flexiblefullpage
billboard
interstitial1
catfish1
Currently Reading

Evaluating and investing resources to navigate past the COVID-19 pandemic

Coronavirus

Evaluating and investing resources to navigate past the COVID-19 pandemic

As AEC firm leaders consider worst-case scenarios and explore possible solutions to surmount them, they learn to become nimble, quick, and ready to pivot as circumstances demand.


By TAMI HAUSMAN, PHD, AND LONNY ROSSMAN, AIA, NCARB | September 28, 2020
Evaluating and investing resources to navigate past the COVID-19 pandemic

Photo: Pixabay

   

The best thing about the future is that it comes one day at a time. — Abraham Lincoln

The last few months have been interesting to say the least. We’ve all faced personal and professional challenges while striving to manage both the day-to-day and longer-term realities of the pandemic. When the AEC economy is shaken to the core, firms’ most significant assets—their human capital and financial capital—require the greatest attention. We’ll take a look at the ways four companies have responded to the changed business landscape by reevaluating their resources.

Since mid-March, many firms have recognized the recessionary challenges ahead and proactively revisited their strategic plans, identifying which market sectors present the greatest potential for resilience and which are most likely to falter. This analysis leads directly to an assessment of existing talent and whether it aligns with the company’s current workload as well as with revised short- and long-term business goals. Does your company have the right mix of employees? Should the company consider strategic hires that provide a competitive advantage in the pursuit of new work? Are there sufficient financial resources to make strategic investments? Many companies are faced with difficult decisions to eliminate or furlough employees to alleviate financial pressures with the intent of fortifying the balance sheet and creating new options. 

Where there’s challenge, there’s opportunity. When the economy is good, key talent is busy and not inclined to make a change unless there are specific underlying and compelling reasons to do so. When the economic ground starts to shift and uncertainty prevails, the same in-demand individuals are more apt to listen and explore career options beyond their current situation. The practice of countercyclical hiring, the investment in human capital during an economic downturn to develop a talent-based competitive advantage by focusing on the company’s long-term strategy, has been proven to propel growth. Don’t waste a recession.

 

Maximizing Existing Resources

For Ted Hyman, FAIA, Managing Partner of ZGF Architects, this time has provided an opportunity for the firm to think and act differently. While ZGF has invested in new talent and technology, and continues to explore strategic partnerships that leverage the firm’s expertise in the pursuit of new projects, most of the firm’s focus since March has remained squarely on how best to support employees and create a culturally comparable experience to working in a ZGF office for staff now working remotely.

When the economy is good, key talent is busy and not inclined to make a change unless there are specific underlying and compelling reasons to do so. When the economic ground starts to shift and uncertainty prevails, the same in-demand individuals are more apt to listen and explore career options beyond their current situation. 

Shortly after implementing firm-wide work from home (WFH) practices, a major project in Sacramento (where ZGF planned to open a project office and hire or relocate 30+ employees), shifted to WFH as well. The results have been notably positive, with clear collaboration, consistent productivity, and a satisfied client. This success has recalibrated mindsets within ZGF’s leadership, paving the way for greater flexibility when building future project teams, adding talent and retaining great employees—even after everyone can return to the office. 

 

Mergers & Acquisitions

Historically, corporate mergers and acquisitions (M&A) see an uptick during a recession. Evidence from the 2007-2009 global financial crisis shows that companies making significant acquisitions during an economic downturn outperform those that did not. The benefits of M&A include acquiring highly skilled individuals who have proven experience working together coupled with a portfolio, clients, and reputation, that can accelerate growth.

According to Doug Parker, AIA, Chief Business Designer with Design Business Advisors, “Since mid-May, M&A activity has increased with an emphasis on sector, service, and geographic diversification as well as increased market share.” At the heart of M&A is talent acquisition. For example, NBBJ’s acquisition of ESI Design in early 2020 resulted in synergistic business benefits and the acquisition of industry-leading team members.

According to NBBJ Managing Partner Steve McConnell, FAIA, “The acquisition is all about bringing talent and expertise that NBBJ did not previously have, and that is aligned with the company’s vision and strategy.” While NBBJ continues its commitment to organic growth, the firm remains open to further selective M&A opportunities.

 

Same Product, Different Package

Be creative. How can your company deploy its existing resources differently? When managed with creativity and purpose, this kind of approach can bring significant payoffs. For instance, the online collaboration and communications platform Slack (which was launched during the Great Recession) was the outgrowth of a completely different venture: an online multi-player game. While the game failed to gain traction, the online application the company developed to share information internally emerged as a stand-alone business. In the AEC industries, we’re seeing comparable examples of businesses leveraging their assets in new ways. 

At Mancini Duffy, such a shift started in 2014 when Christian Giordano assumed the role of President and outlined a long-term plan to create a culture of entrepreneurship for the firm that empowered its employees. Giordano set out to raise the company’s profile as a design industry leader by leveraging technology to elevate its clients’ interaction with the process of design. Initially established to provide an immersive VR experience for its own clients, the firm’s Research & Development arm now offers its proprietary Mancini:Toolbelt software—bundled with a hardware package that includes 3D goggles—to other design firms. During the pandemic, Mancini encouraged its programmers to innovate even further. They developed an alternative technology providing a comparable online experience without the VR hardware that has resonated with clients that are currently working remotely during COVID.

In another example of Mancini’s entrepreneurial culture, employees Maureen Baker and Sara Bergman approached management with a business plan for MDLX, a new consultancy to provide interiors finishing services for hospitality and amenity-driven, collaborative work spaces. These two diversification measures have allowed Mancini to weather the recession while elevating their ability to service clients across all project phases.

 

Diversify and Stay the Course

For Amanda Baxter (President) and Eric Baxter (Vice President) of Baxter Building Corporation in Hudson Valley, NY, the 2020 economic downturn has been a time to zero in on research and evaluation in order to fine-tune staffing and reinforce its business strategy. At the forefront has been Baxter’s relentless drive to support and elevate talent in a growing organization, especially when projects were paused or stopped due to New York’s statewide mandates regarding construction. Working with CFO Sue Houston-Marks, Amanda steered the company through the volatile months of March through June by analyzing market conditions daily and adjusting accordingly to protect the business and employees. The company’s investments in innovation, continuing education, and talent assessment have proven invaluable as the fluctuations in project demands required people across the organization to assume a range of responsibilities. Now, Baxter is adding talent across the company’s development, construction, and property management businesses, seizing the opportunity to elevate their expertise while capitalizing on the pandemic-induced migration of New Yorkers out of the city and into the Hudson Valley. 

As the AEC industries continue to address the effects of the pandemic, business leaders recognize the need to act swiftly and decisively to adapt to changing conditions. The overall tenor shared by ZGF, Mancini Duffy, NBBJ, and Baxter is positive yet cautious, as they focus on stabilization and growth with a dedication to building flexible, top-quality teams at the core of their companies. One day at a time.

Related Stories

Office Buildings | Jun 3, 2024

Insights for working well in a hybrid world

GBBN Principal and Interior Designer Beth Latto, NCIDQ, LEED AP, ID+C, WELL AP, share a few takeaways, insights, and lessons learned from a recent Post Occupancy Evaluation of the firm's Cincinnati, Ohio, office.

MFPRO+ Special Reports | May 6, 2024

Top 10 trends in affordable housing

Among affordable housing developers today, there’s one commonality tying projects together: uncertainty. AEC firms share their latest insights and philosophies on the future of affordable housing in BD+C's 2023 Multifamily Annual Report.

K-12 Schools | Apr 29, 2024

Tomorrow's classrooms: Designing schools for the digital age

In a world where technology’s rapid pace has reshaped how we live, work, and communicate, it should be no surprise that it’s also changing the PreK-12 education landscape.

Healthcare Facilities | Mar 18, 2024

A modular construction solution to the mental healthcare crisis

Maria Ionescu, Senior Medical Planner, Stantec, shares a tested solution for the overburdened emergency department: Modular hub-and-spoke design.

Office Buildings | Mar 8, 2024

Conference room design for the hybrid era

Sam Griesgraber, Senior Interior Designer, BWBR, shares considerations for conference room design in the era of hybrid work.

Airports | Jan 15, 2024

How to keep airports functional during construction

Gensler's aviation experts share new ideas about how to make the airport construction process better moving forward.

Apartments | Jan 9, 2024

Apartment developer survey indicates dramatic decrease in starts this year

Over 56 developers, operators, and investors across the country were surveyed in John Burns Research and Consulting's recently-launched Apartment Developer and Investor Survey.

MFPRO+ Special Reports | Jan 4, 2024

Top 10 trends in multifamily rental housing

Demographic and economic shifts, along with work and lifestyle changes, have made apartment living preferable for a wider range of buyers and renters. These top 10 trends in multifamily housing come from BD+C's 2023 Multifamily Annual Report.

Urban Planning | Dec 18, 2023

The impacts of affordability, remote work, and personal safety on urban life

Data from Gensler's City Pulse Survey shows that although people are satisfied with their city's experience, it may not be enough.

Senior Living Design | Oct 30, 2023

Navigating architectural challenges—from 'unbuildable' to unbelievable

Mick Schaefer, AIA, NCARB, LEED GA, recounts the challenges Vessel Architecture & Design had to overcome while designing a state-of-the-art senior living facility.

boombox1
boombox2
native1

More In Category


MFPRO+ Special Reports

Top 10 trends in affordable housing

Among affordable housing developers today, there’s one commonality tying projects together: uncertainty. AEC firms share their latest insights and philosophies on the future of affordable housing in BD+C's 2023 Multifamily Annual Report.



halfpage1

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021