Navigating the Future: Strategic Planning for A&E Firm Success in 2024

As we begin another year, architecture and engineering (A&E) businesses are gearing up for the complex task of planning for the future. The process of business and strategic planning demands a keen understanding of industry trends and a purposeful approach. By recognizing industry trends and leveraging benchmark data, you can set realistic yet ambitious goals for 2024.

In today’s current landscape, firms face both a number of challenges and opportunities. Despite strong financial performance and record profitability, the A&E industry is not without its hurdles. Firms are experiencing pricing pressures, staffing challenges and overall uncertainty due to market and economic fluctuation. To navigate these complexities, it becomes crucial to adapt and refine business plans to address both the positive and negative factors affecting the A&E industry.

To build an effective plan, it's essential to first define what success looks like for your business. Look beyond the standard practices and focus on what your business needs this year. To do this effectively, start by reflecting on what worked and what needs improvement. This introspective analysis sets the stage for developing the right goals that align with the company's vision and the industry's trajectory.

Leveraging Benchmark Data and Navigating Industry Trends

One key strategy for setting realistic goals is using industry benchmark data. By examining industry trends for key performance indicators (KPIs), businesses can gain valuable insights into how their firm compares to others. Then the firm can more easily identify where there are areas for improvement and what realistic goals could be for the business.

One resource for industry benchmarks and trends is the 4th Annual EMEA and APAC Deltek Clarity Industry Study. This past year, nearly 550 project-based businesses of varying sizes and types participated in the survey, which focused on financial management, project management, business development, human capital management and technology trends. The report provides a look at key performance indicators across Northern Europe, Australia and New Zealand, helping firms benchmark where they measure up compared to their peers in the industry.

Firms should take the benchmarks and do more than just review the updated numbers once a year. These benchmarks should be a key component of developing business and strategic plans. Take the trend lines for specific KPIs and map the numbers against your firm’s stats to see where you are today and how you have performed historically against the data. This can help your firm determine the best path forward.

For example, if you want to boost utilization rate in the coming year and your firm has historically outperformed the overall median from the Deltek Clarity report, your firm may want to set targets that are above the median so you can continue to follow the trend but stay above the line. If you are below the line historically, you may not want to set goals to achieve high performer numbers right away and can determine a more realistic and reasonable goal for your company.

Once you have compared your numbers to the industry benchmarks, you will have greater insight into how your firm is doing in comparison to firms like yours, what is working well, where you need to improve and what you need to do differently in the coming year to help achieve your business goals. These are key inputs to help develop your annual plan and strategic business goals so you can build them in an intentional and informed way.

5 Steps to Help Achieve Your Plan for 2024

By conducting a comprehensive assessment, defining clear objectives and implementing accountability, firms can create a plan that is not only purposeful but also adaptable to the ever-changing business landscape.

Here are five steps to consider:

1. Set Achievable Stretch Goals

Set realistic yet challenging goals that are meaningful and achievable. Identify a starting point, set a realistic timeline and consider the broader impact on various aspects of the business. Don’t just concentrate on financial goals – set goals for each area of the business so you can balance the impact of a specific goal and consider the impact to other areas of the business.

2. Identify Goal Champions and Milestones

Ownership and schedule are often the biggest downfalls for implementing plans and reaching goals. Many firms also struggle with having too much of the task ownership on too few leaders who can’t truly lead all the initiatives. Each goal or initiative needs a champion who is passionate about the specific goal. You want someone who wants to see the initiative succeed and understands the impact it can have on the business.

There needs to be clear goals and responsibilities agreed to by the champion and firm leaders. This includes who’s responsible for checking in on the goal, monitoring the goal and seeing how well the firm is doing against that goal.

Maybe you determined who your project champion will be and your overall timeline but now you must develop a true plan. If you treat this like a project, depending on the people who are working on it, you're much more likely to be successful.

3. Select the Right People, Tools and Resources

When creating a business plan, it is important to ensure that the right people are selected for the job, the right tools are identified and the goal responsibilities are assigned. This will help to ensure that everyone is on the same page and that the goals are clear.

Depending on the complexity of the goal, you may want to assign task champions. Align those champions with what they do best. For example, if you need to do research for a particular part of the market, is there somebody in your marketing team who excels at that type of research? Pull them in to work on that goal. The more people that you have who are passionate about the goal and the specific tasks that they're working on, the more likely you are to reach that goal. It is also important to determine if outside resources are needed and to review all tasks and deadlines to ensure that the team has everything they need to succeed.

Finally, it is important to communicate the plan with all stakeholders to ensure that everyone is aware of the goals and responsibilities.

4. Move From Planning to Action

Think about where you are today and where you want to be. Start with a kickoff meeting with the entire team so that everyone is on the same page. Make sure that everybody understands what the goal is, the plan to get there and the time required to make this initiative a priority. There may need to be some candid conversations about what the champion or team members need to stop doing to make time for your plan. Then, the champion has to start putting the pieces together and executing the plan. There needs to be a focused and iterative approach to managing the goals. This includes the need to assess what has been accomplished, identify areas that require attention or determining what needs to be initiated. To make these goals a reality, communication is absolutely critical and that goes beyond just the core team. There are many other people in the company that have a vested interest in the success of these activities and it is critical to share progress along the way so they can see what they are doing matters and how these key areas of focus are improving the business. Not all goals need to be shared broadly, but consistent communication with the right people in the firm is essential to success – just like project updates for clients.

5. Monitor and Measure Success

To ensure success in achieving goals, it is essential to establish clear measurement criteria upfront, minimizing surprises for champions. Fostering accountability is crucial, emphasizing a positive, collaborative approach. Establish regular check-ins, whether through meetings, emails, or shared collaboration spaces and provide a platform for team members to showcase progress, share successes and identify challenges. This encourages a safe space for addressing obstacles and strategizing solutions collectively. Owners can use these interactions to share roadblocks and assess whether adjustments in priorities or task assignments are needed. Additionally, celebrate milestones and interim achievements to keep the team motivated, reinforcing the significance of their efforts. Recognizing accomplishments along the way ensures that the team stays engaged, motivated and aligned with overarching goals.

In today's dynamic business environment, creating a strategic plan is not just about drafting a document to sit on a shelf; it's about crafting a dynamic roadmap that propels a firm from its current state to a desired future in a deliberate and purposeful manner. An actionable strategic plan is a living document that guides decision-making, aligns resources and fosters adaptability.