By Scott D. Butcher, FSMPS, CPSM

In covering the AEC industry trends for 2013 and beyond, we’ve had two posts and four trends.  The first post addressed Commoditization and Focus on Individual Team Members.  The second post  covered the War for Talent and Era of the Employee.

In this post we’ll look at two more trends: technology and proof of concept.

BIM Revolution

Building Information Modeling (BIM) has been considered a trend for several years, and the fact is that BIM is a reality and here to stay.  Yet, BIM technology – while no longer in its infancy – is probably only in the toddler stage.  On the 3D design-side, not all software programs are created equal, so while a program like Revit Architecture is pretty advanced, its MEP cousin is playing catch up.  A lot of engineering firms I’ve spoken with still find that productivity is better with AutoCAD, though in fairness that program has been around a lot longer and has many more fluent users.

BIM holds great promise for taking 3D design models and integrating schedules (4D), costs (5d) and life cycle management (6D).  But the technology to do this is not necessarily ready for prime time.  Not all software programs play nice with one-another, and sometimes third-party programs are required to get A to talk to B.

On top of the technology challenges, there is the issue of adoption.  Architecture, engineering, and construction firms have implemented BIM at varying levels – including many who haven’t yet done their first BIM project.  This is changing, but until all designers and builders – including sub-contractors – are fully implemented, the true benefits of BIM will remain elusive.

Furthermore, the elephant in the room is owner adoption of Building Information Modeling.  Few owners are sophisticated enough to take the detailed models and incorporate them into the everyday management of their facilities and equipment life cycles.  Most owners seem to have a laissez-faire attitude, happy to realize any coordination, budget or schedule benefits, but really only caring about the final product, not how designers and constructors choose to get there.  They have no use for the model after the project is completed, and thus they aren’t involved with providing vital information into the model early in the process – information that could make their facilities management lives easier if they were capable of maintaining the model after the project ended.  While many owners use CAFM programs like Maximo and Archibus, few integrate them with BIM.

BIM can be a major diffentiator between competing firms, and those who can effectively sell the benefits of BIM during design and construction, and be able to demonstrate those claims are true from past project experience, still have an opportunity to stand out.

There are a lot of design firms using Revit for 3D design, but not a lot of firms that have experience with a truly integrated building model at all stages of a project.  This is changing, of course, and the playing field is slowly leveling.  However, it will take several more years to get there, and in the interim the AEC industry needs to do a better job educating owners about the benefits of BIM as it relates to the lifecycle of a building or system.

Evidence-Based Design & Marketing

There’s a generation – or two – of people in the workforce that still occasionally use a famous movie catchphrase, “Show me the money.”  Cuba Gooding, Jr.’s football character in Jerry Maguire famously made Tom Cruise’s sports agent character shout out “Show me the money” during a telephone conversation.  To many people, the phrase has become synonymous with “prove it.”

And that’s the basis for our next trend: proof of concept.  Many AEC firms operating in the health care industry are already familiar with the concept of Evidence-Based Design, which Wikipedia defines as “field of study that emphasizes the importance of using credible data in order to influence the design process.”  The genesis of this concept in the design and construction industry is research into how design of health care facilities could help patients by minimizing stress, creating an environment for healing, reducing length of stay, etc.

This is a really interesting concept in that it moves design and construction into a new research-based realm.  Decisions made during the design process are based upon prior verifiable research.

Think of it as lessons learned on steroids.

Whereas we often talk about lessons learned from previous projects, these are mostly anecdotal, and mostly in the heads of only a few people.  Evidence-Based Design, on the other hand, brings in a more formal approach to research and documentation from studies, interviews, surveys, statistical analysis, and other methodologies.

Because of the success in the health care industry, the concept has spread to other market segments.  How do interior finishes impact worker productivity?  Does daylight help students get better grades?  In fact, the green building rating programs incorporate concepts from Evidence-Based Design, with proven methods or products earning points toward certification.

Thought-leading firms in the industry have embraced Evidence-Based Design as the next evolution of the profession.  Just check out this edition of Gensler’s Dialogue, which demonstrates the breadth of their research initiatives (PDF): http://www.gensler.com/uploads/documents/D19_03_08_2011.pdf.  They are conducting research across the market segments served by the company.

I believe that this trend is having a direct impact on the way we promote our firms as well, and I call it Evidence-Based Marketing.  For every claim we make, the prospect is thinking, “Show me the money!”  A value proposition is meaningless unless you can back it up with evidence of that value.

In a way, a testimonial letter, reference, or referral is Evidence-Based Marketing.  A happy client is verifying that they had a positive experience with your firm, and your deliverables (whether design or construction) met or exceeded their expectations.

One of the recurring themes of these posts about where the design and construction industry is headed is that clients are becoming more sophisticated.  And because of that, the need for “evidence” will become increasingly common – evidence of design success, evidence of marketing accuracy.  Not a lot of firms are doing this.  Yet.  So it is a great differentiator for those that are.

What do you think?  Is BIM ready for prime time, or still finding its legs?  Are your clients currently asking for evidence of any kind?  How will you respond when they do?

By Scott D. Butcher, FSMPS, CPSM

In the last post I wrote about two of the trends impacting the AEC industry – Commoditization and Focus on Individual Team Members.

This post continues the trends series, and focuses on two more areas related to staff: the War for Talent and the so-called Era of the Employee.

War for Talent

The Great Recession may have forestalled this next trend, but it is squarely in our headlights now.  Employment in some sectors of the AEC industry is down significantly, but many people have also left the business for good.  Many Baby Boomers delayed retirement, but are now beginning to retire, or at least making plans to do so.  And there aren’t enough students currently enrolled in architecture, engineering, and construction-related programs to offset the void that will soon be created.  Plus, of those enrolled, many are international students, who plan to return to their homes abroad upon graduation.

How bad could this problem really be?  In 2012, McGraw-Hill published an informative SmartMarket Report, Construction Industry Workforce Shortages.  The authors found that 37% of architectural and engineering firms believe they will struggle to find enough skilled professionals (with ten or more years of experience) by 2014.  General contractors share a similar concern – with a whopping 49% of those surveyed stating that they are concerned that there won’t be enough craft workers (with ten or more years of experience) within two years.

Two years!  What makes this even more notable is that the architectural and construction professions have seen jobs cut by as much as 30% since the recession began – and the 2012 AIA Firm Survey found that architectural firm revenues are down 40% from 2008.  So employment is down, business is down, and yet firms are fearful that there won’t be enough quality employment candidates in the coming years.

Furthermore, this talent war will be “every firm for itself.”  Companies in secondary markets will compete with those in major metropolitan markets as the “back to the cities” trend continues and professionals move back to the urban cores.  Design firms will compete with construction firms for the same people – and this is happening now.

I primarily work on the design side of the business, and my company has lost promising engineering hires to construction firms, and others to larger metropolitan areas.
Our story is not unique, and yet this talent war is only just beginning.  How is your firm position to deal with this?

Era of the Employee

Employees have more choices than ever before.  True, employment in AEC industries is down from its peak a few years ago – but there are always firms looking to hire.  Many that downsized are growing again.  Employee retention has to be a key strategy for any AEC firm, and the retention policies must begin with the understanding that things have changed.  Employees have more power today, and they increasingly expect to be treated differently.  Employee loyalty to their employers has declined, and a recent Deloitte survey found that 65% of employees across various industries are looking to switch jobs.  Furthermore, only 28% of Generation X members in the workforce plan to stay in their current jobs!  Why does this matter?  These are the people that are moving into firm leadership positions, running projects, and helping to bring in work through their expanding network of contacts.  They are also the individuals that often have the restrictive credentials mentioned in the Focus on the Team Members post.

Monster.com, LinkedIn, and other websites regularly offer a smorgasbord of jobs, so even those who aren’t planning to switch jobs are being exposed to new career opportunities almost daily.

According to a recent survey by the Corporate Executive Board, employees value other things more than money.  They ranked job-interest alignment, manager quality, co-worker quality, people management, respect, and collegial work environment ahead of salary when asked what matters most.   If employees don’t understand how they’re helping to making a difference, or they don’t care for their boss or colleagues, they have little incentive to stay – even if they are well paid.

We are in what is sometimes referred to (though not universally) as the Knowledge Era, which has evolved beyond the Information Age.  Companies like Starbucks, Google, Microsoft, and others have led the way – just reference Google’s “Innovation Time Off” model, which allows employees to spend up to 20% of their time innovating.  Do you think that Google employees feel that their work matters?  Companies of all shapes and sizes are updating their work areas to be team-focused, adding lounges or employee cafés, implementing telecommuting capabilities, and allowing flexible working hours.

What is critical about this trend is that a company needs to understand what is important to its employees, and then work to have a workplace that aligns with their staff.  Gone are the days when a company could afford to say “take it or leave it.”  Losing even one employee can have a major impact on a company.  Think about a few of your key people – not just your leaders, but also your doers.  What would happen if one or two of them left the firm tomorrow?  What would the immediate impact be?  And what would happen if you couldn’t replace them with hires of equal caliber?

I began this post stating that these two trends relate to staff, and they absolutely do.  But they have huge implications for marketing, too.  When pursuing work – with new clients and even with existing clients – your firm is only as strong as the weakest member on the team.  If you can’t recruit the right people, or retain the ones you have, your prospects for future work will drop dramatically because your team won’t have the “right” credentials.

Firms that thrive in the near future will have aggressive recruiting and retention programs, and will seriously reevaluate and evolve their corporate culture, benefits, policies, and even facilities to keep the employees they have and attract quality new prospects.

Is your company prepared for these two trends?  Have you already experienced them firsthand?