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Two days, a central London location and the leaders of around seventy of Europe’s leading consultancies. This was ACE’s inaugural European CEO Conference, and it was no surprise that discussions looked at how to lead firms through tough times, along with what could be learned from the last three years.
The consultancy and engineering sector is extremely diverse. Firms range in size from the very small to what the conference termed mega-consultancies. Some firms operate globally, others nationally, and others have an even more local focus. Meanwhile, some companies enter every sector while others target a key area of activity, servicing the main client or clients engaged in it.
Despite these differences, there was a lot of common ground covered as business leaders talked with remarkable candour. They discussed some of the problems faced through the credit crunch and the lessons learned. Most felt it had been too easy for many firms to relax when times were good, and that a key lesson was to remain lean under all circumstances. Some noted how hard they had worked recently to speed up their billing and bring down the time it takes to be paid for their work.
The keynote lecture by EFCG president, Paul Zofnass, drilled down into the detailed figures ACE and EFCG had collected on the industry. There were key questions raised as to why American business appeared to have better margins and was able to grow quicker than European engineering firms.
However, while engineering often appeared unglamorous to the wider public, Mr Zofnass noted that in 20 years of EFCG benchmarking in America the industry’s internal growth rate only underperformed US GDP growth in four years. He stressed that was quite a feat and unlike almost any other industry.
This served as a backdrop to a degree of confidence that the long term future should be strong. While Chinese and Indian competitors would change the market in some ways, the feeling remained that expertise and innovation, not low costs, would remain the key driver of success.
Chief executives spoke of the convergence of the world’s major problems on engineering solutions. A rising population, resource shortages, climate change and urbanisation all pose profound challenges for the world. CEOs recognised that the solutions to those challenges were, first and foremost, engineering solutions.
In meeting these challenges, firms must to look at their own conditions and plan to thrive, not merely survive the present hardship that has not yet finished. As such, diversification drove a lot of the discussion, despite its multiple meanings.
Some firms were looking to ensure their presence in new geographical markets, while others sought to broaden their expertise to additional sectors. This flowed into debate about how to enter new markets, and the view was clear that to do so is a long-term undertaking.
Building a presence and establishing a firm in a new market takes time and CEOs enjoyed sharing stories of reported overnight success that had taken more than a decade of hard work to achieve.
Inevitably, with so many industry leaders in one place, there was a great deal of discussion about what leadership really is and where the next generation of leaders comes from.
Comparisons between CEOs and orchestra conductors or managers of sports teams were offered. The analogy suggested that the key role of a leader was to build the talent of those around them and help direct them rather than try to play every instrument or score every goal themselves. And while they agreed there was a place for firm analytical testing of potential young leaders, there was little replacement for the “gut feeling” that a person was or was not right to be a future CEO.
Concern was raised at how few women had made it to the top of engineering firms. Some speculated whether women were held back by social influences and working practices. Others suggested that women were starting to emerge as leaders now and that a culture shift was starting to emerge.
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