Crisis Creates Opportunities For AEC Firms

"When written in Chinese, the word "crisis" is composed of two characters. One represents danger and the other represents opportunity." -John F. Kennedy

The prognosis for the economy in the AEC Industry remains unclear. Uncertainty remains the biggest concern for the construction industry. However, when there's crisis and uncertainty, there's opportunity.

-Government stimulus package legislation is likely to be introduced and passed early in Obama’s administration. Infrastructure, institutional and community projects are likely to benefit the most. States are preparing “Ready To Go” Lists for projects.

-The credit market remains tight, which makes is difficult for companies to access capital for new construction, expansion and development projects.

-Prices for construction materials and commodities have plunges after a rapid rise in prices. As demand has dried-up, prices have fallen.

-Consumers spending is still tepid due to uncertainty, specifically a drop in there personal wealth, plunging housing values, and fear about job loss.

-Talent will become available from solid AEC firms.

While there is considerable uncertainty, there are several approaches and strategies AEC firms can take to weather the economic situation and be positioned for opportunities when the economy improves.

Focus on Key Customers- Continue to maintaining and developing customer relationships. Focus business development efforts on key clients and building loyalty. Also protect your key clients from competitors. Communicate regularly with your clients and convey a message of strength and stability. Customers want to work with a vendor they can trust and rely on in difficult times. Also consider offering more services and handling different projects for your key customers.

Communication- Communicate regularly and clearly with your employees. Your employees are barraged with negative media messages about the economy. You have an important role to communicate with your employees candidly about your business and marketplace. Consider engaging them in finding cost-saving strategies.

Change Your BD Strategy- Many companies have cancelled or delayed large capital and maintenance projects. Demand is shrinking. While your customers or prospective customers have financial constraints, this does not mean all projects will be cancelled. Your job is to understand their financial condition, verify funding sources, and understand how you can tap their budgets. Consider breaking a large project into smaller projects, offering some incentives or bundling work. Be flexible by working with your customer to create win-win solutions. Also seek to build diversity and consider other types of projects your firm may not have considered in the past.

Modify Your Marketing Messaging- The financial crisis has turned the business world upside down. Several long standing and trust financial companies are gone or have been acquired. Stability can no longer be assumed. If your company is fortunate to have a long history, focus on your stability in your marketing messages.

Focus on Effective Marketing- Many companies decrease marketing investments during tough economic times. In fact, marketing is one of the first things to get cut. This is a great time to invest in marketing. Publishers are typically willing to negotiate favorable terms. Fewer people are advertising so your ads and messages have a better chance to cut through the clutter. Also consider shifting dollars to web marketing initiatives such as SEO and Web 2.0 efforts.

Focus on Niches- Identify key niches or market segments where you have a strategic or competitive advantage. The reality of challenging economic situation is that there are more bidders on projects and prices typically go lower. Offering value-added services and having a clear focus on markets that are not solely price driven will help you weather the storm.

Upgrade Your Talent- For the first time in many years, talent supply exceeds demand in the construction industry. Talent, including engineers, project managers, and business development people, is available. This is a key time and opportunity to add key resources that will strengthen your firm.