Lessons Learned From An Economy Turned
May 27, 2009 at 5:28 pm aepcentral 10 comments
By Matt Barcus
President, Precision Executive Search, Inc.
Managing Partner, A/E/P Central, LLC, home of CivilEngineeringCentral.com
So one of the headlines from CNN.com on Wednesday read “Economists: Recession To End In 2009.” Reading this article got me to thinking that, now that we are beginning to see a little light at the end of the tunnel, what are some of the lessons that the civil engineering community has learned at the hands of this recession?
If you jump on the band wagon, be sure you pack a lot of padding for when the wheels fall off.
How GREAT was the land development boom in places like Las Vegas, Phoenix, and the greater Washington, DC area (just to name a few)? Engineering firms were actually turning away work from developers (or, working 90 hour work weeks because they couldn’t say “no.”); engineers of all levels were relocating to these “hot spots”; Professional Engineers were starting their own firms because they saw the dollar $ign$ that were there to be made; every engineer I spoke with was chomping at the bit to work for a home builder or developer, and vying for those positions was like trying to get into Walmart as the doors open on Black Friday. You don’t have to look very far to see what has happened in the wake of this recession. Home builders and developers are selling off land (if they can) and running on skeleton crews at best. As a result, many of the civil engineers who were living the high life during these boom years have since been acquainted with acronym “RIF.” Knowing where the market was in those regions during the real estate boom, check out some of the headlines from the Las Vegas Review Journal for 2009: http://www.lvrj.com/hottopics/housing.html. Did you know that average price for a single family home in Phoenix for 2009 is $103,953.00 vs. $283,472.00 in 2008 (Source: Realty Times – Phoenix, AZ). To see the effect in the outlying suburbs of Washington, DC , take a look at the Housing Market Outlook For The Washington, DC Region as prepared by Robert Charles Lesser & Company. My hope is that everyone who reaped the rewards of these robust land development markets was able to tuck away some of those lucrative bonuses and put them to use to help cushion their fall.
Diversify. Diversify. Diversify.
If you have stuck around long enough to read through the paragraph above, you know where I’m about to go here. How many firms do you know put all of their eggs in the land development basket? I guess you can’t blame them, right? That’s where all the business was and it did not take long to be completely bogged down with lucrative land development work. To come up for air and even consider anything else was nearly impossible. With all that money floating around, that would have been the best time to hire some key players in water/wastewater, municipal infrastructure, transportation and other areas of specialization in order to begin establishing a presence outside of the land development arena. All good things come to an end, so when they did, by diversifying you would have had built established relationships and developed a nice track record within the municipal sector that would have helped ease the pain of the real estate bust. Unfortunately, many firms failed to diversify and by the time they realized they needed to pursue work in other areas, it was too late…in fact, pursuing work with public and governmental agencies these days is like trying to get into Walmart as the doors open on Black Friday (yup, I used that analogy again). Everyone is lined up looking for a piece of the action, but only a few will be fortunate enough to walk away with that nice plasma television.
Beware of “Best Firms”. Are they only the “Best Firms” during the best of times?
Don’t get me wrong, there are many firms out there that deserve all the awards they receive for ethics, management style, benefits, employee training, employee incentive programs, employee retention, state-of-the-art technology, exciting projects, work environment, etc. In fact, there are many firms that would likely win those types of awards but just choose not to submit themselves for consideration. The best firms to work for, as I see it, are the ones that have strong business plans with strong leadership and that have had a fully executable game plan in place for when the market turned as it did. They produced high quality work at a reasonable price with a diverse client base. They stocked away some cash and had good working relationships with their bankers. They are coming out of this downturn with minimal damage. They way I see it, the firms that rise out of this downturn and recession with the least amount of collateral damage to its employees, they are the “Best Firms” to work for.
The best marketing is producing a quality product. True, but lose the crutch.
It has always been said that the best form of marketing is developing a quality product, which in turn will produce great returns as a result of repeat business. How true this is, not only for civil engineering, but for many industries. But avoid using this as a crutch. What happens when your client’s well runs dry? Be prepared to put on your sales and marketing cap and start pounding the pavement. To better prepare yourself, make sure you take some classes and seminars on this topic of marketing and business development in the civil engineering industry; or even better, find a mentor within your company. And then once you learn some of the strategies, don’t let them become dust collectors – make sure you put them to practice. Keep in mind, just because the repeat business keeps repeating itself does not mean you should not be “out there” in the mean time marketing your services to other prospective clients. This way, when your backlog runs low you will have a head start on the process, and your cold calls will now be warm calls.
Keep your resume polished up as often as your shoes.
Treat your resume as you would your finest pair of shoes. Imagine a pair of dress shoes that have not been polished up in a long time. They look fine when you finally get them done, but if you had kept them shined and polished regularly throughout the years they would remain in top notch condition. Top notch condition is the way you should also keep your resume. Every time you get a promotion or receive an award, update your resume. Everytime you speak at a conference or write a paper, update your resume. Everytime you complete a project, update your resume. This way, should you roll into work one day after 20 years of loyal service only to be greeted with a cup of coffee and a pink slip, you will not be scrambling.
There are certainly many other lessons to be learned as we scratch and claw our way back into multi-year backlogs, and these are just a few. What other lessons have you learned that you can share with our readers?
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Entry filed under: Career Development, Civil Engineering Issues, Marketing, The U.S. Economy & Civil Engineering, The Workplace, Uncategorized. Tags: Career Path, Civil Engineering, civil engineering firms, down market, Marketing, Solutions.
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1.
Juli Smith | June 26, 2009 at 10:51 am
So I have had conversations with several of my candidates and former clients, who for the past 10+ years, have focused their careers and practices to the land development boom. I have talked with 20+ year VP’s on down to the young EIT’s who have been out of college for 2 years or less. My query is to the rest of the engineering niche: What is going to happen to all of these talented degreed engineers if land development does not come back? I spoke to a young EIT yesterday who had an excellent GPA from an ABET-accredited school, several years of Co-op experience, and post-graduate experience with a nationally recognized civil firm. He has been unemployed for almost 6 months. The stories are similar at multiple levels. There was such a shortage of engineers in the past, my fear is that if these people are forced into other careers and we lose them altogether, what is going to happen when the economy comes back.
In each post-recession market, the economy has surged beyond the boom times if you look at history over the past 50 years.
I had a conversation with a municipal engineer yesterday and I asked him, ” Why can’t you take a solid civil engineer who has worked on private land development projects and groom them for municipal clients?” The response was classic of civil land development engineers from the boom times who were unwilling to look at another civil engineer without experience with developer clients- ” They just can’t adjust to the difference in the clients.” I have to wonder if this is really true.
I throw this discussion out there to all of you for comment.
2.
Victoria | June 12, 2009 at 3:26 pm
I would like to share my feelings on an issue that I feel needs to be addressed. I have 23 years of experience in my field as a Cad Drafter/ Designer and I have been unemployed for 18 months (through no fault of my own). I have kept up on my skills through the Autodesk Assistance Program by learning the latest versions of software in the industry. I am seriously looking for work in my field as a Cad Drafter/Designer. I spend a lot of my time writing cover letters and sending off my resume to countless ads that fit my job description. In the past, whenever I applied for a job I always got a response by either a phone call or a letter. Now I wait and wait for a response and very seldom do I get one. If a company is going to advertise for a job and people take the time to respond to your ad, than please, at least acknowledge them by dropping them an email as to why they were not chosen as a candidate (and please be specific as to the reason or reasons that they were rejected, so we don’t keep repeating the same mistakes over again). There is no excuse for not acknowledging a person who has taken the time and effort to respond to you ads (Even if you receive 500 responses). This is just bad business practice and you would not treat a prospective client this way. Since most companies in this industry are suffering from this economic down turn than maybe you can take the time to practice better business ethics.
3.
Wiff Peterson | June 3, 2009 at 11:02 am
It seems to me, that the article is a classic description of the impact of a market bubble on businesses. Engineering managers need to be able to see likely bubbles for what they are, and avoid shifting resources into a bubble market in a way that makes it difficult to quickly redeploy those resources when the bubble pops.
The recent crash suggests that while it’s good to be opportunistic, we need to configure our businesses to minimize fixed costs and maximize flexibility. The organization’s ability to quickly adapt to changed conditions (or not) is a key organizational strength (or weakness). At the same time, not moving at all to take advantage of emerging and hot markets, clearly can hurt an organization because taking advantage of favorable markets can generate earnings to cushion later.
The recent crash shows that balancing effort between markets (diversification), building reserves during good times (setting aside a reasonable portion of earnings), and continuously assessing the organzation’s vulnerability to market changes are all important elements in ensuring sustained organizational success.
4.
Jackers | June 1, 2009 at 9:28 pm
I agree wholeheartedly – especially with regard to quality. In uncertain times quality is paramount. And from that quality comes reputation, brand, goodwill and solid relationships – all of which are critical in relation to the ‘turned economy.’
5.
John Poole | June 1, 2009 at 1:43 am
Great article. I wonder what the criteria is for those best firms lists? Does their ability to keep employees through recession come into play?
Hopefully when we get out of the recession sometime in 2009 we won’t then have to go Christmas shopping at Wal-Mart.
6.
Kevin Taylor | May 30, 2009 at 4:45 pm
Great reinforcing article, Matt. I think that once we persevere through this economic maelstrom, we’ll see a more conservative and rainy day approach to business before things return to (the old) ‘normal’.
Juli, I’m in total agreement with you. The keeping up with the Joneses lifestyle will seriously be evaluated as a result, at least those who learned their lessons.
7.
Juli Smith | May 29, 2009 at 9:24 am
This is an excellent article and as I look at my own clients who have weathered this storm, you have described them to a tee.
The other question we should be asking ourselves is what lessons have WE learned as individuals from this economic downturn? Just because the banker tells us we qualify for a 500K house, do we really want to go that far out on a limb? Can we live just as happily in a smaller house that is more in line with our income, especially if one or both of us loses our job or gets a debilitating illness? Do we really want to have two car payments? Do we really need to take our kids to Disney and spend 5K or would their memories be just as full going camping and walking in the woods vs. standing in line for an hour to take a 60 second thrill ride?
The older I get, the more I want to scale back and am happier with less. We sleep well at night knowing that even if one of us lost our jobs, we would still be able to have a roof over our heads and have food on the table. it’s time to turn back to simpler lives and be happy with what we have.
Just one old lady’s opinion-
8.
aepcentral | June 26, 2009 at 11:00 am
Hey Juli…great comments…in fact, you have stolen my thunder! Earlier this morning I outlined this very topic for next weeks blog..inspired of course by our conversation yesterday 🙂 I will give you props in next weeks blog, don’t worry.
9.
hintonhumancapital | May 28, 2009 at 10:37 am
Matt,
This is an excellent article. Your clear commentary on the issues is a good break from the “fluff” we get from other sources.
Keep up the good work.
10.
aepcentral | May 28, 2009 at 10:39 am
Thank you Steve for the kind words…just tryin’ to keep it real. Matt