Thursday, January 26, 2012

Preemptive Quality Assurance

The quality revolution that swept through American industry in the last 30 years has been driven by one overriding principle—it's better to prevent mistakes than to correct them. The traditional method of quality control was inspecting products at the end of the assembly line. This was not only inadequate to ensure high quality, but it incurred a high cost in fixing or discarding products that failed to pass.

Unfortunately, many A/E firms haven't evolved much beyond the old inspection method. The common quality control process (and that's a generous term for what many firms have) still relies heavily on reviews near the end of the project. Even if the reviews are well done, which sometimes isn't the case, there's added cost involved in correcting the errors and omissions that are found.

Too Much Rework

How much cost? Some estimate that rework in our industry averages 10-20% of project budgets. Most companies in other industries couldn't survive such a high rate of rework, but we tend to accept it as normative. Granted, much rework is beyond our control, imposed by clients, regulators, or changed conditions. But there's still plenty A/E firms can do to substantially lower the cost, and improve quality.

The important thing is to step up your quality assurance measures in the early stages of the project. Prevention is key. You may be familiar with the 1-10-100 Rule, a general rule of thumb often cited by quality management professionals. The theorem goes that for every dollar spent preventing a mistake it will cost you $10 to catch and correct it internally. But the cost escalates to $100 once you experience an external failure.

The numbers may not be precise, but the 1-10-100 Rule illustrates a basic truth: The cost of an error increases exponentially the later in the project delivery process you are when it is discovered. Many of us can share stories of multimillion-dollar construction failures that resulted from preventable design errors. In fact, one of my former employers was pushed into bankruptcy by such an error—discovered several years after the design!

Key Causes of Unnecessary Rework

It's helpful to consider what leads to avoidable rework. As mentioned earlier, there will always be things beyond your control, but most rework can be averted by minimizing the following:

  • Failure to clearly understand the client's expectations
  • Not carefully planning the details of project execution
  • Failure to seek client and stakeholder endorsement of your project plan
  • Poor communication between the client, project team, and other stakeholders
  • Inadequately defining client deliverables at the start of the project
  • Failure to engage senior reviewers prior to the development of work products
  • Inadequate intermediate work product reviews
  • Poorly defined standard work processes
  • Failure to clearly define review roles
  • Poor communication with the client and contractor after the design is complete
A Basic Preemptive QA Process

The following briefly outlines some key steps in building a quality assurance process that seeks to prevent mistakes rather than merely catch them in the final review. This process establishes expectations and secures buy-in early. It promotes the type of planning and foresight that often gets shortcutted in our task-oriented profession.

Clarify client goals and expectations. Make sure you understand not only what the project is, but why it is happening and what it's supposed to accomplish—including how it will meet strategic and personal needs. Formally benchmark quality and service expectations with the client before proceeding.

Carefully plan project execution. A project management plan (PMP) is advised for all projects requiring substantial time and resources to complete. You should engage other project stakeholders in defining the best approach to meet client needs, deliver great service, and maximize efficiency and deliverable quality. Involve the client as much as possible up front.

Define deliverable content in detail. For design projects, this typically involves a design basis memorandum, concept design, or other similar preliminary work product. For reports and studies, a detailed report outline should be required that summarizes not only the structure of the document but its core content—observations, conclusions, recommendations. I call any of these products the "deliverable profile."

Gain endorsement of the PMP and deliverable profile. Secure the buy-in of the client, project team, and other key stakeholders (e.g., regulatory agencies). Endorsement involves not only getting approval but mutual commitment. Each party formally commits to do his or her part. It's important to get internal senior reviewers engaged at this point.

Actively collaborate with the project team. Superior quality and service is best achieved by project teams that work closely together. Conversely, "lone ranger" PMs who have inadequate involvement with their project teams are at the root of many project problems. Take steps to foster ongoing collaboration and communication, even measuring it to the extent you can.

Closely monitor and manage project progress. The PM is responsible for keeping the project on track in terms of meeting scope, schedule, budget, and client expectations. This must be done regularly so that potential problems can be identified and mitigated before they become serious. Develop a plan for managing project change at the outset.

Religiously stick to internal milestones. One of the most common quality and schedule problems is failing to adhere to internal deadlines. This results in task completion being constantly pushed toward the client deadline, meaning that the effort is rushed and inadequately reviewed as the deliverable heads out the door—a sure recipe for mistakes. The PM should strongly reinforce meeting internal milestones.

Clearly define internal review roles. Reviewers should have distinct review roles, avoiding unnecessary duplication or, worse still, gaps in the review process. Some degree of overlap is desirable, but reviews tend to be more thorough when reviewers are focused on specific things. Checklists are helpful in guiding the different reviews.

Diligently check all work products. Final reviews are still needed, even with a proactive approach to quality assurance. But hopefully you will be finding fewer errors and omissions because fewer are being made. All client deliverables (including some correspondence and emails) should be checked by a third party before they leave the office. More complex deliverables warrant a multiparty review.

Apart from these reviews, it's important to ask every project contributor to check his or her own work before it is passed on. Besides adding another level of review, you want to promote a culture of client focus, individual initiative, and ownership of the work product—even in its intermediate stages. Getting everyone to share this responsibility is one of the best ways to preempt quality problems down the line.

Friday, January 20, 2012

Where Are the Service Leaders?

In my last post I mentioned a survey conducted for my previous employer that failed to identify a leader among our competitors in providing great client service. Instead, clients pointed to individuals within those firms who exemplified service excellence. Since then, my search for service leaders in the A/E industry has turned up few exceptions to the norm.

Why? In a hotly competitive business hard hit by a persistent recession, where A/E services are increasingly commoditized, why haven't more firms pursued service excellence as a means to distinguish themselves? Perhaps they're unconvinced that great service is an effective differentiator. The evidence of this is limited but compelling:
  • There's a big gap between A/E firms and their clients in how much importance is assigned to service. Technical practitioners think their expertise sets them apart (80% of time, according to one survey). Clients say the experience (client service) is equally as valuable as the expertise they receive. And they usually fire A/E firms not for technical shortcomings, but poor service.
  • Service excellence is in short supply in our business. In one survey, only 16% of clients gave an "A" score for the service they received from A/E firms. Another survey found that only one-fourth of clients would recommend their primary service providers. I've conducted hundreds of client interviews and would concur that while firms generally get good scores for service, it's rare for a firm to receive excellent scores (e.g., 4.5 out of 5) from most of their clients.
  • Exemplary service delivery produces bottom-line results. We can all agree that people often pay more for great service. Does this apply to our business? Well, don't your most loyal clients--presumably happy with your service--generally provide the highest profits? Data from other professional service sectors supports this conclusion: Those firms providing the best service (determined by meeting certain client-validated criteria) earned 30% higher profits, 35% greater client retention rates, 7-9% higher fees, and 200% faster growth.

So there's a strong argument to be made for becoming a service leader among the clients and markets you serve. How do you get there? I've written a good deal in this space about strategies to improve service and strengthen client relationships. You can search this blog for specific guidance, but let me suggest a few steps that are particularly critical:

Create the vision. The number one reason few firms achieve service excellence is that few explicitly pursue it. Yes, I've seen the corporate values and mission statements posted on walls that espouse devotion to clients. But how many firms have specifically defined what that looks like, how it's done, or how to measure it? How many have expressly committed to being a service leader?

To get started on the road to service excellence, you need a vision, a priority, a charge. You'll not get there without an overriding culture of client focus, as described in my last post. And, of course, you'll need effective leadership to gain everyone's buy-in and follow-through.

Establish a service delivery process. Most firms rely on their client managers and project managers to do the right thing for the client. But rare is the firm that can meet the standard of service excellence depending entirely on individual competency. Would you entrust your technical work products to such a laissez-faire approach? What is the "right thing" anyway?

You need standards; you need consistency. Otherwise service levels will vary across the organization (as is usually true). The larger your firm, the greater the divergence in service levels if you don't have some specific direction. I developed a service delivery process years ago that has worked well for my clients who have applied it. Plus many clients have enthusiastically embraced it.

I recognize that there are many aspects of service excellence that are not addressed in such a process. There is always a human element--interpersonal skills, chemistry, relationship building--that can't be reduced to a step-by-step approach. But a service delivery process can provide a foundation for further development of such personal competencies through training, coaching, and feedback.

Benchmark service expectations. Admitting that very few firms will commit to following my six-step delivery process, let me recommend a shortcut. You should at a minimum do these two things: (1) mutually define expectations and (2) gather regular client feedback. Just doing these two steps will probably distinguish your firm from all your competitors--and spare you unnecessary trouble with your clients.

Benchmarking expectations involves uncovering what the client wants the working relationship to be. In my experience, when an A/E firm fails to provide good service, it's usually rooted in a lack of understanding expectations. Our contracts and work orders outline scope, schedule, and budget, but typically say little about communication, information sharing, decision making, managing changes, or tracking satisfaction. Yet these latter activities go a long way in determining the client's overall experience.

Get regular feedback. Once you've determined what the client really wants, how do you ensure that you're delivering it? I find it amazing that while A/E firms all claim to provide great service, only 20-25% of them collect client feedback to confirm it's true. Just as clients often don't share their expectations unless you ask, they often will not inform you when you fail to meet those expectations. From the many client interviews I've done, I can assure you that many grievances are not shared until asked.

To gather feedback, I advocate a combination of (1) regular client conversations (by a third party; see below) and (2) a formal questionnaire. Some firms rely entirely on using a questionnaire. But in my experience, questionnaires generally provide less insight into what the client's thinking than asking similar questions in conversation. On the other hand, a questionnaire better enables tracking service performance across the firm and over time.

Assign a Client Advocate to every key client. Sometimes it's better for a third party to solicit client feedback or to respond to client concerns. Many clients are reluctant to confront your project managers with problems, especially if the PM is perceived to be part of the problem. I could share many examples of this. So I've long advised that you assign someone other than the PM, preferably someone not directly involved in the project, to work with the client to confirm satisfaction and address concerns.

PMs frequently get distracted with the technical aspects of the work, neglecting the "soft side" of keeping the client happy. They can also become shortsighted, focusing more on the project than the long-term relationship. Your Client Advocate ideally fills that void. His or her job is to make sure that the client is satisfied, both with the expertise and the experience delivered, and that the relationship is nurtured for the long haul.

The above steps, of course, fall short of all that's needed to become a service leader. But together they comprise a strategic beachhead in beginning the pursuit. Do these few things and your firm will already be in rare company.

Monday, January 16, 2012

Cultivating Client Focus

I've hung around this business long enough to hear lots of disparaging comments about clients. I've voiced a few of my own, to be honest. The question is: What do these complaints reveal about us?

Every A/E firm I know wants to portray itself as being distinctively client focused. But are they really? What does a client-focused company look like? A few years ago, Ed Fredrichs, former president of Gensler, wrote a thought-provoking article for DesignIntelligence entitled "Let the Client Drive Your Organization." He challenged firm leaders to rethink every aspect of how they do business in light of what it takes to do great work for clients.

True client focus goes beyond holding to a philosophy, or even a commitment. It is a way of life. Client focus is not a set of actions so much as a core value and a corporate culture. It's not just what your firm does, but who you are.

Fredrichs wrote that for most firms, client focus starts with an attitude change. Delighting clients, rather than just doing quality technical work, must become the driving force in the firm. Organizational structure and functions are shaped not by looking inward, but by aligning with client needs and preferences.

I've worked with many firms over the years that did a pretty good job of serving their clients. But rare have been those firms that, in my opinion, met the standard of being truly client focused. How do you go about cultivating client focus in your own firm? Here are a few defining characteristics to pursue:

There's a mindset where every employee feels he or she is working directly for the client. Studies show that employee performance can improve dramatically when employees sense a direct connection to serving customers. In organizations like the average A/E firm, it's easy for most staff to feel somewhat removed from external customers. They work for their boss--and not surprisingly, their relationship with that boss is the biggest factor in how satisfied they are with their job, according to Gallup research.

There's something powerful and invigorating about infusing everyone with a sense of working for the client, not just the boss. If it's impractical to bring employees into direct contact with the client, then the project manager or client manager needs to vicariously connect the client to the staff. Give them insight into the client's goals, needs, expectations, preferences, etc. Communicate any feedback from the client, especially when it pertains to those working on the project.

Everyone takes ownership for meeting client needs and expectations. Whenever I investigate persistent quality or service problems in an A/E firm, I invariably find instances of employees not taking "ownership" for ensuring the project is done right. In these cases, work assignments are compartmentalized, with people doing their individual tasks with too little concern for the project overall. Responsibility for delivering service and quality is pushed down the line to the PM or QC reviewer.

Of course, this problem naturally arises when people don't feel a connection to the client. They do their task in a vacuum and assume someone else is responsible for serving the client. In a client-focused firm, a collective vision for project success overcomes the tendency to view work as a collection of individual tasks. Responsibility for meeting customer goals and expectations is shared by all team members. The key to making this happen is ongoing communication.

Employees commit to each other as part of the network that serves the client. One of the first principles of client service is that in order to excel at serving external customers, you must also excel at serving your internal customers. This principle is not to be divorced from the earlier advice to connect all employees to your external clients. But we deliver our work through teams and thus effective teamwork is required.

I'll suggest that most internal dysfunction results from a lack of client focus. When employees are devoted to delighting clients, they work harder at working well together. They are more aware of the interdependencies between colleagues, that all must contribute to the success of the team. Client focus is the tonic for curing much of what ails our organizations.

There's a willingness to work within a consistent service delivery process. As leader of our Quality and Service Initiative, I was able to persuade my last employer's management team to adopt a new core value: "Our top operating commitment is to set the industry standard for service." That begged the question: What is the standard?

We commissioned PSMJ to conduct a client survey for us to determine who set the standard and how they did it. But not one of our competitors emerged as the service leader. Instead, clients identified individuals they felt set the standard for service. Therein lies one of the main reasons our industry receives generally middling scores for client service. We don't employ a process for consistent service delivery, instead relying on individual competency--which produces inconsistent results across the firm.

In a client-focused firm, there must be a consistent way of delivering great work and service. And people--specifically firm leaders and project managers--must be willing to yield to a collective process. Having worked with many firms in trying to implement such processes over the years, I can tell you they usually fail because some senior members of the firm refuse to go along. That's not acting in the best interests of clients.

Organizational functions are designed to better serve clients. Many of the troubles A/E firms have satisfying clients are related to structural issues: Disciplinary departments that are internally focused and don't adequately collaborate. Project managers who lack the authority to deal with problem project team members. Offices that essentially compete with each other trying to meet their respective performance metrics. Quality assurance procedures that were imposed without staff input so that they are now largely ignored.

I don't want to suggest that there's only one way to organize your business. If you look at the organizational structures and functions of the top performing firms in our industry, you'll see that different models can work. But the driving question for any client-focused firm will be: How can we better organize our business to serve our clients? Let me encourage you to gather firm leaders to explore that very question if you've not already.

The firm exercises care in selecting clients. One of the best ways to promote client focus is to work with clients that you enjoy serving. Consultant David Maister once did an informal survey among various professionals that found they only really enjoyed working with 30-35% of their clients. The other clients they tolerated or disliked. What would the percentages be for your firm's current clients?

If you and your colleagues only really enjoy working with a minority of your firm's clients, do you think that impacts performance? Does it diminish client focus? I would think the answer to both questions is a resounding "yes." It's hard to be your best at anything you don't sincerely enjoy doing. That's another reason why there's real value in being selective about what clients and what projects you pursue.

Being client focused doesn't mean you must sacrifice self-interest. On the contrary, client focus should enable you to derive the most satisfaction from your work because you love serving clients. That becomes easier when you build your business on a relationship-building model that seeks the right clients. That makes delighting them all the more rewarding.

Serving clients is the primary attraction, rather than a distraction, in doing the work. Let's be honest, many technical professionals would prefer to labor at their craft without interference from clients. It's clients with their shifting preferences, quirky personalities, burdensome requirements, and tightfisted spending that distract from the work we really love doing. And that perspective is a key reason why we don't love doing the work more.

If all we want to do is engineering or architectural design and consulting work, we're probably in the wrong business. Our real job is to serve clients using our technical expertise, not the other way around. Client-focused firms have that priority straight. Their business is broader than providing technical services; it's helping clients succeed at what drives their business. That's a strategic connection that many A/E firms miss.

When you have the right priority for your business, by the way, you're likely to see less grousing in the ranks about clients that get in the way of the work. That's because the client is the focus of the work. At least that's true for the few A/E firms that can honestly claim to be client focused. I suspect those firms can also claim to be uncommonly successful.

Friday, January 6, 2012

Take Proactive Steps to Manage Project Change

Project change is unavoidable. Over the course of a project, new circumstances and conditions emerge, better ideas are conceived, mistakes are made, and people simply change their minds. All this can wreak havoc on project success if your firm is not properly prepared to deal with it.

PSMJ found that the number one cause of project failure is inadequate planning. And one critical element that is often ignored in the planning process is project change. This leaves many a project manager ill equipped to deal with change when it inevitably occurs. It can result in budget overruns, missed schedules, poor quality, increased liabilities, damaged reputation, and unhappy clients.

Let's start by considering some common sources of project change:
  • Scope creep. Small incremental changes in work scope that eventually result in significant change, whether internally or client driven.
  • Errors or omissions. Mistakes or oversights that can occur both in defining the project scope and in executing the work.
  • Increased level of effort. Time and labor substantially exceed the project management plan for various reasons, including continual refinement of alternatives (overdesign) and poorly defined work processes.
  • Personnel changes. Key project team member or client representative leaves or is reassigned during the project.
  • Unanticipated external event. This could include any number of occurrences from regulatory enforcement actions to accidents to mergers to software glitches to loss of funding.
  • Lack of community or regulatory acceptance. Strong technical solutions may fail the test of community acceptance or regulatory approval resulting in delays, scope changes, etc.
  • Client discretion. Client wants to initiate changes not anticipated in project scoping, perhaps due to nothing more than preference.

Effective change management begins before project changes happen. Through careful planning and well-defined strategies and work processes, many unwelcome changes can be averted, or at least their impact minimized. Recommend steps include the following:

Benchmark client expectations. Be diligent in clarifying expectations that go beyond the formal scope or work, but can dramatically alter the course of the project (e.g., what the client expects of the working relationship).

Carefully plan the work. As noted earlier, a strong project management plan can forestall a number of project problems. For best results, seek participation or buy-in from the client and other key stakeholders on your plan before proceeding.

Assess project risks. Every project has inherent risks and uncertainties that may adversely affect the project and your firm. The suggestion is to identify any risk or change that is reasonably possible, define a probability, and outline steps to avoid or minimize it.

Adhere to the contract and project management plan. These documents specify the agreed-upon terms of a successful project and should be continually reviewed and carefully followed throughout. Any deviations, even seemingly minor ones, should be negotiated in advance with the client.

Define the response to change in advance with the client. Don't wait until changes occur before agreeing upon a change management process. This should be described and documented in the project management plan before problems arise.

Be constantly on your guard for potential changes. Everyone on the project team should be alert for activities and circumstances that could result in significant project changes. The sooner changes are identified, the better able you will be to head them off or to manage them effectively.