If you're a leader of an engineering consulting firm, I'm sure you'll understand the concept - even if you've never heard of the term Jaws of Death. It has been the cause of more sleepless nights that you do not want to admit. It is ruthless, indiscriminate and challenges the long-term sustainability of many consulting firms across a range of industries.
In simple terms, the "jaws of death" are phenomena where the long-term trend of margin reduction and rising costs means that you need to sell more hours to make the same profit. The reference to the "jaws of death" comes from converging lines of decreasing margins and rising costs that reduce profitability to the point where the business is no longer viable.
Take a look at your P & L over the last 5-10 years. Are margins constant or have they been slowly eroded? Do your costs also slowly increase by a few percent every year? If so, to compensate for this, you are finding ways to reverse this trend and save your business from a very frightening prospect. The harsh reality is that it is a slow, painful and inevitable trend that many consulting firms will face. Especially when there is an element of trivialization of the services they offer.
Now for the difficult part - find solutions.
When you retrofit it into its most basic forms, the standard solution most consulting firms adapt to deal with the Jaws of Engineering Death is to follow two paths - drive efficiency in the business or develop a decoupling strategy.
Efficiency is quite simple and common. It's about reducing the cost of delivering your services. Reduce costs, reduce overheads, speed up delivery, or install low-cost engineering centers. But improving efficiency is not a sustainable long-term solution - it will only delay the inevitable. Do not take this the wrong way, efficiency factors are an essential part of any business strategy. But this path only allows you to save time.
The decoupling strategy is very different and encompasses more innovative ideas and direction. It is a matter of decoupling the hours worked from the income generated. You think of innovative products/services, optimization and training of others, new technologies and new business models as part of a decoupling strategy. The end goal is to make money when your lights are off.
And if there was a new way to hybridize these two strategies? A strategy that could change your engineering consulting firm so that it can bring about a change in coherence while generating revenue while your lights are off? The new hybrid strategy encompasses business agility and flexibility. This agile strategy redefines your resources, uses more efficient methods to supply your business, and transforms your business and economic model into a much more sustainable model.
I'm sure you've heard of Uber, Airbnb, and Freelancer. These companies have completely upset their respective industries - Uber for taxis, Airbnb for hotels and Freelancer for creative and web-based talent from the crowd. They have each transformed conventional supply channels by harnessing the enormous potential of a globally dispersed crowd, with each person working as an independent salesman with very low operating costs.