Without a doubt, the last two years have been extremely tough on our nation’s architectural and engineering firms. It is not uncommon for firms to operate at a loss; even worse is the fate of others: ceasing operations. And current indicators say the immediate future will likely be just as arduous. Nonetheless, there are success stories; many firms prospered during the grim economic climate and expect to continue that trend in the coming months.
Detailed here are several reasons why some architectural and engineering firms are succeeding.
Diversity was one key characteristic shared by those companies that thrived during the recession. These firms immersed themselves in a wide variety of sectors: infrastructure, education, airports, medical, higher education, et cetera.
When one particular sector contracted, such firms had the ability to redeploy and lean on other sectors to maintain a healthy bottom line. No matter how deep a recession, certain market segments will inevitably hold up better than others. A firm that emphasizes client diversification will be in a position to take advantage of such trends.
Recognizing potential growth
In a similar vein, firms successfully weathering the recession did so by exhibiting flexibility. This means quickly responding to changing markets and reaching out to untapped sectors, particularly those in which a firm has no previous experience, but has recognized potential growth.
An example of this approach is the number of architectural and engineering firms getting on board with the “green” revolution. Many firms that once planned and designed nuclear and coal-fired power plants are now involved with more environmentally friendly projects. The sharp increase in government subsidies for renewable energy projects, as well as the increasing client demand for more sustainable solutions, made it evident this was a sector with much growth potential.
Solid workplace cultures
Employees obviously want to be proud of their completed work; however, they also want to be proud of the place where they work. Employees are more motivated when they work for a company that reflects their personal and professional values. Therefore, creating a workplace culture that reflects the values employees hold dear is vital.
Focusing on the public sector
For many firms, the key to weathering the recession was avoiding heavy reliance on private-sector markets such as retail, office, and housing, and putting greater emphasis on municipal, state, and federal public-sector projects.
In many areas of the country, construction in the private sector slowed to a crawl, as projects such as large-scale apartments and hotels and other developments became less frequent. Meanwhile, the public sector — particularly the areas of health care, education, and energy — offered more stability. At the same time, the federal government’s stimulus package, which heavily invested in the country’s infrastructure, presented many firms with the opportunity to work on road and bridge projects, as well as drinking water and sewer systems.
Staying ahead of the competition
With the number of potential projects dwindling during the recession and firms making inroads in untapped sectors, competition was particularly fierce.
For many firms, staying ahead of the ever-increasing competition meant further strengthening basic business ideologies such as, “Always deliver the best work at the most cost-effective levels.” “Back to basics” may sound like a cliché, but when economic times are tough, it can be the surest road to success. Engineering firms that returned to these fundamental business values were the ones that continued to make their presence felt in the marketplace and thus, continued to secure projects.
Operating productively and efficiently
Anyone with experience in the architecture and engineering world knows the industry is cyclical. While recent years have been lean, there will be a strong demand for future services once the economy fully rebounds.
In the meantime, those firms that are operating productively and efficiently, offering a diverse set of services, and promoting solid workplace cultures will continue to thrive, even in this stagnant economy.
Dean L. Groves, P.E., is president and CEO of Fay, Spofford & Thorndike Inc. (FST). He has been with FST his entire 35-year career. His technical background focused on transportation planning and environmental documentation in connection with complex transportation projects such as the Central Artery/Tunnel.