Finnish blogger Aarni Heiskanen has designed and written a truly powerful blog at aec-business.com, worthy of reading by any AEC professional interested in improving business operations, marketing and practice profitability. This is an exceptionally well-written site, and you’ll discover many insights and knowledge gems within its entries.
In two recent posts, he discusses the advantages and pitfalls of partnerships in the industry. This is a topic close to my heart, in part because of my work a couple of years ago in researching a white paper about strategic alliances for the SMPS Foundation.
He writes, in describing the advantages of partnering:
Construction companies have always done joint ventures. The reason has been to simply be able to bid for and deliver a project that would be too big for one company at that specific moment. Partnering allows you to become larger than you are and to get work that would otherwise be out of your reach. It also lets you spread the risk in a demanding project among the members.
The second potential benefit is increased productivity. In a tight economic situation, which seems to become the norm, companies are looking for ways to increase their productivity. However, it is becoming more and more difficult to make significant productivity improvements within a company.
An average company pays 55 percent of it revenues for goods and services. You have to ways to save in purchases. You can either squeeze your suppliers or you can select a handful of suppliers and build durable relationships with them. There is a lot of evidence that the partnering performs better in the long run. By removing traditional company boundaries between the buyer and the vendor you can become really efficient and competitive. When a supplier can engage directly in the parent company’s processes and share process information transparently, both parties win. Toyota in the auto industry is a good example of that.
A third area of benefits has to do with innovation. Partnering is a great way to bring something completely new to the market. Suppose you identify an urgent customer need that no one has been able to satisfy because of the traditional ways companies do business. Companies can either wait until some intermediary realizes the business potential, creates a concept and asks for bids from suppliers. Alternately, a group of companies could develop a similar concept together and offer the service in a partnership.
Be sure to take advantage of Aarnie’s offer for a free download of How to manage client relationships: A short guide for architects, engineers and contractors. This succinct document takes you through the questions you should be asking about how you are selecting and maintaining your clients –aligning client values and focuses with your own objectives.
He also includes interviews with leading Finnish and multinational architects and contractors operating in Finland, giving you an additional perspective of the industry and relationships.
One impressive quality of this blog is the quality of English writing here: Aarni communicates in English better than many really literate native-English writers.