3 Key Questions to Diversify Strategically

27 Jan

The financial collapse of 2008 changed the way a lot of architecture, engineering, and construction (AEC) firms managed their businesses. It was the death of the Go / No Go for firms that didn’t have a strong marketing department guiding their efforts and the birth of the ‘chase everything’ mentality. Companies were forced to diversify, because they were concerned that their core markets weren’t going to sustain them. Larger firms went about this by acquiring smaller firms that specialized in their desired core competencies, but smaller firms just started bidding for the work.  What they discovered was that their hit rate fell as they weren’t ready to penetrate new markets.  Even jobs they should have been winning, they were losing, because they were spending too much time chasing work they couldn’t win.

One thing became abundantly clear -- something needed to change.  Firms realized that they didn’t have the data necessary to determine what markets were ideal to infiltrate. Without this understanding, strategy was being replaced with a very expensive guessing game.  Research at the local level might say to penetrate a certain sector, but without the knowledge of which clients were looking for that type of work, what relationships you had in place that could assist in your win or what Project Managers within your reach had that type of experience -- the best a firm could do was to submit a generic proposal in an extremely competitive market. This pattern lead to an abundance of waste in both time and resources.

CRM solutions like Cosential give firms the ability to quickly understand where they can expand. You can readily review existing clients and relationships to uncover potential opportunities. If you’re working with a school district and your contacts have influence with the city -- maybe you can adapt those skills from schools into municipal work. It’s also helpful to know which partnerships and teaming partners are most fruitful and can help facilitate growth. What experience does your personnel have and with whom. And not just the work they’ve done with your firm, but the relationships and work history from previous firms.

Team GatheringIn essence, Cosential allows you to answer the following three questions so that you can strategically diversify.

  1. Where’s the work?
  2. Who has the strongest relationships to help you win that work?
  3. Can we assemble a team with the necessary experience to win and succeed in the job?

With this type of knowledge, you can then reintroduce the Go /No Go to ensure that you’re chasing the right work with the right people.

Whether you’re thinking of diversifying or not, it’s good business practice to repeatedly ask and answer those three simple questions. They will enable you to scale at the appropriate rate and ensure that your firm is running at maximum capacity. To learn more about what data you should be tracking for greatest efficiency, grab a free copy of our eBook, The AEC Metrics Handbook.

To get a deeper dive into how Cosential can benefit your firm, join us for a live demo.

   

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