Are You Measuring the Things That Really Matter?

The connection between metrics and peformance is well established. The old axiom "what gets measured gets done" is true. What is less clear is whether most firms are tracking the best performance indicators.

Four underused measures come to mind. They each relate to goals that we can all agree upon. But somehow measuring performance in these four areas has not been a priority in most A/E firms. I'd like to make a case for adding these to the metrics you use, if you're not already.

Client satisfaction. Undoubtedly serving your clients well is one of your firm's core values. So how are you doing? Most firms can't answer that question with any certitude. Sure, they point to the fact that 80% of their work comes from repeat clients. But that's fairly routine in our business, not exceptional. The fact is that only one in four A/E firms routinely solicit performance feedback from their clients. Plus there's ample evidence that clients are not as happy with us as repeat business rates might suggest.

So here's a clear opportunity to measure something that really matters, and something that most of your competitors aren't. I provided some specific guidance on soliciting client feedback in a previous post.

Employee satisfaction. The second core value that I see most prominent among firms is some recognition of the central importance of the people who work there. In professional services, the quality of a firm is mostly dependent upon the quality of the staff. With a growing talent shortage (the weak economy notwithstanding), most companies realize that having satisfied employees has never been more vital.

So why aren't more firms asking their employees what they like and don't like about their employer? As with presuming client satisfaction, firm principals often overestimate how well they're serving this crucial constituency. Oddly, managers are sometimes reluctant to conduct an employee survey for fear that they'll learn the truth (usually explained as being hesitant to "stir the pot" or some similar metaphor). There's a mistaken notion that surveying employees creates problems rather than reveals them so they can be addressed.

Similar to clients, retention data can be misleading. Many employees don't leave for the same reason that many clients don't leave--it's hard to start over. But as important as employee retention is, that shouldn't be your primary goal for seeking satisfied employees. Research shows that uphappy employees exact a high cost in lost productivity, not to mention impossible-to-quantify opportunity costs (i.e., things you might have accomplished if your employees were more enthused about their jobs). And then there's the value of treating employees well simply because it's the right thing to do.

I advise conducting annual employee surveys so that you can both (1) track trends over time and (2) gage response to steps you've taken to address areas of concern. An important thing to keep in mind about employee surveys: You have to act on the feedback you receive. Fail to do so and you risk invalidating the whole process. This doesn't mean that you're committed to fixing every problem or shortcoming that comes to light. What employees want is that you acknowledge and value their feedback and take reasonable steps to address their concerns.

Supervisory performance. Why is this important? Because research indicates that bosses are probably the most important factor in defining the workplace environment. As Gallup puts it: "People join good companies and leave bad bosses." So if satisfied and loyal employees is your goal, then you should take steps to try to provide them effective bosses. A good place to start is to get feedback on how employees think their bosses are doing.

Typically this type of feedback is acquired through a 360-degree review, as part of the annual performance appraisal process. In this context, it is the feedback from supervisees that is key. Unfortunately many firms aren't seeking this kind of input. Once again, they may be making the mistake of assuming they know how employees feel about their bosses based on anecdotal evidence. Such evidence is rarely reliable. You have to ask the people whose perceptions matter.

I encourage firms to establish clear performance expectations for those in supervisory roles. Many managers are not judged on how they supervise and mentor others, but on other metrics such as utilization, sales, revenue, and profit. These, of course, are important measures of success. But don't ignore the crucial role that managers have in guiding and working with others in your firm. That relationship strongly influences your firm's overall performance.

Targeted behaviors. What? I doubt you've ever heard of such a metric. I borrowed the concept from the time I spent with my former employer developing and implementing a new behavioral safety process. Safety, like most performance issues, is usually monitored by tracking what is known as trailing indicators. These include measures such as OSHA recordable incident rates, lost work days, and near misses. Most other business metrics are also trailing indicators; they describe outcomes resulting from past actions.

To improve those metrics, of course, you need to change current and future behaviors. How will you know how well you're doing? By looking at subsequent trailing indicators? That will help, but after the fact. A better way is to monitor the current behaviors--a leading indicator--that you believe will yield better future results. In behavioral safety, this is done by a process known as "observation and feedback."

In this approach, someone regularly observes people working, checking in particular to see that they are doing the few "targeted behaviors" that are deemed most important to getting the desired results. The observer uses a checklist to document which of those behaviors are exhibited (judged on a pass-fail basis). Workers are provided with real-time feedback, either complementing them on doing things the right way or pointing out how they can improve. Rewards are provided to both individuals and teams according to their scores. This kind of approach (as part of an overall behavioral-based safety process) has helped numerous companies dramatically improve safety performance.

Could a similar approach be applied to other tasks and performance goals? I believe it could. It clearly defines what behaviors and methods are expected. It monitors work activity in real time, providing feedback and coaching, and rewarding good performance. It focuses on the most critical ingredient of organizational change and improvement--individual behaviors.

So as you look ahead to 2009, let me suggest you revisit the question: Are we using the right metrics to help us achieve the results that matter most? Hopefully I've inspired you to consider a few different options.

The Myth of Multitasking

Now here's a novel resolution for 2009--do less! Sound preposterous? Generally we charge into the new year with visions of achieving more than we did last year. Getting better results usually translates into doing more. In a weak economy, just holding your own may require working harder than last year.

Let me throw a little cold water on those plans. There's recent research that reaffirms what we've always known: We have limits. And for most of us, we're already there without adding any of those new responsibilities outlined in the latest strategic plan or corporate initiative or reorganization. Somehow, we've got to learn how to get more done in the same amount of time. The problem is, that's largely a myth.

"People can't multitask very well, and when people say they can, they're deluding themselves," said MIT neuroscientist Earl Miller in an NPR series broadcast in October. For the most part, according to Miller, we can't focus on more than one thing at a time. Our ability to switch attention quickly fools us into thinking we're multitasking, but we're really not.

So what's the problem? Psychologist Gerald Weinberg has calculated that when you try to work on two projects at once, you lose about 20% of your time to the task of switching between the two. Add a third project, and nearly half your time is lost. Researchers using brain imaging can actually see the brain struggling as it switches between tasks.

Ironically, the very technological tools (email, instant messaging, Blackberries, etc.) that were supposed to improve our productivity are contributing to the problem. They create increased interruptions that essentially have the same impact as multitasking. In a recent study by Basex, a business research firm, unnecessary interruptions were estimated to cost U.S. businesses $588 billion a year in lost productivity!

BBC reported that another study at the Institute of Psychiatry found that technology-induced interruptions can temporarily lower a person's IQ by 10 points. That's more than twice the impact of smoking marijuana.

All these findings point back to the premise I outlined in an earlier post entitled "Simplicity: The Leader's Secret Weapon." If you have a leadership role in your firm, let me encourage you to focus your efforts on enabling the effective use of time and attention. Simplify. Achieve more with less effort. Help your colleagues focus on their primary work. Minimize unnecessary interruptions.

There are a couple of tools on my website that can be very helpful in making people more aware of the problems described above. The Time Tracker helps you track your time usage over the course of a work week. The Interruption Tracker is used to track interruptions. Using these tools will enhance your awareness of the challenges you face in the battle for time and attention, and hopefully increase your resolve to do something about it.

Don't Waste the Client's Time!

In the midst of a recession, we can expect a significant increase in the number of sales calls as firms scramble to find work. Poor clients! Let's face it, most sales calls are a waste of the client's time. Here are a few of the classic time wasters:

• Glad-to-meet-us sales calls. "I'd like to come by and introduce you to our firm. Who knows, you might discover something about us that you haven't seen in all the other firms calling on you."

• Drive-by sales calls. "I'm going to be in your area next week, so since it's convenient for me, I wonder if we could meet."

• Touching base sales calls. "It's been a while since we last met, so I thought it would be a good idea to get together again so, well, you won't forget about us."

• Something's up sales calls. "I know you haven't heard from us for a long time, but I heard the RFP is coming out soon, so I thought it's time we visit again."

Of course, we're never quite so honest in asking for the appointment. But don't you think clients get the message? The sales call is primarily for our benefit, especially now that we really need the work.

In my experience, the average sales call lasts about one hour. That's a substantial chunk of the client's day. And what does the client get in return for spending some of his or her valuable time with us? Let me challenge you to make answering that question foremost in thinking about your next sales calls. Here are some suggestions:

Bring something of value to every sales call. This is what I call your entree, a valid business reason for the client to expend precious time meeting with you. Typically this will involve sharing information or advice relevant to a pressing problem or need. Offer your entree as a basis for scheduling any sales call. Of course, this means you need to do your homework to try to identify what issues the client is facing before making the initial contact.

Make serving the client the focus of the call. Don't treat a sales call with a prospective client much differently than you would a project meeting. You're there to help. There's no need to tell the client about what you can do; demonstrate it by doing what you do best. That's the best way to sell anyway.

Ask for only 20 minutes of the client's time. I know, that's hardly enough time to accomplish much. So you have to come prepared to maximize the time. But here's the beauty of this approach: Rarely will you only be there for 20 minutes. If you're providing value, the client will encourage you to stay longer when you say, "I promised only 20 minutes of your time and that time's up. Is there anything more I can help you with?" It's a great way to show that you're sensitive about the value of the client's time

End each call by establishing the basis for the next meeting. As hard as it may be to identify your entree for the initial sales call, it can be even tougher for subsequent meetings. So a key goal for each sales call is to mutually determine why a next meeting would be beneficial. Of course, this is much easier to accomplish if you've shown that meeting with you is valuable for the client.

Many technical professionals spend too much time trying to convince the client why their firm is a better choice. By respecting the client's time, bringing something of value to every conversation, and demonstrating your commitment to serve the client, you will do more to win approval than any sales pitch can ever accomplish. So before you make that next call to the client, be sure you won't be wasting his or her time.

Training On a Tight Budget

Given the economy, your firm may be looking for ways to reign in overhead expenditures. Perhaps training is one of those "discretionary" items you're thinking about cutting. Let me urge you to reconsider. There are a number of ways to trim training costs without reducing professional development opportunities for your staff. Here are a few suggestions:

Plan training in advance. Your office undoubtedly receives a regular stream of brochures in the mail announcing various training programs. It can be hard to resist the impulse purchase when something good comes along. Reduce the temptation by conducting an assessment of your staff’s training needs every 6-12 months, and budget accordingly. Pick specific training programs in advance to the extent possible.

Utilize local colleges. Most colleges have departments that offer training services at costs substantially lower than private-sector suppliers. Some of the best bargains can be found at your local community colleges, which are increasingly providing high-level training in areas such as management, marketing, and technical skills. In some cases, the same trainers used by the pricey private sector firms also work through universities at a fraction of the cost.

Share the cost with another company. Rather than pay the full fees for having a training firm come to your office, split the cost with another company or two interested in joining you. This can be an especially useful strategy for small firms that lack the staff size to warrant a volume discount or an attractive per-person cost. There are also intrinsic benefits in training with another firm, such as sharing ideas on issues of mutual interest.

Control incremental costs. Ask the training vendor for a cost breakdown for their program, then seek to negotiate specific items. For example, the vendor may charge $30 each for three-ring binders. Offer to buy your own. You might be able to make copies of the program materials yourself at substantially less cost. It’s also a good idea to look into training at your office, or another economical location, rather than leaving the meeting place arrangements to the training firm.

Use “real-time coaching.” Provide on-the-job instruction and encouragement so that staff members can learn and be billable at the same time. Instead of sending them to a seminar on how to do better project planning, for example, bring the trainer in to teach them as they are planning an actual project. Besides saving money, this approach increases learning and practical application.

Train your own internal trainers. You may already have employees who competent in training and mentoring others. Take advantage of their skills. Others may need outside help in developing their training abilities. This requires an upfront investment, but can save money down the road. Plus internal trainers offer the benefit of being more familiar with your firm and your business.

Create or purchase computer-based training programs. This self-directed option has grown tremendously in recent years. While I'm less confident in the effectiveness of this method compared to other options, it probably still deserves a place in your training arsenal. Like training the trainer, this may require a substantial initial investment, but in the long run this can be a very cost-effective alternative. Computer-based learning works best when coupled with some kind of live follow-up like testing, on-the-job exercises, or discussion groups.

Another computer-based option is the internet. Despite its sometimes overwhelming variety of information, the internet can be a very useful training tool. There are many online training programs, as well as forums for exchanging ideas and networking with other professionals.

Level 5 Marketing

Marketing in this business suffers from low expectations. I find this true even among most marketing professionals. In the midst of a recession with the worst still ahead for most A/E firms, perhaps it's time to raise the bar in terms of what we expect our marketing efforts to achieve.

First let me clarify that I use the term marketing in the conventional sense. In our industry, we often use the word as a euphemism for sales. I'm talking about the complementary activities we do like public relations, writing articles, speaking at conferences, maintaining a website, sending out direct mail, etc. These activities support the sales process, but are distinct from it.

So what does your firm expect to achieve from its marketing efforts? Responses I commonly hear include: increase our name recognition, strengthen our brand, build our reputation. So how do you know how well it's working? Ah, now that's a tough question! Companies in other industries, however, don't spend millions on marketing and advertising for such nebulous outcomes as name recognition and reputation building. They expect it to motivate prospective customers to act.

Let me suggest that your marketing results increase as you progress through five basic levels:

Level 1: We have some materials. You have a brochure, resumes, project descriptions, a website. For some firms, that's about as far as their marketing efforts have taken them. And some struggle even at Level 1. But for firms with a strong client base, sound selling skills, and little ambition to grow much, Level 1 may well suffice.

Level 2: They've heard of us. Some firms do a great job getting their name out there. They send out regular press releases, advertise frequently, get listed in directories, sponsor highly visible events. This builds the aforementioned name recognition, which is certainly important. But it doesn't go far enough to attract clients' attention.

Level 3: They know what we do. Not simply the basic services you offer, but what you're really good at, what you specialize in. More targeted marketing helps establish your areas of expertise. People see you regularly associated with specific industries or building types or technologies, and they develop a sense of your core business.

Level 4: They're favorably impressed. This is a critical juncture in your marketing efforts, when people begin to favorably compare you with your competitors. That's the genesis of brand. Many proudly point to their repeat business rate of 80% (which everyone seems to attain!) as evidence of their strong reputation. But Level 4 involves building a reputation well beyond existing or past clients. People have never worked with you, but they've heard and seen enough about you to think you're among the best.

Level 5: They're calling us. In my mind, this is the one marketing metric that really matters. How many people are contacting you because of your marketing activities? Don't know? I recommend taking steps to be able to monitor response to your marketing. The easiest step is to establish a phone number and an email address used exclusively to receive inquiries from your marketing efforts. Encourage your colleagues to report when they get a call as a result of marketing.

If your marketing is really working, you should be getting increasing numbers of contacts from prospective and existing clients. So how do you get to Level 5? Simple answer: Serve the client. Provide content that helps them improve their business and achieve their goals. Shift your focus from the usual self-promotion to becoming a trusted source of information and insight. For a few more ideas on this, check out my previous post "Marketing for Leads."

Keep in my that you're never firmly entrenched in Level 5, or any of the other levels. Your intended audience will be in different places, from never having heard of you to seriously considering your services. The goal is simply this: You want to track a positive trend of greater contacts from clients in response to your marketing. Anything less is expecting too little.

The Intrinsic Value of Your Network

Recently I've run across many articles on networking. No doubt our faltering economy has much to do with the renewed interest in this topic. And rightfully so, for networking should be the centerpiece of your business development strategy, whether the economy is weak or strong.

I expect networking will also take on growing importance in how we recruit talent. No longer can this remain simply an HR function. Firms will need to draw on the collective relationships of their employees to find adequate new hires to fuel their growth goals.

But there is a value in tending your network that goes beyond merely meeting the current pressing needs of business. This came home to me, surprisingly, when I first went out on my own and was in desperate need of clients. It occurred to me during that time that attempting to jump start my networking efforts to drum up new business obscured the reason those relationships really mattered.

After 32 years in this business, I found myself pondering what my legacy was. What had I done of real value over all those years? What were my lasting accomplishments?

Unlike most of you, I hadn't designed much--some roads, sewer lines, parking lots. There were no buildings or bridges I could point to and proudly say, "I had a key role in that." I never started a company that would live on after I retired. Most of my greatest achievements as a manager or consultant had been or would ultimately be forgotten, usually swept away in the wave of a management or ownership change. So what exactly had 32 years on the job produced, other than an income?

That's when I had the epiphany that changed the way I think about networking. What really mattered after all those years were the relationships I had developed and the opportunities I had to help others. Those relationships aren't important today just because I might be able to mine them for information, a referral, or a new assignment. They have their own intrinsic value beyond whatever business benefits they might yield. They're valuable even if they don't help my business at all.

Upon recognizing this, I also realized something else: I had done a poor job of maintaining many of those relationships. I had moved on, or they had--a new job, a new location. I had lost touch with some of my favorite colleagues and clients. In some cases, I had no idea where they were now. Thanks to Google, I was able to relocate most of them. Unfortunately, I haven't necessarily done a good job keeping those relationships current (another victim of the curse of busyness!), but I keep working at it.

So now when I'm helping my clients improve their business development process or providing sales training or speaking at a conference on the subject, I always stress the importance of networking. But not just as a sales tactic. I encourage people to get serious about networking for the intrinsic value of those relationships alone. Bottom line: Make friends, take care of them, and you'll reap the rewards, both personally and professionally, for years.

This is not just advice for old guys or rainmakers or managers. It's sound advice for everyone. I urge young professionals to develop the habit of building and nurturing their network now so hopefully they won't struggle with it as much later as I do. It takes time and discipline. You must make it an immutable priority.

One final point: Yesterday I facilitated a meeting where the national business development director for one of the largest firms in our business stood up and implored everyone to focus on those important client relationships. But, he said, give first priority to the most important relationships of all--your family. Great advice! He too recognizes that our careers are summed up in the strength of the relationships we forge along the way, both at home and at work.