One truism of business you dare not overlook is: The more value you deliver to customers, the more value is
returned to your company. This returned value can take several
forms, including higher fees, more profit, revenue growth, increased sales,
loyal customers, more interesting work, etc. Keep this principle in mind as you
consider the following:
Most professional service providers (e.g., attorneys,
accountants, management consultants, advertising professionals) achieve a
significantly higher labor multiplier than architects, engineers, and
environmental consultants. The difference is on the order of 4-6x for other
professional service firms compared to 3x for A/E firms. I would argue that a
firm's average multiplier is a reasonable measure of value—how much mark-up a
client is willing to pay.
Why this discrepancy? I've pondered that question for years.
No doubt there are several factors. But one stands out in my mind: Those other
professionals do a better job of delivering business value than we do. They
help their clients succeed in meeting strategic objectives.
Wait a minute, you might argue: We do that too! Of course we
do. We design the infrastructure that supports modern society. We design
buildings that house critical business functions—including hospitals where
lives are saved, schools where children are educated, laboratories where
incredible new products are conceived and tested. We advise clients on how to
protect the environment and comply with complex regulations.
Our work is obviously important...but less valued. Could
that be a result of not clearly demonstrating how we deliver business value?
Or, in fact, hardly even talking about it? Want proof? Consider how we describe
our work—indeed, how we promote the value of
our work experience in our proposals, marketing materials, and websites. A
sample:
Groundwater Quality Assessment. [Our firm] developed the physical model for the groundwater management zones (GMZs) for [a Southern California water district], consisting of the specific yield and elevation of the effective base of aquifer for each model grid cell. Each model grid cell measured 400 meters by 400 meters in area. The average current ambient groundwater quality (AWQ) for each groundwater management zone was calculated by a volume-weighted approach based on the results from each model grid cell within the groundwater management zone. However, the specific yield and elevation of the effective base of the aquifer included in the physical model was developed in the 1990s. We employed more recent information to update the physical model to improve the accuracy of the AWQ recomputation...
Oh, there's more, but I'll spare you. This proposal project
description is more jargon-bloated that usual, but it illustrates an
all-too-common plight—our failure to capture business value (or even context)
in descriptions of our work. They read more like a routine task list than a
response to a complex, crucially important client problem—in this case, the
declining availability of suitable drinking water in the Los Angeles basin.
The root of this problem, I'm convinced, is what might be
called project myopia. It's the tendency, common among
technical professionals, to get caught up in the details of executing a project
and not see the bigger picture. It's a focus on project tasks rather than
goals. It's analysis divorced from strategy. Some of the prevalent symptoms of
project myopia are:
- Failure to identify the project's strategic drivers. There are always desired business outcomes behind the
projects we perform. These define why the
project has been moved to the top of the priority list. When I work on proposals,
I always ask the lead seller-doer(s) why the project is happening now. I
rarely get a satisfactory answer.
- Viewing success as a completed project. If we perform the scope as defined, on budget and on
schedule, is that not a success? Well, not if it failed to achieve its
stated (or unstated) objectives. Outcomes drive any successful venture.
- Not talking about the business value our work delivers. I touched on this earlier. Perhaps you're
thinking if it was important to clients, they'd bring it up. I'd suggest
they usually don't because we've pigeon-holed ourselves as technical
specialists who don't get involved in their business.
- Focusing business development on pursuing projects rather
than clients. Considering
how critical enduring client relationships are to our business viability,
it seems odd not devote more of our business development efforts to
seeking and initiating such relationships. Yet the typical A/E firm's
approach is almost entirely transactional—just win the next project, and
hopefully a few of these client relationships will develop into something
long lasting.
- Creating plans for managing the project, but not for managing
client relationships. Most
firms handle client relationships with intuition rather than intention.
They would never apply the same approach to their projects. Is that
because they think they're better at cultivating relationships than
performing projects? You know the answer.
- Failing to uncover the client's service expectations. Clients usually define what they want the project to be
in some detail, but rarely are specific in describing what they want to
the working relationship to be like—unless we ask. The problem is, we're
more inclined to make assumptions about how the client wants to be served.
That's why most service breakdowns are rooted in the firm's lack of
awareness about what was expected.
- Investing far more in strengthening technical skills than
client skills. This
investment includes training, tools, processes, and oversight. The
relative availability of options reveals the discrepancy in demand: For
example, there are countless training programs for technical skills, but
where do you turn for help with client skills?
As these symptoms suggest, the real problem of project
myopia is who gets caught in the blindspot—the client. The client ultimately
engages our firm to deliver specific outcomes, not just complete a scope of
services. The interaction the client has with our firm during the project is a
large part of the value provided.
When we narrow our focus to just doing technical
project work, we may well miss seeing what's most important. I recently stumbled across a study that
found our brains are only able to engage in either analytical thinking or
empathetic thinking at one time. Perhaps this helps explain the problem of
project myopia. When technically-oriented people focus on projects, many
naturally become less attuned to more broad-based client concerns. It's not
that they don't care about clients, but that their analytical thinking tends to
take over.
Obviously, I'm not suggesting that we de-emphasize project
work. That's what we're hired to do. But acknowledging the problem of project
myopia does mean that we need to be more deliberate in focusing on the needs
and expectations of clients. In my next post, I'll offer some steps for
balancing our focus between projects and clients.
