In our last blog, we touched on the Ideal Project Profile (IPP) and what it means for AEC firms to pursue ideal, profitable projects for their firms. We mentioned TrebleHook’s ability to connect to 3rd party applications like your ERP/Accounting, Construction Project Management Solution, etc. To centralize all of the information and data around a building project, acting as the single source of truth for all team members within your firm.
Let’s face it, construction and design projects aren’t easy, especially when you’re pursuing projects that are losing money, costing you too much time, or excessive resources.
However, in that blog, we didn’t specifically cover how to identify and create your Ideal Project Profile. Today, let’s take a look at the methodology behind discovering your firm’s IPP and how it can help you make better business decisions going forward for your AEC firm.
Step 1: Understand Your Firm’s Business Plan, Growth Goals, and Objectives
For your firm to Pursue and Land the Right Projects, you must clearly understand your business plan, goals, and objectives. Having a clear goal and a plan of attack to achieve those goals is vital for AEC firms, and any business for that matter. Further, these goals give you a clear vision for the future that helps align your organization and create more success for your firm in the long term.
Do you have a business plan outlining your company’s future? When you are in the “heat of battle,” we understand that it can be hard to turn down projects that are going to bring revenue to your company. After all, you’re in the business of tackling projects of all shapes and sizes.
However, at the end of the day, you should not ask yourself, “what is my goal for this project? And does it align with my firm’s goals for growth?” A clear understanding of where your company wants to go will guide you on how to identify and leverage your IPP for future business and construction project undertakings.
Step 2: Uncover What Makes Your Company Unique
Think about some of your favorite businesses or brands. What makes them stand out compared to others in the same field? It could be their marketing strategies, high-quality work that leads to successful projects, or they offer excellent professional products or services compared to everyone else.
What are some of the factors of your business that make you and your company unique? If you are unsure, talk to people within your company to understand why they chose to work at your firm. Speak to your customers about why they choose to work with you above anyone else. Is it your people, your longevity in the marketplace, the technology or process you offer, some expertise in specific markets, etc.?
You might even think that you know what makes your company unique, but when you talk to others, you may be surprised by what you uncover.
If you are unclear about your unique value proposition (UVP), finish going through this step-by-step process and then come back and define it. If you cannot clearly articulate what makes your company unique, then your customers and prospects will never be able to understand or see it either.
Step 3: Analyze Your Past Project Performance
Not only does a vision of the future impact your project bid and firm success, but so does your company’s project history.
3a. Examine Your Last 12 Months of Projects
In the AEC industry specifically, projects can often last multiple years, so it’s always good to begin by taking a look at your last 12 months’ worth of project history. If you find you need to expand out further than that to pick up a grouping of additional projects, it’s always good to do so.
3b. Gather Your Project Data So That You Can Analyze Key Project Success Factors
You likely have an idea of some ideal characteristics to look for before bidding on a project. These characteristics probably allow you to determine, to the best of your ability, if a project will be profitable or not. However, without looking at your project history in fine detail, can you be sure that you know all of the factors that make a project profitable to you?
Through working with many AEC industry firms over the years, we have uncovered quite a few (sometimes surprising) factors that impact the success of projects. Here is a list of some things to examine throughout your past projects:
- Project Revenue: What was the revenue of the project? What did the project cost?
- Project size: What was the project’s square footage, acreage, etc.?
- Client type: Is the project with a new or a repeat client?
- Industry: Commercial, mixed-use, industrial, residential, etc.
- Location: Where did the project take place? Was it a certain distance from your offices?
- External Project Team: Who were the consultants, contractors, subcontractors, owners, developers, etc., on each project?
- Internal Project Team: Who were the people in your firm that worked on the project?
- Profitability: Did you make money? If so, how much? How did the final profit compare to the forecasted profit when you started? Did it go up or down throughout the project? Were there a lot of billable hours?
- Duration: How long did the project take to complete? How does that compare to the original timeframe?
- Project Team Insights: Ask the project team how the project went. Have you ever had a project manager tell you it was a “nightmare” or that everything went smoothly?
- Other potential insights: Other potential project details to look at would be pursuit cost, differentiation against your competition, and why you won the work in the first place (low cost, qualification, etc.) The goal is to establish some common characteristics that each and every project can be measured by.
We suggest that you compile all of this data into an Excel spreadsheet to help you compare and analyze. We have created a sample project history sheet that you can use as a baseline to begin analyzing your past project performance. Seem a bit manual? Shameless plug…Don’t worry, if you partner with TrebleHook, our solution does all of this for you within our platform so no need to manage manual Excel spreadsheets.
3c. Once Compiled, Try to Bucket Your Work Based on Performance and Assign a Score
Once you’ve nailed down your past 12+ months of project performance and have the data documented for each project, you can begin understanding success commonalities between projects. Start by sorting your project history sheet by profitability percentage, then review other significant factors like your project team’s insights around a project.
When looking at your past work, ask yourself: For your most profitable projects, what were the characteristics of those projects? For your least profitable projects, what are the commonalities between them? Typically, you will see about 3-4 characteristics (industry, team, etc.) that seem to be common denominators in your most and least successful projects.
Once you start seeing the trends, you can begin to assign a score value to the various types of projects: At TrebleHook, we use our TrebleHook score to help you predict future project success based on your Ideal Project Profile. We use a straightforward scoring system of “A,” “B,” and “C” to rate projects based on various complex factors, including those listed above.
- An “A” project fits your growth goals and objectives, allows you to make the most money, and allows you to differentiate yourself.
- “B” projects are the middle ground projects. These projects are the ones that you need to discuss pursuing as a company/leadership team. You may choose to accept these projects to keep resources going, or you may decline because of certain external factors. “B” projects are going to take the most time and the most discussion.
- Lastly, a “C” project is one that you need to steer clear of. They tend to lose you money, are a pain to execute, and have high pursuit costs.
For example, you might see that your “A” projects are with repeat customers, within the healthcare industry, between $10m-$20m, with a specific project team. Or you might see that your “C” projects are those you won on price, with new customers, in the retail industry, and were more than 100 miles away from your office location.
What’s fun is to then use this data to compare to your company’s “gut reaction” on projects. We find there to be a pretty big disparity between the data and your thoughts.
Step 4: Begin Applying Your Learnings to Future Project Pursuits
Use the same classification methods we discussed when analyzing past projects, but on your future projects. Doing this will allow you to assign a score to each project.
For the “A” projects, pursue them with all that you have. For the “C” projects, be disciplined to turn them down and focus your attention elsewhere. Note: one of the hardest things to do in business is to turn down work because it doesn’t fit your Ideal Project Profile. This will be a culture change for many organizations and will require folks to get outside of their comfort zone. But, if it was easy everyone would do it. For the “B” projects, develop a process for your project team to review and discuss in order to decide on its pursuit value.
Remember, this will be a process that must be refined over time, so don’t get too complex upfront with your analysis.
Step 5: Redefine Your Business Plan and Marketing Strategy to Pursue Your Ideal Project Profile
Now that you understand where you can win the most, be the most profitable, and add the most value, it is time to shift your entire company’s direction, business planning, and marketing efforts. This may mean you must rethink your business model completely, which is excellent! Your website may change, your mindset, your marketing materials, and even the skillsets and expertise in your business.
Clients today are not looking for jacks of all trades. They are looking for experts that know their space. They want people that have deep industry expertise in their specific application. So, once you know your Ideal Project Profile and focus, it is time to tell the world.
At TrebleHook, this process is not only built into our solution but is part of our DNA.
If we did not mention it, TrebleHook captures all your project data in a centralized location and performs automated scoring. This takes all of the heavy lifting out of your hands and allows you to focus on pursuing and landing the right projects.
To grow your business in this market, you must bring something special to the table. You must be unique. The faster you understand these values, the quicker you can pivot your company to focus on IPPs and away from a generalist mindset.
For TrebleHook, this is why we are laser-focused on Architecture, Engineering, and Construction firms that are mid to large in size, have multiple divisions or multiple locations, want to grow and innovate, have disparate project data within the business, and have some sort of dedicated business development and marketing. This is who we market to, build our teams around, and focus all of our efforts on.
Do you want to learn more about TrebleHook? Let’s talk.