7 Characteristics of High Performing Firms. Smartsoftware Seminar
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1 7 Characteristics of High Performing Firms Smartsoftware Seminar
2 Key Characteristics 1. Rock Solid Reputation 2. Determined Leadership 3. Enlightened Management 4. Well Managed Projects 5. Innovative Culture 6. Forward Thinking 7. Financial Performance
3 What is a High Performing Firm? Financial Performance: 15% annual profit year after year. Valuable Design: As seen by clients and fellow professionals. Healthy Work Environment: Employees like working there. Viable for the long term: Succession plans are in place.
4 What Is a High Performing Firm? Selection Criteria for High Performing Firms: Net Labor Multiplier 15 +% Operating Profit
5 Size Breakdown of High Performers 25% of all firms qualified as HPFs 28% of Small Firms (1-50 employees) 23% of Medium Firms ( employees) 24% of Large Firms (251+ employees)
6 1 ROCK SOLID REPUTATION A clear identity, a purpose and an easily understood area of expertise Mastery, a hard-earned reputation Expertise, Service, Quality, Successful Projects Reputation puts you on the short list
7 1 ROCK SOLID REPUTATION Question: Does your firm have clear identity (a brand) and does it cultivate its reputation?
8 2 DETERMINED LEADERSHIP Leadership that is committed, determined, persistent and passionate about its goals. Ability to communicate vision Strong people skills Takes risks, learns from failures Optimistic, never gives up Celebrates, celebrates, celebrates
9 3 Enlightened Management The difference between leadership and management Leadership is outward focused Management is inward focused People their talents, knowledge, skill and experience are the firm s assets Shape the management approach to maximize the assets
10 3 Enlightened Management Great managers place talented people in the right positions Things a manager must do well: Select the right people Set expectations Motivate Develop people
11 4 Well Managed Projects High Performing Firms have strong project management habits A Sound Agreement with Scope & Fee A Project Plan An Experienced Project Manager Habits, Routines, Guidelines
12 4 Well Managed Projects Conscientious Project Planning Break projects into phases and phases into tasks Separate work into smaller and smaller tasks Set milestones for phases and deadlines for tasks As each phase advances, bite size the tasks Identify subtasks and assign staff on a weekly basis
13 4 Well Managed Projects Firm Milestones for: QA/QC at specific points for specific components Review and coordination with consultants Review and coordination with client Seek continuous feedback throughout the project
14 4 Well Managed Projects Cultivate repeat business by focusing on relationships Strong personal, long-term relationships at all levels Treat every project as if it were your only project Build a reputation for service, attention and quality
15 Short Detour - Expand on PM Culture A strong PM culture is critical to the success of your firm The 3 pillars of PM excellence 1. Building strong and effective PMs 2. Creating an environment that enables them to be successful 3. Instilling accountability across the organization
16 Why a Strong PM Culture is Critical to the Success of Your Firm
17 There Are Many Ways Your Firm Can Spend Money There is only one way it can make money on projects
18 Strong PMs Are Seller-Manager-Doers Typical PM Roles Plan Organize Direct Control Additional PM Roles Up-sell and cross-sell Close new deals Design/technical direction Earn THE profit Bill the client Secure payment Where to Find Time? PM 10% RULE:
19 Your Firm s Future Depends On It
20 Direct Impacts Claims Client Retention Employee Retention
21 Pillar 1: Building Strong and Effective PMs
22 What Makes a Great PM?
23 What Makes a Great PM? Follows through (on commitments and on others commitments) Good listener Proactive Nails every aspect of job Leads by example Good communicator Backs decisions of team members Organized Handles multiple priorities well Technically proficient Holds people accountable Delegates well
24 A Strong PM is Like a Great Server in a Fine Dining Restaurant 1. Explain all the scope options offered? 2. Make sure customer understands firm's pricing structure? 3. Understand the scope that the customer wants before starting the project? 4. Communicate desired scope to project team? 5. Assure that project team prepares work product per customer s desired scope? 6. Deliver it in a reasonable time? 7. Periodically check with customers to see if they desire additional scope items? 8. Deliver invoice as soon as project is completed? 9. Assure that customer pays invoice? 10. Incentivized to provide excellent service to customers?
25 Best Practices A vision created by senior management Clear company-wide standards Efficient processes Functional professional development Formal project management training Mentoring to enhance skills (team management, public speaking, etc.) Consistent accountability
26 Every PM Needs A Development Plan PM Duties/Authority Current Vision Manage proposals for the projects he/she will ultimately manage No Yes Prepare the fee budgets for their projects Occasionally Yes Actively participate in fee negotiations with clients No Yes Actively participate in selecting their project team members No Yes Actively participate in performance evaluations of team members No Yes Able to get non-performers removed from their projects No Yes Control design and technical decisions (within the overall constraints of firm policies) Yes Yes Stay in firm control of their project budgets Usually Yes Stay in firm control of their project schedules Yes Yes Maintain the day-to-day relations with their clients Yes Yes Sign and seal the drawings (in states where they are licensed) No Yes If there is a collections problem, directs the collection efforts Participates Yes Really feel accountable for the success or failure of his/her projects Yes Yes
27 Pillar 2: Creating an Environment That Enables PMs to be Successful
28 Best Practices Templates and tools to comply with standards Efficient, well documented processes Workflows from PM system to provide real-time project insight Insight into project financial performance Support from senior project manager or principal
29 Establish a Partnering Relationship Between Principals and PMs Activities Project Manager Principal Fee proposals Prepares Approves Fee negotiations Participates Directs Team selection Requests Approves Performance evaluations Inputs Performs Removing non-performers Recommends Acts Design/technical decisions Meets standards Set standards Client relations Maintains Client Sponsor Future work Secures Approves Accountability Maintains Rewards/punishes
30 1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 1-Jan Give PMs the Tools They Need to Do Earned Value Management $173,790 $156,411 $139,032 $121,653 $104,274 $86,895 $69,516 $52,137 $34,758 $17,379 $- Planned Expenditures Actual Expenditures Earned Value 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
31 Pillar 3: Instilling Accountability Across The Organization
32 Best Practices Senior management o Management sets the standard! o Rigorous project reviews at least monthly PMs o Document compliance with required actions o Project plans current and scope changes addressed with management o Standard escalation steps followed if project falls behind with budget or schedule o Monitor KPIs monthly and take action when project performance is below benchmarks Finance o Partner with the PMs information sharing, training
33 Client Evaluations How One Successful Firm* Evaluates Their PMs Exceptional Excellent Exceeded Expectations Met Expectations Acceptable Needed Improvement PM # PM #2 3 PM #3 4 PM #4 Unacceptable * Reproduced courtesy of ClientFeedbackTool Much Below Target Profit Below Target Profit Target Profit Profitability Above Target Profit Much Above Target
34 10 Things Principals Must Know About Their PMs Projects 1. Is the job set up properly in the accounting system? 2. Has a Project Management Plan been prepared and distributed to the team? 3. Are there pending change orders that need to be formalized? 4. Has the job been billed recently? 5. Are payments current? 6. Is the job running over or under budget? If over budget, what corrective actions are being taken? 7. Is the project on schedule? If not, what corrective actions are being taken? 8. Are our QA requirements being followed? 9. Is the client happy? 10. Is there more work coming up with that client?
35 We Don t Recommend This Method CFO Principals Project Manager
36 You Can Get the Answers By
37 Or You Can Schedule Formal Project Reviews
38 Selecting Projects for Formal Reviews % Spent varies significantly from % Earned % Earned = % Spent High risk projects High opportunity projects Strategic client projects
39 One Firm s Project Review Process 1. All PMs submit Earned Value reports to their Office Managers each month. 2. Each Office Manager in conjunction with the Regional Manager will select a day each month to conduct project reviews. Time allocated will be 30 to 60 minutes per PM, at the discretion of the Office Manager. Office Managers will have a schedule in place on or before November Office Managers will advise Regional Managers, PICs, COO and CFO which projects are scheduled for reviews each period. Regional Managers, PICs, COO and CFO will attend at their discretion (either in person or via web). 4. Each PM must present at least one project each month. If the Office Manager is also the PM, the Assistant PM will present the project 5. Project reviews will include both PowerPoint and Excel templates (plus other clarifying management information that the PM may want to include) 6. The COO monitors the implementation of this process
40 5 An Innovative Culture Change is the one constant How fast can you find out about a competitor, a client, a partner? How fast can a client find out about you?
41 6 Forward Thinking Performing well over a long time requires thinking 10 or more years ahead What do you want to accomplish?
42 7 Financial Performance A business mindset and discipline to grow revenue and make a healthy profit year after year Attention to these financial issues is as much a focus of the leaders and managers as is design, marketing and managing the practice.
43 7 Financial Performance Strategic Reinvestment of Profits in Technology and Equipment Emphasis on technological advancement and improving efficiency Plan and commitment to integrate technology across the firm
44 Key Characteristics 1. Rock Solid Reputation 2. Determined Leadership 3. Enlightened Management 4. Well Managed Projects 5. Innovative Culture 6. Forward Thinking 7. Financial Performance
45 Q&A
46 Thank You! Mike Bourgeois
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