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
| Apr 13, 2011
Expanded Museum of the Moving Image provides a treat for the eyes
The expansion and renovation of the Museum of the Moving Image in the Astoria section of Queens, N.Y., involved a complete redesign of its first floor and the construction of a three-story 47,000-sf addition.
| Apr 13, 2011
Duke University parking garage driven to LEED certification
People parking their cars inside the new Research Drive garage at Duke University are making history—they’re utilizing the country’s first freestanding LEED-certified parking structure.
| Apr 13, 2011
Red Bull Canada HQ a mix of fluid spaces and high-energy design
The Toronto architecture firm Johnson Chou likes to put a twist on its pared-down interiors, and its work on the headquarters for Red Bull Canada is no exception. The energy drink maker occupies 12,300 sf on the top two floors of a three-story industrial building in Toronto, and the design strategy for its space called for leaving the base building virtually untouched while attention was turned to the interior architecture.
| Apr 13, 2011
Former department store gets new lease on life as MaineHealth HQ
The long-vacant Sears Roebuck building in Portland, Maine, was redeveloped into the corporate headquarters for MaineHealth. Consigli Construction and local firm Harriman Architects + Engineers handled the 14-month fast-track project, transforming the 89,000-sf, four-story facility for just $100/sf.
| Apr 12, 2011
Rutgers students offered choice of food and dining facilities
The Livingston Dining Commons at Rutgers University’s Livingston Campus in New Brunswick, N.J., was designed by Biber Partnership, Summit, N.J., to offer three different dining rooms that connect to a central servery.
| Apr 12, 2011
Retail complex enjoys prime Abu Dhabi location
The Galleria at Sowwah Square in Abu Dhabi will be built in a prime location within Sowwah Island that also includes a five-star Four Seasons Hotel, the healthcare facility Cleveland Clinic Abu Dhabi, and nearly two million sf of Class A office space.
| Apr 12, 2011
Luxury New York high rise adjacent to the High Line
Located adjacent to New York City’s High Line Park, 500 West 23rd Street will offer 111 luxury rental apartments when it opens later this year.
| Apr 12, 2011
College of New Jersey facility will teach teachers how to teach
The College of New Jersey broke ground on its 79,000-sf School of Education building in Ewing, N.J.
| Apr 12, 2011
Mental hospital in Boston redeveloped as healthcare complex
An abandoned state mental health facility in Boston’s prestigious Longwood Medical Area is being transformed into the Mass Mental Health Center, a four-building mixed-use complex that includes a mental health day hospital, a clinical and office building, a medical research facility for Brigham and Women’s Hospital, and a residential facility.
| Apr 12, 2011
Miami courthouse design does justice to children and the environment
Suffolk Construction broke ground recently for the Miami-Dade County Children’s Courthouse, a $328 million project the firm has a 30-month contract to complete.
