An A/E/C business development process can redirect your program toward the new realities of a different tomorrow.
If architecture and design firm principals wish their firms to survive, prosper, and regain some of their lost presence, they must make specific adjustments in their outlook, culture, and business practice model. In the case of many firms, their model for business development was not effective prior to the Great Recession. Those models will be even less productive after the national economy reawakens.
In a foreword to one of his books, legendary business guru Peter F. Drucker wrote, “It is difficult to predict the meaning of facts and figures in the context of a different tomorrow.” For the A/E/C industry, that different tomorrow is today. Unless professional practice firms transition to a new mode of business development, they will fall behind those that are willing to embrace change and seize the day.
Reality Check: Design is Not All
In their foreword to Joan Capelin’s thought-provoking book Communication By Design: Marketing Professional Services, Weld Coxe and Ed Vick explain that the architecture and design professions have an insular perception that design is all and that ingrained cultural belief mires their business development in the historical practice-based business model.
By contrast, many successful firms are shifting to a more realistic and productive business-based practice model, which includes a different strategic approach for generating clients. The reality is that what prospects and clients want is not design, per se, but effective functionality as attractively packaged as possible, on time, on budget, and without a leaking roof.
Reality Check: Don’t Misuse the Interview
For 14 years in Georgia Tech’s A/E/C marketing and business development course, I have heard outstanding firms of all sizes describe their approach to business development. Many practice-based firms still treat the interview as an opportunity to tell the prospective client how wonderful the firm’s principals are by virtue of what they did for some other client on some earlier project.
I call this organized bragging. The presenters are merely over-confirming the reasons they were invited to participate, extolling their past glories for other clients. What such presenters are doing is squandering the opportunity to talk about the project at hand meaningfully and engage in an interactive dialogue with the prospective client. The result is a nervous presentation with visuals followed by embarrassing silence when the audience is asked, “Are there any questions?”
If firms persist in merely repeating these tired interview presentation strategies as used in the pre-meltdown economy, they will lower their batting average even further in the different tomorrow we are now entering.
Reality Check: Build Trust
No matter where you are positioned in the interview sequence, building trust is the primary objective. Any firm reaching the interview stage must realize that the client already considers every presenting firm to be qualified. Therefore, the interview becomes a series of psychological chemistry checks creating perceptions of interpersonal working relationship probabilities during the project.
Accordingly, the firm that builds the greatest level of trust usually wins the engagement by swaying the client’s emotional reaction or intellectual expectation that everyone will be able to work together on the project effectively.
Shifting the Historical Paradigm
The key to creating and achieving a paradigm shift from the old to the new business development model can be summarized in a three-step process of externalizing the starting point.
Step 1: Externalize your portfolio and market sector development strategies. Rather than inviting a prospective client to select services by interpreting the wonderful way you delivered past projects for others, the more effective method is to approach the current project and its economic, social, and aesthetic objectives from the client’s perspective.
That means mentally and physically going outside the firm into the specific market sector where the prospect operates and performing information development and analysis activities to answer certain basic questions:
• What are the economics of the market segment? (Where does the money come from?)
• What types of projects are prevalent in the sector and what are their economic or other functional purposes?
• How, where, and by whom are procurement procedures for A/E/C projects initiated and later managed throughout the project delivery process?
• What are the prospective client’s specific objectives and goals for this project beyond the usual expectations?
• Who are sector leaders (people and organizations) and where do they interact with each other (associations, conferences, seminars, trade shows, workshops, recreational venues, etc.)?
• How best can we communicate and interact with these sector leaders?
• What publications and online sources do they regularly read or access?
The information you develop in response to these questions should help you plan an effective sector penetration strategy for business development.
Step 2: Use the new A/E/C business development process as your platform. A new and improved method of planning and organizing a business development initiative will be needed. My recommendation, based on more than a half-century as a marketing disciple, is to begin using the A/E/C business development process described in Figure 1.
After years of personally introducing marketing into a variety of different business sectors, I have constructed this business development process model using Northwestern University marketing professor Philip Kotler’s original description of the organization in terms of seven marketing management functions (labeled A through G in Figure 1). The Kotler model has been used for 30 years in both the real world and academia to help people understand and use total marketing for business development purposes.
Due to the unusual nature of business development for architects, an eighth marketing management function (H) is added to support this unique scenario for business development (marketing) for professional services.
Careful study of this new A/E/C business development process model will reveal that business development is the superordinate (i.e., highest degree) business function of the three basic ones needed for a successful business-based professional practice. Successful business development then generates clients for business performance (the second basic business function). This delivers the project solution, which is the creation of the design and working documents to execute it. All the while, business management (the third function) is used to build and manage the firm for growth, continuity, and profitability.
Atlanta’s internationally-recognized architecture firm tvsdesign uses the analogy of a three-legged stool to explain this business management functional model internally to associates and externally to all their constituencies.
In this new A/E/C business development planning platform, the overall function of business development is supported by a visualization and step-by-step description of how strategic marketing (often misnamed “business development”) precedes and interacts to guide functions that are part of tactical marketing positioned below the dashed line in Figure 1. The line of dashes separates thinking and planning activities from doing activities in the sequence of business development activities using the total marketing process as visualized.
The eighth marketing management function — client base relationship management and image-building activities — fulfills the need for ongoing client interaction after project completion as well as activities to keep the firm’s brand alive in the eyes of the firm’s eight most important constituencies. Of all professional services, it is architecture and design practitioners who have the greatest need to build and maintain client relationships not only for current and past project clients but also with the other important constituencies identified in the schematic model.
Step 3: Initiate business intelligence activities further out on the new business timeline to identify opportunities. This is all about performing information development activities earlier for marketing research (of the process) or market research (sector-specific or client/prospect-specific information gathering).
To reach that objective, business intelligence leads off Function A: marketing research, analysis, and planning. For the A/E/C sector, business intelligence will be more like activities in the economic, political, and business intelligence section of the Central Intelligence Agency than it is consumer-sector market research, which tends to be situation-specific and quantitative.
As of late 2010, the best general source of business intelligence available in the civilian economy is Strategic Forecasting Inc. (Statfor), whose analysts provide global business, political, economic, social, and other non-military information for consumer marketers and other clients across the business spectrum. A Stratfor subscription costs less than $400 a year and is a great place to start familiarizing yourself with information about happenings and issues in the real world that will have business development implications for the A/E/C business sector. If you could add only two more sources, add BusinessWeek magazine and The Wall Street Journal. Forget Fortune and other investment community publications.
Most important, begin monitoring the leading professional or trade publications in the market sectors where you wish to do business and create clients.
One global architecture practitioner in Atlanta keeps the office coffee table stacked with client market sector-specific trade and business publications. When he has spare minutes, he scans the latest issues for the sector of interest.
Used well further out into the future, business intelligence can alert you to new indicators — signals and clues not recognized by competitors — that can give you a favorable time advance for developing and using more specific information and for starting to build relationships ahead of the herd. Effective business intelligence can create extra momentum and opportunities for your entire business development thrust.
Better business intelligence can increase your batting average for building early relationships with the best prospects in a market sector, for being invited to more interviews, and then for performing more effectively in the interview because you know more about the prospective client and their business sector than do your competitors .
Living a Different Tomorrow
DesignIntelligence readers may shudder at this need to incorporate new levels of business intelligence activity into their overall business development program. Sorry, but better business intelligence must be integrated into the business model if you want to enhance your survivability and viability.
However, once you become comfortable with the business intelligence process basics, you will adjust effectively. This has been proven to me by almost 400 students who have taken Georgia Tech’s A/E/C marketing and business development course since 1998. Once you learn the process, it becomes a fascinating new business adventure.
I hope that by using this process as your planning and organization platform, you can redirect your business development program successfully toward the realities of our different tomorrow.
Richard K. Rodgers operates his consulting practice, The Kelley Rodgers Group, from Atlanta. He is a part-time visiting associate professor in Georgia Tech’s School of Architecture. A 1998 op-ed piece he wrote for the Atlanta Business Chronicle caused Georgia Tech College of Architecture Dean Thomas Galloway to ask him to develop Marketing Architecture & Engineering Services, the first course of its kind in U.S. A/E/C higher education.