by triumphantly guiding their firms through the worst economic times our industry has seen in decades. In addition, Frank A. Stasiowski, FAIA, and Dave Burstein, P.E., PSMJ’s resident experts possessing a combined 80+ years of industry and firm management experience, give statistics and advice to these leaders and let the audience know where the A/E/C industry is headed. For more information on future conferences, go to www.psmj.com.

Architecture Firm Billings Rebound Modestly in August

The American Institute of Architects’ Architecture Billings Index showed a modest rebound in firm billings in August. Although business conditions remain mostly mixed around the country, this sudden increase comes as a welcome surprise after four consecutive months of steady decline. While the majority of firms are still reporting a decrease in actual contracts signed, inquiries into new projects continue to grow and more firms reported an increase contracts in August than in the month of July.

The Architecture Billings Index (ABI) serves as the leading economic indicator of construction activity, and reflects the approximate 9-12 month lag time between architecture billings, and actual construction spending. The monthly ABI scores are centered around 50, with scores above 50 indicating an aggregate increase in billings, and scores below 50 indicating a decline.

The ABI registered a score of 51.4 in August, a significant improvement over the 45.1 registered in July. Business conditions are still fairly weak in all regions of the country, but those located in the Northeast reported the sharpest downturn in firm billings for the second month in a row. Conditions also continued to deteriorate at firms with a residential specialization, in spite of moderate growth reported by those firms earlier this year.

The economy as a whole remains pretty weak, and unemployment has remained unchanged in August. This marks the first month with no employment growth since 2010, and only the second time ever that unemployment has had a net change of zero. Construction employment was essentially flat for the month, while architecture services employment increased modestly for the fifth consecutive month in July (the most current data available). The Conference Board’s Consumer Confidence Index declined sharply in August, falling to a score of 44.5 (1985=100), the lowest in more than two years, as consumers became more negative about the future outlook.

Stalled projects remain a major issue for architecture firms

Nearly two-thirds of firms (65%) report having at least one design project under contract that is currently stalled, but likely to eventually proceed to construction. Three-quarters of these stalled projects are delayed due to difficulties obtaining financing. Firms report that all project types have been impacted by financing issues, with 40% of these projects being in the institutional sector: 16.3% education, 9.3% healthcare, and 15.7% other institutional projects. Multifamily residential projects also account for a significant share (15.1%) of projects stalled due to problems obtaining financing. In contrast, industrial, single-family residential, and office projects each account for less than 8% of projects stalled with financing issues.


This month, Work on the Boards participants are saying:

• We are seeing an increase in industrial activity, although we have heard from other firms that multifamily housing has slowed down again. However, a large home builder has announced a new development, and they have recently begun to complete a development that has been on hold since 2009.
- 25-person firm in the South, commercial/industrial specialization

• We are busy and getting busier. Have hired two full-time and two part-time employees in the last two months.
- Five-person firm in the Northeast, institutional specialization

• In the last six months, inquiries and initial feasibility analysis work have dramatically picked up. In the last week, our office has had one stalled project released from a three-month hold, and signed contracts for a new single-family home, and a residential renovation project. With the market soft, construction costs have seen a substantial reduction, leading to a small surge of clients seizing an opportunity.
- One-person firm in the West, residential specialization

• Owners are taking longer to begin contracts. Most clients are renovating existing facilities instead of [starting] ground-up new construction. Work from non-profit entities is virtually nonexistent.
- Eight-person firm in the Midwest, commercial/industrial specialization

10 Strategies to Stay Connected With Your Clients

Though most of us went to school because we love to design or build things or engineer them, we are in a “people business.” Relationships are the foundation of successful projects. But, do we really understand what it takes to form a real connection with our clients?

A previous survey of 200 buyers of professional services indicated that 85 percent encountered at least one major problem with a service provider during the sales process, including: “Did not listen to me” “Did not understand my needs” “Did not respond to my requests and correspondences in a timely manner.”


The following 10 strategies can vault you past the less proactive and unsuspecting competition:

1. Have a plan. Determine your client targets and include action items that will be meaningful to your client. Include costs and timetables. Monitor your progress periodically.

2. Know their business. It’s impossible to understand a client’s needs if you don’t understand their business. Start by finding out what they read and which organizations they belong to. Read those publications and attend applicable functions and become familiar with their concerns and needs.

3. Know them personally. Figure out ways to get to know their interests outside of work. You’d be surprised how much you can learn from just a quick visit to their office. You are not trying to become their best friend. That’s not a reasonable approach. You just want them to feel comfortable around you. Clients are going to work with those they feel comfortable with.

4. Listen with your ears and your eyes. You can tell when someone isn’t really listening to you. So can your clients. While they are speaking, look at them and listen with your eyes. They’ll pick up on your nonverbal communication. Don’t look at your watch, your blackberry, or any other distraction. The only time you look away is to take a brief note on an important item that will need to be followed up.

5. Make the most of meetings and phone calls. An occasional “how are you” call is certainly okay. As a general rule, have an agenda for each client communication. Leave the meeting or end the call with action items and next steps. Action items and next steps make the next contact easier. And, you will gain the reputation as a dependable “closer” when you follow-up.

6. Expand your network within the client organization. Sure, there’s usually one ultimate decision maker in each company. But, don’t exclude the influentials. They can be extremely valuable in your information gathering. Plus, they often influence the decision maker. Get to know as many people as you can within the organization.

7. Share leads. Find ways to help your client be successful in their industry, such as sharing information about industry trends or passing on business leads to them.

8. Confidentiality is critical. A breach of trust is the quickest way to sever a relationship— client or otherwise. Don’t do it. And, don’t pretend to give them information that was given to you in confidence. That only shows you break confidences.

9. Give and give again. It’s not going to happen overnight. Don’t expect to get awarded a project after the first face-to-face meeting.

10. Stay focused. Again, it’s all about your plan. Use it and refer to it often. Revise it as necessary. Keeping track of your progress will ultimately enhance your existing relationships and help you form new ones.


Maintaining a great relationship with your clients will ultimately benefit you and your firm’s bottom line. As a PM, make strengthening your client connections a priority.

For more project management tips, come to PSMJ's A/E/C Project Management Bootcamp, the world's most successful PM training program in the industry! This Bootcamp is a revolutionary training 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.

PSMJ's A/E/C Project Management Bootcamp can instantly and dramatically improve your ability to manage projects for quality, speed, and profitability. Contact PSMJ Education Department at education@psmj.com or (800) 537-7765.

MHC says starts rise in August; housing is mixed; retail remains weak; industrial gains

"New construction starts in August advanced 8%,” McGraw-Hill Construction (MHC) reported on Wednesday, based on data it compiled. “The gain followed a 10% decline in July, and continued the fluctuating pattern that’s been present in recent months. The pickup for total construction in August was the result of greater activity for each of construction’s three main sectors—nonresidential building [7%], residential building [4%] and nonbuilding construction [13%]. For the first eight months of 2011, total construction on an unadjusted basis was…down 6% from the same period a year ago.” Nonresidential building declined 8% year-to-date; residential, -5%; and nonbuilding, -4%. “‘Over the [latest] three months an up-and-down pattern has emerged,’ stated Robert A. Murray, vice president of economic affairs for [MHC]. ‘This suggests that construction starts are beginning to stabilize after the earlier loss of momentum. At the same time, total construction remains on track to register a moderate decline for 2011 as a whole, after leveling off in 2010. While August showed some improvement for institutional building and public works, each of these sectors will be subject to funding cutbacks at the federal and state levels of government. Single-family housing continues to see homebuyer demand restrained by the sluggish economic environment and more restrictive lending standards. And what appears to be the early signs of recovery for commercial building may well end up being deferred by rising investor concern about employment growth and the near term prospects for the U.S. economy.’”

Data on August housing starts and building permits that the Census Bureau released on Tuesday show a mixed outlook for residential construction. Single-family starts dipped 1.4% from July’s level and 2.3% from August 2010; permits, a reliable indicator of near-term single family construction, rose 2.5% and 2.0%, respectively. Multifamily (two or more units) starts dropped 13% and 14% but permits climbed 4.5% and 22%.

The outlook for retail construction remains bleak. Major national retailers at AGC’s Public-Private Industry Advisory Council meeting on Friday reported they expect to spend more on distribution facilities in 2012 than on new or remodeled stores as they consolidate and speed deliveries to stores and respond to growing online orders. Other chains continue to give up or market existing space. “Sears Holdings Corp., whose sprawling stores are laden with extra space, is aggressively marketing itself as a place for other retailers to set up shop,” the Wall Street Journal reported on Friday. “Through its real-estate arm, Sears…has listed on its website nearly 4,000 of its namesake and Kmart stores that have space for other merchants or retail operations to lease.” Retail sales at most categories of stores other than gas stations and auto dealers rose roughly 5-6% in the first eight months of 2012 compared with the same period in 2010, while sales of nonstore retailers (online and mail-order) jumped 13%, the Census Bureau reported on September 19.

Online sales are one factor stimulating warehouse and industrial construction. “Signs of the market’s growth are apparent in the New York area,” the New York Times reported on September 14. In “Edison, New Jersey, the J.G. Petrucci Company is building a 570,000-square-foot warehouse even though the developer has not lined up a single tenant….In Robbinsville, N.J., [Matrix Development Group is] constructing a 150,000-square-foot industrial building for the beverage distributor Ritchie & Page[. But] smaller properties are languishing…‘because banks aren’t lending, and people have no equity in their homes to take out second mortgages to finance new businesses,’” said Jack O’Connor, a principal and director of the national industrial practice group at Newmark Knight Frank in Long Island.

“Ports also play a role in industrial real estate, and in New Jersey investors are making big bets that port business will increase,” the Times article reported. “This is in part because of a $5.25 billion project to widen the Panama Canal by 2014. The widening will allow large cargo ships that currently anchor in California and use trucks or the railroad to move goods to the East Coast to sail directly to New Jersey….To prepare for an influx of larger ships the Port Authority of New York and New Jersey plans to raise the Bayonne Bridge by 2016. [The Port Newark Container Terminal] agreed to invest $500 million in capital improvements.” Other ports on the East and Gulf coasts are also investing in port, rail, road and warehouse construction, while West Coast ports and railroads are trying to improve transfer and delivery times. “Union Pacific plans to invest approximately $3.3 billion in capital during 2011,” the firm reported in a press release on Thursday.

“Bridgestone Corp. said on Wednesday it plans to spend $1.1 billion to expand an existing auto-tire plant in [Graniteville,] South Carolina and build a new factory nearby to produce tires for heavy, off-road vehicles,” the Journal reported on Thursday….The announcement highlights an ongoing move by auto-related companies choosing to manufacture in the U.S. with an eye to exporting elsewhere after years of moving operations out of the country in search of cheaper labor in other parts of the world.”

“Some say…the Bakken shale formation, a 15,000-square-mile oil field straddling North Dakota and Montana and producing 300,000 barrels per day of crude oil…expected to increase to 1.2 million barrels per day by 2015” is “the biggest construction project in the U.S.—a job requiring $8 billion in rail and fuel terminals, oil pipelines, natural-gas plants, oil wells, highway upgrades, water distribution systems and more,” Engineering News-Record reported on September 19. “The number of construction projects, speed of growth and cold-climate challenges are mind-boggling."

Improve Your Hit Rate With A Better Go / No-Go Process

In this economy, all firms are on a constant hunt for new projects to bring into the office. Not surprisingly, because of this, many A/E/C firms follow a Go/Go procedure with their RFP! In other words, they go after every RFP that comes in regardless of project/client type appropriateness, timing, or availability of staff. No one wants to be the person turning away leads and projects!

But you MUST resist the temptation to go after every RFP!

One sure way to increase the hit rate of your proposals is to have an objective, efficient, orderly, rigorous system for deciding when to propose on projects, and when to walk away. Here are a few things to ask yourselves before starting work on your next proposal:

- Is the client a “strategic client?” Strategic clients clients are important to the overall success of your firm because their work will support your growth strategy or some other business imperative. When you consider an RFP, consider the role this client and this project would play in your ability to achieve your strategic goals. Always give “strategic clients” a go.

- Is working on this proposal going to take time away from producing another quality proposal? Consider the time and money you will need to invest in preparing a proposal. You need to pick and choose the proposals you know you have the best shot at winning. It is better to concentrate your efforts on a few quality proposals than do a mediocre job on a lot of proposals (believe it or not, clients can tell when you “phone it in”). If your current hit rate is far below the national average of around 35 to 40 percent, you’re not being picky enough.

- How wired are you to win this proposal? Have you done work before with this client? Do your Principals have a good relationship with this client? Have you laid down the appropriate Business Development contacts with this client? If you answered NO to 1 or more of these questions, respectfully decline the RFP. Chances are there is another firm with a better connection /relationship to this client who is going to win the job. You have a better chance of winning a proposal if you have already established a relationship with the client 6-12 months in advance of an RFP arriving in your inbox. If you turn this into a go, you might as well throw your proposal in the trash.

- Are we uniquely qualified with similar project experience? In this economy, you might be tempted to branch out into a new project type or market, but doing so can be extremely risky. With competition being so fierce out there, there are bound to be more qualified firms pursuing the project – to most clients, experience counts a lot. Stick to what you know and try to find more opportunities within your firm’s niche.

- Do you know the client’s hot buttons? You might not be able to learn everything you need to know about a client or a project just by reading what they say in an RFP. The most valuable information typically comes through your direct relationship with your client, through your marketing intelligence, or through reading between the lines of an RFP. Your proposal should be uniquely written and targeted to talk about how you are going to solve their specific problems. If you don’t know your client’s hot buttons, you don’t know them well enough to submit a proposal.

One important aspect of marketing is knowing when and how to turn work down. Although you may be tempted to say “Yes” to every RFP, remember to check the criteria above before you start any proposal. Remember, healthy firms say “NO” when work is not in line with their own focus and vision.

To learn more about how to establish a proper go/no-go process and increase your proposal hit rate, join PSMJ this fall for our Winning Proposals and Presentations seminar, coming to 5 locations across North America. Get the tools and confidence you need to succeed in bringing in more work for the firm – register today!

PSMJ’s Webinar Membership: Online learning just got a little easier!

Get a year of webinars for one low price with PSMJ’s Webinar Membership Package!

At PSMJ Resources, we are committed to dramatically improving business performance of A/E/C organizations worldwide by empowering CEOs, Principals, Project Managers, Marketers, HR Directors and other top firm leaders to make strategic and tactical improvements that pay off with great speed in measurable ways. With our industry experience, and commitment to program and product excellence, we continuously strive to teach you new ideas and trends, as well as continuing to offer the proven concepts that have long endured in the architectural, engineering and construction industries.

One way to deliver these new ideas and trends is through our innovative, up-to-the-minute webinar presentations. Since we started our webinar program in 2009, we have instructed thousands on green design, mergers and acquisitions, public sector marketing, employee engagement, innovations in project management, and many other topics.

Now, we are pleased to offer you an opportunity to view one whole year of webinar learning for only a fraction of the cost of attending each one individually!

Purchasing an annual subscription allows you to view our live seminars every month, and catch up later on the ones you can’t see live! As a member, you will have unlimited access to view these webinars time and time again, and for each webinar you view, you will earn 1 valuable continuing education hour towards your recertification!

How the webinar membership works:

1. You will be automatically registered for the webinars currently featured in our 2011-2012 webinar schedule.


2. You will receive a reminder from our education department about your upcoming webinar, including a link to log into the webinar.


3. After the webinar date, you can request a link to the presentation if you missed the live event, or you just want to see it again.

You will have full access to the webinars promoted from now until your membership expires in a year. Currently, we plan to host our webinars the 3rd Tuesday of every month (barring holidays or speaker conflicts) and have already booked the following webinar schedule:

October 18, 2011: Integrated Project Design

November: Why Most Business Plans Are a Total Waste of Time – and How to Do a Really Good Plan in Just 4 Hours

December: Strategic Pricing – Maximizing Profits, Not Just Winning Work

January: How to Keep Your Projects Under Budget Every Time

February: Getting the Most from Your Young Professionals

March: How to Find a Really Good Firm to Acquire

April: “IFBP” – The “Secret Sauce” That Will Dramatically Improve Your Proposal Hit Rate

May: 9 Ways to Speed Up Collections

June: Using the FAR and AASHTO Guide to Your Advantage

July: Managing Overhead for Long Term Growth

August: How to Successfully Tackle the Federal Market

September: How to Expand into Overseas Markets

* Titles and dates are subject to change due to speaker availability, hot trends, or holidays

Right now, if you were to purchase all of these webinars individually, it would cost you $249 per webinar ($149 for newsletter subscribers) or $2,988 total ($1,788 for subscribers)!

For only $695 (or $395 for newsletter subscribers), you can get all 12! Now, we think that is a great deal! Every webinar on the slate is one that will dramatically increase your profits, improve your strategic thinking, and make you a better leader. Even if you can only justify needing to see 3 of these webinars, this membership will STILL pay for itself!

Becoming a PSMJ Webinar Member is a no brainer! Sign up todayand enjoy your first webinar, Integrated Project Design on October 18, 2011.

Managing Risk in Public Works

Any discussion of risk management in public works project delivery must consider the primary causes of project failure. In a landmark study, sponsored by AASHTO, which looked at project delivery history of over 26,000 project delivered over a five-year period by 20 state DOTs identified the following common causes:


• Environmental permitting issues

• Inability to get utilities relocated (especially if a railroad is involved)

• Inability to get rights of way

• Political/public opposition to the project

• Underground surprises


All five of these causes can be managed, particularly if they are recognized early in the project delivery process. The key here is to initiate the process early, monitor progress regularly and take aggressive corrective action when appropriate.


• Environmental. There is a prescribed process for complying with the environmental permitting process. Although broadly based on the NEPA process, the various Corps Districts have developed their own implementing processes and consequently, timelines. Establishing and maintaining liaison with the local Corps District office can determine the processes and timelines.

• Utility coordination relocation. Utility companies will, of course, be responsible for the relocation. These companies, often quasi-public, are typically understaffed, have their own capital program and relocation for a public project is simply a distraction. Early identification of utilities and proactive interaction with utility companies can help smooth the process. Railroads are particularly problematic. Across all of North America railroad permitting is a common challenge. Although the railroads have a process for working with public agencies, these same agencies regardless of whether they are state or local consistently report that railroad coordination takes inordinate time, costs excessively and remains a challenge. If a project requires coordination with a railroad, allow substantial extra time and budget.

• Rights of way. Acquisition of rights of way for public projects must, by law, follow an established, prescribed process. Much of the process has timelines attached to it that cannot be shortened. Again, recognizing and respecting the process and understanding the time that right of way acquisition takes can help prevent unanticipated delays.

• Political/public acceptance. A fundamental truth about political and public acceptance is that it is subject to change. A project that is needed and even clamored for can suddenly fall from public acceptance. Thus a proactive outreach program, encompassing both public and political interests, is essential. Be careful with timing, any public outreach occurring during election season can, and probably will, become a campaign issue. This is not a comfortable place to be!

• Underground surprises. If a project requires digging a hole, prepare for a surprise. Anything from uncovering an archeological site, finding contaminated soil, unknown utilities or unsuitable soil conditions can be found. Expect it! Remember, it’s cheaper and easier to find these conditions before construction begins than later with the backhoe. The fundamental rule here is “Do not short change the underground investigation even if you think you know what’s there.”


These risks have much in common— they involve coordination and the cooperation with other individuals and agencies unmotivated by the mission to build the project. Thus common rules can be followed. Start early, allow time, respect the processes of the other agency, provide for a contingency in both schedule and budget and don’t shortchange the underground investigation.

For more project management tips, come to PSMJ's A/E/C Project Management Bootcamp, the world's most successful PM training program in the industry! This Bootcamp is a revolutionary training 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.

PSMJ's A/E/C Project Management Bootcamp can instantly and dramatically improve your ability to manage projects for quality, speed, and profitability. Click here to order or contact PSMJ Education Department at education@psmj.com or (800) 537-7765.

FSC Architects & Engineers Joins with Leading North American Design Firm

PSMJ serves as exclusive advisor for FSC in the transaction

FSC Architects & Engineers, based in the Northern Canada city of Yellowknife, has signed a letter of intent to join North American design firm Stantec. With more than 70 employees in four office locations, FSC is the largest multidisciplinary consulting firm headquartered in Northern Canada.

Founded in 1976, FSC Architects & Engineers is a professional consulting practice with a special interest in cold-climate and remote-location architecture and engineering projects. FSC provides services and expertise within architecture, mechanical, electrical, civil/municipal, structural, and environmental engineering for public and private clients.

“This is a great fit that aligns the deep technical expertise and niche of FSC with the well-known and well-respected Stantec brand,” states Bradford Wilson, CMA, lead PSMJ consultant on this engagement “The combined firm is positioned well to capitalize on market opportunities.”

FSC has a diverse portfolio of projects including the highly acclaimed Northwest Territories Legislative Assembly Building in Yellowknife, the Piqqusilirivvik Inuit Cultural Learning Facility in Clyde River, Nunavut, and the RCMP “V” Division Headquarters in Iqaluit, Nunavut. FSC also designed the Eric Nielson Whitehorse International Airport Expansion in Yukon, and the Yakutsk International Air Terminal Building in Russia

“With the FSC team joining Stantec we significantly strengthen our presence in the Canadian North,” says Bob Gomes, Stantec president and chief executive officer. “FSC’s unique cold-weather focus will add a new element to our buildings practice and allows us to offer a complete package of environmental, scientific, engineering, and project management services to FSC’s unique client base.”

Good Project Management is Good Risk Management

Most risks are foreseeable and responsive to thoughtful project management.

• Accept only the right clients, then the right projects. Require a retainer from new clients to be credited to the last invoice. A retainer larger than the maximum anticipated WIP and Aged AR may be appropriate.

• Risk reduction by any means is usually superior to any management scheme. Identify workable systems as early as possible. Stick to projects you understand and let your ability determine what you attempt. Learn from challenges with similar projects and clients. Use detailed planning to enhance understanding. Avoid unconscious execution via custom and tradition.

• Clearly written agreements are essential. Agreements that are legal, effective, and achievable are even better. Define effort and actions from your perspective and performance criteria from the client’s point of view. Specify client responsibilities as well as your own. Break the scope into manageable chunks to form natural firewalls that limit how far things can go wrong. Require client approval of each critical decision before starting the next step.

• Manage expectations more closely than schedule, cost, and scope. Educate the client to make better team decisions. Under promise so you can over achieve.

• Ensure the right team is really available before issuing the proposal. Be cautious with inter-departmental sharing. Treat adjunct and borrowed staff at least as well as “your own” to keep them engaged. Build a reserve posse outside your usual project team to accommodate sudden demands.

• Lead your people effectively and the project should follow. Value individuals and interactions over processes and tools. Be results oriented, listen well, empower, and provide clear unwavering vision and strategy. Construct mentoring opportunities around project goals. See and be seen. Visit the job site often. Experience the project first hand. Ensure safety and quality are being practiced effectively.

• React to change in real time. Use evolutionary methods. Issue timely change orders (even if there is no cost) to support an iterative and incremental approach based on customer collaboration rather than contract negotiation. Test your understanding by re-planning when necessary.


Vigorously protect the most important member of the team, you. Set strict criteria to guard against your own ego and over extending yourself to take on too many challenges.

For more tips on how to mitigate risks with great project management skills, attend PSMJ's A/E/C Project Management Bootcamp, the world's most successful PM training program in the industry! This Bootcamp is a revolutionary training 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.

PSMJ's A/E/C Project Management Bootcamp can instantly and dramatically improve your ability to manage projects for quality, speed, and profitability. Click here to order or contact PSMJ Education Department at education@psmj.com or (800) 537-7765.

Breakthough 2012

Hear why Dave Burstein thinks you should attend Breakthrough 2012 in October!

Do You Think You’re Going To Live Forever?

The results of this month’s A/E Pulse survey seem to indicate that a large number of principals believe they will live forever. Here are the results, along with some of our conclusions and interpretations:

1. In 2/3 of firms under 50 employees, the founder still owns most or all of the firm’s stock. These firms will find it increasingly difficult to affect a satisfactory ownership transition as the founder gets closer to retirement age.

2. In over 40 percent of firms under 250 employees, authority is still based mostly on the amount of stock owned rather than organizational position. These firms will find it increasingly difficult to grow and prosper.

3. Less than half of all firms have an ongoing ownership transition plan that is working smoothly. With most owners in the Baby Boomer generation, the lack of a good ownership transition plan means that the current owners won’t get the full value from their stock when they finally sell it.

4. Most firms (56 percent) have identified future leaders but 1/3 of these firms have no leadership development program of any kind. This is increasingly frustrating to the future leaders of these firms. And they will be ill-prepared to take over when the current generation retires.

5. Only 17 percent of firms assign future leaders to temporary positions in order to broaden their experience. These firms will find that their future leaders have serious gaps in their knowledge base that will prevent them from successfully taking over their firms from the retiring generation.

If your firm falls into any of these categories, you need to attend one of PSMJ’s upcoming Ownership and Leadership Transition Planning Roundtables. PSMJ is holding two Roundtables this fall on each coast for the leaders of today's A/E/C practices just like yours – October 24-27, 2011 in Miami, FL and November 7-10, 2011 in San Diego, CA. Let PSMJ walk you through a structured, logical approach to developing practical planning tools, and help you avoid the pitfalls to set your firm on the right path to a successful leadership and ownership transition.

Do You Have A Disaster Response Plan?

When your ship is sinking, there is not much time for planning. Every project needs a disaster response plan. Real disasters you may face include:

• Technical, e.g., bad or missing information, flawed design



• Financial, e.g., cost overrun, bankrupt client
  


• Physical, e.g., subsurface conditions, construction conflicts
  


• Temporal, e.g., permit denial, late client approval
  


• Human, e.g., key team member quits, new client contact assigned

Some risks present in every project, e.g., computer network crash or fire in the office, may be best addressed at the department or business level. Others are project-specific and should be anticipated when planning the proposal and expanded upon at the Project Initiation Meeting. General components of a disaster response plan may include:


1. Talk and listen openly, honestly, and frequently with your client and team. Seek first to understand the facts and the situation. Then, lead decisively.

2. Minimize unnecessary effort/cost. Practice triage. Focus on what matters most. Conserve your time for the most essential decisions. Read the contract closely. Do no more than you must, no better than you must.

3. Renegotiate commitments when they cannot be met or actual conditions are significantly different from expectations.

4. Stop work: temporarily to avoid making conditions worse or permanent if there is no way you can execute the project successfully. Recognize reality and consider termination terms.

• Understand the most brutal facts. What will it take to make this project right? Are you certain?
  


• Determine the full cost of termination, not just returning any fees that have been paid. Are your reputation and this client worth the cost?

5. Start damage control promptly. Notify your insurance claims management team and get legal help before claims are made.

6. Never lose your cool, integrity, or sense of humor.

7. Once you have paid the tuition, be sure to get the education. Perform a frank, open, and blame free autopsy with your team so you can be better prepared before the next disaster occurs.


Learn more tips for what you need to do when you face a disaster (and what to do once the damage has been done) at PSMJ's A/E/C Project Management Bootcamp, the world's most successful PM training program in the industry! This Bootcamp is a revolutionary training 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.

PSMJ's A/E/C Project Management Bootcamp can instantly and dramatically improve your ability to manage projects for quality, speed, and profitability. Click here to order or contact PSMJ Education Department at education@psmj.com or (800) 537-7765.