When an award is “pre-wired”

On Thursday this last week Matt Handal of Trauner Consulting Services, Inc. sent several marketers that I have a great deal of respect for a draft of the article “Learning to Accept the Three Card Monte.” The article discusses the practice of “pre-wiring” solicitations by procurement professionals.

It caused quite a stir, including two great posts at the Construction Marketing Ideas blog (including the thoughts of Ellen Moore at Aker Systems in Houston and Frank Lippert of David Evans and Associates, Inc.). This led me to two questions that I believe must be answered in light of the article:

Is it ethical to benefit from a “pre-wired” solicitation?

To start, lets differentiate two types of pre-wiring. The first is “Incumbent Pre-Wiring” and the second is “Illegal Pre-Wiring.”

What most people perceive as ‘pre-wired’ is often simply an existing incumbent relationship that has exceeded the client’s expectations to a point where they do not want to take on the additional risk of trying a new company. Incumbent Pre-Wiring is a good thing as it allows clients to maintain relationships with firms that best meet there needs. It ensures that clients receive the best service throughout the project and it is the mechanism that allows clients to refuse to hire a firm that does not meet expectations. One thing to note about incumbent pre-wiring is that it still allows for other firms to compete for the work in the framework of fair procurement.

Illegal Pre-Wiring is another story. It is the practice of illegally manipulating procurement rules or results to ensure that one firm wins. Let’s be clear here: it is not ethical to benefit from Illegal Pre-Wiring.

How should you respond when you see a “Pre-Wired” solicitation?

If you are dealing with an Illegal Pre-Wired solicitation there is only one answer, you should have nothing to do with it. If you want to debate this issue just look at the governing bodies of every professional discipline (AIA, PE, LA, LS, CPSM, etc…), all have very strong ethical guidelines and, if not followed, can result in the loss of licensure or certification.

If you are dealing with an Incumbent Pre-Wired solicitation as an outsider you need to evaluate your goals with regard to pursuing work with the client. Remember, relationships are everything in business and you should evaluate the pursuit from that standpoint. I do not believe that you should put together extensive or specialized marketing materials simply as a brochure. Rather, focus on developing a path that you can follow that will result in a strong relationship and the opportunity for obtaining work.

If you are dealing with an Incumbent Pre-Wired solicitation as the incumbent, congratulations! You have succeeded in developing a strong relationship with your client that is based on trust and (most often) strong performance. Do everything possible to make certain that your client follows ethical standards of fair procurement, and enjoy.

Networking with a Newspaper Article

Wayne Cobleigh, Manager of Project Development at GZA GeoEnvironmental sent me an interesting article titled “Comfortable Enough to Ask for Business: Networking should be much more than small talk” published in the Hartford Business Journal this week. The author, Carole Donovan of Image Boosters identifies how she believes you can succeed when networking. Although I appreciated the article I was truly impressed that Wayne was practicing the foundation for all good networking relationships: helping others.

Wayne knows that I regularly write and speak on the topic of networking and by taking a minute to pass that article along he strengthened our relationship by selflessly doing something for me without any thought of what I could do for him. Wayne has nothing to gain from his gesture this week. However, over time as we build our friendship I hope that I will likewise find ways that I can help him succeed. This is the foundation of networking: a focus on building relationships by helping others rather than simply selling our services. Have you sent anyone an article lately?

Marketing vs. Business Development

‘Marketing’ and ‘Business Development’ are often used interchangeably in the business community because many people struggle to understand the difference between the two terms. The reality is that Marketing and Business Development have two distinct yet interrelated roles in the sales process. Most businesses define the roles and responsibilities of the two business functions as:

Marketing develops assets and materials that facilitate the foundation for business and relationships.

Business Development focuses on the development of relationships through direct communication channels.

I recognize that this is an oversimplified view of two complex aspects of the sales process, but I have also found that the reason many people misunderstand the difference between the two terms, is because of the drawn-out definitions that we often use to explain their functions. If you are a Marketing or Business Development professional that has a hard time educating staff on these functions then start with these simple definitions and expand on their intricacies after this foundation is understood.

E-Mail vs. Phone vs. In-Person Meeting?

To what extent can you substitute emails for telephone calls and face-to-face meetings when maintaining and developing relationships with clients and other key market contacts?

Four highly respected writers, authors, and marketing specialists are taking on the “E-Mail vs. Phone vs. In-Person Meeting” question through a simultaneous post on there blogs today. I am excited to see the answers and encourage you to check them out as well.

1) Brian Carroll – specialist and noted author on generating leads for the complex sale.
2) Tom Kane – specialist on marketing and selling legal services.
3) Ford Harding – an expert on “Rainmaking” in professional practice, who has written some influential books on the challenges of selling professional services.
4) Mark Buckshon – prestigious blogger and specialist on marketing and selling design and construction services

Changing Corporate Culture: Reward Success

Step 4 – Reward Success

Probably the most widely debated component of the cultural change process is rewarding success. Simply put, the goal in step 4 is to make a direct correlation between the desired culture of the organization and rewards for being apart of that culture. In the example of building a company culture that embraces business development this could include attributing a portion of annual raises to meeting business development goals or having a bonus directly linked to those goals. The important thing to note is that the rewards must be linked to individual expectations (Step 2: Defining Expectations).

Not just money
Rewards do not always have to be monetary in nature, although I have found that bonuses and salary increases are the easiest for employers to implement and for employees to understand. Title changes, parking spaces, and office locations are all examples of non-monetary rewards that I have seen to be motivational.

Why reward success
Organizations usually have pioneers that forge ahead into the new culture rapidly after they understand where management is moving. The importance of rewards is to ensure that they, and everyone else, understand that there is personal benefit to adapting to the new culture. Without step 4 firms often begin the cultural change process but wonder why it is never fully embraced. The reason this happens is that, with time, pioneers will realize they are doing the extra effort but are not being compensated for that effort. By ensuring a clear understanding of this correlation you are ensuring the long-term success of your cultural change.

Culture Change Motivations
Managers often want to believe that cultural change which benefits the company will motivate their employees to active participation in the change. The reality is that, while this should be correct, human nature dictates that this is not usually the case. Through the study of behavior modification we can see that one of the most powerful ways to change behavior is to reward the specific desired behavior. This is reflected in step 4 by rewarding individuals that achieve success that aligns with the new corporate culture.

Four Steps to Changing Corporate Culture
Executive Summary
Step 1 – Educate and Encourage
Step 2 – Define Expectations
Step 3 – Acknowledge & Celebrate Success
Step 4 – Reward Success//
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Changing Corporate Culture: Acknowledge and Celebrate Success

Step 3 – Acknowledge & Celebrate Success

By the time you have arrived at step three in the cultural change process employees should have a solid understanding of the culture that you are moving towards (Step 1: Educate and Encourage) and you should have defined expectations of how they fit into the new culture (Step 2: Define Expectations). The purpose of step three is the long-term acceptance of the change by the staff, not management.

Why acknowledge & celebrate
After seeing many new business ideas come and go over the years, employees innately learn to “wait and see” if change is going to last before they embrace it. Think about the many companies that have unsuccessfully tried to embrace a matrix organizational structure only to revert back to a hierarchical structure. With time, employees learn that many business ideas are initiated and then fade away in short cycles, often over the course of just a few months or years. Because of this, employees often wait to adopt new practices wholeheartedly until they see that the initiative, and their personal investment in that initiative, will succeed. It is for this reason that employee’s must be reinforced through acknowledgement in order for employees to embrace cultural change.

What it looks like
In the example of building a culture that embraces business development, encouragement can be accomplished by the CEO and others in upper management taking the time to walk into individual’s offices just to say “thank you” for bringing work in the door.  This brief moment of acknowledgement will ensure that the individual knows what they did was important and appreciated by the highest levels of management.  In addition to acknowledging employee efforts you can celebrate success through popping a cork on a bottle of champagne when a new client signs up, or with bagels the next morning for the department with a note of thanks. The important thing is to ensure that individual efforts are noted and appreciated. Once these efforts are clearly established through this process it is time to move on to reward the success (Step 4).

Why companies never initiate this step
The primary reasons companies do not succeed in this stage is the large amount of effort that it takes to acknowledge and celebrate success. It is very easy to hire a consultant to provide education, and managers’ typically don’t mind defining new expectations for their staff, but managers must make a purposeful effort to acknowledge individual contributions. Unfortunately, this often goes undone, resulting in the failure of employees embracing cultural change.

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Changing Corporate Culture: Define Expectations

Step 2 – Define Expectations

Originally, John had felt good when he hired a consultant to educate his staff on the culture he was trying to create. During and after the training he had even been encouraging his staff when he saw that they were modeling what they had learned. The problem, however, was that only a handful of his staff really even cared about the new direction for the company. Most were busy doing their jobs just as they always had and didn’t think much about a ‘cultural change’.

Cultural change is more than a one-step process. In the all-to-common story above we can see how managers feel after they begin to implement a cultural change process. The reality, however, is that John has succeeded at the first step. What he sees happening in the office is commonplace and it is nothing less than an indication that he needs on move to step 2 in the cultural change process: Defining Expectations.

The Individual and the Culture
Defining expectations simply means identifying where people fit  and how they should act in the new culture. Note the emphasis on the individual at this step; changing corporate culture is dependent on changing one person at a time. This also means that what is expected of individuals may vary. In the case of changing corporate culture to embrace business development, a project manager may be responsible to achieve specific goals relating to meeting prospective clients while a receptionist may be responsible to learn people’s voices on the phone and address key clients by name.

Cultural Goals
The key to defining expectations is to develop clear and measurable goals for people in the organization. It should not be done in the context of threatening or coercion, but rather by clearly identifying what is expected.  The good news is that the “defining expectations” step is the easiest of the four steps. For decades managers have refined the process of establishing S.M.A.R.T. goals that help their staff succeed. This is simply an extension of the employee goal model that already exists in most companies.

The Most Important Steps
Many companies fail at changing corporate culture because they stop here. It is very easy to hire a consultant to provide education, and managers’ typically don’t mind defining new expectations for their staff. But culture is dependent on the long-term acceptance of the changes by staff, not by senior management. As a result, the most important steps of changing corporate culture are steps 3 and 4.

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Changing Corporate Culture: Educate and Encourage

Step 1 – Educate and Encourage

Educate

In order for someone to succeed in a new culture they must first understand the culture in question. If you were going to send someone from your company to China you would first give them training on how to conduct business in China’s culture. The same is true when asking someone to integrate into a new corporate culture. You must first educate your staff so they know what is expected in the new culture. By doing this you will give them the knowledge necessary to succeed.

Many firms unfortunately miss this critical first step. Often those in leadership positions see the desired cultural shift as “easy to understand” or “something that will just happen over time.” The reality is that your staff is the central key to your cultural change because they are your culture. Humans inately shy away from change that they do not understand. What is exciting to note, however, is that most humans are excited and easily willing to accept change that they see as beneficial. As a result it is important to educate your staff not just so they understand your terminology, but also so that they understand what you are working to achieve and how it will benefit them.

Encourage

Most people understand the reasons that education is a critical first step, but struggle to see why encouragement is such a key component. When my wife and I first started to teach our children the alphabet we encouraged them every time they got a letter correct. After they had learned five or so letters they started to realize that they were capable of learning the letters and eventually they became self motivated as they became excited about how the letters worked in the world around them.

The same holds true for adults. If you receive encouragement (positive reinforcement) along with education it is easier to understand when you are succeeding. The result is a shorter duration to obtaining the knowledge and the development of self motivation. Simply stated, we learn better when we receive positive reinforcement for our actions.

Most often the encouragement we are referring to takes the form of verbal praise when someone incorporates that which they have learned into their job. The important thing is to ensure that they understand what they are being praised (encouraged) for.

What it looks like

Take for example the objective of changing corporate culture toward a culture that embraces business development.  Under this example, the first thing people need to know is how they can be a part of bring work in the door.  This may require training in areas such as networking, understanding the marketing process, and business development. During and after training management should focus on encouraging employees that try out newly acquired skills by simply saying ‘good job…’ and calling out the specific action that was in line with the corporate culture shift.

 

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Roll with the Changes

In his recent post Roll with the Changes on PSMJ Resources Ed Hannan addresses the ever changing face of marketing. I especially like his thoughts on LinkedIn in the last four paragraphs. Namely, he and I agree that LinkedIn has become the business networking site of choice in the United States today. If you haven’t visited the PSMJ Resources blog recently it is well worth taking the time to explore. Also, Bruce posted a great blog today on the same site that will help you determine if you are a seagull manager. Thanks Ed and Bruce!

It’s Not ‘Just Business’

The phrase “It’s Just Business” has become an accepted way to dehumanize important decisions.  The reality is that, in our relatively small industry where relationships are everything, it is impossible to negate the importance of relationships when faced with difficult business decisions.  We cannot suddenly stop making important business decisions, but neither should we selectively disregard the importance of relationships when making those decisions.  To succeed in the long run we need to make people, not business, the primary focus of our decision-making process.

Making Sound Business Decisions
This past year our company celebrated its 30th anniversary with an open house to which we invited as many of our previous employees as we could track down.  We were surprised by what we found: most of our previous employees were still working locally; many were leaders of change affecting our business everyday; and dozens were now our clients. 

Looking at how these former employees have continued to impact our company has reinforced the importance of these long-term relationships.  Sound business decisions should consider not only immediate needs of the company, but also the company’s future, which is based largely on a culture of trusted relationships.  Business decisions made with the “It’s Just Business” philosophy embrace the faulty premise that the company is more important than people.  By making decisions that are best for people we strengthen our companies and build teams that believe in our decisions and leadership even after individual team members depart.

An Industry Built on Relationships
In his blog, Mark Buckshon, President of Construction News and Report Publishing, states that, “You will achieve the highest results if you think longer-term and in the context of giving.” His statement is especially true in our industry, which is a leader in recognizing the importance of relationships as the key to our successes and failures.  It is important to note this as we make business decisions, knowing that others in our company and industry will evaluate our motivations and, based on their observations, will develop trust in our leadership accordingly.

It’s Just People
Many companies have succeeded at making people the center of their decisions.  Some examples include: the company that tries to find new jobs for employees facing layoffs; the manager that mentors an underachiever instead of firing the employee; and the owner who respects seniority when promoting a young project manager over an experienced individual by changing a title or adapting team structure.  Undoubtedly, this people-centered approach to business decisions can be more difficult in the short-term, but most successes are built on long-term, not on short-term gains.

It’s Just Smart Business
Perhaps it is time to give up our “It’s Just Business” slogan and instead focus on the value of every relationship – current and past employees as well as clients.  Next time you are making an important decision think about the potential long-term benefits of maintaining strong relationships. 

This article, written by Tim Klabunde, was originally published in the August 2008 edition of Marketer, the leading marketing publication of the Architecture, Engineering, and Construction industry.