fast future (02/2012)
DESCRIPTION
The Fast Future isn't just coming - it's here.The next twenty years will bring a global transformation of astounding scale ... with big winners and big losers. AEC industry firms with a ‘business as usual’ approach face a rocky ride - and untimely death.Please join this engaging, energizing, and eye-opening discussion of the fifteen uber-trends impacting our industry and world – and what AEC firm leaders must do to survive and thrive in an exploding, accelerating, Fast Future!TRANSCRIPT
1
FAST FUTURE!
And What AEC Firms Must Do to Survive and Thrive on the Road Ahead
Fifteen Uber-Trends that Will Rock the World
Copyright 2012. J. Doehring & Co., LLC. All rights reserved.
Copyright 2012. J. Doehring & Co., LLC. All rights reserved.
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Helping professional services firms and their leaders to achieve extraordinary outcomes in business and life.
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Roadmap
1. Economy and Industry
2. Fifteen Future Fast Trends
3. Organization Response
4. Personal Action Planning
3
4
PART I.
OK, it is the Economy.
Copyright 2012. J. Doehring & Co., LLC. All rights reserved.
Copyright 2012. J. Doehring & Co., LLC. All rights reserved.
U.S. Economic Growth
5
Source: http://www.bea.gov/newsreleases/national/gdp/gdp_glance.htm
U.S. Unemployment Rate
Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-120
2
4
6
8
10
12
6
Source: US Bureau of Labor Statistics- http://www.bls.gov/news.release/empsit.nr0.htm
Monthly unemployment rate, domestic U.S.
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Copyright 2012. J. Doehring & Co., LLC. All rights reserved.
U.S. Unemployment Rate
7
Source: US Bureau of Labor Statistics- http://www.bls.gov/web/laus/mstrtcr1.gif
Copyright 2012. J. Doehring & Co., LLC. All rights reserved.
U.S. Economic Forecast
Jan-
11
Mar
-11
May
-11
Jul-1
1
Sep-
11
Nov-1
1
Jan-
12
Mar
-12
May
-12
0
1
2
3
4
8
2011 Forecast – USA Today & IHS Global Insight
Source: http://www.usatoday.com/money/economy/story/Economic-Outlook/35290148/1
Eleven Leading Indicators
+ Real federal funds rate+ Interest rate yield curve+ Corporate bond spread+ Hours worked+ Building permits+ Non-defense capital goods orders+ Money supply+ Stock prices+ ISM export orders index+ Crude oil prices+ Light vehicle sales
Copyright 2012. J. Doehring & Co., LLC. All rights reserved.
U.S. State PopulationsGrowth Forecast (2000-2030)
9Source: U.S. Census Bureau at www.census.gov
% Change
-10 0 10 20 30 40 50 60 70 80 90
-5.5
2.6
7.6
10.4
16.5
28.3
37.1
51.9
59.8
79.5
29.2
USAFLTXNCCASCNJMAMINYND
USAFlorida
Texas
North Carolina
California
South Carolina
New Jersey
MA
MI
NY
ND
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U.S. State Populations
1 4 7 10
13
16
19
22
25
28
31
34
37
40
43
46
49
0
5000
10000
15000
20000
25000
30000
35000
40000Population Distribution (k)
Average State Size
All States and DC 6.14 MSub Top 4 (100 M, 33%) 4.50 MSub Top 10 (166 M, 54%) 3.52 M
CA, TX, NY, FL
IL, PA, OH, MI, GA, NC
10
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Megaregions (Megapolitans)
11Source: http://www.america2050.org/megaregions.html
Copyright 2012. J. Doehring & Co., LLC. All rights reserved.
Architectural Billing Index
12
Apr-1
0
May-1
0
Jun-
10
Jul-1
0
Aug-1
0
Sep-
10
Oct-1
0
Nov-1
0
Dec-1
0
Jan-
11
Feb-
11
Mar-1
1
Apr-1
1
May-1
1
Jun-
11
Jul-1
1
Aug-1
1
Sep-
11
Oct-1
1
Nov-1
1
Dec-1
135
40
45
50
55
60
65
BaselineABI
Source: www.aia.org
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AEC Industry Forecast
13
“We saw nearly identical conditions in November and December of 2010 only to see momentum sputter and billings fall into negative territory as we moved through
2011, so it’s too early to be sure that we are in a full recovery mode. Nevertheless, this is very good news for the
design and construction industry and it’s entirely possible conditions will slowly continue to improve as the year
progresses.”
AIA Chief Economist, Kermit Baker, PhD, Hon. AIA.
Source: http://www.aia.org/press/AIAB092722
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AIA Consensus Construction Forecast2012 (% Change)
2012 Consensus
McGraw Hill
HIS Global Insight
Moody’s Economic .com
FMI Reed Construction Data
Associated Builders & Contractors
Non Residential Total
2.1 -2.5 0.2 3.9 2.0 5.3 3.8
Commercial Total
5.6 5.6 3.9 8.8 2.4 5.9 6.9
Office 4.3 3.0 -3.1 9.1 2.2 7.8 6.8
Retail/Other 5.0 4.1 4.7 6.8 2.5 4.7 7.2
Hotel 10.2 23.3 7.1 18.1 2.4 4.4 6.0
Industrial Total
6.0 1.1 8.8 10.3 -2.3 12.3 5.7
Institutional Total
-0.1 -7.9 -0.8 2.3 2.3 3.3 0.0
Health 4.5 2.4 4.6 5.1 2.5 4.7 8.0
Education -1.7 -10.7 -3.1 3.2 1.4 3.1 -4.0
Religious 5.1 -1.3 25.3 - -2.0 -0.2 4.0
Public Safety -3.8 -15.9 - -0.3 3.4 -2.2 -4.0
Amusement/Rec.
0.2 -16.3 1.3 - 7.9 5.4 2.8
Copyright 2012. J. Doehring & Co., LLC. All rights reserved.
AIA Consensus Construction Forecast2013 (% Change)
2013 Consensus
McGraw Hill
HIS Global Insight
Moody’s Economic .com
FMI Reed Construction Data
Associated Builders & Contractors
Non Residential Total
6.4 8.7 4.2 6.5 4.5 8.1 6.1
Commercial Total
11.4 17.9 17.7 12.1 5.4 9.0 6.2
Office 9.6 12.8 11.7 11.8 5.1 10.3 6.0
Retail/Other 9.9 22.1 9.6 8.6 5.3 7.7 6.0
Hotel 19.7 16.8 47.3 29.2 7.1 9.9 8.0
Industrial Total
10.2 8.7 10.9 16.1 4.1 13.3 8.2
Institutional Total
3.6 2.8 0.6 4.8 3.6 6.3 3.5
Health 5.3 3.2 1.0 6.7 4.1 8.9 8.0
Education 3.1 1.5 0.8 5.5 3.3 5.4 2.0
Religious 6.3 2.4 13.9 - 4.1 72 4.0
Public Safety 0.3 -4.1 - 3.1 3.3 2.0 -3.0
Amusement/Rec
6.5 13.6 4.5 - 4.7 6.9 3.0
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AEC Industry Forecast - AGC
February 3, 2012
CONSTRUCTION EMPLOYMENT HITS TWO-YEAR HIGH IN JANUARY BUT INDUSTRY'S 17.7 PERCENT UNEMPLOYMENT
RATE REMAINS DOUBLE OVERALL RATE"Although it's great news that the industry has added 52,000 jobs in the past two months, the unemployment rate in construction is still double that of the overall
economy, and construction employment remains at 1996 levels," said. "It will take another month or two to see if the recent job growth reflects a sustained pickup or merely acceleration of homebuilding and highway projects that normally halt when
the ground freezes in December and January."
Ken Simonson, AGC Chief Economist
"Without adequate long-term funding for infrastructure, competitive tax rates and fewer costly regulatory hurdles, the construction industry may lose
many of the jobs it has gained in the past year.”
Stephen E. Sandherr, AGC Chief Executive Officer
16
Source: http://www.agc.org/cs/news_media/press_room/press_release?pressrelease.id=1020
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Industry Recovery Factors
Economic uncertainty
Tight credit and lending
Overbuilt markets
Weak municipal bond market
Federal budget deficit
Energy (oil) prices
17
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AEC Firm Key Issue Areas
18
Vision/ Mission
Enterprise Business Strategy
Leadership Alignment
Leadership Development
Strategic Marketing Framework
Business Development
Leverage
Operational Excellence
Ownership Transition
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Questions
19
20
PART II.
No, it’s the World.
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Copyright 2012. J. Doehring & Co., LLC. All rights reserved.
Fifteen Fast Future Trends
Globalization
Technology
Volatility and Change
Meritocracy
DiversityLife and Living
Knowledge and Know How
Consumer Power
Urbanization
Infrastructure
Small FirmFluid Supply Chain
Energy and Environment
Community
21
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The Big Five
Technology
Information
Globalization
Meritocracy
Change
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23
TechnologyRapid technological development and innovation will change everything.
And the pace of the change is accelerating.
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Computing Power
24
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AEC Industry Technology
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Accelerating Convergence
26
Computers. Information. Nanotech. Biotech. Communication.
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The Singularity IS Coming
27
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28
Information
The geometric explosion of information will fundamentally transform all human endeavor.
Knowledge
Communication
Power
Wealth
Society
Family
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29
Globalization
The world will experience increasing global connectivity – on virtually every dimension possible.
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30
Meritocracy
What one does will supplant who one is – in a more democratic, merit-based world of broadening economic opportunity.
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31
Change
The era of stability and predictability is over. Near constant volatility, uncertainty, and change in the global economy will become the norm.
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The Business Five
32
Consumer
Supply ChainSmall Firm
Infrastructure
Energy & Environment
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33
Consumer
The age of the consumer is here - buyers (not sellers) will control the market.
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34
Supply Chain
The global supply chain will include a continuously churning, mutating, and evolving mix of providers, suppliers, partners, and competitors.
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Supply Chain Phase Changes
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36
Millions of (very) small firms will compete successfully on the global stage.
Small Firm
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AEC Industry Statistics
NAICS Type No. of Firms Total Receipts
54131 Architectural Services 24,283 $37,149,909
54132 Landscape Architectural Services 6,088 $4,365,336
54133 Engineering Services 47,714 $187,531,866
54134 Drafting Services 3,146 $1,083,581
54135 Building Inspection Services 5,673 $1,830,059
54136 Geophysical Surveying/Mapping 729 $3,093,348
54137 Surveying and Mapping (Ex Geo) 9,567 $6,760,251
54141 Interior Design Services 13,492 $9,799,480
54162 Environmental Consulting Services 8,274 $10,423,169
Total 118,966 $262,036,999
37Source: U.S. Census Bureau Business Database, 2007
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AEC Industry Firm Size
59.418.6
11.5 6.7
2.1 1.6
Employees
0-4
5-9
10-19
20-49
50-99
100+
38
Source: U.S. Census Bureau Business Database, 2007
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Pressure in the Middle
Largest Firms
Smallest Firms
100 firms over $100M
1800 firms $13-100M
10,000 firms with 20-100 staff
100,000 firms with staff <20
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40
Infrastructure
Those who build today will lead the world tomorrow.
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41
Energy & Environment
Environmental health will become intrinsically important worldwide – though always balanced by
economics.
Alternative energy will gain in importance - but petroleum will be king.
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The Social Five
42
Diversity
Healthy Living
Knowledge
Community
Urbanization
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43
Diversity
The majority will be defined by consensus, alignment,
and collaboration – and nothing else.
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44
Healthy Living
Peoples around the world will live healthier (longer and better) lives.
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45
Knowledge-Know How
Expertise will become both
the language and currency
of the global realm.
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46
Urbanization
Living in cities and city-states will become increasingly attractive - to nearly everyone.
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Jinan, China
12th largest city in China, 48th largest in the world;
47
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Largest World Cities
#
0 2 4 6 8 10 12 14 16 18 20
ChinaUSAIndia
48
Top One Hundred World Cities
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Megaregions
49Source: http://www.america2050.org/megaregions.html
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50
Community
Engaging in new communities will become increasingly important and meaningful.
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So - What Does it all Mean?
“The future ain’t what it used to be.” Yogi Berra
51
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Questions
52
53
PART III.
Actually, it’s about us.
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Impetus for Change?
54
“Change is not necessary…
Survival is not mandatory.”
W. Edwards Deming
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Forget Buggywhips
55
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Control What You Can
56
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Key AEC Firm Issues
57
Overarching Objective
Enterprise Business Strategy
Leadership Alignment
Leadership Development
Strategic Marketing Framework
Business Development
Leverage
Operational Excellence
Ownership Transition
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Your Response?
58
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Choose your road.
59
The Road Not Taken
TWO roads diverged in a yellow wood,And sorry I could not travel bothAnd be one traveler, long I stoodAnd looked down one as far as I couldTo where it bent in the undergrowth;
Then took the other, as just as fair,And having perhaps the better claim,Because it was grassy and wanted wear;Though as for that the passing thereHad worn them really about the same,
And both that morning equally layIn leaves no step had trodden black.Oh, I kept the first for another day!Yet knowing how way leads on to way,I doubted if I should ever come back.
I shall be telling this with a sighSomewhere ages and ages hence:Two roads diverged in a wood, and I—I took the one less traveled by,And that has made all the difference.
Robert Frost
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Getting Things Done
60
Kn
ow
led
ge
Effort
Zombies Laborers
Pundits ExtraordinaryProfessionals!
Modified after Jim Cathcart
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Not Just What You Know
“Execution is the single biggest issue facing business today.”
Larry Bossidy and Ram Charan
61
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Success Magic - Action Plan
No.
Action Outcome
Lead Due Date
Notes
1
2
3
4
5
62
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An Organization Framework
1. Pay Attention2. Ask Questions3. Advise Others4. Take Action
Copyright Kleinfelder, 2011. Used with permission.
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Parting Thought #1
64
“Make no small plans; they have no magic to stir men’s blood.”
Daniel Burnham
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Parting Thought #2
“Whether you think you can, or
think you can’t …you’re right.”
Henry Ford65
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Questions
66
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67
Thank You!
Helping firms and their leaders to achieve extraordinary outcomes in business and life.