2020 has been a peach, hasn’t it? A global pandemic. Raging wild fires. Riots and looting. Facemask battles. Ongoing trade wars. Election-year shenanigans. Recession fears. Increasingly divisive politics. Everything canceled. (Lest we forget zombie deer and murder hornets.)
In a year of jobsite shutdowns, project delays, funding pitfalls, and project postponements—and with no guarantee of a more prosperous 2021—it is understandable for AEC firm leaders to take a guarded, hunker-down stance when planning for next year and beyond. It is natural for firms to focus first on “right sizing” the business by slashing investments, overhead, and operational costs.
But these positions of passivity and cost-cutting run counter to the key lessons from AEC leaders who successfully navigated their firms through past market downturns and economic events, says Scott Winstead, President of FMI Management Consulting, who’s firm last year studied takeaways and strategic lessons from the Great Recession (BDCnetwork.com/DownturnLessons).
A common mistake AEC firms make during down cycles, says Winstead, is running the firm as a collection of projects, versus a business. “It’s a subtle but very distinctive difference that speaks to the long view versus the short view, and to the notion that you can’t save your way to prosperity,” says Winstead.
The firms that came out of the Great Recession in growth mode, according to the FMI research report, focused on investing in their clients, people, and business; they diversified their services and found unique ways to outperform the competition; they streamlined their operations and put their “A” players in a position to succeed and grow the business; and they created a company culture that is nimble, collaborative, and transparent.
Winstead says 2020-21 should be no different. “If I think back to 2008 and the beginning innings of the Great Recession, I heard then what we heard early on in this scenario, which is mistaking backlog as a proxy for health,” he says. “Backlog is a reflection of work that has already been sold and booked, and is in the process of being burned off. Past performance is no guarantee of future results.”
The key finding of the FMI research, which gathered insights from more than 150 engineering and construction executives, was that AEC leaders who increased their financial investment in strategy reported higher effectiveness in operations, strategy, and overall company performance, compared to respondents who either didn’t do anything or decreased spending in that area. “Strategic thinking and planning are among the top leadership skills needed to be an effective leader during a recession,” wrote the authors of the report.
Download the FMI report, “Leading Through Business Cycles: Lessons Learned From E&C Executives,” at: BDCnetwork.com/DownturnLessons.
Related Stories
| Sep 13, 2010
World's busiest land port also to be its greenest
A larger, more efficient, and supergreen border crossing facility is planned for the San Ysidro (Calif.) Port of Entry to better handle the more than 100,000 people who cross the U.S.-Mexico border there each day.
| Sep 13, 2010
Triple-LEED for Engineering Firm's HQ
With more than 250 LEED projects in the works, Enermodal Engineering is Canada's most prolific green building consulting firm. In 2007, with the firm outgrowing its home office in Kitchener, Ont., the decision was made go all out with a new green building. The goal: triple Platinum for New Construction, Commercial Interiors, and Existing Buildings: O&M.
| Sep 13, 2010
Stadium Scores Big with Cowboys' Fans
Jerry Jones, controversial billionaire owner of the Dallas Cowboys, wanted the team's new stadium in Arlington, Texas, to really amp up the fan experience. The organization spent $1.2 billion building a massive three-million-sf arena that seats 80,000 (with room for another 20,000) and has more than 300 private suites, some at field level-a first for an NFL stadium.
| Sep 13, 2010
'A Model for the Entire Industry'
How a university and its Building Team forged a relationship with 'the toughest building authority in the country' to bring a replacement hospital in early and under budget.
| Sep 13, 2010
Committed to the Core
How a forward-looking city government, a growth-minded university, a developer with vision, and a determined Building Team are breathing life into downtown Phoenix.
| Sep 13, 2010
Conquering a Mountain of Construction Challenges
Brutal winter weather, shortages of materials, escalating costs, occasional visits from the local bear population-all these were joys this Building Team experienced working a new resort high up in the Sierra Nevada.
| Sep 13, 2010
Data Centers Keeping Energy, Security in Check
Power consumption for data centers doubled from 2000 and 2006, and it is anticipated to double again by 2011, making these mission-critical facilities the nation's largest commercial user of electric power. With major technology companies investing heavily in new data centers, it's no wonder Building Teams see these mission-critical facilities as a golden opportunity, and why they are working hard to keep energy costs at data centers in check.
| Sep 13, 2010
3D Prototyping Goes Low-cost
Today’s less costly 3D color printers are attracting the attention of AEC firms looking to rapidly prototype designs and communicate design intent to clients.
| Aug 11, 2010
Cubellis principals reorganize as CI design
Former principals of Cubellis Inc. have formed ci design "with a stellar group of projects in the United States and internationally," states John Larsen who, with Richard Rankin and Christopher Ladd, is leading the architecture and planning firm.
| Aug 11, 2010
Leo A Daly changes name of STH, completes acquisition
LEO A DALY has changed the name of STH Architectural Group to the name of its parent company, Leo A Daly. STH was acquired in February 2009 as a strategic move to accelerate growth in its core business sectors and to strengthen the firm's presence in the Florida market.
