Who's In a Recession? You Are!

I stopped listening to NPR and reading the news awhile ago. Not because I didn’t want to listen to current events, but mainly because I was sick of hearing about the economy.

Today I heard that, by definition, the economy is in fact NOT in a recession. 2 consecutive quarters of shrinking GDP is apparently the red flag…however today it was reported that the economy actually GREW this past quarter.

In the AEC industry some firms have felt the rippling effects of the media circus surrounding grim economic forecasts. In my mind, this consumer uncertainty is a self-fulfilling prophecy driven by mainstream media—and anyone who consistently adheres to those “grim forecasts” is likely to find themselves a part of it.

While many firms struggle, however, there are others who are making a profit. There IS money somewhere. It hasn’t just disappeared. The only thing is that there’s less of it being handed out—and when money isn’t just handed out, mediocre firm’s profit margins take the hit while sustainable, pliable firms are continuing to do what they’ve always done: creating value.

Unfortunately for mediocre firms they find excuses to support their (business sustainability) negligence. They chalk it up to a recession—and the media only fuels this rationale. Of course the market place has its cycles, hasn’t it always?! What baffles me is that if this sinusoidal model is common knowledge, why the heck are businesses not adapting and adjusting to roll with that wave—and instead getting washed away with it? My guess is short-term, inflated value. Just one of the many flaws in a society of rush-rushism.

Outsourcing HR? Terrible Mistake

I was flipping through the “Hot 100 Businesses” in the last issue of Entrepreneur the other day and noticed something: a lot of these firms are staffing agencies. This got me thinking: why has HR become a necessity for outsourcing?

I would surmise one of two things: either HR departments (and I’m just talking AEC) are understaffed or lazy. Don’t get me wrong, HR is probably one of the most important functions of a business—but it’s interesting to see how much people are willing to pay to not have to recruit or hire potential employees.

I think AEC firms are making a mistake in not maintaining a fully functional HR department. As per the aforementioned statement, “HR is probably one of the most important functions of a business.”

I like to view HR as a revolving door. Everything that intricately associates with your firm enters and exits there. In addition, HR is partially responsible for the well-being of your people! Word of Mouth advertising (whether good or bad) is largely driven by HR, for something as vital as the portal of your company why not pour in ample resources for it to function at the top of its game?

Now we return to our staffing agency situation. I think HR departments are understaffed and rationalize the need to properly fund HR at their firm by outsourcing and saying “it’s not my problem.” This is NOT the way to go. Outsourcing one of your most important functions only adds extraneous layers to your business model. It’s one more ear to whisper in (a la the children’s game telephone). If you look at long-term value, the cost of managing a great HR department in-house outweighs the cost of replacing 50% of your hiring pool every year because of mismatched employees.

Making sure that HR is well taken care of and receives the necessary resources to ensure the well-being of your people is an investment that is sustainable and well worth the cost.

Message Mixing in Today’s AEC Environment

We get hit with hundreds of messages everyday—and usually that’s not even going online! Depending on how much you drive, check email, surf the web, watch TV, listen to the radio…or just walk down the street—that number could easily rise into the thousands.

Getting bombarded with advertising and marketing on a daily basis will cause anyone to become desensitized. Sooner or later, someone figures out a new tactic—and it works—for awhile. The thing is if it does work, then everyone jumps on it, causing that medium to quickly become over-stimulated. And over-stimulation only elicits message indifference—leaving us at square one.

The AEC industry is filled with many “follower” firms to adhere to this bandwagon strategy. That is, not many are apt to be innovative and edgy. Not many are willing to do things a different or unique way. Does it hurt the bottom-line that they neglect this novelty? Perhaps. Though, an argument might be made that engineers and architects (and potential clients) don’t and have never really care about those things. Well, perhaps that’s accurate. SOME might not—but the reality is that a lot do.

In this industry, a marketer’s most difficult task is to find their place in the wide world of messages. In order to do so, why not open up the box and push the envelope? Instead of pouring thousands of marketing dollars into typical advertising, why not revert back to a more classic direct mail campaign or a client-interview approach? If you do wish the spend your budget through directories, sponsorships and print advertising, why not adjust your marketing-mix to strike a new or unique medium? Something that other firms don’t? Radio? (non AEC) Magazines? Billboards? A Hotel? What you’re doing is creating placement that doesn’t get lost in the wash. You’re branding—not selling. Who goes flipping through a magazine looking to find an architect to build their next elementary school? No one. But who remembers your name and company when they saw your billboard everyday on the way to work? The recognition gets you one step closer to the trust that it takes for someone to take that leap with your firm. And then, well they’re yours to lose.

Present day marketing requires finding new ways to consistently move ahead of what the rest of the industry is doing—and it is clearly evident that more attention should be focused on this topic in the coming years—as business development departments fight for clients and human resource departments fight for prospective employees. Oh yeah…and then there’s the 78 million person generation exiting the workforce…

Customer Relationship Management (CRM) for the AEC Industry

Magical. Marvelous. CRM genie in a bottle is often the way sales reps paint the picture for relationship management software. Often times, busy executives looking for a quick fix to their business solutions are the ones taking the bait.

Who can blame those reps? They're just doing their jobs. Because CRM software is a useful tool and can actually be beneficial to those who need it and understand it FIRST, I personally think there is nothing wrong with what CRM reps are doing. The responsibility falls into marketing professionals with influence at the top.

Because I work with a company that has fallen into the "pretty picture" trap I only offer a few suggestions on how to go about conducting the proper due diligence before jumping in.

First, know what your business goals are. Have focused direction and your employees on board. Make sure that your top-levels are on board.

Second, begin your research and explore all options. Some CRM software is for big fish, some for small. Know what you are and how these tools can help you achieve your business goals. Also, talk to those who've implemented before and understand their lessons learned.

Third, conduct your cost-benefits analysis. Does it make financial sense? Include cost of populating and upkeep. These are general costs you can calculate through bill rates and estimated manhours your research gathered (in step 2).

Fourth, using management's assistance, promote it to the company. Use creative techniques and establish handbooks or standards for the company to follow. No one likes a system they don't understand. Make sure everyone knows what it is and how it might help.

My firm never got past the implementation stage...because we didn't fully plan for the system, we just bought it and hoped it would create itself.

We did learn a valuable lesson, however, and next time around when we're ready to consider CRM we'll have a much more realistic and effective approach.

Educating Top Level Management about Marketing

Why isn't marketing being highly regarded in the industry? That is, why is only 5 or 6% of annual revenue being poured back into work and potential employee generation?? I think the problem is hidden at the executive level--and in that problem is a solution.

I think the responsibility is in our hands to convince those at the executive level of our worth. We can do this by making sound decisions, following through on our initiatives and actions, and delivering results that impact (and reflect) the bottom line.

The respect has long been absent from our industry...it's up to us to become the "experts" of our field--so that when someone thinks of marketing, they think of consulting us.

Unfortunately, the majority of professionals at the top are technical experts by trade. Now consider this...you've spent 20 plus years developing skills as a technical expert, sure BD might come naturally to you (if you're an extrovert). You might even go as far to group marketing into that knowledge bank and assume since you understand BD you MUST understand what "marketing" is as well.

Well, heck, I understand how a storm water management plan is done, but I wouldn't suggest doing one...that's a civil engineer's JOB! THEY'RE THE EXPERT! Now let me do my job.

So, how do you educate someone who thinks they understand something just because they've been around for awhile? First I'd say respect their opinion because it does matter. Second I'd say research and develop bottom-line arguments. Develop dollar figures for everything you suggest. Especially your returns. Third I'd say enlist the help of other "business" people, such as BD, HR, IT, Accounting, etc. The fact is we're all in this together and there's no problem with helping each other when in need.

I believe that right now marketing professionals in this industry are revolutionizing our field. I love being around as it happens. I think it's up to us as marketers and business developers to EDUCATE our top levels and anyone else who lends an ear through quality research, analysis, logic, and numbers--because that is what comes naturally to many of those at the top.

Understanding another person's perspective is our key to being understood.