30 Mar Covid-19 Market Disruption
To all our Architectural, Engineering, and Construction colleagues around the world:
We at The Coxe Group have been very grateful to have interacted with so many of you over the last several weeks. The speed of your response to the pandemic, your prioritization of your people, and your client service have been a wonder to behold. We are especially grateful to firms that have been willing to share their approaches to this crisis.
As we have identified to you all through our conversations, this type of economic turbulence can be extremely unsettling for any practice. Thankfully, many of you have prepared in the ways we have discussed, and now, with your people as safe as you can achieve and your clients starting to think about the future after the pandemic, we are getting to the point in time to consider the way you deploy your pre-prepared and pre-funded strategies. Here are some things to consider:
- Start with the upturn in mind. The economic downturn, which we are already experiencing, will deepen first through Q2 of 2020, and, considering current projections at the time of writing, spring back aggressively in Q3 of 2020 and Q4 of 2020. With such a return of market vitality, how will you deliver your projects for your clients?
- Conserve cash. For two years, we been suggesting that you double and even triple your cash position to allow you to stretch to the six-month mark. That should not mean spending continues at the same rate, but it does mean making strategic initiatives and operating investments to strengthen the firm. Look to trim variable costs, and even fixed costs such as rent (talk to your landlord) during this period. Remember though, being too extreme with this measure may put you at a significant disadvantage when the upturn comes.
- Focus on strong leadership. The number of leadership development assignments in which we have been involved has been tremendous over the past year. Now is a time for emerging leaders to deploy those lessons learned for your people. Don’t allow the desire for stronger management cause a weakening of leadership. This is a time to manage the near term and lead for the longer term.
- Consider your choices. Where will you be successful in your markets both during the crisis and during the upturn? How will your project yourselves to achieve that success, especially when capacity to deliver designs may be a key differentiator in the upturn? What skills and staff will be key to that delivery? How will you maintain high retention when other firms will be looking to grow their staff levels and secure work?
- Stay relevant with your clients. Your clients right now are in the same position as you. That will change as movement restrictions loosen. What methods and tactics will you use to stay in contact with your clients and show them you understand their position? When we discussed marketing management strategies in a downturn, many of the same rules apply in this instance, only with a twist. Be cautious though, since at the present time, your clients will have their own things to deal with, so be mindful of their needs.
Two reflections from this crisis. First, the availability of your clients who are part of our client perception work on your behalf has been tremendous. So for those folks with work in progress, the data should be rich. The second is, those who are looking to add to their firms through acquisitions or have recently acquired, the conversations that are occurring are thoughtful and rich in discussions on how those new partnership will flourish after the crisis eases.
Great job everyone. Take care of yourselves, your families, and your people. We are available if you want to talk, and we will be back in the skies soon.