If there’s one phrase that describes 2020, it is not “business as usual.” The ways in which A/E/C and environmental consulting firms have fared in this unprecedented year have been as varied as the businesses that they run. In this issue of The Friedman File, we’re sharing some lessons learned, how firms have coped (or thrived) and what we see as ways forward in a still uncertain landscape.
Leading during crisis
While I’ve long advocated for transparent management, 2020 has required that on a whole new level. At times of economic uncertainty, employees look to their leaders to chart a course, to have a plan and to enact, if necessary, transformational changes or survival measures. It hasn’t been easy to be a leader this year, but many have risen to the challenge: enlisting staff in the need to create new services, implementing firmwide business development efforts, providing sound rationales for layoffs or furloughs, acknowledging bumps in transitioning to remote work and more.
We have also seen firm leaders prioritizing more frequent communication with staff, individually and as an organization. Some, such as 210-person Conco Construction (Wichita, KS), have incorporated personal messages, such as the importance of voting, following COVID-19 health guidelines and recognizing individuals who are putting company values into action.
Ways forward: While we talk about the “new normal,” leaders in 2021 will have to think more expansively about what they want “normal” to look like at their firm going forward. That means asking new questions: Do we want to fully return to our previous normal (and is that possible)? How do we mentor, lead and maintain culture if we’re not in the office? What does this firm truly need to thrive?
“We shouldn’t assume that once we’re back in the office, things will be great,” says Shannon Nichol, founding principal at 50-person landscape architecture firm GGN (Seattle, WA). “We should think about those things now. It will be a different world and staff will come back with emotional stress that has accumulated.”
Financial management
During the 2007-2009 global financial crisis, industry firms across the board were laying off in large numbers. This year is different. The impacts have not been uniform, we’re only 9 months in, and as a result, staffing needs and salaries have generally not reset. For many firms, utilization and productivity have increased. Cash flow has been helped by major reductions in travel, event and marketing expenses, as well as economic stimulus money that cushioned the blow for some and provided strategic reinvestment opportunities for others.
“We have clients who are having their best year ever,” says David Cohen, Managing Director at Matheson Financial Advisors (Natick, MA). “For others, the sky is falling. If anything, what we have seen is the importance of diversification and a strong balance sheet.”
Ways forward: This is the time to scenario plan around your top and bottom performing markets. It’s also a good time to revisit your expense lines to see what 2020 adjustments you may want to keep, and to reevaluate whether you have the capital structure that you need to weather an extended storm. Many firms who are doing well are leveraging this time to plan for growth, make key market hires, and pursue acquisitions to grow their staff or diversify their markets.
Workforce planning
Although few industry firms were managing remote teams before the pandemic, many moved rapidly and smoothly into a remote environment. All year, we’ve heard firm leaders asking questions such as: Is now the time to thin out nonperforming staff or practice leaders who may not be the right fit? Will we fully return to the office or maintain a hybrid workforce? What have we learned about project staffing, scheduling and efficiencies?
Ways forward: While it’s unlikely that our future is 100% remote, there will be consequences from a year of working differently. Flexibility is already more important. Employees have given up their commutes and enjoy more flexibility in balancing their work and home lives—even if there have been tradeoffs in face-to-face communication, collegiality and mentoring. Not all are eager to return to the old ways. “There will be companies who offer flexibility, and if yours doesn’t, your employees may leave for a different path,” says Cohen.
Brick and mortar offices will likely see innovative new options, such as trading large urban offices for multiple small suburban locations closer to employee homes, hotel-style co-work spaces or smaller footprints to accommodate a hybrid work model.
Business Development
As conferences, events and client visits have moved online, traditional face-to-face BD has nearly disappeared. Firms have had to get creative, leveraging technology to their advantage, to create lunch and learn series for clients, implement robust CRM systems or take their positioning and thought leadership to social channels where they can follow up. This year has also made the case for two foundational must-haves: a firmwide culture of – and system for – business development and pre-positioning your firm’s expertise with relevant and thoughtful content.
Forty-five-person architecture firm Dyer Brown (Boston, MA), for example, leaned into helping their corporate, retail and hospitality clients understand and navigate an eventual (safe) return to the workplace. The firm published and distributed Future Shift: Workspaces in Transition: A Post-COVID-19 Playbook for Returning to Offices and Shared Work Settings, along with a related blog series and an off-the-shelf system of social distancing signage.
Ways forward: We won’t know what the new landscape of BD looks like until we get there. Sales cycles may be longer or different. Client needs may have changed. Communicating solid expertise, a clear point of view and connecting the dots for your clients is increasingly important. Prioritizing relationship management and systematizing your outreach (via scheduled check-ins, client surveys, sharing content that speaks to their new normal, establishing a clear CRM) will put your firm ahead while we wait for the face-to-face.
Conveying and Adding Value
One of the biggest lessons learned this year is that firms must enhance and communicate their value to clients, instead of waiting for them to share their needs. HRP Associates (Farmington, CT) has done health and safety work for many years, but has now launched a suite of COVID-19 Health and Safety services, including preparedness and planning, decontamination, construction site health and safety, and a COVID training course for universities. The 125-person firm also revised its health and safety compliance audit delivery to a hybrid virtual and in-person model.
Likewise, Haley Ward (formerly CES, Inc.) (Bangor, ME), a 120-person engineering, environmental and surveying firm, partnered with the University of Maine System to help them establish an innovative systemwide wastewater testing program across their statewide campuses. Each week, wastewater is tested for the presence of SARS-CoV-2, the virus that causes COVID-19, to help the system respond quickly to potential outbreaks.
Ways forward: In a rapidly changing economic landscape, it pays to be proactive and creative in how your firm partners with and communicates with your clients. Find new ways to ease their pain, reduce their risk, find them money or save them money. Don’t assume that you know what they need, ask. Then position your firm to help through creative adaptation, new services and sharing (or building) expertise.
“You’ve got to be nimble and open, and you need to set aside time for ‘spaghetti-off-the-wall’ meetings to generate ideas,” says HRP COO & President Tad Goetcheus. “That was the genesis of our new YouTube channel (which showcases the firm’s expertise while educating clients). Our subscribers love the channel, and our employees are lining up to be an actor, director, or content manager. In doing so, we’re also bringing in more younger people.”
Business Planning
Depending on what markets you’re in, it may feel hard to plan right now. But whether they’re thriving or surviving, re-evaluating the business plan is on many management team agendas. Services, markets, and locations may have opened or closed, boomed or busted. Longstanding problems have been brought to the forefront. Some, like HRP, saw an opportunity to dissect every part of their business and improve each area, with a goal of improving their overall client experience.
One of the positive outcomes of 2020 is that it has, by necessity, opened minds up to change in an industry that can be conservative and change-resistant. There’s nothing like a year with a pandemic, economic disaster and presidential election to usher in plenty of change.
As the CEO of one 150-person architecture firm shared, “COVID was a blessing and a game changer because it forced us to rip off the Band-Aid of some things that needed to be changed and forced revolutionary, transformative change versus incremental change.”
Ways forward: Much remains uncertain, and right now, business planning needs to include more flexibility and truth-telling. Plan now for markets that may be poised to benefit from pent-up demand, or those, like infrastructure, that may be impacted by funding delays. And don’t miss the opportunity to be proactive in addressing what needed to change before 2020 along with what’s happened this year. There’s never been a better time to be a change agent in your firm.
What’s your firm’s biggest lesson from 2020, and what are you putting into your 2021 playbook? I’d love to hear from you at rich@friedmanpartners.com or (508) 276-1101.
