There’s no shame in making a name for yourself in a consolidated industry, writes Steven Yule, ICE country representative for the UAE.
During a competitive tender, every bidder sends in clarification questions before pricing.
Read across them and they are strikingly similar. The offers that come back are alike too, with little to distinguish one bidder from another.
Buyers can’t tell the offers apart, and the firms can’t find a way to stand out.
I have watched it happen from the inside. The bid did everything right, answered every requirement and question the client asked, except the one that mattered most.
What were we bringing that none of the rest could?
A consolidated and commoditised industry: how we got here
Consolidation and commoditisation usually arrive as complaints, so it is worth being precise about what they mean.
Consolidation is structural. Engineering consultancy has merged into fewer and larger firms, mostly within the last two decades though on older roots.
Commoditisation is commercial, work bought on price because the outputs look interchangeable.
The two are connected.
As firms merge, they end up offering much the same range of services, and once a buyer cannot see a real difference between them, price becomes the only sensible way to choose.
The cost of sameness
There is a cost, though, and it’s easy to miss because nothing about it looks like failure.
When every firm optimises for the same frameworks and the same buyers, the firms begin to look alike.
It used to be common for a consultancy to carry the name of the engineer who founded it. A few still do, but most of those names now sit inside something larger.
The reputation of an individual became the property of a firm, and the firm was eventually bought and sold.
Now, if you read how the largest consultancies describe themselves, you’ll see the words are nearly interchangeable: integrated, end-to-end, whole life, global.
Offers converge in language even where the underlying capabilities still differ, differentiation drains out of the market, and sameness is a hard place for innovation to live.
Pricing by the metre
The thinking gets trained into people too.
I have heard engineers price work by rules of thumb, so much per drawing, and then reach for the same logic on smart systems and city-scale platforms, work that is far more complex and less commoditised.
The unit logic holds for the repeatable work it grew up on. Stretched over everything else it produces a number with no real relationship to the work.
Lose the bid on that number and the firm rarely goes back to ask why. Win it, and the answer arrives slowly over the course of the job, in the work nobody priced.
Who gets a say?
Ownership adds a further layer.
A mentor of mine, recruited into a leading UK consultancy by its founder in the 1970s, watched it become a listed company two decades later.
They believe the flotation (converting a private company into a public one) changed the firm more than any project ever did.
Decisions now had to answer to the business, clients and investors at once, and those audiences do not always want the same thing.
What about industrialisation?
To the fair question of whether all this is simply industrialisation, the honest answer is partly yes.
It is a move toward a systems-based way of designing and building, with standard components and tested interfaces, and that is a sound idea.
Clients wanted more complex and more integrated solutions from fewer suppliers, and public frameworks reward breadth almost by design.
Reuse and standardisation genuinely help, above all, whoever has to maintain the asset afterwards.
But a systems-based approach only works when the integration exists to support it, and the client is informed enough to manage it.
It also needs a contract set up to extract its value, and without that it gets executed poorly and competed down to the bottom.
The obvious objection is that the large firms are where the innovation money sits, and that is fair.
Scale funds research, tooling and repeatable methods that no small practice could carry. The question is what it is aimed at.
Investment follows the measures a firm is judged against, so it flows to whatever makes work faster and cheaper, and rarely to the first-of-kind work that no framework yet measures.
That is improvement, though it leaves the field much as it was.
What architecture kept
I have been reflecting recently on architectural practices in this same market. Of course, architects offer different services and are procured differently, but even then, the contrast is striking.
Architecture consolidated at the top, and its largest global practices now run to thousands of staff, but it kept its tail.
Of the Royal Institute of British Architects' (RIBA's) chartered practices in the UK, nearly a thousand are one person working alone and barely 50 employ more than 100 people.
This model isn’t always secure, but the small practice remains a viable way to do distinctive work.
Engineering kept a handful of outliers, mostly the firms that never listed or sold, and lost most of its middle and its tail.
Part of the reason may sit in that procurement difference, because architects are still often selected for an idea rather than a rate.
Where does that leave innovation in our industry?
Innovation lives in the work that refuses the template.
It lives in the practices that kept their independence, and in newer firms building whole-life offers from scratch. Judgement, which cannot be bought by the metre, tends to concentrate here.
For the individual engineer, this is the lesson I would most like you to take away. The structure of the industry is set well above any single career, but a career does not have to mirror the structure.
Seek out the work that can’t be templated and learn the commercial side well enough to see where value is created.
There’s no shame in building a reputation in a specialism, because making a name for yourself, done honestly, is about the difference you make.
Consolidation concentrated firms. It didn’t concentrate ideas, and it certainly didn’t concentrate them out of individual engineers.
Head to the ICE’s Knowledge Hub to keep widening competence beyond the work in front of you.
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