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FMI Quarterly/March 2014/March 1, 2014

Teaming to Win

businesscharacters44_interview_imageTake a sharp look at what you need from a teaming partner before you start approaching potential companies. First and foremost, you are looking for the right partner.

Why should a customer pick you for the project? That is always the question. Customers use short lists to generate a limited number of qualified contractors that are chasing the same project. Each contractor competing has expertise, a résumé, satisfied past clients, a solid team, etc. Creating or identifying a competitive advantage is the starting point for many companies when thinking about teaming as a project win strategy.

Of course, not all contractors are perceived by the customer to be equal, even if they are on the short list. Some contractors stand out more than their competitors do. Some have better reputations, stronger teams, etc. The customer may have worked with one or two of the contractors in the past, giving it firsthand knowledge of the contractor’s qualifications, etc.

Culling the potential competitors to a qualified short list by definition and the perspective of many customers mean that all should be able to deliver a quality project, on time, within budget and with some level of customer service. So the question becomes, “Why should the customer pick you over the other good contractors pursuing the work?”

If you do not have a singular differentiating (or competitive) advantage, could you create that advantage by teaming with another firm?

WHY TEAM?

While researching this article, FMI reached out to a number of our clients to get a better understanding of how they think about teaming and what it takes to pick good partners. One conversation that particularly stood out was with Jeff McCord, business development director of Western Summit Constructors, Inc. Western Summit, a Kiewit company, is a construction leader in the water and wastewater treatment market.

The water and wastewater plant business is an interesting example of what contractors can accomplish through teaming. On any particular project, contractors and engineers in the plant business may approach the job solo, team with a competitor contractor or link with an engineer. One day the competitors are working jointly together on a new wastewater treatment plant; the next day they are competing head to head on a project both want to pursue separately. How do they decide to team or go it alone? It is part strategy, part customer focus and part necessity.

Creating a strategic advantage is the key for winning projects of any type. In an ideal situation, teaming provides companies with key missing elements needed to win. Customers are looking for the team that best meets their needs. The team can create unique competitive advantages once paired together. The advantage might come from a distinctive technical solution, design approach, depth of staff, customer relationships, available technology solution, etc. The key is having deep insights into the customers’ needs and the competitive landscape you are facing.

“Project debriefs have taught us that customers are looking for teams where companies and people have a track record of working together successfully. If you can find people who have aligned values and a similar approach to managing projects, build strong relationships with them. They need to be your go-to teaming partners,” according to Jeff McCord.

Teams can be one or more partners coming together to chase and win a project. The team might include a couple of contractors or be composed of contractors, engineers and architects. It all depends on the project and what the customer wants to accomplish. To be successful with teaming, one or more people in the joint venture must be business development savvy and find opportunities in the process, discover customer hot buttons and put together a strategy to win (see Exhibit 1).

2014q1_teaming_to_win_ex1Common reasons to team include:

Resource Availability: This is when additional resources or capacity is needed to pursue the project. The team can provide needed estimating, preconstruction or operational capability to purse and build the project. Finding top talent in the open market remains difficult, but having a partner on the project can provide the talent needed to be successful.

Unique Capability: Projects requiring unique design experience can require reaching outside your own organization. The team might include an engineer and contractor linking together to enhance design-build capability. Contractors that do not have the specific design capability needed to pursue the project solo can reach out to engineers to bring that capability to the team. Engineers that do not have a construction arm can reach out to a contractor to team for a client interested in fully integrating design and construction functions.

Project Size: Mega projects bring financial challenges that can be difficult for one company to handle independently. Sometimes, pushed by bonding or banking to do so, contractors bring a large competitor on board to help shoulder the risk of the project, mitigate the talent drain and increase the available financial wherewithal.

Balanced Work Portfolio: Clients may be concerned about the total number of projects that one contractor is building for them at one time. For example, if the client has four major projects in its capital program, it may want to limit the number that one contractor wins. Teaming can be a good strategy for the customer to feel more comfortable with distribution of projects to a single contractor.

Areas of Expertise: Health care, higher education and power are a few examples of markets where project owners are looking for specific project expertise. Teaming can increase the overall résumé of relevant projects as well as the number of people who have the necessary certifications for the project.

Risk Management: Individual project bonding limits can require looking for a teaming partner. If you have maximized the individual project-bonding limit, yet have a good chance of winning a significant project, a teaming partner can sometimes help alleviate the concerns a bonding company has with its client undertaking yet another project. Make sure you pick a partner with strong project performance and start talking to your bonding company early in the pursuit process.

Client Relationships: Strong client relationships are the key to winning many projects. If a customer has an unusually large project that does not fit the work program of its go-to contractor, a teaming arrangement can give the customer the benefit of both worlds — it gets the contractor it knows and enjoys working with, blended with a bigger contractor who knows how to handle large, complicated work.

Emerging Markets: An emerging market might be a market segment new to your company, or it might be new to the whole industry. Examples might include photovoltaic projects, peaker power plants or specific new technology inside a project. The emerging market is in need of contractors that have that specific experience. If you have never built one of those projects, reaching out to a partner can be a great strategy to break in and win work in the new market.

Teaming is one part of the overall project win strategy to displace top competitors. Teaming becomes a strategic decision on how to best serve the customer and secure the project.

PICKING A PARTNER

Finding a good partner is an important factor in a successful team relationship. So is being a good teaming partner. Teaming relationships can range from a simple subcontractor agreement to a formal joint venture. The type of agreement stems in part from what the teaming relationship is designed to achieve.

2014q1_teaming_to_win_winstrategyChemistry is one of the leading criteria that companies talk about in successful teaming relationships. The ability for your staff and theirs to come together, share best practices and form a cohesive team is essential. That ability is not shared by all organizations. Typically, a strong internal culture can form invisible barriers to highly integrated teaming relationships. When culture is strong, there is a great deal of pride of authorship of ideas and a clear notion of the “best way” to do things.

Teaming partners have to be able to put aside their internal best practices to embrace practices that are in the best interest of the team. Not all companies are good candidates for a team, nor are all of your people. Some will simply play better with outside team members than others will.

Chemistry needed to be successful as a team is unique to each project. Being able to identify and build chemistry is a core competence of companies that have long records of accomplishment in successfully teamed projects. Shared values and experience are part of what is needed to create successful chemistry and need to be part of the selection process for potential teaming partners.

Chemistry is also noticeable to the customer. Team members with good chemistry come across better in project presentations. When you come across confident and seamless, hit rates improve. A good team member increases the odds of winning a specific project.

A strong track record of successful projects together is what customers are looking for from companies that are teamed together. When two companies have good chemistry, they tend to reach out to each other for future projects and naturally build that track record of projects between them. Conversely, first-time teams are often less persuasive to the experienced buyer.

APPETITE FOR RISK

Individual appetite for risk is also a factor in determining who will be a good teaming partner and who will not be. For some contractors, minimizing their risk is so essential that it is difficult to embrace the additional risk that a teaming relationship brings. For those companies, a subcontractor relationship can minimize the amount of “skin in the game” and yet allows them to participate in the project. It can also be a good first step to test the waters with a potential teaming partner.

The desire to manage risk is one of the reasons why companies might pursue a formal joint venture. A joint venture relationship makes sure both companies take an equitable amount of risk. The actual structure of the joint venture may change from project to project. Determining the potential partner’s risk appetite early in the selection process can reduce the number of steps needed to both find a viable partner and negotiate the structure of the relationship.

PICK PARTNERS EARLY

Picking a project partner starts early in the business development process. Time is needed in order to engage with the customer and build relationships. One reason to select a partner is that it has a good sense of the market and knows of projects well in advance of them being released to the street. The early notice allows the teaming partners to get prepositioned with customers, architects, engineers, vendors, influencers, etc. Selecting early also ensures you get the best team available, denying that best team partner to your competition.

Teaming discussions might start a year or two in advance of the project becoming a reality. Bringing in a partner late in the game is an expensive strategy that often means losing the project. Late entry does not allow time for building the right relationships, getting prepositioned or time to craft a thorough win strategy. Teaming needs to be a proactive strategy, not a reactive one when you find out that your company is not well-positioned to win. Be clear about the customer’s view of your strengths and weaknesses, as it will make selecting a partner that much easier.

Teaming might not be the first choice for most companies. Many will want to keep the project internally if they have a reasonable chance to win it and be successful building it. However, not having teaming as one of the strategic options in your project-win strategy can negatively affect your overall hit rate and your ability to meet the customer’s needs.

LESSONS LEARNED

The following are lessons learned from a variety of contractors that use teaming as project win strategy.

  • 2014q1_teaming_to_win_quoteAlign cultures early and in tangible ways. If your goals are misaligned from the beginning, it will not get better down the road while you are building the project. Early challenges are a warning sign that the team partners might not be able to develop a successful working relationship. After all is said and done, how your staffs work together is one of the most important elements of delivering a successful project.
  • See eye to eye and work out any issues as they arise among management groups. If you have an engineering partner that needs its staff to remain billable in the get-work portion of winning the project, that needs to be worked out early or the team will find itself in trouble during the design and construction of the project. Sharing risk, costs, etc., needs to be an equitable agreement from the beginning.
  • Start early — the earlier, the better. As soon as you can identify a potential project opportunity and the need to team, the better you will be on the project. Striking early and getting the first selection of the most desired candidates is a huge leg up in winning the project.
  • Share project control systems and spend the time upfront to find out who has the best systems. Commit to using them consistently throughout the project. Frequently, that means training needs to happen on the project so everyone understands the systems and tools that will be used to manage the project.
  • Understand what your limitations are upfront and candidly discuss that in your conversations with potential partners. Do not overcommit in order to make the marriage work and then be forced to pull out of the relationship before the project is won.
  • Be clear on the resources you are willing to commit to the project. You will need your A team. It is easy to underestimate the level of talent needed to make the relationship work and deliver the project. Your teaming partner is looking for your team to be experienced and have a proven track record of success. Your team needs to be able to deliver a successful project, ensure it is profitable for your company, and be able to work with your team partners. Balancing all of those needs simultaneously makes the process difficult for less experienced staff.
  • Be open to new ideas. You need to be comfortable in a teaming environment where your idea is not always the one selected. Be able to see the project from others’ point of view. That means sometimes you have to go with your partner’s best idea, not yours.
  • Be collaborative: It’s a look in the mirror. Both teams need to give and take and work as one. Some cultures are more willing to do that than others are. It comes down to the people, and not everyone is wired for it. It is human nature to be defensive instead of receptive to new ideas. That needs to be taken into account on how the relationship is set up, in the project kickoff and throughout the design and construction. Many successful partners absolutely commit to formal partnering on the project, and consistently apply it to all of their teaming projects in order to set up the collaborative culture that is needed to be successful.
  • Clarify the level of decision-making authority and who has responsibility over what areas of the project with a decision-making ladder. Team members come together to determine how decisions will be made, what the levels of authority are and how issues will be escalated if a roadblock appears.
  • Create a project charter to determine how the teaming partners will interact and define success on the project. The charter provides the vehicle for getting commitment from everyone on the project goals and objectives

Best practices for teaming abound in the industry. If you are new to the process, ask other industry firms for their lessons learned. If you are an old pro at teaming, help share the successes and challenges you have experienced internally and externally.

A great avenue for learning is sharing lessons learned from teaming on projects internally with other staff members. The characteristics that make you a successful teaming partner also help others in your firm create stronger bonds with customers and other companies with which you interface.

CONCLUSION

Teaming is an effective get-work strategy, but never a guarantee of success. Focus on the client. Make sure you are adding unique value to the customer with your project approach. Spend the time needed to set the team up for success.

Be clear why you are engaging in a teaming relationship (e.g., to grow your business; explore new technologies, geographies, sectors; etc.) Share your reasons with potential partners and your team internally.

Create success measurements before the project starts in order to ensure that teaming relationships are productive, collaborative and effective. Invest the extra time needed for the team to engage before the project kicks off to set up the working relationship for success.

Understand what is required to compete and truly be successful as a team from the perspective of the customer and your firm internally. Take a sharp look at what you need from a teaming partner before you start approaching potential companies. First and foremost, you are looking for the right partner. That is the essential win-win strategy for it to be a success. There are right and wrong reasons for looking to team.

Remember, you are looking for a long-term teaming partner in order to build history between the two companies. A proven track record of working together is a key customer hot button. Make teaming an overall plan, not just one project, and success will come. ■

Special thanks to Jeff McCord, business development director of Western Summit Constructors Inc., for his help with this article.


How Do You Rate as a Partner?

Rate your firm on each of the following characteristics on a scale of 1 to 5, where 5 = Very strong, consistent performance, 1 = Poor or inconsistent performance.

1. Culture and engagement

  • Innovation is a cornerstone of company culture.
  • A culture of openness and teamwork extends to team members outside the company.
  • Risk management philosophy allows for new ideas and approaches.

2. Staff availability and depth

  • Top talent is available and interested in the project.
  • There is a depth of experienced staff members —with the customer and project type.
  • Team is open to new ideas and embraces creativity.

3. Project controls and communications

  • Companies have a successful track record for teaming or joint ventures projects.
  • There are robust project control systems to track project progress from a distance.
  • Companies have compatible technology platforms.

4. Senior management support

  • Senior management gives support and commitment for the project at a high organizational level.
  • Senior management of both firms is willing to invest personal time in project.

5. Teaming experience

  • Teaming partners have come back to you to engage on future work.
  • Customers rate the team as strong and responsive.
  • Teaming partners are willing to have “skin in the game” from a risk perspective (i.e., more than a subcontractor relationship).

Cynthia Paul is a managing director with FMI Corporation. She can be reached at 303.398.7291 or via email at cpaul@fminet.com.

 

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