The lead story in the daily ENR e-mail gives a detailed, state-by-state breakdown of stimulus money for transportation and public works projects. http://enr.ecnext.com/coms2/article_bmfi090225StateStimulu
Archive for February, 2009
Eliza Speranza, president of CH2M Hill’s OMI division, published an interesting view on the overlap between our social and business lives as it relates to Web 2.0 sites. http://www.omi.ch2mhill.com/news/newssplash/2009/Feb/0209.html
Feeling good about the prediction in the PSMJ publication, 2009 A/E/C Firm US Market Sector Forecast, that the higher education market for AEC firms would hold steady despite the downturn and endowment losses. This after reading a February 13 article in the Boston Business Journal. (You need to be a bizjournals subscriber to read the whole thing, but you can get the gist from the first few paragraphs.)
Despite the economic challenges of the day, resulting in some delayed and canceled projects, higher ed, health care and energy still seem to be bucking the downward trend overall. With the stimulus money, public works sectors are likely to finish the year on the upswing. Other market sectors, such as single-family residential, retail, and spec office will take longer to recover.
See what all the buzz is about.
Most AEC firm leaders are realists, so they know that, despite the political rhetoric, the recently passed stimulus package is not going to make our industry’s problems go away. Nor will it solve the worldwide economic crisis.
It is going to help; even its critics would admit that if they were permitted to infuse a little honesty to go along with their strategic, partisan bashing of the move.
Hey, the stimulus package is far from perfect, and a small-government conservative is bound to despise most of this new law. At the same time, all indications are that we had to do something. And this is what we got.
To be fair, many in the Obama Administration and Congress clearly stated that the stimulus package is not a panacea. Let’s hope that AEC firms aren’t banking on the money from this bill to singularly carry them for the next couple of years, because it’s not going to happen. If a firm is on life support, the stimulus bill is not likely to save it. Firms need to keep doing all the things that made them successful in the first place — namely marketing hard (and smart), doing good work, taking care of clients, hiring and rewarding good people, being fiscally responsible, and so on.
For firms to benefit from the stimulus money, they need to be in position to do so. This means being informed about how and where the money will be spent (and most importantly, by whom). If a firm’s leadership hasn’t gotten close to the money source — for example, if it’s a transportation firm, keeping in front of their DOT contacts — they’re already facing an uphill battle because that’s what their competitors have been doing.
In PSMJ’s report, “The Obama Infrastructure Plan: A Supplement to PSMJ’s 2009 A/E/C Firm U.S. Market Sector Forecast,” American Society of Civil Engineers (ASCE) president Wayne Klotz says, “…the guys in the front of the line are going to get first money. If you’re not ready, it’s going to go to the next guy behind you. They need to know what projects are ready to move and how quickly they can get underway.”
Firms that will benefit should also keep the purpose of the package in mind. The goals are to create jobs and infuse money into the economy quickly. So projects that require manpower (i.e., jobs) and that can show immediate results are likely to get the first wave of funding. For an A/E firm, this could mean focusing on construction-phase design, design-build, or construction management type work.
Paul Meyer, executive director of ACEC-California, said in the PSMJ report: “There are projects in all kinds of stages and with that timeline, there is a lot of work that engineering companies can do. If anything, planning and design work gets more intense as you get closer to bid. And even after the bid, there are design changes, engineers are retained to conduct reviews…it’s a pretty dynamic process.”
Despite the attention paid to the “shovel-ready” requirements of the stimulus package, a second wave of infrastructure stimulus money is planned; some firms may choose to turn their attention that way. These projects may not require fast completion, but they likely will need to exhibit extraordinary value and long-range benefit. The more a firm can help a client identify and quantify the value of these projects, the better its chances of grabbing some of the stimulus bounty.
If you want to keep track of how the stimulus package is progressing, check out recovery.gov, the federal website set up to monitor the distribution and results from the stimulus package. This also brings up another point addressed in the PSMJ report — that the “unprecedented transparency” promised by the president may result in unprecedented bureaucracy. Firms should be prepared to maneuver through that minefield as well.
Many engineers, architects and other AEC technical professionals simply don’t understand how the marketing function really operates, nor do they instinctively grasp the importance of relationship building to a professional services firm. These people need the kind of insight that the following cautionary tale provides.
The managing principal of a small civil engineering firm had worked hard to cultivate his relationship with a municipal client planning a major transportation project. It was the kind of project that the firm had completed successfully before, and it was also of sufficient size to nearly carry the firm for at least a year, maybe two.
He knew the project was coming because he’d worked on a similar stretch of this state route adjacent to the project site. The need to redo the roadway was clear, and it was the only remaining stretch of this particular corridor that had not been reconstructed in recent years. This project would surely qualify for federal and state funding at some point, probably sooner rather than later.
When an old friend with the municipality contacted this principal to let him know that they were planning to pursue the project, the principal immediately began priming the pump.
He contacted relevant board members and sent a marketing package to all stakeholders to illustrate the firm’s experience and qualifications. He scheduled and delivered a presentation on the government funding mechanism that would finance the project. He later gave another presentation on the technical challenges of the project and how his firm would tackle them. Both presentations were rich in illustrations stressing key points that would drive the design process — safety and efficiency issues that the laymen decision-makers could relate to and understand.
When the community decided that it would invest a relatively small sum on a justification report/traffic report to get the ball rolling, this principal wowed the town’s leaders with yet another informative, provocative presentation. Where the two other consultants invited to present did just enough to get by, this principal threw everything he had into the presentation, differentiating his firm in the process.
The firm easily won the initial project. Now all they needed to do was impress the town with a stellar first-phase report to ensure government funding and this project – worth possibly $20 million in construction – would help this firm ride out the recession.
He handed this simple project off to his 30-plus-year senior transportation engineer, with whom he had shared his vision throughout the process, and gave explicit instructions to do an A-plus job. He monitored the report’s progress with occasional check-ins and meetings.
Before continuing, you should know that the municipality dragged its feet for a couple of weeks before committing to the initial project, making an already compressed deliverable schedule extremely tight. This did not help with the planning or review of the deliverable and gives a measure of slack to the senior engineer.
Be that as it may, when the principal initially read the project report draft, he was disappointed to find that all the added attention and extra miles that were the hallmark of his pitches to the town boards were absent. At the very moment that he rose from his desk to walk over and deliver his critique to the senior engineer, an e-mail popped into his Outlook in-box – it was the primary contact at the municipality expressing similar disappointment with the report.
The senior engineer had already submitted the report for review, as the schedule dictated. The principal’s first thought was, “All that time and effort, wasted.”
Technically accurate as it was, the report lacked the big-picture view that the town appreciated during the courting phase of the process. Ultimately, the key to unlocking state and federal money for this project was the articulation of the need to upgrade the roadway for safety and efficiency reasons. The need was acute and obvious, but you wouldn’t know it from this report.
This kind of situation is common in the AEC industry. A principal or marketing professional does all the right things to create and build a relationship, turning a target into a client. Only to have the rug pulled out from under him or her because of a sub-par technical product or surly project manager who can’t seem to understand the importance of good client relationships.
When you have to work your tail off to win a client over, and you let that client down by failing to deliver on your promises, your chances of winning them back are almost nil.
How can you prevent this from happening in your firm? The easiest way is to hire people who “get it” – who understand the importance of treating client relationships like the precious currency they are. Some call it an “ownership mentality.”
Since you can’t always find these people to fill project management or other technical roles, the other option is to clearly communicate with your staff how the process works and, more importantly, how it affects them. The senior engineer who delivered the report probably thought it was fine – it was technically correct, free of major formatting or grammatical errors and contained enough evidence scattered throughout its pages to provide the town with the justification it needed for the project.
What the engineer failed to comprehend was that the report didn’t tell a story – a compelling story that would win its readers over, making a convincing case that this project was a priority among priorities. The report also wasn’t visually impressive; it was, in fact, drab. It failed in all the ways that the principal’s earlier presentations succeeded.
Technically, it was right on the money. Even the client said so, as disappointed as he was with the product. But the disparity between the principal’s impressive display of technical and political insight and the bland, basic report could leave the town’s leaders with the mistaken belief that this firm is all flash and no camera.
As a result, this critical anchor project that the principal could almost taste is now likely lost. Sure, he subsequently worked with the senior engineer to revise the report and resubmit it with some of the flair and punch the first submittal lacked. And he can try to pull the project out of the fire by re-injecting himself into the process (to the extent his busy schedule allows). But to this particular client, the memory of being let down is likely to linger into the next phase as the town decides who gets to design the major project.
You may think your people realize how much work goes into building a client relationship or how easy it is to destroy that good will; it seems so obvious to you. Can’t they see that every AEC firm relies on this kind of relationship marketing to get the work the technical staff performs? As this principal found out the hard way, that’s an assumption you can’t afford to make.
AEC Insight recognizes that we have a burr under our saddle about Sean Hannity and Fox News (not to mention a tendency to use archaic phrases), and that we should make a point not to watch, however accidentally we do. The problem is that some otherwise intelligent people appear to be shaping their opinions about politics, our country and our world based on the so-called “news” presented on Fox News.
Case in point: Last night, for the third straight time we’ve happened to see him speaking, Hannity derided the stimulus bill by making specific reference to a frisbee golf park that our hard-earned taxpayer money would build. Greta Van Susteren, ever the diligent “journalist,” failed to press him for an explanation. So if all you did was watch Fox News, you might believe that the $800-plus-billion stimulus bill is weighed down with billions of dollars specifically targeted for frivolous activities such as frisbee golf.
Were we sitting where Greta was, we’d have asked good ol’ Sean, “So you’re saying that the stimulus bill specifically earmarks funds for a frisbee golf park?” Sean, never one to miss the opportunity to, um, stretch the truth as a means to his ideological end, would almost certainly insist that, yes, the stimulus bill contains a provision for a frisbee golf park. He might even know that this infamous park would be built in Austin, Texas.
We’d then say, “But Sean…we read all 647 pages of the House version of the bill and searched all 778 pages of the Senate version and we didn’t find a single word about frisbee golf. In fact, we read that funds from the bill could not be used for any type of golf course. So what the heck are you talking about, Sean me boy?”
We imagine he’d refer to the Wall Street Journal article discussing the fact that the U.S. Council of Mayors submitted 18,750 “shovel-ready” projects and that among these projects were some of dubious value to the stimulus effort. For example, a request by the City of Austin for $886,000 to build a 36-hole disc golf course…with no guarantee that it would be funded, we might add.
So all the huffing and bloviating by Hannity about the “pork-laden” bill amounts to one request by one city for an amount that is approximately 1/10,000th of 1% of the total stimulus bill. And that’s all he can talk about?
If you want to debate whether people who don’t pay taxes should receive a tax break, we could certainly get on board for that. More to the point, we’d question why a stimulus bill focused on infrastructure would cut nearly $20 billion for school construction projects, as the Senate has done with its version of the bill. But then we clearly don’t love our country as much as Sean does.
Okay then…with that off our chests, let’s see what happens today with the Senate vote, where we expect narrow passage. Then begins the battle to rectify the House and Senate versions.
Reading the intro to the ACEC article I see the interview was conducted prior to the election. I was thinking that Obama sounded like he was still campaigning — turns out he was.
Interesting interview with the President by ACEC in its Engineering, Inc. magazine. On a quick scan, I didn’t see much new in terms of his positions and priorities, but it’s good to see him reinforce his concern about issues important to the industry.
Looks like Collins, Snowe and possibly Spector crossed over to support the stimulus bill. The Republicans are conceding that it’s a done deal, so now I believe it is.
The tactics of the hard-line conservative talking heads continue to disgust. Tonight I found myself yet again hearing someone on Fox News say something provocative in a definitive way — in this case, that the CBO is projecting a decrease in GDP over the next three years if the stimulus package passes — then going to the source and finding out that the exact opposite is true.
Having an opposing viewpoint is one thing — we actually need that as a country. But so-called “pundits” on both sides who distort the truth to support their rigid ideology and influence people who may not have the time or interest to investigate the facts are the bottom of the barrel.
Having slammed Fox News above, and in the interest of balanced critique, I’ll refer you to my friend and former colleague John Kreiss, who is aghast at Rep. Barney Frank’s views on limiting CEO pay for companies that are not part of the bailout.
While the GOP clearly sees this stimulus debate as an opportunity to paint the new administration as another incarnation of the same old tax-and-spend Democrats, it seems apparent that the Republicans weren’t really given a seat at the table when the House and Senate formulated their packages.
Personally, and for the sake of the AEC industry, I would have liked to see more Republican influence in the final package. Forget the rhetoric about ultimate frisbee parks and state government bureaucracy run amok; the problem is that the bill is laden with too many provisions that might be worthy, but that don’t belong in an economic stimulus bill (e.g., distance learning programs, child nutrition assistance). There should be more for infrastructure, in lieu of these pet projects.
If the bill does pass this weekend or early next week, as expected, at least we’ll finally know what we’re dealing with. In the March issue of PSMJ newsletter, I’ll address what the final package means to the industry and how, if at all, the result is different from the expectations included in my report published last month by PSMJ.