Archive for October, 2012

A Book is Done; A New Challenge Begins

Wednesday, October 31st, 2012

On October 25, 2002, I walked into the Town Hall in Lynnfield, Massachusetts, and registered a dba business called The JAGG Group. I was not crazy about the name, but others seemed to like it so I went with it.

Ten days before the 10th anniversary of The JAGG Group, I walked into the Burlington office of 98-year-old engineering firm Fay, Spofford & Thorndike (FST) as their new Manager of Marketing and Strategic Business Development. The JAGG Group lives on, at least temporarily, to provide service to the buyers of my latest book – The 2013 Guide to the U.S. AEC Markets - and for a few remaining projects that we’re wrapping up. Otherwise, my focus is on adding what I can to the marketing and business development programs, systems and processes that have made FST such a successful and respected firm for such a long, long time.

It was not a decision I made lightly. The JAGG Group was doing well and business opportunities were picking up. We had also begun the process of writing and self-publishing another book, continuing us down the path of having a full-fledged publishing arm to go along with our consulting work.

Of course, anyone who has owned any kind of business — from a global megacorporation to a paper route — will tell you that business ownership is a blessing and a curse. The blessing is that you call your own shots, the accountability stops at you, and your time is often your own to choose when, where, how and for whom you work. These three blessings can also be curses, as can the responsibility of always being the one “carrying the water.” This is especially true in small firms like The JAGG Group.

Despite these challenges and stresses, I enjoyed what I was doing and would be still be doing it except for the opportunity that I stumbled across one day in September. I saw an ad on the Linked In business-based social media site that said it was looking for…well, me. I had applied to exactly two jobs in my 10 years in business — one because a headhunter called me and the potential to be a ground-floor investor seemed great; a second because it seemed to be similarly designed especially for me. In both cases, they wanted someone with more experience in high-tech PR (the first was an air-quality monitoring product company, the second an AEC industry software giant). I never even went for an interview.

During my initial meeting with Peter Howe, FST’s President and CEO, I quickly saw the possibilities that this position presented to me. Not only from a career standpoint, but as an opportunity to use the skills and experiences I’d gained in my 30-year professional career to contribute to the continuing and expanding success of an established firm. This time, though, it would be from the inside, as a true part of the team. It was a great fit, I thought, for me and for FST.

The thing that most intrigues me about my new position is Peter’s (and as I eventually found out, the board of directors’) outlook on what the firm does very well in marketing and business development, and where it could benefit from some changes and possibly a new perspective. In my 2-plus weeks at FST, I’ve confirmed that we have a very strong business development culture – our exceptionally talented and hard-working marketing staff produces attractive, professional and technically sound proposals at an incredible clip. Yet, there are systems and programs that we can improve to make the proposal production process even better and more efficient. Many of the firm’s engineers, planners, scientists and other technical professionals are also well in tune with the need to not only do good work and support their clients, but to look for new opportunities and projects.

FST’s marketing culture is not as advanced as its business development culture. I’m talking about what many engineers consider the “softer” side of marketing and BD — press releases and published articles, brochures and other marketing collateral, social media outreach, and so on. Our goal is to put a comprehensive, intelligent and achievable plan in place to bring the marketing culture here to the same level as the BD culture. It’s a big challenge — not only here, but in most of the engineering firms I’ve worked with in nearly 20 years in the AEC industry –and I very much look forward to tackling it with my new colleagues at FST. As I’ve said internally (and in the press release about my new position), FST has so many great stories to tell about the incredible work we’re doing; I can’t wait to start telling them.

As for the book, it took a bit longer than we’d hoped (for a variety of reasons, including the obvious one), but the good news is that it’s done. The better news is that it’s good — at least I believe it is. Readers will be the judge. My hope is that The 2013 Guide to the US AEC Markets provides sufficient insight to the people and firms who buy it to help them make smart decisions in their own planning processes — formal or otherwise — in the coming year and beyond. We offer a money-back guarantee for this reason. I’m proud to say that we’ve not yet been asked to send anyone a refund on either book we’ve published.

If you want to check it out, you can order it with a credit card by clicking on the button on the top right of the AECInsight home page. If you have any questions, email me at my JAGG Group address — [email protected] – and I’ll get back to you within a day.

As for AECInsight, I plan to continue posting articles relevant to the industry, albeit with the focus of the Manager of Marketing and Strategic Business Development at FST rather than of an independent consultant. I will link it with FST’s growing social media presence, along with my own Twitter and LinkedIn accounts. We may even expand it and post more often. We’ll see.

In the interim, if you want to talk with me about FST-related matters, contact me at [email protected] or 781-221-1299.

Thanks.

Jerry

 

 

 

Grading Our 2012 Projections

Tuesday, October 2nd, 2012
Market researchers like to make predictions, assigning projected growth percentages to everything from market subsectors to the global economy. Yet, how often do they look back to see how they did when the next year rolls around…especially if their prediction was off?

It’s like taking a test, but never getting a grade.

In late 2011, we ranked 26 U.S. sectors and subsectors based on their anticipated growth and activity in 2012. We did not assign projected growth rates, just a ranking, top to bottom, from the market that our data indicated would be healthiest in 2012 to the one we expected to be least healthy.

We don’t do estimated growth rates because, simply put, we think they’re all but useless and not worth the trouble. How valid is the numerical estimate from even the most competent economist when we’re talking about volatile design and construction markets in a turbulent national economy?

Even if these numbers could lay claim to some accuracy, how important is it really to the average AEC firm? Does it matter to a 50-person West Coast architecture firm if the $17 billion healthcare construction market ticks up 2.1% or 2.2%? Sure, that 0.1% is a lot of money in the big picture, but if this firm is only capable of capturing $5 to $10 million of it, there are far more important factors to consider.

All you need to do is look at the massive differences among the various prognostications to question their relevance. For example, for 2012, IHS Global Insight (Englewood, CO) called for 9.6% growth in the retail and other commercial sector for 2012 off $32 billion in 2011 spending put-in-place. Wells Fargo Financial (San Francisco, CA) predicted only a 3.6% gain on $43.4 billion in 2011 spending put-in-place. Almost a third less growth on a 35% differential in 2011 spending put-in-place. (This is according to the AIA Consensus Construction Forecast.)

Let’s face it; these things are hard to quantify. We don’t even try. (If you like these numbers, though, we do report on how others see the markets growing, though the results are often contradictory.)

Instead, we prefer to consider factors such as whether the right metrics are in place for growth in the sector, the overall economic health of a geographic area, and trends and developments in the industry. Most importantly, we want to find out and assess what owners and investors are saying, seeing and feeling about specific markets.

So let’s look back at a few of our rankings for 2012:

1. Apartments. We ranked apartments at the top of the list simply because the market was strong when others weren’t and it showed no signs of slowing. Our comment at the time was “The good times aren’t over yet for the surprisingly strong multifamily-for-rent sector.” This was especially true amid the struggles of single-family housing.

How’d we do?  The National Association of Home Builders (NAHB) (Washington, DC) Multifamily Production Index rose for the eighth straight time in the second quarter of 2012. While the highest rate of activity has been concentrated in the strongest metropolitan areas, and production is far better in market-rate units than affordable, we’d be hard pressed to find a market that has done better.

2. Wastewater. “Despite a likely reduction in federal funding, the wastewater market is back near the top due to increasing demand, aging infrastructure and government mandates,” we wrote.
 
How’d we do? Experts say it has been flat through the first half of 2012, and we didn’t get the regulatory push we thought we might. Yet, given the intense need, growing municipal and industrial demand, and potential for catastrophe if we don’t act, we’re not conceding this one yet. At minimum, it is certainly a solid long-term market.
 
3. Health Care. “Not without its issues, and reform has the industry in limbo, but still good in the short term and great long term. A caveat: if the GOP wins the presidency and tries to repeal reform, the limbo could linger.”
 
How’d we do?  We were a little optimistic on this one, though it is still in the top tier. We’ve talked with health care design firms who experienced their first down period in years in 2011-2012. Health care construction grew only slightly through the first half of 2012, and projects continued to be delayed and canceled. It remains a good market overall, but the stagnation brought on by reform and other pressing issues held it down more than expected. On the plus side, Modern Healthcare reported that capital investment is climbing among health systems.