Firms can still thrive in a down economy
September 29, 2008
Appeared in The Zweig Letter
> Constant communication as well as diversification of geography and services can provide a boost to A/E firms in uncertain times.
It’s not easy for firms to thrive in a struggling economy, such as the one that is plaguing our country these days. The Architectural Billings Index (ABI), published monthly by the American Institute of Architects (AIA) (Washington, DC), has shown a consistent downturn among architecture industry in 2008, with July’s ABI rating at 46.8, up slightly from the 46.1 mark in June but still the sixth consecutive month with negative scores. Any score above 50 indicates an increase in billings.
That doesn’t mean, though, that it’s impossible to survive, or even thrive, in a down economy, firm leaders say.
Diversify your locations and services
Having locations across the country usually means one office or more will have more work than they can handle, even in a struggling economy, says Jeffrey Gerber, president and CEO at PGAL/Pierce Goodwin Alexander & Linville (Houston, TX), a 225-person architecture and engineering firm with nine offices, including locations in Boston, Massachusetts; Los Angeles, California; Washington, D.C.; and Dallas, Texas.
The firm also dips its toes into several types of work, from office buildings to hospitals to courthouses, working on both private and public sector projects.
“All our offices will have either a good year or a bad year, and it’s not the same ones having good years or bad years every year,” Gerber says. “When one does well, another one is struggling. That’s just the way it works.”
The geographic diversity is relatively new for PGAL, he says, with the firm starting 64 years ago, and only expanding its locations during the past five to seven years.
“That’s really added to our strength,” Gerber says.
The continued advancement of technology allows PGAL to keep its teams together in the various locations, while spreading the firm’s work across its offices. The locations that aren’t seeing as heavy a workload are able to chip in on some of the smaller tasks such as designing the interiors, skins, or furniture.
“It’s somewhat unusual for us to do a whole project in the same location,” he says.
Thomas Dever, president at Dever Architects (Glen Mills, PA), an 18-person architecture firm, is a big proponent of a diversified service offering for his company. The firm works on a variety of project types, including auto dealerships, banks and credit unions, educational buildings, green buildings, health care, hotels, interior design, international work, mixed-use, office and industrial, religious, residential, restaurants, senior living, shopping and retail, spas and salons, and supermarkets.
That multi-pronged attack has made it easier to weather the storm when the economy heads south, Dever says.
“We always provide a variety of services and work on a variety of building types,” he says. “For the 23 years of our firm’s existence, this flexibility has been a key to our success. In a good economy, it does sometimes make it a little more challenging to compete with specialized firms, but we still compete well enough and can focus in any economy on the areas where there are opportunities.”
Stay in touch
Andrew Ciancia, senior principal at Langan Engineering & Environmental Services (Elmwood Park, NJ), a 650-person geotechnical, environmental, and site/civil consulting engineering firm, touts constant communication as a key to making it through a tough economy.
“Weekly, we hold a one-hour webcast— or longer if needed— to senior members of each (of our 11 U.S. offices) to review various business topics, including marketing efforts, staffing, and collections,” he says. “Busier offices can work together with slower offices to share staffing needs and marketing efforts. We work as one firm, not isolated offices.”
Through webcasts, e-mails, telephone calls, and office visits, Langan firm leaders are able to evaluate staff workloads, such as needs and availability, review marketing opportunities, talk to clients, review accounts receivable issues, and evaluate opportunities in other parts of the country or world, Ciancia says.
Taking advantage of the downturn
Cyrus Izzo, co-president and co-CEO at Syska Hennessy Group, Inc. (New York, NY), a 790-person consulting, engineering, technology, and construction firm, says the company is using the struggling economy to its advantage, recruiting employees who may have been let go from other companies that aren’t able to tread water for long.
“It’s very easy in a soft economy to scale back and try to wait it out,” Izzo says. “We’re pushing our team to stay on the cutting edge. We want to recruit and retain the best talent, so we’ve taken this as an opportunity to increase our recruiting in a time that others see as soft.”
Adding employees who might not have been as available or easy to scoop up in a thriving time, Izzo says, has allowed Syska Hennessy Group to attract better and more interesting clients.
“They want a firm that can supply innovative solutions to their problems, not just be an order-taker,” he says.