The American Institute of Architects' yo-yoing Architecture Billings Index returned to its July level with its September ABI rating of 43.1, up from 41.7 in August and matching its 43.1 number from two months ago.
That July number was a six-point increase over June, so it's starting to look like August's number represented merely the latest in an ongoing up-and-down pattern that has plagued the ABI for the past several months. The index was 42.9 in May, dipped to 37.7 in June, increased to 43.1 in July, dipped to 41.7 in August, and went back up to 43.1 in September. Any score above 50 indicates an increase in billings.
This type of pattern makes it difficult for architecture firms to make strategic decisions with any certainty that their fortunes are turning for the better.
Then again, the new projects score in August was 59.1, its highest level since September 2007 and up from 55.2 in August, 50.3 in July, and 53.8 in June.
"The fact that inquiries for new projects are so high is an encouraging sign that we may be seeing new construction activity entering the design phase," said AIA Chief Economist Kermit Baker. "But that optimism has to be tempered by the fact that the marketplace is so competitive that firms are broadening their search for new projects, thereby inflating the number of inquiries that they are reporting. However, some larger stimulus-funded building activity should be coming online over the next several months, partially offsetting the steep decline in private commercial construction."
Regional averages were as follows: Northeast (47.2, up from 45.2 in August, 37.8 in July, and 42.8 in June, but still below the 48.3 in May), Midwest (43.0, matching its 43.0 in August but up from 36.9 in July), South (42.7, down from 44.1 in August and 43.4 in July, but up from 40.5 in June), and West (36.0, down from 37.5 in August, 39.7 in July, 39.9 in June, 39.4 in May, and 39.2 in April).
The September ABI breaks down by sector as follows: multi-family residential (45.1, up from 43.4 in August, 40.7 in July and 42.7 in June), institutional (43.9, up sharply from 37.5 in August, 37.1 in July, and 37.0 in June), commercial/industrial (39.0, down sharply from 45.6 in August, 42.9 in July, and 39.5 in June), and mixed practice (36.3, down sharply from 41.4 in August, 42.9 in July, 43.5 in June, 44.5 in May, 44.2 in April, and 44.0 in March).
Ed
Wednesday, October 21, 2009
Saturday, October 10, 2009
It's funny until someone loses an account
Interesting thing happened this week at PSMJ...for the last several years we've used the same company to do our credit card transaction processing. Their services are behind the scenes and about as commoditized as you can get. Other than the transaction statements they send to our bank, we never hear from them.
We were approached by another transaction processing outfit that is going to deliver this commodity service for lower fees and they demonstrated how they can save us a couple thousand dollars a month. We called the first company to tell them we were switching over at which point we got a message asking us to consider their counter-offer and to give them an opportunity to keep our business. I am not going to consider it and here's why:
First, I am a little angry because I feel like these people have been ripping us off for years. We've been loyal customers, you'd think they'd want to take care of us. When I do business on a commodity service, I want to be made to feel special...like I have a choice. Second, the sales rep for the new company is my boss' nephew - so not only are we getting a special deal from the new company, we're getting it from someone with whom we have a connection.
Remember, don't get fat and happy with your client base. Treat them like gold because no matter what you think, you really have no idea how tenuous your bond may be.
Until next time,
Bruce
We were approached by another transaction processing outfit that is going to deliver this commodity service for lower fees and they demonstrated how they can save us a couple thousand dollars a month. We called the first company to tell them we were switching over at which point we got a message asking us to consider their counter-offer and to give them an opportunity to keep our business. I am not going to consider it and here's why:
First, I am a little angry because I feel like these people have been ripping us off for years. We've been loyal customers, you'd think they'd want to take care of us. When I do business on a commodity service, I want to be made to feel special...like I have a choice. Second, the sales rep for the new company is my boss' nephew - so not only are we getting a special deal from the new company, we're getting it from someone with whom we have a connection.
Remember, don't get fat and happy with your client base. Treat them like gold because no matter what you think, you really have no idea how tenuous your bond may be.
Until next time,
Bruce
Thursday, October 1, 2009
The needless hand-wringing over social media
Has anyone stopped to think that the insistence of some people to make social media a “cornerstone” of a business development or client relationship-building plan like serving Kool-Aid with Steak au poivre at a four-star restaurant? Does anyone really think that a design firm is going to go out of business because its Marketing Director doesn’t have a Facebook page or its PMs are not “tweeting” project status reports to clients?
With a few exceptions, social media has proven to be a very sophisticated toy with some business potential. Even serious business-minded people are using it almost exclusively for social communication – loading Youtube videos of cute pet tricks and finding out who is going to the high school reunion next month. In fact, people using social media for straight-up business communications look awkward and out-of place – like a 40 year-old at a high school dance.
I keep getting frantic messages from people who “ought to know” that we should be doing something about social media…what are we doing about social media? We’re behind in our development of social media! SOMEBODY HURRY UP AND EXPLOIT SOCIAL MEDIA BEFORE IT’S TOO LATE!!!
Relax. In social media – as with most technology – it probably doesn’t pay to be an early mover. Unless you can really figure out how to leverage it, you are probably better off standing off to the side and seeing what others are doing. It’s not like a value-add design service where if a competitor gets a leg up it could take you months to catch up. In this communication medium, you can close the gap in a matter of days or a couple of weeks.
So what should you do? Use social media to get to know people better in a non-threatening, casual way. Make notes about what you learn about clients and prospects and integrate this intelligence into your normal business development strategy. Also, listen and ask questions about how your clients and prospects use social media. They – not opportunist “social media” consultants – will be a far better barometer of what you should be doing.
In the meantime, if anyone wants to “friend” me on Facebook – I am out there. You’ll get to hear all about the NFL and my son’s rock band…sorry, no cute pet trick videos.
Until next time,
Bruce
With a few exceptions, social media has proven to be a very sophisticated toy with some business potential. Even serious business-minded people are using it almost exclusively for social communication – loading Youtube videos of cute pet tricks and finding out who is going to the high school reunion next month. In fact, people using social media for straight-up business communications look awkward and out-of place – like a 40 year-old at a high school dance.
I keep getting frantic messages from people who “ought to know” that we should be doing something about social media…what are we doing about social media? We’re behind in our development of social media! SOMEBODY HURRY UP AND EXPLOIT SOCIAL MEDIA BEFORE IT’S TOO LATE!!!
Relax. In social media – as with most technology – it probably doesn’t pay to be an early mover. Unless you can really figure out how to leverage it, you are probably better off standing off to the side and seeing what others are doing. It’s not like a value-add design service where if a competitor gets a leg up it could take you months to catch up. In this communication medium, you can close the gap in a matter of days or a couple of weeks.
So what should you do? Use social media to get to know people better in a non-threatening, casual way. Make notes about what you learn about clients and prospects and integrate this intelligence into your normal business development strategy. Also, listen and ask questions about how your clients and prospects use social media. They – not opportunist “social media” consultants – will be a far better barometer of what you should be doing.
In the meantime, if anyone wants to “friend” me on Facebook – I am out there. You’ll get to hear all about the NFL and my son’s rock band…sorry, no cute pet trick videos.
Until next time,
Bruce
Thursday, September 24, 2009
Why design isn't king anymore
Media blogger Charles Warner wrote in today's Huffington Post that media content is no longer king. Among other things, the proliferation of content of all types of quality on the Web was key to arriving at this point.
Warner goes on to assert that mystery of parsing out the good bits of content has been solved by Google, which has become the largest media company in the world by being an aggregator of content, not an originator, a creator of content. In other words, the content is the commodity - the ability to make sense of the content is the bankable function.
Using Warner's piece as a backdrop, think about how the proliferation of design of all types of quality is commoditizing your business. I hear all the time about firms re-inventing themselves to get into markets that are thriving. In western Canada, The Trade, Investment, and Labour Mobility Agreement (TILMA) is creating a climate in which projects that would have attracted six or seven consultants are now attracting 25 to 30. And for as long as we are in slow recovery, this is going to be more prevalent for the next 12-18 months.
So how do you become the Google of the markets you serve? For starters, you need to become a separator of wheat from chaff for your clients. Make sure your marketing people, your PMs, and your principals are authorities on your clients' businesses. All things (design) being more-or-less equal, your competency as a business partner is what gets and keeps good clients. Once you have established your firm as a business consultant that does design, you'll see significant improvement in your proposal and presentation skills as well as your ability to choose the right clients and projects.
Warner goes on to explain that individual media brands (like Stephen King) don't even need Google...but I will leave turning your firm into the Stephen King of the A/E industry for another day.
Bottom line: let the others worry about commoditization - you should embrace it - and use it to your advantage.
Until next time,
Bruce
Warner goes on to assert that mystery of parsing out the good bits of content has been solved by Google, which has become the largest media company in the world by being an aggregator of content, not an originator, a creator of content. In other words, the content is the commodity - the ability to make sense of the content is the bankable function.
Using Warner's piece as a backdrop, think about how the proliferation of design of all types of quality is commoditizing your business. I hear all the time about firms re-inventing themselves to get into markets that are thriving. In western Canada, The Trade, Investment, and Labour Mobility Agreement (TILMA) is creating a climate in which projects that would have attracted six or seven consultants are now attracting 25 to 30. And for as long as we are in slow recovery, this is going to be more prevalent for the next 12-18 months.
So how do you become the Google of the markets you serve? For starters, you need to become a separator of wheat from chaff for your clients. Make sure your marketing people, your PMs, and your principals are authorities on your clients' businesses. All things (design) being more-or-less equal, your competency as a business partner is what gets and keeps good clients. Once you have established your firm as a business consultant that does design, you'll see significant improvement in your proposal and presentation skills as well as your ability to choose the right clients and projects.
Warner goes on to explain that individual media brands (like Stephen King) don't even need Google...but I will leave turning your firm into the Stephen King of the A/E industry for another day.
Bottom line: let the others worry about commoditization - you should embrace it - and use it to your advantage.
Until next time,
Bruce
Wednesday, September 23, 2009
So much for that ABI turnaround
The American Institute of Architects' Architecture Billings Index gave back some of the increase it registered in July as its August ABI rating was 41.7, down slightly from 43.1 in July. That July number was a six-point increase over June, so while things were a bit sluggish in August, they are still above what they had been in June.
That said, the August numbers represent the continuation of an up-and-down pattern that has plagued the ABI all summer and is indicative of the changing nature of the economy. The index was 42.9 in May, dipped to 37.7 in June, increased to 43.1 in July, and now dipped to 41.7 in August.
This type of pattern makes it difficult for A/E firms to make strategic decisions with any certainty that their fortunes are turning for the better.
Then again, the new projects score in August 21 was 55.2, up from 50.3 in July and above the 53.8 in June.
"While there have been occasional signs of optimism over the last few months, the overwhelming majority of architects are reporting that banks are extremely reluctant to provide financing for projects, and that new equity requirements and conservative appraisals are making it even more difficult for developers to get loans," said AIA Chief Economist Kermit Baker. "Until the anxiety within the financial community eases, these conditions are likely to continue."
Regional averages were as follows: Northeast (45.2, up sharply from 37.8 in July and 42.8 in June, but still below the 48.3 in May and 47.1 in April), South (44.1, up from 43.4 in July and 40.5 in June), Midwest (43.0, up from 36.9 in July), and West (37.5, down from 39.7 in July, 39.9 in June, 39.4 in May, and 39.2 in April).
The August ABI breaks down by sector as follows: commercial/industrial (45.6, up from 42.9 in July and 39.5 in June), multi-family residential (43.4, up from 40.7 in July and 42.7 in June), mixed practice (41.4, down from 42.9 in July, 43.5 in June, 44.5 in May, 44.2 in April, and 44.0 in March), and institutional (37.5, up from 37.1 in July and 37.0 in June).
Ed
That said, the August numbers represent the continuation of an up-and-down pattern that has plagued the ABI all summer and is indicative of the changing nature of the economy. The index was 42.9 in May, dipped to 37.7 in June, increased to 43.1 in July, and now dipped to 41.7 in August.
This type of pattern makes it difficult for A/E firms to make strategic decisions with any certainty that their fortunes are turning for the better.
Then again, the new projects score in August 21 was 55.2, up from 50.3 in July and above the 53.8 in June.
"While there have been occasional signs of optimism over the last few months, the overwhelming majority of architects are reporting that banks are extremely reluctant to provide financing for projects, and that new equity requirements and conservative appraisals are making it even more difficult for developers to get loans," said AIA Chief Economist Kermit Baker. "Until the anxiety within the financial community eases, these conditions are likely to continue."
Regional averages were as follows: Northeast (45.2, up sharply from 37.8 in July and 42.8 in June, but still below the 48.3 in May and 47.1 in April), South (44.1, up from 43.4 in July and 40.5 in June), Midwest (43.0, up from 36.9 in July), and West (37.5, down from 39.7 in July, 39.9 in June, 39.4 in May, and 39.2 in April).
The August ABI breaks down by sector as follows: commercial/industrial (45.6, up from 42.9 in July and 39.5 in June), multi-family residential (43.4, up from 40.7 in July and 42.7 in June), mixed practice (41.4, down from 42.9 in July, 43.5 in June, 44.5 in May, 44.2 in April, and 44.0 in March), and institutional (37.5, up from 37.1 in July and 37.0 in June).
Ed
Friday, September 18, 2009
A good client and staff recruiting tactic
Earlier this year, the Boston University Mens' Ice Hockey team won the NCAA National Championship. Their long-time coach Jack Parker originally planned to raise his team's championship banner during one of the first home games of the season vs. Notre Dame. Recently Coach Parker changed his mind and opted to raise his banner during a scrimmage game against the US Under-18 Development team.
Why would he do that? The game will be sparsely attended by alumni and fans and the event will likely pass without much media fanfare. Here's why it's a brilliant move:
Many of the players on the US Under-18 Devlopment team are blue-chip college prospects and have not committed to college yet. What better way to showcase the program than to make these players a part of recognizing the achievement of the sport's ultimate goal? What will these players be thinking as they watch BU's championship banner being raised to the home rink's rafters? Do they see themselves on the other bench wondering what it feels like to be a champion?
What's the lesson for A/Es? Start making your successes into targeted recruiting tools. PR is great, placing articles and getting media coverage is important, but you need to look at every excellent thing you do as a direct opportunity to show prospective clients and employees that you are the best. For example, when you win a Design Award, have the celebration at a college where you can recruit top graduates. When you open a new building project, recognize it at a meeting of your clients' affiliated organizations. These are the people that need to see your success and more importantly, envision themselves as an integral part of the next one.
Have a great weekend!
Bruce
Why would he do that? The game will be sparsely attended by alumni and fans and the event will likely pass without much media fanfare. Here's why it's a brilliant move:
Many of the players on the US Under-18 Devlopment team are blue-chip college prospects and have not committed to college yet. What better way to showcase the program than to make these players a part of recognizing the achievement of the sport's ultimate goal? What will these players be thinking as they watch BU's championship banner being raised to the home rink's rafters? Do they see themselves on the other bench wondering what it feels like to be a champion?
What's the lesson for A/Es? Start making your successes into targeted recruiting tools. PR is great, placing articles and getting media coverage is important, but you need to look at every excellent thing you do as a direct opportunity to show prospective clients and employees that you are the best. For example, when you win a Design Award, have the celebration at a college where you can recruit top graduates. When you open a new building project, recognize it at a meeting of your clients' affiliated organizations. These are the people that need to see your success and more importantly, envision themselves as an integral part of the next one.
Have a great weekend!
Bruce
Thursday, September 17, 2009
Balfour Beatty to buy Parsons Brinckerhoff
Yes, you read that headline (printed this morning on MarketWatch and Reuters, among others) correctly.
According to an article posted a few minutes ago on Marketwatch,com, the London, England-based engineering firm Balfour Beatty said earlier today that it will acquire Parsons Brinckerhoff for $626 million and will finance the deal with a rights issue.
The acquisition and rights issue, taken together and before exceptional items, are expected to enhance earnings per share in 2011, Balfour Beatty said. The rights issue will be fully underwritten on a three for seven basis and will raise approximately 353 million pounds ($583.19 million U.S.).
"The acquisition of Parsons Brinckerhoff represents the realization of a number of key strategic objectives for Balfour Beatty. In particular, we believe it makes us one of the world's major players in professional services, substantially strengthens our U.S. presence and puts Balfour Beatty in an excellent position to take advantage of increased infrastructure spending," the firm said.
Shares jumped 8.1 percent in London on the news of the deal.
Ed
According to an article posted a few minutes ago on Marketwatch,com, the London, England-based engineering firm Balfour Beatty said earlier today that it will acquire Parsons Brinckerhoff for $626 million and will finance the deal with a rights issue.
The acquisition and rights issue, taken together and before exceptional items, are expected to enhance earnings per share in 2011, Balfour Beatty said. The rights issue will be fully underwritten on a three for seven basis and will raise approximately 353 million pounds ($583.19 million U.S.).
"The acquisition of Parsons Brinckerhoff represents the realization of a number of key strategic objectives for Balfour Beatty. In particular, we believe it makes us one of the world's major players in professional services, substantially strengthens our U.S. presence and puts Balfour Beatty in an excellent position to take advantage of increased infrastructure spending," the firm said.
Shares jumped 8.1 percent in London on the news of the deal.
Ed
Subscribe to:
Posts (Atom)
Posts
