You’ll never be able to eliminate uncertainty, but there are some things you can be sure of. Keeping these in mind will help you be ready for what lies ahead.
It’s been said many times before that “business dislikes uncertainty.” Well, good luck to those of you who are owners and managers of AEC businesses, because you will never be able to eliminate uncertainty! The fact is pandemics, recessions, terrorist attacks, and more can happen at any time with no notice, and without our approval.
That said, I do think there are some things we can be certain about, and keeping these in mind will help us be ready for what lies ahead. Here are some of those things:
- This pandemic – and others – will probably be around for years to come. The latest COVID resurgence we are going through with the delta variant shows how difficult it will be to get rid of this thing or something else like it. As polarized as our culture is today and as diametrically opposed as the two major camps are, we can’t seem to figure out how to respond to threats as a unified nation. There are multiple implications for AEC business firms. They need to be ready for the unexpected – if that is even possible. Redundancy in staffing, serving a wide range of client and geographic markets, and having sufficient working capital will all be critical to surviving future events, whatever they might be.
- Investments that allow us to work from any location is money well-spent. Now that so many people have a taste of not going in to the office every day – and the firms they work for did well in spite of that – it’s going to be hard to go back to the way it used to be. Not to mention how this change has opened up more options for firms to hire people who are not local to any of their offices.
- Offices will become more of a gathering place versus the place everyone goes every day all day. Larger common areas and places for big meetings will be common. There will be fewer “cubicle cities” and if there are cubes, they’ll be higher and more private. There will also be miniature private spaces for Zoom meetings or calls – akin to modern-day phone booths – and carrels that people will claim on a first-come, first-served basis.
- The worker shortage will probably never abate. There are just too many reasons why it’s going to be an employee-driven job market. Our industry has always had a shortage of people who were designers or technical people who also had the requisite communication skills to succeed as consultants in client-facing roles or managers of other people. But now our schools aren’t turning out nearly enough architects and engineers and surveyors to meet an ever-increasing demand for their skills. And we are facing unprecedented needs in so many sectors – water and wastewater, power, transportation, housing, health care, and many more. If there is any silver lining to this labor shortage cloud it’s that AEC firms have been able to raise their prices.
- Debt-laden firms are going to be hamstrung because interest rates will go up. Borrowing money has been ridiculously cheap for a long time. I don’t see how it can continue. If firms that are used to borrowing money at 4 percent to 5 percent interest are suddenly finding themselves paying 10 percent or more (and we have had higher rates than that in the past) because inflation is running away, it’s going to be a big drag on profitability and growth for the firms that have a lot of debt.
- Marketing and branding will become increasingly sophisticated. Just having a good website and doing regular social media postings is nowhere near enough to keep up today. Real video production capabilities, creating podcast series, doing original market research, and even measurement of brain waves of those who are observing marketing messages will be things most firms in this business will be doing in the future. Marketing is not standing still.
Mark Zweig is Zweig Group’s chairman and founder. Contact him at email@example.com.Click here to read this week's issue of The Zweig Letter!