Society Views A/E and Environmental Industries Positively-How Do We Leverage That?

warming earth

As a leader, how often do you ask yourself if you can do more to benefit society while keeping consistent with your firm’s mission? Is there another stream of revenue– one that is particularly meaningful– that you are leaving untapped?  If you’re unsure about how to get started, begin with your firm’s strategic plan.

Michael Porter shares my perspective and speaks about his own in this Ted Talk, Never Mind Corporate Responsibility, Companies Can Solve Actual Social Problems. He sees social responsibility as the largest opportunity in business today– solving social problems (also referred to as corporate social responsibility (CSR).

Michael identifies that there are several industries, like banking, who are seen by society as a cause of problems. This is where the A/E and environmental services industry is different. More than ever, we are seen as an important part of society’s solutions. So, how do we leverage that?

You will hear from me in the near future about an exciting new initiative assembled to do just that-to help our industry leverage our position, our skills, and new technologies to create more powerful, and rewarding business opportunities.  A group of 50 industry professionals, including myself, met last summer and early February at the University of Omaha and have established the Engineering Change Lab-USA.

Join my blog and you will be the first to know more about this initiative. In the meantime, here is Michael Porter’s TedTalk.

Corporate Responsibility Ted Talk

What opportunities do you envision for our profession 10 or 20 years for now? Share with me and I will bring your ideas to the Engineering Change Lab-USA.

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Posted in Change Management, Growth & Profit Strategies, Strategic Planning

DB: A/E Business Viability Risk or Sustainable Practice?

What has the A/E industry learned after 30 years of Design-Build and CM-at-Risk infrastructure projects? The industry has learned that owners love it. And, they have learned that it has stung many A/E firms.  It is clear that the owners are the winners, not A/E firms. Must A/E firms continue to be the victim or is there a solution?

I believe that a sustainable practice can be realized. To get you started, I am going to provide you with 12 essential implementation rules for a sustainable DB practice.

Like Death and Taxes, DB will be in Your Future

2016 DBAssociationTranssurvey

You don’t engage with DB projects? Might you be fooling yourself that you can avoid it and stay in business? The reality is that alternative delivery methods are quickly becoming the mainstream solution demanded by owners.  These methods are here to stay. Avoid it and death will find your business (in which case you will avoid taxes).

Not only are these methods here to stay, the demand for these services is exploding. The Design-Build Institute of America (DBIA) conducted an analysis in 2016. Since 2002, the industry has grown 800%, from 140 transportation design-build projects to over 1300. A survey by DBIA revealed that 8.7 out of 10 DOT owners will continue to uses DB. And that is just transportation. Many sectors have already embraced DB (DB in this discussion refers to all alternative delivery methods).

Pain Avoidance as Told by DB Experts

ACEC of Massachusetts convened a panel of professionals who lead their firm’s national DB practice to answer the question: “Is it possible for the A/E industry to profitably practice DB?” The panel’s discussion was facilitated by industry legal legend, David Hatem, Esq. founder of Donovan-Hatem, who has supported the A/E industry for over 40 years to avoid and resolve claims.

2017-10- ACEDCMAHatemDBslideThe panelists were representatives of Simpson, Gumpertz & Heger, VHB, and Burns & McDonnell.  David Hatem provided his legal perspective. The overall problem identified is that DB, CM and P3 projects too often end up in one or more lawsuits. These claims drain resources and money. Settlements and verdicts wipe out a firm’s equity and can force a bankruptcy filing. Reputations are ruined.

Let’s consider just some of the “red flags” the panel identified where claims occured.

  • Risks were transferred from the owner and the prime contractors to the A/E firms
  • Owners selected on low price, not qualifications
  • Teaming partners were incompatible
  • Contract terms were unfair
  • Roles and responsibilities of the teamed companies were poorly defined
  • Project managers and project staff were not experienced in the delivery method

Does your team fully understand what these mean and know how to make decisions to avoid and resolve disputes?

Your “A team” is Your Only Viable DB Team

My observations and personal experience with DB tells me the overall connection to disputes is the quality of the project team. I agree with David Hatem, that it is imperative that the A/E firms assign only their “A teams” to DB projects.

Doesn’t this mean that you have to have at least one “A team?” The answer is, “you need more than one.” You might have a team in mind when the proposal is developed. But it could be a year later before the projects starts. Will that team be available? Will it still be intact? And should you wish to grow, plan on developing many “A teams.”

What do we mean by “A team”? Yes, I know you have many very good project managers. But you need a team that operates at a higher level than “very good”.  As David Hatem stated, “there is a heightened standard duty of care”.  We are used to “Standard Duty of Care”.  Does your team know how to operate at this “heightened” level?

How do you develop these high performing teams? All of your project managers have been through Project Management training, you say? Well, that is not good enough. They also need to be astute business professionals.

DB Success = 12 Imperative “A Team” Rules

This list identifies where “A team” proficiency is imperative in a sustainable DB practice. I also identify the actions required for proficient solutions.

  1. Always, always, always have a teaming agreement executed well in advance of a procurement request. Obtain legal support.
  2. Know when, and have permission to, walk away no matter how much has been invested in the pursuit. Define criteria. Secure senior management buy-in.
  3. Choose a contractor partner and other team members who you know and trust. Marketing support and relationship development are important early activities. 
  4. Only pursue clients with a positive track record with DB. Engage marketing and relationship development efforts to identify “red flags”.
  5. Agree on contingencies that will be used for each phases and define what they cover. Consistently apply cost estimating processes.
  6. Develop contract language that spells out responsibilities and reduces, avoids, or transfers risk. Obtain legal support.
  7. Secure project specific liability insurance. Obtain insurance provider support, legal support, contractor and owner buy-in.
  8. Jointly develop the CPM schedule. Involve all teaming partners.
  9. Never provide quantity estimates, not even informal ones. Provide training for PM and technical staff.
  10. Defining clear roles and responsibilities. Train your team on well developed business processes.
  11. Include terms for compensation  for when the contractor fails to submit the proposal after the effort starts.  Secure legal guidance. 
  12. Rigorously manage the fast paced information exchange and coordination processes to adapt the design as you go, with proper QA/QCThis requires heightened experience, training and discipline. 

If you follow these 12 core principles your DB practice will be profitable and enrich employee’s career and your business. Ignore these rules at the stockholders’ and employees’ peril. Ensure you have “A teams.”

How do I develop business proficient “A teams”?

For information about a business learning program embraced by more than 80 A/E firms, click and follow this link



Posted in Business Learning, Growth & Profit Strategies, Leadership/Management

Making Money Leads to Good Things

New projects are exciting and new business is necessary for survival. If you don’t take the time to scope the project and price it right, you’ll lose more than profit. Can your firm afford to lose its good reputation, be known for providing poor service and, thus, create low staff morale?

Oh, by the way, I bid 50% under budget to win the job

A lesson I learned early on in my engineering career was the consequences of accepting a project from a partner who knew it was a money loser. “Getting a foot in the door” was the excuse. A year later, with a way over budget project, I had my performance review. “Too bad your project lost so much money.” “What the F!?” Not too much later I changed jobs. I realized I could not obtain a high reputation in a firm like that.

chuck berry.gifThis experience was one of many that supported my extreme discipline of making sure my budgets were adequate and projects were completed with top level profits. Over the course of my career, this performance contributed to me being elected shareholder at two firms and I regularly was the most profitable project manager. I learned that making money led to good things.

Personal gain requires discipline

Howard Birnberg, Executive Director of the Association for Project Managers, touched on several of the skills I mastered that made me successful. His piece in CSNews identified solvable weaknesses in project manager performance. They include failure to adequately assess your firm’s capabilities, to have good contract language and to secure an adequate budget. He recognized that the path to success required more than just learning new techniques. The path was 3 part–learn, apply, and stay disciplined.

Learning that cements new skills into behavior is a win-win

My approach is also 3-fold and takes advantage of the power and flexibility of digital learning.

First, an interactive and engaging on-line business learning program focused on all aspects of profit control. Second, video conference coaching between each of the on-line learning modules. And third, video conference application of learned skills to project and division managers’ real project in real-time.

Participants not only learn, but they become proficient. Their performance and the company’s immediately leap to new heights. The ROI on the program is instant.

What if you and all of your firm’s project managers and principals effectively and consistently applied profit gaining behaviors? Would life be better for all?

Follow this link to learn more about the program through two short video clips. 

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Posted in Growth & Profit Strategies

SWOT Your Way to Your Future

Growing a business profitably is not something that comes naturally to many with technical backgrounds, even if they have risen to the highest ranks in a firm.  While some have natural business skills, those skills must be stronger than their competitors.  Otherwise, they are at the whim of economic trends and ever smarter competition.

The landscape is littered with the corpses of once-successful firms that overextended or pursued badly flawed growth strategies. That said, the changing economic landscape will offer numerous expansion opportunities for firms that approach growth sensibly and strategically.

Would you like to overcome this technical-mind limitation to business? Engineers, architects and scientists are an intelligent group.  Is solving this just like solving a project challenge? Take a pause.  Isn’t this your ego talking?

A wise man once said “any ego is a bad ego as nothing productive will come from it”. How many times have you seen the do-it-yourself approach work? As a technical professional I have done this, and it worked. But only after lots of pain, suffering, re-work and busted budgets.

The truth is that preparing for a bright business future has to be done the right way, with continuous learning, not just a one time program.

For further perspectives and ideas that may help you to contribute in your position, leadership or not, take a look at my article published by Industrial Magazine. The article reviews concerns identified by over 100 CEO’s at a recent national conference for professional services design/construction firms, and provides solutions. You will find this article fresh and relevant.


Posted in Business Learning, Growth & Profit Strategies, Leadership/Management, Strategic Planning

The Halo Effect: What is it and can I use it to power sales?

What Is It We Do That Has the Largest Impact on Business?

Your employer’s reputation is based on what?  Its website?  A 2017 survey revealed that only 12.2% of AEC firms feel that its website has the most impact on business. As far as I am concerned, a website has very little impact on a firm’s business.  A website is simply the ante for playing the game.

So then, what has the greatest impact on the firm’s business?  The same survey reports ID-100262838that 29.9% of firms feel that speaking engagements are #1 and 21.9% feel that conferences and trade shows are #1.  So, what are we really talking about when we saying “speaking” and “trade shows”?

For both of these activities aren’t we talking about the firm’s employees?  And not all of them.  Just the ones speaking and attending these events?  These are the employees who are highly visible throughout the industry. This are the firm’s Visible Experts.

So, if we continue the logic this might also cause us to believe that these same persons are the magnets who attract all the business for the firm.  But in reality, this is not accurate. While they likely do generate a lot of business for the firm they have a much broader and deeper impact.

Visible Experts Generate a Halo Over the Entire Firm

Within your own firm can you think of employees who actively contribute to booking new business?  If they are not highly visible how do they do this?  They do this because the Visible Experts have imparted a Halo Effect on the firm.  Let’s examine how this happens.

It is likely your firm started with one to three principals, each of whom had positive industry reputations.  Business flowed to the firm because of who they were.  Those persons were known experts. Thus, we have the term Visible Experts.

So now the firm is 100, 500 or 10,000.  Who are the employees in the firm who are broadly known in a positive way in the industry?  Make a list and write one sentence to describe their fame.

Now, how about the firm’s reputation as a whole?  How closely does that reputation mirror full_circle_rainbowthose employees you just summarized?   I’ll bet the reputations are the same.  Those employees collectively contribute a “Halo Effect” on the company.  This makes it much easier for everyone in the firm to contribute to sales because of the aura cast on the firm by the Halo.

This also works in reverse.  Can you name several mediocre firms? How does your perception of the firm compare with their key personnel?  Probably the same too.

Those employees are like a tree with large thick branches. They cast a shade on the company’s reputation.  Those companies can sometimes endure, but their performance is never good.

We often think of employees’ contributions as they relate to their defined role without consideration for how they might contribute to the firm in other ways.  What if you created a program for each of your experts to turn them into Visible Experts?  It would likely be the least cost, highest impact program you every deployed.

How a Halo Factory Is Created

What might such a program look like?  Here is one approach I employed.  I gathered my team and lead a discussion about the benefits of being visible and the barriers that get in the way. One barrier was time.  The other was knowledge of how to create, re-purpose and distribute thought leader communications. My program eliminated both of these barriers.

I told everyone that a good way to be recognized by their peers, receive top bonus’s and enjoy admiration from their family, was to be visible. And, to help them achieve visibility I would retain a Digital Marketing Copywriter for anyone who identified a topic and would schedule an hour to be interviewed by the copywriter.

This worked like a charm.  From that point forward many from my team brought me ideas based on their projects or interests. The copywriter met with each, drafted their article, contacted editors for print publications, submitted abstracts for conferences, and created pieces for LinkedIn, Twitter and Blog posts. They also received assistance with presentation content and rehearsals.

This approach proved not only good for revenue and profitability, but for staff’s self confidence and energy. This was a win-win and it really didn’t cost the firm much.  In a flat economy, revenue grew over $3 million in the first year.  Profits quadrupled to 22%.

Build Your Own Halo Generator

The strategy I am laying out for you is one whose goal is to achieve the biggest and brightest halo.  The rate at which you generate visible experts will drive the halo’s intensity. The resulting “glow” will excite your staff and improve business through growth, more sole source business, higher margins, higher billing rates, and higher quality pursuit teaming.

Start your program by examining your internal experts and assessing their visibility. Then, work with a “Visibility Expert” who is usually a copywriter who understands both print and digital marketing methods.  Don’t stop here.  Make sure you provide a process and support for tracking leads, building relationships, and identifying new business opportunities.

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Posted in Growth & Profit Strategies, Leadership/Management, Selling, Strategic Planning

Why you’re not meeting your clients’ needs

I am excited to offer you a free downloadable tool to keep your services positioned for high-demand and high-profit. See below for the link. Read to find out why this is so critical to your career and financial health.

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.


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Posted in Growth & Profit Strategies, Strategic Planning

Use these steps to avoid CRM implementation failure

A strong Client Relationship Management program (CRM) can be a major asset for your organization’s revenue generation engine. But… effective CRM implementation is OFTEN TRICKY and more often than not, it fails. Time and money is lost and frustration and blame leads to misery.

There is a right and wrong way to implement CRM. Very smart people have fallen victim to the wrong way. I am going to share with you the right way. You will be successful if you follow my process exactly.  No shortcuts.

At the recent ACEC National Conference in Colorado Springs, as a member of a CRM Implementation Panel, I delivered this solution.

Cart Before the Horse

The most prolific reason that CRM fails is because it is implemented when there is not a single established and working sales process. It is critical to recognize that CRM is wrapped around your sales process. It is a software tool that supports people to implement a sales process.


Take a look at the Classic Sales Funnel graphic (right). Note that sales is a  multiple stage process. CRM’s are built to manage all of them. Are you thinking and managing sales with these or similar stages?

Note the Selling Conversion Rate chart below. Are you tracking sales effectiveness this way? Hardly any professional services firms do, but they should. If you do, your sales will be more efficient and more predictable.

The Funnel and Conversion Rate charts clearly show that proposal win rates are an incomplete view of sales. Each of the stages shown has its own Go/No-Go and required skill set to execute. A sale starts from a Lead that is identified out of the Universe of client entities. It then progresses to the Relationship stage, then uncovering Opportunities and finally to closing the sale.  Learn these first, then implement a CRM.

sales-conversion-chartIf you do not have a single in-force sales process in your firm, you are not ready for CRM. The CRM is not justified to just have a central place to store contacts. It is not just a central place to log opportunities either. That is a “make work” approach that will surely fail. Either use it to manage sales, or don’t use it at all.

Don’t despair if you don’t have a single sales process in which all revenue responsible staff have been trained and are making part of their daily behavior. If this is you, then first apply the process I  describe to establishing a single sales process.

This approach works because my method applies to every strategy idea. So, just fill-in the words “Sales Process” into this article where it says “CRM” and get to work on your Sales Process.

You Must Have Sincere Buy-in From the Start

In a nutshell, you need to show others what they’ll personally gain from the CRM system.
All of your communications, such as your company goals, need to be expressed in terms of personal, not corporate benefits. Syncing with personal goals paves the way, whereas conflicting with them is cause-of-death for new programs.

Be aware that in a public forum, it is easy to think you have buy-in. People around the conference table know what they SHOULD say. You need to know what they really think.

Securing sincere buy-in is the single most important element of success of any corporate initiative. So spend the right amount of time to identify and overcome resistance before a single dollar is spent on the software.

This is the first step in the People element of your firm. And there are four elements which must be addressed in sequence.

Organizational Element Change Sequence Crucial to CRM Implementation Success

The four elements described below are fundamental business law when it comes to implementing strategy. People, Process, Structure and Tools must be addressed in the order they appear below.

PEOPLE:  People will refuse to use the CRM—unless they’re PERSONALLY interested to see it succeed. Frequently a problem occurs when there’s intense attention on being billable. If you force the sales process and CRM upon them, they’ll find a way to work around them. The unintended consequences of this are diminished client relationships and sales.

However, if the priority is sales AND people are influenced to be truly excited about sales, then they will seek out training, processes, and tools to achieve more sales. Because their core career purpose is to work on projects (which means be billable), they will seek to save time and simplify the process. A clear sales process and CRM will do this for them.

PROCESS:  People will likely think CRM is a time waster that conflicts with their priorities if the CRM doesn’t seem to support their individual processes. It’s also going to be a big mess if everybody does their own thing, their own way. Especially when they start recording CRM activities into a system made for a standardized sales process.

Therefore, it’s crucial to develop a uniform and systematic sales process so that everybody is on the same page and speaks the same sales language.

STRUCTURE:  CRM can easily become another low quality, chaotic stockpile of customer notes. Therefore, it’s vital to decide how information will be recorded and reported, and who’s going to be responsible for managing the CRM and provide QA/QC oversight.   

CRMs come with data entry forms and reports out of the box. Resist the idea of tailoring it too much. Is your tweak deviating from your sales process? Who is responsible for what, who does the training and who must be consulted before changes are made? Who is managing the sales process? Is it distributed?  

TOOLS:  Don’t just run out and buy any CRM. Make sure you choose the system that best suits your organizational needs. Will this only be used to track sales? Do you want a fully integrated system that includes individual emails, email campaigns, people and “internet of things” research data and mobile device applications?

Look beyond what your competitors are doing. Much of the digital marketing and sales world has advanced far beyond professional services firms’ practices. Seek out and analyze firms that lead in the marketing and sales world.

Should you be a leader and adopt those processes and tools as well?

If you have any questions or if you’re having sales, CRM or strategy implementation challenges now, shoot me a quick email at Provide a description of your challenge and I’ll help you overcome it. There is no charge for our first consultation.  It may also be a good topic for a blog post, so just send it over.


Posted in Selling

SuperStar Project Managers Are the Envy: Set Yourself Up On Day One

swimmerWhat if I told you that you could become a superstar project manager and it wouldn’t be that difficult. I’ll show you how to set yourself up to be the envy of your peers and you don’t need to be Michael Phelps.

Learn ways to reduce on-the-job stress, enhance your reputation, become a top profit principal and project manager. And, wouldn’t it also be nice to be recognized for your skill at retaining loyal clients?

In my ACEC webinar I shared tips to help project managers set themselves up to become superstars that make money. Although I cover a variety of ideas in the webinar, in this post I’ll share a successful budgeting and contracting tip that you won’t find in any book. Here is an example of a win-win contract that worked for me.

What was the Client Really Asking?

My client wanted me to help them to rehabilitate their 30 million gallon per day water treatment plant. We developed a budget and a contract for the work. The client liked a collaborative approach which matched with my values.

I knew that the staff, and even the City Manager and some City Councilors would want to be informed too. My budget included meeting time with all of the stakeholders. The budget was developed with a budget for me of 20% to make sure I had enough time to spend with the stakeholders as well as manage the project.

It was a rehabilitation project with many complexities due to working with an older facility. I made sure my client understood the design budget had to be robust to allow for surprises. Since surprises along the way were certain, I knew there would be more exploration and more re-do.

To account for large unknowns, the contingency budget was set at 20%. I set up the contract as a fixed price, which provided for monthly invoices based on percent complete.

The City Manager looked it over and wanted to know the basis of the contract fee. He asked that we set it for payment using hourly rates. I explained we were comfortable taking on the risk of a fixed price and that would give him assurance over the budget. He said he was okay with that, but he wanted to make sure the basis of the budget was documented.

To address his concerns, I showed him my budget back-up, a very large spreadsheet with hours and disciplines for each sub-task.  He then asked if I could attach it to the contract.  After giving this some thought I labeled a printout of the budget “for information purposes only”.  Then, I included it as an enclosure with the transmittal letter for the contract.

The budget was then not a formal part of the contract. But the City Manager had a copy for his file.  You see, what he really wanted is a document that showed how the budget was derived, should someone ask.  I thought it was smart of him to know this might become important.

Since I was successful at securing a fixed price, the project was invoiced as a percent complete, with no hourly rate back-up.  I was motivated to manage every hour and minimize our cost while delivering a good product. An hourly contract would have limited my profit to profit in each hour. There would be no motivation to finish under budget.

The Art and Business Science of a Solution

This is an example of understanding how to listen to the client’s true concerns and to apply best business practices to negotiate a contract that was a win-win for everyone. The client knew their costs and I addressed their key concern about the basis of the budget. The project was finished with a 30% profit (that is over $300,000 to the bottom line), the largest project profit for the company to date.

This, and hundreds of other approaches are best practices that are not offered in standard project management training programs.  It requires a business educated mind, and years of practical experience.

The Superstar Program

Learn more by viewing my on-demand ACEC webinar— Superstar Project Managers Make Money: Set Yourself Up On Day One.  If  achieving Superstar status excites, my profitability program for managers and executives is the surest solution. Email me at for further details.

Doug Reed, Business Consultant, FosterGrowth

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Posted in Growth & Profit Strategies, Leadership/Management

Three questions for successful client relationships

Want to build strong relationships with your clients from the beginning? One that ensures all their goals and issues are addressed effectively to set you both up for success?

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”

Woodchip production

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.

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Posted in Business Learning, Selling

The one thing you need to know about decision making certainty

It can be lonely at the top. As a CEO or firm executive, your shoulders are burdened by huge responsibilities. This impacts your personal life, your sleep, and your feeling of accomplishment. There is risk everywhere.lonelyattopmtn

Your employees have each other for collaboration, brainstorming and feedback. Do you have an honest, tell-you-what-you-need-to-know resource? Have you ever had a decision blow-up that you considered avoidable? Has this contributed to your holding back on other decisions?

Wouldn’t it be nice if you had readily available resources who could answer all your questions, test all your ideas and prevent you from making decisions you regret? You would sleep like a baby, have more time to spend with your family, perfect your favorite hobby, and your accomplishment list would be “on fire”. Life would be grand.

There is a solution and I am going to share it with you. First, please allow me to share a true story of one CEO’s experience.

The Slowly Opening Gate Valve Let Loose a Deluge

watergushingThe CEO, Palmer, was charismatic and a good businessman. The company had grown from 25 to 150 over five years by diversifying services to architectural and MEP. As the company grew, it needed to add higher skilled corporate positions. For instance, no longer could the senior administrative assistant cut it as an HR Manager.

Palmer hired a 30-something Harvard grad, Kenny, as our first HR director. I sat near the Palmer’s office and it seemed like Kenny was always in there. When Kenny emerged, it was not unusual for Palmer to announce to the nearest person, “Isn’t Kenny great!”

The problem was that Kenny was not great to anyone else. The talk of the office was how Kenny never seemed to have time to talk to anyone. Trying to get a benefits question answered took persistence and he was always short. For managers who needed to add staff, Kenny acted like advertising new positions was his last priority.

Yet, at every management meeting, Palmer glowed about Kenny. All he got back from his team were smiles.

Six months later, Palmer decided to convene a meeting to check the pulse of the company. He invited a cross section of employees. I was included as a younger generation representative (29 years old), and thus, I was a witness to the big surprise.

During that meeting, Palmer glowed about Kenny. He asked the group if they concurred. The person to his right, agreed, but sounded half-hearted. Same with the next two persons. When it got to the 4th person, the comment was, “He is okay but he has not always been responsive”.

It was like a slowly opening gate valve that held back the water above the Hoover Dam. Each person opened the truth valve a little more, emboldened by the prior revelation. The comments became more and more negative, until they were downright scathing. Palmer was embarrassed. He had been fooled by a “brownnoser”. 

On the way to my desk I saw Palmer bring Kenny into his office. The next thing I knew, Kenny had boxed up his possessions and left. He had been fired.

Seek Input From Those Outside Your Sphere 

This was all avoidable. The moral of this story is that even though the firm was growing due to the technical and sales skills of the management team, the management team and CEO were not prepared to support change to sustain growth. 

The solution is so simple, yet it is underutilized. In a Harvard Business Review survey, over 80% of CEOs say they would benefit by having one or more paid advisers. Yet, only 30% do.

Why? Is it ego? Are they afraid to invest? Are they too involved in the weeds of company management and don’t see the big picture? 

There is research that measured the impact advisers have on a senior leader. Assembling Your Personal Board of Advisers, an HBR article by Yan Shen, Richard D. Cotton and Kathy E. Kram, highlights that CEO’s 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 advisers and what to do when all your needs aren’t met.

We all get advice from many sources– friends, family, books, webinars, and the media. Rarely is this tailored to you. Discussion groups abound but only safe topics get discussed and that group themselves might not have the time nor expertise to recognize and resolve your issue. Wouldn’t you benefit from a personal advocate to look out for your interests and boost your leadership impact?

Envision Your Career with an Advocate 

To fully grasp what this will look and feel like, click here and I will provide you with a summary of effective approaches that you can use to boost your impact.  

Don’t find yourself in Palmer’s shoes. He didn’t deserve it, and neither do you.

Douglas Reed

Posted in Leadership/Management

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