Wednesday, May 29, 2013

Creating a Rainmaking Culture

Rainmaking has long been the domain of a select few people in the typical A/E firm. The vast majority of employees contribute little to nothing to the crucial function of bringing in new business. Perhaps it's time to reconsider that model.

While business is picking up, we're still a long way from the prerecession heyday. Back then, if your firm wasn't growing, you were doing something wrong. But what you were doing right back then is unlikely to be enough to fuel similar growth and stability today. So what are you doing differently?

Rainmaking success today ultimately requires (1) broadening your base of key relationships and (2) extending the reach of your firm's reputation. Consultant David Stone writes that the average A/E firm has "spent years developing a strong and loyal following from a small segment of the market. And those clients have served them well with a long record of repeat work and a steady supply of projects. Far too many firms, however, are virtually invisible outside that limited group of clients."

And for most firms, that limited group of clients isn't producing enough work in today's economy. Unfortunately, my experience indicates that few firms excel in developing new client relationships—quite the opposite, in fact. In surveying many firms regarding their business development capabilities over the years, new client development has consistently emerged as the greatest weakness.

So what's the best way to expand your efforts to attract new clients? You could direct your top rainmakers to step it up, spending more time prospecting and lead finding. You could hire a dedicated salesperson who is particularly skilled at new client development. You could enlarge your marketing function to help build your reputation in the marketplace.

Or you could substantially broaden staff participation in your business development process. I can anticipate the objections to this suggestion: "We can't afford the impact to utilization." (I've never advocated subtracting billable hours, only better allocating of existing nonbillable hours for BD.) "Most of our people are uncomfortable with or lack the skills for selling." (There are many ways to support BD that don't involve selling, and there are better ways to approach sales that alleviate much of the discomfort.) 

Broader participation should increase BD activity, which in itself is a good thing. But I think there's a still more valuable benefit. In my experience, the things that firms do best are typically a product of their culture. It's the core values, the normative behaviors, the routine practices that express "how we do things around here." It's the synergistic effect of people working together to accomplish their collective goals.

Arguably there's nothing more important to a firm than its ability to bring in new work. So why is it normally relegated to a functional sidebar that engages few people? What if you created a rainmaking culture that engaged most employees in at least some small way in supporting this essential task? Sound impractical? It's not. Here are some strategies for making it a reality:

Change the focus from selling to serving. If you follow this blog, you know this is one of my constant themes. But in creating a rainmaking culture, the shift in focus is crucial. As important as company performance is, most employees are going to be more energized by serving an external purpose, as they are when contributing to a successful project, a satisfied client, an innovative design, a community asset, an energy-saving building, etc. You will gain greater buy-in if you frame your business development activities as seeking opportunities to achieve those greater objectives versus merely meeting the firm's need for more revenue. Serving also makes "selling" less distasteful.

Fit people to the right BD tasks for their skills and interests. Selling is not nearly so monolithic an activity as it is often characterized—and disdained for. There is a role for virtually everyone in supporting the firm's marketing and sales process. This can involve tasks such as:
  • Conducting market or client research on the internet
  • Building and maintaining a network of contacts
  • Participating in professional and trade associations
  • Attending conferences and trade shows
  • Helping develop informative and helpful marketing content
  • Developing tools and resources for prospective clients
  • Writing (or supporting writing) for publication
  • Speaking at conferences or other events
  • Providing webinars or seminars
  • Developing and making sales presentations
  • Calling on existing clients for information and leads
  • Updating resumes, project descriptions, other marketing resources
  • Writing proposals
  • Making sales calls to existing or prospective clients
This list can certainly be expanded. The point here is to show that there are many ways to contribute that don't require making sales calls—or necessarily taking much of someone's time.

Budget time for BD. You won't get far building a rainmaking culture if employees are constantly fighting the perception that it detracts from billable work. It's best to approach it as another project, with tasks and hours assigned and tracked accordingly. These hours in most cases will be drawn from the pool of nonbillable hours already available. BD is too important to expect it to be done with leftover time, which is what usually happens when you don't specifically allocate time for it.

Encourage everyone to build their network. We typically associate networking with sales, largely performed at social events where "working the room" challenges most technical professionals. That's too narrow a definition. The networking I'm talking about here is simply keeping in touch with people you know in the business, nurturing those relationships, and—for the adventuresome—building new relationships. Once again, you'll have more success with networking if your focus is on serving others. That means having useful information and leads to share rather than just asking others for them.

Make it a team effort. Selling is often a lonely activity, which lends to some of the stigma about it. The more you can make people feel they are part of a team, the better results you're likely to get. That doesn't require sending people out in pairs—although that's sometimes appropriate—but fostering interaction between those involved in the BD process. Regular sales meetings are recommended for this purpose, not to mention the inherent sense of accountability that comes with having to report one's accomplishments to peers. Promoting collaboration will also lead to better sales strategies and sharing of information.

Don't let project managers off the hook. I'm puzzled by the many PMs I've met in various firms who have little to no responsibility for BD. These are a firm's primary client relationship managers, yet many want to avoid having to help build new client relationships? I've heard more than once that selling is "just not my thing." But show me a PM who lacks the ability to contribute to building new client relationships, and I'll show you someone who's not a very good PM either. Aren't we talking about essentially the same skill set? Many firms require PMs to at least be responsible for new business from their existing clients. That seems a reasonable minimum expectation. PMs don't need to necessarily be involved in cold calling and lead finding, but should at least be willing and able to support efforts in the Sales Funnel

Don't shortchange marketing activities. Most A/E firms I've worked with were already investing adequate hours in sales activities. Many were spending too much time writing proposals instead of positioning the firm in advance of the RFP. But almost all of them were giving too little attention to marketing to make it effective. Marketing well done can bring interested clients to your door, something any firm can appreciate. Research shows that firms that generate the most leads through marketing grow much faster and are more profitable. In expanding participation in your BD process, this is likely where you should concentrate first.

Recognize and reward employee contributions. This goes without saying, but it's important to provide positive reinforcement. Don't ignore earnest efforts even if results haven't come yet. The most productive BD strategies often take time to come to fruition. Plus it's essential to reinforce new behaviors, especially when it doesn't yet fit within people's comfort zone. Embedding change like this in your corporate culture is no easy process, but it's well worth the commitment. 

Monday, May 20, 2013

Tangibilize Your Intangible Strengths

Have you ever tried to articulate your firm's value proposition? Your value proposition is the primary reasons clients are likely to select you over your competitors. For most A/E firms, coming up with a compelling value proposition is exceedingly difficult because most firms aren't that different from each other in the eyes of clients.

In the past two weeks, I guided leaders from two firms through an exercise designed to help them identify key elements of their value proposition. Both firms predictably struggled with it. And both listed as their top differentiators attributes (such as responsiveness, reliability, quality, relationships) that are difficult to prove to prospective clients.

I like the RAIN Group's description of a strong value proposition. They suggest that an effective value proposition must have three characteristics (likening it to a three-legged stool):
  • It must resonate. A strong value proposition aligns with what clients want and need, and what they value. It's relevant.
  • It must differentiate. It sets your firm apart from your competitors. It's different. 
  • It must substantiate. It offers proof that you can deliver the value you claim. No empty marketing slogans. It's verifiable.
Each of the three characteristics present a formidable challenge to the typical firm. It's easy enough to relate to client needs and wants. But we're less clear about how we meet high-value strategic business needs.

Most A/E firms seem to list differentiators that are experiential and unverifiable. In other words, existing clients might recognize that your firm is trustworthy and flexible, and they might continue to work with you because of a strong relationship. But how do you sell such virtues to prospective clients? And doesn't every firm make similar—and similarly unprovable—claims?

If you're convinced that these kinds of intangible qualities constitute your competitive advantage, then you must determine how to tangibilize them. This means making them, at least in part, observable and verifiable. How do you do that? Let me suggest three primary ways:

Produce objective evidence. You're probably familiar with the venerable test of marketable benefits, which involves answering two questions: "So what?" and "Can you prove it?" Assuming you can describe how a particular area of expertise or qualification is beneficial to the client (and don't assume it's automatically evident!), then you're faced with the second and toughest of the two questions: Can you show me the evidence?

The fact is that there is scant evidence for most of the marketing and sales claims we make: "We provide high-quality work," "Our designers really listen," "We put our clients first," "Our employees are dedicated to producing exceptional solutions." Such verbiage only drains the value from your value proposition. For this reason, I encourage you to try to avoid claims of distinction that you can't validate.

Instead, focus on those strengths that you can verify. For example: "As evidence of our commitment to quality, change orders related to our designs have averaged only 0.7% of construction costs over the last decade, compared to an industry average of 2%." If you lack the evidence to back up your claims, go find it if you can.

Define a delivery process. Most of the supposed intangible strengths that A/E firms offer as differentiators are not the product of corporate intent but of individual competency. Client service is a ready example. Every firm claims to provide it, but very few can show a process or system for ensuring its consistent delivery. Combined with the fact that few firms even measure how well they serve clients, this typically amounts to a meaningless sales claim.

I can attest to the value of being able to describe (and show) a process for delivering the intangible strength you're trying to sell. Years ago, I developed a client service delivery process for my former employer, a firm that determined it wanted to be "the service leader" in its target markets. We even could produce a picture of how we provided leading service:

Admittedly, it's an oversimplification of what great service entails, but it nevertheless proved to be a valuable business development asset. My favorite example of this was a shortlist interview for a nationwide environmental services contract with Delta Airlines. I had tried to convince my colleagues not to even pursue this since our firm lacked any experience with airlines or airports. But for some reason we made it to the shortlist.

I wanted to stress our service delivery process since we had heard that Delta wasn't happy with some of their current environmental consultants. When we showed the slide with the diagram above, one of their managers exclaimed, "Why are you the only firm talking about this? Poor service is why we're looking at new firms. Yet you're the only one to tell us how you're going to give us better service!" We got the contract.

Can you take a similar approach for other intangible strengths? I think you can. You could talk about steps you take to strengthen client relationships. You could describe your firm's policies for ensuring responsiveness to clients. You could outline your training program that promotes better collaboration on projects.

Demonstrate it in how you develop new business. If you follow my blog, you know that I advocate a service-centered approach to business development. To borrow Charlie Green's terminology, this amounts to "samples selling"—demonstrating your intangible strengths versus merely talking about them. You can allow the prospective client to sample most aspects of project work before buying; for example:
  • Client focus—by reversing the usual focus on you the seller and centering it on the buyer instead
  • Problem solving—by helping the client characterize and identify the solution you hope to help implement
  • Quality—by delivering sales products (white papers, correspondence, proposals, etc.) of exceptional quality
  • Reliability—by consistently delivering what you promised, even in the little things like returning phone calls promptly
  • Expertise—by providing great insight and knowledge relative to the client's needs
Those intangible qualities that you believe are genuine and valued by your clients typically mean little to prospective clients without proof. By taking steps to tangibilize them as described above, you can turn those empty sales claims into real points of distinction. Maybe you'll even hear one of your new clients exclaim, "Why is everybody just talking about this instead of showing us how they're truly different?"

Monday, May 13, 2013

The Real Innovation Is Getting Things Done

Last week I facilitated a planning meeting for an engineering company in need of fresh strategy after years of flat growth. But the ideas the group came up with in this first of two planning sessions broke little new ground. We'll try again in two weeks.

The next day I led a workshop designed to teach emerging leaders how to promote innovation in their respective offices and departments. We employed several techniques known to expedite the creative process—stretch goal planning, associative thinking, brainstorming sessions, and cross-disciplinary collaboration. But again the group fell short of coming up with truly innovative solutions to our sample problems.

Perhaps these results point to my deficiencies as a facilitator. Or maybe it's unrealistic to expect real breakthroughs in a span of a few hours (as one participant observed, "it's hard to produce inspiration on demand"). Indeed, in my experience, innovation is usually the product of a prolonged iterative process. Or sometimes it comes suddenly, unexpectedly, without any formal prompting.

Absent fresh ideas, both groups nevertheless came to an important conclusion: The actions they listed, while not really new, had not been accomplished. In many cases, they were common-sense steps that had been identified before, but remained untried or unfinished. "Maybe if we really did these things," one participant suggested, "that would be innovative enough." 

I think he may be on to something.

Consultant David Maister wrote that "much of what individuals and firms do in the name of strategic planning is a complete waste of time and about as effective as making New Year's resolutions. The reasons are the same in both situations. Personally and professionally, we already know what we should do...but we don't do what's good for us, because the rewards (and pleasure) are in the future; the disruption, discomfort and discipline needed to get there are immediate."

Every firm would like to come up with a unique marketplace strategy. But if you are unable to implement that strategy, what good is it? On the other hand, imagine the firm that merely accomplishes what we all know we should be doing—excelling at business development, delighting our clients, developing our people, improving our productivity. Would that firm not have a substantial competitive advantage, even minus any novel ideas?

Maister observed that he saw little meaningful differences in the strategic plans of competing professional service firms. Any leading insights or new services or pursuit of growing markets were quickly replicated by other firms. But the best firms excelled in putting their plans into motion. It was their follow-through, not their strategy, that truly set them apart.

Clearly innovation is a powerful force in business. Yet the companies we all admire and want to emulate have succeeded not just because they've had great ideas, but because they've been able to bring them to life. They are implementation masters. In fact, many top companies have prospered by building on others' innovations (e.g., Japanese companies that dominate U.S. market share with products developed from American inventions).

Perhaps the real innovation in the A/E industry is the ability to succeed at what most firms are unable to achieve. Doing what we all know we should be doing, but can't for whatever reason. How can your firm get over the hump? I've written on this topic before, but let me add a few additional insights (including from Maister): 

Align short-term operational goals with long-term strategy. The two are often in conflict. For example, the push to meet business unit profit goals may discourage managers from investing money and nonbillable labor into new services or expansion plans. It's not that you can't do both, but you need to remove the obstacles to acting in the long-range interests of the company. That includes a reward system that favors only short-term achievements.

Personalize corporate strategic goals. Strategy often exists as a disembodied vision of what would be good for the firm but not necessarily for the people involved in making it happen. That ignores a basic truth: People are more inclined to do what's in their best interest. The most powerful form of strategy is that which achieves personal ambitions. It's not always possible to bring the two—corporate and personal goals—into alignment. But you should take what steps are available to make company success personally rewarding for those most responsible for it (by the way, don't overestimate financial rewards). 

Deal with leaders who won't lead. In my extensive work with strategy implementation over the years, there's one cause of failure that trumps all others—the unwillingness of some influential managers to support the strategy. The may resist loudly or quietly, but the result is the same: It usually undermines attempts to move forward. It's hard to make a case for working hard towards achieving strategic goals when some key managers treat them as optional.

Maister put it this way: "Professional firms are afraid of this conclusion. They try to work around the skeptics, the nonbelievers, and the nonparticipants in their senior ranks, preferring to hold on to revenue volume rather than put together a senior team whose members are equally committed to reaching [strategic goals]. That's fine, but you can't call it strategy."

Nor can you call it innovative if you can't get the organization out of neutral. Strive for the best ideas you can come up with, but if you must, settle for ordinary goals pursued in extraordinary fashion.

Saturday, May 4, 2013

Tell the Client Why—And Why Not

When preparing to write a project-specific proposal, chances are your attention first turns to coming up with the right solution. But offering the right solution may not be enough.

Let me give you an example of what I mean, drawn from a real-life experience. Suppose your firm is invited to prepare a proposal to design an industrial wastewater system. Your engineers evaluate various treatment alternatives before selecting the one they deem the obvious best choice. 

You submit what you are convinced is a strong proposal, but lose to a firm recommending another, less expensive treatment option. Ironically, your engineers had evaluated that technology at some length, but rejected it for a number of reasons. Unfortunately, you didn't mention this in your proposal, nor your justification for selecting the option you proposed.

After the system is designed and installed, it fails to meet performance expectations—for all the reasons your engineers had projected in their initial assessment of the technology. Feel vindicated? Hardly. You still didn't get the job.

The outcome may well have been different if you had simply offered the client the benefit of your analysis. This may seem obvious in this example, but most proposals I review fail to discuss options and the reasons for selecting the one proposed. Perhaps it's a simple oversight. Or maybe the proposal team feels the choice is too obvious to need to explain it. Or more likely, they don't consider the proposal from the client's perspective.

Today's sophisticated clients are looking for more than what you are proposing; they want to know why. And if another alternative seems plausible, you should tell them why not

Ideally, you've already had this discussion with the client before you write your proposal. That way you're not guessing which option might be favored. But even if you've discussed it, you should include the evaluation and explanation of your selection in the proposal. 

Explaining both why you are proposing a specific solution and approach—and why you are not proposing something else—is a common-sense, yet often overlooked element of writing a successful proposal. Here are some suggestions:

State your objectives up front. Obviously these should reflect the client's objectives. These form the fundamental criteria for defining the best approach to the project. The objectives should respond specifically to meeting the client's needs and expectations. Clarifying these at the start of your project approach description provides critical context for justifying your selection.

Share your thought process. There are fewer clients today who simply want your conclusions without understanding how you came to them. Often they value your analysis as much as your advice. So share it in your proposal. Knowing how you came to pick one alternative over another gives the client greater confidence that yours is the right choice.

Compare alternatives. An important aspect of revealing your thought process is discussing various alternatives (assuming the client has not dictated your approach). Present the advantages and disadvantages of each option, and explain the basis for selecting the one you're proposing. This can help your proposal stand up to a competitor's offer to do something different (and especially when it seems less expensive), as in the example given above. 

Cover your weaknesses. Anticipate where your approach could be questioned or criticized. Tackle these issues up front. But do so in a positive way, not in the sense of seeming defensive or pointing out faults. The goal is to avoid being ambushed by objections you had not addressed in your proposal. Remember, in making tough choices between competing proposals, clients are as likely to look for reasons to not select a particular firm as for reasons in favor.

Leave your options open. If possible, don't give the client a take-it-or-leave-proposal—or one that could be interpreted that way. Make a case for your best option, but offer other alternatives that you would be willing to implement if the client preferred. While your proposed project approach can be the strength of your proposal, there are advantages in presenting your firm as the best choice independent of a specific approach or alternative.