it's not just that we couldn't market,
it's that our clients didn't want that.
They wanted to play golf, they wanted
proximity, they wanted to be
friends, you know, to bump into
one another. And our markets now have
changed so dramatically
since that time. Our clients have
changed, how they've, how they buy has
changed, what they value from us has
changed. And that's why...
Welcome to the Bold Brand Show!
The SMPS Foundation was in
town for retreat this week,
so we have a treat for you.
We're going to be unpacking
some of the latest research
from the SMPS Foundation.
Here with us today are
SMPS Foundation trustees,
Sarah Kynard and Michelle Raftery.
Sarah is a nationally
recognized strategist,
researcher, speaker, and the head bird
of the Flamingo Project,
a consultancy known for helping AEC firms
grow with clarity and confidence.
With over 20 years of experience,
Sarah brings a research-first mindset
and a refreshing
approach to market research,
business planning, and strategic growth.
Sarah is the current SMPS
Foundation national president.
Michelle Raftery, FSMPS, CPSM, Well AP,
is a principal and
partner at 4240 Architecture
and just wrapped up her term
serving as the SMPS Foundation president.
Her work is driven by the
power of actions and results
that can come from good
research and intelligence.
Sarah and Michelle,
welcome to the Bold Brand Show.
Thanks, Josh. Thank you.
So on this podcast,
we want to learn what
you're thinking about,
the challenges the industry is facing,
successes you've had,
and some of the boldest
moves that you've made.
Specifically, the
SMPS Foundation partnered
with our friends at FMI Consulting
to conduct one of the
most comprehensive studies
on emerging marketing and
business development trends
in the AEC industry,
combining insights from
more than 200 surveys,
25 executive interviews,
and cross industry research
to reveal how the profession is evolving
and where it's headed next.
While anyone can read the PDF,
I'd like to dive in a little deeper
to help clarify some of the
takeaways from this study.
So to get started,
the SMPS Foundation's
latest emerging trends research
highlights a shift from
marketing as a support function
to marketing as a revenue driver.
Are firms actually behaving in that way?
Are we still stuck in old models?
It depends on the firm.
It depends on whether they
are really looking at growth
as an engine for their company,
or if they're generally
kind of following the trends.
There's a lot of
structure that has driven us
to having marketing as a support function
rather than a strategic lever for firms.
And so if you look at firms of any size,
and you see that the vast
majority of marketing staff
are proposal or pursuit focused,
then they are not leveraging the talents
and the skills of marketing to look at
where the firm can go
and what the firm can do in the future.
If you look at a firm
and they've got leadership
that is both on the pursuit
as well on the strategy side,
then the answer is yes, they're doing it.
Josh, my take is a little bit different.
I like to remind
people that when you look at
our ability to market
professional services firms
in the AEC industry,
this is still a
relatively new profession.
The AIA made it legal to market in the
sixties and seventies
was when this transition really happened.
And so when you think,
okay, we're still babes here
in the scheme of how this revenue
generation can happen
as Sarah speaks to, but
such an evolution has happened.
Where these are
strategic business functions
that are driving
effectiveness in our firms.
And so that change has increased
and has rapidly transformed
the landscape for AEC firms
to really operate as
effective businesses.
Michelle, one of the
other really important things
that you just highlighted there was
it's not just that we couldn't market,
it's that our clients didn't want that.
They wanted to play
golf, they wanted proximity,
they wanted to be friends,
to bump into one another.
And our markets now have
changed so dramatically
since that time.
Let's call that even the 1990s
and not all the way to
the sixties and seventies.
Our markets have changed so dramatically
that our clients work with
people all over the country.
They're no longer just local.
And so our clients have changed,
how they buy has changed,
what they value from us has changed.
And that's why
marketing is so important now.
I just think about like our
fictional Don Draper moment
in the 1960s for
consumer goods and products,
like that was after
what, a hundred, 200 years
of advertising and
marketing in the consumer world.
And we're sort of just
to that 50 year mark,
55 years maybe, closing in on that.
And man, it's gonna be exciting to see
where our industry
goes as marketing matures
further as well.
One of the dominant
themes in the research
is the growing
integration of AI and automation.
Where would you say
firms are overhyping AI
and where are they under utilizing it?
Overhyping everywhere, I would say.
It's kind of like Sarah may have made
this analogy earlier,
but she said, it's
similar to when sustainability
became the buzzword.
Everyone knew they needed it.
Not everyone had
figured out what that means,
but everyone was talking about it.
And there was just such a
broad range of adoption,
much less workflows in
place that could really
capture the opportunity with AI.
And so the technologies,
the processes are critical
when paired with that human experience.
Well, and where AI is today,
where AI is going to
be in five and 10 years,
we know it's going to evolve and change.
But what we know today is
it is not a solution alone.
And I think that is the
overhype that we're talking about
that many firms go, oh
great, AI, it's a solution.
Well, was Revit the solution?
Was BIM the solution?
No, it's just another tool.
It's another way to collaborate.
It's another way to
integrate in projects.
And AI is another way to
use different workflows
that might be more efficient
or they might not be more efficient.
And that's really, to me, the
evaluation of AI in businesses
where does it 2X someone,
take away some of the
redundancy in their job
along with the certainty?
Because that's the big question, right?
It's also what
certainty do we have with it?
I'm a huge proponent of
using AI and all kinds of things,
but understanding what is it replacing?
And is that something that
I'm willing to replace with AI
or something that does need the
handholding of people
and the understanding of
walking around this earth
for the last 20 years in this industry?
Yeah, so production.
Yeah.
Absolutely production.
The other thing that
we've seen that this brings up
is the ability to build trust.
Our industry is based on building trust
and building relationships
and shortening that trust cycle
in order to create opportunity, right?
How can you build a relationship
that you can immediately trust someone?
And what we do is hard.
It takes a lot of
people working together.
And so if AI can do some of
the, let's call it grunt work
to increase your ability to be effective
in creating that human
connection and building trust,
then we know we're using it properly.
But I can't tell you how
many times conversations
are just navigating
to, well, this happened
and I can't believe AI got it wrong.
That's right, AI is learning,
but there's this big thing called trust
that we need to be very
deliberate about our engagement.
That's right.
We are a industry of accuracy.
And if you haven't drawn that correctly,
interpreted it correctly,
and they go to pour the concrete
or insert really anything in our world,
that's a huge problem.
And that's a huge
risk for your companies.
In marketing, you know,
cause we're talking a lot
about the, what I would
say the practitioners work
in our industry, but in marketing,
it's a huge opportunity to help us
parse that client information
so that our people can go build trust.
So we've got a lot of
really good opportunity
in our workflows, as well as
in helping our practitioners
with the intelligence that
they need to build that trust.
Yeah, I'm sure there
will be areas in which AI
can just start to finish, do a thing.
But like, for me, I think
about it more in terms of like
doing a thing with AI's help.
As an example, if you're
listening to this episode
or watching this episode, and you don't
hear the wind howling
throughout the entire interview,
it's because my AI removed the wind
howling in the sound.
And it does an excellent
job of cleaning up a thing
that would have taken hours and hours
and a sound engineer
to figure out before.
And now I can just drop
that filter onto a track
and it takes it out because it's a
particularly windy day
in Denver today.
Well, the research
suggests that firms that win
in the next decade will be those
that blend human relationships
with the advanced technology.
What do you think that
balance should actually look like
in practice?
Well, we are people.
Easier said than done, but I
think one of the powerful trends
that we saw in the
research related to the maturation
of marketing and business
development is the effectiveness
in that quadrant of the
business that can affect operations,
that can affect HR, that can affect these
really critical pieces that drive our
work forward together.
And so I think remembering that
connection is critical.
And I think the other important part of
that is we are human
and as we are leading and
as we are moving through
whatever initiatives we
have going on in our company,
that the blend of technology,
intelligence, and people
is all supposed to bring us together
with a common
understanding and less friction.
Do you think we're
heading towards a future
where proposals are largely AI assisted?
I know everything that is being sponsored
by everyone right now seems
to be a new AI proposal tool.
And because I'm not in the world of
creating those proposals,
I'm not in that so much.
But what do you think
becomes the real differentiator
if all these AI tools are
helping create proposals?
I mean, we were already
seeing a sea of sameness
in proposal responses.
Our industry is driven by proposals.
It's a very important
function for marketing
and business development
and revenue generation.
And so I think the answer
isn't we are headed that way.
I think it's we're there
and everyone is using it
and differentiation is the real issue
because there's a sea of sameness
that is a result of the technologies.
And so it's that
leadership and that strategic vision
guiding the technology to
celebrate those differences
and find new ways to
be able to talk about
and connect to why that matters.
There's an aspect of the proposal
that's about a compliance.
We all know this.
And that is an area
where AI can really help
going through and understanding
what is this one asking for?
Is my proposal compliant?
What are aspects that I need for that?
From a messaging
standpoint to your point, Michelle,
it's the danger of the sea of sameness.
And so rather than saying,
is it going to replace
proposal coordinators?
Because that's what I hear all the time
is the question.
The answer is no,
because you need
intelligence about your clients.
You need all of that
business development pre-work
that you've done,
the research you've
done about the clients,
the priorities with that project,
all of those underlying
things to really message it
at the end of the day to the human
that you're going to interview with.
I purposely did not say the
human that is going to read it
because many of our clients
are putting them first
through an AI platform
for compliance, just
like they did before.
Are you over 50 pages or
are you not over 50 pages?
Did you submit your XYZ compliance plan?
I'm of course talking
about public in this moment,
but there's compliance
that has always gone along
in our industry and it
was always the first filter.
And if you weren't
compliant, you were out.
Same, same, same.
It's just a different
set of tools is evaluating
whether you're compliant
and eventually you get down
to the human who's reading
your content and they're saying,
do they know me?
Do they see me?
Do they understand my problems?
And how do they plan to solve it?
And then of course the interview,
as of right now at least,
we're not doing AI driven interviews.
Who knows?
At the end of the day, proposals matter.
Yes, as a compliance, but it
does come down to the people.
Our top trend in this year's research
is around collaboration as a currency.
Not necessarily from a
project delivery standpoint.
Yes, there are ways
to structure a contract
and delivery method to be more effective
for certain projects and
clients and decision-making,
but also how those teams
perform together with the client.
How those teams perform
internally with a client.
But more importantly, what
are those buying behaviors?
You wanna know your architect
that you're
potentially going to work with
well before you get a proposal response
with their face in that got
through compliance, right?
And so collaboration as currency,
it's no longer one person saying,
here's the firm we're gonna work with.
It's multiple people saying,
here is the team that we
wanna work with and why.
And they are going to their team members
and saying, here's why I
think that's important.
And that is not coming
through AI generation.
That's coming from the human experience,
which is a blend of what they've learned
through those interactions,
as well as what they've
learned through that response
as long as it's aligning.
Yeah.
Well, I think
speaking of the human piece,
I mean, the research talks about
predictive analytics
and advanced CRM usage,
but so many firms are
still sitting on data
and they're not utilizing it at all.
Why is that?
Well, maybe I won't answer
the question of why that is,
but I can talk about
one of the major forces
that we've seen in our industry.
Private equity has
entered AEC in full force.
One of the things that that has done
is it has made us better business people.
We now need metrics.
We now need to clean up our data
and we now need to be
able to talk about ROI
as it relates to increasing EBITDA.
So it's a really important influence
because while you are,
maybe you're a PE firm
and you're doing that,
or you are competing against a PE firm
and you are shifting your practice
because you need to be competitive
for your markets in which
are potentially more risky
to lose those engagements.
So private equity, it's
changing things for us.
And we get to decide what
we want to do with that.
Yeah, and it's also the
gasoline on the fire of like,
I want more people, I wanna grow,
I wanna invest in certain things.
So firms who have that PE investment
have the ability to
scale and tackle problems
that they may not have had
the cashflow to do otherwise.
That's all right.
And a timeline in
which they need to do that.
Right. That's right.
And I think what you've
touched on there, Michelle,
is you have this data,
what business decisions need to be made
and what data do you need to
make those business decisions?
And so going back to
what you're talking about,
whether it's private equity or not,
thinking like a business person,
I have this data,
is it going to drive the decisions
that we need for this business?
Or is it going to drive our
ability to be more competitive
because we have intelligence?
So I think the
barrier really is that firms
don't know how to use the data
and are still thinking
very service-based marketing
and service-based strategies
that are one-on-one versus one-on-many.
One of the things that
came out of the research
was the call for us to think
more like product marketers.
How do we get messages,
customized, tailored messages
to our end audience utilizing that data
instead of the generic messages?
This goes into that differentiation
that we were talking
about relative to proposals.
So you have this data
and are you leveraging it?
Probably not because we don't know
how to leverage it right now.
They're in systems
that we're not necessarily
connecting to other systems.
That really drives the other aspect
of the maturation as marketing
where there are roles
now in marketing teams
that are about data and
companies that are about data.
And that's the overall
maturation of our firms
as well as the marketing teams
so that you have people
who understand with data
what you can do.
So we're sitting on gold.
Yeah.
Well, I mean, I'm sure
there's lots of midsized firms
and probably all sized firms,
but let's pretend I'm
a midsize firm owner.
We know we're sort of
behind on technology
when it comes to marketing
and we really would love to ramp that up.
That's a big goal for us.
Where would you have them start
or how would you guide them into really
becoming tech forward?
I think it's going back to the question
about which problems
are we trying to solve
with this information
or what opportunities
are we trying to grasp
with this information
because we are also
in a time just like AI,
being the solution for
everything in terms of the hype,
we are in a sea of data.
And so what business
decisions are we trying to make?
What are we trying to do?
How are we trying to grow?
And what is the data that we need to use
to help us make decisions?
It's almost like KPIs,
where a KPI is a whole bunch
of stuff that comes together
to tell you it's a key
performance indicator.
It's not just your hit rate.
Right, yeah.
It's a lot of things that come together
and that's what this
data is supposed to do.
And so what are we trying to solve
and what's gonna get us to the
destination for the decision?
I think with mid-sized firms
and because I am one of those.
You represent that remark.
That is the challenge, right?
Because your effectiveness
again in talent attraction
and retention, your effectiveness in lead
and pursuit
opportunities, your effectiveness
in overall brand
reputation and in performance,
they are so intertwined that often have a lot of opportunities
competing priorities.
But one of the things
I always say is no less
than two degrees away from an opportunity
to help keep that focus and
to keep those steps in line
with direct revenue opportunities,
at least for the way
our business is structured
from a mid-sized standpoint.
I can remember back in maybe 2011, 2012
was the first time I got a phone call
for a brand or website project.
And the client said,
yeah, we want new business
but we're doing this work
because of our talent pipeline.
The talent war is brutal right now
and we need to first and
foremost make this attractive
to incoming talent.
So it's not surprising
to me, 14 years later,
we're still talking
about talent as a major piece
of the foundation research.
And in particular,
this widening skills gap.
So what could we or should we be doing
in terms of young talent
who's coming up through the ranks?
Should we still be
training them on proposals?
I mean, is marketing
effectively still a proposal role
in our industry or are there other things
that we need to be training them up in?
One of my favorite things that we did
as part of this research was
to look at how universities
are educating the marketers and
salespeople of the future
because they're looking at what are
businesses demanding
across every sector and
across the world, honestly.
And the clues are there.
The clues about what talent we need,
what areas of the
business marketing can impact
beyond proposals for us is there.
And there's data analytics in there.
There's client experience.
Client experience is not
just owned by marketing,
but marketing is a big
part of client experience.
There's of course, general
sales and they use that more
the way that we do business development
and what I would say, pursuit focus,
account-based
marketing being part of that.
A couple of different things,
but we looked at what the
universities are educating
the marketers and
salespeople of today, tomorrow,
however you wanna frame it.
And it's the signal.
It's the signal that we all feel.
It's the signal that the research showed
that those are the kinds
of roles that we're needing.
When we surveyed our membership
and those that are in leadership, the
same thing happened.
It was either that we
need strategic leadership
at the C-suite level, or
we need specialized roles
all around data of some kind.
It could be CRM, which we've had CRM
roles for a long time,
but they look different now.
It had data analytics.
It had market research.
So the roles of marketing are still,
still we still have proposal
and proposals are the
way that we win work,
but it is downstream from
all of this other intelligence
that we've gotta gather to
make our firms competitive
and to make us win.
So proposals will forever be a part of it
as long as we have to turn one in.
Should we be rethinking
career paths because of AI?
I mean, there's a lot
of that tactical work
is happening in that.
So what does that look like?
So I just talked about
how we're educating people
differently and the
demands that our firms are saying
that they have, and it says
exactly what we need to do
from a leadership standpoint.
We need to diversify the roles.
They need to be specialized.
And what's really
interesting about how I'm seeing this
in practice in different
firms is some of those data roles
might be shared in a data
analytics team within a company
or the IT department,
depending on how they organize.
So marketing has been this shared
resource for a long time,
but because of these
specialized roles now,
we're going to be shared
in new and different ways.
As I mentioned, client
experience is not just owned
by marketing because the client
experience and the brand
is felt through all
points in the relationship.
And marketing does not
own all of those points
in the relationship, but
we're a key stakeholder
and a key participant in those aspects.
So to go back to the
question, it's specialization
and it's specialization
towards differentiation.
That's what it is.
I think one other aspect on that, Josh,
is we have seller-doer
models that very broadly,
but are still in place
because that is an important part
of the trust cycle.
Our seller-doers are exhausted.
There is, you know,
similar to all of the things
that are wrapped up
and folded into marketing
and business development in our firms,
seller-doers from
regulation, delivery, AI, you know,
everything, it's a lot.
And so I would say the
pathway and career opportunities
for future marketers is
really starting to think about,
again, how we deepen that effectiveness
with our seller-doers in our firms
to really create a new
way to connect, align,
and execute on these
opportunities to connect.
If I had my way, all the
questions would be about branding,
but I was excited to see
that branding showed up
in the foundation research as well.
And in particular, when
I think about branding,
I think about
positioning and differentiation.
And when clients say
that the time and budget
and resumes are important to them,
then all the firms sound the same
because they're talking
about time and budget and resumes
or safety or sustainability
or whatever the latest trend is.
And the things that came
up in the foundation report
around the research
expectations for clients
were transparency,
speed, and personalization.
And I'm curious how that's gonna impact
brand at this point.
I think this is really
where that maturation comes in
and utilizing data and
information is a big part of this.
We've seen generational
shifts happen within our clients
and how they buy, what
they value is different.
And so, especially as we still continue
to have so many
generations in the workplace
and so many generations
in the decision-making
or influencing seat, it's
an important part of brand.
We can't be everything to everyone
as then we're just vanilla.
But how we personalize
and how we really connect
those heartstrings with
our clients is important.
And brand is critical
because people leave.
So they've gotta have an
attachment to your brand
as much as they have an
attachment to your people.
So client experience was one of the ways
that we talked about this in the research
because if you've got
a system and a process
to have a brand experience for clients,
and that's also important for employees,
we're talking about
clients a lot right now,
but for employees, then you've got a way
to measure what's going
on and you've got a way
to measure what matters to your clients
so that you can properly personalize.
So as we're talking about
data and the sea of data
that we have, that's
the data that matters.
That's the data that
will get your brand there.
Again, we've talked
about systems and tools
to get you from I have this
data to how do I leverage it?
Well, client experience
program is a really great place
to start if you haven't.
Yeah, the other thing I
love about this question
is we are assuming that
again, our brand is great,
but we have no data.
So step back a moment and measure.
And is your brand what you think it is?
And that's what CX does.
It helps you alleviate the, oh, well,
I will work with you, but only if I get
this project manager or this principal
or this architect or this engineer,
because that's where the trust was built.
When you create a
client experience program
and you're deliberate with that,
that experience that they
feel is across the company.
It doesn't matter who they touch,
they will have that experience.
So it builds that consistency of brand
and it helps you weather the storm.
And in fact, we did a
separate research project
with Client Savvy,
a ClearlyRated Company.
Okay, so I wanna give you an example.
In the Client Savvy research
that we did diving into CX,
because it was one of
these top drivers and trends,
we wanted to understand more about it.
And so we have laggards
and we have leaders, right?
The leaders in the CX
program development,
they had greater
revenue, greater profitability.
And they also, I don't know if I,
I don't know if I should say it, Sarah.
Okay, it's fine.
Well, what you're
dancing around, Michelle,
is the fact that with
loyalty, typically come higher fees
because they see the value
in what you are
providing their organization.
Think about when you're
trying to get that client
for the very first time,
you're having all of the
conversations around the table
because you have no loyalty,
you have no advocacy with that client.
Those are client experience words that
I'm using on purpose.
You're sitting around the table saying,
how high and how low
can we go for this client?
Versus we know that this
client values what we bring
and this is what it
costs to bring that value.
It drives a very different conversation
within your
organization and with the client
because the client could
come back and say, listen,
we value what you do, but
not quite at that number.
Can we come down?
But that's a really
different conversation
than your competitor came
in at X, can you beat it?
Yeah. Yeah.
And it's interesting
that that's a new idea
in our industry, but
premium products and services
are premium products
and services for a reason
because somebody will pay more for it.
That's right.
Think about working with a home builder.
You could work with a
big production home builder
or a custom home builder
to effectively create the same product,
but there are lots of things
that they're wrapping that in
on the custom side and
making it exactly how you want it,
which maybe isn't wildly different from
the production home,
but they can charge twice as much.
This is also a good reminder.
This trend, CX, sort of the
emergence for our industry.
CX has been in other
industries for a very long time
and very effective.
And again, we are just seeing it now.
Maybe it's because PE is here.
Maybe it's because
there's more maturation
in marketing and business development
and it's all kind of coming together.
But one thing I think is interesting,
we always like to ask,
what is the risk of not
considering this trend?
And the risk of not considering CX
as a growth driver for your firm is,
again, making that dangerous assumption
of what your brand is
without actually asking or measuring it.
And I was at a conference,
I was sitting next to folks,
I won't say what very
large engineering firm
they were from.
But what was astounding to me
is I was asking them about their business
and connection to the content.
And they were not from
the marketing department.
They were not from the business
development department.
They were not seller doers.
They were from the risk department.
So again, how are you thinking about risk
of not acting on
information that you have,
trends that you're seeing?
It's that sobering moment, right?
It is. Okay.
Well, we already talked
about the conversation
about how do you differentiate
and get out of the sea of sameness?
And this is it.
Understanding, and this was your question
that we started with, Josh, is the brand.
Well, how do you differentiate the brand,
if you don't know?
And how do you differentiate the brand
in an ongoing fashion?
Right.
All of a sudden, this is a
new risk for your client.
You need to message towards it.
All of a sudden, there's
an opportunity over here
and you need to message towards that
and not just at the pursuit level.
You're talking about
every level of communications
with your end clients.
And that will also help
drive decisions for your business
about how you're gonna grow or not grow.
So it's a really important part.
And we're talking
about brand aspects of it,
but it's a business system
that informs your
brand, informs your strategy.
So we kind of changed
the topic on you, sorry.
Well, I think where you're getting to is
what we do from a
brand strategy perspective
is we'll sit down with a
firm principal and the owners
and say, what are you about?
What do you think you're about?
What do you want to be known for?
And then we'll go ask their clients
what they see as their strengths
and how they view them and
where they see them fall down.
And we're looking at
the four things over here
we heard internally and the
three things we heard externally
and do those line up at
all, where did those line up?
And the areas in which those line up,
that's where you can make
some really great momentum
around positioning and
messaging for your firm
because you feel that way and
the market already sees that.
Now, if you go to the market and you say,
we are X, Y, and Z and the
market thinks you're A, B, and C,
you're not gonna have any luck there.
And that's where people are
gonna get frustrated and say,
well, I only wanna work with Larry
because he's the only one I trust
because there's not a consistent
experience over there
that they see that you also talk about.
That's right.
And when it comes down to our AEC firms
underestimating how
buyer behavior is changing.
Yes.
Yes.
So we've been presenting
trends across the country,
different chapters,
different regions, individuals,
large national conferences.
And one of the things
that always comes up is,
we survey and we say,
okay, where are you at in this?
And very few people when we say,
it has completely changed,
raise their hand or vote for that.
And so I think there's a lot of denial
that's happening right now.
Because when we look at the facts,
our clients are demanding more from us
than they ever have earlier.
They want full teams, they
want practice charrettes,
they want individual references,
at least three for
each person on your team.
There are these short timelines
in which they are working with
to get their team, their capital,
all of their partners in line.
And so the rate in which we're working
and responding to that
has greatly compressed.
I talked a little bit
about this trust cycle.
Again, it's such an important opportunity
to be a partner
versus a service provider.
We don't say this word
commoditization very much anymore,
but that is where it will end.
If we are just having AI
go through our proposals,
look at a number, use
a qualitative analysis
of fields that have been entered in
for factors of consideration.
If we don't have that
human piece in there.
It used to be, hey, I'm
the head of this company.
This is the firm I want to work with
because I grew up with
Sarah or Joe more so.
And we're gonna do that,
we're gonna put this together.
And it's different, it's very different.
And part of the reason it's different,
we've got
generationally some things happening
that are different, but the main reason,
and this showed up all over the
foundation research,
is risk has shifted and changed, period.
And when clients have the
vast majority of the risk
and there's not a lot of risk sharing,
how they make decisions and what they
make decisions about
is loaded in a really different way
than it has been in the past.
That's why they're
demanding collaboration.
They wanna know I've
got the best team of minds
all around this and that
you all have actually sat here
and thought about my problem.
You mentioned the charrettes.
They want, as you said,
those three
references for each individual.
They are taking on all of the risk
and they are making decisions that way.
And so even if you still had the same
sort of generational considerations
about how they make
choices and what they value,
the owner has more risk
than they used to have
and the landscape, just like for us,
continuously changes for them.
And so they are different
because what they are
dealing with is different.
Yeah, a piece of that too is the
generational differences
and there are a lot of
people that were retiring
or trying to retire.
We had the pandemic, we
had the great resignation.
Everyone's now at different firms.
How do you market someone whose
experience was elsewhere
and haven't really
collaborated with new folks at the firm?
So again, more risk.
That was happening on
the AEC provider side.
At the same time, that was
happening with our clients
and with our partners in
these various jurisdictions.
And so everyone's in a new role.
Everyone's trying to figure it out.
And maybe there's a
human piece around that too.
That we're trying to sort through to say,
you know what, the rules used to be this.
But if we look at it
at the end of the day,
what are we trying to
accomplish together?
That's right.
And how can we bring
everyone together in a way
that supports that baseline,
but also kind of exceeds that because
standards are higher.
Standards are higher.
And the people that we're selling to
have been in this market doing this.
They're not, you know, this is not the
one and only project
that they're ever going to
do in their lives anymore.
They've been through the ringer.
They've had the successes.
They've got, you
know, their favorite teams
or assumptions about favorite teams.
So, you know, we're dealing with people
who have a lot of bruises, honestly.
Like you just said, we were
dealing with certain things.
Our clients were dealing with certain
things, jurisdictions,
the whole collaborative environment
has had a lot of stuff shift.
And we've had some things
happen that we want to repeat
and things that we don't want to repeat.
And so again, it goes back to risk
because what risk am I willing to take
and as the end client?
So that's a conversation
we don't talk about a lot.
And I know as we've been
going around the country
talking about this research
and helping people unpack it,
normally we talk about market trends
or we use other words,
but when you say risk,
it grabs onto that
neuropsychology, right?
Which there's
research from the foundation
on neuropsychology just as an aside.
Full fear of loss there.
(both laughing) But, you know, it grabs onto something
in a way that I have
seen resonate with marketers
at different career levels
as we've been going around
the country talking about risk.
So that's why I'm
liking to frame it that way.
And the rate of change
is increasing, right?
This industry has always been
impacted by economic swings.
And because of, you know, we,
the report doesn't talk
about a lot of those forces
that we know impact us
from a regulatory standpoint,
from a cost of capital standpoint,
from a workforce standpoint,
but it is a huge factor
in how we can be effective
and get in front of what that might be.
And so I guess to
answer your question, Josh,
it's complicated, exciting.
And if anyone can figure it out, we can.
Yeah, maybe to combine two questions
that I was going to ask you,
but in a world of, you know,
some firms are largely pursuing work
based solely on vibes
and some are, you know,
have a really intricate go no go process.
Ultimately, marketing
is being looked at now
for both to own
revenue targets potentially,
but also ROI and return on investment
for the area energy and efforts.
What are metrics that
marketers should be looking at
that are real and valuable?
And what are just vanity metrics
that they shouldn't be concerned with
and should marketing
own those revenue targets?
Marketing should own
those revenue targets
in combination with everyone else
that is leading the
effectiveness in that.
And so as an integrated
function of your firm,
you cannot discount how
those targets and effectiveness
and that affects your
attrition or ability
to attract team members.
It should not affect your operational
over selling something
that you can't perform.
So it does have to be integrated.
And it's, I guess
it's not as easy to say,
like this is on marketing, figure it out
because it would be
ineffective ultimately.
If marketing succeeds
in hitting those targets,
but everything else
isn't woven into that,
then the end result is
going to be a very bad KPI.
Yeah.
And I think what
you're getting at there is,
cause you asked the
question, what metrics matter?
They're metrics that drive revenue.
And I know that that
sounds like a really simple way
to say it, but a lot of
the time all we're doing
with marketing is
measuring our impressions,
our clicks, our hit rate.
These are important components,
components to give you intelligence,
but at the end of the
day, did it drive revenue?
And to Michelle's
point, we're a part of that.
Sometimes we're the
most important part of it
depending on where they
are in the funnel or cycle,
whichever terms you want to use.
But once it gets to a certain point,
you know,
particularly for repeat clients,
we don't have control about
what happens on a project.
You know, we may be
involved in the client experience
program and help coach and help along,
but if a project goes sideways, you know,
it's going to be hard.
It's going to be hard.
It's going to cost a lot of
money to get that client back.
And so we need to be a part of setting
the revenue targets.
We need to be a part of being measured
with those revenue
targets and we are a part of it,
but we're not all of it.
Now, I say all of that.
There are some companies
that have pursuit teams
and their marketing
and business development
joined pursuit teams and
they're measured together
relative to their efficacy,
relative to bringing in
revenue and revenue targets.
So again, this is kind of that.
We are no longer a
generalist marketer environment.
So, you know, if you are
going to measure all of marketing,
then it's a shared thing.
If you are measuring what
I would refer to as really
pursuit focused with BD, then sure.
Okay, they can own it with BD.
That's fine.
I'll let you do that, you
know, but that's my opinion.
But overall, as a
integrated marketing partner,
you know, everyone owns it.
It's like everyone owns the brand.
So critical KPIs to add to
Sarah's list repeat clients.
Yeah.
We also like to think
about those more squishy KPIs.
Like, would we put this on
the front page of our website?
Is this a story that we wanna tell?
Are people gonna get excited about
working on this project?
Are we excited about
working on this project?
I mean, those are
huge drivers that affect
all the other KPIs,
revenue, profitability.
How much are we gonna love doing this?
The work we do is hard.
There are gonna be times when you're just
cranking through it.
But if most of it you love
because there's something
about it, you know, we
have a lot of clients,
even my partners, we talk about that.
It's like, okay, you
know, is this a client
that we think will be fun
to be on a journey with?
Yeah, I talk about
that as like a power ball
for your go no go.
Obviously, is this a strategic fit?
And do we think we
have the right experience
to win this work?
Do we have the relationship?
But at the end, if your
score is like kind of squishy,
I think that's when you come back to,
if we win this, will we
be excited that we won?
And if your answer is no,
then move on to the next one.
If your answer is no, you
probably won't win it either.
Yeah. That's a great point.
That's true.
The other thing that
you said, Josh, you know,
you used go no go as the framing,
and go no go, as we all know,
can happen at various stages.
And what we've all been walking around,
so I just kind of wanted to say it is,
you said at the beginning in your
question about vibes
versus strategy, really.
Yeah, yeah, yeah.
And so what Michelle was talking about,
like, is this a client that
we're gonna enjoy working with?
Is this a project we're
gonna enjoy working on?
That can all be within
your strategy, you know,
about these are,
could be within your
business development strategy.
We'll just go there,
since we're talking
mostly about marketing
and business
development on this podcast today.
But in your business
development strategy,
what are those aspirational clients,
aspirational project
types that we wanna, you know,
or scopes that we really wanna pursue,
so that we're doing what people love,
whether it's construction,
design, it doesn't matter.
There are projects that
get your people jazzed.
There are locations that
get your people jazzed.
And there are clients
that get your people jazzed.
And to your point, you're gonna win those
because they're gonna be excited,
and you're gonna perform
well because they're excited.
And it helps when, you know,
you're in the middle of
one of those projects,
it's a little bumpy, it's a little bumpy,
but I'm still really excited I'm here.
Well, we talked a
little bit about the PE side
of the AEC world now,
how private equity is really
changing how our firms operate.
The other major thing
that's maybe not quite as new
is the idea of mergers and acquisitions
being a big part about how firms grow
and thinking about in
terms of both geographic growth
and skills growth and
having new markets open up
or new disciplines.
How should firms be
thinking strategically
about growth in the next few years?
Just the framing element as a consultant
that does research and works
with lots of organizations.
I get engaged in a lot of
different M&A conversations.
I am not an M&A advisor.
But I think one of the healthiest ways
for companies to think about M&A
is really about
expansion of capabilities.
And I think as we move
forward in the changing market
with the nuances of our markets
and how they're going to
grow, adapt and change,
new capabilities, the
ability for new capabilities
because you've now brought together this,
it's sort of like Captain
America by the powers combined.
We can now do something
different and special.
And so it's about, you could say
collecting capabilities,
but these capabilities
that are going to end up
being so valuable to your client
and therefore valuable to your business.
I think what we saw with the trends
is both from a PE and an M&A side,
there is more activity on the engineering
than you see on the
construction architecture side
for a lot of reasons that we can imagine,
but also again, to be
effective in delivering that,
expanding services and a little bit more
of a business mindset
around just less vibes
and more like KPIs, not entirely,
but I think it is
interesting to look at how
the E side of the AEC has really leaned
into that even more.
And the ones that I have
done a lot of studying of
are about those
capabilities to be more valuable
to the client and solve more complicated
engineering problems.
Engineering is a giant discipline, right?
I mean, you can talk about horizontal,
vertical, invisible,
products that they're
designing and building
and they really
understand the nuance of we need
this expertise now over here
because of a new regulation
or new compliance and
they're bringing them together
like Captain America.
(laughing)
Is it Captain America?
I think that's Captain Planet.
Captain Planet, yes.
By the powers combined.
You watch my show, I wanna make sure we
get all this straight.
Now you know how old I am too.
Avengers Assemble is Captain America.
Yeah, that's right.
Thank you.
These are very similar, yes.
They are, yes.
Maybe staying on the M&A topic,
I think from a branding perspective,
having a multi-market, multi-office firm
is tough enough to
have a consistent brand
or client experience.
But then when you think about that
through the lens of M&A,
this is another firm with another history
with other offices in multiple markets.
How do you integrate all of that?
Or what is the foundation data showing us
that how firms best integrate
following mergers and acquisitions?
I think the most successful firms
have again, an integrated strategy.
And because it,
typically in the M&A landscape,
these are larger firms
acquiring multiple small firms.
That's not always the case, right?
You could have a like for
like and there's a merger.
But in general, you are most effective
because you have the heads of
these very focused disciplines
as part of the conversation.
You have a head of communications,
you have head of integration,
you have a head of collaboration,
you have a head of all of
these different functions
that are not
necessarily found in most firms,
but are critical to being
deliberate about the brand
and the culture and the
services and the opportunity
to come together and
be stronger together.
I think we're also,
it's important to talk
about where it breaks down.
And that is where there's
misalignment to begin with.
And I do think that as
our industry has matured
in this area, firms and
advisors have become much better
at helping to navigate where there's like
for like, not just in firm size,
but in values and how
they approach things.
And I think that these core functions,
one of those is again,
it's client experience.
So if you've got a
program already in your company,
you're folding them in to the, this is
how we do it moment.
And this is how we deliver,
tell us how you've been delivering
so that we can innovate
our client experience program
versus this, you no longer
matter, this is what matters.
That was really the
beginning of mergers and acquisitions
in our industry, let's be honest.
So we're getting more sophisticated
with our business
systems, as Michelle alluded to,
and she also alluded to,
we're getting more
sophisticated in how we integrate.
There are many
companies I've been talking to
that I was surprised with
the size of their platform,
that they have
integration teams now, and they do.
It's not just for HR and IT,
which we'd seen that in the past,
but it's the marketing and the comms
and the business development,
because they don't want
people to miss a beat.
They don't want employees
to feel left out in the cold
to figure it out on their own.
It's an all around, right?
It's clients and employees, all of that.
And I've just been
really impressed personally
with some of the
outreach that I've gotten
from these integration teams
where they've only done
one or two acquisitions,
and they realized through that process
that that's a critical component.
So they've built these
teams before they go out
and acquire any more.
So they're not, you know,
they're not Jacobs, AECOM,
you know, really,
really large, they're not.
But they care a lot about what they do.
And so they're building
those teams to make sure
that the business continuity is there,
and part of the business
continuity is the brand
and the clients and the people.
And the reason that many of these firms
are in the position to be acquired
is because they do not have
a transition plan in place
or the talent that's
been grown in the right way
to take over, or they
haven't had enough profitability
to really allow those founders to retire.
And there's an interesting thing
that's kind of continuing to happen,
which is like, we have,
it used to be you're an architect,
you die at your drafting
board, like you just do it.
And that has changed in the last,
I would say even just 20 years.
People wanna retire.
They wanna leave the
company to someone else.
And when that is not an option
because of various factors,
they are, you know, placing it
and creating that growth
opportunity in other ways.
I think the other thing that's happening
is these firms are incredibly valuable.
They're incredibly valuable
because they've got capabilities.
And that's why we're seeing
a lot of these M&As happen
because they've got a capability.
They may have found a
limitation with their growth
with that capability,
or they've just made the decision
that the best way for them
to grow is to be acquired.
I've been parts of firms personally
that thought that they
would be the one to acquire
and then decided that the best path for
them was acquisition.
And so I think there's a lot of really
interesting dynamics
that are happening out there with M&A.
And there, I believe, Josh,
you've had some people on
the podcast talking about M&A
and those dynamics.
But as we look at it as growth drivers
and marketers and business developers,
it's about, it goes back to
what we've been talking about,
that you're acquiring capabilities
and you are acquiring a brand
and making sure you have a
good process to integrate
so that you become one brand.
And not because it's got a
plus symbol on the announcement,
but because your
processes and your procedures
and your business is ready for that.
And that's how you navigate.
And I made it sound simple, I guess.
It's not because there's people involved.
And that's why I started
with Protect the People,
both your clients and your employees.
Protect your people
because they are the ambassadors
of that success.
Well, one of my
favorite things that came out
of the AEC Advisors episode,
and if you're watching on YouTube,
I'll put a link to their episode up here.
And if you're not watching on YouTube,
get with the program,
people, it's on YouTube too.
But one of the big
takeaways from that episode
was the irony of when
you build your business
and really optimize it for acquisition,
you're really optimizing it for profit.
And spoiler alert, you
might not want to be acquired
once you do those things.
So I think it's a really
great exercise for all firms
to be going through all times,
thinking about if somebody
were gonna walk in the door
tomorrow and try to run
this business instead of us,
like are we in a
position that we could do that?
And that's also put you
in a really great position
to be able to walk away for a vacation,
for a sabbatical or for retirement.
For whatever the next chapter is,
whether it's
acquisition or it's succession,
because we do have a lot of firms
that are first generation ownership.
I don't remember what the statistic is,
but it's high, first
generation ownership.
And so they've gotta move
on, they've gotta move on.
And it's one of the
conversations that happens a lot
in M&A is have they
been through a successful
transition of ownership
because that's the question
of can we go on vacation?
Yeah.
Would you say in addition to maybe
the financial planning side of it,
and thinking about in those terms,
what are other bold
firms doing differently
that your run of the mill
firm isn't thinking about?
Finding a unique voice.
Part of the reason brands can be bold
is because they've identified and
accepted who they are.
And have found a way to talk about that.
And so when I think about,
I don't have the answer for everyone.
They only know that themselves.
It's almost like
looking in the mirror, right?
And having that confidence and insight,
and I don't know, fire in their belly
to go and be bold and
to do things differently.
I think that's really the model
and everything else will follow.
It has to start there.
I think what you've
said, I'm gonna say it
in a maybe a more
provocative way is it's focus,
clarity and saying no.
When I see companies doing bold things,
they've said, this is
what we're going to go do
and we're building a
business around doing that.
If we want to be known as,
and this goes into your company's vision,
if we want to be known as X,
then we are investing towards that.
And we've seen it happen on the
commercial side of things
and in our consumer
world where brands lose focus
and you say, oh man,
they're all over the place.
And then you hear in the
news or in the stock market,
that they're all over
the place because of it.
And so we know that focus is critical.
And the other part is focus
and being bold in that way
is your differentiator.
And that's what
you're saying, Michelle is,
B, stand out, stand out for who you are
in your brand voice.
And I think that when
companies really go after that,
they're looking at
all business functions.
They're not delegating one of
them to an administrative role
and we're a business
function in marketing
and business development.
And as we talked about earlier,
now we need specialized roles
in order to be able to do that.
We need them across all
aspects of our business,
not just marketing and
business development.
There's all kinds of
intelligence that HR is looking for
in terms of recruiting
that they didn't use before.
There's all kinds of
things operations is looking at
that they didn't look at before.
So I look at it as a bold business says,
this is what we're doing,
this is what we're not doing.
And they absolutely architect their
business towards that.
It takes courage and it
takes discipline and it's hard.
I mean, we're all business
owners here on this podcast.
It's hard.
It is hard.
Yeah.
So if there are so many topic areas
that this foundation research covers
and we'll tell everybody
where to find that here shortly.
But what if I'm a firm
owner and I just say,
ah, I'm gonna ignore all of it.
What's the risk in not paying attention
to what's happening here?
Michelle already
touched on it a little bit.
It's the sea of sameness.
Everything that we
uncovered in this research was that
you have the
opportunity through collaboration,
through focus, through CX,
through really having a
mature business function
in your marketing and
business development
to differentiate and to win.
And so, the sea of sameness
staying in the sea of sameness
is really your risk.
It's losing out on opportunity.
It's not resonating with the market.
It's your clients going, who are you?
(laughing)
But it's losing what you
have, I think is the biggest
because it's going to move this way.
It is moving this way.
Yeah.
So get on or go away.
There's no status quo.
No.
So you can't do this, right?
You either do this, you
grow in your effectiveness,
you grow in what you're
doing, or you're declining.
So you get to make that choice.
Yeah.
Well, this is maybe
tagging onto this idea.
There's so much future
facing research in this report.
So I'm gonna push the two of
you to go a little bit further.
This is where I typically ask people
to look into their crystal ball
and tell me what their bold
prediction is for the future.
I would say maybe if you can,
share one prediction
that you feel strongly about
and one that you're maybe
not sure, a little uncertain.
I predict that we are
going to see a percentage
up to 20% of CEOs that were former CMOs.
Ooh, I like that.
Or CGOs, CSOs if you
have a sales or strategy.
I'm seeing it happen more and more
in the succession of regional firms.
And when I say regional firms,
I mean they could
cover four or five states.
I don't mean that they cover two cities.
Regional firms, I think they understand
with their intention of
staying in their geography,
how critical intelligence
and capturing more market share
where you are is.
That's what I've
witnessed across a couple.
And I go, yes, you all are awesome.
You're doing something different.
And bold companies say no.
My prediction is that, what is the
timeline by the way?
Whatever you decide.
(both laughing) I like to look really far in advance.
So my prediction, if I were to look
really far in the future,
would be that marketing
and business development
isn't a function within your firm.
It isn't a department.
It is an integrated role
that looks completely
different than it does today.
It's almost like an
insight to your client role
in the way that we
have become sophisticated
in how we think about opportunity
and how we think about
business development.
Partnership.
I also think that one of
the reasons that's possible
is just like with all the
trends we're seeing from CXAI
and collaboration,
I think the harder, maybe
less likely piece would be,
can we get past regulation?
And some of these markets,
so much of what is holding us back is
based on regulation.
It's that compliance piece
and it exists, it's real.
And so while that may be more possible
in private sector work, I
think some public sector,
it's a little bit harder
because of that regulatory piece
to really see that same type of progress.
I think it'll just be different.
Yeah.
Mm-hmm.
So before I let the two of you get on
to all of your foundation meetings
the rest of this week here in Denver,
any parting thoughts,
challenges for our audiences?
One of the things I'm
gonna parrot Michelle
that she has said throughout
us embarking on this research,
which this is the first
time we did this research
in this way and we'll do it
annually now, you can expect it,
is we don't just want
research, we want action.
And so one of the things
that we've been calling
as we've been going
across the US is we've said,
as you hear this, what is
something that you heard
that you're gonna bring back and you're
going to start doing?
What is something you
are going to stop doing?
And as we do in this industry,
what is something you
are going to approach
with a low resource strategy
to see how far you can get it?
We want action with this research,
we don't want it just to be a report
and oh, that's
interesting or that's validating
based on where I am
because different parts of the US
are at different
maturation places with these themes,
different firms are,
we don't wanna validate
or make your mind go scramble.
So action has been at
the heart of what she and I
have been putting
towards any of the delivery
of this research
because you can go read it,
but what are you gonna do with it?
Yeah, turn insight into action.
One of the ways that I often
frame it is in my own firm,
we talk about we don't wanna
be paper architects, right?
What fun would it be to design something
that never gets
built, never gets realized?
And so same thing with research,
you have the ability to
go down these insights
and really think about
what that means for you
and how that creates action
and turn it into something.
That's the most exciting
part, turn it into something.
And a little bit, you
know, self promotion
for the foundation because of this,
we've been approached by
companies who have said,
we wanna take this
information to our annual meeting.
And so we have a short presentation
that you can actually
also acquire to be able
to take it around and
talk to your leadership,
your ownership about this and to the people
about this and to have
the conversation as a group
about what are we gonna do with this?
What is our call to
action for us and our company
in the moment that we're in?
So it's, yeah, there's a lot of great
information out there
about anything, what
are you gonna do about it?
And we're really
promoting what are you going to do
for marketing and business development
to help fuel your business?
Well, that's a great
segue before we let you go.
Where can our audience find this research
and where can they find
that presentation deck?
And is it, this is just for members,
is it available for non-members?
Where can they dig all these things up?
Yes, so all of our research can be found
at smps.org forward slash foundation.
And you will see all
of the reports in there.
You will see
information about our donors.
We exist because of generous donations
from members and
companies in chapters and regions
across the US and Canada.
And we would, none of this would be
possible without them.
So more information about donors,
information to get
involved with the foundation.
And you'll see the library of knowledge
that the foundation has
built through research
and through those generous donations.
Most of our research is available for
free for SMPS members
or it can be purchased.
You'll see, when you
arrive at that webpage,
it's a store, it's a storefront
and you can acquire any of
those pieces, purchase them
either based on having a membership
or not having a membership.
And as you check out
with the emerging trends,
you'll be invited to
purchase the presentation deck,
among other things.
We are excited, so
excited that this research
is resonating with our members.
That's where we've really
spent our time and energy
getting this message out to them.
So thank you for giving
us your platform, Josh,
to go beyond our
members and into the industry
because our members are what fund the
foundation generally.
Right now our members and
their, as Michelle said,
their companies and our
regions and our conferences.
But we are taking this
outside of our walls as well
within the industry.
We're excited about that.
We'll be speaking at
some industry conferences
and that's another way
that we wanna activate.
So through donation, we are happy to come
and deliver this
research and do workshops
and all kinds of
different things because again,
we're trying to activate the research,
but we're also
fundraising for the next one.
Awesome, it was a
pleasure having both of you
on the show today and I hope you enjoy
your windy stay in Denver.
Sarah and Michelle,
you get to tolerate this
for the rest of the winter.
But where can folks
find each of you online
and learn about your firms as well?
Yes, you can find me
on LinkedIn primarily.
That's my best platform.
Michelle Raftery with 4240 Architecture
and I look forward to connecting with you
and any questions you have about the
foundation research.
I'm very passionate about it,
so I would love hearing from you.
And Sarah Kynard with
the Flamingo Project.
You can go to my
website or LinkedIn as well.
And I'm there.
Awesome, well, thanks
for joining us today
on the Bold Brand Show.
We'll see you all next time.
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