There has never been a more challenging time for firms in any sector worldwide.
The Covid-19 pandemic has put great strain on businesses of all sizes and nothing is off the table as MEP contractors and consultants move to secure their long-term futures.
Black & White Engineering CEO, Mick Cairns, is looking to the past for guidance on how to best navigate the global health crisis.
“I agree these times are indeed incredibly challenging, possibly the greatest challenge in my lifetime,” he told MEP Middle East.
“However, we will use the knowledge and experience from previous industry lows to set a course for better times ahead.
“The Asia currency crisis brought an almost over-night halt to the construction industry in the Philippines when I was living there in 1997.
“About 80% of expats were suddenly superfluous to requirements and eventually left the country. Being based in the UAE in 2007 was also a tough time for most industries, and I believe the entire construction industry felt significant effects.
“Stories are still repeated today about the depths of despair companies and individuals had reached. At Black & White our business model is designed to cope with super highs and drastic lows. The coming months will be a true testament to this.
“As far as emerging from this current crisis, I guess that we will find out once a global solution is found and we return to a certain level of normality. Currently we are only part way through the crisis. We have, however, been successful in implementing remote working so that our team can work from home.
“The health and wellbeing of our team is of paramount importance as we unite and play an active part in preventing the spread of Covid-19.
“Thankfully, our experience of functioning as one global team from various offices around the world, and our existing internal systems, has enabled us to take remote working to another level and continue to deliver to our deadlines with fantastic results.
“Our internal message is that we will continue to service our clients during these challenging times but will ensure the health and safety of our staff in all our procedures.”
Despite adequate planning, the uncertainty that Covid-19 has thrown up is impossible to mitigate fully.
Cairns says there have been two major impacts on operations for Black & White since the beginning of the UAE sterilization programme.
He explained: “Firstly, our marketing and enquiries dried up almost completely, giving a very clear insight as to when our current backlog would fall below capacity.
“Typically consultants are pleased to have four months of back log at 100% capacity. Many of our design projects rarely last beyond six months (except for site roles).
“Secondly, this impacted our operational processes. As an engineering consultant practice projects are designed by teams of mechanical and electrical engineers who need to debate challenges and solutions from many aspects at the same time.
“Communication is absolutely key. We have been fortunate that we live in a world where video communication and screen share is both readily available and inexpensive.
“As a company we have worked with remote teams for over 12 years so we were able to expand our existing protocols to ensure information is available and the necessary discussions are taking place daily.”
Black & White is in a more favourable position than most, having carved out a strong client base and leading reputation in the region.
But for smaller firms this pandemic could prove fatal.
“To an extent I do agree, particularly if a few projects are suspended,” said Cairns.
“However, there is also a flip side. Smaller companies of six to 10 persons are often more agile and can adapt to a change in market more quickly than a large business.
“As a business owner you can see the agility and ease in which a small business can lower its overhead simply by directors deferring salary, as they often represent a significant part of the P&L.
“Small businesses tend to be leaner and carry less central and / or non core business delivery staff as they will outsource on an as needed basis.
“In some cases, larger companies will suffer greater as the employees are not so ready/able to accept deferred pay or salary reductions.
“Large companies tend to have large central teams of ‘non core’ staff which can create a higher cost base for HR/marketing/accounts/legal.
“Notwithstanding the above the biggest challenge to all companies will be liquidity. If clients can’t pay or decide to take advantage of the situation then the outfall will be devastating for companies of all sizes.”
One certainty to come from all this disruption is that business models will change post-Covid.
“I have long been a believer in creating Global Design Hubs and have always seen this as a huge positive for our business,” Cairns said.
“Nevertheless, it is fair to say that the world class infrastructure we have in our GDH office is not available to many staff in their home and this has created a major challenge when staff in the Philippines have been working from home.
“Fortunately, with Cloud services, the amount of data that is required to be downloaded and uploaded is hugely minimized.
“We have been actively studying ways of improving home working and work life balance in all offices, and the results of the effectiveness of how each team has responded during the pandemic are quite revealing.
“There are definitely infrastructure changes we will implement to be better prepared for any repeat.
“From my personal perspective the biggest lesson we will take will be which clients can be relied on.
“My biggest hope is that it will change the mindset of those companies that chase turnover at all cost. When bidding work at rock bottom fees you really need to have a plan B in case of a slow down or a ruthless client.
“The most important issue in mind during this crisis is to look after your staff. Staff will remember how they have been impacted during challenging times.
“Which companies are willing to sacrifice profit to ensure longer term staff stability will be interesting.”
Cairns also believes the crisis will drive forward the move to digitalisation – a much discussed factor in the future of the industry.
“As a business deeply connected to the technology sector (70% of our business is designing data centres) we have built our company with disaster planning at the heart of our delivery model and processes.
“This is an unwritten pre-requisite to enter the market, all major clients require a detailed DR plan as part of your bid/prequalification.
“The construction industry joined the digital world many years ago, the steps are becoming greater each year, but there are still many firms that have not yet reached their digital potential.
“To keep up, companies need to recognise that digitalisation will influence every one of their processes.
“We believe that the fundamental principles and objectives of BIM processes are synonymous with our core ethos, and it is integrated into our design processes and management systems.
“As already mentioned, remote working relies on infrastructure as well as improved communication and process.
“The Cloud has enabled us to find our way through this for the last five weeks.”
A greater collaboration between firms of all sectors post-coronavirus has also been mooted across the board.
“There will certainly be lessons learned, some companies will perform better than others for many different reasons as discussed.
“This may create new stronger alliances from the success stories and may prompt other relationships to ask questions of each other.
“People will look deeper into a potential partner’s process/delivery method and should question their disaster recovery plans.
“What I have learned is that after each crisis the construction industry always bounces back, people leave the area, new people arrive.”
The message from Cairns right now is to exercise patience.
“My message to those who employ contractors/subbies/consultants is act fairly and take a long term view.
“If you are in a position to assist someone, then do it. Nothing bad ever comes from doing a good deed. During times like these, integrity becomes infinitely more important.
“The implications of Covid-19 are constantly changing, as are the responses from contractors and consultancies alike.
“There are no one answer fits all, but doing the right thing will help us all come out the other side with a prosperous future ahead of us.”