New Location for Blog

I've moved the AEC Insight blog to a new address. www.aecinsight.com. Please check it out (and reset any feeds, if you will.)

I'm still working on coordinating my own feeds.

Thanks
Jerry

"Selection Success!" should have a spot in your AEC firm library

"Selection Success!" by Lori Stanley and Hilari Weinstein, is a thorough primer on the science and art of winning a qualifications-based selection (QBS) process. As with many of the "how-to" books you'll find in our industry, the book offers its highest value to the novice, walking the reader through the fundamentals of submitting a statement of qualifications (SOQ), preparing and delivering a presentation, and shining in the interview. Yet, it also provides sparks of ideas and inspiration for even AEC firm veterans.

The authors, as expected, are industry veterans themselves. Stanley spent nearly two decades in the contracts administration section for the City of Phoenix prior to beginning her own consulting company, Selection Solutions Consulting. Weinstein, the principal of High Impact Consulting, is a speaking and presentation coach who writes for Southwest Construction magazine and serves on the American Council of Engineering Companies' Leadership in Engineering Administration Program.

Writing in "Selection Success!" is crisp, clean and to the point. The authors also provide a useful notes section at the end of each chapter.

The book delivers solid advice on the go/no-go process...in particular, discouraging firms from submitting when they aren't qualified to do so. It also offers excellent recommendations on how to develop a winning SOQ. A highlight in this section is the suggestion to use matrices to illustrate qualifications, both project and personnel, in the SOQ text.

A few things that may have added to the value in these areas -- a more in-depth look at how different industry firms arrive at go/no-go decisions and a discussion of the distinction between requests for qualifications and requests for proposals.

The chapters on visual aids, rehearsing and presentation delivery are the sweet spot of "Selection Success!" In these three chapters, the authors' true expertise comes out. Stanley and Weinstein impart concrete tips, in rapid fire, that range from the simple things we know but often forget to time-tested secrets of the speaking/presenting trade (e.g., control the audience's gaze, keep an open stance).

I also like the way the book spends considerable time discussing the need to rehearse for presentations, debunking the usual excuses that team members consistently employ -- excuses many of us have used.

A personal presentation pet peeve that isn't addressed head-on in "Selection Success!" is the tendency of firms to rely on technological tools over strong content in presentations. I'm reminded of a recent municipal project in which the owner brought in all six applicants to present. The winning firm was the only one that didn't use PowerPoint slides.

But that is nitpicking. "Selection Success!" should be in the libraries of most AEC firms, bottom line. You can find it on amazon.com and barnesandnoble.com. Published by Mill City Press, it is also available at www.selectionsuccess.com and lists for $44.95.

AEBL Summer Symposium Offers Leadership Tips, Great Value, Beautiful Locale

The Association of A/E Business Leaders (AEBL) is offering a deal for AEC industry managers that sounds almost too good to be true. The group's two-day 2009 Summer Leadership Symposium features a quintet of heavy hitters in the leadership coaching arena at the picturesque Inn on the Lake in Canandaigua, N.Y., with a member registration fee of just $375 ($425 for non-AEBL-members).

The symposium takes place August 24-25.

The faculty features John Zumwalt, the CEO of ENR Top 30 firm PBS&J; John Engels, president of Leadership Coaching, Inc.; Sherri McCardle and Jim Ramerman, co-authors of "Why Dogs Wag Their Tails"; and Michael Lillibridge, a nationally renowned psychologist. (Program summary below.)

AEBL Board Member Wayne Wegman, P.E., president of Passero Associates, says, "The quality faculty and low cost are what set this event apart. These are leadership consultants that work all over the world, making as much as $400 or $500 an hour, and our attendees will get a half-day from each, over the course of two days, as well as dinner at a very good restaurant and a cocktail hour, for $375. The value is outstanding."

The venue is impressive as well. The Inn on the Lake is a full-service resort in the heart of the Finger Lakes. The discount rate for conference attendees is $169 per room, per night (plus tax).

Wegman adds, "It's also going to be a great place to network. On Monday evening, the 24th, we'll have the session leaders and all the conference attendees meet to network, ask questions and learn more about their best practices."

Another plus for attendees is that AEBL is intentionally keeping the event relatively small, with only a limited number of spaces available. The goal is to ensure that all attendees get sufficient attention and opportunity to network, learn and ask questions.

For more information, go to the Summer Symposium page on the AEBL Web Site.

The sessions:

Running a successful business in tough economic times
Sherri McCardle and Jim Ramerman – Co-Authors of “Why Dogs Wag Their Tails”

Developing Leaders
John Engels – President of Leadership Coaching

Leaderships
John B. Zumwalt, III, PE – CEO of PBS&J Corporation

People Map Training
E. Michael Lillibridge, Ph.D., Nationally recognized Psychologist

Lunch and cocktail reception/dinner included on Monday – breakfast/lunch included Tuesday

What To Do With Client Survey Results

Following up on the July 8 blog, "More on Client Surveys," here is a recent e-mail exchange I had with an AEC-firm marketing professional:

LaTonya Whitaker of consulting engineering firm Hankins and Anderson wrote: "I was recently reading your blog post, 'Do You Really Know What Your Clients Think of You' and was wondering what your thoughts were on what to do with the actual survey data. How do you formulate the appropriate messages to your clients based on their responses?"

Here was my reply (omitting the introductory niceties, thank yous, etc., but adding an additional thought in brackets):

In most of the surveys I’ve done for AEC firm clients, there are two levels of external response. The first is to provide a general overview of the survey results to everyone who participated. This response is usually a one- to four-page summary of the results, very basic and highlighting the key points. Sometimes we will send this to everyone the client targeted for the survey, not just those who participated, to maximize the marketing benefit. (And sometimes, it’s a two-page summary to participants and one-page overview letter to everyone else…you get the idea.)

You want to be honest in these summaries, addressing the good and not-so-good results, but you want to do it with as positive a spin as possible. For example, if the results for “communications,” were not as impressive as you’d like, note this in the summary, but also mention that the firm recently established a new response policy to ensure improved communications. Obviously, if you hear something seriously negative about the firm or someone in it, you don’t want to explicitly share that in this overview summary.

Depending on the results, we may also do a press release, newsletter article or magazine article pitch. This data is often great for repackaging in your marketing program.

The second level of response addresses specific issues identified by specific clients. If one of the respondents (assuming it’s an open survey, not a blinded one) said that the project manager on their last job did not keep them adequately apprised of the job’s progress, the PIC or firm president should contact that client directly, apologize/get more information, and tell the client what steps the firm is taking to correct the issue.

You’ll also want to address the results internally, usually with one or two meetings. This can be company-wide, principals-only, or (preferably) both. We always include recommendations in our surveys. This would be the venue to discuss those recommendations and implement the ones that make sense. There’s nothing more frustrating for us than to find out that the survey work we did was set aside and never addressed.

[I recall a survey we did several years ago for an engineering firm, during which some of our client's clients said they loved the work that this firm did, but were dissatisfied with their landscape architecture providers. This inspired our client to buy a landscape architecture firm they knew and liked, which allowed them to capture an entirely new revenue stream with many of their existing, satisfied clients.]

Your question is a good one and it speaks to why client surveys are such a valuable tool (especially when they’re done correctly). It offers several opportunities to make contact with clients and prospects, while helping the firm improve external and internal operations.

The bottom line is, do something with the results and use common sense in how you disseminate the information.

Have any readers had different experiences or do you have additional advice?

More on Client Surveys

Despite what the critics say, client surveys can be a valuable tool for AEC firms.

I recently read an article in which the author argues that customer surveys are "worse than worthless." Using provocative, inflammatory language to deride the practice, this marketing professional lumps all customer surveys into the same waste pile and proceeds to throw lit matches on the concept, point by point.

It's a straw man argument, however, because the bulk of the article stresses the value of communicating frequently and openly with clients. As the author surely understands, a well-conceived, well-executed client survey -- even in this age of Twitter and LinkedIn -- is still one worthwhile option in the marketer's repertoire of client communication tools.

I offered my take on the subject in a blog post from April: http://aecinsight.blogspot.com/2009_04_01_archive.html

Sure, some client surveys are worthless. Mindless and stale multiple-choice response cards that fail to ask probing questions, for one. Or surveys of any kind that don't provide the survey subject the opportunity to offer constructive criticism.

But don’t believe those who say that all client surveys are worthless simply because there are new ways to communicate with clients. Typically, these critics are attempting to push their own agenda as consultants or seeking to get a rise from the audience. But if you do use client surveys as a marketing and/or performance improvement tool, remember these points:

Be as personal as possible. This means to do it by phone or even in person, if practical. Most AEC firms or branch offices have manageable enough client (and prospective client) lists that they can hit a significant portion of their potential client universe using the personal touch.

Maximize the opportunity. Use the survey as a way to contact the target clients and prospects as many times as possible by adding introduction letters, thank you letters, and results summaries to the process. Also, don’t forget to publicize any results that reflect well on the firm and could be of media interest.

Make it as painless as possible for the subject, without giving the process short shrift. Be extremely accommodating in scheduling the interview for the subject's convenience. Limit the amount of time you require from the subject to about 10 minutes (though some will voluntarily give you more). Minimize or exclude onerous quantitative survey questions (e.g., “on a scale of 1-10, with 10 being best, please rate our firm in the following 32 areas").

Do something with the results. Too often, firms spend the time to conduct a client survey, then do little or nothing with the results. (I will address this issue in a follow-up article soon.)

Jerry Guerra

AEBL Interview with TAYLOR CEO Randy Regier

At www.aebl.org, Randy Regier discusses his firm's business approach and AEBL's value.

An excerpt:

AEBL: What differentiates Taylor from the competition?

RR: One thing that differentiates us is our culture. It has a lot to do with our mission – “promoting wellness through architecture.” The people in this firm really get behind that. In health care, you can see how your work really changes people’s lives. Everybody here rallies around that as a benefit on a much bigger scale. The work we do can make the difference between someone going home in four days or six days. They can recover faster in an environment more conducive to healing. Perhaps more important, we are in the position to be able to create environments for wellness rather than just environments for curing sickness.

AEBL: How does AEBL fit into the picture for TAYLOR?

RR: The great benefit of AEBL is that it’s a non-competitive place where the barriers are let down. At the CEO Roundtables, every person who attends comes in with an open mind and a willingness to assist a colleague, even if they’re technically a competitor. It’s a benefit to the industry as a whole and it makes the industry better. If you hoard your ideas and your experiences, that does nothing for the industry. With AEBL, everyone is trying to make a collectively better industry. You don’t necessarily get that in some other organizations, where it can be more competitive. AEBL is neutral territory. It’s like Switzerland.

AEBL: What has AEBL meant to you in your career?

RR: As a newly minted CEO, being able to attend those CEO roundtables gave me the confidence to come back to my own organization and speak and lead with confidence. That was about five years ago, and though I may have eventually gotten there on my own, being able to sit side-by-side with CEOs that had been doing it for anywhere from five to forty years was invaluable. I can’t say enough about how beneficial that was for me. I gained way more insight into the role and it helped me formulate my vision and ideas. It gave me the conviction to know that maybe my ideas weren’t so batty after all.

P3s for the AEC Industry

I'm working on a book on public-private partnerships for PSMJ. Here's an excerpt from an article on the topic to appear in the PSMJ newsletter next issue:

California Governor Arnold Schwarzenegger is a proponent of P3s, having passed legislation that facilitates their use. In April 2009, Schwarzenegger announced a $32 million public-private partnership designed to reduce the health care worker shortage in the state. And in November 2008, he trumpeted a public-private partnership between the State of California and the Northern Sierra Partnership to fund environmental preservation while supporting economic growth. For the latter project, advocates raised $25 million in private funds.

These projects are notable for many reasons, not the least of which is the fact that they are a departure from the types of project that many people think of when P3s are mentioned – namely, toll roads or public works infrastructure.

The New York State Commission on Asset Maximization (NYSAM) (Albany, NY) wrote in December 2008, “Over the past decade, we have seen rapid advances in infrastructure, technology, and renewable energy development across the United Kingdom, Europe, Canada, and China due to innovative arrangements with the private sector that have helped deliver projects with greater speed, efficiency, and reduced costs. Alternative approaches have been used to deliver all forms of infrastructure, including non-revenue producing assets.”

P3 Opportunities and Risks

NYSAM was established by Governor David A. Paterson and charged with broadly examining whether asset maximization can benefit New York State, as well as whether any specific New York State assets are suitable candidates for public-private partnerships.

In its December preliminary report to the governor, NYSAM wrote, “A key goal of asset maximization involves the reallocation of risk from the public sector to the private sector. This shift incentivizes the private sector to pursue design, construction and management strategies that will increase efficiency. Additionally, it insures public entities from incurring additional unforeseen costs. At its most effective, it also protects public entities from incurring unforeseen and incremental costs.”

This shift of risk, which is a factor that makes P3s attractive to the public sector perhaps as much or more than for funding reasons, was the topic of a Design Professional Roundtable hosted by Donovan Hatem, LLP (Boston, MA). David Hatem, an attorney well-known for his expertise in A/E matters, predicts, “Interest in (P3) projects at the local, state and federal levels will continue and substantially increase in the next few years and continue strongly into the next decade.”

In his April 23 presentation, entitled “Public-Private Partnerships: Opportunities and Risks,” Hatem noted that private firms participating in P3s may find themselves on unfamiliar legal ground. “Risks not typically dealt with by private entities may be transferred to them in a P3. Some of this is not insurable risk.”

I'd be interested to hear your thoughts on P3s for the AEC industry. If you want to know more about the P3 book or the PSMJ newsletter, contact them at http://www.psmj.com/.
jag

Client Surveys: Do You Really Know What Your Clients Think of You?

As part of a research project last year, I interviewed a major developer client of one of my clients. The questions I asked were general -- essentially, "How do you feel about your architecture and engineering consultants in the following categories?" (The final product was a "report card" on A/E industry service.)

This developer told me that he was completely dissatisfied with the service he received from his architecture and engineering consultants. In particular, he was unhappy about how often their fee estimates ballooned with additional services and overruns. He told me that he had changed consultants before because of this problem and that he was thinking seriously about doing it again.

Wow!

The loss of this developer would have been a major blow to my client. But because this interview was confidential -- not to mention part of a project for another client -- I couldn't really come out and tell my client what I'd heard. I have managed to nudge my client toward rectifying the issues the developer has with them without breaking my pledge of anonymity. I also encouraged my client to open a dialogue with the developer about their performance. For now anyway, the relationship is salvaged. (We'll see what happens when development picks up again, however.)

This incident reinforced to me the tremendous value of client relationship surveys. In my days with a major management consulting firm for the A/E industry, I managed dozens of these surveys. Even when the results were largely a reassurance of what the client already knew, my clients told me it was money well spent.

Our preferred process for these surveys is to conduct them by phone. We schedule a time (but are always ready to do the survey when the contact person is) and request about 10-15 minutes of their time. We'll ask approximately 10-12 questions, making sure that these questions allow the interviewee the opportunity to provide constructive criticism in an open-ended manner. Surveys that are primarily quantitative, in my experience, are much less valuable and telling than those with qualitative data.

At their least, these surveys send a clear message to your clients that you care what they think. It also affords a firm the opportunity to make contact with clients (and in some cases, strong prospects) multiple times. In addition to the actual survey process, you can send an introductory letter, a thank you letter and even a summary of the results.

At their best, these surveys can provide information worth many times their cost. I remember a case where one of my client's largest customers was a Fortune 50 manufacturing company. My client had a tremendous relationship with the corporate office and worked all around the country for this manufacturer. As it happened, on the day I interviewed the manufacturing company's contact person, he had received word that the company's leadership had decided to begin decentralizing much of their construction project duties. As you might expect, this news resulted in a radical change in how my client now needed to market this company.

(I called my contact the second I hung up the phone, of course. I don't think he would have been too happy to find that gem buried in the report two or three weeks later.)

Sure, it was a coincidence that we happened to be in the right place at the right time for our client. But it was also an illustration of how important it is to be in constant touch with your clients -- especially your best clients -- and to continually ask them about their satisfaction with your services. In this case, a client survey costing a few thousand dollars probably saved my client millions.

A customer relationship survey can offer you many other benefits, but only if it’s done right. A third party with excellent interviewing skills should conduct the survey. The questions should be open (to allow for elaboration) and not be leading or softballs (e.g., "Did we meet or exceed your expectations?" Come on!). Much of the value from these surveys comes in the followup questions, so it's important to have someone who understands your business asking the questions. At the same time, if it's someone within the firm -- especially the client's primary contact -- the survey process can be strained and/or bog down. (The primary contact should be talking with the client informally all the time, anyway.)

Surveys can be anonymous, which ostensibly leads to more candid feedback, or completely open. I prefer the latter because the value of knowing who said what usually far outweighs the supposed "openness" benefits of a cloaked survey. Most of the time, interviewees tell me that they prefer to have their comments attributed to them.

Here are a few more benefits of client surveys:

Reassurance. For most good companies, positive feedback usually outweighs the negative in a customer relationship survey. And while everyone loves a pat on the back, there is also measurable value in this type of feedback. A well-designed customer relationship survey can provide you with needed reassurance that most of your customers think you're doing a good job. You can then take that information and concentrate on making sure you keep doing the things your customers like, and you can spread the word internally to help keep up morale. This is particularly important in these economic times.

Inside information. By surveying your customers you can find out about unannounced projects or opportunities, trends in their industry, and actual leads on new work. During a survey I did for an engineering firm, I interviewed a manager who had just been hired by an organization my client coveted as a customer. This manager felt stuck with the board's choice of consultants and told me, “If your client can do anything to help me get rid of my current engineering consultant, I’d be indebted to them for life." As soon as I hung up the phone, I called my client and relayed the manager's comment. My client said, “That information just paid for this whole survey.” Surveys aren’t always this fruitful, but you’ll usually get some leads if you ask the right questions the right way.

Marketing goodwill. Believe it or not, people like to be asked about what they do. Think about it. People spend day after day, year after year at their jobs, but unless they're celebrities, they're very rarely asked to talk about what they do. I’ve never conducted a client survey of any size that didn’t include at least one interviewee saying something like, “Tell them I think it’s great that they’re doing this.”

If you want to learn more, e-mail me at info@jagg-group.com.

Bridge Engineer Craig Finley offers his Perspective to Aspire magazine

Craig Finley, the founder and managing principal of Finley Engineering Group, Inc. (FINLEY) is the featured columnist in the Perspectives section of Aspire magazine's Spring issue. Published by the Precast/Prestressed Concrete Institute (PCI), Aspire is the organization's bridge-focused magazine.

In his column, the widely published Finley ties the concept of sustainability to efficiency in bridge design and construction. Quoting a long-time goal of the American Segmental Bridge Institute (ASBI), Finley writes that sustainability's interests are served when the project team "gets in, gets out, and stays out." Read more at:

http://www.aspirebridge.org/pdfs/magazine/issue_10/perspective_horsley_spr09.pdf

Design Consultants, Inc. cover story in MassBuilder on Low-Impact Development

Read it here from the 4Q issue of MassBuilder Magazine.

Rich Friedman talks branding at A/E Advisors CEO Roundtable

Posing the question, "What's so special about your company?", marketing strategy consultant Richard Friedman challenged the assembled AEC firm leaders to consider how their firms were truly different from competitors during a session at the recent A/E Advisors CEO Roundtable in Scottsdale, Arizona.

The key point in Friedman's session is that every firm differentiator needs to pass the "So what?" litmus test -- as in, if you recite the reasons your firm is better and the client thinks or says, "So What? How does that help me?", your "differentiator" really isn't one.

That came clear when Friedman asked the CEOs in the smaller-firm session (150 or fewer employees) what differentiated them from the competition. Many of the answers were the same as their competitors may have offered -- great client service, responsiveness, repeat clientele, and so on. While these factors are important, Friedman noted, they are not true differentiators. Consider the comment about repeat clientele; since an estimated 80% of all AEC projects are for repeat clients, the satisfied customer angle doesn't hold much water as a differentiator.

A few firms did have true differentiators. For example, an engineering firm CEO whose company focuses exclusively on airports explained that a high percentage of people in his firm -- himself included -- fly planes. So they are not only consultants to airports on runways and facilities, they are primary users!

Friedman cautioned that many firms seeking to communicate a differentiator will mistakenly focus on features of their firm (e.g., size, location, client satisfaction rate), rather than on the benefits they can provide to the customer (e.g., innovative project delivery, streamlined communications, specialized expertise).

A number of participants suggested that client surveys are a great way to learn how customers perceive your firm's differentiators. A client survey can help a firm identify its "brand" as defined by customers and peers. The consensus was that this approach is most effective and efficient done over the phone by a third party interviewer.

Another technique that the CEOs liked was the strategy of debriefing a prospect after winning a project, not only after losing one. When you've won the project, the environment is likely to be much less tense and more amicable than when you've lost. You can find out not only what you did well and where you could improve, but also how your competition did in those areas.

Among the action plan items to come out of the session were:

• Recognize that your project delivery process can be a very compelling differentiator in a crowded playing field (e.g., how they communicate with clients, continually asking how they're doing).


• Brainstorm your firm’s differentiators and value provided (in the context of the client’s needs) before every proposal.


• Structure your marketing and business development plans and implementation around client sectors, if possible.

Rich Friedman is managing principal of Friedman & Partners, a marketing and management consulting firm based in Massachusetts. The firm's web site is http://www.friedmanpartners.com/.

HR Consultant Barbara Irwin Launches a New Generation of Leaders at A/E Advisors CEO Roundtable

Should the primary attribute of a prospective A/E firm CEO be an aversion to the job? That was one participant’s half-joking observation when HR Consultant Barbara Irwin asked participants to list the qualities an A/E firm CEO should possess.

"The first thing I look for (in a future leader) is someone who doesn't want the job," said the CEO of a large, growing engineering firm in the Midwest. "If they want it too much, they're probably not right for the job."

That moment of levity occurred during Irwin’s session, “The Leadership Pipeline: Launching a New Generation of Leaders,” at the A/E Advisors CEO Roundtable in Scottsdale, Arizona, last week.

Irwin began the 90-minute open discussion by noting that firms needing money can borrow from a bank, but firms with a leadership void face a much more difficult challenge. This is why it is critical for the current upper management group to continually identify and groom the next generation of leaders.

The president of a West Coast firm said he expects his firm’s next generation of top managers to have the same traits he had when he was tapped as a future leader – “a moral compass, strong work ethic, and if something needs to be done, they do it. If I don’t feel these things are there, I won’t recommend them.”

Other qualities identified by the CEOs, all of whom were from firms with more than 150 employees, included:

· Vision
· Problem-solving ability
· Flexibility
· People skills, both internal and external
· Loyalty to the firm’s core principles
· Capacity to learn
· Drive

An East Coast CEO noted that creating a list of desired attributes for the next generation of leaders is a good way to thin the herd and move the transition process forward. “If you look at this list, you can consolidate the pool of candidates to a relatively small group. You can then spend time with the ones you’ve chosen and show them the business.”

The same CEO added that he sees value in letting the candidates know that they are in competition for the top job. “It’s a horse race and they’ve got to run.”

Irwin wrapped up the session with several action items proposed by the group. They included:

· Identify traits for different leaders at different levels within the firm.
· Develop a training program
· Assign individuals to sit on committees and boards.

Irwin led a similar session for CEOs from smaller firms (fewer than 150 employees) on the first day of the three-day conference at the Westin Kierland Resort in Scottsdale.

A long-time HR executive with A/E firms prior to forming her own company, Irwin is the president of HR Advisors Group, LLC. For more information about HR Advisors Group, A/E Advisors, or the CEO Roundtable, visit http://www.aeadvisors.com/.

A/E Advisors Keynote a Huge Hit

A/E Advisors CEO Roundtable keynote speaker Herb Meyer presented a fascinating, if sometimes chilling outlook on world economics and politics at the group’s three-day summit in Scottsdale, Arizona. Meyer, a former high-level U.S. intelligence official, is a frequent guest of television talk shows and the author of the book Real-World Intelligence.

Demographics played a large role in Meyer’s worldview; he explained that a birth rate of 2.1 is necessary to maintain consistent human population and that many countries are well below that level. Specifically, he offered statistical evidence that large, industrialized countries in Europe and Asia are “on a downward spiral” because their birth rates aren’t sufficient to sustain their economic standing in an increasingly aging society. For example, Meyer said, India will soon outdistance China in terms of economic power and influence because China’s birth rate is unable to keep pace with the population growth necessary to continue moving ahead.

Meyer also compared the conflict between radical Islam and modern Western Civilization as a “clash of competing operating systems.” He added that people could debate whether the Iraq War was executed properly and/or worth the expense, but that it is ultimately a “spectacular success” because it created a democratic state in the Middle East. He was less encouraged about the situation in Afghanistan, where the Taliban has regained power, and somewhat horrified by recent events in Pakistan, where the Taliban is attempting to wrest control from a government that possesses nuclear weapons.

The connection between Meyer’s assessment of the geopolitical landscape and the challenges facing the A/E business leaders in the room was often thin (which was just fine with the vast majority of the audience, based on their favorable reaction to his speech). However, he did offer a bit of sage business advice relative to the world events he discussed in his speech. Most notably, Meyer said that the middle class is expanding by millions of people worldwide every year and, to meet the needs of this explosion of consumers, companies that can create products and services that are “clever, inexpensive, and green” will take the lead.

Meyer’s keynote was the highlight of a three-day CEO summit sponsored by leading A/E industry consultants, A/E Advisors. The program featured a day dedicated exclusively to CEOs of firms with fewer than 150 employees, a day dedicated exclusively to firms with more than 150 employees, and a middle day where both groups came together to share their thoughts, ideas, and war stories as the industry tries to survive the current economic downturn.

Structural engineer Charles Thornton provided the other keynote presentation, advocating for the use of building information modeling (BIM) as well as for the ACE mentor program that exposes inner-city high school students to the A/E profession. Thornton, a co-founder of Thornton Tomasetti Engineers in New York City, also founded the ACE program.

Highlights from Day One of A/E Advisors CEO Roundtable

Kathryn Sprankle's session entitled "Good Governance: What Strong Boards Should Accomplish" was one of two sessions kicking off the first day of A/E Advisors' Annual CEO Roundtable at the Westin Kierland Resort in Scottsdale, Arizona. The event, which offers design and construction firm CEOs the opportunity to meet and discuss issues unique to the top leadership spot in their firms, runs from March 10-12.

In her session, veteran A/E industry leadership consultant Sprankle led the assembled CEOs in a discussion of the qualities that define a successful board of directors. Sprankle noted that good governance means strong, clear decision-making, a feature that is lacking among many A/E firm boards. The assembled CEOs also discussed the ideal number of people on a board, the role of outside board members, and the board's primary responsibilities (e.g., holding the CEO accountable, ensuring that the strategic plan is followed).

Concurrent to Sprankle's session was strategic planning expert Ray Kogan's session, entitled "Your Firm's Future: Painting (and Selling) the Big Picture." This SRO session focused on the CEO's role in getting employees to buy into and help execute the firm's vision.

Colvin Matheson, CFM, discussed firm valuation in turbulent times. This was a wide-ranging session that included input from firms with ESOPs to those whose value is based on convoluted formulas -- one firm said their valuation formula is 20 pages long. When the discussion turned to the importance of good financial reporting software, Colvin said: "I'm a finance guy. If I see crummy information, I see risk. If I see risk, I see lower valuation." Colvin also offered a word about the importance of cash these days: "Cash is no longer king; in this economy, cash is god."

Other sessions, which we'll address in future blogs this week, were presented on project delivery, marketing/branding, and the leadership pipeline.

While Tuesday's program was exclusively for firms with fewer than 150 employees, Wednesday's program combines the smaller and larger firm CEOs. Highlights include keynotes from engineering legend Charles Thornton and intelligence expert Herb Meyer.
jag

Live Blogging from A/E Advisors CEO Roundtable

This week in Scottsdale, A/E Advisors is holding its third annual CEO Roundtable. I'll be there, chronicling the event for the management consultants of A/E Advisors.

Scheduled for discussion at the roundtable are the following topics:

• Breaking Away from the Pack: What’s So Special About Your Company?
• Exits and Entrances: Ensuring Smooth Leadership Continuity
• Good Governance: What Strong Boards Should Accomplish
• Industry Consolidation: Is the Party Over or Did the Invite List Become More Select?
• P3, DBO, IPD, Etc.: The New Alphabet Soup of Project Delivery
• The Best of Times/The Worst of Times: Firm Valuation in a Turbulent Economy
• The Leadership Pipeline: Launching a New Generation of Leaders
• Workplace of the Future: Build It and They Will Come
• Your Firm’s Future: Painting (and Selling!) the Big Picture

Plus keynote speeches from national intelligence expert Herb Meyer and Thornton Tomasetti co-founder Charles H. Thornton.

Good news on transportation funding

Announcement of $8.4b in funds from stimulus for transportation projects, a week after Obama includes Infrastructure Bank in his 2010 budget. http://www.dot.gov/affairs/dot2609.htm

Lightspeed Changes in Marketing

A couple of years ago, I wrote an article entitled "Tapping In to the Power of the Press" and sent it in newsletter format to a number of AEC firm principals. This article also served as the basis of a webinar, most recently delivered for the American Council of Engineering Companies (ACEC) last December. Next month, I'm presenting a live version of the topic at ACEC's Annual Convention in Washington.

It's amazing how much public relations has changed since I first sat down to write that article less than two years ago. Specifically, how many more opportunities there are to publicize your firm and how different those opportunities are. This is due, in great part, to the growth of networking sites such as Twitter and LinkedIn.

More than ever, if you have an interesting viewpoint that can raise your firm's profile with your target audience, you don't need to win the approval of a writer or editor for one of the industry trade magazines to get it into a reader's hands. You can "self-publish" this information in a blog or through some other online resource (on LinkedIn, say, linking it back to your web site).

You could always go directly to the audience, of course, by sending personalized letters or hard-copy newsletters. A few years back, e-mail newsletters became a trend to accomplish the goal of getting your thoughts directly to your target audience. In both these approaches, you risk having your hard work dumped in the trash without it being read.

Hard-copy trade publications are still a powerful medium through which to market an AEC firm's services...one that I believe will outlive a lot of other so-called "traditional media." The principles from the "Tapping In..." article still hold true.

But the ease with which I'm seeing firms draw attention to themselves through the "Web 2.0" phenomenon hints of a future where most of our writing, marketing, and publicizing will go straight from the writer's hard drive to the reader's computer screen with no filter and no middle man. This is revolutionary for marketing in our (and any) industry.

Granted, the current audience for material on blogs and social networks is relatively small. But it's an audience that is growing exponentially; for example, Web tracker comScore says Twitter attracted 6.1 million global visitors in January, an increase of 40%.

The attention being paid (and time being spent) on these networking sites means it's only good business sense to know as much as you can about these potential marketing tools. How else can you decide where your firm should be on the growth curve?

As for my presentation next month, any thoughts of making a few minor tweaks to the previously delivered material are gone. I updated my material to incorporate the online networking trend in the context of gaining press coverage for AEC firms. Otherwise, my presentation about tapping into the power of the press would be old news.
jag

ENR State-by-State Stimulus Fund Breakdown

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

Interesting perspective on social networking

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

Higher Ed holding strong in Mass.

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.

Testing Twitterfeed

See what all the buzz is about.

The Stimulus Package -- Reality vs. Wishful Thinking

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.

Marketing, Relationship Building and the Technical Product

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.

Fox News and Frisbee Parks

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.

The OUTRAGE!

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.

Hmmm.

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.

That explains it!

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.

ACEC Interviews Obama

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.

Couple of GOP Senators cross, so the stimulus will pass

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.

Some thoughts:

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.

Not even close to resolution on stimulus bill

The headline -- "Tentative Deal on Stimulus Bill Reached" -- couldn't be more misleading. It looks like the White House and Senate Democrats have agreed on the bill they're going to push to the Republicans in hopes of getting a bill passed before the President's Day break. From the comments I'm reading, I'd say this thing still has a long way to go.

Not so fast on the infrastructure bump

If there's going to be any more stimulus money invested in infrastructure improvements it's probably going to require cuts elsewhere. A proposal by Senate Democrats to increase funding to highways, transit, and water programs by $25 billion was shot down by Republicans who insist that any increase in spending is offset by decreases elsewhere. I'm betting they can find $25 billion to cut elsewhere. Question is, will they try?

http://news.yahoo.com/s/ap/20090203/ap_on_go_co/congress_stimulus

Maybe More for Infrastructure in Stimulus Package

As the fight over the stimulus package rages on, there's a growing movement among Senate members of both parties to boost the infrastructure portion of their version of the bill. The goal of increasing highway and Army Corps of Engineer Funds is shared, but Republicans will likely look to pare down other areas of the bill. Some Democrats agree that spending in the package needs to be reined in, while others have initially shown no such inclination.

http://news.yahoo.com/s/ap/20090203/ap_on_go_co/congress_stimulus

The House, in its final version, increased money for transit, but shortened from 180 days to 90 days the time period the departments of transportation have to obligate the money they receive.

http://enr.construction.com/policy/economic_stimulus/2009/0202-TriplingHighwayPortion.asp

Marketing in a Recession

I may get thrown out of the SMPS for saying this -- or I would if I were in the SMPS -- but I find it incredibly disingenuous for someone who sells marketing consulting services to advise their client base to increase marketing expenditures during troubled economic times. Even if they truly believe what they're saying, these people must recognize the perceived conflict of interest this raises.

It’s like they're telling you to put gas in a boat's engine when it's sinking. It's true that the boat (i.e., firm) will go nowhere without gas (i.e., marketing). But if you don't first plug the holes, there won't be a boat. And in this case, the people giving the advice own the gas station!

Most AEC firms don't have to invest more money into marketing. You may, in fact, be able to cut overall marketing expenses if you invest your firm's time and effort into more cost-effective forms of marketing. For instance:

• Publish Articles. The mainstream media may be dying, but there is still what seems an endless stream of trade and specialty publications for the AEC industry. Target a handful and try to get an article (or a few) published. It's a lot less expensive than splashy, full-color ads and, as part of the editorial content, an article carries a lot more credibility with the reader (i.e., your client base). I'll be speaking on this subject at the ACEC's Annual Convention in Washington, D.C., on April 28, 2009.

• Make Subtle Web Site Improvements. A lot of company web sites in our industry are showing their age. Yours may need an upgrade, but if money is tight, make cosmetic changes and functional improvements instead of revamping the whole site for big bucks.

• Use Your Staff's Non-Chargeable Hours. For A/E firms seeing their staff's average chargeability dropping, the choice sometimes comes down to laying people off or finding other things for them to do. If you're in position to carry some folks while you wait for the workload to pick up (if only so you don't risk losing someone good), instruct your marketing staff or a marketing-savvy co-worker to get these people involved in the marketing effort. This could mean attending networking events, writing letters to clients and targets, starting a company blog or some other Web 2.0 function, or helping with graphical or electronic marketing collateral. See what these people are good at and use it.

• Give Some Attention to Down Markets. There's not much residential building of any kind going on here in Massachusetts, but one of my engineering/survey clients is keeping the development community in his firm's marketing rotation. He just contributed the cover article to a local builder magazine, receiving several comments about it from developers. They're down now, but they won't be forever. Chances are, they'll remember my client when the market comes back.

• Pick Your Spots Carefully. It's important to get out to trade shows, conferences, and other leadership events. Unfortunately, when money is tight, some firm leaders just stop going altogether. Or, if they limit it to one or two events, they choose the wrong one or two. Before you do anything, do some research. Look at the universe of possible events and make an honest assessment of which are likely to provide the most benefit to the firm as a whole. (Or to you, professionally, because if you're a firm leader, they're one in the same…just don't go to a show in Vegas only because you love Vegas.) You may find that the friendly trade show where you see the same old faces from the same old firms isn't as valuable as a leadership event that challenges your preconceived notions and breaks you out of your comfort zone. You may determine that the "fringe" event you never considered is actually rich with potential clients. When it comes to events -- and, in fact, most methods of marketing -- doing something just because that's what you've always done is usually the wrong approach.

These are just a few ideas of many. Give it some thought, talk it over with your partners or marketing staff, and I'm sure you'll come up with a few of your own.
jag

ENR's analysis of the Senate Version of the Stimulus Bill

ENR published an article online this morning analyzing the Senate version of the stimulus bill and comparing its infrastructure spending and AEC-related tax initiatives with the House version.

But there are wide differences in allocations for other budget accounts. For example, the Senate has $1 billion for prison construction and upgrades; the House has zero. The Senate also allots $5.5 billion for cleaning up DOE’s former nuclear-weapons facilities, while the House has $500 million.

On the other hand, the House is more generous to Clean Water state revolving funds, providing $6 billion, compared with the Senate’s $4 billion. The House also recommends $3 billion for Airport Improvement Program construction grants; the Senate version contains $1.1 billion.

The largest single construction spending allocation in each bill is federal highway funding. Senate appropriators provided $27.1 billion. Of that, about $570 million is set aside for projects on American Indian reservations, federal lands and for ferry
transportation. The other $26.5 billion would be distributed to states according to the current formula for the Surface Transportation Program. STP requires 10% of the funding go for safety-related spending and another 10% for bike paths and other transportation “enhancements.”

Daily Roundup

Interesting day today on the AEC business front, made all the easier to dutifully follow here in Mass. when outside the window was snowfall, then sleet, then a cold rain.

At 10 a.m., the American Society of Civil Engineers (ASCE) officially released its 2009 Report Card on America's Infrastructure. The results were predictably bad, but the tone of the press conference had welcome measures of optimism and forward-thinking ideas.

At 1:30, I listened in on part 2 of PSMJ Resources' A/E Industry Forecast Webinar. In Part 1 yesterday, the news on private-sector markets was almost entirely bad. The only exceptions were the energy and environmental sectors. The results on public-sector markets today was a little better. Again, a bit of hope trickled through the gloom.

Later, I spoke with a client who tells me that he's dealing with frustrating delays on major public-sector projects. In thinking about it later, I wonder if the anticipation of the stimulus money isn't as much or more at fault than the crummy economy.

A few minutes ago, the House passed its (only slightly changed from the original) version of the stimulus bill. The vote was along party lines, with the exception of 11 Democrats who voted against it. Not exactly the rousing bipartisan support President Obama wanted. Next week, the Senate will take up its version. Unlike the House, the bill is unlikely to pass the Senate without at least two Republicans voting for it. This could mean significant changes in the bill -- good changes for our industry, I hope.

Busy day. Big day. Can't wait to see what's in store for tomorrow.

Follow-up -- ASCE's Report Card Webcast

The ASCE press conference on its 2009 Report Card for America's Infrastructure was well executed. It featured ASCE president Wayne Klotz, Committee Chairman Andrew Herrmann and Pennsylvania Governor Ed Rendell.

In addition to presenting the grades and adding some perspective to the needs and problems identified, the ASCE deserves credit for offering solutions that go beyond the $2.2 trillion they say we need to invest to bring our infrastructure up to good condition. This includes public-private partnerships and changing our personal behavior as it relates to using our infrastructure.

All three speakers referenced positive changes that have been made -- and that could continue to be made -- to improve specific situations. For example, Mr. Herrmann described how the solid waste issue has improved due to increased recycling and agreements with manufacturers to address concerns about landfill capacity and technical waste. This is why solid waste has the best grade of C+.

ASCE deserves an "A" for how they've handled the presentation of the 2009 Report Card thus far. Their tone wasn't threatening or entirely doom-and-gloom, but they expressed the seriousness of the situation and showed their commitment to helping improve it.

America gets a "D" from the ASCE

The American Society of Civil Engineers (ASCE) released their 2009 Report Card for American Infrastructure this morning. If we were a student and we brought home these grades, we'd surely be grounded. We might be looking at military school.

The overall grade of "D" was the same as the nation received the last time ASCE assessed the state of our infrastructure system in 2005. According to AP, the highest score is a C+ for solid waste. Only one category improved -- energy went from a D to a D+. Three areas dropped: aviation and public transit slid from D+ to D and the highway system went from D to D-.

ASCE is holding a press conference and live webcast at 10 a.m. to announce the results and give more details. As this is the kind of easy-to-get, research-free sound bite that journalists of today thrive on, expect the ASCE report card to be mentioned on every network and in every major newspaper and magazine over the next few days. Just don't expect any of them to delve too deeply into the results or provide much in the way of perspective -- U.S. media outlets don't seem to have the time or inclination to do that kind of thing anymore.

ASCE has done the industry and the country a tremendous service by drawing attention to the horrible state of our infrastructure system. Still, I hope the full report -- to be released in March -- offers some big-picture solutions that go beyond the call for insane amounts of money ($2.2 trillion now, according to AP) to be invested by government to fix the problem. If we really want to repair our infrastructure problem, it's going to take some combination of dollars and innovative thinking to get it done. This includes more public-private partnerships, more efforts to ease the burden on our infrastructure system, and more efficient use of the money that we do spend on infrastructure.

ASCE Report Card Comes Out Tomorrow!

Tomorrow (January 28), the American Society of Civil Engineers (ASCE) presents the U.S. with its infrastructure report card. Something tells me we won't be seeing our name in the paper when the honor roll is published.

The full House is expected to begin debate on the proposed infrastructure bill either today or tomorrow. The timing couldn't be better for the pro-infrastructure forces --as the ASCE releases the type of grades you'd expect from a Delta House pledge, Congresswomen and Congressmen will determine how much of the federal investment in the stimulus bill will go to infrastructure projects such as roads, transit, and public works. Expect the ASCE to get some "face time" on C-Span this week.

By the way, the ASCE is releasing the report card two months early. Probably not a coincidence.

Thoughts on the Stimulus Plan

I just finished writing a report on the stimulus plan for management consulting and publishing company PSMJ Resources. The report -- entitled "The Obama Infrastructure Plan: A Supplement to PSMJ's 2009 AEC Firm U.S. Market Sector Forecast" -- focuses on how the plan may affect the markets served by the AEC industry.

I'm amused, but not surprised by the fact that the stimulus debate has become politically charged only a few days into the new administration. After all, what's in it for the Republican Party to help the Democrats succeed? If things go smoothly and the country recovers more quickly than expected, the party in control (in this case, the Democrats) would get full credit and the GOP would have a hard time getting anyone elected anywhere. That's politics. It's a natural function of the party out of power to be obstructionist.

That's not to say that the Republican criticism and their desire to help shape the bill are wrong. It's just that the fight was so darned predictable.

With that said, the plan will eventually pass in a form close to the one originally proposed. The Democrats are likely to insert a few more "soft" programs into the bill -- during committee deliberations, they already increased money for some non-infrastructure investment programs. Some Democrats also want to put more union restrictions on the bill's infrastructure funding.

To win Republican support, the Democrats may agree to include more tax cuts and, with any luck, increase some hard infrastructure spending. As it stands now, here are three important factors to remember as you follow the process and wait for the infrastructure spending to arrive:

1. The goal of creating jobs quickly is likely to result in highway projects that have already advanced pretty far down the pipeline. This include "shelved' DOT projects that couldn't get funding and maintenance projects that require very little design work. All isn't lost for the design side, according to my interviews. The consensus is that there will be work for designers, both in the construction phases of "shovel-ready" projects and in long-term projects for which federal money would be withheld from the short-term spending requirement. The latter is to ensure that critical infrastructure needs are addressed, and not just quick fixes, as well as to prevent the spigot from abruptly shutting down too early in the recovery process.

2. Design-build and other "alternative delivery systems" may be a ticket to winning some stimulus-driven work. If the goal is to fast-track projects, design-build may be promoted as a way to get that done. If your firm has design-build experience or solid relationships with some allied professional firms with which you could form a design-build team, start talking now.

3. Don't anticipate a huge influx of work or money any time soon. The Congressional Budget Office said last week that the stimulus money would trickle in. After researching this unofficial report, I believe their analysis is flawed and sells the plan short because it does not appear to take into account the provisions requiring fast appropriation of federal money. Yet, we do need to recognize that it takes time for any money to get to its final destination when infrastructure projects are involved. Contractors and designers need to do the work first, then they need to bill the work before they can get paid. So assuming you're one of the many firms trimming costs and getting lean, it's prudent to continue that course of action.

The bottom line is that the stimulus plan should help the industry and the nation to survive during difficult times. But it won't signal a return to the boom times we experienced a few years ago.

My advice is to keep apprised of the bill's progress and position your firm to take advantage of opportunities likely to emerge from the bill. This includes transportation projects (highway, aviation and transit mainly), school projects (lots of energy-related work, but also some new construction and renovation), energy (smart grid and expanding the transmission/distribution network), public works (mainly water and wastewater system upgrades, as well as flood control) and federal buildings (military bases, parkland structures, museums, border stations, etc.). There might also be some work in low-income housing, but that is likely to have a minimal effect in the grand scheme.

I suggest treating the stimulus program like you're (I hope) treating social security as it relates to your retirement planning -- if it's there when I need it, great...but I'm not counting on it to keep me afloat. -- Jerry Guerra

Welcome to AEC Insight

Hello:

I've created this blog to offer news, advice and insight to AEC (that's architecture, engineering and construction) industry leaders. This blog will be heavy on breaking news, media, market research, and marketing as it relates to the design and construction industry. Let's see where it takes us.

Jerry Guerra

Principal

The JAGG Group