A business model for the 21st century planning, engineering or design firm

The recent demise of one of New Jersey's largest engineering and planning firms,  CMX (formerly Schoor-DePalma), has made us think about what could be a winning model for private sector land use firms in the 21st century.

In the 20th century, such firms could rely largely on the expertise and relationships of influential professionals (such as Olmsted, Bartholomew and Schoor).  As the firms grew, more work would be farmed out to junior and mid-level associates in a central office, who generate the greatest revenue margins in the private sector.  Bigger firms could better afford the hardware and manage the human resources to become sources of expertise for their clients. With the reduction of travel costs and the growth of the Internet, bigger firms could afford to have more branch offices to compete against smaller local firms.

Here's why the 20th century business model won't work as well in the upcoming decades:

• Globalization.  Globalization doesn't just distribute goods around the world -- it distributes brain power.  Within the next decade, if not already, there will be thousands of English-speaking professionals in lower-wage countries like India and China.  Some will have trained in the United States.  Some, like those in the Middle East, will be trained in their home countries by American universities.  And of course, there are plenty of fine universities throughout the world.

• Information technology. As more information gets digitized, and there is more bandwidth to distribute it, there is less need to keep it in any central location -- especially not in high-rent locations like New York City or San Francisco.   Videoconferencing and cloud software (such as Google and Zoho applications) allow professionals to collaborate from anywhere they can get an Internet connection.

• Diversity.  Olmsted, Bartholomew, Schoor and others were almost always building business relationships with other white men like themselves. They could build connections in the Rotary Club meetings and golf courses, then close the deals in the conference rooms.  In the 21st century, more decision-makers are going to be women and people of color.  (And not just in the cities.  American suburbs are becoming more diverse.)  It's easier to work with people who are like yourself, and so large planning, engineering and design firms tend to go from lighter to darker, and from more male to female, as you move down their organization charts.  Decisionmakers who are women or ethnic minorities are going to wonder how well your firm can serve their communities if your staff look like the people who used to live in those communities. 
  
  (By the way, you know that technique of tossing 5% of the work to a women-owned or minority-owned business, then showing up with someone from that firm at the interview to show the diversity of your team?  Yea, decision-makers will catch on to that soon.)

  So what might the successful 21st century American business model be?

• It may be based anywhere in the United States, but its technical and analytical work will be done in India, China or other countries with large numbers of English-speaking professionals and lower wages than in the United States.  Teams will collaborate by videoconference and large files will be sent through the Internet.  Anything you can do from your desktop in the United States can be done by someone else anywhere in the world -- for less money.  

• Branch offices in the United States will be boutique offices.  They will have a small number of staff -- mostly people who are good at getting contracts that can be managed somewhere else -- and be in locations that clients will enjoy visiting.  (Hint: Nobody wants to visit an exurban office park.)  Because information is so cheap to get and hold, more professionals will look the same to clients.  Building personal relationships with a wide variety of people will be more important than ever.

• It will be more diverse and culturally competent.  No, no, no -- it's not that clients want to hire only those people who look like themselves.  Clients will know that everyone who pitches to them has the same basic level of expertise. Contracts will be given not for being smart, but for being able to understand the concerns of the client at a deep level. 

• It may not even be a single firm, but a consortium of boutique businesses sharing resources. Why carry the overhead of full-time staff when you can have friends in the business who are on-call? (By the way, this is happening now, and it is a threat to mid-sized firms.)

If you are a professional in the United States with at least 20 more years left in your career, you should build skills in business development, cultural competency, team building and leadership.  Even if there is more demand for planning, there may not be much more demand for mere technicians in the United States.

--Leonardo Vazquez, AICP/PP

If you want to learn business development skills, try the upcoming BOCEP Deep Learning course Business Development for Planners, from May 26 to July 3, 2010.

Why being smart is not enough in the new economy

A New York Times columnist recently wrote about a newspaper in Pasadena, California, that uses reporters from India to cover local news. Traditionally, reporters attend public meetings, meet with sources and work in the communities they cover. But these outsourced reporters watch meetings on streaming video, and never work in communities they cover. How can they get to know a place? Google Maps. Community blogs. Pasadena-based websites. The more that's on the web, the easier it is to learn about a place.

So what does this story mean for planning, public affairs, and community and economic development professionals? Anything you can do from your desk could be done by someone else anywhere in the world - and probably for less money.

Technical professionals - those who specialize in analysis and technology tools like GIS -- should be especially concerned. In order to expand their markets, technology companies over time make their products easier to use. A decade ago, there were many trained web designers building sites that can now be done by technophobes with templates. How many people still work exclusively as typists?

Even when the economy recovers, it doesn't mean that technical or desk jobs will be safe. The growing global market means increased competition - and more pressure to be more efficient. If a few firms save money outsourcing some technical functions, expect others to do the same. Nonprofits and government agencies, under pressure to be cost-conscious, will follow suit. (Government agencies may lag behind because of political pressures to keep local jobs. But they may contract out more services to firms that would then outsource their jobs.)

How do you protect yourself in a recession and the new economy?

• Build your leadership, management and interpersonal skills. Become more effective at leading groups, managing conflicts, getting others to work at a higher level, adapting to change and communicating effectively in diverse organizations and environments. These functions are much more difficult to outsource. Become more knowledgeable about budgeting, project management, regulations and other matters that help keep organizations running. This may make you more useful in your employer's eyes.
• Network, network, network. In our fields, where so much work is collaborative and done in the background, it is hard to distinguish yourself from other professionals. The more people with whom you have good relationship, the more opportunities you may get.
• Broaden your areas of knowledge - and make your peers and supervisors aware of your growing knowledge base. As with any ecology, when economic conditions change, specialists who fail to adapt get hurt. By the way, knowing more may help you be more creative and effective.
• Pay attention to office politics. The people who support you now may leave, or be removed from, their jobs. If you've got support from their supervisors, great. If not...
• Keep your resume fresh. Keep your eyes open for new opportunities. It's better to change on your own schedule.

For more reading: Maureen Dowd's "A Penny for My Thoughts?"

--Leonardo Vazquez, AICP/PP

Do you have a professional development tip you would like to share? Have a question that you would like to see answered here? Please send it to Leo at vazquezl@rutgers.edu