For Pete's Sake

“Hold the pickles. Hold the lettuce. Special orders don’t upset us. All we ask is that you will let us serve it your way!” Remember that advertising jingle from Burger King?

The next “c” word in my series is “choice.” Our clients definitely want it, so we compile an unlimited array of options, from the building and design expertise we offer to the colors and finishes on the products we sell. We want to be all things to all people, and our message to the client is, “Have it your way.”

But with so many choices, clients are often confused, and in their confusion, they’re afraid to make a choice because it might be wrong. Psychologists call this consumer behavior “choice overload.”

Research on consumer behavior suggests that choice is demotivating. When clients encounter lots of choices, they often have fun choosing but are ultimately less satisfied with the selections they make. Conversely, clients who choose from fewer options are often happier with their ultimate decisions.

Abundant options make clients unhappy because they’re unsure of the resulting decisions and are frequently unable to distinguish good decisions from bad. This is particularly true when decisions have big consequences, like specifying the wrong HVAC system for a museum renovation or purchasing expensive custom-made products that can’t be returned.

Now consider the double whammy of choice overload and the economic uncertainty we find ourselves in now. Is it any wonder why our clients go dark on us? How many clients have pushed you to get them information in a hurry, only to stop returning your phone calls after they have received it?  They are paralyzed by the multiplicity of choices and, in a bad economy, are afraid they’ll make the wrong decision.

Does having lots of choices give clients freedom and flexibility, or does it confuse and stifle them?  People are so busy doing more with less they don’t have time to sort through the countless choices we present. Or worse, because they have no real intention to spend money now, they waste time while enjoying the process of choosing.

Ask anyone in the traditional building business now, “Are you busy?” They often answer, “Yes!” Then ask, “Are you selling anything?” “Not much,” they often reply. Are we trying to do too much? Are we trying to be all things to all people, dazzling clients with a dizzy, and demotivating, array of choices and options?

The more freedom they have to choose, the more our clients rely on institutions and other people, especially experts like you. What if we were able to make decision-making easier by limiting the choices we present but presenting what we have more expertly? What if we made it simple to choose? Who knows? Maybe clients would choose to spend more.

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Ordinarily if I were quoting from a newspaper while writing for an audience composed of preservationists, the words would likely originate from an arts and leisure section or a column about high culture or an article about architecture. Currently, however, there’s a story from the sports section that’s relevant to the next “c” word in my series about our traditional building industry: “certainty”.

Tim Tebow, the Denver Broncos’ quarterbacking phenom, has assumed a leadership role for his team by creating certainty where there was none. What looked like a losing season in Denver suddenly turned around when Tebow stepped in to help make teammates believe in themselves and in their ability to win.

His example is instructive for businesspeople, too. The future has rarely looked so mysterious. After three years of economic hardship, most of us have lost customers, money and confidence, in that order. None of us is very sure about the future. With a steady diet of bad news, from the European debt crisis to the possibility of a U.S. government shutdown, it’s hard to avoid feeling discouraged, much less feel confident about winning. Even our victories, the few we can claim, have all been hard fought and down to the wire, like the Denver Broncos’ last-minute field goals.

We look at economic forecasts to find certainty, but even these have been wrong lately. Here is the latest from FMI’s “Construction Outlook,” which is as good a prediction as any.

RESIDENTIAL CONSTRUCTION (in millions of current dollars)

NON-RESIDENTIAL CONSTRUCTION

Those are mostly positive numbers, but they might not be strong enough to create certain outcomes. “If you can’t predict the future, create it,” says business guru Jim Collins. Susan Marvin, president of Marvin Windows and Doors, is using Collins’s quote in company meetings as a morale builder. Only worry about that which you can control, she says, and control that. With control comes certainty, or at least the feeling of it.

With all this uncertainty, however, where is certainty to be found? We don’t have to create it all ourselves. There are some facts that bode well for a more certain future in real estate and construction, including the $170 billion traditional building market. According to the U.S. Census, there are 126 million people between the ages of 22 and 46. This is almost twice the number of baby boomers who drove the real estate and construction booms between 1969 and 2005. The sheer number of people entering the work force or entering their peak earning years is encouraging for builders, remodelers, architects, building owners and suppliers.

Moreover, these current and future clients are determined to live their best lives, now, because they grew up with tragedies like Columbine and 9/11. They know there are no certainties tomorrow, so they live for today. Soon, they will choose to move on with their lives—it’s already starting to happen—and moving on includes buying, building and renovating houses and buildings generally.

How do we appeal to these current and future clients? How do we assure them that our products and services are a good bet in an uncertain economic environment? Take a page from Tim Tebow’s playbook. Lead; don’t follow. Think less about what you do and more about what they want.

And because in these uncertain times, our clients are often irritable, moody and indecisive, we need to lead them, with confidence, integrity, clarity and decisiveness. Those characteristics are inspiring. They provide a way to win the game because they create certainty where there was none before.

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The only thing worse than making something you can’t sell is selling something you can’t make.

With revenue down by at least 50 percent for many segments of the design and construction industry, most of the architects, builders and suppliers I talk with are about half their former size. Between layoffs, staff attrition, plant closings and consolidations, most of us in the business are operating with half the company footprint we had even three years ago.

“Business is picking up a little. We have all the business we can handle,” my friends working in traditional building and design are telling me when I ask how they’re doing. That observation leads me to the next “c” word in my continuing series, “capacity.” Nearly every company or firm has had to right-size to fit a market that’s a shadow of its former self. However, a good question, even now, is will we have the capacity to deliver products and services when business picks up steam?

During these tough times, we’re all busy but not necessarily flush with cash or even profitable. We’re busy because our clients demand more and take their sweet time making decisions. As one renovation contractor friend of mine says, “Three years ago, the client said, ‘Let’s do it.’ Now they say, ‘Let’s discuss it.’” We’re also busy because we have to do more with less. It is not unusual for an architect to put several thousand dollars’ worth of time into a proposal only to be told, “The project is on hold.” Busy feels better, but it doesn’t always pay the bills.

The president of a big window company told me recently, “We have figured out how to make money with only 600,000 housing starts.” The recession has allowed us to shed excess of all kinds. Good news, to say the least. But it has also diminished our capacity to deliver, and this puts more stress on a smaller number of producers. Not so good news.

I see more partnerships being formed on large projects, even partnerships with competitors. This spreads risk, increases output and gives clients confidence their project teams have the capacity to deliver. I also see more temporary workers, the 1099ers who are hired for a specific skill required on a specific project. Both are reflections of how we’ve adapted to the new, uncertain reality. Nobody has the confidence to invest more than they know will yield a solid return.

Finally, I see a greater emphasis on hiring people who can do more than one thing, sometimes simultaneously! And managers who are used to delegating are now doing it themselves, especially owners who feel like they are starting all over again in a start-up business. Retirement for most of us just got postponed, indefinitely.

How to cope? A positive attitude and eternal optimism pay off, if only to give us the capacity to keep going, despite an economy where victories are fewer and further between. Celebrate every little win! And innovate.

A new initiative will re-energize you and your team. It will cause you to focus on the future so the present seems more bearable. It will give you hope that better times are ahead.

For many of the traditional building professionals I talk with, every day is daunting because everything we do seems harder than before. It reminds me of a bicycle trip my best friend and I took from Rapid City, SD, to Cody, WY, over the Big Horn Mountains, about 13,000 feet up. Standing at the foot of those mountains, looking up at the snowcaps from the eastern slope (we were traveling west), made me wonder how the heck I was going to make it over. Did I have the capacity to do this?

That was the last time I looked up. Instead, I focused on putting one foot (pedal) in front of the other, slowly but surely making progress. When we got to the top, the ride down the other side was a lot easier.

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Three years ago, there were three contractors bidding on one dollar. Now, there are seven contractors bidding on 50 cents. Business is scarce, and competition, the next “C” in my series, is fierce.

We are all busy chasing work that is slow to close. In the marketplace, I hear this: “Quoting is up, business is down. Competitors we’ve never heard of are stealing business from us, some of it with our past clients.”

Everyone is diversifying their businesses to sell into new markets—including yours. Although these new competitors might be posers, lacking authentic experience in historic restoration and renovation, your clients and prospects don’t necessarily know better. If they do, they are still seduced by a low price. When every job counts toward keeping the doors open on your business, losing jobs to the competition is particularly painful, sometimes even fatal.

What’s more, a new kind of competition has emerged in this challenging market: inertia. The uncertainty of these times has taken the urgency out of making decisions. “If I wait long enough,” some customers seem to be saying, “the right answer will be revealed.” Fear makes buyers freeze. (Certainty, or the lack thereof, in this market is one of my next “Cs.”)

Competition is a great motivator. Has it motivated you? Competition is good for the customer because it forces suppliers and service providers to be more innovative. I’ve seen a lot of innovation in this recession; adversity truly is the mother of invention.

Think differently about your competition. It’s not so much the other companies we bid against. It’s competing with ourselves to lower cost, increase efficiency, improve our execution, launch new products and services and be more relevant to our clients. Nowadays, it’s also about competing with our own clients’ inertia. What creative idea will cause a client to start a stalled project? What pressing problem can we solve to motivate a client to begin?

In a piece of research by Restore Media, government and university facility managers, important clients in our field, said the most telling thing their suppliers can do is “provide solutions.” This was followed closely by “provide technical expertise.”

The continuing recession has taken a toll on past clients; some are even out of business. Have you updated your client list to reflect this? Are you communicating with all the important influencers within client and prospect firms? The principals are not the only decision makers. The AIA’s survey of architectural firms reports an increasing number populated by unlicensed architects, many at the entry level. These are often the young professionals who show up to “lunch and learn” sessions because they’re asked to scout suppliers and service providers. Cultivate them. They need the technical expertise you provide.

How do you stand out from the competition? How do you compete with a lack of urgency in the market? How do you compete with yourself to improve your own performance? As the saying goes, “The more things change, the more they stay the same.” There will never be a better way to compete than to provide innovative, relevant solutions for clients who trust you.

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If you have been following my blog, you’ll know this is the fourth “C” word in a series of 10 that encapsulate my observations of the traditional building industry.

Control.

How many middlemen stand between you and your client? All those predictions in the 1990s about their destruction are turning out to be true. Poor bandwidth only temporarily delayed this inevitability.

Business is too competitive for us to put our destiny in someone else’s hands. If you are selling through distribution or communicating with clients via an “allied professional,” too much gets lost in the translation. And alliances, however strong when business is good, are fraying now, under the pressure of a challenging economy.

Customers want just-in-time delivery, but distributors don’t want to stock inventory. And the Internet allows customers to know more about you and your business, sometimes more, it seems, than you do. In fact, the Internet allows customers to buy direct, bypassing middlemen altogether.

My company, Restore Media, LLC, did a survey recently aimed at architects, interior designers, contractors, building owners and facility managers. Seventy-five percent said they purchase building materials online. The product category they bought most often online was hardware, followed by lighting and plumbing products, in that order. Sixty percent of those surveyed who do not currently buy building materials online plan to do so in the next 12 months. Fifty-seven percent of the respondents said they buy directly from the manufacturer.

In this age of transparency, middlemen are exposed and often suspect. Clients want to know which subcontractors you hire. If you are the sub, they want to know you. Whether you are the preservation architect working for the general architect-of-record on a multi-phase project or a stone mason reporting to a historic buildings consultant, clients question everything and everybody.

You may not be able to sell directly to them, but you can communicate directly with your clients. Do it often. In fact, over-communicate. Control the flow of information, and you will control the client.

In a separate survey of traditional building facility managers, we asked, “What do you want most from your suppliers and service providers?” They answered, “Technical advice and solutions.” Your buyer wants expert information and a solutions provider. What your clients don’t like are suppliers treating them like a “sales lead,” obsessed with capturing their contact information, which they often pass on to a middleman whose technical expertise is often lacking.

Control your own destiny by controlling the flow of information, services and materials to the customer. Clean up your client database, and communicate with it. Improve your Web site. Make more visits to the jobsite. Get involved with groups and associations that connect you with your clients. Attach yourself to the things they care about. Don’t leave this up to your intermediaries.

Embrace the Internet as your direct communications and selling channel to clients who demand the best service and the best price. Business is too competitive to give up the ability to control it.

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Magazines with strong content are engaging, and engagement is an important goal not only for publishers, but for marketers, too.

In my series of 10 “Cs”, I’ve written about “conservation” and “compatibility,” both significant parts of the package. The third is just as important: “content.”

IPads, iPhones and other mobile devices, Kindle, Nook, Facebook, Twitter, LinkedIn, and many more are all obviously popular technologies, endlessly discussed in blogs, e-newsletters and magazines; at conferences, cocktail parties and water coolers and on elevators, golf courses and talk shows.

These new technologies allow us to communicate faster, more frequently and to a wider audience. But our fixation with them is obsessive.

Don’t get me wrong. We should all embrace these new technologies. They make us smarter, faster and more efficient. They save us money and time. They connect us.

But does the gizmo in our hand engage us, or are we engaged by what we see, read and hear? Is our message as important as the device on which our message is delivered?

The plethora of new devices that deliver content has distracted us from the content itself. Because we deliver more and more of it, content has become commoditized. There is more content of less quality. As a result, truly good content is in greater demand. Do you deliver good content? Or are you just good at delivering?

Restore Media routinely conducts research to find out what information (content) our readers, Web site visitors and conference attendees want. You tell us, “I need technical data” or “I’m looking for solutions” or “Your information is reliable.” In the research, there is not much feedback about how the content is received; nearly all of it has to do with the quality of the content itself. Is this because people view our content as information (about their businesses and fields) instead of entertainment? In the general media, the difference is often blurry, with the emphasis on the delivery method.

Wikipedia is very convenient and widely used. It jumps to the top of most Google searches. But the information it delivers is not always true or accurate. Like fast food, it is widely available but not very good.

Different kinds of content lend themselves to different kinds of content delivery technologies. Visual, color-sensitive design ideas convey best in a big, colorful magazine format. Technical data, the kind of information we have to look up, reads well online. The typical reader of Clem Labine’s Traditional Building magazine spends an hour reading the publication. The Web visitor to www.traditional-building.com spends about 10 minutes on the Web site (a lengthy visit by Internet standards). The fact-seeking audience for www.traditional-building.com is several times larger than the audience for Traditional Building magazine. Clearly, each delivers a different content experience.

What content do you create about your product, practice or business? Whether you deliver this content on your Web site, via your catalogue or on your Facebook page, this content needs to be good. Good content sets you apart.

What makes good content? Reliable sources, facts, research, specificity, word choice, illustration, correct punctuation, experience, complicated topics made understandable, brevity, clarity, cadence and, perhaps most important, relevance. Your message will resonate with your audience because it means something to them. It should speak to their specific needs and interests, at the right time.

When it does, it will engage with readers no matter how it is delivered. Then and only then should you deliver your content in as many ways as possible.

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This addition to the original Carhart Mansion relates well--is compatible with--the Carnegie Hill neighborhood on New York City

By 2050, there will be 300 million Americans living in U.S. urban areas. This includes our cities and close-in suburbs.

There will be 55,000 multi-housing units built in the next 40 years.

According to the U.S. Department of Energy, the restoration and renovation of existing, commercial and institutional buildings will double in the next 20 years.

Seventy-five per cent of new housing has no access to public transportation. In some markets, commuters spend up to 25% of their yearly income just driving to and fro. Conversely, public transportation is available to those who live in urban areas.

There are 24,000 schools in the United States that were built before 1951, most of which are within walking distance of older neighborhoods.

Thirty per cent of the U.S building stock is 50 years old or older.

Wall Street, America’s iconic commercial district, now has more residential than commercial real estate.

In many markets across the U.S., infill construction is the only new construction happening; to satisfy the demand, production home builders are launching “infill” divisions inside their corporations.

The point to all of these numbers and realities is that more and more building design and construction will be contextual. It will have to look like, and be compatible with, what is already surrounding it. (“Compatibility” is the second in my list of ten “Cs”.) Some of this will be required by historic district commissioners who strive to protect the context of their places. Much more will be influenced by the people already living in these places; they want new buildings to harmonize with the existing environment. They want to minimize change and visual disruption. They seek certainty and familiarity in these uncertain times.

Architectural “continuity” not “contrast” is how Professor Steven W. Semes, author of The Future of the Past, articulates what’s needed, though not always encouraged, by historic districts. In his fascinating book and in lectures, Semes points out that since passage of the National Historic Preservation Act in 1966 and publication of the U.S. Secretary of the Interior’s Standards for Rehabilitation in 1977, “we must re-examine architecture and historic preservation practice in light of the developments in the field, most importantly, the emergence of New Traditional practices among contemporary architects and urban designers.”

“The city is a fabric of parts, a collective harmony,” Semes told me over coffee in my kitchen recently. The evening before, he had delivered a compelling speech to the Mid- Atlantic Chapter of the Institute of Classical Architecture & Art on the subject of compatibility versus differentiation in urban design.

Perhaps the most convincing case Semes makes for the growing importance of compatible design is that it is polite. A new building, drastically differentiated from its existing neighborhood, sticks out, like track shorts and flip-flops at a wedding.

The marriage of old buildings and new buildings favors compatibility.

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In my last blog, I promised to write about ten trends in the traditional building industry, which were the subject of a speech I gave recently. These trends are observations, really, based on my conversations with the readers of our magazines, visitors to our Web sites and attendees at our conferences.

The ten trends each begin with the letter “C”. Conservation. Compatibility. Content. Control. Competition. Capacity. Certainty. Choice. Cash. Confidence. I’ll start with the first one, conservation, and address the remaining nine in subsequent blogs.

Conservation is a new recession ethic, which will stay with us even after the economy improves. It not only includes the conservation of resources—sustainability, that is—but it also speaks to the way many people are thinking and feeling.

Sustainability is here to stay, especially in the non-residential building sector. Consumers are less willing to spend on green features in new houses because green standards for residential construction are confusing to homeowners and because conserving cash trumps saving the planet. But homeowners are conserving in other ways in which saving energy means saving money. Tax credits have helped. And homeowners are renovating their houses, instead of building new ones, right-sizing remodeling projects in the process and often paying cash rather than taking on another loan.

LEED is the clear standard for sustainability in non-residential building. Institutions are mandating it, including government and educational entities. The Government Services Administration (GSA), for example, employs a director of sustainability, who tells me the GSA manages 430,000 buildings and has spent $5.5 billion on green upgrades to them, thanks in part to the Economic Recovery Act.

Existing buildings in the U.S. account for 300 billion square feet, which represent an enormous amount of embodied energy. For every square foot of building material we conserve, we save about 8 gallons of gas. So, saving 300 billion square feet of existing structures equals saving nearly 2.5 trillion gallons of gas.

This is why Carl Elefante, of Quinn Evans Architects, says, “The greenest building is the one that’s already built.” Jean Carroon, of Goody Clancy Architects, adds, “Old buildings are the new economy.”

The economic downturn has forced our return to a culture of thrift. The U.S. savings rate is up to 4% (from less than zero in 2006). This manifests itself in a number of ways, including making more of what we have and even extending to a consumer behavior called “materialistic disenchantment.” One New York architect told me her wealthy clients have “luxury shame.”

The good news about conservation is that people want durable materials. Sustainability in traditional building is defined by long life. The gizmo greenies might still be wrapping skyscrapers in glass powered by HVAC systems on steroids, but the original greenies want buildings with natural materials that are often locally produced, thermal massing, operable windows, overhanging eaves and design well suited to the site.

These traditional building practices are back in vogue, even as a plethora of energy fashion products hold out the promise that bad buildings can achieve good performance.

Poverty is good for preservation, and conservation is here to stay.

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As chief ambassador for Restore Media, I speak with a lot of people in our industry. Half my time is spent talking with our readers and conference attendees (architects, contractors, building owners) and half with our advertisers and sponsors (building material suppliers and tradespeople). This is what I’ve been hearing lately.

“Business is picking up, not enough to get real excited but definitely picking up. We have little victories, lower expectations and all the work we can do.”

“Our business is improving, but we are nowhere near our peak three years ago.”

“We were on track to have a record month this March, but the weather fouled it up in the last week.”

“The high end of the market is very active. We are quoting more jobs than ever before.”

If you read the same forecasters I do, perhaps you have seen these predictions for 2011 (from McGraw-Hill Construction).

• Total construction +8%
• Single-family housing starts +27%
• Multi-family housing starts +24%
• Commercial building +16%
• Institutional building -1%

What my clients tell me has more weight than what the economists say. I have heard many stories from builders and architects about wealthy people finding great bargains on houses, big houses, that went for $4 million four or five years ago but for which they paid $2 million. Then, they go about renovating the whole house with the money they “saved.” I’ve heard that the “materialistic disenchantment” or “luxury shame” rich people felt at the trough of the recession is now behind them as they “get on with their lives.”

“I’ve never seen this much scrutiny about price,” a renovation contractor told me. “Everyone wants value engineering, and clients nit-pick every line item in my contract.” This helps to account for a big spike in bidding and quoting activity now , as clients shop more sources for the best deal. Everyone in the traditional building industry is saying, “We’re working harder than ever before for every order. Closing deals takes much longer.” This includes commercial and institutional architects, who sometimes spend $25,000 in non-billable fees and drawings without landing the job.

Whether it’s competitive prices or “people getting on with their lives,” business is definitely improving. The traditional building market is more influenced by what happens with the stock market than with the housing market. A spring thaw and some market momentum should bring a very good second half .

But even when business improves, we’ll face a new reality. It was outlined in a speech I gave this month at the Building Stone Institute’s annual meeting and is summarized in ten words that all begin with “C.”

Conservation. Compatibility. Content. Control. Competition. Capacity. Certainty. Choice. Cash. Confidence.

I’ll talk more about the ten Cs in my next blog. Stay tuned.

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