It’s often been said that you can tell a lot about a person by how they handle adversity. In my experience, this is also true of A/E/C and environmental consulting firms. The strongest firms out there are those who are not only prepared to respond when things go wrong, but welcome and create the opportunity.

After years of seeing this play out, I know one the best things that you as a leader can do for your firm is to instill a culture of viewing problems as opportunities. In this issue of The Friedman File, I’m going to share two examples of how it’s done.

Perils of the CYA culture

Should a problem — such as a project going south — really be embraced?

In some firms, the mindset is that no news is good news, or what we don’t know won’t hurt us. Firms like this embrace what I call the “CYA Culture.” Here are a few indicators that this could be happening:

  • PMs and senior leaders do conduct client surveys and interviews, but they stack the deck with clients that they know will provide glowing feedback.
  • Project snafus are swept under the rug, or discussed in a flurry of reply-all emails that diffuse responsibility and accountability.
  • The firm culture penalizes those who have documented problems on a project or an unhappy client, so you don’t always hear about them.
  • Offices and P&L centers are pitted against one another instead of allocating the best technical resources for a client, no matter where they’re located.

When you sweep problems under the rug (or worse, try to evade responsibility for them), you eventually lose credibility, clients and money.

But when there is a genuine desire to know what your clients, partners and prospective clients are thinking, even when you might not hear what you want to hear, the outcome can be very different.

A tale of two clients

Consider the experience of a large engineering and environmental consulting firm that was unsuspectingly on the verge of being fired at the time I conducted an independent third-party assessment with their Fortune 500 client. The interview revealed that this client was unhappy with their performance and the perceived value for the cost on a long-term project.

Senior management and the project team reviewed the bad news and met with the client right away to understand where expectations were not met. Working together, they made changes to correct performance deficiencies. Not only did the firm not get fired, they won an additional $5 million in work and the client’s value rating jumped from 5 out of 10 to 9.5 in a follow-up interview one year later.

In another case, I conducted a client satisfaction interview on behalf of an ENR 100 firm with one of their key clients, a client the firm was about to target with $75K of business development initiatives. The interview did not go as expected.

Again, the client was unhappy with the quality of services provided and value imparted. It was clear that this organization would not be hiring the firm again, and had already hired another consultant.

What did my client do? The feedback was immediately shared with the CEO and the project team. Then, the CEO contacted the client personally to discuss their feedback. After that discussion, the firm decided to refund their full fee.

What happened? Their client was won over by such a powerful response to negative feedback. It renewed their trust in the firm’s desire to fix and not repeat its mistakes. It also netted the firm an introduction to potential opportunities in other parts of the organization.

Going from bad to good

What does this look like on a day-to-day basis? How can you instill a culture that makes the most out of a bad situation?

  • Be willing to initiate and reward having difficult conversations, so that you can address problems before it’s too late. Train your senior leaders and project leaders to do this effectively.
  • Establish a regular system for gathering feedback from your clients, prospects and partners (and not just the ones who love you). For example:
    • Loss (and win) debriefs to improve future chances of winning
    • Client and prospective client perception studies
    • Ongoing project performance measurement
  • Consider using an experienced and independent third-party researcher to ensure that client interviews are more probing, more revealing and more comfortable for the client to speak their mind.
  • Make your client’s perception your new reality. The fastest and most effective way to change how an unhappy client sees your firm is to identify and correct the problem. It’s futile to argue with someone’s perception. They’re entitled to that based on their experiences. How you respond is what matters.
  • In addition to solving immediate concerns, analyze the client data you have collectively to look for trends or systemic issues that may be impacting your firm’s performance.
  • Share success stories of turning around a challenging situation for professional development and learning. Build a climate of continuous improvement.

It’s a rare firm that is already doing all it can to turn challenging client situations into gold. Which strategies will your firm commit to in 2016?

Questions? Ideas? Contact me at rich@friedmanpartners.com or (508) 276-1101.