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A/E/C Business Development
The Decade Ahead
from the
Rearview Mirror
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By Scott D. Butcher, FSMPS, CPSM
Feature
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In late 2011, the SMPS Foundation launched one of its most ambitious initiatives, researching and writing a book about the future of business development in the architecture, engineering, and construction (A/E/C) market space. Almost 30 volunteers contributed to the book A/E/C Business Development: The Decade Ahead, which was published in 2013.
The built environment during this period was a vastly different place than it is today. Although the Great Recession officially ended in June 2009, the return to a robust construction economy paced several years behind other industries. The Dodge Momentum Index bottomed out in 2011, and by 2012 and 2013 the industry was clawing its way back; however, it still had a long way to go.
Newer digital technologies like Building Information Modeling (BIM) were beginning to see widespread adoption, promising gains in productivity and design-construction integration. Social media was continuing to proliferate, and firms were bullish about the opportunities to embrace CRM software.
Under this backdrop, the SMPS Foundation established the Thought Leadership Committee to gauge where A/E/C business development was at that moment in time – and where it was headed. I had the honor of co-chairing the committee with Scott W. Braley, FAIA, FRSA. The committee decided to focus on qualitative research, interviewing more than 100 sellers (AEC firms) and buyers (owners/clients) of services. The research methodology segmented these sellers and buyers into groups based upon their behaviors, with a goal to possibly predict future behaviors in a given business development situation.
Buyers and sellers were each asked their own set of baseline questions to gain an understanding of the differing viewpoints around business development strategies and techniques, roles, trends, and anticipated changes in the coming years.
As it has now been a decade since the research was published – and the book promised insight into “the decade ahead” – it’s time to ask the question: How’d we do?

Project Delivery

In 2013, buyers expressed the belief that project delivery would continue to evolve, with more design-build, construction management at risk, and integrated project delivery. This prediction certainly held true, particularly where design-build is concerned. A March 2023 report compiled by FMI for the Design-Build Institute of America found that in the market segments assessed (not including residential), design-build represented $181 billion of construction put-in-place in 2013 and is projected to reach $370 billion in 2023 and more than $400 billion in 2026, accounting for 46% of spending.
How disruptive has design-build been to project delivery? The once-dominant “traditional” design-bid-build approach is projected to soon account for just 14% of spending in 2026, with construction management at risk representing much of the balance. As an owner stated in A/E/C Business Development – The Decade Ahead, “I see design-build as a future delivery model. Design-bid-build is a horrible waste of time and resources.” As for Integrated Project Delivery, it has not materialized to the extent that many people expected, although an IPD-Lite approach has emerged, driving the collaborative aspects without the contractual and risk/reward sharing elements.

Nontechnical Business Developers

Perhaps the most controversial finding of the research was a concern regarding nontechnical business developers identified in the owner research, particularly with more sophisticated client types. One of the research teams found that 80% of the owners interviewed did not see a role for nontechnical business developers. A developer shared, “I am not interested in talking to business development-only folks,” while a higher educational facility manager offered “Business development people coach their team, but they are superfluous in winning the work.”
How have things trended? The research findings noted that a client preference toward meeting with technical professionals during the business development stage. Over the past decade, the environment in which A/E/C firms operate has changed significantly. Companies have increasingly become busy, with seller-doers spending so much time doing that they turned to dedicated business developers for selling. The global pandemic changed the game, and severely limited opportunities to get in front of prospective clients. Digital tools proliferated, creating new business development opportunities via virtual meetings, allowing technical experts and nontechnical business developers to jointly meet with prospects without out-of-office time. Dedicated, and often nontechnical, business developers continue to be a critical component of business development for A/E/C firms.
However, Scott Braley is concerned about a trend he has witnessed, declining communication skills: “In 2013, technical people were cited as stereotypical ‘poor communicators.’ Today that criticism can be extended to nontechnical business developers. Too many rely on impersonal technology – they’ve lost their edge in verbal communication.” This concern is certainly not unique to BD professionals as recent studies from sources from LinkedIn to Forbes have reported that employers are increasingly seeing a lack of soft skills, driving the need for more training across all levels of organizations.

Seller-Doers

Along with the research finding that some owners, typically on more complex projects, didn’t want to meet with nontechnical business developers, there were also several findings about the movement toward seller-doers for business development.
In 2013, technical people were cited as stereotypical ‘poor communicators.’ Today that criticism can be extended to nontechnical business developers. Too many rely on impersonal technology — they’ve lost their edge in verbal communication.”
— Scott Braley, FAIA, FRSA
“I want to talk to the project manager,” a hospital facility manager told our researchers. “The project manager is the one I see on a regular basis. That’s who I need to interact with.” A college representative shared, “I want to see the person who I’m going to look across the table to and be held accountable.” And a commercial real estate developer offered that he doesn’t want to meet with “a person hired solely for new business that has never actually executed a project.”
While the buyers were telling us that they didn’t want sales pitches about what a firm did yesterday, had no interest in meeting with “order-takers,” and preferred specific conversations about their project and what an A/E/C firm can do for their future, sellers were telling us that they were working to make business development cultural. Some firms indicated that they were training business development and communication skills to technical professionals. Others shared that technical staff who weren’t fully utilized were taking on business development responsibilities.
Based upon these findings, a second research effort was undertaken by SMPS and the SMPS Foundation, resulting in the report Sell. Do. Win Business. How A/E/C Firms are Using Staff to Win More Work. Released three years after A/E/C Business Development – The Decade Ahead, this research found that design and construction firms utilize a mix of seller-doers and dedicated business developers. The larger the company, the more likely they are to have professional business developers. Roughly half of firms with 10-25 employees utilize business developers, while that number is 92% for firms with 500 employees. Additionally, approximately three-quarters of all firms reported using seller-doers, with 84% of engineering firms, 70% of architectural firms, and 66% of construction firms employing the model.
Today the seller-doer approach continues to be prevalent, often in tandem with business developers. While the seller-doers are the subject matter experts and frequently the closers, the business developers are coaches, strategists, and door openers.
There are many marketing and business development tools that firms are using to generate leads and differentiate from the competition, but at the end of the day people do business with people.”

Technology

Technology was addressed by both sellers and buyers of A/E/C services, but the world has changed drastically since this research was conducted. Sellers discussed technology in terms of gaining a competitive advantage through greater use of websites and social media, full integration of Building Information Models, and better use of CRM applications. Buyers, on the other hand, were expecting A/E/C firms to incorporate technology to improve their projects, elevate innovation, and reduce costs.
Although one owner commented “I do not like virtual firms,” no one could have anticipated the shift to a virtual existence during the pandemic, much less that the ways of doing business would forever change as a result. Business developers have robust digital tools at their disposal today, creating opportunities to improve productivity (you can have more virtual meetings than in-person meetings in a day), have more people attend meetings (allowing greater business developer / seller-doer collaboration), and meet with people you may never have been able to meet with in the past. However, the cost of this digital proliferation has been a continued decline in interpersonal skills, and relationships that are not as deep – and even loyal – as they used to be before these tools were commonplace.
In hindsight, Scott Braley feels that we overestimated the promise of ‘pure’ CRM in 2013. “Outside of zealous the marketers and BD’ers, we did not see enthusiastic adoption of CRM. Today’s more advanced integrated technology is eclipsing the CRM possibilities we saw in 2013.” How will automation and artificial intelligence change the way we approach business development? We’re only now beginning to understand the possibilities.

Thought Leadership

Sellers of A/E/C services were bullish on thought leadership in 2013. Many interviewees talked about the end of wine-and-dine meetings and a greater emphasis on educating clients. Conducting primary research as well as publishing white papers and books were examples shared with our researchers.
In 2019, SMPS published Marketing 2022: A Survey Exploring Current and Future A/E/C Marketing Practices. The goal of the research was to look at how A/E/C firms were incorporating newer marketing approaches, including those popular in the business-to-consumer realm, and better understand how these approaches would evolve over the next three years. A few short months after the report was released, COVID-19 reared its ugly head.
Interestingly, because many of the findings related to digital marketing approaches, there seemed to be – anecdotally, at least – an acceleration in the adoption of certain approaches during the pandemic. Thought leadership was certainly one of those areas. When you couldn’t meet with clients much less get in front of prospects, thought leadership became a preferred alternative to generate touchpoints and stay in front of these connections. Firms launched webinars, accelerated blog production, and conducted and published research.
One of the most powerful findings in the research, and a further demonstration of the importance of thought leadership, was that 85% of A/E/C firms surveyed intended to spend at least half of their marketing resources on education-based marketing (as opposed to promotion-based marketing) by the end of 2022.

Project Fees

In the 2013 research, sellers were very concerned about the race to the bottom, with buyers focused on low fees at the expense of best qualified and best value selection. Fast-forward to the past few years, where companies – particularly on the architecture/engineering side – have been enjoying high fees and record profitability. The workforce shortage, most prominent in engineering and skilled trades, is driving project costs higher because of compensation inflation (and material cost increases). Firms are reporting higher fees being submitted, and still winning work even though they didn’t price aggressively.
However, the pendulum might be swinging here. While the Infrastructure & Investment Jobs Act (IIJA) promises much work for transportation and other nonbuilding construction projects in the coming years, there is a concern about vertical construction and a tightening of the market based upon economic trends and forecasts.

Client Sophistication and Expectations

Clients are becoming more sophisticated. That was a consensus finding from the seller-side research in A/E/C Business Development – The Decade Ahead. During the Great Recession, many A/E/C professionals were downsized or simply chose to switch professions, and ended up on the client-side, buying architectural, engineering, and construction services. Conversely, buyer-side research found that clients expected business developers to come with a high level of knowledge about the buyer: their mission, their culture, their industry. Buyers wanted to know that the business developers had done their homework and could truly add value, not just offer services.
And today? “Not only did we get this right, but it is also now more important than we expected,” says Scott Braley. “Buyers are very, very savvy – they expect the design professionals in particular to ‘understand the issues we face, and how to optimize our project’s possibilities in terms of our performance and enhance OUR mission and business results’.” However, Scott is concerned that while construction firms have been able to maintain a client focus, design professionals “have lost their laser-focus on the actual client and client’s specific needs/priorities.”

Cultural Change: Not on the Radar

One area that was not addressed in the research was diversity, equity, inclusion (DEI) and social justice. It has become a dominant theme in the 2020s, and has changed the way we run our businesses, pursue work, and recruit employees.
“Some may say we could have been more insightful at the time; however, in 2013 the industry was not experiencing the DEI cultural shift we have seen in the past three or four years,” according to Scott Braley. “Today’s buyers have extended their project goals to include some acknowledgement of sustainability, diversity, and inclusion – either out of genuine core beliefs and values or public relations necessity.”
When it comes to DEI, the A/E/C industry has a very long way to go. The number of licensed female architects and engineers hovers around 16-17%, while the percent of women construction managers is just above single digits. The racial/ethnicity make-up of college engineering programs is neither reflective of society nor overall college enrollment. For instance, Black/African American college enrollment represents 15.2% of all college students, yet only 4% of engineering students. Likewise, 19.8% of college students are Hispanic/Latino, and yet represent 11% of engineering students.
Beyond the society and firm culture implications, this lack of diversity has increasingly become a marketing and business development imperative. Buyers are focused on DEI and justice, and demanding to better understand the demographics and policies of the firms they are working with. Firm DEI strategies as well as employee gender, race/ethnicity, and age breakdowns are even sometimes requested in RFPs. Human resources staff are being pulled into business development discussions at the clients’ requests. A/E/C firms and teams with high levels of diversity may obtain additional scoring points or be eligible for certain projects that less diverse firms and teams are not.

It's Still About Relationships

One of the overriding findings from the 2013 research is that at the end of the day, it is still about the people. Both sellers and buyers of A/E/C services care deeply about relationships. There are many marketing and business development tools that firms are using to generate leads and differentiate from the competition, but at the end of the day people do business with people. Buyers still want to know who their project team members will be and interact with them from the very early conversations.
They are also demanding team consistency, which has increasingly become a challenge. One of the seller strategies uncovered in the research was a focus on minimizing staff turnover as a marketing strategy. People come with knowledge, credentials, and relationships. And when they leave a company, those things go out the door. The Great Resignation of the past few years impacted the A/E/C industry, but the reality is that employee loyalty to design and construction firms was already declining. In 2012, the average architecture and engineering employee had been with their employer for 7 years. By 2022, that number had dropped to 5.2 years. On the construction side, the numbers went from 4.3 years in 2012 to 3.9 years in 2022. Employee loyalty is dropping, and clients are increasingly asking A/E/C firms to “guarantee” that their project teams will be in place for the duration of a project – something that is typically not possible to do.
With rapid integration of automation and artificial intelligence, the relationship between people will become even more critical – but companies must be providing communication and interpersonal skill training or risk losing business.

What Did We Learn?

There were many additional findings from the research, and a summary of some of those findings can be found in the April 2013 issue of Marketer.
So how did we do?
The first factor to consider is that this wasn’t quantitative, statistical research. This was qualitative research through interviews with a diverse cross-section of A/E/C sellers and buyers. The researchers were looking for trends or patterns in the findings.
The second factor is that the world in 2012 was a vastly different place. Millennials were still relatively new to the workforce; many were still in college or even high school. Social media was in its infancy. The iPhone was only five years old and the iPad only three. Mobility was in its earliest stages. Many of the technologies we rely on today didn’t even exist.
And the third factor is that there’s only been one global pandemic in our lifetime, and we are still very much feeling the effects of it. Global pandemic was certainly not on our bingo card when conducting the research in 2012-2013, and it changed some things drastically – increased lack of access to decision-makers, inability to be in front of clients, and a move toward virtual business development, to name a few.
We are looking back in time with vastly different lenses that we had when conducting the research. And yet … the research still very much holds true in many ways. It is still about relationships – even if many of them are now virtual. Technology has permeated everything we do and, in some cases at least, is still a differentiator.
Thought leadership has become critical, clients are even more sophisticated, design-build is dominating in a lot of market sectors, and firms must be laser-focused on their clients to succeed.
But we didn’t anticipate the cultural change driven by the social equity movement, and the impact it would have on A/E/C firms. Some of the tools we thought would be commonplace today – like CRM – haven’t panned out the way we anticipated. Most of us weren’t thinking about an A/E/C workforce shortage, acceleration of A/E/C staff switching firms, and a significant drop in communication and interpersonal skills.
If it works today, it’s obsolete.”
— Daniel Burrus
One additional finding not referenced above was a concern that many sellers shared: what used to work in business development doesn’t work today. Well, that one has certainly held true. You don’t have to be Captain Obvious to see that this continues to be the case. As futurist Daniel Burrus once stated, “If it works today, it’s obsolete.” This holds true with business development as much as it holds true with technology – and so much else within the business world.
But perhaps we should revise the Burrus quote: “If it works today, it’s obsolete for some people.” We are in an era of hyper-personalization; prospects and clients have different preferences when it comes to communicating and how they buy A/E/C services. Successful business developers must understand prospect and client preferences, and adopt their approaches accordingly.
Now that we’ve looked to the past, we need to look to the future. How will business development change in the coming decade? Will virtual selling become the norm? How will AI impact BD approaches? How will dedicated business developer and seller-doer roles evolve? What huge disruption is on the horizon. Grab your crystal ball, and let’s go find out!
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Scott D. Butcher, FSMPS, CPSM is Director, Strategic Growth Advisory at Stambaugh Ness. A past board member of SMPS National and past president of the SMPS Foundation, Scott has led several research projects for SMPS including Marketing 2022: A Survey Exploring Current and Future A/E/C Marketing Practices and Sell. Do. Win Business. How A/E/C Firms are Using Staff to Win More Work.
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