Project Management as the Product?

Bruce Lynch of PSMJ has an interesting post on their blog this week: "Why design isn't king anymore." He draws a parallel between the proliferation of web content and the plentiful availability of A/E design services. The result of abundant supply in both cases is a product of diminished value.

Great content, like great design, is still vitally important. But can you imagine the internet without Google (or other search engines)? How less valuable would all that content be if we didn't have such a tool to sort through it all? It's not content that makes Google.com the most-visited web site; it's the site's ability to make others' content more useful.

Is there a similar role in our industry? Program management comes to mind. Clients sometimes hire firms to provide overall guidance and coordination for large, complex programs. Construction management can serve a similar role in the construction phase of projects. But most A/E firms don't provide either service. Is there a Google-like, value-added service opportunity available for them?

Yes there is--project management. You doth protest? I realize that project management in many cases has been more commoditized than design services. Some clients seemingly don't want to pay for it, banishing it as a line item in the project budget. So how can I mention this as a value-added service?

Consider the role of the project manager. He or she (with the project team's help) diagnoses the problem, pulls together the best available resources to address it, develops the right solution, then delivers it to the client. The PM is an integrator, drawing from multiple disciplines, perspectives, and skill sets, and bringing the right mix to the client.

With a little imagination, that's not too far from what Google does for us on the internet. We plug in the search terms (problem) and Google tries to bring the best match (solution) to our desktop. It employs a team (multiple computers, web bots) to filter thousands of possible sources (potential alternatives) to narrow our choices, using ranking criteria, and help us arrive at the best answer.

Design services are delivered through the PM somewhat like internet content is delivered through Google (work with me here). Sounds good in concept. So why isn't project management more highly valued by clients?

First let me suggest that clients don't value project management more highly because they usually don't see it done all that well. In a recent survey by Morrisey-Goodale, project management received an "A" grade from only 7% of clients, the lowest score among 13 service factors. Project managers, not surprisingly, didn't fare much better, with 12% receiving the highest grade.

Complaints about project management are widespread. In client surveys I've conducted for various firms, the vast majority of criticisms relate to the project management role. Project managers commonly fail to communicate adequately, clearly understand client expectations, respond promptly to client concerns, and effectively coordinate with their project team.

These shortcomings, I believe, contribute substantially to the commoditization of our core services. Think about it: If a trip to the store yields slow service and poor product knowledge, what do you expect? Great prices. On the other hand, there are many examples of stores that can charge more for their products because they provide great service and expert advice.

Are those not attributes of the strong project manager--great service and expert advice? Will clients pay a premium for a premier project manager? Yes, many of them will. If you're like most firms, your most profitable clients are usually those who have a solid relationship with the project manager. That relationship is the value-added product that too many A/E firms seem to underestimate.

Obviously, it won't be easy to persuade clients that your project management is a premium product. They've been programmed to expect too little. You'll have to demonstrate the difference. Let me suggest some core qualities of the high-impact project manager:

• Trusted advice. Provides great counsel, broad insight, problem-solving ability. Doesn't necessarily have to have extraordinary expertise, but knows how to effectively pull together the know-how and skills that are needed.

• Client focus. Makes the client, not the work, the center of every project. Understands the client's business, technical needs, personal expectations. Tailors service delivery to the unique needs of each client.

• Proactive communication. Keeps in regular contact with the client, providing advance notice of changes or developing issues or concerns. Makes the same commitment to the project team, including outside subcontractors and stakeholders.

• Active collaboration. No mavericks here; understands the value of cooperative problem solving and solution development, both with the client and with the team. Integrates multiple perspectives, disciplines, and services to deliver the best possible outcomes.

• Disciplined performance. Routinely tracks progress and metrics to ensure that the project fully satisfies contract requirements and client expectations. Minimizes surprises, delays, budget overruns, mistakes.

• Inspired team contributions. Knows how to get the best out of project team members, providing strong leadership and motivation to perform at a high level. Develops people as part of doing projects so that their value on future projects grows.

There are other attributes I could name, but these comprise a worthy goal. A tall order to achieve these? Yes indeed. But you don't have to perfect these to stand out because most firms seem to accept the status quo for project management. You can go further and make project management your most prized product. Then see if the value of your design services doesn't increase as a result. You might call it the Google Effect.

Making CRM Work for Your Firm

What's the best Client Relationship Management (CRM) system for your firm? That's easy; whichever one will get used. Of course, choosing a system by that criterion isn't all that easy.

CRM belongs on the long list of technological seductions that promise more than they typically deliver. It's not the technology's fault--not usually. It's a people problem. No doubt you've heard the phrase "garbage in, garbage out." With CRM, the most common shortcoming might be restated as "too little in, too little out."

Don't get me wrong, a CRM system can be an immensely valuable tool. But most firms I've worked with that have CRM fail to get adequate staff participation to make it work well. Like any database, the value of CRM is determined by the quality of information in the system. If that information is incomplete or outdated, the system yields limited benefits, thus fewer people are drawn to make use of it, thus the information remains inadequate.

How do you break this vicious cycle? Let me share some suggestions based on my experiences with a few firms that have made CRM work:

Choose a system based on what you want to do with it, not what you could do with it. This is where the problem with technology usually starts. Firms often make such purchases based on a whiz-bang demonstration of all the system's features. This elicits a response like, "Wow! Look what we could do with this." Then somehow it never seems to work as well after you buy it.

That's putting the cart before the horse. A technology's potential shouldn't drive your work process. Instead you should first determine your objectives, get buy-in among those who will use the system, then select the system that best serves those purposes. Don't neglect this basic reality: People will have to do some things differently. But those changes should be dictated primarily by the need to improve the sales process, not to fulfill the "needs" of your CRM system.

Master CRM with some key accounts before rolling it out firm wide. Like any database, CRM has limited value until it is adequately populated with information. When you attempt a full-scale rollout, it's common to lose most people's interest before you get there (which means you never get there). Start small. Pick a few key accounts and bring those up to speed in your CRM system as quickly as possible. Then you can more easily demonstrate the benefits to your other client managers and rainmakers as you gradually expand the system.

Sell people on the personal advantages of using CRM, not just the corporate benefits. This is a critical transition. Most people won't fully adopt CRM until they find it personally useful. Yet most firms promote it primarily for it's corporate usefulness. That's never a good strategy for getting widespread buy-in. Invest adequate time in training people how to maximize their use of CRM so they can experience the personal advantages. This works better, of course, if you started by getting them involved in making the purchase decision--fitting the system to their needs.

Develop some respected internal champions to promote greater use of CRM. It's better to pull rather than push people into change. In implementing the graduated rollout with key accounts mentioned above, it's important to start with key influencers who are willing to adopt CRM. Once they start singing the praises of CRM, others will be more easily persuaded.

Make it as easy as possible to use. Many firms overreach, asking for more information than they really need--and more than they can reasonably expect to get. Keep it as simple as possible. Pick a few mandatory fields and leave the others to the discretion of the user. The more information you demand, the more likely you are to end up with a CRM system of limited value. Of course, ease of use should have been a crucial criterion in selecting which CRM system to purchase. If your firm erred in that regard, then dumb it down appropriately. It's better to have 95% of 10 key information fields than 50% of 30 fields.

Delegate responsibility for keeping CRM up to date where necessary. There always seem to be a few individuals who won't use CRM consistently for their client accounts. You can try coercing them into compliance, but a better approach may simply be to assign that responsibility to someone else. I've seen administrative staff used effectively in this role. They work with client managers to see that CRM is kept updated.

Tie performance metrics to CRM. You've heard the old adage, "People do what gets measured." Well, it's usually fairly easy to tie important metrics to CRM. In fact, what metrics you want to track in CRM should be a key factor in determining which system to select. Many firms, for example, do all their proposal and sales tracking in CRM. So if people aren't using it, they end up under-reporting their business development activity. That can be a strong incentive for managers to ensure that CRM is kept complete and up-to-date.

What's the perfect CRM system? The one that gets used. I'm hard pressed to recommend one software product over another. But I favor simplicity, ease-of-use, integration with other programs. How it is used is far more important than what it can do.

Check out the perspectives of the rest of our panel of experts on what constitutes the perfect CRM system:

• Ford Harding (http://www.hardingco.com/blog/)
• Tim Klabunde (http://www.cofebuz.com/)
• Bernie Siben (http://builtenvironment.blogs.com/)
• Bobby Darnell (http://buildingnewbusiness.com/)
• Matt Handal (http://www.helpeverybodyeveryday.com/)

A special thanks to Matt for pulling this forum together. Please get involved and leave your comments at our respective blogs. If this works well, maybe we'll do it again. Got any ideas for future topics?

Online Forum About CRM

A valuable tool in any rainmaker’s arsenal is an effective Client Relationship Management (CRM) system. Unfortunately, many rainmakers and firms struggle to successfully implement these systems.

On Monday, September 21, a group of rainmakers and business development experts will provide their own unique perspective to answer the question, “What is the perfect client relationship management system?” Somehow I was invited to be part of this expert panel.

On our respective blogs, the panel will outline our vision of the ideal CRM system. We will provide you with insights into what works, what doesn’t work, and what you should consider when implementing a CRM system.

This panel of experts includes:

• Ford Harding, author of the popular book Rain Making-2nd Edition (http://www.hardingco.com/blog/)


• Tim Klabunde, author of the CRM chapter of the Marketing Handbook for the Design and Construction Profession (http://www.cofebuz.com/)


• Bernie Siben, author of A Horse of a Different Color: Marketing in the Public Sector (http://builtenvironment.blogs.com/)


• Bobby Darnell, former Director of National Accounts at Reed Construction Data (http://buildingnewbusiness.blogspot.com/)


• Matt Handal, Contributing Editor of SMPS Marketer (http://www.helpeverybodyeveryday.com/)


• Me, author of...well, this blog (but I'm perpetually working on a book idea!)
  

Join this esteemed group at their respective blogs on Monday and contribute your own thoughts and experiences to the discussion by leaving comments.

The Deceptive Distinctives

Virtually all firms want to pursue differentiation and the rewards that come with it. This is evident in their marketing literature. They make various claims that essentially communicate: "Hire us; we're different."

But how different are they really? Several surveys suggest that clients see few significant differences among competing technical consulting and design firms. The differences are particularly difficult to discern in their technical capabilities, the very thing most firms trumpet as their competitive advantage.

Are you interested in true differentiation? A good starting point is to acknowledge the ways that firms in our business try to distinguish themselves that really don't work. I call them the "deceptive distinctives." Four, in particular, come to mind:

Technical distinction. A few firms might claim an advantage technically. These firms have done the first, the most, the biggest, or for the longest. They may have solved a unique problem. They may have won an award for their work.

But such distinctions are usually fleeting at best. Innovative solutions are quickly duplicated by competitors. Having done 150 such projects often isn't viewed by clients as a meaningful advantage over another firm having done 75--both are well qualified. Awards are won among a select field, not necessarily the best in your industry.

Research and experience indicates that clients aren't all that impressed by our claims of technical distinction. They expect technical competence and are usually skeptical of claims that somehow "we do it better." RFPs may suggest otherwise, typically listing technical capability as a key selection factor. But an SMPS-commissioned survey of clients showed that technical capability is a relatively small factor in selecting the winner among shortlisted firms. At that point, all firms are deemed qualified.

Technological distinction. Some firms have invested hundreds of thousands of dollars in various design, enterprise, and communication technologies. For the most part, these expenditures amount to simply "keeping up with the Jones." Yet many firms still tout technology as a competitive advantage.

Like technical distinction, firms can sometimes have a temporary edge on the competition. But if it truly yields an advantage, other firms are typically quick to catch up. That's one shortcoming in striving to achieve technological distinction, but there's another hitch that's even more problematic.

Various studies have uncovered few significant productivity gains through investing in computer technology. Why? Because people are slow to leverage the potential advantages of the technology. In most firms, employees are using only a small fraction of the capabilities of the so-called productivity tools at their disposal. Enterprise and project management software commonly fall short of performance expectations because staff resist changing their routine work practices to take advantage. Bottom line, technological distinction rarely works as a differentiation strategy.

Quality distinction. Most A/E firms boast about the quality of their work. Many claim it as a competitive advantage. But clients, for the most part, aren't buying it. If quality distinguishes, it's usually negative. Poor quality will get you noticed. But it's hard to make good quality a point of distinction.

Part of the difficulty is how quality is defined. In the most basic sense, it is meeting client requirements. It's expected; it's not a bonus. Most firms do about as well in fulfilling the scope of work, avoiding mistakes, and satisfying deliverable standards. In fact, our quality assurance processes are oriented towards this minimum standard of quality.

The typical approach to quality in our industry is what I call "defensive quality control." The focus is on minimizing mistakes. Rare is the firm that seeks to exceed the industry norm through its quality process. In fact, it may not be worth it. Higher quality usually means higher cost. Can you convince clients to pay more for additional reviews, fewer mistakes, and higher quality deliverables? Most clients would say, "Give that to me...at the same price. What else should I expect?"

Satisfaction distinction. This is the most seductive of all the deceptive distinctives. Why shouldn't you be pleased if your clients indicate they're satisfied with your firm's work? Because research indicates a surprisingly weak link between customer satisfaction and loyal customers. For example, consider one broad-based survey that found that 85% of customers who changed vendors were either satisfied or very satisfied with their previous supplier. Or consider that in the auto industry customer satisfaction scores average 85% to 90% but repurchase rates average no higher than 70%.

A study by RainToday.com concluded that if you're using a 5-point scale to measure client satisfaction, you can only depend on those giving you the highest score to remain loyal. Those giving 4s were only modestly more loyal than those giving 3s. This study found that almost two-thirds of professional service firm clients were open to switching from their current providers.

So the bottom-line goal is not satisfied clients, but loyal ones. How do you get there? By continually providing them with something they can't get from your competitors. That's the going standard for differentiation in today's marketplace. It's not easy, but that's why it's a point of differentiation!

As I've noted in previous posts here, the keys to true differentiation are strong relationships and superior service. Rare are the firms that make significant investments in pursuing either. That's your opening.