In Brief:     The winds of change are blowing a chilly breeze for many design and construction firms.  Architects,  engineers and other design and construction professionals are seeing projects being put on hold left and right.  Financial markets, responding to global influences from Europe to Asia, have injected an air of uncertainty into project financing that we haven’t experienced for a long time..     

     Not long ago, firms were turning away business for lack of staff.  Today, many of these same firms are watching backlogs shrink, sometimes dramatically.           Watching and waiting is not the right thing to do.  It’s time for firms to take a hard, objective look at their marketing efforts.  If you’ve gotten soft because of the ease of getting work in recent years, you need to tighten up, get in shape and develop new, creative ways to position your firm to be the best qualified for new projects that come down the pike - especially now that competition is intense.         Everyone knows that clients always select the best qualified firms.  Just ask any client.   They will be quick to tell you that they always select the best qualified firm.  Or, they might say it another way that, if all firms are equally qualified, then why not select the firm with the lowest fee?  And they’re probably right!  If all firms are equally qualified, then it would make sense to select based on price.          The problem with that kind of thinking is that all firms are not equally qualified any more than as individuals we all have the same intelligence,  capabilities, experience, expertise, information, resources, etc.....   Firms are as different in their capabilities and competencies as are people.  The problem is, that most design and construction firms act the same and consequently appear to be equally qualified to prospective clients.  You need to be different if you want to win clients and projects and have a successful marketing program.  You need  to be perceived as being the most qualified or the best qualified.      If you look at almost any selection process in the public or private sectors, it’s not at  all unusual to see all the competing teams focusing on the same generic types of issues.  These include the  usual litany of capabilities, experience of the team, attention to time, cost and quality, and outlining their systematic approach to doing the work.  It’s a very process-oriented approach focusing on their firm instead of focusing on the problems at hand or addressing what the client might need to do to resolve the issues.  This sameness can be pretty BORING when clients have to sit through this kind of a drawn-out exercise in sameness, whether it’s reading a dozen proposal or listening to like sounding  presentations.       For this reason, it’s not surprising that clients have a hard time seeing any meaningful differences between the teams they are considering for their project.  Talking about team composition and process is not all that exciting to most clients.  What they really want to hear is how your team plans to  make the client’s company or organization more profitable, more efficient, or more successful.  They want to know how they will benefit by hiring your firm.  How their job will be easier and more productive or how they might personally benefit. They want to know what results you can achieve that will benefit them if you are hired.       Breaking out of the traditional Experience/Time/Cost/Quality rut is essential if you want to be perceived as unique and better qualified. An article in  ENR said this .... “few clients are willing to hire a design firm based solely on a name.  Clients want to see how a design firm’s array of services can help them cut costs, or produce more.  The cutting-edge design firms are learning to sell the value of service to clients.”

        No one knows for sure where the economy is going in the near term.  Some market segments have  experienced softness in  varying degrees.  It’s could be just a matter of time before we will see more of the same whether it’s six months or a year away.    

Firms need to take the time now to evaluate each of their markets and prepare the firm to minimize the negative impact of this downturn and take advantage of the opportunities to position  the firm to rebound strongly as this market turns around.

Getting your costs in line is more important now than ever in this competitive recessionary environment.  It's no longer feasible to achieve largepermanent cost reductions by slashing head count.  Besides, it's danger­ous.  Indiscriminate firings and cost cutting can hurt design firms in the long run.  If you're not careful, your knife may (and probably will) nick bone and muscle, diminishing your organization's capacity to perform.

     Mandates to "cut costs 10 percent" for example, leave important programs in trouble, key slots unfilled, and investments that could bring hefty returns de­ferred.  In all cases, it's better to analyze before acting.

    Here are some cost cutting tips.

     What's your business? Figure out where your core business lies and outsource the rest.  Ask, about every activity, "Why are we doing this?" The best way to re­duce costs is to eliminate non-essential activities.

     Work closely with subconsultants.  Screen them care­fully, audit their work, and train them in quality im­provement and cost-reduction techniques.

     Engage all members of the workforce.  Employees trained in reducing costs feel a sense of pride and ownership.  Plus, they can come up with great ideas.

     Find the true costs.  Traditional accounting prac­tices - like adding a standard percentage for overhead to your costs - obscure opportunities to cut the fat.  Activity-based costing and other methods uncover them.  By identifying discrete costs, you can leverage certain activities - or eliminate them. All costs are investments subject to analysis.

     Measure.  Use ratios to measure profitability, to maximize the productive use of assets, and to monitor dangerous levels of debt.  And techniques like Pareto analysis can help you improve continuously.