Finally, A Tried-and-Tested Guide to Selecting Better AV Integration Projects for Your Firm

The ‘Scorecard Approach’ to project scoring AV projects came from Felix Media Solutions efforts to improve their AV integration business.

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Finally, A Tried-and-Tested Guide to Selecting Better AV Integration Projects for Your Firm

When we at Felix Media Solutions started off in AV integration, we chased every project in sight. We went after K-12, restaurants, offices, house of worship, retail, RFPs, residential, multi-family, hotels and tons of AV projects in between.

Amazingly, we won quite a bit of what we went after by being a bit less expensive, and clearly eager to work. We also won some multi-family, low-margin RFPs, state work and even a church.

At that time winning deals was all that I cared about. The problem was, many of the AV projects we won were not a good fit. In fact, some were a terrible fit, and while we completed them, they hurt morale, finances, schedules and trust in the sales team.

What our worst AV project in recent memory taught us

Early last year, we were short-listed to win a project for a food delivery startup’s Austin offices and we were being pressured to lower our prices to win the project.

The designer, an outside firm, had designed all of the rooms using a bizarre mess of consumer parts, a control system we didn’t like, and strange furniture that didn’t accommodate what they had designed.

Mike and I decided to go in with a “winning” bid with a gross margin lower than we had done before for any project. We said we would make it up in doing a bunch of similar rooms. Things did not go as planned.

The GC and the client and all of the trades were a dream, but the AV design was a complete disaster, and each room took four times as long to complete.

We finished the project bloody and filthy, but alive. Barely. We used so much labor to make that job work we drained all of our cash, were behind on AR, and the job ended up being upside-down for us. It nearly killed us. It was time for a hard talk about what the future would look like.

Wrangling differing viewpoints on “success”

When we got together the first time to figure out what was causing our pain, it became apparent everyone in the leadership team sees a project from their own lens in order to determine what they think is a “good job:”

  • As president, I liked big dollar signs, known brands, a quick “yes” and little competition. Mike Watts, our VP of design, liked AV projects that bid quickly, used parts we knew, were straight forward in design, and repeatable.
  • Ben Lanclos, our Director of Field Ops / PM Team, liked long stretches of consistent work for the crew, step and repeat labor, and well managed new construction job sites.
  • Lindsey Rima (then, programmer / designer, now VP Finance & Ops) wanted full deposits, fast payment, easy billing jobs that had high margins.

I would get invited to bid a complex hotel worth $900K, but Mike didn’t want to spend a week bidding it against 4 other bidders, Lindsey hates AIA billing, Ben liked the amount of work, but the project schedule was chaos. I was frustrated that no one wanted a $900k project. I thought I was doing well!

The next meeting, Lindsey, Mike, Ben and I got into our conference room, cleaned the white board and started defining what are we best at: Where do we make the clients the happiest? What AV projects are profitable? What AV projects are painful? And what clients we will not work with?

To my surprise, most of the ideas that went up, we all agreed on. We excel at corporate office interiors, light retail, fitness and restaurant. We prefer negotiated deals, particularly when a construction project management company brings us in.

We prefer AV projects within 75 miles of Austin, but some “good projects” in other locations would be considered. Bid work and RFP are a distant second that we agreed to entertain when the project “looked good”.

We like some custom work, but overly complex Swiss Army Knife systems from “creative” or lazy AV integration consultants were a no. As were house or worship, K-12, Higher Ed, Hotel projects which we agreed were not our forte and had poor margins.

The simple distillation was: we are a design-build AV integration company that focuses on corporate office interiors. That alone helped shed quite a bit of the AV projects we wasted time trying to win. But how to quantify that?

If we could only chase, bid and win the best jobs for us, we would be able to sharpen our focus, sharpen our skills on the main products and truly excel at one thing better than anyone else. The leadership team would focus on finding the gems we all agreed on.

We began to list what are the most important things to measure in deciding what AV projects to go after. We went through a number of iterations, but within a few hours we had a score card that would end up transforming our sales, design, billing, execution and support and ultimately significantly moving the needle on net profit.

Our scorecard is what works for us. Every company is different, and what matters to one may not to another.

We drew a line to divide best and worst and gave it numbers. Lower = bad, higher = good. The key to a successful cheat sheet, score card, or any other system is it needs to be simple.

While ten criteria worked for us, the number of criteria is less important than the ability of each to capture a concept and deliver something understandable. The main goal was to have what we needed in order to make a decision and feel confident in the findings. This is what we came up with:

1. Relationship

Is this someone we have rapport with? Do they like us? Is this likely a yes? Or is this someone we don’t know at all, have never spoken to? Chasing jobs with no relationship is low %. But a quick yes on a stinker project isn’t so great, either. Be careful what you wish for!

2. Strategic Value

A magical essence, a mystical force, the shine we get from taking a job as it will lead to more work.

On the flip-side, a difficult low margin project for a “strategic” client that is painful in many respects may be all you need for a no. Strategic AV projects align directly with the core of what we do best and if we can do our best work.

3. Size in Project Scoring

We watched sales people go strictly after size and nothing else. Put a big number on the board. Hotel? YES! Amusement Park? BID THIS PLEASE!!! Mega-church? Praise the Lord! But no. Hold your horses.

Size matters, but so does fit. What is too big? What is too small? Should we roll a truck for one TV hang? Should we go after a $5M project with what we have on our plate now?

One measurement alone does not a fit make and we chased lots of big AV projects for the top line where when we go after smaller projects that are in our wheelhouse, we win, we do our best work and everyone is happy. Singles and doubles are what make the game work. Focusing on home runs is a terrible distraction for us.

Related: The Way You Talk Is Costing Your Tech Integration Business

4. Potential Margin

We created a bidding sheet that has smart formulas and tells us how profitable a job will be. This fixed a lot of the bidding where we may be light on materials profit or labor.

A simple bit of spreadsheet formula math helped make sure we were not only hitting minimum numbers on project margin, it rewarded people for higher margins. While top-line sales count for bragging rights, net profit percentage is what we care about when it comes to AV projects.

The big food delivery company should have been a ‘no’ from us. Had we had this metric in place, it would not have passed muster and we would have politely declined.

5. Time to Bid

This was overlooked for a long time and it tied up valuable people who could have been bidding jobs we should have focused on. We had a project come across our desks that was low relationship and lower margin but it was all simple parts and repeated over and over in a simple new construction space.

We saw it as low risk, margin was ok, it was something we did well and it took 2 hours to bid a $750K project. While we didn’t win, the cost to try was low. Spending 2 weeks to bid it would have been a bad choice.

6. Complexity in Project Scoring

This is one we usually feel comfortable with but sometimes AV integration design firms make things massively, and needlessly complicated. Sometimes the requirements end up as a hairball of future service calls. And sometimes, things can be super easy.

A Crestron Mercury in 70 conference rooms is easy, fast to bid and low complexity. On the other hand, modern courtrooms are a multimedia succotash that has a need to be pretty bulletproof lest you anger your local magistrate…

We figured out what our top limit is on complexity and when things get into that red- zone, we try to negotiate for a simpler design. It’s not a hard no but it creates risk and future headaches if we build something overly complex. Particularly if we didn’t design it.

7. ‘The Fit’

This is further down our list but our list doesn’t have any real hierarchy. The purpose of the list was not to be particularly linear. It is a guide, a simple Rosetta Stone to help us understand.

Is this whole list about fit? Yes, it is, but we also defined who we are and what are the AV projects that match up with our expertise. So, does the project match up?

This tends to hold a lot of weight for us because even if everything scores well, if this was us bidding UT Stadium, we would pass. It’s not what we do. We tend to stick with what we know, and it serves us very well.

8. Risk in Project Scoring

Risk is where the INTJs of the group like to push the glasses up their nose, raise a finger and talk about how scary the project is ‘if X goes wrong.’

So, what can go wrong? Long lead items? Delicate finishes? Long payment terms? Staffing? Tiny margin that would make any mistake a catastrophe? Honestly getting all the risk on the board is key for us. This is where we spend time making sure the project will not hurt us.

9. Time to Pay

Time to pay is where the bookkeeper perks up after that exhilarating risk conversation. Cash flow is critical to a business. We take a deposit on all design-build AV projects. That deposit covers materials and a good part of labor. We then progress bill until the end.

But some clients take a long time to pay on progress billing and require lots of chasing and cajoling to get them to pay. Lindsey got us from 75 days of average AR down to 18 days on projects not on AIA billing. We are a for-profit business and getting paid on time is critical to our ability to operate.

10. Time Frame

Total project time may seem trivial, but it impacts work schedules, cash flow, warehouse space, PM attention spans and more. We tend to like projects that have a total life cycle of under 3 months per space from pre-wire to delivery.

Long delivery AV projects are not preferable and while we do often approve them, the time introduces elements we have to take into account when we charge for the PM time and trips.

With the board marked up with scores, we do not add up the score. I imagine you could, but that is not what decodes the puzzle. A single 1 score could be a kiss of death for a project and it would not show up in a total.

The patterns should be self-evident. This approach has been applied to previous jobs and it was scary how spot on it was about the winners and the losers. That test helped us validate findings. Our best jobs fit the metrics we care most about. The stinkers showed up clearly as stinkers. It should be as simple as that.

A project scoring tool is only useful if it reflects it’s intended use and delivers a quality result. Some tools need work and evolve over time. Some are great the first time.

There are a lot of things to contend with in business and knowing which jobs to go after and which ones to leave alone has allowed us to do our best work, increase morale and calm as well as more than double our net profit while growing significantly.

Learn more about Felix Media Solutions here