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You created your business model back when your company was formed or when you took over as CEO. You have been implementing since and will continue to do so. Not so fast! In the ever-changing marketplaces full of newbies and innovation, you must revisit your business model on a regular basis. Why?

Click for Free Commodity-Value Tool

Your business model is focused on how you provide value to a defined client, such as hospitals, beverage producers or transportation agencies. If your clients’ business has evolved over the years, do you think that might alter the effectiveness of your model? Most definitely. Revisiting and updating your business model keeps you sharp, away from commodity services and seen as valuable to those clients.

I witnessed a firm transform their contamination assessment services into services that also included marketability analysis. This analysis helped developers to know to whom they could market the property and to prioritize the environmental clean-up costs for that market.

Clients then saw the firm as more valuable. Thus, the engineering firm moved this service away from commodity to become high value. They did this by having a complete understanding of the client’s business and being open and thorough to ideas on how to align to that market’s business drivers.

To create an effective model, some difficult questions to deeply explore include:

1. How well do you understand the drivers of your clients’ business?
2. How can your business deliver services leveraging that understanding?
3. How might your core skills be evolved or complimented to directly support your clients’ business goals?
4. How will you get the word out to find those who will value your services?

If done well, a strong business model guides your firm to differentiate yourself, create niches and deliver top-notch services.

Where are your services on the commodity-value curve?  Click for free Commodity-Value Tool and place an X on the curve where you think each of your services lie. Which service requires action?

Share with me your first assessment and I will respond with additional guidance of next steps.

P.S.  Are you following my blog? There are over 40 insights on managing your business. By following the blog you will be notified when new content is posted.  Its free and it is On-Demand.

Doug

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Then, client relationship management must be a top priority. This does not mean you “roll over” when pushed by a client. 

Of course, these are two obvious statements.  What is not obvious are the answers you need from your client to know how to accomplish this.  Obtaining accurate answers is part art and part science.  You don’t want just to know their overt needs, you want the one’s burning in their gut. The real and covert needs. 

I am going to share with you three critical questions that will reveal the answers you desire. These are not the only questions, but the most important.  And, you likely are not always asking these. But first, allow me to share a related story. 

“We Shred A & E Firms”

I had developed a policy for pursuing business. When I identified that a prospective client had a history of conflict with consulting firms I made an automatic No-Go. 

One day I received an RFP from a former client. I had worked with them earlier in my career as a project engineer while I was with a different firm. I had accompanied the Project Manager to Board of Public Works meetings and saw the board shred him over ridiculous issues. With that vivid memory, I made the requisite No-Go decision. 

I contacted the Superintendent and told him that we did not have time to prepare a good proposal, thus we would not be submitting. He and I got along exceptionally well and we remained friendly over the years. The next day, he called me back and said, “What if I get you more time? I really want to work with you again?”

My white lie did not work. My emotions got the better of me and I submitted. We were selected.

At the kickoff meeting the town manager said, “Doug, we have shredded many engineering and architectural firms. What can you do to avoid the typical outcome?” I said, “I will work with your board and manage expectations.”

At the kick-off meeting one of the board members said, “This design and construction project must not have change orders.” I said, “Change orders will occur to deliver a good product since they’re part of the design and construction process. Some changes are improvements and some are to fix the designer’s mistakes.”

There, I put mistakes on the table.  Earlier in my career I sat next to my Project Principal and listened to him agree with several clients to “no change orders” and he paid for design errors as if the firm was guilty of low quality.  I saw this not only hurt project financials, it hurt the reputation of the firm and the individuals who worked on the project. It was wrong. 

I vowed never to chicken out and to discuss the role of change orders and “standard duty of care” with each client as part of the Project Kick-off Meeting.  I learned that by having the discussion early, clients came to understand that some change orders are going to occur and are even necessary to produce a better project. 

After a tough discussion, the board, while still challenging, understood that errors and omissions were normal and not poor design. The firm did not “eat” a single change order. The project was completed reasonably within budget and the client continued to give us business.

The client really just wanted to feel they got a quality design for a reasonable cost. I knew that and spent the time helping them to accurately understand what that meant. I changed their criteria of what it meant to secure a quality project instead of caving in. 

Its All About Knowing, Then Delivering To It

Even clients who are difficult will appreciate your resolve. They just want to know they are getting a fair deal. I had dozens of similar discussions with clients and twenty years later I am still professional friends with many.

To be profitable and have a good reputation does not mean “roll over.” Provide all of your project managers with these tools and they can repeat this kind of conversation. And, be wildly successful.

The Three Questions

Start with the following simple yet not always obvious questions.  

1. What are the performance metrics upon which we will be judged?

2. What is the outcome you desire for yourself and what will that do for you?

3. What are your and your organization’s “warts”?

These questions set the tone for all of your future dealings. And, although bumps in the road are unavoidable, a strong start helps you deal with them with less stress.  

I invite you to share your personal experiences with me as I use this information to help others to whom I am advising. As a former A/E/Environmental engineer, manager and principal, I now partner with professional services firms to ensure their success.

Doug Reed, P.E., Business Consultant at FosterGrowth. dreed@fostergrowth.biz

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Most of all, you want something of value out of your learning investment. Yet, time and again, you experience little or no change. Don’t you find this discouraging?

The problem is that you learned the theory with almost no application of the skills. Workshop role playing is not the same environment as the real world.  So, what you need is an environment where you can learn in the real world. And, I am going to tell you how you can do this.

First, I ask you to consider this true story.

My Brain was Infused with Knowledge

A decade into my very technical engineer career I took a job with a firm led by an entrepreneur who was also a professor. That was not the reason I took the job, but fate was in the making.

I discovered that the entire environment was supportive of learning and trying new ideas. I recall at least six outside consultants who were brought in by those owners. These persons coached me on sales, on employee engagement, on project management, presentation skills, motivating employees, influencing employees, writing, negotiating, contracts, and financial management.

The point is, it was constant. And, I was nurtured and supported to apply those skills in the real world. In only 18 months after joining the firm, I had blasted through the bookings, profit and customer satisfaction requirements to be elected shareholder. And, I was.

Was this expensive for the firm? You bet it was. But how did that compare to stock that doubled in value every three years? It was chump change.

Why Throw Away Time, Money and Potential Gains?

Think about a professional athlete. To perform at a high level, they make use of one or more personal trainers. Imagine if they tried to design their own work-out program?

Why should you? Why not make it easy on yourself and make sure you’re not only learning, but applying the learning as it was intended– for you to be more successful at whatever you seek.

Comprehensive Programs Encourage Long-term, Sustainable Change

A Harvard Business Review Discussion Group member asked, “Is training worth-while?” The comments posted were from 40 persons across the globe and range from academics, business managers, and management consultants. I have two takeaways.

First, for any learning program to be effective you must have a desire to participate and learn. You do that by placing yourself in an environmental where learning is actively encouraged. By doing this, you will begin to see that you CAN improve yourself as a result of learning.  This perspective of yourself in the world is the real impact; the real value.

Second, set your ego aside and seek lessons from those who have proven their talent on the topic. Don’t just learn the material, practice the material. Find someone you can learn from and who will be available to you as you apply the new skills. Rarely will it be as easy as during the lesson. Real-time support is essential to your adaptation of your new skills.

What is it You Seek More of?

Seek out a trainer and coach who knows the business and will make sure you get there. Here is what a project manager, now an owner and Senior Vice President, had to say:

“(Doug’s) largest asset is his ability to blend his knowledge of technical issues with the ‘soft side’ of human interaction and understanding– a skill that eludes many engineers. Doug has been of great assistance to my personal and professional success.“ 

It is All in Your Control

What is it you are not achieving that you seek? What is getting in the way?

Do you and your firm support my hypothesis? You can be your own wings or be a leader who provides the wings. Don’t be the drag.

Click here for the many solution opportunities FosterGrowth provides.

Doug

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You probably just thought, “Way too much– I would never get home!” Or, “That’s impossible because technical people don’t like selling.”

I hear these perspectives all the time and it reminds me of an event early in my engineering career.

Selling Services was the Farthest Thing From My Mind

I was with a 50 person A/E firm managed by a business educated CEO. He was not an engineer, so he knew he needed us engineers to sell. He knew clients did not want business people who knew nothing about infrastructure talking about projects with them. He was determined to pursue client relationships using technical staff.

The CEO’s approach was to bring in an outside instructor to lead a hands-on workshop. Just about everyone in the company participated in workshop including me. Lots of technical people attended who, like me, just wanted to work on cool projects without a focus on selling.

We learned about the power of conversation. We were shown how to recognize our fears about business conversations and learned to have confidence in our own abilities. We also learned about a process (engineers love process) to follow to win our clients’ respect and confidence.

This wasn’t selling. It was about how to be popular with clients with the goal to improve client relationships. Never ever having won a popularity contest, this seemed like a time for me to try.

I immediately took my new skill to one of my clients. At age 28 I also had the chance to meet with prospective clients about their RFPs. Improving client relationships wasn’t so bad.

At first, it was awkward. It wasn’t quite the same as it was in the workshop. But, I stuck to it.

I began to see that prospective clients would return my follow up calls after a first meeting. And, my active clients seemed to enjoy talking with me, even about their personal life. I enjoyed it.

A year later I had the process down pat. And, having experienced it with many personalities, I had adapted the process out of necessity. As a manager I then taught my direct reports which lead to requests to teach other groups and offices.

After 35 years in the A/E/Environmental business, I learned that just about everyone can enjoy their job more. Cementing great client relationships is a key, even for a technical career.  If the result is that the client wants to keep giving us more interesting and enjoyable business, is that selling?

The secret is– it doesn’t feel like selling. Technical staff love it, marketing staff are giddy, and accountants can finally relax. Not to mention, shareholders are tickled to see their stock value rocket.

My oldest, tried and true workshop has been completely redesigned and renamed to Listening Builds Relationships. It was rolled out for a client to rave reviews. This one workshop has had more impact than any single sales or client management class I have ever seen.

Re-design means the 3-1/2 hour workshop applies the latest participative learning methods for a fast-paced program. The skill is retained, applied, and it benefits every employee of the firm. It is why I was made a shareholder-twice.

Share this with others in your organization and your friends with other organizations. She/he will thank you. Email me at dreed@fostergrowth.biz for more information.

P.S. If your firm has under 100 Massachusetts located employees, the State will pay for half the program cost.

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Talent that shares your firm’s values critical for growth

How often do you think about your company’s values and purpose and how they’re related to your business growth strategy? The answer should be, “all the time.” As the leader it’s easy to be distracted with day-to-day operations and lose sight of what’s really important to you and your business. Successful leaders communicate these beliefs and priorities to their staff regularly as well as consistently model the behaviors that represent them.

There are certain times when reflecting on these company values is especially critical for future success– specifically during the hiring process. Sure, resumes with a long list of accomplishments and credentials are impressive. We can all agree on that.

But, how do you ensure a potential employee fits your company culture? Do you know how to figure that out? And, what makes knowing this and hiring based on this essential to your business growth strategy?

It goes both ways too. Potential employees need to feel that they are aligned with your values as much as you are with them in order to make a successful partnership.

I advise clients on an approach I used many times as an executive in an engineering consulting firm. Identify an interview team and give them a specific role. Make sure that at least one, if not two, are responsible for getting a sense of the candidate’s values and characteristics relative to the company’s culture.

Other evaluation topics to assign to interviewers include aspirations, technical skills, technical leadership history, non-technical ways they have contributed either professionally or socially as well as how they manage conflict. Dig deep– don’t let the interview process be a repetitive experience for the candidate.

Amanda Shore, writer for TalentCulture, shares tips to help you understand your culture better in the article titled, Cooking Up A Better Company Culture. Here, she describes steps for figuring out why people chose and stay at your company. Hire based on them to ensure you’re aligning with people with the right qualities. She identifies the following:

• Start by identifying high-performing employees.
• Define what behaviors and characteristics make these employees high-performers.
• Interview these employees and ask them why they work here and what makes them stay.
• Using their answers, determine what makes your company unique and defines the culture.

Focus on the values of the individuals on your team.   Try not to get too caught up in their particular area of expertise.  Most often, you need someone who fits into your organization and will engender loyalty with your clients.  Only with these two attributes can their technical skills secure the business results desired.

What approaches have worked well over your career?  When you try my suggested approach, send me an email and share what worked and what was challenging. dreed@fostergrowth.biz.  Thank you.

Doug Reed

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No two firms are alike and they are guided by unique principles– core values, if you will. Throw in business innovation and you, for sure, have a one-of-a-kind approach to projects that stand above your competition. Or, at least that’s what your clients hope. This doesn’t mean you don’t use guidelines– it’s just that they’re particular to your organization.

In a post I wrote a few months ago titled Strategic Execution– What 4 things must you do to “make it so,” I explained how one engineering firm where I worked encouraged employees to submit proposals as a means to expand the business.

This firm used business innovation to execute its strategic plan. They empowered staff to put forth their own ideas without restrictions. For selected proposal proponents, professionally delivered education and coaching programs were provided to build business skills. Energy and enthusiasm exploded and every proponent and initiative became an important and successful investment. This is a very different approach than a group of senior managers who lock themselves in a room for a day and generate their own strategic plan for the rest of the company. The first approach is empowering and the latter is controlling. See the difference?

As technically minded professionals, we tend to get lost in Best Practices. There is a place for Best Practices, such as quality control, proposal standards, go/no-goes, a contract risk review program, or design document development. We like these kinds of programs as they are easy to grasp and the outcome of their development has clarity. For our business to be successful, it is even more important to create a culture of business innovation. It takes practice, but by exposing technical staff to business ideals and methods, and to show them how Best Practices are an outcome of these business innovations and strategies, a culture that supports long term goals can be achieved. Thus, “do your best” can be understood as “do your best at achieving long term business goals.”

In “The Myth of ‘Best Practice,’” Bernie Siben shares his thoughts on why firms must figure out their own set of rules and processes. He says that firms need to have a “workable go/no-go thought process in place”— which levels the playing field among staff and results in better decisions in what projects to choose.

My advice– be unique, stick to your values and create your own best practices that deliver the best in business innovation.

Do you see struggles between Best Practices in terms of service delivery and Best Practices in support of business health? Share one observation or experience with me.  I will respond.  dreed@fostergrowth.biz

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There’s an important distinction between a cheap hire and a good hire. Hiring the best is a critical part of your business development strategy.

I recall an experience from my past that brings me angst to this day. I was aggressively growing multi-state services as a senior project manager. The plan was working well and frequent hiring was needed. I needed to hire managers who could take on the new clients because I could not do it all myself. I worked hard to identify quality candidates, the ones who were presenting, the ones on committees and the ones clients respected.

The problem was my operations manager was cheap. Four times I found a star and four times the salary and package needed to land them was not approved. Thus, I continued to be over worked and not able to spend time growing the business, which was my calling.

In desperation, I hired a project manager who was not my top pursuit but who fit our salary range. I gave him two of my easiest clients who were very loyal to me. He was a poor communicator, and the projects continuously went over budget. At one public meeting he could not handle a tough crowd and my client was very angry. It took all of my skills to calm my client and secure fee increases. Eventually, after many sleepless nights, the PM was fired.  Agony.

Later, I was doing a debrief with a client on a proposal I lost. I asked why they hired the firm they did and learned the firm’s senior engineer was a star, both with clients and with regulators. I had a recruiter call him. Then, I bypassed my stingy operations manager and went directly to the president and explained my needs as an important part of our business development strategy. He could bring in millions in business and be billable. We offered the engineer $20K over our normal pay, proposed a generous signing bonus and offered to pay his relocation fees. He accepted, and soon, the project we lost ended up our project. It’s been years and the hire remains a terrific investment.

George Hedley recently wrote a piece, Put the Right Players in the Right Positions for Construction Business Owner Magazine, in which he explains how making those difficult decisions now will secure higher profits later.

Make hiring a top priority in your business development strategy and make the right decision for your business from the start. Share your challenges on this blog or with me directly. I will read them all and answer each in detail.

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Don’t go it alone

It can be lonely at the top but it doesn’t have to be. Just as your employees rely on each other for collaboration, brainstorming, feedback, etc., you too, as the leader, need this support. But it doesn’t always come naturally when you’re the CEO. For example, since employees won’t necessarily feel comfortable providing you honest feedback, it’s difficult to gauge how you’re doing and how they feel. By forming a reliable network of resources based on your needs, you create an environment to bounce ideas, get expert guidance, feedback and more.

There is research that measured the impact advisors have on a senior leader. Assembling Your Personal Board of Advisors by Yan Shen, Richard D. Cotton and Kathy E. Kram highlights, demonstrates that CEOs can’t go it alone AND succeed in today’s business environment. The researchers provide an in-depth look at how to identify needs, pull together a personal board of advisors and what to do when all your needs aren’t met.

In today’s complex business environment, one mentor is no longer sufficient. Executives and managers need an array of advisors, mentors and role models to provide critical information and support at defining moments.

We all get advice from many sources, friends, family, books, webinars, and the media. Rarely is this sufficiently focused and tailored to you. A formal arrangement achieves this dedicated focus, exclusivity and confidentiality. Start with one and grow from there. As a business advisor who understands technical minds, functioned in many engineering technical and executive roles, Doug Reed, P.E. of FosterGrowth.biz could be a powerful tool in your toolbox.  Contact him now to explore this experience.

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The concept of focusing on a single business model is not new. In 1995, Treacy and Wiersema wrote “The Discipline of Market Leaders.” They described three core business models and made the case that to excel in business one needed to pick one model and use it to frame all decisions. One needed to have the best product or experts, or one needed to be the most efficient operation, or one needed to wrap their business around the client’s business and deliver it “their way.”

Since 1995, there has been substantial debate on whether one can ignore two of the three models. I was employed with one firm for 15 years that refused to acknowledge that it should focus on one model. Over two decades the company did none of them well and profit and growth was erratic at best. Later, I was involved with setting the direction of the firm and we did choose one. That firm grew by a factor of 3 in two decades. What I tell my clients today, is to pick one and 80% of their focus is on that one, then spend 15% on the second, and less than 5% on the other. The point is to know one cannot be good at all things.

In Michael Maddock’s recent piece in Forbes, “How Being Really Bad Is Really Great For Business,” he is more extreme. I don’t interpret this literally but since there is so much natural resistance and fear with choosing one model, to avoid falling back into trying to be all things, I do think it is often necessary to be extreme. To make the point, Maddock provides inspiring examples of seven well-known brands that achieve greatness using this strategy.

“I advise my clients to pick one model and put 80% of their focus on it. The point is to know one cannot be good at all things.”

Reacting to negative feedback on your low priorities by making changes takes energy away from the important ones and will not help your organization grow stronger. To explore the 3 business model ideas, make a list of common business decisions and then identify the focus of each for each of the models. You will see that actions and decisions that support one model, conflict with the others.  Stick to your guns and stay focused on the prize.

Doug Reed

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