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Why Are You Innovating? February 19, 2010

Posted by Jason in Insider's View Relapses.
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So many names have been suggested for the last decade; the Digital Decade, Hysteria Decade, the Aughts, the Naughts, the Double-0’s. It could just as well be called the Innovation Decade — not because of any particular real innovations, but because that’s what we all thought (and continue to think) we should be doing, even if we don’t know why.  One of the drawbacks of rapid mass communication like the Internet is our tendency to become caught up in new technology or management fads without paying attention to our individual businesses. Just as dangerous, we may also lose sight of the realities of industry-wide trends.

This is especially pertinent to engineering. Despite our real need to innovate and solve new problems, engineering is still based on fundamental principles and processes that are older than any of us now practicing. Countless engineers bemoan the commoditization of the engineering profession and lack of understanding on the public’s part about our services. Why don’t customers respect the work we do? Why do we have to keep competing on cost when we “know” that our work is higher quality than that of the shop across town? Engineers and surveyors have long promoted the idea that if we could just educate our clients, many of our problems would be solved.

If the last decade and its economic environment have taught us anything, it’s that nothing can be taken for granted. Civil engineering, with its mix of public and private clients, range of sub-disciplines, and business models from sole proprietors to global giants, promises to be around for decades to come. Society will continue to need clean water, transportation, and new construction. And our various innovations strive to improve how these things are delivered, as well as their quality and cost. Though important — and often critical to public safety — innovation, or rather our idealized picture of it, misses one crucial point.

What businesses often mean when they pursue innovation is that they seek to create a new market or client that did not exist before. In this way, they can theoretically maintain their going concerns in perpetual growth markets. For example, some firms strategically choose to be early adopters of new techniques or processes; they might implement GIS, BIM, TQM, or even Twitter to better serve or attract customers. But later, when the bugs have been worked out and “best practices” have been developed, these novelties tend to become industry standards and everyone is expected to follow suit. Implementation costs drop, risk will be reduced, and less sophisticated clients will begin to expect this now-basic level of service at last year’s low prices.

But the larger engineering industry — the application of physical principles to the built environment — will not have changed. Rather than being a growth industry (even if small niches are), engineering faces the economic reality of maturity. Indeed, in the worst sectors — especially private greenfield land development — the reality is that of a declining industry in many locations. In addition, when we speak of best practices, we aren’t just competing against other engineers. Indeed, we compete against other industries with which our clients work as well. Just as consumers have become accustomed to the conveniences of things like credit cards, wi-fi hotspots, and cup holders, your clients expect professional services to include certain benefits: clear communication, rapid responses, and yes, reasonable prices.

If your firm is “innovating” by buying new software, pursuing a new market (in which your competitors are already successful), or establishing a Facebook page, you might merely be catching up to your clients’ expectations after the fact. You must know whether you are providing a truly new service or demand that was not there a year ago. But most importantly, unless your firm has established a bona fide niche market or other differentiating characteristics, you should be cautious with long-term growth projections centered around any particular innovation. No one knows your own business better than you, but it takes a wider view of several industries to identify opportunities for true innovation and creativity. Are you ready to take the next step?

— From Insider’s View, February 2010



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