FEDERAL FEAR FACTORS

How to Eliminate Fear and Make Money in the Federal Market

FEDERAL FEAR FACTORS is a new Kindle book I've create to address certain specific issues as to why architects and contractors should examine the Federal Market.

INTRODUCTION

OVER THE LAST TEN YEARS, consistent business has been difficult for many industries, particular construction. Many companies have had a very difficult time surviving.

 Ironically, there were companies that actually did quite well during this time period. When these companies are examined, two noticeable traits emerge.

One, these companies are planners, meaning they used strategic, business and marketing plans to give them an organized tactical approach to the market. Their use of these plans often signaled market changes far earlier than their competition who didn’t use the business planning process, as certain key business indicators outlined in their plan were not met raising red flags.

For example, if directors and manager were having difficulty meeting their annual objectives, then something might be happening in the market impacting their business. This allowed their company to react far faster to seek market niches that had signs of stability. There will be more detail on the planning process later, but it’s clear that business planning (does your company have a strategic, business and marketing plan, and was your business and marketing plan updated this year?) is a very important part of the process. As we shall also see, planning is a key component of entering and being successful in the federal market.

Second, as we know, many very good providers of AEC services and products are absolutely terrified of the federal-military market, both domestic and International. They’ve heard about the problems, and the paper work, and the hassles, so they leave this market to others.

Consider the following, when one thinks about it, very often, just down the street from a contractor who has “federal fears” is another contractor who regularly wins federal projects. It’s a market they enjoy and profit in on a regular basis. They don’t talk about it much, because maybe, just maybe, it’s their little secret. It’s their competitive advantage.

WHAT’S THE DIFFERENCE? Why are some companies scared of the federal market and others not?

There could be many answers to this question, but it basically comes down to this one CONCEPT; what do they know that you don’t know? The purpose of Federal Fear Factor is to discuss these ideas and concepts so you start to understand that the federal/military market can become part of your corporate strategy.

As a business planner in the federal market, and as a strategist helping companies grow and profit, I’m approaching examining the federal market this from the point of view of my capabilities in business planning. To develop the information needed to communicate these issues, I sought counsel with one of the leading, if not the leading consultant in the federal market.

I was pleased to interview Marc Pacino of Ambiente Federal Services, LLC, Ambiente Federal Construction Group, and Anthem Federal Consulting, LLC with offices in Las Vegas, NV, Ventura, CA, Honolulu, HI, Barrigada, Guam, Tokyo, Bangkok.

We discussed a number of issues dealing with the federal/military market. Marc has had enormous success in the federal market and knows exactly what a company should do to become successful. 

As a team Member with Marc Pacino, COMPASS Consultants collaborates on various planning documents needed to enter the federal market. Business plans and other positioning documents are a critical part of the “federal footprint” process. I include Marc Pacino’s corporate experience here so that you quickly understand the enormous knowledge base he has, and how together we can help you become successful.

For More Information, GO TO: 

SECRETS OF CONSTRUCTION MARKETING

The following article on Strategy is part of a new book to be published in 2015.

MARKETING CONFIDENTIAL: 101 SECRETS TO INCREASE PROFITS IN THE CONSTRUCTION INDUSTRY

Essential Tactics You Need To Know about Marketing, Business Development, Business Planning and Strategic Planning. for “Contractors, Subcontractors, Design/Builders, Construction Managers, Architects and Engineers” by Ronald A. McKenzie All Rights Reserved. Copyright© 2015

SEVENTY: What Does Strategy Really Mean?

The Difference Between Leading and Following

In my book on business planning titled Successful Business Plans for Architects I wrote that the term “strategy” is closely associated with military terminology, meaning what an adversary might or might not do. In fact, a dictionary defined strategy as follows:

1. The overall planning and conduct of large-scale military operations
2. The art or skill of using stratagems as in politics and business
3. A plan of action

Likewise, stratagem is defined as a maneuver designed to deceive or surprise the enemy. For our purposes it’s best to say that strategy is a plan of action used to achieve an objective with a given resource. In other words, strategy is related to the goals and objectives and, hence to the mission statement.

It’s also important to understand that there are many strategies and many plans of actions within a given company. Strategy is a name given to a process when addressing a plan of action to accomplish and objective or a goal. To complicate matters, the words strategic and strategy are used in different parts of the plan. For example, you might have a brilliant corporate strategic plan, and a plan’s advertising program is labeled “strategic advertising plan.”

If you think of strategy as a process as opposed to a magical answer, it begins to help you understand the planning process.

MCKENZIE'S SECRETS OF CONSTRUCTION MARKETING #70

“Many companies could improve their competitive positioning by developing more of a strategic approach to their business. What can you do different that creates value and a demand for your services.”

THE WOLF

I was once standing quite alone on the frozen banks of the Yampa River high up in the Rocky Mountains not far from where I lived in Steamboat Springs, Colorado. It was January and it was cold -- about minus 20 degrees. A fresh powder snow had fallen during the night on the Western Slope and everything was white. The Aspen trees blended with the snow and there was no wind. It was absolutely still without any signs of life around the frozen river. As I watched the woods on the opposite bank I looked from one side to the other, and then stopped. I was looking dead on at a very large silver gray wolf.

Uh, Oh, I thought to myself. I was over a mile from my car and had traveled in on foot. My only thought was, I wondered how thick that ice really was?

When you think about marketing, think of the wolf.

Good marketing, like the wolf, is always there, half hidden, watching, and sniffing the wind for danger – like competitors invading your territory. Just like marketing, when necessary the wolf is prepared for fierce battle - defensive to protect their territory, or offensive to gain territory.

In marketing terms - to increase market share. Wolves travel in packs to work together to achieve a certain objective -- such as food so they can survive. They also defend themselves as a pack. So the next time you think about the wolf, think about your marketing program.

 Is your company prepared for battle? Whether it’s a design business or a construction business, you have competition. Competitors are constantly evading your territory. They want your business and are spending money to get it.

 Your competition is just like you, they provide a service that they feel is better than their competition (that's you); they have a network of relationships out there that they are constantly expanding in an effort to get into your market, and they have growth plans. They work in packs with several people taking on the responsibilities of getting more business. Their goal is to take away your business. Like the wolf, you must be prepared for battle. And it isn't getting any easier.

With the Internet, a small upcoming construction company or design firm can take on larger firms head-on. Internet sites can sometimes be misleading, but one thing is for sure, they have one goal, and that is, to engage a prospect, maybe your prospect, in a conversation. Once their foot is in the door, astute business developers start a relationship process that may be very difficult to stop.

Even tougher if the business developer is able to surround their services with VALUE that they provide from day one. Is your company constantly surveying the market to find out what is out there and what is happening that might affect you? When was the last time you did a survey of your clients? When was the last time you developed market research material that can help you focus on developing trends, such as changes in population or shifting economic climates.

This research can help you better assist you in making key strategic decisions. Is your company constantly sniffing the wind for danger, like the wolf? Is your company expanding its territory? Expansion is serious strategic move. It’s expensive as it requires setting up an entire new office that requires manpower. To be done correctly it must be planned far in advance. But expansion also provides the opportunity for the competition to step in the back door of your existing territory as you are focused on the new territory. So, like the wolf, you must constantly be alert.

Does your company work together like a wolf pack? For example, I was talking with a general contractor in California and I asked how he managed his company. His response to my question was that he sets people up to fail, and that gives him the edge to hammer the employees. This is astounding. I asked wouldn't it be better to set a course where there is a chance for everyone on your team to win. In other words, instead of setting the stage for a disaster, wouldn't it be better to have company goals and objectives that everyone has a chance to meet.

This is an example of companies that have a hidden goal where they set the plan several bars above what they really want, and that way, they can keep the pressure on the staff. The actual effect is a disastrous hit on morale as well as employee turnover. Ever have someone out of the blue just leave? These are serious indications that a business is suffering from mismanagement. Of course, with so many companies not having a clear set of company goals and objectives, this is not a problem.

 But when you use a business plan to set the company goals, they must be ones that can be met. Three scenarios will happen:

One, you will meet the goals,

Two, you miss the goal, or
Three, you exceed the goal.

If you meet the goal, you can set the bar higher given the right conditions. If you miss the goal, you can discover the reasons why in a financial, operations and marketing debriefing. If you exceed the goal, then it is an indication you’re hitting your mark with the programs that you have in place, and it supports a reason to be more aggressive with your future planning. So now, the following year, you can look at the last several years' financial statements, and say, "this is the plan." It’s based upon:

• The current economic conditions and environment

• The prior year’s performance

• The amount of money to be invested in marketing

• Specific marketing programs

A plan must be based on all of the above. It must reflect the capital investment, the status of current marketing programs, current economic conditions and past performances. If the economy is going south, then a company must reflect that in their proforma financial projections. The important point is to make sure that a company follows the economic trend. Of course, it would be nice for a company to set record earnings in a down economic time, but the fact is, in order to do this, there must be three conditions:

• The firm must be strategically well positioned, like the territory of a wolf

• The firm must work at a team, like a wolf pack

• The firm must have back-up plans after back-up plans, like a defensive wolf.

BUSINESS PLANNING is a tool whereby realistic goals and objectives are set that can be met and where success can be shared by all. Business Planning is not a hammer.

For information on BACKUP PLANS, see “The Law of the Billiard Table”

http://www.compassconsultantscorp.com/Billiards.html

FOR MORE INFORMATION, go to www.compassconsultantscorp.com

TOUGH ECONOMIC TIMES!

Economy Flutters

I'M STARTING TO HEAR STORIES about construction companies that are closing down. It hits harder when you recognize the firm's name, or maybe even know the people involved. I wonder to myself if it could have been avoided. I wonder what steps were taken on the inside to prevent that decision of letting everyone go and shutting the doors. Then I drive past other construction companies and I wonder what steps they're taking. Are they also in trouble, I wonder? 
            

One important strategy to understand is that Marketing and Business Development in tough economic times is different from a normal economy. Companies that understand this concept gain a staggering strategic advantage.

One of the remarkable marketing misconceptions of construction companies and design professionals is that they believe once you get your marketing program up and running, you're done. Worse yet, many companies CUT their marketing budget when they start to have difficulties. They cut programs, they cut marketing managers and in some cases, valuable business developers. What they don't understand is Marketing MUST Change; it must reflect what is happening in the current economic climate. Marketing must be evaluated based upon the a) the current economic condition, b) your company's goals and objectives, c) your company's services, and d) your company's ability to perform.

All of these parameters can change at any time; consequently, they must be constantly monitored relative to current marketing efforts. Based upon the idea that there will always be change, following are SIX STEPS you can take to MANAGE your Marketing and Business Development in Tough Economic Times:

1) Market your Value

2) Manage your Services

3) Strengthen your Relationships

4) Evaluate your Markets

5) Expand your Company Wide Marketing Efforts

6) Develop a Promotion

This can all be summarized by the word POSITIONING, which is an important part of the business planning and strategic planning process. Ask yourself these questions: Why is it that some contractors prosper and other suffer under the same economic conditions?

Why is it that some contractors or designers always have the ability to attract and hire the best people, while other equal companies can't seem to get the right people in place?

Why can't some companies retain the right people? Why is it that some companies build in several well-defined market niches, and others can't? Even architects have a significant positioning challenge, as they all seem to look alike. Sorry architects, but I'm an architect, and that's what I see, and that's what I'm told. The secret to surviving in tough economic times is positioning: the secret to positioning is unquestionable unfaltering flexibility.

Unquestionable unfaltering flexibility means constant management. It means there must be a core management team in place. This team represents the future of the company; it reflects a training program for managers you are bringing up through the ranks; it reflects a forum where ideas are discussed; it reflects the place where tough decisions are made; it reflects strategy, business development and marketing.

The core management team members are charted with one goal, and one goal only: To implement annual business plan based upon a current strategic plan. A team such as this that is trained in setting goals and implementation, will be far ahead of the pack when there are significant change in the economy. They would have talked about it, planned for it, and taken the necessary steps.

Six Steps you can Take in Tough Economic Times

1) Market your Value. It is important to understand what prospects buy. Prospects buy Value. In the seminars I have spoken at I get the objection that prospects buy price. Low price gets the job. While sometimes this is true, this doesn't explain why often, the second, or even third lowest price wins. Why? The answer is that another contractor has developed a RELATIONSHIP where they have been able to CLEARLY establish in a prospects mind the VALUE they bring to the table. Prospects buy VALUE, and Clients come back for VALUE. Surround your services with VALUE.

2) Manage your Services. Are your services competitive? Are you are losing work to contractors that are offering design/build or construction management? If you're an architect and feel that the contractor is getting more and more architectural work through the design/build process, then it is important to look further at your services.

3) Strengthen your Relationships. The biggest change in construction is the development of relationships that can lead to work. This has had a huge impact in construction because no longer is it a rule that the low bidder gets the job - public work not included here, but even that is changing. Many States are going to a Point system in evaluating the contenders: certain number of points for your bid; certain number of points for experience and other criteria.

4) Evaluate the Markets. At the end of each year in every major city, in every major construction related and real estate related publication there are economic forecast issues. There are special reports you can obtain, and numerous other sources for what is going on in your market. These need to be read and reported to/by your core management team. Are there changes in the economy and what industry sectors are being hit? If you can identify trends then you can be in position to take advantage of it.

5) Expand Company Wide Marketing Efforts. Everyone in a company is responsible for marketing. Everyone should be able to tell a company story. Everyone should have a "vision card" that can be used to tell the company story. Everyone has a network, and it is important to communicate in your internal marketing program that everyone can help.

6) Develop a Promotion. In a tough economy you must take action. You must do something out of the ordinary to get your name in front of exactly the group of prospects that you can help. One can no longer say, we are on time and on budget. If you do, you just lost. Now you have to truly understand the Value you bring to your different market niches, as discussed above, and you must bring that message to them. You must be creative  your approach; you must present your message within the arena of relationships you're creating; you must surround your promotion with other mini-promotions so that your name surfaces in front of them on a regular basis; you must, in short, become as interested in them as you would like them to be interested in you. It is important, because this is the reason why some companies prosper and some don't. 

It's all about determination.

FOR MORE INFORMATION, go to www.compassconsultantscorp.com

STRATEGIC MARKETING THINKING™

Winning at Marketing is very similar to winning a horse race!

For the last several years I’ve heard of stories about construction companies that are closing down. It hits harder when you recognize the firm's name, or maybe even know the people involved. I wondered to myself if it could have been avoided. I wonder what steps were taken on the inside to prevent that decision of letting everyone go and shutting the doors. Then I drive past other construction companies and I wonder what steps they're taking. Are they also in trouble?

One important strategy to understand is that Marketing and Business Development in tough economic times is different from a normal economy. Companies that understand this concept gain a staggering strategic advantage. One of the remarkable marketing misconceptions of construction companies and design professionals is that they believe once you get your marketing program up and running, you're done. Worse yet, many companies CUT their marketing budget when they start to have difficulties. They cut programs, they cut marketing managers and in some cases, valuable business developers. What they don't understand is Marketing MUST Change; it must reflect what is happening in the current economic climate. Marketing must be evaluated based upon . . .

a) the current economic condition,

b) your company's goals and objectives,

c) your company's services, and

d) your company's ability to perform.

All of these parameters can change at any time; consequently, they must be constantly

monitored relative to current marketing efforts.

In the NEXT POST I’ll list Steps you can take to help you in tough times.

Strategic MarketingThinking™

As a strategic planning consultant, I look for ways to communicate to potential companies how I can help with their business. My methodology is based upon business planning and using the plan to implement business change. Strategic Marketing Thinking™ is a way to communicate to the construction industry that there are a lot of different options available to them to accomplish their company goals and objectives.

But sometimes, given the business condition, a company may need some outside resources to get them started in the right direction. This newsletter is one way to get that direction. In each BLOG there are examples to get you to think differently — to think strategically. The BLOG is intended to be short so it can be reviewed quickly and easily. It is specifically for the construction industry. Print it out, throw it in a briefcase, take it to lunch, read it with morning coffee, or copy it and hand it out to your staff. It’s meant to be used, read, digested, and questioned.