MESH, one of the many start-ups from Davis Langdon / AECOM, approaches its sixth year of business this month, Managing Director, Tim Molden reflects on the role and value of the Small or Medium-sized Enterprise (SME) moving forward.
Britain has been labelled as a ‘nation of shopkeepers’ as far back as 1794. Today, the UK economy continues to be dominated by SME’s, defined as fewer than 250 employees and less than €50 million annual revenue, with 96% of businesses in the UK having fewer than 10 employees.
Moving from a large business to a start-up provides its own challenges. Many of the perceived strengths of working for a global giant naturally fall away, such as offering a plethora of services to clients with a global footprint to service. What has been evident for us and equally for many other new start-ups, is that this provides little or no benefit to most UK clients, unless you are also a global corporate.
We have noticed a shift in clients’ behaviour to valuing the personable approach:
- Continuity – Meeting the person that will deliver your project, not who will be the account manager and having to work with several business units that are ‘waiting for a job number to be raised to start’; or what the regional delivery structure is. Client’s simply want the person that will take care of the delivery of their project from start to finish.
- Mobility – The ability to work nationally for us has remained a key strength. Clients have expressed a desire for specialist expertise to be mobile.
- Empowered – Having an unrestricted ability to make decisions, not having a ‘faceless individual’ telling you otherwise, is important.
The shortlisted candidates for the 2021 Building Awards honour all sizes of organisations. The industry recognises efforts of such firms by providing categories to support both large and small organisations. It is equally interesting to see that the big still wish to get bigger with the recent marriage of T&T to CBRE, with the market impact still to be realised.
It’s entirely a client’s choice on their reason to select a consultant and in a way, it is good that there is such a diverse range to engage with. In an economy where selecting the right people in the right business to deliver the right service for the right project is key to success, the framework approach does appear to work against this. Clients who are wanting to approach smaller specialist businesses only to find they are not instantly accessible through the required ‘Framework’, and the list of options available would never be there first choice. This equally applies to principal contractor frameworks.
As we submit for a number of framework bids, with the clear intention of attracting SME sized businesses, the volume of governance and point-of-entry often reflects a procurement process akin to bidding for a delivery partner for the 2012 Olympics. This is in complete contrast to what is realistically deliverable for an SME and raises the barrier to entry beyond that of the SME. So, for clients to benefit from specialist expertise of the niche firms and their people, there needs to be a realistic approach to a point of entry, constructing the procurement process to enable SME’s to fully participate on a level playing field. Otherwise, smaller consultants will be forced to focus efforts elsewhere which would long-term be a loss to both the industry and profession.
It is equally refreshing that a number of clients and consultants look to the long-term, as we are often engaged in collaboration with others, to provide the right team engagement tailored to the needs of the client and project.
The work we do in retail demonstrates some lessons others can learn. In one case, although the client is a global player, they sourced both consultants and contractors based on SME scale businesses so that they could realise the true value offered at this point on the spectrum.
With over 1,000 RICS regulated cost consultant businesses in the UK, it is clear most of them are SMEs, which provides clients and other consultants an ability to bring the right people to the project.
We have had several triumphs in collaboration, with other larger cost consultants, (Alinea, RLB) and equally noting a recent trend of similar size PM businesses wishing to align with us, providing a joint service offering.
We have only had one case, so far, of a larger business claiming to wish to collaborate with the industry and when the opportunity clearly presented itself, preservation of share price trumped providing the right service. I would ask all clients to be tough on consultants whose bid team secure the commission and then decide to back-fill with un-vetted individuals which, otherwise if presented at interview, would not have secured the appointment.
The phase ‘too large to care’ is often shared with us, when projects are not going well, whether that is an actual failing, who knows, but almost certainly is the client’s perception.
For the future, feedback from potential new staff is very positive about the benefits of working for a smaller business, I have no doubt we will see more collaboration amongst SME businesses and equally clients welcoming this approach, as the right team are presented to deliver the project.
Author
Tim Molden
Managing Director