It has been obvious to me for years now that there is an alternative out there to the traditional brick and mortar engineering business model. Fueled by collaborative technology and a desire on the part of engineers to tap into the collective brain trust of their global counterparts, this growing movement is one of the motivations behind the Engipreneur Blog and the Engipreneur Group on Linkedin. It wasn’t until I launched my own business, however, that I came to recognize the power behind this emerging trend and the very real threat that it poses to more conventional companies.
The mass layoffs of 2008 had a far reaching effect on the perception of the American workforce. Whatever trust that employees had in the corporate realm was vastly eroded. It was clear to everyone that the days of fat pensions and lifelong employment for one company were a thing of the past. Even the public sector failed to provide the security that it once offered. I witnessed the resentment and sense of betrayal firsthand as I engaged numerous times in that awkward discussion where loyal engineers are told that they no longer have a job. The thing about engineers, though, is they tend to analyze problems and look for the root cause so as to not repeat the same mistake twice. As the recession started to break and the rest of the workforce, with their short-term memory, dutifully returned to their jobs, the engineers had developed a cynicism that became obvious during job interviews. Something had changed.
The Great Recession changed companies as well. Less projects and the constant downward pressure on fees made it obvious to professional service firms that fixed overhead expenses were eating away at their profits. They learned that they could actually function with less administrative staff weighing down their bottom line. Many engineering companies further cut their overhead expenses by reducing their office space. Unfortunately, there was only so much fat to be cut. The traditional business structure itself came at a cost; there would always be rent to pay and employee benefit programs to fund.
Imagine an engineer sitting in her home office preparing drainage studies. She no longer has a commute. She no longer has to worry about losing her job. Her clients are primarily other engineers, most of whom work out of their home or small office. She communicates with them and other engineers regularly via email, phone, or Skype. If she needs to collaborate with the grading engineer, she simply shares screens with him online. He is the best grading designer she has ever worked with; he lives four states away. File storage is in the cloud. Money is transferred electronically. Hard to imagine? No, not really.
Now imagine a whole network of engineers, each in business for themselves, collaborating on projects across the nation (or the world). Each one focuses on his or her area of expertise. Some are good at design. Others are good at business development. All of them are highly motivated to succeed. Their livelihood depends on it, as does their new enhanced lifestyle that is enabled by this “new” way of doing business.
Meanwhile, professional service firms across the nation are trying to figure out how to motivate and instill loyalty in a new generation of engineers who are now highly skeptical of the corporate world. They increase the recruiting budget, make salary adjustments that are long overdue, and invest in more team building and social events. Overhead expenses start to climb again. The stage is set for a new competitor to enter the market.
This competitor consists of a highly motivated team of professionals. There are no employees – yet the team is made up of the best and the brightest, made possible through the removal of geographic barriers. There is no central office space – yet this does little to hinder their technology-fueled collaboration (and let’s face it, clients simply don’t care about plush conference rooms). There is no overhead – yet somehow they function without a hitch and are able to consistently undercut the big guys on fees when it really matters.
This isn’t a pipe dream. It’s happening now and businesses are feeling the effect. Some of them are scrambling to respond. Others are simply preparing for another day at the office in their pajamas.