One of the most important milestones in the development of an A/E/P or environmental firm is the first time the company turns down work. Knowing what work to take on and what work to refuse is essential to a firm’s ability to grow and prosper. And though marketing people have been talking about this subject for years, many firms still seem to have a hard time with it. I’m not talking about turning down bad projects from bad clients. That’s easy— even for architects and engineers. What I am talking about is turning down a good project from a lousy client, or a bad project from a good client.Getting to a “no” decision is seldom easy— and it’s even tougher to communicate to the client. Small firms have a tendency to take on any work, especially when they are just starting out, in an effort to survive. The short-term survival instinct overrules any longer term concerns about profitability or liability. The worse things look as far as future prospects are concerned, the greater the tendency to do this. This practice then becomes part of the firm’s corporate culture and directly impacts a principal’s or other seller’s inability to say “no.” Most of us who have worked in an A/E or environmental firm for any length of time have been heavily programmed that service is important above all else. Saying “no” gives us real heartburn since we are refusing to help someone who needs us. Many people in this business just aren’t comfortable with that.The “experts” will tell us that we need a formal go/no-go decision making process, which includes a form filled out for every job. But anyone who has tried in earnest to institute that kind of a process can tell you it’s really not practical. One problem with this approach is that the go/no-go decision usually ends up being tied to some sort of minimum estimated fee, since most firms have many small jobs and only a few big ones to go after. Yet, the proposal effort and potential liabilities are often the most underestimated in smaller jobs, and that’s where some intelligent thought about the go/no-go decision may be most critical.It may prove necessary at times to take on a lousy job for a good client. Anyone who doesn’t think so is naive. That may be a significant part of the value of the service that you provide to the client— the fact that you take care of all of his or her problems. On the other hand, this implies that the client is a repeater, one with the potential to do lots of work with your firm. You wouldn’t want to be doing lousy jobs with one-time clients.Then there’s the issue of how do to say “no” to a client even if you can come to that decision internally. My experience is that not knowing how to say “no” keeps many firms from saying it, and understandably so. Firms that come to the “no” decision usually do one of the following, and unfortunately, none of these tactics is flawless:Do nothing. This is not a common approach, because most firms will go ahead and pursue the job even if they don’t really want it or if they figure their chances of success are slim due to their fears of what the client will think about them if they don’t. Quote a high fee. This approach may save you from saying you don’t want the job, because you probably won’t get it anyway. On the other hand, there are many potentially harmful ramifications. First, you could still get the job, and you may not want it even at a ridiculously high fee— it may be one where the liabilities outweigh any potential rewards, for example. Second, you probably won’t get the job, but will end up leaving the client with the idea that you are more expensive than you are worth. This could prevent the client from considering you for future work, which you may want. Claim you are too busy. I have used this approach myself in the past. It’s good in that being busy implies some sort of desirability. Other people obviously want you, so you must be OK. It’s bad in that it may communicate that you are too small to handle big work, or simply not interested enough to rearrange your workload, staff up, or do whatever is necessary to help your client. They may consider that the next time they have a good job for you to do. Refer the client to another firm. This may help or hurt your client, depending on the quality of the referral. If you recommend a company that can really help them, you run the risk of losing your client to that firm forever. If your referral doesn’t do a good job, you look bad for not helping them. Either possibility is dangerous! Tell the client why you don’t want to— or can’t— do the job. I like this approach best. Honest discussion may very well result in a different scope or increased fee to do the job, especially if you have a relationship of mutual trust and respect and/or are positioned as an expert in serving clients of that type. And if the problem is that you are too busy, perhaps the client can wait until you’re available, if there is a good reason for them to do so.There are no simple answers to the problem of how (and when) to say “no.” But it is an important issue that any firm should be discussing among all those who make or participate in making the decision.Originally published 12/12/1994
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Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training. Zweig Group exists to help AEC firms succeed in a complicated and challenging marketplace through services that include: Mergers & Acquisitions, Strategic Planning, Valuation, Executive Search, Board of Director Services, Ownership Transition, Marketing & Branding, and Business Development Training. The firm has offices in Dallas and Fayetteville, Arkansas.
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