Imagine- Achievement vs Effort

A VISION for those in Professional Services:

The standard form of pricing professional services work among architecture and engineering firms still mostly involves some form of “gross up” cost estimating based on predicted labor investment at a defined labor rate. Even when setting fees on a “top down” basis or “cost of construction,” there’s still a “bottom up” exercise in regards to budgeting labor. Almost all firms “monetize” their time in some way by also filling out time sheets. The hours are loaded into the accounting system by project, by phase, by labor code.

Re-imagining

Let’s just imagine for a moment instead, a professional services business based only on results and value. There’s no time-sheet in the traditional sense. The business is not selling their time for a labor rate, but is focused solely on outcomes.

What is the issue? The time-sheet, recording time by increment, by labor code, by job number, on an hourly basis, is focused through the lens of effort– a justification model, “People like us focus on monetizing our time, documenting that effort, billing for it, while we hope to get the right results on the project.”

The opposite is a business focused through the lens of results- an achievement model, People like us produce results like these for fees like this.

Imagine:

  • Everyone is paid a salary – no hourly workers at any level.
  • There’s no discussion about “billable time,” only expected outcomes within time frames.
  • The focus is entirely on an achievement and income model:
    • “People like us produce results driven by value, scheduled completion dates, project milestones and deliverables that are billed at pre-determined values.”
  • The expected work week is to “complete the targeted work”- no exceptions. Work status is either “done or not done,” or “on-track or off-track.”
  • Jobs are billed based on percentage basis according to the fee and progress against the deliverable, not the time accrued.
  • There’s no accounting for time, but only revenue, only outcomes. We determine the percentage complete based on the results achieved vs the results planned. We set the fee based on the value to the market, region, project type, client.

What about Time and Materials ( T & M hourly) work, you ask? Perhaps there needs to be an excpetion for certain activities, but then why not charge more for T & M work than for fixed fee work. (We can’t achieve the margin a fixed fee can allow when we bill T & M.)

Alternatively, we simply stop working entirely on the effort-based model of billing for time. No T & M, ever. We work for clients that value the fixed fee model. For those clients that aren’t willing to pay a fixed fee we take the position of, “People like us produce the type of value where we believe a fixed fee is the only reasonable approach.”

Imagine this business, where everything is results, outcome, achievement driven rather than time-effort driven. Imagine piloting a project or a group that tests this approach.

Imagine quoting projects from the top down only, “We think a project like this should cost this much”. Our thinking is centered on the mindset of, ”Our business costs this much to run per year so we need to sell X-times that cost in executable backlog to be completed within this time frame”

Imagine.

The Least Recognized Design Variable

As I stated in my last Blog, time constraints, those things such as schedule, ship date, move-in date, budget (which relates to time available to invest in the design) and other milestone deadlines are part of the design variable equation. What do I mean? I mean that the content, depth, elegance, or otherwise, of a design solution, is dictated by numerous boundary conditions, one of which is the required schedule, budget, and “done date.” However, in my experience, most often this is not viewed as such by the technical professional. “Hey, it takes whatever time it takes to get it done,” is often the attitude.

No. Not true. It takes the time we have allotted, the solution set, scope, and delivery we have sold to the client, and that they have purchased, to get it done. I dive a little deeper with some observations and comments below.

Parkinson’s Law.” This is the adage that “work expands so as to fill the time available for its completion.” This is so true. I have seen it over and over. I don’t think any design, service, or product would ever be completed if it weren’t for deadlines, whether externally or internally imposed.

Do you need a solution in an hour, a day, a week, a year? We can provide that. You may not like the one-hour solution, and patience will wane with the one-year solution. Any good technical professional can tell you something that will work, sketch a solution, or provide a recommendation in a short period of time. It will likely be heavy, bulky, conservative, not elegant, but it will be a solution. If the client has $500 to purchase engineering vs. $50,000, the design will be impacted. If they have a day vs. a week, the design will be impacted. We can’t provide the same level of value and design in both contexts.

If we let design expand into “the void” until we think we’ve perfected it, we will reach the asymptotic stage where the curve flattens out, running almost parallel to the horizontal axis forever, never reaching the desired outcome (whatever criteria we have established.) Remember, there’s no perfect design, no perfect work product, no perfect solution. There’s complete, correct, finished, polished, specified, scheduled, completion of the work product, service, solution. Get it to the defined, specified, standard of care, and ship it.

How about an example from the building industry. Do you want quick turnkey delivery of your building for occupancy? How about a tilt-up precast or pre-engineered metal building? Not an elegant enough design solution? Better modify your timing. Do you want hand chiseled split-face stone, marble floors, custom bronze doors, glass from Europe, stone from Italy? If that’s the more elegant design solution, then get out the calendar and push the move-in date out a couple years.

What about modern tools of technology? Can’t they “hack” the time variable and do more work in less time? Sure, in theory. Those tools can enable a more elegant design in a short period of time. What I’ve found over the years though is that the tools of technology are often misplaced in the mind of the technical professional in this way; they become the thing we are serving rather than them serving us. If you’re my age, you’ll remember when the prediction was that things would go so much quicker the more advanced the tools became. Unfortunately, many lose site of this and use the tools to dive deeper and deeper to a point of diminishing returns, rather than using the tools to advance the design solution more quickly. Step back. Assess. Regroup. Do this often. Plus, there’s this thing called complexity. Simplicity is undervalued. Systems fundamentally create more complexity. The more capable an IT platform, computer, software, the more complexity can increase. Sometimes we need to step back, sketch and idea, assess “1st principles” and re-state the scope and deadline.

Schedule, time to perform, ship-dates, timing, all are part of the considerations in design. Schedule is a design variable. I recommend this be kept in mind when deep in the midst of “the work” and the scope and end goal is getting murky. Keep the end in mind.

The Flagship Office- The Office for the Now

Back in early December of 2020, one of my outside board of advisory members asked me this question, “So now with COVID19 reality and remote work, what are you going to do with this building?” My immediate answer was brilliant, “I don’t know.” Subsequently the board members, my partner, and I, engaged in a discussion about the pro’s and con’s of having a substantial office space that was equipped for doubling the size of our staff, assuming everyone was in the office. “What do you think the odds are that everyone will return to the office?” “Do you envision a reality where 100% of staff will be operating together 100% of the time, with no offsite remote work?” “How do we justify the overhead costs with empty space?” “What’s the value?” Many of us are asking these same questions.

I recently participated in a PSMJ (Professional Services Management Journal) webinar about current compensation strategies and the future of human resources (HR) in A/E firms (Architecture and Engineering.) Multiple surveys were taken from the 300+ participants during the 1-hour session. All were dealing with the questions of remote work, partial remote work, in-office, out-of-office, and so on. Interestingly, while multiple hybrid work models were the largest percentage of the sampling, a follow up analysis showed that only 5% of people wanted to remain remote and work at home 100% of the time. If you had gotten answers to the same question one year ago in February of 2020, prior to everyone actually doing remote work, you would have gotten a much higher percentage.

The debate is real. The questions are substantive. We’ve seen big companies choose to not occupy new headquarters buildings, to cancel new leases, and to stay in current spaces. We’ve seen some say “we’re going to be 100% remote now forever.” We’ve seen some still going ahead with buildings equipped to house all or part of their staff. But the reality is, everything has changed. What was once the norm is now disrupted. It was going this way, but the COVID19 pandemic reality accelerated the process; it created the cause-effect response available in a connected, internet-based, digital world. Response to the remote-based work environment, hybrid models, or 100% in-office, are going to vary by industry, company, and position. All I know is that it’s going to be different.

Once again, the question: “So now with COVID19 reality and remote work, what are you going to do with this building?” I’ve been thinking about this continually, monitoring our experience, getting input from others on an Executive forum thread with PSMJ, listening to staff, to podcasts, gathering information, talking to clients, related businesses, and more. I’ve been watching the realities hitting retail in the pandemic and digital environment as well. We all know that the future, and the “now”, of “brick and mortar” retail is quite different. Smart retailer’s have gone digital, while also showcasing some of their work and products in specific stores. Outlier stores have been closed, inventory in the remaining stores reduced, and more invested in online and warehoused inventory. So what about the future of the “office?” What about the future of it in the context of professional services? How about more specifically in A/E? Here’s how I envision it.

Think “flagship store.” The future of “the professional service office” is a multi-dimensional experience for all who enter, all who are affiliated with the company, including staff, clients, vendors, affiliates, referrers, advocates, collaborators, students, recruits, and more. Just as smart retailers have put in place digital infrastructure while creating a physical retail location that is experiential, showcasing products, services, and supporting their brand, such is the future of the professional services office. What does this multi-dimensional office look like? What is the envisioned experience? What is it? What is it not? It will depend on the location, industry, work type, and so much more.

It is no longer simply a place to go work for 8 hours a day and go home. It is no longer a static space to just do work and collaborate with clients and staff. It’s a “watering hole” a “community well” a “gathering place” for the industry, domain, practice segments. It is a representation of brand through physical placement of things representing the work, through digital experiences accessible in multiple areas throughout the facility, where clients can access and reference the showcased services, engage electronically, or personally. The 3-D printer is continually printing samples of products and goods supported by the service. Spaces are nimble and flexible for collaborative teams. Spaces are hybridized. Glass is more prevalent in creating separation and visibility at the same time. People can talk to a representative like they do at a bank. Services can be ordered and procured on the spot if desired. Clients, supporters, and other people connected to the company can come and use common spaces as a “third space” to use wireless, collaborate, take a coffee break. Staff members work productively whether from home or from office based on the need, the work typology, and tasks at hand. Projects are displayed physically, and electronically. The space is a shared work space, brand support, resting space, and more. It is a media center as well. The podcast (if you have one) is produced from a studio in the office such as the one I produce called “The Creating Structure Podcast.” When not accessible, staff, clients, and constituents can have a virtual experience.

Everything we do, including the facilities in which we work, are an opportunity to support and express brand; to express innovation, attract, retain, support and care. The facility, in my reality, has always been required to communicate as much as possible about who we are in the physical expression of the space.

I’m looking forward to creating more of a “flagship” office experience. That’s what we are going to do. That’s how we will use the space. Now let’s see how much we can make it a reality.

Telling the “Story”

When your material strength-to-weight ratio has not been optimized in the aluminum and steel buy-out items and you are spending more than you need to (or more than what’s in budget)…….

When there’s a leak on the carpeting in the CEO’s corner suite in the new corporate headquarters and no one can trace where it’s coming from…

When the wall has allegedly been designed to meet thermal criteria but occupants are uncomfortable with excessive cold or warm air entering their space…

When the vapor barrier has been breached and what seems like a leak in the wall is actually condensation flowing from exposed metal….

When the transitions between wall systems have been left to “by others” and now there are endless call backs about water infiltration in an occupied building….

When that “Value Engineered” item is now a 2′ x 2′ metal panel blowing in the wind after being pulled off the building, and has become a life-safety issue….

These are all introductory statements to real-world experiences we’ve been called in on, or for which we’ve been able to show a better way.

What’s the cost of engaging a consultant or specialty engineer on “that project”?

What’s the cost of “not”?

Choose wisely.

Engineering and Value

I learned a long time ago that engineering is a means to an end. The process and expression of engineering should deliver value to the client, and the end user, to create safe, serviceable, components, parts, and systems, and in many forms. Engineering is part art, part science. It becomes a way of thinking as we do the work. My familiarity is with building systems and components, building science, structural and systems engineering for buildings, and most specifically for specialty systems know as curtain walls. These systems also are described as cladding, facade, architectural components, and building envelope. I am going to break down some items and factors that I’ve found to be important in executing engineering work in the proper context. It applies to the broad categories of engineering as well as the specialties I’ve noted. Value-based engineering has these types of mindsets and expressions:

Connected: It’s connected with client. It begins with the end in mind. Work backwards from the clients goals and desires, whether labor savings, redundancy, risk mitigation, manufacturing efficiency, optimization, or all of them.

Collaborative: Create a context where we are working in a shared reality with the client. Break down barriers, seek collaborative solutions. A shared reality puts us figuratively in “the same boat” or in “each other’s shoes.”

Competent: The fundamentals have been mastered so that the principles and practices can be utilized in an increasingly elegant manner, and with confidence in the accuracy of the solutions

Codified: One must be aware of the minimum requirements as outlined in building codes, standards, or applicable governing authorities.

Communicative: Keep an ongoing dialogue with the client. Let them know what is being done, inform them of our progress. Use email, instant messaging, phone calls, virtual meetings. Clients appreciate concise, informative, ongoing feedback to support collaboration. Engineers typically struggle with the idea of need to communicate regularly and just the reality of being communicative. Communication is the differentiator.

Concise: Solutions should be understandable, able to be interpreted, and as straightforward as possible to implement.

Clear: Solutions, drawings, reports, sketches, narration, should be clear and logical, simple to understand.

There’s more to this conversation and additional categories to discuss, which I will do in future blog posts. Stay tuned, and thanks for reading.