Are Your Expectations Realistic?

Oct 10, 1994

Every firm in this industry must do four things to survive— sell work, do work, bill for work, and get paid for work. That’s it. If you ask me, architects, engineers, and environmental consultants (along with their advisors) do a wonderful job of making what should be a simple business too complicated. Consider the following: How can you expect to sell work if you haven’t even identified who can buy your services? 98% of A/E/P and environmental firms have never taken the time to identify all the organizations that could possibly buy their services, much less everyone in those organizations who can make or influence the purchase decision. This is where marketing starts— by identifying buyers. With this kind of haphazard marketing process, is it any wonder so many firms struggle to get work? You need a company-wide client database to get a handle on the problem. How can you expect to sell work if your salespeople don’t even know your capabilities? Every day, we see firms with such disorganized marketing information that the people doing the selling can’t even find out what their company has previously done for that client. We also see situations where people doing the selling are completely unaware that one of the firm’s employees used to work for the client. Most firms have no method to ensure that this never happens. Once again, you need a company-wide marketing database. How can you expect to do good work if you have no control over the people who are supposed to turn it out for you? The most common form of organization structure for an A/E/P or environmental firm is a matrix based on a combination of project managers and production units. And it doesn’t work. The matrix virtually prohibits accountability. It ensures that those doing the selling have no power to deliver on their promises. Team or studio organization structures work best for most firms in this business. How can you expect to do good work if you never find out what your clients think about it? Only 25% of firms always ask for a client debriefing after failing to get a job. An even smaller percentage actually take the time to poll their clients regularly to find out just how happy they are with the services the firm has provided. This is the perfect role for the P.I.C. who otherwise might be sitting on his rear. It also justifies hiring an objective third party to poll your clients once every couple of years. How can you expect to bill for work if you don’t have complete and up-to-date information on the time spent on the job by each individual working on it? Collecting times sheets once or twice a month is not enough, especially for firms doing lots of small jobs (the bulk of the industry). The budget is busted before the P.M. has seen the first report. Most firms desperately need on-line project time recording and management reporting. How can you expect to bill for work if you don’t have all the supplier’s bills related to the job? Most firms in this business take days or even weeks to input and schedule invoices received for payment. Why should it take so long? Get caught up, then input every invoice to your system the day you get it. You should only go through the process of getting approval from the appropriate project manager (or principal) after the invoices are entered into your accounts payable system. How can you expect to get paid for work if your bill doesn’t get to the client? Most firms take between four and 20 days to get bills out after all of the time sheets are collected. Why so long? Everything should be ready to go so when the time spigot is shut off, or the regular billing cycle comes around, the bill can immediately go out the door. How can you expect to get paid for work if your bill doesn’t make sense? Pull out 10 of your most recent invoices. Do you understand everything on them? If you don’t, how in the world is your client going to? Why do so many firms send out bills that are called “statements,” or bills that have all kinds of unintelligible garbage written all over them like internal project reference codes, obscure task/phase/activity references, and so on? If it’s because your accounting system puts them out that way, change it. Or port the data over to the word processor and fix it there. Selling, doing, billing, and getting paid for work– that’s what it’s all about. But don’t expect to do any better in these areas if you aren’t willing to change. Originally published 10/10/1994

About Zweig Group

Zweig Group, a four-time Inc. 500/5000 honoree, is the premiere authority in AEC management consulting, the go-to source for industry research, and the leading provider of customized learning and training. Zweig Group specializes in four core consulting areas: Talent, Performance, Growth, and Transition, including innovative solutions in mergers and acquisitions, strategic planning, financial management, ownership transition, executive search, business development, valuation, and more. Zweig Group exists to help AEC firms succeed in a competitive marketplace. The firm has offices in Dallas and Fayetteville, Arkansas.