Most likely you are aware that architecture and engineering firms don't command the magnitude of fees that most professional service firms do. I've long pondered why this is.
Our industry has probably been more willing to discount our fees.What we charge is often limited to a percentage of the cost of the facility we're designing (especially in architecture). Simple supply and demand may come into play; we do seem to have a lot of competitors!
But I suspect there's another key factor that is usually overlooked: Most professional service firms do a better job meeting their clients' strategic needs. These are high-value needs that relate to the client's overall business success. Think about it—lawyers, accountants, management consultants, advertising agencies (to name a few)—are directly involved in helping their clients achieve bottom-line business objectives.
What about A/E firms? We talk about helping clients succeed, but often fail to make the direct connection between what we do and our client's strategic goals. I believe the connection can be made, but we're prone to focusing on technical issues and overlooking how they impact business results. If you can make that connection, you add value to what you do.
It's helpful to think of three levels of client needs: strategic, technical, personal. A/E firms naturally gravitate toward meeting technical needs. But meeting strategic and personal needs is more valued. Their relationship to corporate and personal success is more readily established. They typically require more customized (hence more valued) solutions. There is a stronger emotional connection to strategic and personal needs.
Yet while these different levels of needs are distinct, they are necessarily intertwined. A/E projects are almost always driven by strategic needs. Personal needs are met (or not) largely in the how the client is served in the process of doing the project. When you can envision the project as more than a technical problem to be solved—but as a means to achieve corporate and personal success—you are on the path to creating added value.
So how can you do a better job connecting your technical solutions to meeting your clients' strategic needs? Here are a few suggestions:
Learn as much as you can about the client's strategic needs. Most strategic needs fall into one or more of the following categories:
Public relations issues
The more familiar you are with your client's business, the easier it will be to identify strategic needs. Firms that specialize in a few targeted markets tend to be more profitable in part because they better understand their clients' strategic needs and are better able to meet them.
Uncover the project's particular strategic drivers. As noted above, our projects almost always are driven by strategic needs. Yet I find that technical professionals are often unclear as to what those needs are. When I work on proposals, I routinely ask the question, "Why is the client doing this project now?" It's amazing how seldom I get a satisfactory answer from those who supposedly know the client best. Many seem satisfied simply to address the technical scope of work.
But from the client's perspective, there is more to the project than its technical scope. It meets one or more strategic needs. Fail to recognize that and you've effectively devalued your work. Remember the old fable about the quarry workers? When someone asked what they were doing, one saw only the work's technical scope: "I'm cutting the stone into building blocks." Another saw the strategic value of his job: "I'm helping build a beautiful cathedral!" Be diligent in uncovering specifically how your work meets strategic needs.
Define how you will meet project-related strategic needs. Raising the value of your work involves more than simply making a conceptual connection to strategic needs. You need to demonstrate how you will specifically meet those needs. Sometimes this is largely perceptual. In other words, your firm is meeting strategic needs but it may be overlooked unless you point it out. For example, showing how projected energy savings will reduce overall operational costs.
In other cases, you may need to sell the client on complimentary services that meet strategic needs. When I worked in the environmental industry, community relations were sometimes a critical facet of a successful project (and the impact could extend well beyond the project itself). Because of our firm's track record for successful community relations programs, we could enhance the perceived value of our remediation expertise.
Even if you don't have such complimentary services in-house, you can still take steps to connect your work to meeting strategic needs. You might subcontract the services needed, or show how your project strategy will enable the client to better satisfy those needs.
Document your contributions to achieving strategic objectives. How we write project descriptions says a lot about how we view our work. We focus far more attention on what we did than what we accomplished. In my last position as head of corporate marketing, I set out to compile new descriptions of our most important projects. Besides the usual information about project scope, I asked project managers to describe what primary problem(s) they were solving (strategic drivers) and how they added value. Most of them struggled mightily to offer more than a technical scope of work.
That experience probably illustrates a part of the reason that we aren't compensated more. We don't tend to think of our projects as solving business problems or adding strategic value. If you want to be more valued by the client, you need rethink how your projects create value—and document it. Not just for the marketing department, but for the client. And in reviewing project performance with the client, ask about how well you're meeting the strategic needs associated with it.
Help your client contacts succeed within their organization. Those professional service firms that are making more money than you? They almost certainly aren't working for the same client contacts that you are—they're working for their bosses. That's because the people highest in the organization are typically the most concerned about strategic needs, and are willing to pay appropriately to have them addressed.
It may be quite difficult to get an audience with senior client executives, in part because it can strain the relationship with your primary contacts to go over their heads. So what can you do? First, understand what strategic needs impact your contacts the most. How do those strategic issues affect their jobs? Which strategic objectives affect the assessment of their job performance? Then outline how you can help them succeed in meeting those strategic needs through your project work.
Once you demonstrate your firm's ability to address strategic needs, you may be able to gain access to key decision makers higher in the organization through your current contacts. This is particularly true when your contact can see the personal benefit in making the introduction. In this scenario, you are meeting both strategic and personal needs...and creating added value.
About the Author: Mel Lester of The Business Edge (www.bizedge.biz) helps engineering, architectural, and environmental firms improve business performance by implementing effective strategies in organizational leadership, business development, client service, and project delivery. He can be reached at firstname.lastname@example.org.
PSMJ is always looking to publish diverse views on emerging issues and trends in the A/E/C industry. We invite you to submit a 500-word post on any industry-related topic. We look forward to hearing from you.
For more information on creating value and addressing client needs, check out these related blog posts: