What I’ve Been Up To – The Big Pivot

No one has heard from me through this blog in over one year. No posts; no updates. It’s not coincidental. It’s a simple case of energy management, focus, other priorities. Much of it has to do with the “big pivot” at our company Wheaton & Sprague Engineering, Inc., http://www.wheatonsprague.com. I know the term “pivot” is overused, but it’s an appropriate description for what we did starting in July 2023. We made a 180 degree turn on our business. This has been the focus since. I’ve learned a lot in life, and one of them is that I’d rather work to “build the thing” (or rebuild) and then talk about it, rather than talk along the way but not really be able to deliver. This is the “talk about it stage.”

Our business from 1994 to 2023 was primarily a specialty engineering company providing delegated design and engineering to the curtain wall and cladding world. We called this our Building Envelope Engineering Division (BEE). Much of this work was for tall buildings with standard or custom aluminum, metal, and glass cladding in major urban centers. It also included other similar work, and we worked with small, medium and large enterprise subcontractors and fabricators in various regions. We still do, but in different form. I’ll come back to that.

We also maintained a consulting group that was primarily comprised of one person for a few years, and then it grew to 2, 3, 4 and then back down, but it was more of a secondary focus for us. We call this our Building Envelope Consulting Division (BEC.) This work covers broad categories of various building types, forms and surfaces, in the major categories of design, construction, forensic investigation and litigation-claim support.

Along the way at times we tried different things like a Building Structures division that provided primary building structural engineering, and a Building Forensics division which merged all of the above and also a quick response team that could handle emergency failure issues. In 2008 the building structures group couldn’t compete on price with other firms doing only that work, and we shut it down. In the forensic work, we couldn’t really focus enough on that business in the required “horizontal niche” and we shut it down.

What had been the consistent, common thread throughout our history from 1994 forward was building envelope engineering work. This work was delivered primarily by providing structural engineering calculations, shop drawings, fabrications drawings, and thermal analysis (later.) We called this “full service engineering work.” Building Envelope Consulting came along in 2008 through a hire we made. This work got traction over time and remained viable but was a smaller percentage of our revenue.

The full service engineering work over the years provided work on large scale projects, big volume of backlog, often with thousands of person-hours involved. This is what we were know for primarily and where we invested most of our energy. Part of it was intention and part of it was just pure, repeat, sustainable work; energy feeding off of itself, like a hurricane gaining energy as it travels across warm ocean waters.

Over time, we increasingly started fighting various market dynamics. One dynamic was an increase in the number of companies providing similar services, mostly in drafting, but some also in engineering. Another was increased price pressure in the drafting services, which became more of a perceived and actual commodity. In addition, some clients self-perform their drafting work. They only go outside their business if they can’t handle the volume or if they can’t provide the competency on certain categories of work. What happens in this instance is we actually end up competing against our clients. They can typically provide the work at a lower cost recovery rate.

As time marched on, pricing pressure increased. The world got “flatter” and more folks came into the space. Then came 2020. Perhaps the reader may remember a thing called COVID-19, the world-wide pandemic. Everything changed in 2020 and the “rebound year” of 2021. Of course, there’s been strategic shifts and cultural changes since, that are still evolving. One of the big changes was “work from home,” or as it is now termed “remote work.” The demand for building occupancy dropped. The demand for occupancy in major urban centers dropped even more. People began working in all sorts of environments, much of it from home. Demand for virtual work and remote tools soared and was met. What was typically an employer’s market prior prior to 2021 became and employee’s market. Once this door opened, major shifts and movements took place with many leaving their jobs and moving to other companies. It seemed almost like an early western expansion land-grab with unprecedented changes. I mention employer and employee in the context of “business owner with equity” vs “non-owner receiving pay and benefits.” It’s not derogatory, it’s mean to make a point. What had always been the realm of the entrepreneur – owner (I can work from anywhere I want at any time if I choose) became just the opposite. The owner was now saddled in the often empty office, working to maintain course and manage the unprecedented dynamics, while staff members were working wherever they chose, and naming their terms. But that’s the topic for another blog.

Nevertheless, in spite of the above, our BEE business chugged along still providing full-service work at various scales. The work in the BEC business chugged along as well, slowly growing from 2, to 3, to 4.

But finally, inevitably, the dynamics mentioned above, and many, many more variables caught up to us and to themselves. The tail of the building market in our categories started to be visible in summer of 2022. Large design and drafting backlogs of full service BEE work slowly dwindled from September of that year forward, primarily led by lower demand, and increased price commoditization. Clients, also faced with declining demand and staff to maintain, had more and more options from which to choose how to procure their design and drawing needs. Major glazed towers in urban centers slowed to a crawl, if not a stop, except most of those that had been started and financed prior. Interest rates rose, commercial loans came due, leases started to expire, companies needed less space. After 29 years providing full service drafting, design and engineering work, we had essentially ZERO backlog in our drafting service line by June 30 of 2023, even though estimated work had stayed steady. Projects were “delayed” or “on indefinite hold” (whatever that really means.)

So, as it came to be, we made the decision to close our drafting service line and kept only our most experienced senior designer on staff to handle the small volume, system design, product development, and BEC support work. It was a tough decision; 29 years of a primary volume-based service with 8 – 16 people in drafting/design at any given time, now having to be dissolved. We spent the entire month of June and July communicating with hundreds of clients in this space, but to no avail. By the end of July 2023 it was shut down.

Professional engineering worked remained less disrupted since it is less of a commodity due to the smaller pool of registered professionals and somewhat more secure pricing paradigms. While volume dropped somewhat, professional engineering licensing will always be required (until it’s all replaced by AI and “rubber stampers” but that’s another blog as well.)

So our business in July of 2023 became half of it’s prior size in BEE. Thus, the pivot starting August 1, 2023. The pivot was to re-focus on building our BEC business as our primary focus, opening ourselves up to broad categories of building types, shapes and sizes, clad with every type of material on the planet. We maintained our BEE business in structural engineering, system design, product development, and thermal analysis service lines, still providing professional engineering work, and providing shop drawing work on small, boutique projects when requested or when the comps appeared to be viable. For all of the last year we’ve been focusing on building the processes, protocols, new client bases, market segments, all of the infrastructure necessary to support the BEC business, consulting engineering, as a B2B scalable business. We are still working in our “vertical” niche of building enclosure work, but in what we call “radical expansion within our niche.” We work with owners, architects, developers, owner’s reps, other consultants, construction managers, lawyers, insurance companies, manufacturers, suppliers, and more. We can provide services for almost any building type, new or existing, with almost any cladding type, and from sub-grade waterproofing to the roof. We have the people, and the diagnostic and testing equipment necessary to support the work. We have the compliance and statutory entities to perform in multiple states. We still provide BEE work, but in different form and lower volume for now. Our process and senior-level people will allow us to scale BEE quickly if and when demand increases. We also do much ‘cross functional work’ between divisions.

With all of the above came a new location, reducing from 12,300 square feet of office space to 3,920 square feet, still with room to spare for staff in office and staff remote. Yes, we too have a hybrid workforce. We can work from any location via remote workers connected to our home base. We can add satellite offices when it makes sense. I don’t see demand for newly built tall urban glazed aluminum facade work coming back any time soon. I see many other building types and categories still being designed and constructed but they have different looks, types, layouts, and are financed in different ways than prior. I see re-glazing projects, energy retrofits, re-purposed buildings with updated cladding systems. I see brick, metal studs, rain screen systems, foundation walls, roofing and elevated horizontal decks and surfaces. I see buildings in need of repair. I see nothing but opportunity ahead in working to solve bigger problems for owners, who have investments in buildings and properties. Buildings that are important assets to their owners and important places of protection to those working or being housed within the walls. But this is just the beginning. There’s so much more, and we place no limits on what the future may look like in the type of work we do.

The phrase “if you build it, they will come,” has been reverberating in my mind as I’ve been writing this and stewarding the process. That may be true in the Field of Dreams, but it’s not completely true in business. We can build it, and people won’t come if they don’t know about it. We need to tell people about it. We need create visibility and awareness. Creating, or supporting this, is what marketing is all about. In addition, we need to do business development, building relationships with people that make decisions, have needs to fulfill and problems to solve. We need to tell the story, to write about it, to let the world know that we’ve built it, and are continuing to build it. Then they will come. Once they do, excellence, care, solving their problems, will keep them coming, staying, working together.

So, welcome to the new Wheaton & Sprague Engineering, AKA Wheaton Sprague Building Envelope and affiliates. Welcome to our new, 30 year old business. We are all about buildings, building enclosures, buildings in all categories. The best is yet to come

With God all things are possible.