Thursday, January 12, 2012

Architecture Firms Rebound in November

The American Institute Architects’ Architecture Billings Index reported substantial gains for the month of November - the strongest since the fourth quarter of 2010. While inquiries for new projects also increased sharply, the biggest gains were seen among residential and commercial/Industrial firms, and those in the Southern U.S.

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 52 in November; a substantial increase from the 49.4 registered in October. November’s index value marked the fourth month in 2011 that the ABI has been positive, closing in on the end of a year where billings have remained fairly steady. While this upswing could prove to be short-lived - we’ve seen repeating ups and downs since the recession – November’s index will hopefully transition us from the relatively flat year of 2011 into a more prosperous one in 2012.

While average numbers are up across the country, some business sectors and geographic regions are doing better than others. With normal monthly data revisions based on three-month moving averages, residential firms have now reported three straight monthly billing gains, with the November reading currently the strongest since before the housing downturn.
Commercial/industrial firms are matching this performance as well, with three straight healthy months. Firms in the South have reported strong growth over the past two months, and those in the Midwest and Northeast are also showing signs of improvement. If the economy can continue to gain momentum, we can be cautiously optimistic about improving conditions going into 2012.

Modest gains projected for this year

In 2011, there was a split between the share of firms reporting revenue declines of 5% or more and those reporting increases. As a result, firm revenue is estimated to have increased just 0.4% on average. While 27% of architecture firms expect their revenues to decline at least 5% from 2011 levels, 42% expect revenue to increase by at least that amount in 2012. Overall, firms are forecasting revenue gains averaging just below 2% for the year.

Larger firms expect to do a bit better than average in 2012, with firms with annual revenues in excess of $5 million anticipating revenue growth of 3.2% on average, compared to 1.6% growth for firms with revenues of less than $1 million. Commercial/industrial and residential firms are expecting stronger revenue growth than institutional firms. In terms of staffing needs, just over a quarter of firms (27%) think that they probably or definitely will add staff in 2012, but just under 40% anticipate that they probably or definitely will not add staff. The remaining third are not sure what their staffing changes will be over the coming year.

Statistics

By region, the ABI breaks down as follows from October to November: Northeast is down 49.1 from 51.7, Midwest is up 50.9 from 47.7, West is up 45.6 from 43.5, and South is up 54.4 from 49.1.

By market sector: Commercial/Industrial is up 53.9 from 53.5, Institutional is up 48.9 from 47.3, and Residential is up 55.8 from 51.3.


This month, Work-On-The-Boards participants are saying:

• Several large projects that were waiting to move forward are now in design. We believe that 2012 will be a better year, with revenue almost returning to 2008 levels.
— 170-person firm in the Midwest, commercial/industrial specialization

• The monthly ups and downs of the construction environment have made us modify our work model. Most projects are completed in association with a local architect. Any drafting work done in-house is completed by contract draftsmen rather than permanent staff.
— 2-person firm in the South, institutional specialization

• The value of projects is approximately half of a few years ago. Clients are taking longer to pull the trigger, and the competition for work is high.
— 8-person firm in the Northeast, mixed specialization

• There is an apparent slowdown in what we would consider larger projects (over $10 million). There are several midsize and smaller projects that all firms can lobby for; therefore, there is great competition, lower fees, and the resulting lower profit margins.
— 19-person firm in the West, institutional specialization

Wednesday, January 11, 2012

How To Survive During Hard Times

The bad news is that a prospering economy isn’t back with us just yet. The good news is that you control your own future. Now is the time to get aggressive about growth in the “new normal.”

You must be doing everything possible to solidify client relationships so that you will be the first firm on a client’s mind when project time rolls around. Need a boost? Here are 10 ideas to get the backlog faucet flowing again in 2012:


1. Visit every one of your best current and repeat clients. Strengthen the relationships and explore every avenue of their business to learn about both short-term and long-term opportunities. Make face-to-face contact with current, potential, and future clients.

2. Re-tune your promotional tools to be more targeted. If your marketing collateral still makes you look like all things to all people, revamp it to emphasize your depth of specialized expertise for carefully targeted markets. More than anything in the current economy, clients seek firms that know their business inside and out. Make your marketing materials more client-centric.

3. Redouble efforts to find leads that fit with your focused marketing plan. Get active in finding where the opportunities are. Here are some examples:
Visit your local zoning agency to learn who is requesting zoning variances or rezoning land for commercial or industrial development.

- Circulate among local business and trade associations, service organizations, and your local chamber of commerce to uncover leads and make yourself known.

- Attend local town board meetings to find out more about the problems and concerns of local communities.

- Create a lead exchange group. Recruit members of non-competing firms and meet once a month to exchange leads.

4. Pay attention to office morale. Many employees have been beat up by pay cuts and layoffs around them. Initiate whatever activities might help to maintain or boost morale in the office.

5. Reshape your organizational concept. Do an internal analysis and gauge your strengths and weaknesses. Figure out what you need to change and then set it in motion.

6. Trim fat off every category rather than wipe out areas entirely. In slow times, your marketing budget could come under scrutiny. But keep a steady hand. You need to keep business coming in. Be more selective with marketing endeavors and attend seminars/networking events close to home.

7. Take the time to update staff resumes. Put the most impressive facts first and then leave out the fluff. The client is not more interested in who the project manager is and what similar projects they’ve completed recently instead of what college they attended over a decade ago.

8. Target your opportunities wisely. Make sure that you know what is happening in your target markets. Identify your firm’s niche specialties and make sure that you learn everything that you can about your client’s business in these areas to stay ahead of your competition.


In addition to these ideas, don’t forget the basics for business success. Be responsive, stay fresh, and earn your clients’ trust and respect!

As a firm leader, you should know the ins and outs of building business in the “new” economy. 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!

Tuesday, January 3, 2012

Tips on Reading the RFP

Usually, a client’s Request for Proposal is read by one person while sitting an office. The decision of whether the project is doable or not, is based on one person’s interpretation of the document. Here are some tips for reading the RFP from a different perspective:


• Instead of having your mental checklist, saying to yourself, “Yes, we can do that,” try asking “What attribute do we have that makes us uniquely the best choice for this project?” If you don’t have something unique, you likely can’t convince the client that you are the best choice. Hint: No other firm has your people, so there’s a unique differentiator right there. And no other firm has your portfolio of projects. So, between people and projects you should be able to identify a differentiator.

• Read the RFP while thinking like the client. Ask yourself if the client actually wrote the text of the RFP. If the style is different from what you recognize as the client’s style, could it be that the RFP was written by one of your competitor peers? If so, that’s a red flag right there.

• Is the RFP especially detailed or intentionally vague? If much too detailed, it may be that the client has already selected the preferred provider and the level of detail is provided to help weed out others. If especially vague, is the client fishing for ideas? Another hint: If you don’t know the client well enough to get a sense for what the RFP language will look like, you may not know the project well enough to propose and win.

• Look for contradictions and ambiguities and highlight them. You will want to be sure you get any questions about the RFP back to the client in advance of their stated deadline for questions.

• Have at least three people independently read the RFP. Each person reads from his or her own frame of reference. So having more diverse input into what the RFP actually says gives you a better understanding of what the client really needs.

• Can you identify the client’s hot button issues from reading the RFP? Do you know the client and project well enough to understand the issues and why they are issues in the client’s mind? One more hint: If you really know the client and project well, you will know if the stated hot buttons are the only ones, or if there are some left unstated. If you recognize unstated hot buttons and are sure that they are indeed issues, then you will want to weave those into your proposal.


The RFP provides the official window into the client’s thinking and paves the way for your proposal effort. Get the best start on a winning proposal by reading the RFP using these tips!

Learn more how to get on your client’s short list and win the project every time with PSMJ’s 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!

Wednesday, December 28, 2011

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.

Monday, December 19, 2011

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!

Monday, December 12, 2011

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!

Monday, December 5, 2011

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.
 
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