Updated: Nov 14, 2022
"The competitive environment in the mid 21st century is radically different than it was previously. It is more connected; it is more fluid; it is more dynamic."
-Jay Scanlan, Genpact's Head of Global Growth Ecosystems
When we talk about what the future holds for our respective industries, we have certain advancements closely associated with what the 21st century represents. For many, it means major technological innovation that has increased the speed at which we communicate, process information, and compete for the world's attention. Local is now global, significantly impacting how businesses plan for and manage sustainability and economic growth.
What does this more connected, fluid, and dynamic world mean for Environmental Consulting firms? Just like businesses in any industry, it can mean the difference between survival and extinction. However, this industry has a massive lack of development in various key areas that create more challenges for those trying to avoid the cannibalization already occurring.
Here I will outline three of those areas which are most important. First, the 21st century has seen the fastest advancements in digital technologies in history, so much so that it could be considered the "fourth industrial revolution." Second, artificial intelligence, which could be under digital advancements but is so important that it deserves its dedicated section. In a competitive landscape of over 60,000 registered environmental consultants in the United States alone, the disruptive innovation bringing about new technologies is difficult but essential for sustainability. Finally, a more abstract concept perception. As technology changes, so do people, which is why perception is so crucial for the survival of any business. The transformation society underwent in just the last decade is astounding, but this is causing disruptions throughout the world of business and challenging companies to change old habits to stay relevant, essential, and profitable.
What are Disruptions?
"For some legacy companies, operating in such a fast-paced, ever-evolving environment is a challenge, even uncomfortable. But in comparison to the alternative, corporate extinction, evolving an organization's business model and ways of working seems like the clear winning choice", writes Jay Scanlan. If we look at history and the advancements made since humans have been scribing important events, we can see that disruption is only getting faster. Simultaneously, what took ancient empires thousands of years, then later civilizations centuries, now takes less than a decade.
Looking at the last five years and the upcoming five years, we see new technologies and skills are needed to accommodate these advancements and disruptions. Living through the covid 19 pandemic, we had to adapt quickly to everything already in the change process. This has led to industry disruption throughout all markets. As a result, the survival of firms in the environmental consulting industry will need to develop new strategies to connect, predict, and adjust to their client's needs quickly to stay ahead of the latest disruption.
Understanding that the 21st century is the fourth industrial revolution or The Digital Age, we can expect new disruptive innovations and technological advancements that we have never seen before. Like the 'Industrial Age' disrupted the world and had us looking at new ways of developing business, this new 'Digital Age' will do the same. As for AEC firms, they will need to establish innovation strategies for using digital technology. New digital technology will allow the company to be more proactive and less reactive in day-to-day business decisions, enabling employees to be more empowered to service clients and apply their knowledge and strengths to every situation.
Some firms try to create digital opportunities with new technology but only use it for fringe solutions. Instead, your environmental firm should focus on digitizing core services. Leadership in the environmental industry has noted that many E.C. firms lack direct expert help from internal I.T. solutions, often choosing to outsource this service. It may seem like a good solution, but the need for technological infrastructure can leave the firm unable to maneuver through the digital space quickly. With an expert on your side to help sift through the thousands of digital services, you'll be able to choose the right ones for your E.C. firm instead of relying on some company just trying to sell you something. Speaking of tech., admin, accounting, and management software is also drastically falling behind and will need updates and possibly new software, for which your new I.T. will provide guidance.
Lastly, new digital innovation creates more opportunities for better internal communication. For example, the days of siloed departments are over, and technology will be the best path to reach communication enlightenment. More importantly, if E.C. firms can break away from organizational silos, the E.C. industry can work toward becoming a more client-focused organization that can act more instinctively.
As mentioned before, A.I. is in a class all its own when we stop to think about disruptors. Machine learning and A.I. are reasonably new to significant markets; however, that doesn't mean environmental consulting firms shouldn't look at what areas within their business can use artificial intelligence and machine learning. A.I. is already making appearances in other related fields, which means that an environmental firm would be naïve to overlook any reasonable opportunity to use it. Another insight from Scanlan,
"As its name implies, A.I. is sophisticated, machine-driven cognitive judgment, where machines are interpreting, understanding, and responding to the world around it, given a source of inputs and derived set of rules."
Furthermore, suppose the E.C. industry needs to adapt to this significant disruptive technology shift. In that case, we could start seeing BIG Tech enter the space and consume market share with its ever-growing appetite. Areas involving repetitive tasks or system-based technology are vulnerable. For example, aFor example, a consulting firm offering one of those services could be at risk of consumption because they were unwilling to embrace innovation. On the other hand, if E.C. companies find a way to incorporate A.I. into their work, this will create faster and more client-focused systems, which can be leveraged to increase competitive advantage.
Lastly, perception is one of the leading challenges E.C. firms face in the 21st century. Environmental consulting firms are valued differently than other professions (i.e., Lawyers, management consultants, etc.). A fundamental area for improvement in perception is how value is communicated to clients. Frequently the work is seen only in hours and days worked rather than the value E.C. firms bring to a project above and beyond the primary service provided. This is affected by the political climate, how regulations are perceived, the state of a specific business's external environment, and a lack of internal business management practices utilized by E.C. firms. Moreover, the general need for more self-awareness, paired with a weak understanding of clients, creates an often-confusing presentation of the environmental consulting industry.
Additionally, growth and direction can seem challenging when employees are not encouraged to behave like consultants and approach the work like a clock-in/clock-out situation. This mentality also creates a narrowed view of the industry from the practitioners themselves, leaving them too focused on their disciplines instead of seeing the larger picture and leading in new management systems and new technology. In this case, what you don't know can hurt you. The infrastructure chosen by any consulting firm will have a significant bearing on its future. An approach that creates flexibility, operational efficiency, and creativity will improve any company's competitive advantage. An internal assessment of employee and client perception can play an important role when planning for sustainability.
So, are you ready? Is your company positioned to leverage the upcoming changes, or will you be left behind? It may help to frame this question regarding your clients. What will your clients choose? Will they want a company that explores ways to provide quality and efficiency using systems and new technologies not commonly found in their industry? Or will they stick it out with a firm that insists on maintaining the status quo? Or consider your stakeholders and decision-makers. Will they embrace the change or hinder sustainability goals? As we've already discussed, society and technology innovation are occurring faster and faster every year, and if you are trying to catch up now, you may fail. People are changing because tech is changing, and how we communicate is constantly evolving. Business leaders need to make their firms more competitive by adopting innovation now, so the cannibalization of firms as it stands today will only improve.