AR 541: Business Management & Application for Architecture 1 Midterm - Lecture Handouts PDF

AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS Specific Learning Objectives: 1. Identify strategic concepts of marketing architecture in the practice of the industry. MARKETING ARCHITECTURAL SERVICES David Koren, Assoc. AIA, FSMPS, CPSM To build a successful architecture practice, pay close attention to everything the firm does to attract new business and retain existing clients. A strategic approach to marketing enables a firm to allocate resources to support activities that serve the growth of the practice. This article provides an overview of how architecture firms secure work. INTRODUCTION Marketing is the process of bringing new business to a firm in order to sustain and grow the practice. Marketing is much mor e than proposals and presentations; it involves everything that helps to spread the word about a firm, communicate with prospective and existing clients, and get the work in the door-including correspondence, the firm’s website, the quality of the firm’s design work, the firm’s reputation, even the way the receptionist answers the phone. No matter what role an individual plays in a firm, and no matter how large or small a firm is, every employee has an important part in the marketing process by working to satisfy the needs o f existing clients and attract new clients to the firm. Many firms approach marketing in a somewhat haphazard way, but it is important to market thoughtfully and strategically in order to allocate resources efficiently and effectively attract and retain clients. This article and the four that follow discuss marketing-related topics including the basic principles of marketing an architecture firm, the strategic process, research, brand strategy, budgeting for marketing, website development, media relations, business development, networking, social media, the sales process, positioning, targeting new clients, and lead development and tracking. The topics discussed in this chapter apply to firms of every size. Whether the firm is a sole practitioner or a very large firm, the basic process and principles of marketing are the same, and are vital to the success and growth of the practice. MARKETING ARCHITECTURAL SERVICES Marketing architectural services is different from marketing other services or marketing a product. Architecture involves a complex mix of creative and technical skills. In the marketing process, convincing prospective clients of a firm’s creative and problem-solving ability, attention-to-detail and follow-through, and passion for the project can all be vitally important. Because what the client or potential client is actually buying is the individual expertise and ability of the team members, differentiating a firm from the competition happens on an individual and personal level. While it is easy to believe that a prospective client’s decision of which firm to hire is rational (that they will hire the firm that has the best experience, capabilities, and fee), the fact is that the prospective client is a person or a group of people, and which firm they choose will also be based on emotional factors. People tend to select people whom they like and trust, people whom they believe will be good to work with and will help them achieve their desired results. In building credibility with prospective clients and conveying that the firm is the right one for a specific project, the firm’s portfolio of prior work is important, but the portfolio will not win the job on its own. The portfolio lets the prospective client know that the firm has done this kind of work before and is capable of doing it for them. From there, the prospective client will make a personal and emotional decision among similarly qualified firms. All the facts about the firm that a prospective client has gathered along the way-including project experience, the quality of work, fee, etc.-serve to reinforce and justify the decision of whom to hire. While the marketing efforts of many architecture firms are focused on winning work from new clients, it is important not to forget about existing clients. It is generally much easier and less expensive to win new work from an existing client than from a new one. If a firm has worked for a client and has done a good job, the client has no reason not to hire the same firm again. A firm’s first priority in marketing is to keep existing clients happy. If existing clients are happy, they will not only hire the same firm again, they will also recommend that firm to other people they know who may be considering an architectural project. No recommendation is more valuable than the endorsement of a satisfied client. In marketing an architecture firm, relationships are everything-with clients and with other third-party influencers in the marketplace such as contractors, consultants, real estate brokers, and so forth. People talk, and the relationships that individuals in the firm have will influence the way that others perceive the firm: Positive relationships can help, and negative relationships can hurt. When pursuing work with a new client, it is vital that members of the firm build a relationship with the individuals involved in making the pur chase decision. Without some kind of relationship, some kind of natural affinity that helps the client to like and trust the key individuals from the firm who will be servicing the project, it is unlikely that the firm will prevail in a competitive environment. Unfortunately, if a firm enters the selection process without an existing relationship with the prospective client, it is probably already too late-one of the competitors is probably way ahead, and now having the “inside track” with the potential client. 3 Midterms Module 3 Page 1 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS THE PURCHASE DECISION To many architects and other professionals, “sales” is a dirty word. The idea that they would have to “sell” something makes them break out in a rash. Many people hate to sell. “Business development” has a much better ring to it than “sales.” It sounds professional; it sounds like there is an established process for bringing work in. From the architect’s perspective, the business development process is about convincing the prospective client that the firm is the best firm for the job. The conventional selection process is often conceived and explained as very straightforward and linear-moving from hearing about a project to getting more information to presenting qualifications, a proposal, and a presentation; and then, if all goes well, entering negotiations and winning the project. Instead of a straight line, if we think of this process from the client’s perspective, it looks more like a funnel: Many firms are qualified, fewer will be invited to submit a proposal, fewer still will be asked to present, and only one firm will be selected. Of course, the competitive landscape and selection process vary based on the client’s industry. In more public selection environments, such as in government facilities or schools, an opportunity will likely be publicly advertised, resulting in a large number of competitors. When the client is a private company or institution, such as a developer or a corporation, there may be fewer competitors from the outset, possibly an invited list of firms known to have expertise in the specific facility type being planned. And when the client is an individual or a closely held corporation with whom the firm has a long-standing relationship, the firm may have the privilege of being the only firm under consideration. Before entering any selection process, it is important to understand who the client is, what their priorities are, and what the competitive landscape is. Does anyone in the firm know the client personally? Is it possible to meet with the individual or individuals who will be making the decision? Are the client’s objectives and concerns for this project clear to the proposing team? How important is the architect’s fee in their selection decision? At what point in the process will fee be discussed? How many firms will be considered? How relevant is the firm’s previous experience to the project in question? Once enough information has been gathered about the project, the client, their objectives and concerns, and the competitive landscape, a decision can then be made about whether to pursue the project or not. This is commonly called the “go/no-go decision.” Once a decision has been made to “go,” all efforts should be geared toward addressing the client’s specific questions and concerns about the project. The goal in the process of preparing qualifications, developing a proposal, and presenting to the client should be to position the firm not only as qualified and capable but also as the best firm for the project, the firm best able to deliver a project that meets the client’s objectives. THE IMPORTANCE OF GOOD DECISION MAKING Pursuing new work can be expensive. Depending on the size of the potential project and the amount of effort put into the pursuit, it is possible to spend a great deal of time as well as significant financial resources on printing, binding, models, renderings, travel, meals, client entertainment, etc. Resources, in terms of time and money, are always finite, even in a large firm. Pursuing one major opportunity may mean that there are fewer resources to pursue other opportunities. This is why it is absolutely critical that good decisions are made about which clients and opportunities to chase, and which to decline. Being strategic, by definition, means saying no to some opportunities. If a firm pursues every opportunity that appears, this is not acting strategically, or even with a strategy in mind. By developing a strategic approach to marketing and by allocating resources intelligently, focusing on the key opportunities that the leaders of the firm really want and believe they can win, the key individuals in the firm can take more control over their destiny as professionals. In order to make good decisions about where to put limited resources, it is important to understand the client and the competitive environment, and to approach decision making in an objective frame of mind. Research about the client and the project should be conducted in as dispassionate a way as possible. Then, it is important for the individuals leading the pursuit to try to assess the situation from an objective perspective, asking questions such as, “If I were this client, would I hire my firm for this project? If I were this client, and I could hire any firm at all, whom would I pick? Which firm is the absolute best choice for this project? Who has the most experience in this project type? Who has the best press in this area? Which firm feels like the right choice?” It may be helpful to have a conversation with a friend, associate, advisor, or mentor who knows the industry well to ask these questions and gain the benefit of a broader perspective. Architects often learn about a new opportunity and respond with, “We can do that!” no matter what the project type is or whether they have designed something similar before. But unless no one has ever done a project like this before, the client is likely to hire the firm with the most experience, or at least a firm who has done enough similar projects to convince the client that they are intimately familiar with this type of project. There is usually no point for the client in taking a risk on a less experienced firm. That said, the value of a relationship with the client cannot be overstated. If a firm’s leader has a strong existing personal relationship with a decision maker, they may be able to overcome concerns about inexperience relative to the competition. Clients hire design 3 Midterms Module 3 Page 2 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS consultants they like, trust, and want to work with. And that will be easiest to gauge if they have worked with a firm before. Because of this, when determining how to prioritize efforts, what to pursue, what to decline, and how to spend resources, it is vitally important not to take existing clients for granted, or prioritize gaining new clients over keeping existing clients happy. A firm is far more likely to be awarded work from people who already know the firm, and like and trust its principals, than they are from people they have not met or barely know. It is vitally important to spend enough time and attention on the relationships the firm already has, and not to spend too much time courting new clients at the expense of those existing relationships. HOW PASSION FITS IN One often-overlooked factor that can distinguish a firm from the competition is its passion for the project. Because what is being sold is the promise of future performance and the firm’s abilities to deliver on that promise, enthusiasm for a project can make a huge difference in influencing a potential client to hire the firm. It is important to find ways to demonstrate how much key individuals in the firm want to do the project, in a way that is natural and proportionate to the project. For example, on a very important project, it may be perfectly appropriate to say, “This is the most exciting project that has happened in this city in years, and we are very excited at th e opportunity to work with you on it!” but if the project is small or not very exciting, the passion of, “We really want to work with you!” may be all that can be mustered. It is important for the firm’s principals to decide why they want to do this project and then figure out how to express this passion to the client. In a close race between competitors, enthusiasm can be the factor that wins the job for one team over another. That said, passion can also get in the way of objective decision making. It is too easy to take the attitude that, “This project is important and we really want to win it, so the facts aren’t really important here. We’re going after it full-on no matter what.” It is critical to step back and consider the possibility that the firm may lose the project and really evaluate objectively whether the pursuit makes sense. The firm may decide to pursue it anyway. But at least then the firm’s principals are entering the process with their eyes open, and making good decisions about how they are prioritizing their time, and how much energy they are devoting to this pursuit at the expense of other activities. THE MARKETING TEAM Described throughout this chapter are important activities related to marketing the architecture firm. A challenge for each firm lies in determining which of the activities described are reasonable and necessary for this firm and how much help is required to do it. There is some rough correlation between the size of a firm and the number of marketing staff. Generally, firms hire their first full-time marketer when they have 25 to 35 staff members, and their second when they have around 65 to 70. From there, the ratio of marketers t o staff is about 1 to 50, or a little lower. It depends, of course, on how diverse the practice is, how effective their marketing efforts are, and how hard the firm is pushing into new markets. For a sole practitioner or a firm with fewer than 25 people, it is important to be creative about how to address marketing needs. A firm may decide to hire a marketing consultant to help, or may find one employee-either an architect or an administrative staff member-to be a part-time marketer. In either case, it is critical to be very clear about the required tasks and expectations in order to provide the necessary guidance for the part-time marketer. Firms follow different strategies for hiring marketers and building their marketing team, depending on their specific objectives and requirements. For some firms, media relations are critical, and their first hire may be an in-house media relations director. Other firms may use a consultant for media relations, but start their marketing team with a marketing director and later add a coordinator. Architectural marketing is still a relatively new field, so the profession of architectural marketing is still in the process of formation. Most currently practicing professional architectural marketers grew into their roles from some other field. While most have college degrees, very few studied architecture or marketing; many are artists or writers or architectural historians. They tend to learn what they know about marketing on the job, mentored by other marketers or learning on their own through trial and error. Successful architectural marketers share many attributes: They tend to be flexible, creative, smart, and have excellent interpersonal skills, both in terms of communication and their ability to collaborate. Though there is not much applicable formal education available for architectural marketers, a rough career path has evolved over time. It is increasingly common to find architecture firms that recognize their marketers as integral to their operations and give them increasing responsibility with the firm. The sidebar outlines the most common titles for architectural marketers and a brief description of what they do. It is important to note that marketing for architects is a tough job. Burnout is a frequent problem. Marketers are often under the gun, working on deadline, pushing to get something out the door. It is not uncommon for marketers to work a significant amount of overtime. As a result, many marketers leave the industry after a year or two, and less than half stay for more than five years. As an architect, it is important to recognize the challenges that architectural marketers face and to support them. If a firm has a good marketing staff, it is important to do whatever is possible to retain them for as long as possible. Aside from the workload, another key factor that drives turnover is how the firm’s leadership treat the marketing staff and how they are as professionals to work with. Marketers take responsibility for meeting deadlines and getting proposals, presentations, qualifications, 3 Midterms Module 3 Page 3 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS and awards submissions done on time. Do the leaders of the firm support this or do they frustrate it? When the marketer says they need something by Thursday, does the principal-in-charge hand it in on Friday? When the firm receives an RFP or other important communication from a prospective client, is it sent to the marketer right away or does the principal who received it hang onto it for a while? Does the marketer feel as if they know what is going on, or that they only get selected information? The marketer generally wants to be a partner to the firm’s leadership in building the business of the firm. The closer they can come to that aspiration, the longer they will likely stay with the firm. Marketing Consultants Whether or not a firm has marketing staff, there are times when it may make sense to hire a consultant. Marketing staff may have certain expertise in one area or another, but it is unreasonable to expect the marketing staff to be experts in everything. Sometimes it may be necessary to call in an expert consultant to help with a specific problem, exercise, or long-term initiative. There are quite a few consultants out there who specialize in marketing-related areas and who are familiar with the business of architecture. A firm may hire consultants on a temporary or contract basis to help with strategic marketing initiatives, branding, business development, graphic design, web design, writing, media or public relations, photography, videography, presentation training, sales training, or other areas. The rela tionship that a firm generally has with a consultant is very different from the relationship that it has with an employee or staff member. There are real advantages to hiring a consultant to help rather than counting on permanent staff, especially in a smaller firm. These advantages include being able to get the right person for the right job, making less commitment than with permanent staff, having more leverage, and being able to try out different professionals who provide the same or similar services. MARKETING SYSTEMS The technological systems that architecture firms use in the process of marketing their services have evolved rapidly in recent years. Knowledge management is vital to the success of a firm’s marketing efforts and growing its business. Knowledge management includes all the systems-whether electronic, physical, or procedural-that enable staff to easily store, find, and utilize valuable information. Databases and filing systems can help, but it is unreasonable to start with a filing system or database and expect organization to be the natural result. Each firm has to begin with an organization system that feels natural, then add and build systems to formalize the organization and communicate how information is to be captured and shared. Some firms have cultures that more effectively support knowledge management than others. Knowledge management requires people to be comfortable freely sharing information with each other. If a firm has a culture in which, for whatever reason, people with knowledge are regarded as more important than those without it, and where people are not comfortable sharing their information, it is going to be very difficult to institute an effective knowledge-sharing system. Real estate brokers are notoriously bad at institutional knowledge management, because the professional success of a broker is predicated on the broker having information that his or her colleagues do not have. For firms that get it right, knowledge management can be a true differentiator, demonstrating a clear difference between a firm and its competition. When a client asks a question to which an architect does not personally know the answer, whether it is about one of the firm’s past projects or which audiovisual consultants they work with, how long does it take to find the answer? Does the architect need to ask a person, or can the answer be found in some easy-to-use electronic or physical resource? If the architect can find the right information quickly, they will look much smarter to the client. Think about all the different kinds of information a company needs to capture and maintain-on projects as well as in areas related to finance, legal issues, human resources, and marketing. Categories of information necessary for marketing and for which firms often implement knowledge management systems include research, leads, people, projects, and staff. Research: Trends, Articles, White Papers, Thought-Leadership Many professionals are conducting informal research all the time, through the articles that they read and the formal and informal conversations they have with fellow professionals. Research is in many cases difficult to store and track because it can often be free- form information. It does not usually fit into a database, because the information generally is not easily separated into neat fields that can be searched later. Research information can also appear in lots of different formats, some of which are on paper: newspaper and 3 Midterms Module 3 Page 4 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS magazine articles, white papers, reports, notes, etc. To support a firm’s marketing efforts, it is important to create a system for storing research and other information that relates to the work of the firm. Start with an empty physical fi le and an empty electronic file. Fill each with appropriate information such as articles, web links, and other information. Segment and organize the information in ways that are logical, forming a system for organization and retrieval. It may be advantageous to explore link-sharing and notetaking/sharing tools. Link-sharing tools like Delicious allow tagging, indexing, and sharing an infinite number of links on the Internet. Notetaking/sharing tools like Evernote enable the collection and sharing of notes and other content. Tools like these can help a lot in the collection, tagging, and sharing of a tremendous amount of online and offline information. Leads: Managing Information down the Marketing Pipeline In order to manage the business development process, it is important to find a way to track opportunities as they develop from leads to prospects, and then to projects. Some firms use customizable off-the-shelf systems to do this, while others develop their own systems. Lead-tracking software applications are commonly referred to as client (or customer) relationship management systems, or CRMs. Some providers refer to their systems as “sales automation software.” There are many systems out there, none of which are specifically designed just for architects. However, a few are specific to the broader industry and are used by architects, engineers, construction firms, and related consultants. Deltek and Cosential are two industry-specific providers of lead-tracking and other software. There is a much wider choice of CRM software that is not specific to the industry, but the challenge with using sales automation software that is not industry-specific (such as Saleslogix or Salesforce.com) is that this software will need to be customized to track information that is important to architects (such as project size, facility type, construction cost, etc.). Some firms have built their own systems using an off-the-shelf database system. In these cases, the cost of building a system may actually be greater than the cost of buying an off-the-shelf system, when staff time, bug fixing, and other factors are considered. Many firms that build their own systems eventually migrate to one of the commercially available systems. Many firms structure their lead-tracking process around weekly business development reports and meetings. The meeting provides an incentive for key business developers to update their information on the reports, and provides a forum for discussing important leads and issues related to business development. People: Clients and Contacts Lead-tracking software is generally able to store and share information on contacts as well as information on opportunities. It is critical to have an effective system for collecting, updating, and sharing contact information on clients and other people that the members of the firm have relationships with. Make sure the contact management software that is selected enables the firm to do all the things that it needs to with contact information. If the firm is planning to create a series of e-mail blasts or a printed client newsletter, it is important to make sure that the contact management software is able to create and manipulate mailing lists with the contacts that it stores. Many firms have the challenge of integrating multiple contact management systems into one. Each partner or principal wants to maintain their own contact database in Microsoft Outlook or some similar address book system. When it comes time to do a mailing, all of the different address books have to be integrated and sorted to prepare the mailing. Therefore, a much better choice is a scalable, integrated contact management system that everyone can use from the start. Ideally, it is of course best to avoid maintaining duplicate information in more than one system, if at all possible. Projects: Past Experience When a firm is pursuing a new project, it is important to identify the firm’s previous experience that is most relevant, and then to prepare qualifications to represent this experience. If the firm is small or is a new firm without a significant portfolio, this will be a somewhat easier task than if it is a large firm or a firm with a long history. But whatever the size of the firm, it is critical for the firm to institute some sort of system for tracking project information. There are several choices for how to track information on projects: Use an off-the-shelf system created for our industry, create a proprietary database system, or use a file system that is key-worded for attributes that can be searched on later. The file system is the simplest to start, and if it is set up right, it can easily be converted to a database later. Create a basic form (see Table 6.1, for example) for information on projects, fill out the form for each project (one file per project), and store all the files in the same folder. Make the form using a two-column table, with questions/categories down the left (project size, facility type, etc.) and answers on the right side. Then, when an opportunity comes up and relevant projects need to be identified, use your computer’s search feature to look for any files in the folder that contain certain text (such as “laboratory” or “Rhode Island”) to find the appropriate projects. One of the greatest challenges of collecting project information is deciding when to collect it and who should collect it. Often a marketing coordinator who is not directly involved in the project is entrusted with the responsibility to gather project information. The marketing coordinator then has to track down this information from the project team. As this is usually a secondary responsibility of the marketing coordinator, the information may not get collected consistently, but will be done instead when the information is required for a specific proposal. It would be far better to create a system wherein the project manager could provide and update project information throughout the development of the project. 3 Midterms Module 3 Page 5 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS Project information is more than just data, however. It is important to capture images, plans, and other assorted fi les for use in marketing later. As a specific design project proceeds, be conscientious about the materials that are created for the project, and organize them in a logical way that makes it easy to find them later. Everything that is created as part of the project process may be useful later in trying to win the next project. Store site photos, “before” photos, renderings, sketches, construction snapshots, team photos, and so on in one place. When the project is finished and documented through snapshots or professional photographs, store those with other project documents in a physical project file, as well as in an electronic project file. There has been a lot of innovation in image database or gallery applications, like Extensis Portfolio. These systems enable the tagging or keywording of thousands of images, and, depending on the system, may enable the images to be exported in a wide variety of ways, or to be displayed in galleries on the firm’s website. Staff: Resumes and Statistics on the Firm’s Staff Like project information, readily accessible information on the firm’s staff is vitally important when pursuing a project. It may be important to know which architects are registered in a certain state, or speak a certain language, or have worked on laboratory projects. Resumes, of course, are the primary place where this information exists, and it is worth putting it in the effort to make sure that resume files include all the information that may be needed later on any individual staff person. In some cases, however, it may make sen se to create or use a database for tracking information on staff members. Both Deltek and Cosential have portions of their software packages designed to track staff information. When creating a custom project information database, it makes sense to consider adding staff information to this database, so that it is possible to track who worked on which projects. THE REST OF THE CHAPTER The following four articles in this chapter contain additional critical information on how to market architectural services to prospective clients. Developing Marketing Strategy This article describes the process of developing a marketing strategy for an architecture firm, including an overview of how research in a number of different areas informs the planning process, analytical techniques to evaluate a firm’s opportunities, developing action plans to prioritize marketing activities in specific markets, and using the marketing plan as a tool to audit the firm’s performance over time. Public Relations and Communications This article describes the process and tools of developing a communications plan, including utilizing tools such as website design, social media, media relations, design awards, promotional materials, advertising, and crisis communications to spread the firm’s message to all of its audiences. A backgrounder on commissioning architectural photography accompanies this article. Networking and Business Development This article focuses on how to build business through personal relationships, which all professionals develop over time, intentionally or unintentionally, through networking. Key topics in this section include developing a sales plan, growing a network, networking events, networking via social media, and the role of trust in networking. Qualifications, Proposals, and Interviews This section describes the process of responding to a specific opportunity through the process of preparing a qualifications document, a proposal, and a presentation. Specific topics that are discussed include the go/no-go process, reading the RFP, how to organize and run a strategy session, crafting a response to an RFP, coordinating with subconsultants, how to prepare for an interview, researching the client and competition, and what to do to follow up after the interview. CONCLUSION This chapter is a very high-level overview of key topics in the marketing process, from strategy, to public relations, to business development and networking, to the sales process. This is ideally an integrated part of the way that every architecture firm operates on an ongoing and continuous basis, as a practice grows over time. It is important to bear in mind that the common practice in marketing 3 Midterms Module 3 Page 6 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS changes over time with evolutions in social trends and the development of new technology. It is important to view each new marketing activity as an experiment, so that those involved can learn from it, getting better and more practiced over time, continually improving in their ability to communicate with potential clients in order to bring more work to the firm. DEVELOPING MARKETING STRATEGY Ted Sives, FSMPS This article presents a defined and specific approach for developing marketing strategy, combining internal and external research, analysis, and rigorous choice. The process puts marketing plans-including business development and sales, public relations and messaging, proposals, and more-in the context of broader firm strategy and business planning, including firm systems, tools, finances, and human relations. THE ESSENCE OF MARKETING STRATEGY Strategic planning-including marketing planning-should be one of the most exciting things leaders of architecture firms do. Building a plan is the opportunity to discover what firm leaders want and why, to envision and articulate the desired future, and to motivate specific action. The process should be engaging and productive-an opportunity to recharge passion for architecture and practice. The plan, whether for a sole practitioner or a global leader, should be an action road map that is understandable, breakable into doable pieces, scalable with growth, and modifiable to evolving conditions. The focus of this article is squarely marketing strategy: creating succinct targets for market types, business development, public relations, and more, based on sound research and analysis. Because the definitions of strategy and marketing are frequently mixed and misunderstood and the overall process is feared, what follows defines marketing process within the broader context of firm strategy. The entire strategic process is mapped out, with significant detail and examples for the more marketing-focused components. At the most basic level, a strategy is a plan to achieve a specific goal. What does the firm want to be? How does it get there? A strategic plan connects personal and firm passion and abilities to the “real world,” and maps the most effective way to reach desired goals. Crucially, it’s as much a determination of what the firm is not going to do (such as the types of opportunities not to pursue), as what the firm will do. The firm may be interested in all sorts of creative and technical challenges, but it can’t be all things to all people, and clients almost always want specialized expertise. This is especially critical in marketing strategy, because the most successful marketing links specific firm skills and desire to a very specific client or market, sales targets, and public messaging. PITFALLS AND OPPORTUNITIES The most successful strategic efforts build upon the following dynamics: Strategy is always a work in progress; the most strategic firms are rigorous in their process, yet flexible. All plans become outdated the moment they’re finalized. Conditions change constantly and unpredictably. Perhaps the economy reduces capital for sustainable resorts, a competitor loses their lead laboratory designer, the office market gets a little healthier, or a friend offers special consideration in a coveted project type in which the firm doesn’t have experience. Developments like this demand strategic flexibility with; 1) mastering the process so that re-analysis and change can be quick and effective, and 2) a plan that can be easily accessed, updated, and woven efficiently into the practicalities of firm decisions and management. Retreats (advances?) are terrific opportunities for creativity and enthusiasm, for taking out the proverbial “blank slate.” But good strategic planning requires good information and forethought. Rather than one multiday retreat with limited preparation, it’s usually better to distribute the key steps over time, with research and communication between. This allows for reflection, processing, and smart decision making. The strategic planning steps are described later in this article. Strategic planning is a powerful opportunity to leverage multiple voices and audiences in the firm and build internal excitement and energy. Different voices have different ideas and ownership in the plan; a successful effort carefully sequences activities to engage all stakeholders, while maintaining leaders’ decision-making and process control. Participation of the “troops” can include (among other activities) research, creative visioning exercises, or weaving a specific “high-level” idea into day-to-day and project management realities. Successful firms use strategic planning as a major opportunity to reach out to staff and show strong leadership, communication, and inclusiveness. Strategy isn’t a separate activity, it underlies everything. A good strategic plan should weave into the day-to-day activities of everyone in the firm, and help allocate scarce resources. Strategy is the all-the-time baseline, the tool deciding the most important thing to do or say, whether writing a press release, developing a concept design, or hiring/training staff. Example components: A one-page, highly formatted “so cool employees will post it at their desk” declaration of mission, vision, and values (MVV) A one-page dashboard tracking key activities and goals A detailed market-specific plan to chart the multiple efforts required to enter a new market or keep an existing one 3 Midterms Module 3 Page 7 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS A short action plan detailing the most important and powerful design focus, technical resource development, or brand-building efforts The approach for the firm should target both summary and detailed strategic documents, and weave strategic initiatives into existing company tools and processes. While a strategic plan may be dozens of pages, specific parts should live strongly on their own, and be easily revised and edited. For example, a “Health Care Market Plan” will include significant detail on targeted clients, conferences to attend, papers to write, and research and networking activities, and should guide the day-to-day activities of marketing staff and key health care marketers. It should also include targeted clients and influencers, but if the firm has a good working customer relationship management (CRM) database, don’t re-create the data, use the CRM system to identify targets. This “Health Care Market Plan” might target the potential future purchase of a small specialty firm in a new geography, but leave plans for the integration of that purchased firm, in terms of leadership or staffing or systems, to the more operational sections of the firm’s strategic plan. CREATING AND LIVING STRATEGY The “Creating and Living” theme and eight steps of strategic planning that follow are based on organizational concepts and terminology jointly developed by Ted Sive, FSMPS, and Bill Strong, SMPS. The eight steps are: Discover Potential; Analyze Opportunity; Synthesize Direction; Declare Soul; Structure Enterprise; Connect Clients; Channel Aspirations; and Audit Performance. The balance of this article describes an eight-step program in two overlapping phases: creating the plan (including research, analysis, and perhaps a retreat), and living the plan (carrying through strategic goals throughout the operational and marketing inner-workings of a firm). The components of the “living” phase are also in essence the table of contents for a strategic plan. While the emphasis of this article is marketing strategy (choosing clients, markets, project types, publication goals, business development methods, and more), that marketing strategy must be developed within the context of overall firm strategy, which includes core mission and vision, theories of architectural practice, and operational tenets and aspirations. This paper describes a road map for the entire process, focused in the marketing realm. While this process-or formula-works for firms of all sizes, clearly there will be wide variation in areas of focus and quantity of work. And last, while the diagram presents a lineal progression, with information and discovery leading nicely to decisions and further planning, strategy in any firm evolves over time, and many of these activities can happen out of sequence. Discover Potential For any firm of any size in any economy, there’s a wealth of potential. The old aphorism that we’re just specks of sand in the universe reminds us of that infinite potential. The goal here is to consider “What can we be?” “How might we grow and expand?” Look around and ask “What don’t we know, and how can we learn it?” In discovering potential, the point is to gather data, objective and s ubjective, internal and external. This can be organized into five dimensions or root forces that drive architecture firms. Each is an area of specific research: 1. Passion 2. Markets 3. Perceptions 4. Competition 5. Trends Passion What are the firm’s people most passionate about, individually and collectively as a firm? What drives people’s work as professionals? Why did they become architects? What have firm members learned and experienced, and how has it changed them? While this is not a research topic in the traditional sense, thinking of it as research reinforces that concept of diving into and uncovering previously unknown facts. Find some way-leading a discussion, interviewing each other, throwing a “beer Friday”-to articulate passions. Broadly, there are two groups to consider: Leadership. Being an owner or principal is first and foremost leadership; leaders drive the firm, and their visions and desires are key. Leaders have the job of inspiring others, yet that comes after honestly assessing what is individually and mutually desired. Talent. Any firm larger than one person involves important differences in outlook, reaction, and capability; during strategic planning leaders must work to discover the staff’s perceptions, views, meanings, and excitement. This is particularly true with societal and business trends toward empowerment, most notably with Generation Y. Markets Any strategic plan must reflect the real world outside the firm. This means researching the world of clients, how they consider and interact with architects, and what affects their buying choices. Along with accumulating and continuously updating information about clients and potential clients, architects must also consciously work to understand clients by thinking in their language and “walking a mile in their shoes.” The following is a generic list of topic categories and questions to consider when conducting market research. Start with this list and edit to the particulars of the markets being considered. 3 Midterms Module 3 Page 8 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS Market Definition What is the market, as clients defi ne it? What geographic area will be the focus? Clients Location? Size and growth potential (personnel, company revenue, ambition)? Design and construction needs: What services and products do they buy? What delivery methods do they use? Competition/influencers: Who works with them (architects, engineers, contractors, other)? How do they grade and select competing architects? Dynamics What is the overall market size, currently and in the future? What are the economic drivers for this market? What broader social, demographic, and other trends might influence this market? Are there trends in the types of projects within the market? For example, is educational philosophy driving a substantial change in building form? Networking and Organizations Where do the clients and influencers congregate (market sector conferences, associations, social networking)? Market Research Sources and Examples Client organization websites and trade journals (Urban Land Institute [ULI], National Association of Industrial and Office Pr operties [NAIOP], CEFPI) In-person interviews with existing customers Conversations with subconsultants, contractors, and subcontractors Data and reports from AEC organizations (Associated General Contractors [AGC], AIA) Specialized AEC data sources (McGraw-Hill, AIA, PSMJ Resources, Design Intelligence, commercial brokerages) Local business and/or specialty media (business journal analyses of largest, fastestgrowing, etc., businesses) 3 Midterms Module 3 Page 9 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS Perceptions It’s an old joke: “So, enough about me. What do you think…of me?” In this dimension of research, firms learn about themselves from an outside perspective. With better understanding of how the firm is perceived, both on its own and as compared to the competition, comes a better ability to solve deficiencies and identify opportunities. Opportunities include gaining brand awareness, growing into different product types with existing clients, or improving a capability. Remember, what the client thinks (perception) equals reality. In the “Connect Clients” section later in this article, the value and process of project reconnaissance is considered. These are questions specific to projects (response time to requests, availability of key personnel, listening skills, construction document quality, and many more). These surveys are a hugely valuable component of client care, different from the firm perception surveys that are very information-focused for strategic planning. Topics A perception survey asks clients, “How do you see us?” This can include: Client’s definition of the firm’s client service and “brand” Firm strengths and weaknesses in design, technical, management, communication, and other aspects Identification of competition, and comparison to them Suggestions for process improvement Perspectives on or identification of clients similar to themselves, including the client’s competitors Perspectives on future trends in that client’s market (anything from product delivery models to growth potential) Pointers The best questions are open-ended (not yes or no, and only occasionally multiple choice). This leads to a real conversation with the client and to learning what the client feels is important, in their language. Surveys can be conducted by firm personnel, which builds relationships and can start with a helpful familiarity, or by an external consultant, which generally leads to more frank responses and a clearer “big picture.” Remember that clients are sometimes different from owners/users; for example, the client might be a developer who is building a turnkey project for a corporate owner, or a third-party owner representation firm. Many clients have different levels of decision makers-perhaps there is a day-to-day project manager, the executive, and even a building committee. Each might have different priorities. It is important to determine who makes the real decisions, and who is accessible. Focus on how the firm can help the client, not on potential upcoming projects. The goal is to understand their perceptions so that better service can be provided, not to make short-term gains. Surveys can be expanded to include collaborators, subconsultants, and others with knowledgeable perspectives. Competition Clients are buyers. Buyers have choice, and they always- implicitly or explicitly, consciously or unconsciously- compare and contrast among firms. Competitor analysis is an underused strategic tool, and another excellent way of discovering potential and possibilities, while also building “client-thinking” skills. Following is a list of characteristics to consider; it is important to see the competition from both the framework of what is known, on speculations, and on the perceptions of shared clients-these may not be the same. Again, client perceptions are “reality.” Analysis Categories, per Competitor Markets they work in Products they design Services they offer Geographies and office locations Leaders and key business developers Marketplace perceptions (brand) Key clients and projects Trends The last dimension of research is the industry itself: What are the important trends in the world of AEC and real estate? Topics Teaming and delivery methods: How are they evolving and affecting the process of how the firm works in the broader industry? Technology: How is new technology affecting practice? 3 Midterms Module 3 Page 10 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS Society and cultural trends: How are broader trends, such as demographics, affecting the business of architecture and related professions? Pointers Industry publications and conferences are full of research and prognostication on these topics. An internal brown-bag lunch is productive for drawing in a variety of perspectives and inputs. Analyze Opportunity Research during the “Discover Possibility” step will yield a ton of information. In “Analyze Opportunity,” begin with that information and answer the question, “What does it mean for the firm?” The analysis can be broken into two categories of opportunity: possibilities (such as taking expertise in urban housing from one city to another, or leveraging a new hire’s resume to enter hotel design) and obstructions (such as a new competitor, or the need to strengthen “augmented reality” visualization expertise for technology clients). Analyses to Consider: What characterizes clients in a specific market? How do they fit the firm’s mission, vision, and values (MVV)? What is the firm’s market share? What characterizes or differentiates the firm’s existing or potential future work in the market? What and where are the opportunities and risk/reward of geographic or market expansion? How does the firm compare to the competition, and what risks and opportunities does that identify? What specific expertise is required to pursue a specific goal, and what does the firm have/not have (gap analysis)? Synthesize Direction This step is often the hardest: choosing the key focuses that will drive the firm for the term of the strategic plan. These include operational improvements and additions; marketing choices of specific markets, product types, and services to pursue; and an action plan, with key must-do activities. All of this is inexorably tied to choosing what the firm will pursue, making only as many choices as the firm can fund. To complete the resource-loading aspect of strategic planning, a high-level budget and timeline are developed. These illustrate the firm’s financial commitments to specific initiatives, and the sequence and timing. Synthesize Direction is analogous to Conceptual Design. Determine the key big-picture goals for each category, including the fundamental “design” of the firm, each of which will be further developed in the plan itself, much as Design Development furthers basic design concepts. Focusing on the marketing components, the firm needs to choose which markets are active, growth, and reactive. Active Markets An active market is one where the firm wants to maintain an established and significant market share (defined as the percentage of a market the firm typically performs). Maintaining an active market is a high bar in and of itself, with activities including the following: Maintaining existing relationships Forming new relationships as decision makers and the clients themselves change and move on Attending conferences to maintain market knowledge and visibility Keeping close attention to client care on existing projects to foster repeat work Preparing qualifications statements and proposals, typically in response to RFQs and RFPs Growth Markets A growth market is one with the opportunity to significantly increase the firm’s market share, with significant opportunity to gain new clients and/or projects, while staying consistent with the MVV. Growth market activities include all the activities in active markets noted above, plus: Building alliances with potential new team members (e.g., specialty consultants) Performing research and development to maximize skill sets and find creative ways to add value and gain competitive advantage Growing internal skills special to technical/design challenges of the market Potentially accepting less profit as investment in growing internal skills or more aggressively marketing the target Hiring strategic talent 3 Midterms Module 3 Page 11 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS 3 Midterms Module 3 Page 12 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS Reactive Markets Choosing reactive markets is that important, difficult choice to “not do,” resulting in little or no proactive pursuit. Opportunities that do come along might still be considered, subject to a rigorous go/no-go evaluation (see below), with pursuit only if there is no opportunity lost in active or growth markets, or other strategic endeavors of the firm. Declare Soul This is the “heart” of any strategic plan, the firm’s inspiration and essence. There may be a clearly articulated MVV already. If not, or if they need to be rethought or confirmed, now is the time. This is where the planning process ends, and the strategic plan begins “living.” Following are the three “animating principles” for a professional service firm, of why the firm exists and why it matters: Mission: The firm’s purpose-why it exists and its function in the greater world Vision: The firm’s destination-where the firm will be in a given amount of years, stated at least in part in objectively measurable accomplishments Values: The firm’s interaction-how the firm works with clients and collaborators, as well as internally Structure Enterprise To enact and live its soul, a firm needs structure-how it is organized, specific roles, what tools are used, how they are used, etc. Structure Enterprise guides this structure, including critical highlights and direction of how to enable strategy in the “every day.” In the case of big, visionary goals, this may really change the “how” of the firm’s daily work. Leadership Organization and Communication A fundamental job responsibility of firm leaders is living and leading strategy. Who are those people, and what are their roles? An organization chart not only indicates decision-making authority, but also empowers the strategy of “how” a firm wants to conduct work. If increasing design skill and recognition is a key strategy, who is responsible for this, and where do they live and interact with others? What is the person’s job description? Transition As a strategic plan will cover a number of years, firms should consider not just the present structure, but also the future. Who will the leaders be in 10 years? Will they come internally or externally? Will ownership be important for those leaders, and how will they obtain it? (The most successful long-term strategic efforts closely link ownership transition plans with core strategy.) Talent Human Resources The talent in an architecture firm lives the strategy in day-to-day projects and work pursuits. What skills need to be developed? How will new staff be indoctrinated in the firm’s MVV and key tools? Do specific capabilities need to be hired? Tools In executing projects, leadership and talent use tools to carry out the work. To move strategy into the day-to-day, firms should ask: What are the key tools in the firm, and do they help or hinder the firm’s goals? What would benefit from focused development and resources? Design: definition and tools for architectural design processes Technical: building systems and information resources, construction document quality control Process: project management tools and standards Information technology: CAD, BIM, the electronic flow of information, knowledge capture for firm expertise Financial Management: project and firm financial tools and processes Connect Clients Structure Enterprise focuses on a firm’s internal structure and tools-the firm’s operational plan. Balancing that and focusing externally is the firm’s marketing plan, the core of how the firm’s soul intends to connect with clients and the world outside. Following are the key components of a marketing plan. Brand A firm’s brand is the sum total of external understanding and perceptions of a firm. The brand components of a marketing plan are the tools a firm uses to shape those perceptions. Perhaps the most important tool is a brand statement, a 300- to 500-word summary for the essence of the firm, how it is distinguished from competitors, and the value that it brings to clients. In many ways a brand statement is an external retelling of the MVV. Other brand components include the firm’s name, logo, iconography, tag line, and visual imagery. 3 Midterms Module 3 Page 13 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS Markets On one sheet of paper, distill the key markets the firm works in, and whether those markets are growth, active, or reactive, as defined above. Go/No-Go This is a tool to determine whether a firm should pursue a specific client or project. The model should be personalized for a firm’s truly important considerations, including fundamental firm strategies, specific resources needed, the deadline for the pursuit, the time frame of the work itself, and the risk/reward ratio. Some criteria might be required (e.g., “Do we have an existing relationship?”), while most would be part of a point system, with a minimum number of points required to proceed. Public Relations The firm’s public relations strategy is the key effort to influence what the broader range of potential customers, stakeholders, and the general public think about the firm. These plans may be for the firm as a whole, and/or specific to the Growth and Active targets for the firm. Public Relations The firm’s public relations strategy is the key effort to influence what the broader range of potential customers, stakeholders, and the general public think about the firm. These plans may be for the firm as a whole, and/or specific to the Growth and Active targets for the firm. Business Development Firms are hired by individuals and teams who are mostly hiring other individuals and teams. Interpersonal relationships-the one-on-ones between architects and clients and influencers-are the building blocks. Business development is about targeting those individuals and organizations, specific tools, and the actual personal connections involved to build and maintain relationships. Remember that these one-on-ones are not limited to firm leadership, but also management and design talent. Client Care Client care is about performing work and relating to existing clients, which should be tightly intertwined with the marketing plan. The best marketing is to keep current clients, which is aided by “living” the firm’s strategy on each project. Good client care is about building strong working relationships and understanding how clients grade project performance, then making sure the firm performs at an outstanding level on each project. 3 Midterms Module 3 Page 14 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS Channel Aspiration The details and specifics of the operations plan and marketing plan address the totality of the firm and how strategy is being executed. This step is about the action plan, where the goal is to highlight the most crucial deliverable components and inspire everyone in the firm to live the plan daily. The action plan is composed of two components: energy and specificity. Energy: The people in the firm fuel the strategy. Most people, most of the time, want to feel part of something bigger and visionary- this might be especially true for architects, many of whom are drawn to the industry by passionate interest in design, buildings, or social change. Another way to define energy is inspiration, and part of the strategic plan should be tools to communicate with and energize the staff. Specificity: Specificity is another form of fuel. A key component of a strategic plan is a list of the most important activities to build and maintain the firm’s unique vision. While enterprise and marketing plans generally have fixed components with only some information that changes from time to time, the action plan is a few pages, and very current, comprising specific deliverables with specific due dates. An effective action plan format ties very specific assignments of who is doing what task when, to the “bigger picture” tactics and goals. Table 6.2 shows an example of one from “Acme Architects.” 3 Midterms Module 3 Page 15 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS Audit Performance Just like a routine physical with the doctor, the firm stays healthy and identifies challenges through honest self-analysis, ideally before issues become “diseases.” The goal is to put in place a set of measures and a regular check-in process, to continually ask, “How are we doing on our strategy?” An audit performance report card will measure key performance indicators (KPIs) addressing the four key components of strategy (as noted below). KPI audit and analyses may lead to adjustments and refocuses. Client targets may be altered (perhaps due to unforeseen market changes) or operational efforts doubled (such as bringing in a BIM consultant to help create a firm-wide BIM education series). An additional benefit of auditing is that it really begins the next strategic planning cycle, since evaluation of KPIs can generate the next round of “Discovering Potential.” Perhaps most important is creating and testing KPIs so that what is being measured is significant and indicative of what the firm leaders see as measurements of success. Don’t just rely on traditional or accepted measures; for example, focusing too much on financials rather than whether the firm is truly living its strategy. Objective measures of soul, how the firm is living its mission/vision/values, may seem counterintuitive: How can an objective formula measure something that is inherently subjective? For one firm a core value is “distinct solutions” for every project, and they measure it by asking at project close-out, “What appears in the project that never has previously in one of our designs?” While this objective approach doesn’t fully address success to an MVV component, the value of the measure is as much in the discussion-really forcing participants to define what is meant by value, and measuring not so much for the statistic but for the rigor of testing and verifying, and for continuing the discussion. Operational plan metrics are the more traditionally understood KPIs. The following is a limited list of examples: Project profitability Company-wide overhead rate Staff utilization Employee turnover Revit utilization (or transition into any new process or paradigm) Following is a range of marketing plan metrics: Market share (firm’s portion of total fees in a defined market) Total net fees and profit per market and trends over time Proposal short-list rate (short lists/total competitive pursuits) Interview selection rate (selections/total short lists) Direct award work (percentage of new work fees acquired without any competition) Marketing budget vs. actual Significant new client contacts (new relationships with real potential jobs current vs. last period) Public relations (PR) targets and results (number of mentions, placements, articles) Since the action plan includes specific details of “who is doing what task when,” auditing is a simple review of those tasks. Quarterly check-ins are excellent forums for leadership to gather, remind themselves of key strategic goals, and review these KPIs. CONCLUSION There’s an ongoing conundrum with strategic and marketing planning: while it is important to understand the whole process, it’s also important that strategic planning doesn’t bog down in that process. Here are some pointers to effectively adapt what’s described in this article: First, use this model and terminology to define the process. Next, use the process diagram to assess what information and tools are already available and what might need to be created. Potentially, start with some easy activities to build commitment and excitement. 3 Midterms Module 3 Page 16 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS Look for ways to pull in different voices for broad buy-in and wider views. Don’t worry about being “done” with all the components of the plan: Understand the process so it’s clear what was completed and what wasn’t. Consider content more important than graphics. Finally, be realistic in the schedule. Keep the process tight to maintain momentum and build excitement, while allowing time for research, reflection, and reasoned decision making. QUALIFICATIONS, PROPOSALS and INTERVIEWS Sally A. Handley, FSMPS Responding to RFPs and preparing for short-list interviews are two of the most important marketing functions. A thoughtful approach along with advance planning and organization can help minimize the effort and maximize a firm’s hit rate. Spotting a publicly advertised request for proposal (RFP) for a project that firm leaders or marketers have been tracking, or receiving an RFP from a long-pursued prospective client, can be cause for celebration. At long last, there is a feeling that the firm’s long-range marketing efforts are paying off. But euphoria can quickly turn to panic as the RFP is reviewed and the magnitude of the tas k ahead is understood. In firms both large and small, the proposal process can often be chaotic and overwhelming. There are three basic steps every firm can take to reduce the anxiety surrounding the proposal process: The first is to take a good, hard look at the RFP and determine the likelihood of winning the project. The second is to approach the proposal with the same degree of organization with which a design project is approached. Finally, and most important, procedures and processes must be developed to organize the information most commonly asked for in client RFPs. THE GO/NO-GO POLICY Frequently firms respond to too many proposals without really considering how realistic their chances are for winning. The more proposals prepared, the more diluted the proposal effort becomes, because time is finite, and even if people work 24/7, the m ore proposals put out, the less time there is to spend on each one. The secret to a successful proposal effort starts with a good go/no-go policy. Pursuing work that the firm is not qualified for and is unlikely to win is self-defeating and diverts time and money that can be better spent on marketing activities that are more likely to result in jobs won. There are many ways to approach a go/no-go policy. One size does not fit all. Some firms focus on whether or not a project has the potential to yield a profit. Others focus on a project’s potential for publicity that can increase name recognition and identity. Whatever approach is used, policy guidelines should be summarized in writing and a scoring system should be used to give the policy te eth. Here are some sample questions that cover the issues firms should be considering before beginning the proposal effort: Does the project fall under our mission? Is the project in a target market sector? Is the project in our geographic range? Is the project the appropriate size? Is the budget realistic? Funded? What is the potential for profit? What is the client’s reputation and payment schedule? Who is our competition? How were we selected to receive the RFP? Can we demonstrate relevant experience? Can we provide a truly responsive proposal in the time frame? Firms can develop their own scoring scheme. Three or more noes to the first six questions is a likely no-go. The last four questions require more analysis. There may be overriding reasons why the firm might say yes to a project that doesn’t pass the go/no-go test. For example, the client may have lots of profitable work and a reputation as a great client. Often firms may be asked to propose on a project smaller than their no- go minimum. Clearly, this is a test opportunity that most firms may not want to pass up. This detailed approach to judging whether or not an RFP is a go or no-go reduces long-shot proposal efforts that actually diminish the effectiveness of an overall marketing effort. If a go/no-go sheet is developed and completed each time a proposal is completed, a chart can be created that demonstrates over time where marketing hours and dollars are being spent with no return, and where dollars spent are winning work. 3 Midterms Module 3 Page 17 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS THE PROPOSAL PROCESS Reading the RFP In order to complete the go/no-go assessment, be sure to read the entire RFP. This may sound obvious, but all too often in a hectic-paced environment, it is tempting to cut to the chase and just read what needs to be done, skipping the full scope of services and going right to project description, the proposal requirements section, and the due date. A thorough reading of the RFP is a must. It’s possible to discover that the firm doesn’t qualify to respond because of certain requirements. Taking time to read the project description and scope of services, as well as the extraneous requirements that don’t always appear on the requirements page, will actually save time and result in a much better proposal. There is nothing worse than finding at the end of the proposal process that a lengthy form mentioned elsewhere in the RFP was overlooked. Also, there may be specialty subconsultant requirements that have to be met. These are issues no one wants to deal with after they are nearly done with the RFP response, a day or two before it is due. The Strategy Session Both small-firm practitioners and principals in large firms need to conduct a brief strategy session to get the proposal off to a good start. The purpose of the strategy session is to determine answers to the following questions: 1. What is known about the client? 2. What is known about the project? 3. Who is the competition? 4. Why should the client choose us for this project? No matter the firm or staff size, these questions need to be answered in order to develop a proposal that demonstrates understanding of the project and the client. Knowing who else received the client RFP, or which firms are most likely to respond to a publicly advertised RFP, is important in order to understand the context in which the firm is competing. Finally, a compelling argument for why the client should select the firm must be articulated clearly and concisely. Relevant project experience is a key element of any argument for why a firm should be selected. Projects that illustrate a firm’s capabilities, but that are not similar in size or scope to the project being proposed on, may not be relevant. Clients want to know that the design firms they select have experience with similar projects and understand the issues and nuances of a particular project type. Clients renovating a vehicle maintenance facility may not be impressed by a design portfolio consisting of renovations to office buildings or schools, even if those projects won awards. The Relevance Formula in the accompanying sidebar provides guidelines for determining what is most relevant to a client and how to order relevant projects in a proposal. If a team is working together to produce a proposal, all of the key individuals involved need to participate in the strategy session. Depending on the firm size, these might include the principal-in-charge, the project architect, the project manager, the proposal manager, and/or marketing coordinator. The proposal manager or the marketing coordinator should be assigned the task of taking notes that will be distributed to anyone involved in preparing the proposal. Additional tasks to be completed during the strategy session include the following: 1. If it hasn’t already been done, designate the principal-in-charge and the project manager. 2. Create a checklist, schedule, and budget. 3. Select subconsultants who will constitute the project team. (Be sure to review any requirements, such as MWBE (Minority/Women- owned Business Enterprise) goals or specialty consultants, needed for the project team to be compliant.) 4. For large projects, defi e responsibilities and how the team will interact, and create an organization chart. 3 Midterms Module 3 Page 18 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS During the strategy session, the note taker also wants to compile a list of questions that come up. Note any RFP requirements that are vague or about which there is uncertainty and clarification is needed. Every RFP has a point of contact or a specific procedure for asking questions. When the questions are compiled into a single list, one member of the proposal team should call the point- of-contact to get answers. Often clients hold pre-proposer conferences and/or walk- throughs of the project site in order to make clear their project goals and answer questions. A member of the proposal team should always attend. Ideally, the project manager is the right person to attend. Ideally the project manager is the right person to attend. Although not always technically oriented, marketers often are adept at discerning client concerns underlying the technical challenges. Following the strategy session, the designated note taker needs to compile a checklist. The checklist should include deliverables, responsible individuals, deadlines, and p ackaging and delivery method. Table 6.7 is a standard checklist that is a start and can be altered for each proposal. Circulate the checklist immediately, and post it to a central spot for team access. The checklist is a dynamic document and may change based on information obtained throughout the proposal process. Everyone needs to be notified when changes are made. Whether or not there is an individual on staff with the title of Proposal Manager, one individual needs to be designated the proposal manager, champion, or advocate for any given proposal. This individual is the keeper of the checklist and the individual who monitors daily the status of all deliverables. It is best if this individual is not a principal, who is most likely to have client-related and project-related responsibilities that will take priority over the proposal process. For sole practitioners, the checklist is a must. Any amount of time set aside to work on the proposal should begin with a review of the checklist. The valuable tool keeps the process organized, ensuring that long lead items don’t get lost in the process. (See Table 6.7.) Subconsultants The value of long-standing relationships notwithstanding, subconsultant selection should not be something done on autopilot. Subconsultants should be selected based on their ability to enhance the chances of winning a project. Sometimes that means reaching out to new firms that have specialized experience with the project type or client being pursued. In addition, there must always be a good faith effort to comply with client MWBE requirements. Optimally, meeting subconsultants is something done on an ongoing basis, so as not to have to scramble to locate the appropriate MWBE or specialty subconsultant for the first time during the proposal process. Pre-proposer conferences, which generally make attendee lists available, are an excellent way to meet potential team members already pursuing the project. Keeping a database of firms cross referenced by their disciplines, client connections, and certifications will make subconsultant selection much easier at proposal time. As soon as possible after subconsultants have been selected, notify them of the intention to include them on the project team. Determine exactly what subconsultants need to provide, the format in which their qualifications are to be prepared, and the deadline for receipt. The proposal manager or coordinator should be in charge of this effort, and the point of contact for any questions the subconsultant might have. The Mock-Up or Dummy Copy A good practice throughout the proposal production process is to create a physical mock-up of the proposal. As the various elements are completed, insert them into the mock-up copy. Use colored paper to indicate outstanding items still to be inserted. This simple practice gives everyone a good idea of the status of the proposal. In addition, proofreading the printed page yields better results than proofreading on a computer screen. 3 Midterms Module 3 Page 19 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS While some clients request digital copies, multiple hard-copy submissions remain the norm. The mock-up copy can facilitate the actual, physical production of the proposal. As sections of the proposal inserted into the mock-up are judged final, copies can be printed and collated. For obvious reasons, it is preferable to print completed sections as they are finalized, rather than leave all printing to the end. Crafting a Responsive Proposal Of utmost importance is making sure that the proposal is responsive to all of the requirements. The RFP process is highly competitive, particularly in the institutional and public sectors. Clients who receive many responses to proposals start by looking for nonresponsive proposals in order to narrow down the field for serious consideration. If the proposal is being prepared by one person working alone, the proposal must be read cover to cover, highlighting every item required by the client, even those that fall outside the “proposal format” section of the RFP. If there is a marketing staff, it is the responsibility of the proposal manager or marketing coordinator to make sure all required elements are on the checklist. Additional Solicitation Requirements Government forms, schedules, licensing, and insurance requirements should be gotten out of the way early. Lead time for obta ining certain certificates can be lengthy, so, as tempting as it is to let these go until the end, it is not advisable. Writing Persuasive Proposal Content In the case of proposals and requests for qualifications, there is a great deal of information provided by the client in the form of the RFP requirements. If the process begins by jumping to the proposal requirements section, the most important step in persuasive writing will be skipped-understanding the client that the proposal is trying persuade! Start looking at the RFP as the best source of information about the client. Search the RFP for clues about the issues most important to the client. Do they want an iconic building that makes a statement about them and their business? Are they committed to sustainability and desirous of a building that will not adversely impact their environment? Are they concerned about neighborhood resistance to their facility? Do they want a new addition to blend seamlessly with adjacent buildings? Are they a government agency committed to design excellence for public buildings? Next, verify how the firm will be evaluated. The criteria that will be used to judge proposals are almost always provided in client documents, and can be a key to client hot buttons. Consider changing the focus from the proposal requirements to the evaluation criteria. Make a thorough review of the criteria a significant part of the preparation process. Print it out, maybe even blow it up and pin it somewhere in view. While completing all of the required proposal elements is very important, paying equal attention to the evaluation criteria is just as important. Suppose the evaluation criteria look like what are shown in Table 6.8. Now let’s jump ahead and suppose the RFP has been read thoroughly, questions have been answered by the point-of-contact, and the walk-through has been completed. Additionally, at the walk- through a subconsultant confides that the last project done for this client had huge cost overruns because the project manager was inexperienced. This warrants a look at the evaluation criteria one more time. Eighty points are devoted to the firm’s experience, the experience of the project manager, and the management plan. This further confirms that effective management is a hot-button issue for the client. The next step is to write a statement of purpose, indicating what must be communicated in this proposal. Don’t overthink this and get into analysis paralysis. Just quickly either jot it down or type it. For the example above, the purpose statement may be as simple as: “In addition to our firm’s experience with all the elements of the proposed project, we also need to show that our project manager has experience with all or most of the elements of this project and demonstrate that s/he has a track record for controlling costs and completing projects on or near original estimates.” Once a statement of purpose is written, everything that goes into the proposal is there because it will help accomplish that purpose. Every project example, every staff resume, and every question answered must fulfill the purpose; otherwise, it is at best filler and at worst a distraction. Remember, every word written must add to the argument. Next, create a working outline or table of contents (TOC). The TOC may change throughout the proposal writing process, but it’s best to start with a solid outline. In some instances, the client may have very specific guidelines for the TOC, and that makes the job easier. If not, consider organizing the proposal according to the evaluation criteria. 3 Midterms Module 3 Page 20 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS Proposal Content: Less Is More In a letter to a friend, seventeenth-century French philosopher and mathematician Blaise Pascal wrote, “I have made this letter longer than usual, only because I have not had time to make it shorter.” Proposal writers frequently make the mistake of thinking that, in order to be effective, proposals need to be lengthy. The fact is that reviewers of submissions spend approximately 18 minutes reviewing a proposal! That is the reason proposal advertisements often limit the number of pages, sometimes even cautioning that elaborate submissions will be rejected. Clients want an RFP that tells them what they need to know in order to make a decision. They ask specific questions and they want succinct answers, not every piece of boilerplate ever written at a firm. In order to write a persuasive proposal, tailor the boilerplate to the client. Clearly and succinctly demonstrate that the audience is known and their special needs and requirements are understood-that there is sensitivity to their hot- button issues. Avoiding Jargon In his classic Writing for Design Professionals, Stephen Kliment, former editor in chief of Architectural Record, cautions writers to avoid technical jargon and “designer babble” that can actually make it more difficult for the reader or reviewer of the proposal. Technical professionals sometimes forget that even the most knowledgeable clients are not necessarily technical. If technical details are going to be included, make clear to the reader the benefit of the technical information. Here’s a description that does this very well: Established to promote greater public understanding of the United States Constitution, the National Constitution Center is a structure of complex geometries articulated in limestone, granite, and glass. The architect’s sophisticated design relies on an elaborate frame of interconnected steel systems designed to achieve the building’s bold structural form. Long-span, column-free solutions and special connection details accommodate the building’s vast, open spaces. The last sentence does an especially good job of explaining the benefit of the technical design without jargon that loses the reader Quality Control: Assessing the Proposal The schedule set in the strategy session should always include enough time for a thorough proofread and final edit. When all the checklist items are complete, and the proposal is assembled, ask the following questions: Does this proposal demonstrate an understanding of the project? Have we identified potential problems? Are our project examples truly relevant? Do resumes show relevant projects? Have we clearly established our technical expertise? Have we demonstrated that we have the capacity to handle the project and meet the schedule? Have we provided all of the information and documentation required? Is the proposal easy to read and easy for the client to locate the most important information? Part of quality control is allowing enough time for proofing, printing, binding, production, and delivery of the final package. It doesn’t matter how good the content is if there isn’t enough time to create a high-quality deliverable. Just like a schedule for a project deadline needs to allow adequate time for drawing coordination and printing, so does a marketing proposal schedule. Be sure to factor this in to the original proposal schedule at the beginning of the process. 3 Midterms Module 3 Page 21 of 26 AR 541: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 1 MIDTERM LECTURE HANDOUTS QUALIFICATIONS: ORGANIZING STANDARD PROPOSAL ELEMENTS AND BOILERPLATE Ironically, this step really should precede the previous two, because an organized database of the firm’s qualifications- that is, of the types of information and standard write-ups (boilerplate) asked for in a proposal-is the key to an efficient proposal effort. The preceding sample proposal checklist contains the most commonly required elements in any RFP. While each client, project, and proposal is unique, most RFPs request some form of the same basic information. Many firms start each new proposal by using the last proposal submitted as a template. The limitations of that approach to proposal writing become clear when hours are wasted searching for a proposal that predates the most recent one because it contains a perfectly crafted response to the same question asked in a current RFP. One of the keys to an efficient proposal process is the organization of the firm’s qualifications-information that is asked for repeatedly. Designate a folder “Boilerplate Library.” The Boilerplate Checklist (sidebar) contains a basic list of the standard documents that should be included. Create subfolders for items such as Project Approaches. While each project approach must be tailored to the project currently being pursued, previously written project approaches may contain introductions or paragraphs that can be incorporated into current proposals. For example, the approach to historic restoration will probably always start with a site visit and review of existing documents. The time invested in developing a well-organized boilerplate library of the firm’s qualifications will yield tremendous time savings in the future. The added benefit is that the time can be used to better research the client’s needs and tailor the boilerplate to prepare a truly responsive proposal. THE SHORT-LIST INTERVIEW Every planning session, every market research question, every networking event, every cold call, every letter written, every trade show attended, every piece of communication sent, especially the proposal, is intended to get the firm in front of the client for a real opportunity to win a project. The joy of being short-listed is frequently short-lived, however, because the time frame is often less than a week, and the interviews never seem to be scheduled at a “good” time-that is, a time that is convenient for

AR 541: Business Management & Application for Architecture 1 Midterm - Lecture Handouts PDF

Document Details

Tags

Related

Summary

Full Transcript

Upgrade to continue