BuiltEnvironment

Quality vs. price - some thoughts

Here's a story:

In 1992, Mr. and Mrs. Smith wanted to purchase a house. They found three that they liked, and had to make a hard decision.

House #1 was the largest. It was a brand new home designed in a very modern style, with lots of windows. It was in the middle of the block and had only one tree on the property. But it had ample space for all their family's needs, and some room to grow.

House #2 was the smallest of the three, a very plain stucco and wood structure more than 300 square feet smaller than House #1. But it was situated on a corner lot (which the real estate agent swore would increase its resale value), with a large finished patio and more than enough space to put in a swimming pool (one of Bill Smith's dream features), when they could afford it.

House #3 was somewhere between the other two in size; it had enough room for now but not for growth. The house was a kind of non-descript structure of no specific style, looking pretty much like all its neighbors on the block. A typical tract home. It was also the cheapest of the three; the savings would be enough to enable the Smiths to replace some furniture and upgrade finishes.

It was a hard decision. Jeanne Smith asked her parents what they thought. Her dad said, "Great is never cheap and cheap is never great."

Bill asked what he meant, and dad answered, "Just because something costs less doesn't mean it's any good, much less better. This house may be affordable right now, but it could be something you can't resell later."

They asked their friend what he thought. Hank said, "If you're worried about resale value, you can always add upgrades later on. You can look at the market, see what upgrades really add value and do them before you put the house on the market."

So they chose house #3.

By 2000, the house was feeling a bit crowded; they wondered if "cheap" had been the good choice after all. So they shortened the driveway, added a covered carport and turned the garage into a family room, convinced that the second living space would recoup its cost later on.

Toward the end of 2007, they were finally ready for a swimming pool, when the recession hit and the economy tanked. Over the next few years, their house lost almost half its value, which put them upside-down on their mortgage. They were stuck in that house.

A few years later, the house had regained its original value, but there was no profit to be made in a resale because of the upgrades they had made. They were still stuck in that house, and feeling worse and worse about it as time passed.

In 2014, Jeanne and Bill both got big raises. Jeanne wanted less house to care for, and they decided they could finally afford to break even and move on. Which they did, finding a small house that they liked, that they could easily afford. They closed on both houses the same day and moved. But they had both learned an important lesson. As Ben Franklin said:

"The bitterness of poor quality remains long after the sweetness of low price is forgotten."

These same lessons can also apply to procuring architectural, engineering and related services. Lowest-bid architecture, engineering and other services often lead to foundations that crack or move, resulting in structures that fall down and hurt people (or worse). And the ensuing lawsuits are never cheap.

The most effective skills I've learned in my career

When I accepted the 30-day blog challenge back in late December of 2014, I asked my friends to suggest some topics they thought might be interesting. Barbara Shuck (CMO at Wilson & Company, Inc.) sent me a long list of suggestions. This is the seventh of Barbara's suggested topics.

I think there are three skills more important than any others I have learned.

Although Barbara specified "in my career," I'm going to ignore that phrase so I can include one of the most effective skills I ever learned, and one I use every day in my work.

TYPING

I went to a grade school with a super-enriched program, and started typing in second grade. A lot of the early lessons involved learning and memorizing the keyboard and mastering what (in the 1950s) they called "touch typing."

To this day, I don't need to look at the keyboard to type accurately—in fact, I still use the numbers in the line above "q-w-e-r-t-y-u-I-o-p" and below the function keys, and I don't have to look at the keyboard to use them either.

This skill has stood me in good stead for almost six decades!

LISTENING

Growing up in New York City and having to take state-wide Regents exams for most high school subjects taught me to pay attention because if you didn't follow instructions you could lose half or all credit for an answer, or even discover that you didn't have to answer that group of questions.

But paying attention is not all there is to listening.

Then, in the mid-2000s, I actually got to take a class in listening. Freese and Nichols, Inc., my best client at the time, allowed me to attend the Freese and Nichols University class. The instructor was very good. He taught us the differences between active and passive listening, the benefits of active listening and a variety of behaviors that would confirm to a client that real listening was taking place.

The things I learned in that class had immediate positive impacts on my relationships with Freese and Nichols marketing and technical staff, and have continued to benefit all my professional relationships.

WRITING

In my first college English course, I spent an entire term learning about every possible mistake (what the instructor called "fatal errors") or example of bad style one never wanted to write. I learned to write run-on sentences, dangling participles, misplaced modifiers, split infinitives, and total overuse of stylistic tools such as irony and parallel construction.

Thank God for my high school English teachers. They had taught me the rules of writing as a group of things to do. By the time I got to college, no instructor could tear down or even damage the solid framework they had given me.

Today, because of the way I was taught and the frequency and volume of my writing, I can generally complete an 800-word article, polished and ready to email to my editor, in 60 to 90 minutes!

By the way, if you're interested in my results on the 30-day blog challenge, check out the January 2015 archive, where you will find all the posts.

Strategy or execution—which is more important?

I like and respect Christine Hollinden as both colleague and friend. I am connected to her at LinkedIn, where I also follow her firm. I am friends with her on Facebook, where I also like her firm. I often join her instructive and enjoyable webinars and read her blog (http://www.hollinden.com/blog) and newsletter. This morning, in an announcement of her upcoming webinar, "From Strategy to Results: ensuring solid execution," she said something that really made me stop and think:

"Which is more important: Strategy or Execution? All too often we hear that strategy does not matter as long as you are producing results."

So let's look at this from the perspective of a long-term A/E/C industry marketer.

I am a strong proponent of the axiom, "plan the work—work the plan." The graphic to the left, which is my own personal "4 Ps of Marketing," shows this.

I believe that these four steps are the surest way to winning new projects or turning new clients into clients who come back to you over and over again AND recommend your firm to others.

Obviously, no A/E/C firm succeeds without solid execution. Execution produces revenue, revenue covers expenses, and sufficient revenue results in a profitable enterprise. But how much more revenue—and significant revenue, at that—can be produced if a firm's marketing activities are planned, rather than using what we often refer to as the "ready, fire, aim!" approach to pursuit decision-making.

Pursuing work without some kind of planning—some kind of advance thinking—is like going for a walk without first establishing a destination, and hoping that the place where you end up will be a place where you want to be.

So it seems to me that execution without strategy is a rather hit-or-miss situation. Having a strategy tells you what you want to achieve, where you want to go. And from strategies come strategic plans, which pinpoint where you are and provide the maps of how you think you're going to get from where you are to where you want to go.

And part of the strategy is to use the best decision-making processes you can develop and implement. These include great search capabilities for potential opportunities as well as great pursuit-decision processes to determine which of these are true opportunities for your firm.

You can submit ten proposals in a month, turning them out like factory assembly line production using all standard parts. Given the most-likely-middling quality of each, you might win one of them, but probably no more.

But what if you follow your strategic plan and determine that two of the ten are the kind of work you don't do at all, another two are project types for which you don't have a lot of experience, and one is a project with more liability than your firm wants to assume.

Now you are only making five submittals this month, all of them at a higher quality because each gets more of your time. And of those five true opportunities, you now win three, resulting in more revenue with less stress.

Striving for mediocrity

Much of my reading and thinking is about how professional service firms organize to maximize performance—including hierarchies; leadership authority and accountability; how, when and which staff to include in senior processes like planning; and the processes that inform daily activities.

One client of mine had many layers of managers—but few real leaders. In the firm’s organizational model, project managers had authority over their teams and department heads over their departments. Division and regional managers—responsible for service lines, work quality, overall performance and, therefore, the actual brand—had no direct authority over anyone or anything.

You held focus groups to solicit input from people who had no knowledge of a subject but wanted to be part of the decision; and attended meetings of other departments to become better known (i.e. better liked) by staff. You spent large amounts of time with people you wanted to help, getting their permission to help them.

“Traction” for a new idea rested on your relationships with others: you had to be well liked to implement any change—without focus groups, change couldn’t happen—anyone who didn’t like a change could refuse to adopt it—there were no consequences for refusing to change.

What did this mean for someone trying to solve a problem? Consider:

Over time, (let’s call her) Anne noticed that invoicing always put people in “crisis mode” because of a bottleneck. As she watched how people worked, she thought of a way to eliminate the bottleneck.

She told her supervisor, Joe, about the challenge and her solution. She explained how the change would eliminate the bottleneck completely, resulting in increased efficiency, less time spent on invoicing, and more time for other tasks that were now being postponed.

Joe liked her idea. He took the challenge and solution to the administrative services manager, Mike. Mike agreed that the bottleneck was a problem and liked Anne’s solution. He and Joe made a list of people to include in focus groups about the challenge and the change. There were almost 70 principals, managers, technical and support staff on the list.

The list was split into ten focus groups of six to eight people each, spread over four weeks.

In each group, there was at least one person convinced that no change could make a difference; one convinced that this was not the right change; one convinced that s/he could devise a better solution; and one convinced that the entire process needed to be replaced.

In each two-hour focus group meeting, the change was discussed—and nothing decided. Small tweaks were made to Anne’s change, weakening the idea so the change would be less radical, and less problematical for those who just hate any kind of change. By the end of each focus group, attendees hated the change less than at the start because it now bore “their stamp”—their own personal change to the change.

After four weeks, the first three groups were reconvened to get their comments on the changes made by later groups. Ultimately, there were 13 sets of tweaks, nobody was happy with the change, and Anne had to “champion” a change she hardly recognized and didn’t support—something that looked like change for the sake of change without solving the problem, something no longer worth the time it had taken to gain approval.

If there had been a true firm leader, with the courage to make an “executive decision,” the company could have reaped the benefits of the change. Unfortunately, secure in its belief that focus groups could substitute for real leadership, the company had pursued—and achieved—mediocrity!

Regardless of your firm's organizational model, you need strong leadership. A diversity of perspectives and experience will help you achieve great performance, but an executive decision is often the best response to a specific circumstance.

Otherwise, in the absence of true leadership, focus groups and committees take you around in circles, making visible activity, but never getting anywhere.

You can't please everybody!

On February 11, 2015, it was my good fortune to be a speaker at the 2015 SMPS Pacific Regional Conference in Seattle. My topic was one that is of particular importance to me, and a subject about which I am very passionate.

My session was about the often adversarial relationship between marketing and technical staff in the firms that make up the A/E/C industry—planning, architecture, engineering, survey, landscape architecture, environmental, construction management and construction firms—and how to make those relationships less adversarial, more collaborative.

Working both within and for A/E/C firms over the last 37 years, my personal observations have given me some strong opinions about where the difficulties originate, why they continue and what can be done to ease the tension and turn adversaries into advocates for both the marketing effort and the marketing staff.

By my count, we had more than 60 attendees at the 90-minute session. There were a half-dozen or more questions at the end, and a number of people came up to thank me for a good session.

On March 5, I received the evaluation summary of my session. The responses were a bit confusing, somewhat surprising, and brought me up short.

On the positive side, responses included:

• Solid overview of what needs to happen to enable more collaborative relationships.
• Frank input from someone who has been there/done that.
• Bernie has a strong base of information on the subject and communicated it well.
• Great speaker. Good anecdotes. Energetic!
• Bernie was a great presenter. Very clear, knowledgeable, and engaging.

On the negative side, responses included:

• Some of the examples given were a bit “dated” although it was accurate.
• Info and delivery was poor. Came off as old-school.
• Session had a very (ironically enough) adversarial tone. The content was couched in an “us vs. them” tone.
• Do not bring this speaker back. Ever.

Since my first conference presentation almost 10 years ago, this evaluation summary was the lowest scores I have ever received for a presentation. Looking back, I have to agree that the scores are pretty accurate.

The presentation IS “old-school.” I have been submitting this topic to conferences for a few years, and this is the first time it was accepted. It never occurred to me that this is no longer the issue I had been carrying around with me for so long.

The presentation WAS a little angry and negative—perhaps more than just a little angry and negative. I have been independent for more than 10 years now. I guess I assumed that the situation I left in the early 2000s was still common. Apparently, it is not.

I don’t know about the slides being “unengaging,” but they are definitely wordy. I try to limit the number of bullets on a slide, but not the number of words. This goes back to when the slide show was the hand-out. Since this is no longer the case, the slide show is really just an outline from which to speak, and I need to rethink my approach to the slide show—even for when I give presentations I’ve already given.

Bottom line: this set of evaluations was not particularly terrible, but it was not what I wanted to hear.

However, IT WAS something I obviously needed to hear, and I’m glad that the evaluators respected me enough to give honest opinions without pulling any punches.

Short-cuts and unintended consequences

Sometimes, in the heat of making a deadline, we make decisions without completely thinking them through. Generally, these decisions are about saving time, and they entail using short-cuts that we might not want to rely on under different circumstances.

The last century of the film industry is replete with examples of the unintended physical consequences of short-cuts, including someone “taking a short-cut” and stumbling into quicksand, a person driving off the end of a bridge not yet complete, a birthday cake with so many lit candles that it goes up in flames, and so forth. Mostly presented as comedy, or comic relief within a serious presentation, we laugh at these funny situations and tension relievers, and go on watching the movie.

But what happens when the short-cut is one taken by a firm preparing a proposal, or by a public agency preparing an RFP?

First, let’s take the case where a group developing a proposal copies something out of the boilerplate. The writer quickly scans the text to ensure that there are no references to other clients or projects, but doesn’t do a full read of the text or tailor it to this specific pursuit. So every mention of “the client” rather than using the client’s name will scream “boilerplate,” every reference to what the firm can do for "its clients" instead of this client shouts “generic,” and the client might infer that s/he and her/his project were simply not worth some original thought. In addition, any typographic or grammatical errors in the original are repeated, which the client might interpret at sloppy thinking. The unintended consequence: your short-cut submittal is evaluated as “not the team we are looking for.”

Now let’s take an example where the writer copies a text from a previous submittal. Perhaps he borrows the project approach from a proposal where the scope of work seems to be the same. But no two projects are identical—the project site terrain will be different, the local ordinances and permit requirements will be different, the climate will be different, the local building codes will be different, etc. So no two approaches will be identical. And the approach included in the proposal doesn't respond to the specific conditions of the project and site. The unintended consequence: your short-cut proposal is tossed out as “unresponsive.”

Finally, let’s take the case where a public agency used an RFP from a previous procurement. In the late 1990s, I attended a US Army Corps of Engineers conference about how the government wanted to “do business like businesses do business.” The conference included a session on how RFPs are written.

The example used was a procurement where the purchasing group had identified a Motorola product that exactly met their specifications. The purchasing officer “borrowed” an RFP, added the technical specifications for the product he wanted to buy and its maintenance schedule, and issued the RFP without looking to see if there were specifications from the previous procurement that might conflict with his current needs. When the due date arrived and proposals were opened, there was no bid from Motorola.

After the selection and contract, the purchasing officer called his Motorola contact to ask why she hadn’t bid. She explained that the Motorola product required monthly calibration but the RFP stipulated weekly calibration. In that case, Motorola would not make a profit on the contract.

The weekly calibration requirement, of course, was related to the original use of the RFP, but without reading that original RFP, the purchasing officer had no idea the requirement was there. The unintended consequence: the Corps had to settle for the “second-best” product because their own short-cut had kept the best product out of the competition.