Monday, November 28, 2011

Location Efficiency and Rethinking Sprawl

In the early 90s, I gave a talk to the newly formed Congress of the New Urbanism (CNU) that began like this: "My name is Clifton and I'm a child of sprawl." My reference to the first-name-only confessional format of twelve step programs was quite a bit more than superficial - growing up in sprawl in Southern California embedded in me a deep hatred of tract housing suburbs and all that they represented that remains today. It's probably not stretching it too much to say I was emotionally scarred by the deep sense of alienation that such environments facilitate, so questions about the future of sprawl- how to alleviate it, what to do with it, how will it help the economy and the nation- all have a very personal resonance with me.

In a recent article in New York Times, "To Rethink Sprawl, Start With Offices," Louise A. Mozingo, a professor of landscape architecture and environmental planning at the University of California, Berkeley and author of “Pastoral Capitalism: A History of Suburban Corporate Landscapes” suggests three steps to rethinking sprawl and office parks in particular as one of its key drivers: halting agricultural land conversion, connecting dispersed employment centers with alternative transit, and encouraging downtown development. All are good and necessary, and I'd like to add more perspective to the picture.

It is true that office parks seem to represent the most intensively low-density, single-use, non-sustainable type of development in suburbia, but I'm not sure they're the primary driver for low density development. It seems to me that sprawl usually starts with low cost housing on the ever expanding fringes of high density urban cores that have jobs but not affordable housing. Office parks and retail follow the residential development, but all are beset by the problem of low "location efficiency," a term I'm loving lately for all that it implies. Before I address the concept of location efficiency is crucial to what to do about sprawl, I'd like review a bit of recent history around this issue.

Early on in the anti-sprawl movement, New Urbanism, New Urbanists and their ilk were envisioning not only how to hasten the death of sprawl but what to do with the "carcass" as it were- how to repurpose the vast sprawl infrastructure that has been visited upon the face of the earth since the advent of the automobile. New Urbanist Architects like Andres Duany and Elizabeth Plater-Zyberk and others did conceptual designs of parking lot infills and retrofitting parking garages that would surely someday be vacant and abandoned. These early studies were important but still focused on buildings: it's harder to envision what to do with the automobile-centric transportation infrastructure of roads and freeways that sprawl engendered.

New Urbanism deservedly recieved a lot of criticism for being in practice more like the "New Suburbanism," as many of the early key projects, such as Seaside in Florida, were "blank slate" efforts funded by developers catering to rich homeowners and unfettered by the exigencies of affordable housing, urban infill, and lousy existing street grids. The last condition is one of the hardest to overcome, and has a lot to do with why a blank slate approach was so attractive to early planners and architects. In settlement patterns, street grids are extremely difficult to change once they're laid down- I think of traffic engineers as, in a way, the real evil geniuses of sprawl.

New Urbanism also largely failed initially to address energy efficiency at all. Granted, the green movement was the next movement in architecture after New Urbanism, and many New Urbanist practitioners intuitively understood the energy efficiency of better land use and development patterns, but we did not yet really have the vital  public discourse on sustainability that we do today. What's been disappointing to me is that it's been mostly only in the past five years that green architects and planners and New Urbanists been talking to each other. The US Green Building Council (USGBC) and CNU been jointly developing LEED for Neighborhoods for several years, and the LEED standard and the Living Building Challenge both address transportation in their rating systems. But these standards largely address individual buildings, and there's no real metric for a crucial factor behind all sprawl: location efficiency, which measures the amount of fuel, time, and money one must spend to get to work and back.

Most of our operative economic models are based on a historical assumption of an unlimited supply of cheap energy, and  ignoring true transportation costs is one of the most important among many blind spots in these models. David Goldstein and Jennifer Henry of the NRDC have established a strong connection between high transportation costs and high home foreclosure rates in at least two U.S. metro areas: Chicago and the San Francisco Bay Area, as indicated in a paper titled "Reducing Foreclosures and Environmental Impacts through Location-Efficient Neighborhood Design." For mortgage lending purposes, financial institutions are only just beginning to understand the value of energy efficiency investments and their ability to impact the operating costs of homes, but the actual cost of home ownership is never viewed as including transportation costs, which are much higher than water and electricity bills. Applying a location efficiency metric to housing and other building types, including commercial office space, as a decisive economic factor would serve to quantify the real costs of sprawl.

What would a location efficiency rating look like and what would be the implications of including it in economic models and financial lending practices? How would it help to alleviate, rethink, and reuse sprawl?

My first take on what the metric should represent is something like the average percentage of annual household expense that goes to transportation (which includes commuting, shopping, and daily tasks). The data for creating the metric is widely available- what remains to be done is aggregating it and analyzing it. The rating system could be developed and ratified by a consortium of financial institutions, developers, local and state governments, and NGOs like USGBC. Following the LEED model, it's probably most likely  that it be developed by an NGO, then migrate gradually to government policy. Location efficiency also has the advantage to data visualization in that it can tell a dramatic story quickly an effectively, much like the map based data first used to discover the cause and cure for cholera, and like GPS-based techniques used in law enforcement to combat crime. It would play well to us Americans, who usually measure things in relation to the automobile: miles per gallon, miles per hour, horsepower. It would be kind of like MPG for a house, where not only electricity and water are accounted for, but gas and time used in getting there. Consumers are already getting used to rating systems that tell us about the embedded energy in food and building materials- we're thinking a lot more about eating and buying local.

The global trend toward urbanization has many complex drivers, but high density development is happening because of market forces, mostly because the cities are where the jobs are. It's well understood that denser development increases the tax base and lowers the per capita cost of municipal services- water, sewer, power and many others. Affordable housing is a crucial factor in U.S. cities today, and including high location efficiency rating in financial models for affordable housing development in urban cores will help to facilitate its viability.

In her article, professor Mozingo suggests that municipalities drive a harder bargain with corporations who seek to build commercial office space in their towns, and ask for more concessions in the area of transportation infrastructure. I agree, but I wonder about how this will play out. In today's economy, so many towns are desperate for revenue that it's hard to believe there is the political will to do this, but if the location efficiency metric is factored in, it can be a bargaining chip that addresses the real economic factors that impact employees.

 A location efficiency metric will also help to quantify ROI for public transit projects. While rail based systems are highly desirable in many locations, they are very expensive compared to bus systems. Our overdeveloped road system means that bus systems are very affordable alternatives, and presenting these projects as sustainable and viable economically when characterized as improving location efficiency will help to overcome consumer preference roadblocks like the stigma of riding the bus. Good design can also help to overcome our resistance to buses. Curituba in Brazil is a model for bus transportation infrastructure, according to Urban Habitat.

Energy and water efficiency are highly desirable goals in improving building practice, unfortunately most building professionals look at one building at a time. Improving location efficiency has potential scale effects that compare very favorably with energy savings from more efficient buildings. What's best of course, is to improve efficiency across the board with regard to all resources- materials, water, energy, transportation, and infrastructure. Improvements in one area almost always have positive impacts in another.

Signs of sprawl's imminent death are not widely evident, but given the embedded energy costs, it's hard to imagine that sooner or later low density development won't suffer a collapse or a transformation. Should collapse occur eventually, it's fascinating to think what that would look like. Will wolves roam the tumbleweed haunted streets of Lancaster? Perhaps sprawl, like waste, can be thought of as a resource, especially given the amount of existing infrastructure. Municipalities, developers, architects, and planners certainly have a delightful challenge in store figuring out how to transform the hellishly alienated sprawl landscapes that cover much of our continent and others into livable and sustainable human habitat.

Monday, November 21, 2011

Strategic Selling in AEC Part 4: Rethink and Rebuild the Sales Function

How do you start retooling your company culture to be more oriented towards sales and customer service? Given the traditional risk aversion of most firms large or small, it’s certainly a daunting task. Start by focusing on the rewards rather than the risk, and talk about sales and customer service in terms that design and construction professionals understand. Call it business development instead of sales if you have to (you will probably have to). Consider this: integrated design and integrated project delivery are well known concepts in AEC that have proven to reduce errors, save money, and deliver better performing, higher quality buildings. They’re natural evolutions in building practice that are in many ways responses to market conditions. So there’s no reason why we can’t expand the concept a bit with “integrated” marketing and customer service.

Talk to your vendors who sell equipment and are more likely to have a different sales culture. See if they have ideas on sales techniques that you can adapt. They will also be a source of project leads, and you can often team with them for project pursuits. Think of business development as a responsibility shared by everyone in the company- train even junior staff to look for opportunities for services or projects from current clients, or from unexpected sources. Cross training of sales and technical staff is also crucial- let the BD people learn as much as possible about the technical aspects of your products and services, and train technical and design staff in sales and communications techniques. Take junior staff on sales calls once in a while so that they can see where projects come from and get a personal glimpse of a real client in his or her natural habitat. Install a system for mentoring and building leadership for sales and business development activities, and celebrate the winning of projects with everyone.

Examine the attitudes in your company for personality bias around staffing for sales functions. Sales and communication skills are not conferred genetically, they are learned like every other valuable job skill, and are increasingly becoming an important aspect of more and more AEC job functions. While it does seem to hold true that certain personality types are more prevalent in sales than in technical roles, it’s unclear whether this is a result of prevailing attitudes or whether there is a deeper behavioral reason. Consider discarding traditional beliefs about who is suited for sales activities and adopt an evidence based management approach to sales functions. Much of good sales technique involves not extensive persuading and schmoozing, but being organized, doing diligent research, and providing crucial information to clients when they need it. Most importantly, it involves solving problems, and technical staff are good at this. Combining the good people skills of sales focused staff with technical skills of production staff is the ideal approach to a strong AEC sales process, and helps everyone to develop new strengths to augment their core ones.

Marketing activities should also be owned on some level by everyone in the company. Nothing is more important in marketing than your brand, your unique differentiation and reputation in the market. A strong brand greases the sales process, as clients will come to you more or less self selected for fit, saving you the trouble of digging into what they want and trying to fit it to your capability. Build a more detailed, comprehensive, and nuanced understanding of your brand, based on direct customer feedback and interaction, including client surveys when appropriate and feasible, and shared feedback from interactions with customers. Let the brand drive your marketing strategy: in fact, develop a marketing strategy if you haven’t already (most firms, large and small, don’t really have one). Build your brand with thought leadership, publishing as often as possible on hot industry topics that give clients and owners information they can use right away in their job functions. Get your brightest and most articulate people to speak, publish and present at industry conferences as often as possible. Pour great stuff into your social media channels as often as possible- blog, tweet, retweet, and post regularly.

Take advantage of the plethora of literature on sales that has been published in the U.S. – most of it isn’t AEC specific, but most of it is quite applicable to the kinds of sales typical to AEC. Send your people to sales training events and courses as often as possible.

For improving customer service, the best place to start is with the RFI process. There is much available data on the benefits of reducing RFI turnaround for all parties, and if you haven’t done it already, putting a well-oiled RFI process in place with some clear targets of reducing the total number and response time will help to change attitudes towards design upstream, and improve profit and quality overall. Instill in your company a respect for simple practices like responding to clients promptly- usually this is the biggest complaint in all customer service. Create an appropriate level of customer service – overdoing it and delivering on every single little request from every client can blow your budgets and can result in clients taking advantage of your staff. Instill a keen sense of when services are beyond the agreed upon scope, and allow project managers and staff to process small change orders and scope requests quickly if possible. Make it easy to get things done for the client, but keep an eye on project budgets. This is often hard to do, but it’s easier if staff can easily and regularly see the results of their time on their project budgets, so tweak the permissions levels on your project management enterprise system if you have one.

Periodically research, identify, and execute on new service development and delivery opportunities. This
can be facilitated by regular team meetings where project managers and even junior staff can report on upcoming opportunities based on interactions with clients. Incentivize staff to constantly identify and even anticipate client needs that can turn into billable services. Foster collaboration and trust between sales staff and “production” staff- people who produce the work need to know that salespeople understand their process and deliverables and won’t oversell their capabilities or overschedule them. They also need to trust that salespeople will help to bring in enough work to keep the company or business unit afloat, and can manage workflow effectively. Salespeople need to be able to trust that production staff can deliver to clients and nurture relationships that have taken a long time to build. I advocate for a flexible, fully collaborative team process in sales, where dedicated salespeople initiate projects, facilitate project handoff to project managers, and team up with principals and others in building client relationships and closing deals.

I believe that consummate salespeople, contrary to many prevalent mental syterotypes, are not primarily motivated by money but by the practice of service, of giving value to people and projects by making things happen. They genuinely enjoy people and love building relationships, facilitating connections, and making deals. This notion of the professional salesperson is entirely consonant with the altruistic values that motivate many if not most AEC professionals and is necessary for the revolution in building practice that is upon us with green and sustainable design. We all want to build and create and improve the world- one of the best ways to do this is to integrate best practices in sales with those in design, engineering and construction.

Thursday, November 17, 2011

Strategic Selling in AEC Part 3: Why Have a Sales and Service Focus?

This is the third of a four part series of posts on the sales culture of the Architecture Engineering and Construction industry (referred to below as AEC): how it needs to evolve to meet the demands of a rapidly changing industry, and what you can do in your company to integrate sales and customer service more fully into your entire organization.

If you’re an AEC firm, I advocate retooling your business culture to be more sales and customer focused for a host of reasons: perhaps the first would be that true professional sales people will be able to see all of the endless list of problems and challenges detailed above as opportunities, for that’s indeed what they are. Another crucial reason is that you can probably assume that many of your competitors are likely to be stuck in an anti-sales mindset for the foreseeable future, so you can have an advantage in starting a new approach sooner, although the smart AC companies have been onto this for sometime. Let’s look at it from a purely business standpoint.

A typical sale in AEC, let’s say for an architectural firm, involves many millions of dollars, a highly consultative process with many partners, vendors, solution providers, design consultants, and government agencies. There’s always lots of grinding rounds of qualification and competition even to get to a bid situation. And there’s always considerable negotiation around fees and budgets, before and after winning the project, if you’re lucky or skilled enough (or both) to do that. There’s a very long sales cycle, years in many cases, and the project cycles are quite long, meaning that considerable sales activities and negotiations always happen after the project is won- upselling, change orders, scope changes, revisions to designs, schedules, budgets, and deliverables. And presenting conceptual designs and solutions also involves “selling” of sometimes new and crazy ideas. All of this costs a lot of money relative to the fees that can be billed to clients- I don’t have the data, but I’m always amazed at the average cost of sale for an architectural firm. These days it’s higher than ever, especially since most clients expect a lot of competitive design for free, even if it’s not specifically requested in an RFP. This all adds up to a very complex, long term, high stakes, consultative sales process with many moving parts. Why would you not want a seasoned, highly competent sales professional (or better yet, a team of them) in charge of this process?

The sales process in AEC is generally ideally suited for solution selling, as most projects have a multitude of problems to solve before the project is awarded. So many project pursuits for larger projects involve full schematic design phases that there is significant overlap between sales activities and design activities in terms of teaming with clients to solve problems. These phases are good opportunities to integrate sales and design activities. Designers may not be comfortable with sales but are usually hardwired for solving problems.

Let’s look at a few opportunities. Green/sustainable design has been mainstream for years, and firms that specialized in it five years ago have a big head start. But if you’re late to the game, there are still ample opportunities to retool and develop sustainable practices. Growth in this sector is projected to be 250% by 2015. Many innovative firms are rending toward integrated services beyond their core disciplines of architecture, engineering and construction. many new service sectors: strategic planning, extended programming and planning, building commissioning, high performing envelope and fa├žade design, modeling, user experience assessment, existing building assessments, branded environments, LEED, energy services, operations and maintenance, to name a few. Compliance based work (energy and water efficiency, GSA, military, federal mandates) LEED based design will provide a rich source of business as codes governing energy and water use continue to change. Tax incentive driven projects, based on energy and water rebates will also provide work. Commercial developers, institutions, and government agencies all need innovative solutions for higher performing buildings and more flexible and sustainable environments, with better indoor environmental quality that promote work/life balance and employee health and productivity. Green and sustainable retrofits will provide a big source of business, as capital spending for new construction remains low and building owners rethink the ROI on their existing building stock. As owners as they become more sophisticated about AEC services, they will go direct to consultants more and more, and firms that provide a collaborative, consultative, integrative sales and design process will have a competitive advantage.

Next: Part 4: How to Rethink the Sales Function

Monday, November 14, 2011

Strategic Selling in AEC Part 2: Challenges for AEC Sales in Today’s Economy

This is the second of a four part series of posts on the sales culture of the Architecture Engineering and Construction industry (referred to below as AEC): how it needs to evolve to meet the demands of a rapidly changing industry, and what you can do in your company to integrate sales and customer service more fully into your entire organization.

The harrowing global economic crisis has brought a host of pestilence and plagues upon our heads in most industries, but in AEC we face unique challenges. To head up a dauntingly long list, the current state of the RFP (request for Proposal) process alone is one of the biggest challenges. All the AEC sales professionals I know have commented on the dramatic decline in quality in RFPs in recent years- and they weren’t that good to begin with. There are many deeply imbedded reasons for this, but many RFPs are put together by people whose business is not building projects- most clients manage only a few building projects in their entire lives (the exception being municipalities, government agencies, or educational institutions that have professional project managers on staff to handle long term capital improvements- but these kinds of clients have their own set of shortcomings when it comes to RFPs.) Behind the poor quality of RFPs is the obvious buyers’ market situation: construction and capital spending has slowed down dramatically, competition is even fiercer than before, and owners are exploiting this situation relentlessly. There’s no incentive to do better RFPs, or even treat AEC firms with respect, as there will always a firm who will come along and rewrite the RFP for free, hoping for a competitive advantage in selection. (While this happens in a good economy too, the situation is exacerbated by a down economy).

The next plague visited upon us is disruption caused by global competition. In the U.S. in recent decades, we have steadily allowed our manufacturing and agricultural bases to erode, and now we’re allowing our professional services base to erode as well. Sure, we can now compete in global markets, but many AEC firms in Asia are no longer content to provide production while we provide the innovative designs for projects, and high unemployment at home is draining many professionals off to other countries. It’s now clear that it’s a huge mistake to adhere to the cultural notion that the U.S. has cornered the market on innovation. As global economies mature, their ability to innovate will grow exponentially- many, like countries, like China, have highly trained and educated technical workforces and are already building a capacity to innovate competitively. On the other hand, rapidly improving communications and design and prototyping technology and evolving delivery methods are opening up regional, national, and even global markets for even smaller AEC firms. Globalization is driving the need to sell differently, and to sell new solutions, not just design or construction services, but operational, management, and other consultative services.

To continue elaborating on the plagues of disruption, the emerging forms of integrated design practices and new, often hybrid, project delivery methods are encouraging and necessary developments, but they’re also key disrupters. Roles are changing and blurring, and better (not necessarily more) communication is at a premium. Design/build and all its different flavors and permutations are not ideal for all projects, and it’s causing some backlash in certain sectors. There’s a lot of focus on rapid prototyping and up-front conceptual design, and a dramatic increase in continual cost modeling. BIM is really the elephant in the room, and is realigning roles, responsibilities, deliverables, incentives, and the entire design process, often for the benefit of owners and contractors, but not necessarily for traditional design firms.

Other factors impact sales on AEC today. Industry consolidation is taking away some opportunities for smaller firms, and creating others. Much of this consolidation means that larger firms are able to offer more highly integrated services, but there is also an emerging range of new highly specialized services that only smaller firms can provide. Flexibility in design is at a premium as dynamic changes in many sectors, such as science and technology, make it more difficult to predict the future uses of critical facilities and other building types. Increasing globalization is presenting more cultural and communications challenges: learning to work within the context of different regional building practices and regulatory environments has a considerable learning curve. As AEC professionals become more sophisticated about building globally, they’re gradually learning that importing building types from different climate zones isn’t always a good idea- glass box skyscrapers in Malaysia are a totally different proposition than in Manhattan. Global exposure means that designers and builders must adapt to new regional building practices, and this also presents many opportunities to learn from traditional practices that are more inherently green and sustainable.

Perhaps the biggest sales challenge in AEC today is the need to deliver truly sustainable design and high performance buildings at no premium cost: clients and owners are demanding higher performing buildings in order to attract, motivate, retain, and get higher productivity from employees. But the value proposition for deep green building is very often not fully understood or communicated correctly. Continuous cost modeling, rapid prototyping, and high technology can aid in designing and creating deep green buildings, but ultimately it’s a sales challenge- their whole-system benefits and ROI must be compellingly conveyed to investors, owners, partners, governments, and other stakeholders if green projects are to be approved and building practices revolutionized.

Next: Part 3: Why Have a Sales & Service Focus?

Thursday, November 10, 2011

Strategic Selling in AEC Part 1: Sales is a Dirty Word

This is the first of a four part series of posts on the sales culture of the Architecture Engineering and Construction industry (referred to below as AEC): how it needs to evolve to meet the demands of a rapidly changing industry, and what you can do in your company to integrate sales and customer service more fully into your entire organization. I’ll talk about traditional attitudes toward selling in AEC and show how these are no longer effective; discuss new challenges to sales and growth; outline what’s now required to adapt to rapidly evolving economic conditions; discuss dynamic strategies for brand management; show how to identify and sell new services; discuss how to integrate sustainable design into your practice; and how to transform your business by building and maintaining a more collaborative and customer oriented focus throughout your organization.

How can improved sales and customer service in the building industry contribute to a greener world? My logic is that improved quality in building necessarily involves dramatically improving the energy efficiency, performance, and resilience of buildings, and that a big part of improving the building industry is improving relationships with customers. Also, the innovation necessary to make green building practical, affordable and pervasive is by no means the exclusive responsibility of designers and engineers- salespeople have a crucial function in making this happen.

The economic downturn has forced many AEC companies to come to grips with reality in sometimes unpleasant ways. Hunkering down and pulling back on marketing and sales investments my look like a good cost cutting measure in t he short term, but isn’t a good long term strategy. The smaller firms that survive into the next upturn will have adapted to widespread economic dislocations at the regional, national, and global scale. An often overlooked but key part of adapting well is improving sales, communications and customer service. Some larger firms can be more insulated from the downturn because of their available resources, geographic reach, and stronger brand value, but they are also more likely to have a specialized sales focus in their organizations (even if they don’t call it that). AEC companies today need to recognize that a fully integrated, consultative sales function is the main driver in company growth and profitability, and to focus specifically on building, rebuilding, and improving sales activities and practices.

Part 1: Sales is a Dirty Word in AEC

Over the past few years working in sales and marketing in AEC, I’ve been continually surprised by the culture clash that happens around sales in many firms. I’ve been told many times not to use the “S” word, that “we don’t do that here.” So we can call it business development, if we follow the logic that adding more syllables, bigger words and fancier labels (as architects and engineers are often fond of doing), confers value to an idea. AEC is not the only industry with an anti-sales bias, but it seems particularly puzzling here to me. High level solution selling is absolutely crucial to this industry, as I’ll discuss in detail later, but there’s a pervasive anti-sales stigma that prevents many, if not most firms from developing a strategic sales approach that could dramatically improve their practices. History plays a part in this bias: architecture as a consulting practice in the modern era evolved in part as a service to the aristocracy, with the rise of the “gentleman architect” in England particularly: vestiges of highly stratified class distinctions, with their attendant disdain for crass commercialism (and especially the “trades”) probably account for some of the bias.

It’s fascinating to analyze AEC sales culture from a business standpoint: one discovers all kinds of irrational behavior and cultural idiosyncrasies. To begin with, gauging fees as a percentage of construction costs is a broken model, especially given the increasing focus on building performance and the rise of Integrated Project Delivery. Typical sales compensation structures in many industries are based on the volume of orders for materials and equipment, rather than on “intangibles” like services or efficiency: this model can’t adequately account for the value that design and construction professionals provide. Often the most valuable function of most AEC consultants is to figure out how to do more better with less. Even over the short term, smart design can save enough money on construction and/or operating costs to more than offset design fees. This fact presents one of the biggest challenges to selling design and consulting services in AEC. In a sales situation where costs for materials and equipment are a big focus, as with all construction projects, demonstrating that higher fees for design and other services are a good payoff in the long run requires a sophisticated, consultative, strategic sales process.

Another unique aspect of AEC is the nature of competition and the ways in which project teams are formed- a typical building project involves so many different types of design and construction professionals that knowing and playing well with everyone in your regional environment is a critical part of the sales process. The ability to build highly effective teams across many disciplines is a defining characteristic of the effective AEC salesperson. Also, the tightly knit quality of regional AEC communities means that most firms are used to going head to head with competitors one day on one project, and collaborating with them to win another project the next day. The traditional adversarial attitude between designers and the “trades”, i.e. contractors, especially in light of the “percentage of construction” compensation models also impacts the sales process considerably, and must always be negotiated carefully. New project delivery models and design technology like BIM are helping to change the adversarial relationships into collaborative ones, but much of the BIM revolution is being driven by contractors, who realize the profit potential in the new technologies. The disruptions to all AEC job functions that are resulting from BIM must be well understood by AEC sales people and executive staff.

There are many other factors behind the lack of sales focus in AEC. AEC professionals (old and young) typically receive little or no sales or business training in academic institutions, which are largely concerned with physical design and construction and rarely with the social process of design. Cultural assumptions about personality and job function match up keep talented designers at their desks pumping out drawings rather than developing relationships with clients, when they need to do both. A deep seated “personality bias,” which holds that some people are natural sales people while others are technical people, contributes to this behavior. Connected to this factor is the bias toward assigning sales functions to principals and practitioners rather than to dedicated sales staff. While it’s essential to have everyone involved in the sales process, project leads and principals have the highest billing rates, and sales activity is typically non-billable, so there’s financial risk in assigning too much time to them for sales. They also tend to gravitate to what they know and love- to producing work rather than finding it and bringing it in.

Another factor, the legendary “feast or famine” behavior in AEC firms also keeps principals focused on staying billable in the short term, rather than engaging in the strategic sales and marketing required to win projects with very long sales cycles. This behavior is typical in small firms, which comprise the majority of the AEC industry. Even the bigger firms were small firms once, and are populated with former practitioners from small firms: this sales behavior is deeply ingrained in the industry. Without a culture that values client relationships over technical expertise, most practitioners would rather design or build rather than sell: some don’t even want clients at all, they just want to make perfect buildings or systems, which is why there usually aren’t any people in project photographs (they just mess up the buildings!). A factor that is somewhat irrational in light of a disciplined sales focus is design firms’ profligate indulgence in design competitions, exacerbated by the pressures of the economy, and by owners and clients abusing this practice to astounding degrees. This practice adds more cost to an already high cost of sale for most AEC design firms. Finally, there is a general lack of designated skilled sales staff in many AEC firms, and principals who have no inclination or respect for the sales process are often pressed into service as sales people when business drops off.

Business as usual - where only a few key principals bring in all the work based on long term comfy client relationships, and sales, marketing, and customer service are afterthoughts to design, winning awards, and getting published – isn’t going to cut it in this economy. It’s also not going to cut it when (or maybe IF) there’s a recovery, as the game will have changed considerably by then. There will be new rules, and a whole host of leaner, meaner, global players on the field. The firms with the strongest evolutionary advantage will be those who have fully integrated sales, marketing, and communications functions across their entire organizations, who provide cross training to technical people and sales people; who can balance the skills and responsibilities of principals, production staff, and sales and marketing staff; who can manage their brands expertly through a robust system of developing and nurturing customer relationships and processing feedback; who see improved communications in the service-Intensive AEC industry as a part of continuous quality improvement, and good design in the full sense of the word- as it applies to designing companies and processes, not just buildings and environments.

Next: Part 2: Challenges for AEC Sales in Today’s Economy

Monday, November 7, 2011

Beyond Hope and Fear:
How to Beat Green Battle Fatigue and Stay in the Game

I identify as a Green Warrior, since you’re reading this perhaps you do too. Since the early 1990s, I have been involved in three initiatives with a common thread of sustainability: New Urbanism, electric vehicles, and green building. During this time I became aware of the need for radical change in our entire infrastructure, and also of many deep and pervasive interconnections between all global initiatives that may fit under the “sustainability” banner- initiatives around water, energy, agriculture, women’s rights, social and environmental justice, evolving political systems…and a lot more.

Green Warriors work in many fields and types of organizations - green building, communications, fair trade, environmental disciplines, non-profits, government agencies, even the financial sector. When I worked in a green mechanical engineering firm, I used to scoff at what I called the Bamboo Floor People, the “greenwashers.” We Green Warriors know we need significant advances, not tiny incremental ones, and it’s much easier to put recycled bamboo flooring in a building and call it green than it is to push hard to install a highly energy efficient HVAC system that is ultimately much greener. But lately I’ve realized that since all our efforts are so interconnected, and that we’re all becoming more aware of it, some of the greenest initiatives are about not recycling or rooftop gardens or great building systems but about equalizing the distribution of power, wealth, and health. Green building and energy efficiency promote social justice and vice versa. So for my own purposes I’ve redefined green and sustainable to be widely inclusive. All over the planet now, people are coming to the same conclusions by very different paths.

As Green Warriors, every day we fight the inertia, risk aversion and resistance to change that threaten to imperil our planet and our species. We find ways to present ROI on green projects that are almost irresistible but are dismayed when they’re rejected for reasons we or our clients barely understand. We’re acutely conscious of the scale effects of the smallest decisions: a specification of a system component; a new hire; pursuing or accepting a new project or client; separating our trash; driving or walking; turning off the water or the lights.

But most of us believe on some deep level that we’re on a short fuse to total ecological meltdown and widespread economic and social failure, and that in view of global warming, in order to survive as a species we must effect widespread, fundamental, systemic change within a time frame that we know is impossible. Nevertheless, we who choose to fight rather than flee soldier on, by turns warmly optimistic and bitterly fatalistic. The more I learned about the rampant waste and inefficiency in our entire culture, the worse I felt about the current state of the built environment. It’s now almost impossible for me to enter a building, a neighborhood, or a city without noticing wasted energy and inefficient design. I feel this most when I’m deep in the Heart of Sprawl – trying desperately to exit some generic big box parking lot, cursing traffic engineers, zoning codes, big box retailers and the desperate, failing, pliant communities that they prey upon.

Not to trivialize what our military personnel go through in our recent wars (necessitated largely by energy security concerns), but we Green Warriors suffer from a kind of shell shock or battle fatigue: a sense of utter futility when we finally face the sheer size and scale of the imbedded inefficiencies and wasteful and destructive technological underpinnings of our built environment, our transportation systems, and our manufacturing and agricultural infrastructures.

We Green Warriors typically focus most of our energy on setting examples, on telling positive stories, on selling win-win-win and “triple bottom line” solutions and projects to clients, with varying degrees of success. But I suspect that there may be a widespread morale problem that we don’t talk about too often because a lot of our behavior is at root somewhat both altruistic and idealistic – in our zeal we are afraid to counter any doubt or admit defeat. We also take an adversarial approach to the “other side” and feel that if we don’t keep the pressure on, all will be lost. These reactions are entirely understandable, but we’re still often operating largely on either hope or fear. We need to address our own hidden morale problem, and take a closer look at reality.

The first remedy for Green Battle Fatigue is assessing what Tony Robbins calls our “evidence procedures.” Both hope and fear usually involve making decisions based on very little evidence. For instance, today the Republicans are stoking fear of change by claiming that increased environmental regulations will damage the economic recovery, but there is little evidence for this, in fact the opposite is true: recent history shows that increased regulations (such as tighter energy efficiency standards) usually have a positive effect on the economy. We forget that we have ample evidence that green and sustainable initiatives are pervasive, successful, and happening at scale all over the planet: we tend to ignore success stories in favor of apocalyptic scenarios. The behavioral aspects of the hope-fear dichotomy that makes apocalyptic thinking so easy are complex and fascinating, and understanding them and learning to manipulate them is crucial to effecting widespread change. But let’s continue to collect the data and use it to our advantage.

Next, we need to envision the future in a more positive and realistic way. There’s no question that in the general media today, apocalyptic scenarios prevail. But we have on hand several visionaries like Jeremy Rifkin and Amory Lovins who provide detailed, evidence-based descriptions of a future with energy security, balanced budgets, fewer wars, equalized distribution of wealth, clean air and water, ample food, and a balance between humans and the environment. We need to be creating broad, shared, compelling narratives, mythologies, theories, and models for the future, based on examples of success in history or in the present, on a wide scale, beyond single projects. These must be shared by everyone - the general public, who must vote at the ballot box, the store, and at work; technologists who deploy large resource intensive systems; thought leaders who inspire action; politicians who must find a way out of economic and political problems; and designers, engineers and architects who must develop and execute projects on many scales that are at the heart of the necessary transformations. Our visualizations of future cities have to progress beyond glass box high-rises sprayed with plants (the Organic Jetsons aesthetic). Designing better, more sustainable cities is particularly crucial given the global trend toward urbanization and increasing density.

Connected to envisioning the future differently is dreaming big, very big, perhaps bigger than you may be comfortable with. It’s counterintuitive to step out of our comfort zone in a recession, but in many cases we may have no other choice. For instance, all over the country municipalities and state governments are being forced to try new things, including previously dismissed green initiatives, because they’re out of money. Green initiatives generally create jobs, improve living conditions, and increase tax revenue while saving energy and reducing environmental impact: dire times my provide fertile grounds for implementation on a number of fronts. More importantly, as Daniel Goldstein points out in his book “Invisible Energy,” when you adopt an evidence procedure and do the math, there is really no downside to thinking really big in terms of future energy reduction targets- contrary to the claims made by most Republicans today, energy reduction efforts will not result in lost jobs or a slowed economy- the opposite has been shown to be the case historically. From a careful risk-reward analysis, it turns out that the real risk is in business as usual, in fighting to maintain wasteful inefficient, financially ruinous practices and systems in the face of strong evidence against them.

Another step in overcoming Green Battle Fatigue is to get some perspective about time scales and global warming. This is particularly difficult to do, as we’re told constantly by scientists that it’s too late, we’ve already passed the carbon tipping point. While we don’t have consensus on the true extent of our ability to impact the future, we do have enough solid evidence that we must reduce carbon output. But the best way to deal with the global warming issue as Green Warriors is to realize that all of the things we must do (and are doing) to combat it – tighter emissions regulations; higher energy and water efficiency standards for buildings, cars and industrial plants; halting global deforestation; reinventing agriculture (to mention a few) – we should be doing anyway, for many other economic, political, ecological, and social reasons. We’re already seeing the effects of climate change in increased natural disasters and shifting weather patterns- adaptive green design will make buildings more resilient to natural disasters as well as more energy efficient. Climate change means that many parts of the world will get more rain, while others will be dryer- this will drive adaptations in agriculture, and provide opportunities to replace systems based on synthetic petrochemically intensive fertilizers with more robust systems. Decentralized power grids will prove more resilient and provide cheaper, more reliable energy. Gradually, the realization that solutions with multiple positive outcomes are preferable will become a greater part of the decision making process for political and economic systems all over the planet.

Finally, we need to be engaged closely with our audiences and our clients by apprehending and communicating interconnectedness. This is challenging and difficult given the nature of media and the way the brain works. We want simple stories, and interconnectedness is complex and hard to process. But we can be creative in how we do this: just to grab a random example from the movies, in Avatar, the planetary organism that the Na’vi plug into is a great metaphor for interconnectedness: it’s a blend of real things like neural networks and hyphae or mycelium networks that are the largest living organisms on earth. On a practical level, apprehending interconnectedness means facilitating the natural evolution of “multiple win” initiatives, and being able to find and communicate a real, credible “win” for every stakeholder in any new proposal.

Connecting with our clients, our communities, and our colleagues is crucial to our personal sense of having an impact, and this more than anything allows us to overcome Green Battle Fatigue syndrome. When we’re dreaming and planning big, it really doesn’t matter if we’re wrong about the details - we won’t know unless we try, and the things we should be doing are necessary on many levels at once. But it does matter that we’re planning, and it matters even more that we maintain a real, vivid, evidence-based vision of the future and our ability to impact it positively on a personal level. This will give us the inspiration we need to stay in the game and win.