Why Procurement Sucks And What You Can Do About It

Reading time ~10 minutes

ACME Corp. procurement officer.

ACME Corp. procurement officer.

Procurement sucks. Having to bend over backwards in order to jump through hoops on fire over a trap lined with spikes while being chased by a hungry tiger is no cakewalk. Yet, many creative professionals put up with it as it is culturally accepted that, working for free and giving away intellectual property is a small price to pay in order to get work. And in certain cases, it may make sense. But in most of them it doesn’t and more often than not both parties end up worse off as a result of doing business in that fashion.

People in charge of procurement with public dollars have to do what they can, to ensure that the money is well-spent and that there is a high level of accountability within public institutions, for taxpayers to be able to transparently see how their money is spent. Whether this is what actually happens in the real world is another touchy debate that I won’t delve into here.

If one is procuring commodities, traditional procurement makes sense. Whether the Toronto police gets their cars from one dealer or another, they’ll basically get the same product. The main thing being negotiated is price, but the cars come from the same factory. Same for stationery, whether your paper pads come from Staples or Grand & Toy, any difference in quality will be too insignificant to notice and even if somehow you ended up with a subpar paper pad, you’ll probably survive the ordeal.

The problem is when professional services are being treated like commodities. If you listen to one of my past podcasts, Toon Dreessen talks about the absurdity of some situations he’s found himself in. One story that stuck with me is the conversation he had with a stationery procurement officer who did not understand why an architect was required for this project and treated it like she treated paper.

As providers of professional services in the design field, architects know very well that a solution cannot be prescribed in good conscience before a proper diagnostic of the client’s challenges has been made. A doctor practicing that way would be stripped of his credentials and likely sent to jail, yet, procurement processes expect architects to do exactly that. This is a maddening proposition that makes no sense and can actually be harmful.

It really begs the question: why are procurement departments acting so shortsightedly? I genuinely don’t have a clear answer so far, but if we look at how they are incentivized, perhaps we can find the beginning of an explanation. Procurement’s job is to procure something at the lowest cost, as their mandate is to save their employer’s money. Which makes sense if we’re talking about stationery. But when it comes to design services, it has been well established by now, that the cost of designing a building has little to do with its total cost over a lifetime both in terms of capital costs (construction) and operational costs (life-cycle and maintenance), as the design cost is a fraction of the capital cost, which can be itself a fraction of the operational cost.

If a building is designed to save 50% in operational costs over its lifetime, isn’t that worth a higher design fee? And the architect who can confidently deliver on that promise should naturally command a higher price, as his services are more valuable than that of the architect whose designs will cost more operationally. Yet, when procuring these services, these facts are often ignored and the lowest bidder wins. I’m not even going to go into how some firms bid at a loss to “stay busy” and keep their employees on the payroll, while counting on charging for extras, a.k.a. playing the “gotcha” game to stay profitable.

Due to their very mandate, keeping costs low at all cost - pun intended - procurement people are not your friends, as they are by nature asked to undermine you and the value of your services at every turn. Put yourself in their shoes, what would you do in their place?

Your mission as a designer is to solve problems and the more complex those problems are, the more you ought to be paid for it, as this is inherently valuable to your clients, until their procurement departments get involved…

What’s the solution? In the case of public money, I’m not sure there is a solution short of legislating on the matter in order to make the procurement process holistic, and incidentally the topic of an upcoming Single Serves podcast, also with Dreessen. As far as the private sector is concerned, this is where I see a great opportunity to break away from the uncompensated pitch, were we too often give ideas away for free in the hope of getting our pittance.

On one hand, professional service providers have to grow a pair and stop grovelling to their clients’ every whim and tell them when they’re being unreasonable with their demands of a 578-page proposal including a fully resolved building design, construction documents, their staff’s full employment history, including their immigration status - as applicable - as well as their grandmother’s birth certificate and their kids weekly school menu, and I’m barely exaggerating. If what they’re asking for has no relevance to the provision of the service, you are perfectly within your right to tell them off, politely but firmly as you now know they’re just dicking you around.

Imagine if you went on a first date with someone and they keep rescheduling, changing the venue, until you finally get to meet them in person after 10 reschedules and then they spend the entire date fucking with you, keeping you guessing and asking a lot of very deep and personal questions without revealing anything about themselve, wouldn’t you walk away? You would, because you intuitively know that it’s not gonna get better over time. The same goes for your clients. If they metaphorically fuck with you by being unreasonable, chances are they won’t suddenly change if they ever hire you and you’re better off leaving them to your competition.

On the other hand, private companies who feel like they “have to” go through a complex and byzantine procurement process to hire professional service providers, really ought to ask themselves how that’s gonna serve them in the long term. This is where there is a shift that needs to happen, from the cost of the service to the value.

A big part of demonstrating that value is, I’m afraid, your responsibility. It’s a tough job, but not impossible, it merely requires a concerted effort and the development of a long term view of your business’ growth. In this age of crazed and insanely fast (too much so in my opinion) startup funding, venture capital and IPOs, in the vein of the “break things and move fast” credo of Facebook, one really has to sit back and ask “What am I really trying to accomplish here?” Maybe “slowing down and mending things” isn’t such a bad idea after all.

From there, it is possible that the answers will start coming to you and with a healthy dose of courage, one can dig oneself out of this hellhole that is procurement. The alternative is to remain a commodity who’s being mistreated at every turn by clients who are total dicks and are not even apologetic about it.

Which do you want to be?


Arnaud Marthouret is the founder of rvltr and leads their strategy, visual communications and media efforts. He has helped numerous architects and interior designers promote themselves in their best light - pun intended - in order to help them run more effective practices and grow in a meaningful way.

If you have questions about this article or rvltr, or want to chat about your strategy and communications, you can leave a comment, share with a friend, or reach him at arnaud{at}rvltr.studio.

How To Find The Right Hire In A Seller's Market

Reading time ~14 minutes

accomplished-achievement-adults-1124065.jpg

Introduction

In the course of my work, I get to learn about particular aspects of our industry. I’ve recently had the opportunity spent a lot of time talking to people about hiring practices in the AEC industry as part of a research project. The overwhelming conclusion I’ve come to is that hiring is a very challenging process for employers. It takes a lot of time, costs money and there is never a guarantee that your newest employee is the right fit for your company. A lot of company founders and principals sing the same tune: the challenges they all face are all very similar. Every step of the process is a challenge, especially in a seller’s market where there is more jobs than candidates (more on that later). Don’t believe for a second that you are alone facing these issues.

Big or small, most firms go through the same process and employ very similar tactics to hire people. Bigger firms will tend to have more budget and being more willing to spend money to find the right employees, even when it comes to junior positions. By and large the way architecture and design firms hire are very similar across the board.

One distinction across all firms is the difference in hiring processes for Junior vs. Senior employees. More money and effort is understandably spent on filling more senior positions, as these employees have a greater impact on the health of the company.


The Challenges:

Finding the right people: from finding the right fit for your company’s culture, to simply finding people who actually have the qualifications they claim to have, recruiters have to do an incredible amount of legwork when it comes to doing their due diligence. This is not helped by the fact that we are currently in a seller’s market, where there is more job offers than qualified candidates. This makes the search for that unicorn, the candidate with the trifecta of qualifications, cultural fit and availability, all the more complex. It is not rare for recruiters to receive applications from people who do not have the desired qualifications, whether it be from a skillset perspective (juniors claiming to have more experience than they do) or even things like the lack of immigration status (people applying from overseas). Most recruiters waste a lot of time sorting the good from the bad.

Then there is the budget issue. How much money should one allocate to recruiting efforts? How much of that budget do you allocate to different tools and resources? Things like job boards, the interview process and legal fees all cost money, but how do you know how to allocate proper resources to each item? Do you not spend any money at all and dedicate only time (which is also costly by the way)?

Recruiters are expensive but also effective as they put their money where their mouth is, because they don’t get paid if you don’t hire their candidates. Therefore, they have an incentive to do a good job. Since they cost about 20% of your hire’s first year salary, it can be a tough pill to swallow, but they tend to make more sense for more senior positions.  

Job boards are great and free (or very cheap), but the main challenge is that they advertise your opening to the world, attracting all kinds of poor fits and forcing you to go through a long and painful curating process. The problem with job boards is that the a large portion of candidates are the bottom of the barrel. Most good employees never have to look for a job and more often than not they get recruited through their network and therefore never peruse the classifieds.

In his classic book, “What Color Is Your Parachute”, Richard Bolles claims that most companies recruit internally or within their network, only using more public means of advertising a position when they have no other option left. That’s because we tend to trust people in our networks much more than strangers so it makes sense that we tap into familiarity before we look for employees more widely.

If a colleague you know and trust recommended someone warmly, would you not make them your primary candidates? I know I would. When I look for people to work with, I always tend to naturally reach out to my network before advertising and when I do advertise it’s with very specific resources. There is a local college that I particularly like because they are known to produced skilled grads, namely people who have skills in demand in the marketplace. Every year I reach out to them to get a co-op student for summer, keeping in mind that these co-op students will eventually look for a job. When they do, we will be in each other’s network and will naturally tend to gravitate towards one another.

I never advertise on standard job boards, because I don’t want the aggravation of dealing with substandard candidates who don’t even take the time to research the company they are applying to and send generic cover letters. I once received an unsolicited application from an overseas candidate who CC’d about a hundred other people on his generic - gasp! - cover letter letter. Needless to say I had a little fun replying to that one, as I took inspiration from these guys to write a spirited response.

Industry-specific job board tend to be a little better than general recruiting sites (Monster and the like), as they attract a smaller subset of candidates, usually of higher quality than generalist boards.

One of the most common complaint is that people really struggle to find a good fit in terms of skill set but even more importantly, from a cultural standpoint. The most qualified of employees will not be comfortable working for a firm espousing values too different from their own. Worse yet, working for a firm who has no established values. In my opinion too many firms spend too much time focusing on skills and experience, as opposed to ensuring that a candidate will fit right into the office culture. Skills can be learned, knowledge can be acquired, but the right attitude, mindset and work ethic is a given we all have to work with. Better find the right candidate with respect to those soft social skills.


Opportunities to do things differently

Now that we’ve laid out some of the biggest challenges recruiters face, I’m going to expand on some ideas that will give you an edge when looking for employees.


Find juniors before they get out of school and keep your network alive:

Since we’ve already established that networks play a huge part in recruiting effort, it pays off in the long term to maintain and expand that network on an ongoing basis. Keep tabs on current and future cohorts of new grads and identify the best of them as much as you can. By the same token, an ongoing internal internship program is a great way to test people out in the wild and see how they mesh with your culture. Other tactics that will help you in that regard are as follows, in no particular order: attending design crits at local school, job fairs, attending industry events, etc.

Outside of the post-secondary education system, it’s good to identify promising prospects and keep tabs on them. Stay in touch once in a while and ask them what they’re up to. You’d be surprised how much a quick check-in once in a while can help you find the right candidate when time is of the essence. That graduate you’ve kept in touch with for years may very well be your next hire if the stars are aligned. A friend of mine maintains a list of people she would like to work with and has coffee with them once in a while, when a position opens at her firm, they are the first ones to get a call.

In a similar fashion, don’t hesitate to have meaningful conversation with your peers on your challenges, successes and good candidates that have showed up on your radar. The sharing of knowledge contributes to everybody’s efforts and makes it a little easier for everyone. It’s also a good idea to sift through the mass of unsolicited applications to keep the interesting ones for later reference. Bonus points if you can have mini pre-screening interview with the candidates that showed interest and look promising. It will give you a good idea of what they’re about. You can always purge that pile of applications more than 6 months old as these tend get out of date quickly. A quick coffee date with a candidate can go a long way and make the interaction a little more human and personal, which never hurts.


Outsource it:

Sometimes it makes sense to hire a seasoned professional to help you with your recruiting. They have the network, resources, expertise and experience that you don’t and can really make a difference when it comes to narrowing down the field of candidates. Some people mistrust recruiters as they are sometimes seen as ruthless mercenaries that will poach people from their current jobs with little or no scruples.

While I can see that being an issue, and I am sure you’d find unscrupulous people out there doing unsavory things in just about every industry. Let’s not forget that these guys have a whole lot of skin in the game as they don’t get paid if you don’t make a hire through them. As far as incentive alignment is concerned, it’s difficult to make it more favourable than that for you. When it comes to ruthlessly poaching people, I would argue that this is the hard law of the marketplace. But if you’re experiencing people routinely leaving your office for greener pastures, I would highly recommend looking past the financial and emotional aspects of such transactions and take a long, hard-look at your culture. The best way to prevent people leaving your firm as soon as something better presents itself is to define, refine and constantly strive to improve your office culture. A great culture creates loyal, fulfilled employees to whom a job is much more than just a salary. I know first hand of such companies: their staff routinely decline other better paying jobs because they’re having way too much fun. Which leads me to my next point:


Work on your company’s culture and constantly refine it:

As a keen observer of the marketing industry, Terry O’Reilly likes to observe and analyze a company’s touch points to see how they interact with their stakeholders (employees, suppliers and clients). O’Reilly says that there are innumerable untapped opportunities for improving any of these touch points: from the way you sign-off your emails to your on-hold phone recordings, via your website and your social media presence, to name a few. The same goes for recruiting: how would you like your potential employees to perceive you and how would you go about them going “I want to work nowhere but there” upon leaving their first interview.

If you don’t know your company culture well enough to explain it in 1-2 sentences, on the spot, you probably have what I call a “by default” culture. A strong culture is your best bet to attract the right talent as it helps in creating an environment where everybody is valued and treated well. Every single company with a strong cultural foundation that I have observed first hand, has happier, engaged, loyal employees, often that wouldn’t leave their job for a salary substantially higher than their current one.

A great culture, as my friend Stephen Shedletzky puts it, equals values x behaviour. In other words, it means that you have to be clear on your why (purpose) and have well-established values. Not only that, but you need to live those values on a daily basis. Values that are not constantly used as a framework for decision making are useless.

GREAT CULTURE = VALUES x BEHAVIOUR


Don’t recruit solely based on skills and experience, and make the hiring process a family affair:

By the same token, a strong cultural foundation will help you focus on what matters most in prospective candidates: their personality, work ethic and ability to integrate an unfamiliar environment. Vitsoe has become a master at hiring slow and firing fast. They are so keenly aware of the need for new recruits to fit in with the culture that they notoriously dismiss candidates that would be perfectly fine for most of the rest of us, mere mortals. A story that stuck with me over the years is that of a technician that they were trying out on the job. On paper, the candidate was a great fit, but on day one, at the end of the work schedule, he tossed his tools in the toolbox and left. The fact that he did not carefully place his tools back in the order they belonged was a deal breaker for them. Needless to say that they collectively decided against hiring him.

I recently got wind that the email address “iwanttokickfearinthenuts@rvltr.studio” I have listed in a summer internship posting that I put up at a local photography school, turned off a potential co-op student who was apparently offended by its attempt at humour. Instead of feeling bad about it, I realized that I had probably dodged a bullet by avoiding someone who would not understand our company’s culture and values. Better to have no fit than a poor fit.

While this kind of pickiness may seem extreme to some, I believe it shows that a company who knows what they stand for to such a degree, will not hesitate to make such decisions because they know the weight that a wrong decision can carry down the road. And being so picky is another way to turn off people that wouldn’t be a natural fit, so the people you’re left with at the end are the best fits for your company. Which doesn’t mean they’re a good fit for anyone else either, by the way.

On a side note, fire fast doesn’t mean rudely dismissing people without empathy. It just means letting go of the bad fits quickly. It’s certainly not a free pass to be an asshole about it. We still all have a duty to be humane, even in the most uncomfortable of situations.

Additionally, the hiring process shouldn’t be just a HR process. People you hire will work with others and most company with a great culture make hiring decision while involving all concerned parties from the Janitor to the CEO. It does make perfect sense to ensure that one’s coworkers can get along with or your run the risk of mutiny.

Ultimately, a resume and cover letter are a quick and efficient way to separate the good from the bad, but to determine fit, you have spend the time with the candidate and test their mettle, better yet: do it under pressure, as it’s when everything goes to shit that problems arise. Try them out in the real work environment and see how they respond to challenges, big and small and more importantly how they treat other people. You probably want to avoid the person who’s going to think that the janitor doesn’t deserve even the smallest of acknowledgement.

Once you’ve made that hire, keep watching them during the honeymoon period and at the first sign of trouble, address it immediately.


Conclusion:

Ultimately, recruiting is a lengthy, challenging process, in which we all tend to be be way too emotionally involved with. While a great culture will help with making interactions more human and personal and ultimately, hire people that feel at home in your company, it is important to remove as much emotional attachment to the decision making process. In other words, trust your gut but don’t become emotionally attached to the outcome.

In Vipassana meditation practice, this is called “Anicca”: the ability to not have any aversion for negative situations, feelings and sensations as well as for the positive ones. Meditation is a great tool to be able to reach that level of zen master self-control, I highly recommend it.


Arnaud Marthouret is the founder of rvltr and leads their strategy, visual communications and media efforts. He has helped numerous architects and interior designers promote themselves in their best light - pun intended - in order to help them run more effective practices and grow in a meaningful way.

If you have questions about this article or rvltr, or want to chat about your strategy and communications, you can leave a comment, share with a friend, or reach him at arnaud{at}rvltr.studio.