May 26, 2010
An article on the “Architecture Billings Index” ran this week on Reuters (http://www.reuters.com/article/idUSN1817247020100519?type=marketsNews).
The Architectural Billings Index is a scale that AIA uses to indicate if business is expanding or contracting. In April 2010, it went up 2.4 % Points following increases in February and March. I do not want to jinx things, but this may be an early indication that the worst is over for the construction industry in this economic cycle.
If we are seeing a trend line go in a more positive direction, what should we do about it?
Do Not Back Off
Remember that the timeline from when an architect gets a project until a subcontractor gets to bill for materials and services can easily be two to three years. Therefore, whatever efforts you are currently making to “stay in business” need to be redoubled.
If you have been tightening non-essential costs, do it again. This is the time when you are most motivated to make your company stronger.
I have a saying that goes, “companies do not get in trouble in bad times; they get in trouble during good times, they just don’t know it until the bad times come.” By that I mean we are all tempted to obtain non-essential things when there is plenty of business and cash to go around, then when the tough times come along, we are burdened down by that extra overhead.
These tough times are an opportunity to “right size” your organization for both good and bad markets.
Analyze Your True Opportunities
When everything is booming, we are all consumed with “getting the projects built”. If you are in one of those times when your project load is lighter, it presents a perfect opportunity to analyze your true opportunities.
What products or services does your market place really require? What expertise does your company have that differentiates you from the pack? What added expertise could you acquire that would make you better and enhance your offering to your market place?
These should be questions that you answer forever and continually but now is always the best time to address them.
Talent, Talent, Talent
Talent is what differentiates most companies. The legendary University of Alabama football coach, Bear Bryant, emphasized the importance of recruiting when he said, “you cannot make chicken salad without the chicken.” Well, you cannot have an expert company without expert talent.
During these tough economic times many very talented people have found themselves either un-employed or under-employed. If your recruiting skills are expert you can obtain that expert talent.
Senior managers should be spending enormous amounts of their time on recruitment of talent and training of the talent you have. You can either buy existing talent, at premium pricing, or build talent by recruiting great candidates and training them fervently. Either way can work, but doing neither will destine your company for mediocrity at best and failure at worst.
The growth in the Architectural Billings Index indicates that the sun seems to be rising over our construction industry again. The actions you take right now will determine how good your new day will be.
Tool of the Week – www.facebook.com/millerclapperton
On our new Facebook page you can view projects, meet some of our team, and keep up with construction related news such as the AIA Index discussed above.
That is it for this week. Post your comments on the Blog and let us stimulate the discussion.
Thanks,
Ted S. Miller