November/December 2018

Communities: Private Practice
Leverage Disruptive Technology for Career and Business Growth

By Doug Reed, P.E.

AEC firms are often slow to adopt new technology due to risk and cost. Technology, however, should actually drive new revenue streams if used to its full potential—and at enviable margins. Allow me to share a few examples.

In the 1980s, personal computers appeared on every engineer’s desk, and computer-aided design was born. CAD was a differentiator, but not for long. Computers and software became a big part of a firm’s budget, but clients did not pay more for CAD. Some firms were successful in securing computer fees to offset their capital investment, but that was short lived. CAD was powerful, but it did not drive new revenues or profits.

Later, engineering firms realized that this technology offered greater value than as a design tool. Automated design was introduced in the 1990s, and now we see 3D design and even 4D (time lapse design) and 5D (cost variable design). Firms began to realize that they could offer expanded services to clients, and that’s when revenue and profit began to grow. But, it took a good 30 years for this to happen. The good news is that today the maturing of business solutions leveraging technology is accelerating.

Let’s look at how technology has transformed whole industries. When America was just becoming established, our economy revolved around agriculture and locally manufactured products. Several industrial revolutions transformed society from predominantly rural to a more urban and mechanized civilization.

The first industrial revolution launched in the late 1700s from new technology such as the steam engine and the cotton gin. For engineers, railroads required new skills and the design of manufacturing on a scale not before witnessed.

The second revolution of the late 1800s launched from technology such as steel, electric lights, and the combustion engine. Engineers needed to learn how to design skyscrapers and electric street car systems.

During the third industrial revolution of the 1950s, miniaturization of circuits, digital communications, microprocessors, and the internet profoundly changed society and business.

Technology is constantly advancing and evolving, and periods of extraordinary advancement have a transformative impact on our world.

For instance, drones are replacing human inspectors or helicopter and airplane reconnaissance. Remote sensing for operations, water, sewer and stormwater assessments has already replaced field measurement tasks. Data management systems are used to more efficiently manage construction projects and to monitor progress, and some who are dabbling in virtual reality are mostly replacing the physical model.

In these examples, the outcomes are efficiency- or quality-related. These are worthy causes, but they don’t create large new revenue streams.

If we use the first three industrial revolutions as precedents, we can anticipate that many businesses external to our industry will disappear. But what about the classic engineering firm? If artificial intelligence is perfected, what will the professional engineer’s role be? Might software firms and manufacturers be able to move into our space?

As farfetched as this may seem, these are real possibilities. Once you accept this and consider it with a sense of urgency, you can then focus on controlling your destiny. The challenge is to learn how to anticipate the disruptive forces that are around the corner and adapt your skills, and the skills in your firm, to not just survive the changes that are coming, but also to take advantage of them.

The Power of Disruption

The constant business element of the four revolutions has been disruption. Technologies were leveraged to transform commerce, the world markets, and the lives of people who were touched by those markets. They created huge numbers of new jobs and expanded the distribution of products and services dramatically.

The negative business impacts of the revolutions are that the very same technologies lead to efficiencies that dropped demand and margins until firms went out of business. Or the technologies replaced current methods and tools such that no new revenue or profits were generated. This caused the revenue and profit of the firms using that technology to stagnate. In the latter two cases, new industries moved in and took business from firms that could not see how to adapt.

Why shouldn’t the engineering industry be a winner by successfully leveraging disruptive technologies? Innovation shouldn’t be a scary proposition. Disruption has always been part of the engineering landscape.

So, what will the next disruptive technology be? Artificial intelligence? The Internet of Things? Big Data? And what will that technology (or technologies) mean for engineers and the firms they lead?

As engineers, we probably aren’t going to be designing some exciting new technology. No, we are going to have to identify the technology, or technologies, that will be most disruptive—the game changers that will create new ways of providing better designs or client service. So, as engineers, what can we do?

Become a Disruptor

The first step is to know your clients as if you are one of them. Talk to members of their board of directors and C-suite executives and ask, “What are your priorities?” You will learn that their focus is not on their infrastructure. They are providing healthcare, or public service, or education; or selling a product; or providing mobility solutions for large populations.

It’s your challenge to figure out how that translates to your core business, and then figure out how to add skills or change your skills to create services that directly support their business—both for your clients’ sake and to remain competitive. The key is to open up doors for driving revenue and increasing margins.

Some of us will be able to leverage disruptive technology and be seen by clients as offering broader and deeper benefit to clients’ core business. Not only will your bottom line benefit, but you’ll also be positioning yourself and your firm for continued success.

Doug Reed, P.E., is president of FosterGrowth, a business consulting firm specializing in the management of engineering and environmental companies, and author of Lead a Movement: The Insider’s Guide to Powerful Strategy Execution. He can be reached at [email protected].