Winter 2004
Experiencing the Theory
Here’s an interesting case example from which we can all learn. It involves doing and implementing a strategic planning effort … and experiencing the aftermath.
This particular firm has about 100 people, with a broad mix of professional disciplines … architects, site/civil engineers, mechanical and electrical engineers, highway and structural engineers, environmental scientists, planners. It’s located in upstate New York, and historically works in that general region. But …
All of the upper mideast and midwest states are experiencing out-migration. All have very soft economies … which makes strategic market planning even more important. Firms in those regions are finding their markets mature. That economic climate can cut profitability rates and increase the cost of winning work. So …
The firm hosted its first client focus group. Roughly 18 clients and “knowledgeable third parties” brainstormed and then assessed a huge range of markets. In the morning, the most promising markets – and a few that scored poorly, but in which the firm had long been active – were selected for market research. The results …
Overall, the picture is depressing! Northern states have a labor cost that’s considerably higher than elsewhere in the country … or in the world. New York State is also one of the most regulated, which discourages corporations from creating new facilities or even upgrading existing. After all the research, only two markets verifyied as strong. In both, the firm had little strength, with only traces of experience.
The third strategic planning phase, developing tactical action plans for capturing work in viable markets, focused on four markets the research showed made sense:
- Two strong markets sitting amid a weak overall economic climate;
- A search for a geography in which a strong market existed for one of their existing fortes, (as the local market was quite soft); and …
- “Maintenance” work, such as energy cost reduction, for past clients.
Market-focused teams developed tactical action plans for their market. Each included methods for (1) increasing technical strength, (2) expanding their breadth of personal relationships with clients in that market; (3) increasing name recognition; and (4) identifying new leads. The firm’s marketing director continuously reminded (i.e. hounded!) teams to implement … and personally supported their actions. In one of the two strong markets, the firm rented a booth at the client’s major three-day convention. They also got two speakers on the docket. Results …
The speakers focused directly on topics identified in the market research question,
“What’re the biggest issues you see yourself wrestling with
over the next year or two?”
Both presentation rooms were totally packed, with lines going out the door! The speakers were available afterwards at their booth. By conference’ end, they had …
- Significantly expanded their breadth of client relationships;
- Improved recognition of the firm’s name … and in a way the research said was most desirable; and …
- Received one project, sole source, and identified scores of specific project opportunities … at the personal invitations of the clients.
A great start in a virtually new market. Excellent Return-on-Investment for the staff time and dollars spent. And greater enthusiasm for implementing next steps. Meanwhile, “back at the farm,” some professionals were not in the new markets …
- Architects who’d been active for years in a market that’s now almost dead, asked the marketing director to find them jobs in that market.
- Site/Civil engineers asked the marketing director for budget to have a booth for client convention in their nearly dead market. And …
- Specialists in another near-dead market had already committed to have a convention booth … and they came home with nothing!
Having some strong growth markets has paid major dividends in unexpected ways. The firm now spends marketing dollars in areas that produce a clear return on their investment, rather than in a soft market “hoping something comes of it.” They gradually transfer technical capabilities into the new growth markets … rather than let some people go. The market director’s other realization (paraphrased) …
“It’s one thing to assess numbers for markets on a sheet of paper, and even confirm the scores with research. It’s amazing to experience the difference between a convention of clients in a hot market and one of clients in a soft market. One has tons of money & really wants help!”
The U.N. University commissioned a survey of 360 global “influentials” – governmental, corporate, non-profit – asking about their biggest concerns. The top concern of an overwhelming majority was “sustainability.” Those of you who share those concerns may be interested in Lester Brown’s new book, “Plan B.” The first half has lots of hard data about different sustainability issues. The second half describes specific solutions that some groups are already successfully implementing.