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July 2009
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The Anti-"Doom and Gloom": Three Firms Bucking the Trend
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You wouldn't be human if you haven't, at least once,
wanted to curl up in a ball and hibernate until the
economy is on a clear path towards recovery.
Depressing news headlines coming at you through
multiple media don't help, nor does the fact that the
unemployment rate is nearing 10%.
It's hard to find an A/E/C industry firm that hasn't been
impacted in some way — even if it's just
keeping a cautious eye on spending. Yet the
"doom and gloom" theme does not need to be a self-
fulfilling prophecy for your firm.
Some firms (hopefully yours?) are holding their own,
and a few are even growing, in this challenging
environment. What makes these firms so special? Is it
luck, being at the right place at the right time,
purposeful strategies, or a combination of all four?
This Friedman File explores three firms that, knock on
wood, are doing just fine:
- Taylor, a 65-person healthcare
design firm
based in Newport, CA
- ABMB Engineers, a 100-person
transportation-oriented engineering firm based in
Baton Rouge, LA, with three offices in Mississippi
- SpawGlass Construction, a 550-
person GC,
CM-at-risk, design-build firm based in San Antonio,
TX, with offices in Houston, Austin, and South
Texas
Public and Institutional Markets Remain
Comparatively Strong
One trait that all three firms share is that a significant
portion of their revenue is derived from public and/or
institutional work: Taylor's client base is nearly 100%
healthcare; ABMB's is 80% public (including state,
municipalities and counties, and federal such as the
Corps); and SpawGlass is 60% public (e.g.,
municipalities, the military) and institutional.
Mike McGaugh, Managing Principal of ABMB, says,
"We really haven't seen much impact. Our clients
scrutinize our fees a bit more, and Louisiana DOTD
has sought to restructure its contracts away from fixed
fees to hourly and cost-plus fixed fee."
SpawGlass has benefited from a strong Texas higher
education market, which is funded through
endowments and robust state legislature
appropriations (they just earmarked $4.5 billion for
higher education facility construction). Texas has
made a significant commitment to continue to expand
the UT system beyond Austin, as well as Texas A&M
beyond College Station to target traditionally
underserved areas.
This is not to say that these three firms have been
completely unscathed. While none has had to scale
back employee benefits, Taylor and ABMB have
experienced minor layoffs. In the case of Taylor, those
laid off were in the process of being trained to do
healthcare design. But with the healthcare design
candidate pool opening up, Taylor was able to hire
folks with extensive healthcare experience. The firm
has also halved its travel budget — focusing
especially on conference attendance. ABMB was
forced to lay off a few surveyors, which was linked to
the private sector downturn in Louisiana. Mike
McGaugh, Managing Principal, added, "although our
backlog is growing, there has been a shift towards
more engineering-intensive services (e.g., structural
bridge work, rehabilitation, studies) that don't require
surveying."
Even SpawGlass, whose construction volume has
nearly doubled from $250 million in 2003 to a
projected $460 million at the close of this year, has
recently needed to share staff among offices to shore
up locales that have been impacted by fierce
competition. "We're seeing competition from all over
the country that has typically made a living off of
development and retail work trying to penetrate
government and university work," says Fred Raley
President and CEO of SpawGlass.
Strategic and Marketing/Business
Development Planning are Essential
While no one could have foreseen the events of the
past year, few would argue that firms that created and
stuck to a plan (and not a pie-in-the-sky plan!) have
fared comparatively better. All three firms profiled in
this article have been operating from a strategic plan.
"Our first serious strategic planning effort was in 2002,"
says McGaugh. "Our goal was to become the pre-
eminent transportation firm in Louisiana and
Mississippi, and that focus has paid significant
dividends. We've positioned ourselves as a regional
transportation planning expert." At its 2005 planning
session, ABMB made another critical strategic move
— to hire a full-time business manager who has
focused on improving the firm's systems, including
backlog and cash flow forecasting.
SpawGlass has been operating from a strategic plan
since 2003. The firm also created a separate business
development plan rooted in chasing blue chip clients
and staffing each office with a BD leader (not
necessarily a salesperson). Raley emphasizes that
the firm has actually implemented its plans
rather than going through the motions. The company
learned from the late '80s downturn the importance of
seeking out "recession-resilient" clients. "When you're
in San Antonio and there's a downturn, everything
comes to a halt except for the military," says Raley.
"Since the mid-'80s, we've had military projects of
some form with the Corps of Engineers."
A Common Theme: Now is the Time to Invest
in Marketing and BD
All three firms underscore the importance of investing
in high-ROI marketing and business development
(BD) strategies, even at a time when resources are
constrained. "We really think ramping up business
development is a smart thing to do, whereas some
firms cut marketing and BD in hard times," adds
ABMB's McGaugh. "Firms should constantly look for
service areas to grow that are related to what they do."
He acknowledges that the recession will likely cause a
"shaking out" in our industry.
Rick Savely, Chief Development Officer for Taylor,
notes that his firm increased its marketing budget,
embarked on a rebranding project, enhanced the
firm's web and intranet sites, increased its number of
direct mailers, and created its own blog. "Now is the
time to make sure that people know we're here," he
added.
Commit to Continued Employee Growth
All three firms underscored the importance of keeping
their employees engaged and challenged, including
opportunities for professional growth and in some
cases, ownership. "We've brought in new
shareholders, which has energized our company,"
adds McGaugh. "We've had very low turnover, and our
image in the local marketplace is good — the
last thing clients want to see is significant staff
turnover." SpawGlass, where nearly two-thirds of the
staff are shareholders, has aggressively promoted
stock ownership. Raley adds, "We don't hire for the
job; we hire for the career, creating a more stable work
force."
I'd like to hear your firm's success stories — feel
free to call (508-276-1101) or e-mail
me.
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Society for Marketing Professional Services
(SMPS) National Conference (JW Marriott, Las
Vegas, NV)
Richard Friedman presents:
"Maximizing Business Development ROI:
Engendering Top-Down Support"
July 17, 2009
For more information, visit www.acteva.com
Construction Financial Management Association
(CFMA) of Massachusetts Fall Program (Sheraton
Needham)
Panel Discussion: "Maximizing Your Marketing and
Business Development ROI in a Down Economy"
September 3, 2009
For more information, visit www.cfma.org
American Institute of Architects (AIA) Kansas
Annual Conference (Overland Park Convention
Center, Overland Park, KS)
Richard Friedman presents:
"The Power of 'We': Engaging Architects in Business
Development" and "Business Development Tips: the
Cliffs Notes Version of BD"
September 24–25, 2009
For more information, visit www.aiaks.org
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