News

photo

Predicting the Future of A/E/C Business Trends

0

By Scott W. Braley, FAIA, FRSA
Scott D. Butcher, FSMPS, CPSM


Those of us who’ve reached a certain age may remember a low-tech toy from our youth—one that had the power to excite us or depress us— The Magic 8-Ball, prognosticator of the future.

You’d ask the Magic 8-Ball an all-important question like, “Does my ‘true love’ have a crush on me?” and shake it up. The billiard Muses would confer, the multi-sided die inside would spin round and round, and the absolutely true answer would appear: “My sources say no”.

Last year, the SMPS Foundation began a quest to predict the future of business development over the next decade. In essence, we set out to create our own Magic 8-Ball. However, unlike the random entertainment value that was at the core of the toy, the Foundation’s look to the future was backed by primary qualitative research conducted by more than three dozen SMPS volunteers, the majority of whom are Certified Professional Services Marketers or Fellows of the Society.

The purpose of the research was to “predict the future” by identifying trends and forecasting changes related to A/E/C business development in the coming years. In the process, the Foundation’s Thought Leadership Series (TLS) team conducted more than 100 interviews with sellers and buyers of architectural, engineering, construction, and related services; sellers were defined as providers of A/E/C services, and buyers were defined as companies and institutions actively commissioning design and construction projects.

The research methodology segmented the sellers and buyers into categories based upon their behavior—behavior that was either defined and influenced by formal procedures and customs or much more laissez-faire and entrepreneurial. The essential metric was the degree of certainty and confidence with which it is possible to predict the behavior in a given selling/buying situation. The research methodology further classified sellers and buyers by more familiar means such as market sector (e.g., corporate, government at local and federal levels, healthcare, institutional) and provider characteristics (e.g., designer versus builder/constructor, single discipline versus multi-discipline).

Profit motive also was considered as a key distinguisher. Personal interviews served as the predominant medium for conducting the primary research. The interviewees were asked to respond to a series of baseline questions, and then TLS researchers drilled down to specifics within each group. Although the research is still being finalized, some thought-provoking results are emerging from the buyer interviews. A few of the salient points follow.

In many ways, relationships are still key factors, and buyers like the traditional ways of selling. They prefer to work with A/E/C firms with which they already have solid relationships. They hate to be cold called, and many of them won’t meet with just any firm trying to give a generic sales presentation. Face-to-face meetings are critical to establishing rapport.

Buyers are not interested in order-takers. Virtually all of the buyers interviewed noted the days of “show up and take an order” are over. RFPs are trending toward performance requests, buyers expect that sellers will offer and suggest more and ask “What do you want?” less. The market is challenging for buyers as well as sellers, and the buyers point out, “We don’t have all the answers anymore.”

Business developers must understand the buyer’s company/institution and industry. “Don’t even think of contacting me if you don’t know about me, my entity, and my needs/concerns. I’m not here to educate you—it’s the other way around.”

Similar comments were heard in all sectors. Buyers have limited time available to meet with firms trying to sell them design and construction services, so when they do make the decision to meet with someone, they demand the business developer calling on them have more than a basic understanding about their organization. While this may not be earthshaking news, the degree to which this is true represents a tectonic shift in behavior.

The future for non-technical business developers is questionable. While the responses varied by segment, in general, buyers see a declining role for business developers who don’t have technical skills. Moreover, they are quite clear that they want to talk to individuals who will be part of the project team—definitely not separate business developers who will not be around after team selection. On the positive side, buyers observe non-technical business developers frequently have better conversational skills and are better listeners than the technical professionals. This means professional and technical staff members must learn the communication skills so common among business developers. The public sector is an exception to this trend: We found non-technical business developers are more welcome here than in the private sector.

Buyers want you to innovate—and help them innovate in the process. Across most buyer sectors, interviewees indicate they are looking for “leading edge” or “cutting edge” designers and builders. Noting that it is exponentially difficult to differentiate A/E/C firms, buyers say they look for companies that can demonstrate thought leadership in the industry and specific sector. Buyers report some of the first indicators of demonstrated innovation are publishing articles and white papers or speaking at conferences.

Buyers are experimenting (but not taking big chances) with project delivery. Buyers are keen to innovate in project delivery through technology integration or evidence-based design. They feel A/E/C firms that use innovative delivery approaches successfully also have the potential to help the buyers’ organizations innovate the products or services they provide to their clients. However, buyers aren’t willing to take big risks with project delivery: They are looking for A/E/C firms to educate them on the options, make recommendations, choose innovative delivery approaches with care, and back that up with solid, top-notch project managers who can make success happen.

Some buyers say, “Don’t find us, we’ll find you.” A recurrent theme in the interviews is that buyers increasingly use the Internet to research A/E/C firms, preferring to find companies they feel could best help solve their challenges. This growing trend demonstrates the importance of inbound marketing and reinforces a more global trend: the decline in effectiveness of outbound marketing techniques.

Full service isn’t what it used to be. While some firms continue to appreciate the “one-stop-shop” approach, a number of interviewees note they use technology to sift through the myriad of firms serving any given market segment and prefer to pick and choose team members (companies or even individuals) who best match their project needs. The trend toward the buyer putting together the project team will continue.

Reputation and references are still the keys to success. Buyers want to know that a company has been down this path before with similar clients, and they want to talk to those clients about a company’s performance. In fact, buyers often contact companies or organizations similar to their own to get referrals for designers and constructors, which again emphasizes the “don’t-call-us — we’ll-call-you” trend.

Focusing on the buyer’s specific project wins the day. This finding sounds almost too basic to mention. However, just like “don’t forget to breathe,” buyers still find that A/E/C firms spend too much time talking about themselves and not enough time talking about the buyer.

Money makes the world go around. Across all segments, buyers note their project workloads generally are down, their funding has been cut, and any A/E/C firm that can help them find money for their projects will be able to differentiate itself from the competition. This was further evidenced by a growing interest in public-private partnerships. All indicators are that this trend will continue.

Local is the new local. Interestingly, in this day and age of advanced technology and virtual offices, several buyers in different segments note they are under increasing pressure to stay with local A/E/C firms; even when they want or need to cast a wider net for the major projects, they invariably will want to include local participants.

A/E/C firms that offer the most value often go far beyond just design and construction services. This came out in a number of conversations with buyers, and it relates to several points above—whether helping buyers to innovate their projects or services, finding funding for a project, or educating project stakeholders. In fact, within the state and local government group, a number of buyers specifically stated they are under the gun to be more transparent, political officials are demanding perfection, and they are looking to their A/E/C firms to help demonstrate to the public why a project is important and what negative things could happen if the project is cancelled. This is one emerging role buyers felt was ideally suited to the non-technical business developers.

For savvy A/E/C business developers, this research might reinforce a few of your suppositions. Nonetheless, the Foundation’s research is a clarion call to action for A/E/C firms. If you have a poor, out-of-date Web site, you are losing work. If your business development program is still geared toward outbound tactics, with little thought to inbound marketing, opportunities for which your firm is qualified are passing you by.

Following are just a few of the ways that your firm may be losing business:

• If you still go into sales meetings or presentations and spend all the time talking about your company and presenting your portfolio, your chance of success is minimal at best.

• If you are not demonstrating thought-leadership through research and publishing, you are not differentiating your firm.

• If your company relies on a sales force of non-technical business developers, a significant percentage of buyers won’t even meet with your company.

• If your company is overly focused on the “doing”—that is, designing or building—your competitors are gaining a competitive advantage over you by helping buyers to innovate their products or services, or helping them to find money to fund their projects. 
In some ways, the more things change, the more they stay the same—but make no mistake, things are changing! Buyers want to meet with people in person. They want someone who can solve their problems. They want chemistry and rapport with the design and construction members who will work on their team. And they simply won’t stand for cold calls or generic presentations.

Certain changes that have germinated in recent years are emerging as dominant forces in the future of business development. For instance, evidence-based design may have gained widespread acceptance within the healthcare sector, but colleges and corporations are now looking for evidence-based decisions, too.

Buyers want to be educated. They want business developers to present innovative project delivery options and recommend the most appropriate approach. They want firms to offer value by not “just” designing or constructing. In fact, one of the more salient over-arching themes of the SMPS Foundation research is the lessened role of traditional A/E/C services in delivering a comprehensive project solution.

Legendary General George S. Patton is credited with saying, “Lead me, follow me, or get out of my way,” which is often truncated to the simpler, “Lead, follow, or get out of the way.” If your A/E/C firm is not leading edge when it comes to business development methodologies, you should be looking to the industry innovators and emulating them.

Buyers are increasingly sophisticated; they know what the top A/E/C firms are doing, and they now expect this of your firm. But will this really make a difference in how you market your company and your success at landing new clients? According to the SMPS Foundation’s Magic 8-Ball, “Signs point to yes.”


The SMPS Foundation’s research book, A/E/C Business Development: Today and Tomorrow, has been published and is available for purchase. Details are posted at www.smpsfoundation.org. The Foundation is seeking sponsors to underwrite the book’s production. To learn more, please contact Molly Dall’Erta at SMPS Headquarters at molly@smps.org or 800.292.7677, x231.

About the Authors
Scott W. Braley, FAIA, FRSA, is the lead principal of Braley Consulting & Training
(http://www.braleyconsulting.com) based in Atlanta, GA. A Foundation trustee and co-chair of the Thought Leadership Series Committee, Scott helps A/E/C firms with strategy, leadership, marketing, management, and project delivery. During his 30 years of A/E/C practice, he was a highly successful “closer/doer” and served as managing principal in an ENR Top 40 firm. He may be reached at 404.252.9840 or scott@braleyconsulting. com. In the December 2012 issue, Scott wrote about using competitive intelligence to avoid “blind spots” in decision-making. Scott D. Butcher, FSMPS, CPSM, is vice president of JDB Engineering, Inc. (http://www.jdbengineering.com). Also a trustee of the SMPS Foundation, Scott serves as secretary and as co-chair of the Thought Leadership Series Committee. He is the author of more than a dozen books. Connect with Scott on LinkedIn or Twitter (scottdbutcher) or email him at sbutcher@jdbe.com.

For more information, visit Certification at www.smps.org or call 800.292.7677, x232.

Do you have a comment on this article? Please post your opinion below.

Tags: More, Construction Management



Leave A Reply