It’s a Hand-Off: Your road map to a successful transition

Managing changes to your project team is always a challenge. But what do you do if, in the midst of a project, you either inherit the project, becoming the new PM, or the client changes project managers, essentially creating a new client for the project team?

If the client is making a change to their project manager, there are a few things to keep in mind:

• Getting your new client up to speed requires planning and time
• Do not assume the new client will be able to figure the work out as it moves along
• Be prepared to walk your new client through the major decisions made on the project to date
• Be prepared for your new client to disagree with some of their predecessor’s decisions and bring their own (different) ideas to the project

If you are the new project manager, then you also have your work cut out for you. You need to do the following:

• Get up to speed on the project
• Keep the project moving forward during your transition
• Get acquainted with the client and demonstrate that this change will not negatively impact the project
• Engage the project team and keep them moving forward on the project

Four must-do steps to communicating a change in PMs

1. The PM and principal (or client manager) meet with the client or new client PM to discuss the transition.

2. If you are the new PM, meet with your project team to discuss the transition, any immediate project issues or concerns, and plans for an interim kick-off meeting.

3. Conduct an interim kick-off meeting. A new client PM or PM need to have a clear understanding of the status (scope, schedule, project) of the project. During this meeting you must:

• Review the project PMP (project management plan) at the meeting and update it. If you do not have one, this is the time to put one together
• Review each task to be completed on the project in the next three months and capture the status of the tasks and any outstanding issues related to the task
• Review long-lead items or actions, capture their status and any outstanding issues
• Identify imminent deliverables and deadlines

4. Prioritize tasks, actions, and resolution of outstanding issues and prepare a list of items to be completed before the next team meeting.

Having completed a thorough review of the project status, the updated PMP and action-item list are your road map for continuing forward with the project. The four steps provide an opportunity to review project goals and expectations. They also provide an opportunity for the new PM and the entire project team to confirm mutual understanding and buy-in on the project.

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

Convert Doers into Seller-Doers the Low-Stress Way

Everyone in your firm must bring in new work, not just A/E Marketing and Business Development professionals.

Great idea in theory, but do the people in your firm know how to put it into practice? They need to. Fortunately, you can easily convert doers into seller-doers by following these three principles:

1. Learning to sell of professional services occurs on the job, not in the classroom. Learning those skill sets necessary for the seller of services doesn’t just happen by reading books and instruction manuals. It happens by getting out there in the field with a seasoned professional and watching and listening to clients.

2. Learning to sell professional services requires a mentor with demonstrated success in selling. Consider this example:

Jim, a civil engineer with five years’ experience, is at the stage of managing multiple tasks on projects. Like most engineering graduates, Jim has all the technical skill sets needed to handle his job, but has no experience in people skills. He is shy, but once you get to know him, he is a great guy and opens up to conversation quite well.

The question: How to get Jim to move up to that next level—selling? The answer: HaveJim “ease” into selling by taking on more responsibility for those clients that he is already serving with his technical expertise. Give him a few key questions to ask that are not part of the current project—what comes after this project; who else in the industry needs a similar project done; what other activities are you involved in, etc.

3. Don’t send Jim (or Jane) out in the field to do “marketing” without experience. That is a high-stress method, and almost never works out for Jim or the client. Instead, ease your good technical staff into marketing through more and more frequent interaction with their existing clients and well-placed “open-ended” questions designed to get the client talking.

Looking for a way to give ALL your firm members all the skills they need to bring in new work and persuade current clients to give you more…send them to PSMJ’s 2011 A/E/C Marketing Bootcamp: THE Program On How To Get And Keep Clients. This spring, PSMJ is providing 5 locations all across North America to give your whole firm the tools and confidence you need to succeed in bringing in more work for the firm. Click here for more information.

The New Year off to a Strong Start for M&A Activity

29 transactions booked for January; includes GPD Group’s recent acquisition of Jester Jones Schifer Architects which was initiated by PSMJ

With a new year comes new energy and, as such, January is often one of the busier months of the year for M&A announcements. However, according to data from the A/E M&A consultants at PSMJ Resources, Inc., 29 transactions were announced last month and that could be a positive indication of what is to come in 2011.

“January was certainly a busy month. If we keep this up, we could be getting back to pre-recession levels fairly quickly.” comments Gregory Hart, a consultant on PSMJ’s M&A advisory team. “Simply put, we are just seeing more activity and energy on both sides of the transaction. Buyers are looking to put some of their capital to use in acquisitive growth and more and more sellers are seeing the opportunity to either create liquidity or capture growing market share with more resources from a larger player or even a little bit of both.”

One deal that took place last month was the acquisition of Jester Jones Schifer Architects (Marion, OH) by multi-disciplinary GPD Group (Akron, OH). This move allows GPD Group to continue to strengthen its footprint in the Ohio market and bring architecture capabilities to an even broader client base. Jester Jones Schifer has been providing architectural services for more than 30 years.

“We are very pleased that Jester Jones Schifer Architects is now part of GPD Group. Their expertise and project management are well respected within the architectural community, we’re excited about our future together.” said David B. Granger, P.E., President of GPD Group.

PSMJ initiated this transaction and advised GPD Group. According to Brad Wilson, Senior Consultant for PSMJ and the lead consultant working on this transaction “This really was a win-win transaction. GPD continues to gain a deeper presence in the Ohio market and Jester Jones Schifer now brings a full range of architecture and engineering resources to its client base.”


About GPD Group: With locations in Ohio, Georgia, Indiana, Arizona, and Washington, GPD Group specializes in providing engineering and architecture services for a wide range of clients. Markets that the company serves include community facilities, education, housing, parks and recreation, power distribution, public works, retail, commercial, site development, telecommunications, transportation, and wireless systems.

Stop Delegating!

Delegating is quickly becoming one of those overused management buzz words that PMs are tired of hearing. Why? For too long, principals have “dumped” on PMs in the name of delegation. PMs end up doing all the things that the principals don’t like to do. And, don’t stop there. Ask those under the PMs about how they feel about delegation. Same answer. And, why? They, too, are tired of just doing the things the PMs don’t like to do.

So, stop delegating, and start leveraging. Okay, it may mean the same thing, but it sure sounds a lot better!

Leveraging yourself has a synergistic effect. You can begin to accomplish more than singularly is possible. So, where should you begin?

Start by understanding there is a difference between transactional activities and transformational activities. Management is transactional. It involves those important day-to-day activities. Leadership is transformational. It’s trying to create a different outcome, a new possibility. As a PM, you are responsible for both. However, PMs get so caught up in the transactional that they don’t spend enough time on the transformational. PMs need to get transactional activities off their plate.

Example transactional activities include:

• Project set-up
  
• Building and updating a schedule
  
• Tracking project costs
  
• Reviewing who is charging to their job
  
• Putting together meeting minutes, action items, and progress reports
  
• Getting invoices out the door
  
• Keeping project files in order
  
• Project close-out and archiving files
  

PMs need to leverage themselves out and get the transactional activities completed by someone else whom they oversee. Then, PMs can spend more time on transformational activities.

Example transformational activities include:

• Managing the client
  
• Managing change
  
• Mentoring staff
  
• Managing risk
  
• Giving technical direction
  
• Building client relationships

As PMs begin to spend adequate time on the transformational, they will quickly see client relationships begin to flourish, the quality of their deliverables improve, and projects becoming more profitable.

To learn more tips and techniques you can use to become a better and more successful project manager, come to one of PSMJ’s upcoming Project Management Bootcamps!

PSMJ’s Project Management Bootcamp is a revolutionary training seminar like no other-- through interactive case-studies, real-world examples, and proven solutions, you will foster innovation, elevate communications, increase productivity, and improve your firm's bottom line.

Click here to regiser or call PSMJ Education Department at (800) 537-7765.

Prepare for Management Compensation and Bonus Reviews

If you serve government clients, you should be prepared to support your management compensation and bonuses as the year end approaches.

There is increased concern among various segments of our public sector clients over compensation and bonuses in A/E firms. Even if you have not encountered any scrutiny of these issues in past years, you should expect that increased attention will be paid to these areas through the remainder of 2010 and in 2011 proposals.

• The revised American Association of State Highway and Transportation Officials (AASHTO) Audit Guide, made effective January 1, 2010, contains specific guidance on what constitutes reasonable costs for firms. This guidance applies to both prime and subconsultants for state Departments of Transportation (DOTs).
  
• U.S. DOT is increasing their scrutiny of Local Project Administrators (LPAs) and expecting these administrators of federal grant funds to adhere to the same guidance as in the AAAHTO Guide. This applies to highway grant funds passed from a state to a local government, transit grants and airport grants.
• The Defense Contract Audit Agency (DCAA) has acnowledged the issue raised by the Office of Inspector General (OIG) report on transportation firms, and has stated their intent to apply increased oversight on federal agency contracts.
• Several states have committed to adhering to the AASHTO Audit Guide requirements even if design fees are funded by the state and federal rules are not a requirement.

You should expect that many of your government clients will devote more attention to management compensation and bonuses, starting with your 2010 records.

It is your firm management’s responsibility— not the contracting or audit group— to have documentation of the following:

1. Support for management salaries to demonstrate they are reasonable given your firm’s size, location and types of services provided. Generally, this requires that you have survey support for base salaries paid.

2. Written position descriptions that indicate all of the duties of individuals or staff categories.

3. Compensation testing for reasonable compensation and the remove of any excess compensation from your cost submissions. Auditors should no longer do this— they should only review and accept or reject your proposed costs.

4. A written bonus plan that includes the following:

• How the total bonus pool is determined.
  
• Employees (at least by staff type) that are eligible to participate in the bonus plan.
  
• The factors that are considered in determining bonuses. These may be either objective (such as chargeability, project profits, etc) or subjective (such as client satisfaction). You do not need to prioritize or weight these factors, but you must list the factors that will be considered.
  
• How the plan is administered — who determines bonuses and when the bonuses are paid.

Note that owners (principals) may participate in bonus pools, but you should have a separate explanation for any awards that are distributed based on ownership, as these are unallowable distributions of profits. The owner rewards do not have to be cash— they can be stock appreciation or other long-term gains, but you need to distinguish owner rewards separately from employee bonuses.

The biggest issue is likely to be documentation that can be reviewed. Many firms have long-established bonus plans that are followed every year but are not formally written. Unwritten plans are no longer acceptable under the AASHTO Audit Guide.

If you are a superior performing firm, having surveys that demonstrate that your compensation is reasonable is not enough. In order to qualify as a superior performing firm— and qualify for above average compensation— you will need to document your superior performance, as compared to other firms.

Was this news to you? If so, there’s a whole lot more you may not know about working with a government client! For starter, your accounting practices must be compliant with the Federal Acquisition Regulation accounting requirements. Failure to comply could result in the loss of future business, reduced fees, and even criminal penalties in extreme cases!

Join PSMJ this spring for Jail Time for Overhead Rate Errors to learn all you need to know to ensure your firm is 100% compliant with the regulations set forth in the AASHTO Audit Guide. Don’t risk lost projects and significant jail time by being non-compliant – register today!

Business Conditions at Architecture Firms Continue to Improve in December

The American Institute of Architects’ Architecture Billings Index showed signs of improvement in December, as more firms reported increasing firm billings than declining for the second month in a row. This marks the first time in three years that this has been the case, which leaves way for cautious optimism going into 2011.

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

The ABI recorded a score of 54.2 for the month of December, the second month in a row above 50. Any score above 50 signifies growth at U.S. architecture firms, but until the index remains above 50 for a least three consecutive months, there is no strong evidence of a true economic upswing. Another month of billings growth may offer hope for a real improvement in the architecture industry, but if history serves as a reminder, there is no guarantee of a steady economy.

On a positive note, the unemployment rate fell to 9.4 percent in December, and 103,000 jobs were added. The Federal Reserve’s most recent edition of the Beige Book survey indicated that slight expansion continued in November and December. It also showed that commercial construction remains slow and residential real estate markets weak. Commercial leasing, however, is on the rise in Richmond, Chicago, Minneapolis, and Kansas City districts. Furthermore, healthcare, public infrastructure, and multifamily housing are reported to be the primary drivers of new construction.

On a regional level, December’s ABI was somewhat reassuring. Business has improved in three of the four regions of the country; the South, Northeast, and Midwest. While billings remain weak in the West, the index score has been improving slightly in recent months, and business may begin picking up for the first time since mid 2007.

Also, the three major construction sectors each reported growth for the second month in a row in December. This is the first time that this has happened since June and July of 2007, and certainly shows some sign of recovery.

The AIA has also started collecting data on backlogs at architecture firms on a quarterly basis. In December, the largest share of firms (32%) reported backlogs averaging between one and three months, with an additional 30% reporting backlogs between three and six months. While backlogs remain relatively low at this time, they should begin growing as business picks up, especially as we enter spring.

By market sector, the ABI breaks down as follows from November to December: Residential is up 60.1 from 54.3, Institutional is up 50.6 from 49.3, Commercial/Industrial is up 52.7 from 49.8, and mixed is up 47.8 from 45.8.

By region Northeast is up 55.3 from 51.1, West is down 48.4 from 48.7, South is up 54.8 from 50.5, and Midwest is up 52.9 from 50.9.

Each month, AIA collects feedback from various architectural firms along with data for the ABI. This month, Work-on-the-Boards participants are saying:

• “Business conditions have greatly improved. We have staff working overtime, we are using contract workers, and we may be hiring again by the end of the first quarter.” - 11-person firm in the West, residential specialization

• “State, county, and city work is still depressed with only small county project opportunities. There is a noted increase in activity related to university pursuits, but the number of RFQ respondents is still high.” - 42-person firm in the South, institutional specialization

• “Local conditions are still competitive. I see firms seeking more and more opportunities outside the region and internationally.” - 11-person firm in the Northeast, commercial/industrial specialization

• “We are doing a lot more work up front to get a project than we have had to do in the past. One example is cost opinions. In the past this was part of our service once we signed a contract. Now it appears that this is becoming an expectation in order to be considered for a project.” - 3-person firm in the Midwest, residential specialization

Three Ways to Follow-up on a Client Satisfaction Survey

If you’ve recently conducted a Client Satisfaction Survey, you understand knowing what your clients and/or potential clients think of your firm is essential to developing strong relationships, client services strategies, and effective project management and marketing skills. But after they tell you what they think, what’s the next step?

After you receive a client satisfaction survey, use a combination of in-person, written, and telephone contact with the client. For example:

1. Have the lead partner on the most recent assignment call the client or set up a meeting to discuss his or her responses to the survey.

2. If you spot a trend in the responses, offer a seminar on the topic and invite those clients, plus any others you may have identified that would be interested in the subject.

3. At the least, send a thank you letter, signed by a principal or partner the client knows.


Finally, it pays to double-up on your follow-up. Contact the clients again, to get their response to the action you took. It may lead to an opportunity to present additional services.

If you haven’t done a Client Satisfaction Survey in a while, it is imperative that you conduct one as soon as possible so that you don’t waste precious resources chasing clients you shouldn’t and risk losing clients you should hold on to. But where do you start?

If you are looking for a client satisfaction survey that will save you time and money, we can help.

PSMJ, in partnership with DesignFacilitator, has developed a cost-effective survey program to measure client perception and satisfaction that yields rich, highly useful information for the success of your firm. In conjunction with this survey program, we introduced the PSMJ Premier Award for Client Satisfaction, the A/E/C industry's first client-focused accolade. This award honors firms that consistently provide their clients with top quality communications, impressive performance, and high-value 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 advantage of marketing your firm as award-winning in client satisfaction. At only $595, this is a great opportunity to jump-start a client feedback initiative and prove the importance this information has for your firm. Click here to enter or email Kristen Norweg at knorweg@psmj for more details.