On Becoming an Owner: What You Need to Know

To be a successful owner in a design firm, you must recognize at a minimum, four points:

1. The informality you have enjoyed with your coworkers will radically change as an owner. By necessity your professional relationship with them will become more formal and business like.

2. Your management and leadership style influences the firm’s ability to attract and retain top talent. While there are examples of successful firms with autocratic (dictatorial) leadership, the trend is clearly toward a more participative management style among the most successful firms. Young professionals will only stay under the strong hand of a centralized, autocratic management style as long as it is convenient to them. As soon as they reach a certain professional and financial level, the most capable professionals will move to a more acceptable leadership environment.

3. You must become a team builder. The skills needed to build an effective team are substantially different from those required to become proficient professional designers. Some leaders have natural talent, but most have to work hard at it.

4. The key to achieving success in any business is directly related to bringing in new work—new clients. Whether or not you enjoy the marketing and sales aspects of business, you must develop your ability to manage clients, establishing and maintaining relationships with them built on trust and mutual respect. The one who “owns” the client has the clout, every time.

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?

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, give the client reassurances that they will be able to work compatibly with you during the process of delivery.

Are You on the Brink of a Bad Turnover?

According to PSMJ research, at least in design firms, people don’t leave because of money—only about 20% cite wages as a reason for leaving and about half that give “workplace conflict” as their reason for quitting. The biggest cause? Insufficient recognition coupled with limited advancement opportunities.

To ascertain your level of vulnerability to bad turnover, take the following short quiz. It will increase your awareness of the factors that can erode employee satisfaction and lead to bad turnover.

• Are you in a competitive labor market with lots of new job opportunities?
• Does your firm have a strong orientation program for new hires?
• Do you have a good mentoring program?
• Do you have good hiring practices that ensure you hire the right people for the right job?
• Do your employees believe they are effective in their jobs?
• Do employees believe they are wanted or needed by the firm?
• Do your employees see a clear career path and understand how to move ahead in the firm? Is the path to principal clearly understood?
• Is compensation data readily available to all staff so comparisons can be easily made?
• Are your employees dissatisfied with their pay?
• Is your fringe benefits program competitive?
• Do employees believe there is strong communication between employees and principals?
• Do your employees respect the management skills of their supervisors?
• Do employees believe they are being taken advantage of or exploited?
• Are employees given the training and resources to complete assignments successfully?
• Do you conduct regular, fair, and timely performance appraisals?
• Do employees believe they are not being informed of what is going on in the firm?
• Do employees perceive that management does not have a plan for the future?
• Are employees asked to act in a manner they believe is unethical?

Now talk with your staff about the important issues the quiz raises.

The Age-Old Question: Who Should be Involved in BD?

The answer, according to PSMJ’s salary survey, is almost everyone! From the Chairman of the Board to a junior project manager, your people need to be involved. And who better to sell your firm and services than those who know it best.

Here’s the breakdown of average percent time spent on BD activities by personnel category, as reported in the 2013 PSMJ A/E Management Compensation Benchmark Report:

Position	Time Allocated to BD Activities (%)
Chairman of the Board	30
Chief Executive Officer	29
Executive Vice President	28
Senior Vice President	26
Other Principals	23
Director of Finance	3
Controller	7
Business Manager	13
Director of Administration	1
Director of Operations	18
Director of Quality Control	8
Director of Business Development	68
Director of Human Resources	3
Director of Computer Operations	5
Branch Office Manager	21
Department Head	19
Senior Project Manager	11
Junior Project  Manager	7

Follow these tips to increase participation from key people:

* Senior executives. Include them in the BD accountability list. This list provides a reminder that, without clients, your organization is nothing. And who knows the top echelon at your best clients’ organizations better than your senior executives?

* Director of operations. He or she may enjoy the day-to-day in-house routine of running the office. Assign specific BD responsibilities such as client sponsor roles to this individual. Who else knows the full scope of services the operation can provide and war stories to back it up?

* Junior project managers. When a staff engineer gets promoted to any “project manager” role, be sure to sit down with the new PM and clearly state your expectations related to business development. And assign a good mentor (see article on page xx).

You have a wealth of BD assets. Take every opportunity to involve your personnel at all levels!

5 Reasons Why You Need a BD Plan

Does your firm (or branch office) have a Business Development Plan?

If so, does it really work? Is it complete and functional? Do you point to it with pride as you interview potential staff members? Does your Board of Directors consult your plan and use it for benchmarking?

If your answers to any of these questions is a resounding “No,” then this issue is intended for you. And if your answers are all an enthusiastic “Yes,” then this issue can give you a way to consider an alternate way as you update your plan.

Your firm needs a robust BD plan for many reasons:

1. A BD plan drives your entire business development program

2. Developing the right business from the right clients drives your entire business plan… and your success

3. The BD plan allows you to benchmark your operation throughout the year, and take corrective action where necessary

4. The BD plan enables you to measure individual staff members’ success in developing new and expanded business opportunities, and take corrective action where necessary

5. In firms with multiple offices, the BD plan provides a measure of continuity of mission and approach among the offices

What’s the Secret to Nailing the Interview Q&A?

by David Whitemyer, AIA

What’s the secret to nailing the questions during a project interview? Easy, ask your own questions.

A few months ago a few colleagues and I were in Arkansas interviewing for a fairly large (at least by our standards) project. We were among the two shortlisted firms who had been invited to meet the selection committee.

The firm we were competing with was an established organization, nearly 50 years old, with numerous projects overseas, shelves of national accolades and awards, and dozens of employees. Our firm was just two years old, very small, and had only a few projects under the belt of the company name.

Our strength at the interview was in knowing that we were long shots. In putting together our slide presentation, and knowing that there would be time for Q&A at the end, we decided to include pre-prepared questions in our presentation. We began the Q&A period by saying to the selection committee, “If we were you, these are the question we would be asking us.”

We focused the questions on our appeared inefficiencies and youth, and the clear fact that we were not the safe choice; and we turned them into strong positives. It paid off, and we were unanimously selected for the project.

Try it during your next interview. Here is a list of some suggested questions to include in your presentation (in no particular order), written as read by the interviewers.

1.   Specifically, why should we pick your firm instead of the other(s)?

2.   Do you have any inefficiency associated with performing our project? And if so, how will you overcome it?

3.   Why, personally, are you interested in our project, other than just wanting the work?

4.   What challenges do you foresee in our project? What worries you most about it?

5.   Is our schedule realistic? If not, how do you recommend that we change it?

6.   Will we be dealing with the team here today for the life of the project?

7.   When we call your references, what are they going to tell us?

8.   What’s stronger in your firm, technical abilities or communication and management skills?

Prepare your responses, but don’t create a script for them. You want the Q&A to be honest, candid, and conversational. Not all of these will be applicable to your situation, but you’ll get the idea. Tailor them for your own unique culture, projects, and firm structure.

David Whitemyer, AIA, is a Contributing Editor at PSMJ Resources, Inc., a licensed architect, and project manager at a Boston-area design firm. He can be reached at dwhitemyer@psmj.com

Conflict Strategies: For Better and For Worse

Conflict is a natural result of diversity and people willing to stand up for their own ideas. How conflict is handled can turn a differing point of view into either a productive tool or a festering problem. Dealing with conflict effectively is a high art and a valuable skill.

As a manager or coach, a supervisor or team member, the ability to handle conflict—both internal and external—is essential to effective job performance. Conflict resolution skills are learnable. Once your firm leaders have them in their repertoire and teach them to other key players, conflict becomes a manageable behavior.

Several effective ways to handle conflict are to:

• Neutralize it – Restate what is said so that each side can hear the other without feeling accused or offended.

• Reframe it – Define which areas of discord will be the focus of the conflict resolution process.

• Add to, or subtract from, what the disputants describe in their original positions.

Steps in handling conflict involve:

• Plan your session(s) in advance exactly as you would a team meeting.

• Gain commitment from the people in the dispute to make an effort to solve the problem   together.

• Build trust and cooperation.

• Allow venting of strong emotions before bringing the people together.

• Accept and legitimize emotions.

• Build small agreements.

Expand Your Definition of “Network”

What do you consider to be the members of your network? Most of us would include the following:

* Existing clients

* Prospective clients in those areas we plan to focus on

* Trade and professional associations, national committees, and other groups that are populated by those in the first two groups

Often, that is the extent of our network, and we happily sit in marketing meetings and other venues and refer to this list as the end-all of lists.

Let me suggest that you expand your network to include the following categories (for the reasons elucidated):

* Competitors. They may be competitors today but teaming partners tomorrow. And who knows the ins and outs of working with a client better than those who have worked with the client before.

* Equipment vendors. Vendors of equipment and supplies often see the raw, real-life, in-your-face behavior of entities. Lots of times you can learn more about clients or prospects from vendors than from hours of direct client contact.

* Laboratories. Often the labs that provide analytical services have a unique perspective on client relationships.

* University professors. Many times active research faculty have ongoing relationships with your prospective clients and can provide you with unique perspectives on who the real decision-makers are and how they think.

* Others who may influence clients, either directly or indirectly. For example, the local sewer authority may have a different perspective on an industrial discharger than you will get from any other source.

And now the question: How do you get access to these potential contacts? The answer: attend and become active in local associations. Everyone attends these events, from the client himself to the equipment vendor to the local lab. Go, wear your name tag, meet people (network!) and learn. Then apply what you learn to making your own network more efficient and effective. 

How to Measure the Effectiveness of Full-Time Salespeople

by David Burstein, P.E.

Account executives, account reps, BD reps. Regardless of what you call them, they are essentially full-time salespeople—and they’re very expensive. 

How expensive? When you add up their salary, fringe benefits, admin support, travel costs and—most costly of all—the time of your technical people to write the proposals for the leads they find, it totals around $300,000 per year or more. If your firm’s average profits are 10 percent of gross revenue, that means each salesperson must find leads that generate $3 million per year—just to pay their additional overhead costs.

But can a full-time salesperson realistically bring in over $3 million per year in additional work? In very large firms, the answer is definitely yes. But in medium-size firms, the projects generally aren’t large enough to accomplish that goal.

Want a better way to measure the effectiveness of full-time salespeople? Base the success of these professionals on their ability to:

1. Identify and hook strategic clients. Each year, have each salesperson develop a list of “strategic clients” to pursue. Strategic clients should have a lifetime value of several million dollars or more. Measure success based on how many of these strategic clients he/she brings in—regardless of the value of the initial assignment.

2. Maintain the relationships. Salespeople should actively work to maintain their relationships with those strategic clients and be on the lookout for additional sales opportunities. Their success can be measured by dollars of sales booked during the year.

This way, each salesperson has two measurable goals—how many new strategic clients they land and how much additional sales are secured from strategic clients secured in previous years.

5 Tips to Cut Your BD Costs and Improve Your Program

Does it seem too good to be true? Can you actually cut your BD costs and improve your BD program at the same time? Yes! Consider these five tips:

1. Attend conferences at which you will speak or moderate a session. Often the registration fees are reduced (or waived) for speakers or session moderators.

2. Make decisions about conference attendance and exhibit opportunities early. We have seen registration fees and exhibitor fees almost double after the “early bird” registration period passes.

3. Plan conference dinner opportunities with clients and prospects early. Get the most out of your time away from the office with those important people who are there and also away from their offices. You won’t spend that much more than you will for a dinner with your colleagues, but the return can be tremendous.

4. Standardize so you can customize on proposal write-ups. This may seem a contradiction of terms, but there is always a certain amount of boilerplate. For example, most resumes don’t change in the descriptions of the staff member’s college degrees or professional registrations. What does always change is the exact role in the project being proposed. So standardize the unchanging parts of the resume and leave a block open for focusing on the individual’s role in the proposed project. Then spend important time customizing where it counts.

5. Focus on making quantum improvement in one aspect of the program at a time. Don’t spread yourself too thin. For example, if your general intro to your firm in your standard presentation is getting too long, spend quality time redoing that portion. Then make sure your staff knows that the improvement has been made. By making sizable improvements, you focus more energy and achieve better results with less expenditure of funds.  

9 Secrets to Holding Ineffective Meetings

Good meetings are organized, well facilitated, and have a clear, preconceived purpose. But if you’re interested in holding ineffective meetings with your internal team or client group, below are nine, easy-to-follow, proven guidelines that should be practiced at every project gathering.

1. Hold frequent meetings, even if unnecessary. Everyone enjoys spending their days sitting in meetings, particularly when there is nothing to discuss. Principals like to know that their staff is being kept from productive work.

2. Don’t prepare an agenda. Agendas outline limited expectations and discourage participants from going off on tangents. Meetings should allow anyone to discuss anything that pops into their head.

3. Don’t have clear objectives. Everyone loves surprises! Be sure not to inform anyone ahead of time what the
purpose or agenda items are. This way, they won’t have an opportunity to think about things ahead of time or come prepared.

4. Start meetings about ten minutes late. By not starting at the scheduled time, you reward those who are late, and you provide break time to those who arrived promptly.

5. Encourage participants to arrive late. You don’t want your team to think that you take these meetings too seriously. Develop a precedent where attendees can arrive when convenient, and can come and go as they please.

6. Allow everyone to talk at once. Nobody likes a control freak, so rather than taking the lead and being the meeting facilitator, sit quietly in your chair while everyone engages in directionless banter.

7. Schedule meetings for late in the day. People are at their most energetic and productive near the end of the work day, right before they start thinking about heading home or having dinner.

8. Don’t take notes or record decisions. No one reads meeting minutes anyway, so why waste your time recording decisions and distributing notes. Instead, just try to memorize everything, and hope that others are doing the same.

9. Assign action items to groups rather than individuals. By tagging action items to a group of people – or not at all – no one can be held personally accountable when tasks aren’t completed on schedule or performed to a high quality.

It might be helpful to print this list and hang it in your company’s conference room. Distribute the list at your next meeting, to get everyone on board.

PSMJ Resources, Inc. Announces 2014 Circle of Excellence

PSMJ's exclusive Circle of Excellence highlights firms that demonstrate outstanding

achievement in the A/E industry

July 9, 2014 (Newton, MA) - PSMJ Resources, Inc., the premier management consulting firm for the architecture, engineering, and construction industries, announces members of the 2014 Circle of Excellence. Sixty-three exceptional firms made it onto the exclusive list this year.

PSMJ's Circle of Excellence is designed to highlight firms that are successfully managed, based on 13 key performance metrics that demonstrate outstanding achievements in profitability, staff growth, cash flow, productivity, business development, overhead management and turnover. TheCircle of Excellence represents the top 20% of participants in PSMJ's annual A/E Financial Performance Benchmark Survey .

"Year after year, the diversity of these firms continues to prove that success isn't necessarily defined by the size of a firm, their practice area, geographic location, or even the markets they serve, but instead by a strong commitment to solid business practices," says Kate Allen, P.E., Director of PSMJ's A/E/C Industry Surveys. "Our passion may be our practice, but top-notch business practices are critical for sustainability."

PSMJ Resources, Inc. announces the following firms as members of the 2014 Circle of Excellence :

360 Architecture Inc.	Klohn Crippen Berger Ltd.
ADF Engineering, Inc.	KSS Architects LLP
Aillet, Fenner, Jolly & McClelland, Inc.	Levi + Wong Design Associates
American Engineers Inc.	LMN Architects
Axiom Engineers, Inc.	Looney Ricks Kiss
Belli Architectural Group Inc.	M+H Architects
Bluestone Engineering	MKSK
Brown Engineers, LLC	Moore Engineering, Inc.
BWBR	Niles Bolton Associates, Inc.
Carpenter Marty Transportation	Pape-Dawson Engineers, Inc.
Challenger Geomatics Ltd.	Partners in Design Architects
Commonwealth Associates, Inc.	Penfield & Smith Engineers, Inc.
CTA Architects P.C.	Phillips + Bacon Consulting Engineers
DGR Engineering	Praxis3
Enterprise Engineering, Inc.	Prein&Newhof
Felsburg, Holt, & Ullevig, Inc.	Ready Engineering Corporation
Fleming Engineering, Inc.	Robinson Consultants Inc.
GEC Architecture	Rodgers Consulting Inc.
Graham & Hyde Architects, Inc.	Ryan Group Architects
Great West Engineering, Inc.	S & F Engineers, Inc.
Greeley and Hansen	Schmidt Design Group, Inc.
Hart & Hickman, PC	SPEC Services, Inc.
Hope-Amundson, Inc.	Studio Meng Strazzara
Hoyle, Tanner & Associates, Inc.	Tom Green & Company Engineers, Inc.
HVJ Associates, Inc.	Vertical Arts Inc.
INSIGHT Structures	WB Engineers+Consultants
Johnson Braund, Inc.	Weber Thompson
Kimley-Horn and Associates, Inc.	WMA Architects/Planners Inc.
KL&A Inc. Structural Engineers and Builders	Wright-Pierce
KLJ	ZFA STRUCTURAL ENGINEERS

The firms listed above have agreed to have their names published in association with PSMJ's Circle of Excellence. Firm names are listed in alphabetical order.

"The firms recognized in the Circle of Excellence set the bar for outstanding business results confirming that success, in any economy, is possible," says Allen. "Some firms have been in this prestigious group year after year!"

These firms exemplify both the basic and most innovative best practices in the business. PSMJ's A/E/C Industry Summit will bring together some of the industry's top leaders and most successful firms to share their experiences and honor this year's Circle of Excellence members. Located at the Omni ChampionsGate Hotel in Orlando on December 3-5, 2014, this year's cutting-edge conference focuses on Pushing the Limits, covering timely topics from commoditization and international business to client loyalty and brand marketing.

With data from 311 A/E firms across the United States and Canada, the 2014 PSMJ A/E Financial Performance Benchmark Survey Report is the go-to industry resource for firms wanting to increase cash flow, lower overhead, and improve overall financial results. Now in its 34th edition, the comprehensive report provides the most valuable research and insight available for making critical decisions that impact the success of a firm.

About PSMJ: For 40 years, PSMJ Resources, Inc. has been recognized as the world's leading authority, publisher, and consultant on the effective management of architecture, engineering, and construction firms. With offices in the United States as well as the United Kingdom and Australia, PSMJ offers over 150 titles in book, audio, and video format. In addition, the company publishes several monthly periodicals and delivers dozens of seminars, roundtables, conferences, webinars, and in-house training sessions every year for A/E professionals around the world. PSMJ's sought-after consulting expertise covers a range of critical business areas such as strategic planning, project management, valuation, succession planning, and mergers & acquisitions.   

For additional information please contact:

Gregory Hart

PSMJ Resources, Inc.

10 Midland Avenue

Newton, MA

02458

617-965-0055

www.psmj.com