The Importance of Connecting Your Work to the Client's ROI

I've long pondered the disparity in financial returns for architects and consulting engineers compared to other professional service providers. A/E professionals trail most other professionals in hourly rates, profitability, and labor multiplier. Why? Isn't our work of comparable value? Apparently not, the marketplace would suggest.

There are no doubt several factors contributing to the shortfall, but I believe that one trumps all others—business solutions are more valuable than technical solutions. Other professional services are more readily associated with business results. Clients are willing to pay extra for those services that are perceived to most directly affect their bottom-line success.

It's fair to argue that A/E professionals do indeed deliver strong business value. Our work enables new business operations, improves efficiency, helps create necessary infrastructure, reduces liabilities, strengthens balance sheets, boosts shareholder value, converts distressed properties into productive use, brings facilities into compliance, helps build public good will. Why then don't we get more credit for the business value we help create?

Two reasons are foremost, in my mind: (1) there is a gap between delivery of our services and realization of the client's return on investment and (2) we generally do a poor job articulating the connection between our work and business results —particularly on the engineering side of the business. The reality of point #1 makes the impact of point #2 all the more substantial in devaluing our services.

ROI is a critical measure of the success of a key business expenditure. Here's what we need to recognize: If a client spends $100,000 for an engineering study or design, there's a delay before the value of that investment can be realized. A/E professionals generally don't implement their study recommendations or construct their designed facilities. Therefore, when we finish our projects, they still constitute a cost to the client.

I suspect we don't fully appreciate this. We're rightfully proud of our work, and if it's technically sound and delivered on time and on budget, we proclaim the project a success—or at least our portion of the project. But the client cannot really call it a success until the ROI is realized. That comes later.

Interestingly, client feedback data collected by Client Savvy shows that over the course of the A/E portion of a project (and even into construction contract administration) that client satisfaction generally declines until there's an uptick at the end of construction. Could the delay in ROI contribute to this trend? At the very least, we should acknowledge that our view of project success likely differs somewhat from that of the client.

So what can we do about this? It's hardly our fault that the timing of our services usually precedes the client's return on investment. We are to blame, however, for our failure to make the connection between our work and ROI more explicit. Want evidence of this? Read our websites, our proposals, and our marketing materials and see how seldom we talk about the business results of our work. We seem more interested in talking about the tasks and services we perform.

Similarly, we too often give little consideration to client business goals during the planning of our projects. Nor are they incorporated into many of our quality review processes. If our scope of work ends with the planning or design phase of the project, we may not follow it through construction and startup, or track results after the facility is in operation. In other words, we sometimes show little interest in whether our projects are truly a success.

Does failing to clearly articulate the connection between our work and the client's ROI help devalue our services? I'm convinced that it does. Thankfully, more recent project delivery models—such as design-build and P3—put A/E firms in closer proximity to the realization of ROI and, not surprisingly, tend to yield higher fees and bigger profits (for various reasons).

There's ample opportunity for your firm to differentiate itself by demonstrating a focus on delivering business results. A few tips in this regard:

• Diagnose client needs at three levels: strategic (business), technical, people. This helps push your project managers and staff outside their technical box where they're most comfortable. It also helps them better align their project perspective with that of the client, by seeing the bigger picture.
• Uncover the client's desired outcomes at the same three levels. Every project will have expected results relating to how it meets strategic, technical, and people needs. No, the client isn't likely thinking specifically in these terms, but breaking it down this way helps you better draw out how project success will ultimately be defined.
• Let these outcomes drive your design process. Keep this connection at the forefront of your discussions, both internally and externally, about design or solution alternatives. Whereas technical professionals often see technical problems in need of a technical solution, this framework can help your team better envision how that technical solution will deliver business results.
• Consider incorporating a business review into your QC process. The technical aspects of the project are usually the focus of A/E firm reviews, but in some cases there is great value in having a third-party review of the business aspects of the project before it goes to the client for review. That perspective might be found in your firm, or you might decide to subcontract an outside expert for the task.
• Stay involved in the project, even after your scope is completed. At a minimum, contact the client periodically to track project progress. Once the solution is implemented or the facility is constructed, check on whether it is performing as expected. Even if you're not compensated for these ongoing conversations, it helps connect you to the realization of ROI.
• Learn to describe your work in terms of results, not just tasks or services. Perhaps spending more time crafting those project descriptions, for example, can yield more benefit than just making marketing staff happy. Consider it practice in articulating the true value of your services. Work at it until it becomes natural to specifically talk about how your projects deliver client success!