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CEG Industry Blog

Boiling Frogs and the Evolving AEC Market

A look at paradigm shifts affecting your business right now.

Mon March 02, 2015 - National Edition
Brian M. Fraley


The frog is symbolic of your business and the boiling water represents the changing environment. When the changes are subtle, they will often go unnoticed, and therefore, you are unlikely to notice.
The frog is symbolic of your business and the boiling water represents the changing environment. When the changes are subtle, they will often go unnoticed, and therefore, you are unlikely to notice.

There have been transformational changes unfolding in the Architecture, Engineering, and Construction (AEC) sector over the past two decades. Like the process of evolution itself, those that adapt will thrive and those that are oblivious will be weeded out.

The following paradigm shifts are affecting your business right now…

Transformative technologies such as BIM, 3D Printing, and High-Definition 3D Laser Scanning

Globalization has spurred foreign competition and investment

The changing face of communication in the Digital Age

Succession planning and the transition to the next generation of leadership

Merger and acquisition as a growth strategy

The acquisition of small businesses by national/international corporations has brought an increased level of sophistication and complexity to the market

Growing workforce development challenges

Increasing workforce diversity

Expansion of traditional service areas is creating more competition

Increasing competition and the reduction of pricing power

Changing procurement methods, i.e. Design-Build, Design-Build Best Value, Design-Build Operate-Maintain

Alternative methods of project funding, i.e. Public Private Partnerships (P3)

We could rattle off more changes, but you get the point. Some of these changes are obvious. Others are not.

Have you heard of the Boiling Frog Theory? It basically states that a frog placed in a pot of boiling water will immediately jump out, whereas a frog in cold water that is slowly brought to a boil will be cooked. Bear in mind that the scientific accuracy of this theory has been contested by some, but the concept helps to illustrate an important issue.

So how does this apply to your business? The frog is symbolic of your business and the boiling water represents the changing environment. When the changes are subtle, they will often go unnoticed, and therefore, you are unlikely to notice and respond. And then one day, you’ll wake up and realize your business has become obsolete.

As a lifelong student of economics, business, and history, I have always been intrigued by this theory and its relevance in the AEC market. The perceptive folks among us often sense that change is afoot. And the visionaries seem to sense danger and pivot before the damage is done. They’re the frogs that don’t get boiled. Yet others get consumed by the daily grind and remain oblivious to big picture changes.

It’s dangerous to remain unaware because small changes over time can accumulate and render your business uncompetitive, or worse yet, irrelevant.

Are you running your business in the short-term or are you looking to leave a legacy that survives for generations? If you’re thinking for the long-term, when is the last time you revisited your marketing and/or business plan? Do you have a plan?

The greatest benefit of marketing and business plans is that they force you to stop and take in the big picture. That can be a challenge in the AEC field because it’s project-focused and detail-oriented. So many firms are so focused on the tactical level that they lose sight of the strategy. The problem is exacerbated at smaller firms where the executive is designing or building and has no time to execute the vision.

The design and construction industry is changing rapidly. I sense that in 50 years we will look back on this period as a transformational era. There are incredible opportunities for the visionaries, but also formidable danger for the laggards. The boiled frogs end up out of business or acquired. Their very existence becomes the topic of memories and conversations among peers about the "old days."

This is a call to action. Be observant, develop your strategy, implement tactics, and evolve. Do these things proactively and you will avoid falling victim to the Boiling Frog Theory. Ignore them, and you will be telling your grandchildren stories about the "old days."