She's Got to Move
A corporate relocator ramps up with help from FSB.
(FORTUNE Small Business) – As the founder and CEO of Fox Relocation Management (FRM), a Boston corporate relocation firm, Gretchen Fox loves to look at the big picture: market penetration, brand perception, organizational efficiency. Unfortunately, Fox has little time in her workday for such macromusings. From the moment she steps into the office, she is bombarded by minutiae. Famed Harvard law professor Alan Dershowitz wants the hate mail that he keeps posted on his office door to be reassembled identically in his new office on the other side of the campus. A pharmaceutical company wants FRM to make absolutely sure that several million fruit flies remain at the optimal breeding temperature of 75° to 80° during their move across Washington, D.C. The International Brotherhood of Teamsters is upset that FRM is negotiating with a non-union moving company to truck Teamster boxes into a new D.C. headquarters.
Fox is good at finding order in chaos. That's why expanding, downsizing, and even bankrupt companies are willing to pay handsomely for her services. FRM charges as much as $2 a square foot, on average, for its corporate relocation services, slightly more than the industry average. The higher rate is justified by superior service, Fox says. FRM doesn't just move your company's stuff: The firm also coordinates with designers and architects to get new offices up and running on time and under budget. On a recent $90,000 job, Fox says, FRM saved the client $275,000 by suggesting that it reupholster the office chairs instead of buying new ones. "We offer our clients peace of mind," she says.
Since 1988, FRM has blossomed from a solo act operated out of Fox's home into a bustling enterprise that today boasts $8 million in annual revenue and manages some 75 projects for big-league corporate clients such as Bank of America, Houghton Mifflin, and Sun Microsystems. Unusual for the male-dominated relocation industry, about two-thirds of FRM's 65 employees are women. Besides its Boston headquarters, FRM has offices in New York City and Providence, R.I. And Fox recently opened a third satellite office in Washington, D.C. "Taking on government clients should help even out dips in the economy," she says.
Still, the normally calm Fox has the jitters these days. The corporate relocation industry has grown crowded and fiercely competitive. Relocation consulting is a relatively new industry, and Fox was virtually alone in the market when she started. Large real estate companies such as Cushman & Wakefield and Trammell Crow now offer relocation-management services, as do many architecture firms and even some furniture companies. And FRM's growth has made it a much more complicated enterprise to manage. The company's business-development specialists sometimes cut relocation deals without consulting field staff, who are left scrambling to meet contract terms. Fox has no formal process in place to help executives decide whether each new deal makes sense for the company. And her normally high-spirited staff is showing signs of frustration.
FSB enlisted three experts to help Fox unpack and sort through its relocation woes. Marty Avery runs a Calgary-based marketing consultancy called What If? Karen Andersen is a software technology expert with New Tilt, a Boston-based business consulting firm. And Greg Hudgins is an organizational-behavior specialist based in Arlington, Va.
The consultants converge on FRM's sparsely decorated new office in downtown Washington. First to arrive is Avery, a tall, energetic marketing whiz who quickly shares an observation with Fox and several other senior staffers, all women. Just moments before, Avery had placed a call on one of FRM's office telephones. She noticed that the phone was papered over with sticky notes on which an FRM employee had scribbled data, including prices and client contacts. "As a franchise, your value is in your relationships and processes," Avery says. "When I saw the sticky notes, I thought, 'What a waste. All this intellectual property will be lost.' "
Everyone nods in agreement. "What's your average cost of attracting a new client?" Avery asks. Fox and her colleagues shift uneasily in their seats. Fox offers that her staff spends anywhere from five to 50 hours developing a relocation proposal, but nobody has a concrete answer on cost. "It's amazing the amount of revenue you generate with only two business-development people," Avery continues. "But knowing your cost of goods sold is so critical. You need somebody to really start crunching the numbers and set up a system that provides instantaneous answers, a plug-and-play format where you know which clients will be profitable and which ones will lose you money. In the end, the projects you turn down are as important to your success as the ones you pursue."
Avery suggests that FRM start ranking its clients numerically, using criteria such as their professionalism and whether they pay bills on time. "A numeric rating system will help you decide what relationships are worth fostering," she says. Then Avery opens her laptop and launches a detailed map of her own business relationships. The map shows Avery in the center and a network of her clients and contacts radiating outward. "This is one tool I use to assess my business relationships," she says. The chart, for example, helps her spot clients who have routinely squeezed her on price. What happens to such clients? "I cut them off and never look back," says Avery grimly.
The FRM crowd chuckles, but Avery isn't laughing. Neither is Gretchen Fox. "We've been used on occasion," she says. "I think, as women, we're terrible pleasers. We've got to learn to say no." Avery wags her right index finger. "You've got to get over that fear," she snaps. "You can't tolerate any abusive client relationships. It's often said that the customer is always right, but that's not true. Ten percent of all clients are margin-sucking maggots."
When business software expert Karen Andersen shows up, Fox starts lamenting what she sees as her firm's biggest stumbling block: technology. "We've got four offices now, and they are all quite different in how they operate," she says. "Also, our workforce is highly mobile. We need a better system for tracking leads, generating new leads, and capturing the next generation of leads. And we need everyone to be able to access that information."
Andersen cuts Fox off. "I never go right into technology," she says. "I like to start by figuring out how the work is currently being done and how it should be done. When you want to know what someone eats, you don't look in their fridge. It's better to look in their garbage. That will show you the Twinkie that's eaten regularly around midnight."
Andersen listens to a brief description of the firm's day-to-day work processes, from developing leads to writing proposals and project reports to billing and collections to post-project reviews. "It seems to me that you operate your business by collecting knowledge along the way," Andersen says. The problem, she continues, is that FRM uses a tangle of disparate software applications that don't communicate with one another and often duplicate functions. There's GoldMine for entering client information, Excel for generating project reports, FileMaker for preserving the client's data, and a few other applications for miscellaneous tasks.
FRM's primary software is OpenAir, a web-based professional services automation tool whose competitors include Epicor, Deltek, and Win2. OpenAir is a good choice, Andersen says, for companies such as FRM that employ remote workforces and need sophisticated project-management tools. FRM pays a $600 monthly subscription fee for OpenAir, which it uses mainly to track time and material costs.
Andersen notes that OpenAir is capable of handling most of FRM's project tasks on its own. She suggests that Fox assign staffers to transfer critical data into OpenAir and then slowly phase out most of the other applications. "The key here is picking out the right evangelist, someone who can see the value in changing software," Andersen says. "Do not pick a gearhead. In fact, I'd pick a troublemaker--someone who is vocal but also highly respected at what she does. If she likes it, she will be able to sell the advantages throughout the organization."
Not all FRM's problems can be solved with software. That's where organizational-behavior expert Greg Hudgins comes in. "Strive for cultural transparency," he says. "Find ways to share knowledge so that everyone will benefit from it." Hudgins homes in on FRM's staff meetings. Once every month the Boston staff discuss pressing business issues over a catered lunch. FRM's 15 satellite workers join in via the squawk box. For Fox, a key goal of the meetings is to help remote employees feel connected to the company. She would prefer to bring her entire staff together in one room, she says, but she can't afford the travel costs.
At this point FRM's Washington business manager pipes up. "Those meetings can be very frustrating," she complains. "We can't see the people, and we can't hear them very well."
Hudgins has a better idea. Fox could travel to each branch office in turn and host the meeting there, thus blurring the cultural distinction between headquarters and the field. Fox nods. "You know, I'd never considered that," she says.
Two weeks after the makeover, FSB checked back in with Fox. She had started analyzing the firm's projects to see which clients had generated the most profit. Fox also told us that she and her staff had drafted a ten-page outline of their work processes in order to weigh their software needs against OpenAir's capabilities. And from here on out, Fox plans to occasionally host the monthly meetings away from headquarters.
We will keep an eye on Fox's fast-moving business and report back on her progress.
To give feedback, please go to fsb.com.
FOX RELOCATION MANAGEMENT is a thriving corporate relocation company. But founder Gretchen Fox needs to motivate her dispersed staff and get control over the firm's disorganized data. FSB's crack consultants dived right in.
KAREN ANDERSEN consults on business technology for New Tilt, a Boston firm.
MARTY AVERY runs a Calgary-based marketing advisory firm called What If?
GREG HUDGINS is an organizational-behavior consultant out of Arlington, Va.