Imagine- Achievement vs Effort

Posted on by johnlwheaton1

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 exception 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.

Sales

Posted on by johnlwheaton1

My dad shares a story about how one of his former colleagues, the General Manager of a large industrial business, had a phrase on his office wall that said, “Nothing happens until somebody sells something.”

This is true. In business, selling something triggers all the resulting downstream actions. No need for operations meetings, organizational charts, job descriptions, operational infrastructure, and more revenue supporting activities, until there’s a sale. Selling implies the creation of some tangible good or service that has value to the buyer. No sale, no sustainable business. It’s so easy as a business grows, to focus more and more on internal matters. That’s the space where I hire staff, since as a firm grows, the doer-seller model needs a larger and larger support team, including distribution of client relationship management and operations.

My experience (and that of many I have polled and talked to) has been this; for everyone twenty people that can “do” there’s one or two that can “sell.” Sales is the rarer skill. If there’s a choice between selling and doing, pick selling. Own the relationships. Support the brand and the value. Stay connected to the client, the market, the messages outside the business.

Who sold something today?

Checking in

Posted on by johnlwheaton1

It’s been a while since I have blogged and checked in with everyone. I hope you all are well. Thank you readers and followers. I deeply appreciate the engagement. Below I will update you on what’s up.

  1. It’s been a busy time since COVID19 hit. Our company at Wheaton & Sprague Engineering went “100% remote” work, shuttering office locations, on April 7th and we were in that mode until mid-June. We now have about 30% of our staff in physical office locations, and it’s slowly increasing, with caution. It takes extra effort to manage to the necessary level of engagement and communication when people are scattered. We are adjusting.
  2. Speaking of COVID19; I believe we are in this until we aren’t. That may sound obvious, but if anyone is thinking “when this is over and I get back to normal……” you need to adjust your thinking. This is the reality now. It’s a time to figure it out and get stronger; to build more relevant infrastructure in your company; to pursue “best practices” in this environment. My best guess for the next transition with less or no COVID, which may be too optimistic, is September of 2021. Be in the moment, manage to the current reality personally and professionally. Stay engaged. Build your network
  3. More COVID19: We lead with “care 1st” in our mindset and resulting interactions with our clients and staff. This applies to personal life too. “How are you doing?” “I hope you are well.” “Is there anything else I can do to support or help you?” All are relevant lead-ins to conversations. Positive results are produced by healthy people in mind, body, soul, spirit. Results are the outcome. Lead with care
  4. I’ve seen a recent increase in relevant, legitimate, project opportunities. Tech and Medical markets are strong. Combine that with some college work and research facilities and that is a good market presently. There’s more but you can figure out some of those. On the other hand, some past projects were put on hold and will likely push out indefinitely or be cancelled. The longer we can sustain “the gap” and sell into the current reality, the better. Our backlog is steady (up actually) and estimated work is strong (up as well.) We just landed a great new project at LaGuardia Airport and are pursuing some other fantastic projects that are in motion.
  5. Key Relationships: Nurture and foster your key relationships. Build on what you have. Nurture key prospective client relationships as well, and seek referrals. People want to work with those they trust and know will be present in this time. Reduce doubt for people and clients

What else is up?

  1. I have been gardening. We started garden at a community garden and have been working to reclaim the plot and grow veggies and plants in raised beds. It’s a family affair. It’s a great way to refresh and take some measure of control over questionable supply chains, to build community, live in a sustainable manner
  2. I just started a PODCAST called “Creating Structure” Podcast. It’s in the business category and you can find it on BUZZSPROUT. We also are listed now on Spotify, Apple Podcasts, Deezer, Podchaser, Podcast Addict, and Listen Notes. The next Podcast will be recorded Wednesday 8/19/2020 and will be edited and uploaded probably by 8/25/2020. You can find the first episode here https://www.buzzsprout.com/1236827/episodes/4965362
  3. Speaking of the next podcast: It will be relevant to the GLAZING, Subcontracting, Architecture, and Delegated Design-Engineering category. This podcast will feature a discussion between my Branch Operations leader and I at the request of Katy Devlin, for Glass Magazine and their “Outlook Tuesdays”. Stay tuned for future uploads and postings from us and NGA.
  4. The Patio: I turned our patio at Wheaton & Sprague from looking like a prison yard to a workable, desirable, space. It is amazing what a couple patio umbrellas, flowers, and tables can do. “If you build it they will come.” Make spaces INVITATIONAL.

Well, that’s all for today. I’ve got 13 drafts in the blog queue and much more to share. I hope you all are well. Remember, identity drives behavior as my personal and business coach taught me, and reminds me still. What we manifest on the “outside” is produced from what is on our “inside.” Focus on internal health of soul, mind, and spirit, and the physical manifestation will come on the outside. Healthy inside=healthy outside. Life is tough. Look up, lean into God, count each day as a blessing. I do that through the Lord Jesus Christ and provision of His spirit in and through me. I’m “just passing through” this reality, trying to spread blessings while do so, and while on the way to an eternal home without end. For now, I am striving to give thanks in all circumstances. Let’s inform those in our lives rather than letting them dictate to us.

Be Blessed

John

The Escalator

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I couldn’t get to the trade show floor until 10:00 am. That meant 15 or 20 minutes to kill. I looked around at the options and said to myself, “Why not stand at the bottom of the escalator? There’s no better place to see and meet people.”

In the sea of people there were two gentlemen standing near me with name tags that noted their business location; Nantucket, MA. I had just returned from a business trip to Boston the week prior, and then spent 4 days on Cape Cod. It wasn’t Nantucket, but it’s close enough. I started a conversation.

We talked about their work on the island, about the culture, what kind of support they needed, and how they managed logistics. They asked what I did. We shared business cards. I invited them to contact me anytime and they did the same. Then we both went on our way.

That was about 5 or 6 weeks ago. One of the guys, Lee, called me today. “Hi John, I don’t know if you remember me or not….” “Of course, I said. We met at the bottom of the escalator!” “Yep. That’s me.”

He said he needed some engineering support and asked about our availability at Wheaton Sprague. He asked what the next steps were. He said he’d email me the info. I said I’d assess it and get him a proposal. He said, great.

How do we “kill time” while waiting? Usually with our head in a phone or waiting in the wings. That particular day I chose to engage at the bottom of the escalator; to be where people were congregating. Who would have guessed? We never know when an interaction will lead to more. But most business is relational, whether B2B or B2C. How’s your engagement going?

SWOT Analysis – Threat to Opportunity

Posted on by johnlwheaton1

Threats that are defined in our SWOT analysis can actually be opportunities in disguise. Recently in a SWOT analysis review with one of our branch offices, the leader was reviewing a legitimate threat that influences our office’s ability in that market to procure work with certain clients.  I immediately noted that the threat was actually a veiled value proposition, an opportunity. If we could sell the clients on what we know about that space in the supply chain, we would actually do the supplier causing the threat a favor, and make more value for our clients as well. It’s just a different pricing paradigm on the front end in order to achieve a better bottom line for them in the future. It’s a win, win, win if discerned and communicated correctly. Now comes the hard work of communicating the value and overcoming entry barriers; getting referrals; designing a pricing structure and a delivery method.

Some threats are hidde opportunities. Like a “no” in sales and “risk” in innovation. We need to go beyond the surface and figure out if these things are worth pursuing.

Have you dug below the surface?

Selling “Experience” – The Gas Stations

Posted on by johnlwheaton1

There are two service stations in my town. Both are within blocks of each other. Both charge within pennies per gallon of each other for gas. Both are national-level name brands.

One always has receipt paper at the pump. The other doesn’t. One always has full window-cleaning fluid troughs at each pump. In fact, at the one, the fluid smells like Wintergreen. The other rarely has enough fluid, if at all. It smells like regular cleaning fluid.

One has an ample stock of snacks and beverages inside and a clean smell. The other is always under-stocked and has an awful odor like a bad hospital smell inside.

One has nice canopies at the pump stations, well intact, with clean lines. The other always seems to have some maintenance issues going on at the pump stations.

One has uniformed attendants inside that typically respond with a polite greeting. The other has people with no uniforms, and generally a dis-interested person behind the counter.

The price is almost the same at the one or at the other; sometimes even the exact same price. But even if not, it’s worth the extra thirty to fifty cents per fill-up, to use the one.

At which one would you purchase your gas and snacks?

In a commodity business, “the one” has learned at how to differentiate. The other doesn’t care. It is always possible to differentiate within our existing revenue stream and context; to deliver value with some thought and care for the customer’s experience.

How about your business? How about mine? What experience do we want to create? What experience are we delivering?

 

 

 

 

 

PRICE IS IRRELEVANT

Posted on by johnlwheaton1

If the first question a client or prospective client asks about is related to price, then we know that their values are centered around cost. Most attempts to sell them otherwise will not typically work. To this purchaser, value is based on low price, and the product or service is viewed as a commodity. If the client-buyer is interested in what we’ve got, and we aren’t the low price, they may ask us to justify ourselves. I got this question last week “Why are you double the other price? Can you explain why your price is so high?” (This is a downward spiral by the way. Don’t answer the question to try to validate.)

I provided a polite and professional response, but didn’t answer the question exactly. I indicated what value was being provided and how the fee compared to other service-company fees in our category. My response asked the opposite question back, “Why is their price half of ours. What are they so cheap? We are both looking at the same project, right?” Then I explained what was being provided and nothing more.

I didn’t hear back from that client yet. And there’s a good chance that I won’t. They will likely purchase the other provider’s services. Because what this client was really SAYING, not asking, was “Hey, you’re too expensive. I can get the same thing for 40% less.”

So why do I say that price is irrelevant? Because we buy based on our values. Price is the consequence, the manifestation. It’s not the issue. Price or cost-based buying says “any of these firms will do, just get me low price.” The problem with this is that the buyer is assuming that they are getting the identical service from any of the choices presented to them.

It’s never really about price. It’s about the buying mindset and values.

Cost-based buyers want low price. Cost leads the conversation.

Value-based buyers want what they perceive to be the best investment and value for the cost of the purchase. Value and investment leads the conversation, price falls out, sometimes negotiated, sometimes as stated.

Identity, connection, or brand-based buyers, want to identify with a particular person, enterprise, brand or genre. Being connected to the associated values leads the conversation. Price is what it is; “If you want to be connected with us, the fees associated with that are as defined.”

Price is important, but price is really irrelevant. People already know about what they are willing to pay based on their mindset.

What kind of buyer are we seeking to attract?

What values are we seeking to communicate?

How is that portrayed in our brand?

Are we delivering?

Whatever we choose, we need to stick to it and dive deep. Pick a lane and stay in it. We can’t be all things to all people.

Fast and Cheap?

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This was my response to client today (after several emails) requesting us to give our best price for a quick turn and schedule critical project:

“I want to be very clear. Best price and immediate start/quick turn do not go together. Quick turn with quality, and fair price for the situation go together. It’s not “fast and cheap”. It’s fast and commensurate with service.

I don’t like to work like my hair is on fire. That happens enough in this biz every day

We will look at what we can do, how or where it can plug in, how quickly we can get it done for you and your team, and let you know. We always like to provide
value, timeliness, and a reasonable approach with the work to our clients.”

Their response?

“Amen. Good words. You’ll see an RFP soon”

Be clear. Be true. Be candid. Be respectful. Provide value. People appreciate clarity and it makes it easier to improve our ROI on proposals and sales.

Customer Experience

Posted on by johnlwheaton1

It was the jeans that triggered it.

You see, they were the exact same jeans that I had on as I walked into the store. The same jeans I bought there 6 months ago. And I love these jeans.

So the pair I grabbed off the shelf, the exact same color, size, make, model, when I pulled them on, they didn’t fit over my thighs in the dressing room. What? I double checked the size and shape. No difference.

“Perhaps they aren’t marked correctly, I said to myself.”

So I asked the sales attendant if he can help. I ask if I’ve made a mistake.

“Nope, he says. This happens all the time. You see we recommend you grab 3 or 4 pair at a time when you’re trying them on. They’re made in like, 50 or 60 different countries so you never know what you are going to get.”

Great response. Glad you don’t sell for me.

He’s doing a poor job at customer experience management and selling. Plus, he’s saying that they aren’t making jeans with consistent size patterns based on the country where they are assembled. Either way, both the salesperson and the manufacturer are doing a terrible job of designing experience. No thank you. I don’t expect to have to grab 3 or 4 pair of jeans to see if one or more of them, the exact same size, actually fit. I don’t care what country they are made in or what their supply chain logistics look like. Once I find a pair of jeans that works, I expect they will all be close to the same size EVERY TIME. I don’t want to play “roll-the-jeans-dice.”

This company is providing a negative and inconsistent experience when it comes to sales, and product QA/QC.

I quickly placed the jeans back on the shelf and slipped quietly out of the store. I wasn’t in the mood to manage my shopping experience through trial and error.

So what about your company? What about my company? I know different clients can have different experiences even though they all are “shopping” at our place, in different offices, and different ends of the building. How consistent of an experience am I creating? How am I making it easy on the client? How are my colleagues and people representing our services to buyers, prospective clients, and observers? Do our people know what to say and how to say it? Have they been trained in the “why of our business?” Is our product the same EVERY SINGLE TIME?

Even in professional services it’s not uncommon for clients who’ve had a negative experience to quietly slip away; to place the jeans on the shelf and never return. Do everything possible to prevent this from happening.

 

 

Sometimes it Seems Random

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It was 7 or 8 years ago. I was cranking out decent miles on a trail run. I heard his footsteps approaching while leaning into a hill. He was stride for stride but not passing. I sensed this might be an unusual experience for him, but I didn’t like to get passed on my runs; stupid I know, but it’s a part of me; a throwback to my competitive running days. He finally pulled up next to me and we started to talk. (It’s a “runner thing.”) He had relocated here from Arizona. His wife’s family lived in town and she wanted to be closer to them while raising their kids. He took up running as an adult. He did triathlon’s as well. We cruised through 7:30 miles for the rest of the run and had some fun getting to know each other. We talked throughout. He was in fund-raising, business development, lead generation. I was in the business of engineering and construction. I sensed some connection between us.

Fast forward to present; just a few days ago in fact. My fatigue and the cold air led me to the local Starbucks this particular morning. And there HE was at the front of the line. The same guy. He reached out and said, “Hey do you have time for a visit?” I said, “Yeah for as long as it takes to get my drink.” (I was in a rush.) He rolled his eyes, pulled me to the front of the line, and said “Tell me what you want to drink.” Obviously he meant business. He wanted to talk.

Let’s rewind; two weeks ago.

He had emailed me via LinkedIn asking if I’d ever thought about employing a business development professional to advocate our business, open doors, and build relationships (yes, of course.) I’d asked him why, and questioned if he was still in his present job. He informed me that he was. He was looking to the future and to more possibilities.

Rewind again, this time to a month or two ago. We “randomly” cross paths (again.) This time it was just outside the trail entrance on the road. He was running and I was finishing a power walk. He’d recently started training again. I jumped in with him for a bit. It was totally spontaneous. He talked about his most recent position as a business developer for a General Contracting firm. I knew where he was working through our LinkedIn connection, and through his messaging from time to time. He mentioned how he’d helped to increase the GC’s bid opportunities from $2.5M to $12M.

I’d lost track of him before this, between the initial run on the trail and now, except for an occasional encounter at the grocery store, on social media, or around town at random. Now our paths seemed to be continuing to cross. I know more about his background because every time he changed jobs, he let me know. Every time he changed he got closer and closer to what I do; the business of engineering, design and construction. He’d been in fund-raising for a non-profit,  development for a college engineering department, and one prior construction company gig; business development, people stuff, talking, finding a fit, opening doors, designing connectivity; this is what he loves. It’s who he is. It’s a lot of who I am as well, but CEO duties in a growing organization make it harder and harder to build 1-1 relationships myself unless they are very specific and have high potential in scaled opportunities.

My quick encounter at Starbucks turned out to be a 20 minute conversation while I finished my mocha and he drank his coffee. He talked about his goals. We discussed my business. We talked about roles, philosophies, his and my approach to client and business development. Back and forth, back and forth.

I find it more than “random” that I bumped into him at Starbucks. I find it more than random that our paths have gently crossed over the years. I find it not random. People encounters are unique. They aren’t always planned and aren’t typically scripted. It’s important to take notice when recurring themes and people continue to present themselves. This got my attention. I wasn’t looking for it. I didn’t plan it. I was just going about my daily business. There’s a message for me in this perhaps, regardless of what it is or what I do with it.

We never know what relationship or interaction may turn out to be something of significance. Something that changes the way we think; the way we view life; how we interact. I am not sure yet what will happen from this. I’m still reflecting.

Sometimes strategy is planned and initiative. Sometimes is spontaneous and reactive; “opportunistic.” It’s important to watch, to listen, to stop for a moment, to reflect on what might really be happening; to decide what we want to do with it.