If the COVID-19 pandemic taught us one thing, it is that our industry is more capable of change than we ever thought possible, and faster than we ever imagined. Most of us became, almost overnight, completely remote practices. We learned a lot about ourselves, our clients, what we could do and how technology could be leveraged to make us effective and collaborative even at a distance. It also reinforced how essential the work performed in AEC is. While many in AEC “went home” during the pandemic, few to none stopped working. Bridges had to go up, hospitals had to be designed, building systems had to be optimized – AEC was deemed essential at the highest level of government. It is troubling to consider the economic, cultural, and physical impacts the work of AEC professionals has on our world when you realize many of its players are competing on fee at adjusted rates far lower than their peers in the legal, managerial consulting, or accounting professions. After all, who wants to walk across the most cheaply built bridge or receive care in the hospital designed the fastest? Professionals who have spent the better part of decades training and credentialing to render professional services in an industry that defines itself on artistry, quality, codes of ethics, and intense rigor are racing each other to the bottom. This is not a universal issue, certainly many construction firms do a very fine job of dictating the costs associated with safe and quality construction. So why then are architectural and some engineering firms willfully commoditizing themselves, competing on fee rather than differentiation or specialization? The simple answer is, candidly, a mix of fear and ignorance: Part I - Framing the Challenge: How AEC Firms Value Themselves and Think About Profitability Fear of losing the project Fear of the competitors submitting a low fee, and the mental trap of believing that if they compete on fee, so must you Fear of failing to demonstrate differentiation of the firm/services to the client Lack of faith in the differentiation of the firm when compared to competitors, known as “impostor syndrome” Ignorance or lack of alignment on the firm’s strategy and differentiation Lack of training in how to articulate the firm’s differentiation confidently and compellingly Losing sight of revenue vs. profit Siloing those who pursue work from project management (leading to “profitability is the PM’s job” attitudes) Misunderstanding the function and cost of activities at different stages of the sales funnel (for example, submitting a proposal to a potential client who does not know you “to introduce them to us” is a woeful misuse of time/money resources) Losing sight of the real priorities: winning the project is not the goal, profit and client satisfaction is
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