Tuesday, April 29, 2014

Hiring the Right Rainmaker

As the economy continues its slow recovery, many A/E firms are thinking of hiring someone to help them generate more sales. It's an option worth considering, but one that is not without risk. In my experience, more rainmaker hires disappoint than meet expectations. And the fault is usually shared. True, good rainmakers are hard to find. But firms often unwittingly create obstacles to achieving the sales success they desire. 

Below are some recommendations for making a rainmaker hire work for both parties:

Ideally, hire a technical professional with demonstrated sales skills. While there are many successful sellers in our business with limited technical expertise (I was one!), the preferred choice is someone who has an engineering, architectural, or other relevant technical background. Why? If you lack the expertise to help clients solve their problems, what value are you bringing to the sales call? Clients are growing less tolerant of listening to sales pitches or helping salespeople "get caught up" with the client's latest developments. They want something useful in return for their time. Can your non-technical rainmaker deliver?

Find someone who embodies your firm's culture and values. There's a reason most technical professionals are uncomfortable with selling: They've been on the other side of the traditional sales transaction. They don't care for the seller's apparent self-centered motives or approach. So the solution for some firms is to hire someone to do the dirty work for them! Unfortunately the client still has to endure the other side of the transaction. A better choice is to hire a rainmaker who is client-centered and service-oriented, who focuses on building mutually-beneficial business relationships rather than just making sales. At least, I'm assuming that kind of approach is consistent with your firm's values. Don't hire someone who fits the stereotype; hire someone clients will love. 

Develop a team approach; avoid the solo seller. Some firm managers hire a rainmaker essentially to wash their hands of the sales responsibility. Some rainmakers find it frustrating to try to get their colleagues involved in sales, so they tend to minimize the interaction. The solo seller is a bad idea in our business. That's because what is being sold is essentially the people who will do the work. The best rainmakers don't reduce the time their technical colleagues spend on selling; they increase it. They are matchmakers bringing the client together with the expert solution providers. They also help their coworkers develop their sales and client skills.

Give the rainmaker access to existing clients. Failing to do so is a common problem because many professionals are reluctant to share their client relationships. Yet the relationship is strengthened when others are engaged in meeting the client's needs—both before and after the sale. The best rainmakers understand how to grow client relationships and typically help increase sales from existing clients. Limiting the seller to developing new clients is often a recipe for failure because the lead time on new client sales is much longer. Also, temper expectations regarding the rainmaker bringing his or her previous clients to your firm. There are many reasons why this often doesn't happen as quickly or to the extent that the firm may have anticipated.

Keep the rainmaker involved with the client after the sale. If the right way to sell is building relationships (and it is) then it doesn't make sense to cut the seller off after the sale. Yet many firms take this approach. A better way is to assign the seller as a Client Advocate who makes sure the client is satisfied with the firm's performance and service during the project. That also positions the rainmaker to find other opportunities for doing work for the client.   

Establish clear expectations, metrics, and rewards. Ambiguous performance expectations are common for rainmakers, in part because of the difficulty in giving any one person credit for a given sale. Consequently, sellers are often judged (and sometimes fired) for "not getting the job done" when the terms for success were never clearly defined. As noted above, blame for lack of business development success is typically shared. So part of setting expectations and metrics for the seller is explicitly defining the roles and responsibilities of others who participate in the business development process. Also, if the rainmaker is truly successful, don't fail to appropriately reward his or her contribution. Top sellers can certainly sell themselves to the competition! 

Monday, April 21, 2014

Investing Nonbillable Time

Does your firm assign appropriate value to nonbillable time? That may seem a strange question since the prevailing view among A/E firms is that nonbillable time is a drag on the bottom line and should be minimized to the extent possible. 

I understand the financial equation, but the fact remains that nonbillable time is essential to a firm's survival. It allows for critical functions such as business development, operations management, accounting, human resources, professional development, and strategic initiatives. As consultant David Maister once wrote, "What you do with your billable time determines your current income, but what you do with your nonbillable time determines your future."

Unfortunately, the sometimes maniacal focus on utilization that exists in many firms obscures a proper appreciation for the value of nonbillable time. These hours are not simply a cost, but an important investment opportunity. Yet most firms don't treat them as such. It's rare to see managers who give the same priority and discipline to managing nonbillable time as they do project time. The biggest cost isn't the amount of nonbillable time; it's the failure to make wise use of it.

What Are You Doing With All That Time?

Have you ever considered how much nonbillable time there is to put to productive use? Assuming an average utilization rate of 60%, that means of the 260 workdays for the average employee, about 104 days are nonbillable. Of that amount, a reasonable estimate is about 25 days taken for vacation, holidays, and sick leave. So that leaves the average employee in our business with about 79 nonbillable days each year.

So in a firm of 100 employees, there are roughly 7,900 days of nonbillable work! (You can do the math to determine the number for your firm.) That begs the question: What are you doing with all that time?

Managing Investment Time

Firms that make the most productive use of all that time do so intentionally. Don't expect to derive appropriate value from nonbillable hours if you don't have a plan—and the resolve to carry it out. The simple advice is this: Treat nonbillable time like project time. Determine what needs to be done, how much time is needed, and where that time is coming from. Then track follow-through and results. Here are some suggested steps:

Define your strategic priorities. Perhaps you've already done this through your strategic planning process. But a common planning problem is taking on more initiatives than there is time to successfully complete. The temptation is always there because the to-do list always exceeds our capacity. And most of these unfinished tasks seem really important. The key question, however, is: What is most important? Prioritizing your company's to-do list helps you make smarter choices about how nonbillable time is used.

Develop an action plan for each goal or initiative. Like any project, you need to define the specific tasks that are required to complete it. Too many plans identify desired outcomes without adequately describing how these will be achieved. An action-oriented plan enables you to determine resource needs, assign those resources, and track your progress towards your goals.

Estimate the level of effort. This is rarely done, in my experience, for nonbillable projects. No wonder so many firms struggle to complete them. You would never plan a client project without projecting manpower requirements, would you? The same discipline should be applied to internal projects. Once you have estimated the level of effort for each action plan, you may well determine that you need to scale back the number of initiatives.

Specifically budget nonbillable time. Working with firms on their business development process, I often hear managers complain that increased sales activities will negatively effect utilization. Yet most of those assigned sales responsibilities only have utilization goals of 50-60%! The nonbillable time is obviously available; the question is how best to use it. Without budgeting this time, you will struggle to escape this kind of utilization-hit mindset.

Budgeting nonbillable time forces you to make choices about how to use it optimally. Assuming you don't have people sitting around idly, whatever hours you budget to a nonbillable initiative are hours that must be taken from some other activity. You should never give someone a substantial assignment without offloading an equivalent amount of time from what they're currently doing. That may create a domino effect in how discretionary nonbillable tasks are prioritized and assigned across the company—important steps in the right direction.

Track nonbillable time utilization and hold people accountable. Just as you assign project numbers and job codes to billable work, I recommend doing the same for important internal projects. This will better enable you to track how those hours are being spent. If someone isn't spending the allocated time, that needs to be addressed just as you would if someone was slacking on client project work. Without expecting the same level of accountability, you will consign nonbillable initiatives to the realm of "things to do when you have leftover time."

While the steps above will help, effectively investing nonbillable time in most firms will require developing a different mindset. You have to change the traditional view of nonbillable time as being less valuable than project time. But treating it with the same principled approach as billable time will certainly help change that perception. Many of the most successful firms are already doing this. What about your firm?

Tuesday, April 15, 2014

Is Your Firm Serious About Its Values?

Countless studies and best-selling business books repeat the same refrain—values matter. The most successful companies typically have a strong set of values that guide all corporate activity. Thus most firms in our business, recognizing this trend, have adopted a formal statement of values or guiding principles. But there is wide disparity in the degree to which these values really impact the firm.

As consultant David Maister noted in his book True Professionalism, there's a big difference between aspiring to follow a set of values and being absolutely committed to them. In fact, he argued, you cannot truly claim to have values if you don't live by them:
Something cannot be called a value or principle if you are allowed to transgress it. Your firm can be said to have values to the extent that there are clear, nonnegotiable, minimum standards of behavior that the firm will tolerate. In particular, whether or not your values are operational (i.e., actually influencing what goes on in your firm) is crucially determined by whether or not there are consequences for noncompliance.
In my experience, most firms, while claiming to embrace the high standards expressed in their values, repeatedly tolerate behavior that violates those values. For example, every value statement I've seen has something about serving clients and treating employees well. Yet there are typically a few individuals in every firm I've worked with whose actions are not consistent with those values.

Are there any consequences for these individuals not supporting the company's values? Not usually, especially if they are key performers. If they have valuable technical credentials or bring revenue to the firm, they are commonly relieved of the responsibility to conform with the firm's standards of conduct. Of course, their prominent position in the firm makes their disregard for corporate values all the more damaging.

Maister wrote of one firm that made the difficult choice of letting a star performer go because he refused to comply with their policies on collaboration and sharing—which were consistent with their values:
The point of the story is that there aren't many firms with the courage to do what this firm did, which was to incur a short-term income loss in order to bet on the long-run benefits of sustaining their values. In most firms, an economically productive professional would rarely (if ever) be confronted about softer "values" issues. As a result, very few firms actually have real, operable values. They say they do, but few of the professionals really believe that they're serious.
Interestingly, many firm leaders seem to fear that taking such a tough stance on values would be disruptive to the company's culture, which is shaped in part by the value of respecting and tolerating differences. But research and experience prove quite the opposite. Employees want to see their employer demonstrate intolerance when it comes to disregard for its values and standards. That's what reinforces the notion that the company really does stand for something.

So what about your firm? Are you serious about your espoused values? Are they lived out in every facet of your firm's operations or merely attached to the wall? Are you willing to enforce them or are they just something nice to aspire to? Do your values guide your company's decisions, motivate your actions, set the standard for behavior? 

Putting Your Values to the Test

Let me suggest that you do a "values assessment." Take an honest look at the role of your firm's stated values in the everyday life of your firm. You might consider the following questions: 
  • Are our employees familiar with our values?
  • Do our values really mean anything to the staff?
  • Do we demand compliance with our values?
  • In what areas are we not acting consistently with our values?
  • Do all our policies and directives support our values?
  • How should we measure performance in keeping with our values?
  • What changes are needed to bring everything in alignment with our values?
This kind of assessment is best conducted with broad employee participation. That way you're more likely to uncover inconsistencies with your values, plus gain widespread support for renewing your firm's commitment to them. I suspect you'll find just how much your values can imbue new vigor and focus to your firm when they're taken seriously—a glimpse of why the best companies place so much emphasis here.

Saturday, April 12, 2014

Are You Holding Your Young Stars Back?

I don't have any data to support this, but my observation is that technical professionals in senior management roles in other industries are younger overall than in the A/E business. My work routinely connects me with top managers in engineering, environmental, and architectural firms. They are predominantly Baby Boomers like myself.

Yet I often meet technically-trained "senior" managers in other industries who are in their 30s. Am I imagining things or is it possible that we are slower to allow top young performers to advance up through the ranks?

Studies indicate that younger workers are often frustrated by the lack of advancement opportunities, a problem that has only gotten worse with the economic downturn. My own experience surveying and working with Gen Xers and Millennials in A/E firms confirms these findings. These young professionals commonly feel they are being denied deserved opportunities to take on greater responsibilities and increased autonomy.

Of course, I frequently hear Boomer managers complain about the younger generations' "unrealistic" expectations. These managers put in their time and "paid their dues" to achieve their current status. Why do the younger generations think it should be different for them?

Well, maybe because the times are different. For one thing, there's a looming shortage of experienced engineers and scientists as Boomers retire.That alone may be good reason to fast-track the development of younger technical professionals.

There's also research that suggests that Gen Xers are particularly suited for taking on the leadership challenges of our post-Great Recession world. They're collectively more entrepreneurial, adaptive, collaborative, open-minded, pragmatic, and purpose-driven. One cross-generational study of 1,200 professionals found that they substantially favored Gen X managers over Boomer ones (70% to 25%)! Maybe experience isn't all it's cracked up to be.

I do think our industry tends to give too much weight to seniority. I often encounter younger mid-managers who deliver much better business results than their older senior-manager bosses. Yet those older managers define the direction of the firm. 

Could your firm benefit from giving greater leadership responsibilities to your younger standouts? Are you taking steps to accelerate their development? Here are some suggestions for doing just that:

Clarify career paths. Young professionals want to know specifically what it takes to advance. Yet many firms don't make it easy to determine the steps for career growth. Position descriptions typically describe basic qualifications, but the means of obtaining those qualifications is often less clear. The best firms have established a professional development curriculum that specifies what training and experience is needed at each stage of one's career.

Rethink experience requirements for advancement. Experience matters, but employee development doesn't always follow the straight line progression that job requirements sometimes imply. Think it takes 4-5 years to qualify as a project manager? Some younger professionals are ready earlier. Experience thresholds are better used as guidelines than as requirements. Give flexibility to your extraordinary performers.

Combine coaching with training. While many firms attempt to introduce mentoring opportunities for younger workers, most ignore coaching. There's an important distinction, the primary one being that coaching is real-time, as work is being performed (the table below highlights other differences):

Studies show that performance improvement following training skyrockets when it is combined with coaching. That only makes sense: People learn more by doing than listening. Plus coaching provides the immediate feedback and reinforcement needed to dramatically improve performance. Why then is it rare? It takes a significant investment of a leader's time. But it's an investment that can yield a worthwhile return.

Learn to let go and delegate. Many managers struggle to delegate work adequately, and the next generation of managers suffers for it. Delegation is challenging because it takes time to do it right, it means giving up some control, and the next person likely won't do the job the way you would (or as well). But delegating appropriately is critical for developing your young stars. Give them as much as they can handle, but not without proper oversight. 

Regularly seek their input. Senior firm leaders often make the mistake of not soliciting advice and feedback from their younger professionals. This neglects a valuable perspective, whether the issue is project-related or a matter of corporate strategy. Gen Xers and Millennials see things differently, which is precisely why you want to talk with them. Their ideas may not yet be seasoned by experience, but they are often fresh and insightful—and perhaps just the right answer for the situation. When you get them involved in important matters, both you and they ultimately benefit.

Take them along. One of the simplest steps in helping your younger professionals develop is also one of the best: Invite them to join you in your work. I recognize there are limits to this practice given the importance of keeping people (and especially junior staff) billable. But consider this personalized training. Visiting a prospective client? Take a rising star along. Negotiating a big contract? Invite a young colleague. Holding an executive session to discuss your strategic plan? Well, you get the idea.