Quarterly2005 issue 3 rainmaking THIS QUARTER A Focus on Rainmaking 4 BY JERRY JACKSON SPECIAL AWARD FMI’s Hugh Rice is Honored with Golden Beaver Award 6 BY JERRY JACKSON ROUNDTABLE DISCUSSION Program Management 12 BY DENNIS DORAN CONSTRUCTION MATERIALS Global Consolidation in Construction Materials 28 BY WILL HILL ENGINEERS AND ARCHITECTS Design Firm Strategy: Why Retreats Alone Can’t Do the Trick 30 BY HANK HARRIS HEAVY HIGHWAY/UTILITIES Conditions Ripe for Increased Use of Program Management 34 BY JAY BOWMAN PROJECT DELIVERY Project Managers — Defining Great Planners and Communicators 34 BY GREGG SCHOPPMAN QUARTERLY INTERVIEW Soar like an Eagle: An interview With Jeff Thomason 40 BY KELLEY CHISHOLM Publisher & Board of Directors Departmental Editors Senior Editor Jerry Jackson Hank Harris Construction Materials Business Development President and Will Hill Cynthia Paul Editor & Managing Director Contractors Leadership Project Manager Robert (Chip) Andrews Ben Brahinsky Jim Krug Alison Weaver John Hughes Engineers & Architects Mergers & Acquisitions Jerry Jackson Group Manager Tim Huckaby Stuart Phoenix John Lamberson Sally Hulick Kevin Mitchell Heavy Highway/Utilities Project Delivery George Reddin Graphic Designer Jay Bowman Steve Davis Hugh Rice Mary Humphrey Ken Wilson International Trade Contractors Bob Wright Steve Darnell Randy Stutzman Information Graphics Ken Roper Debby Dunn Private Equity George Reddin Strategy Mark Bridgers Manufacturers & Distributors Clark Ellis Training Ken Wilson CONTACT US AT: Owner Services Dennis Doran www.fminet.com Surety [email protected] Lanny Harer Copyright © 2005 FMI Corporation. All rights reserved. Published since 2003 by FMI Corporation, 5171 Glenwood Ave., Raleigh, North Carolina, 27612. Printed in the United States of America. FEATURES A Behavioral Approach to Construction Productivity 54 The behavioral model measures what people are actually doing and tests the effect of various consequences to improve construction productivity. BY RALPH JAMES, PH.D E&C Acquisitions: Integrate or Operate? 64 Integration philosophies vary significantly, but acquisitions are a key element to growth strategy. This article looks at several acquisitions in the E&C industry. BY STEVE DARNELL The Journey to an Envisioned Future 74 With an envisioned future and the commitment to move toward this future state, your organization will have the direction and energy to create exceptional results. BY COLONEL ARTHUR J. ATHENS AND TIM SPIKER Getting Your Strategy Under Sail 84 Your strategic implementation plan will not have traction without focusing on people, roles and responsibilities, resources, reward systems, and measurement systems. BY KEN ROPER AND JERRY JACKSON The Salesmantendent: The Emerging Role of the Project Superintendent 94 By demonstrating a business development mindset, superintendents have the greatest ability to improve the project’s performance and the firm’s backlog. BY GREGG M. SCHOPPMAN Finding Opportunities with Marketing Due Diligence 104 Good research takes a considerable investment of time and money. But the results can be used to make profitable business strategy. BY RANDY GIGGARD How Changes in Healthcare May Affect Your Strategy 112 The following article details four potential future scenarios for the healthcare design/construction market based on FMI’s research. Consider the implications of each for your firm. BY MARK BRIDGERS, PEGGY LAWLESS, AND BLAKE CHURCH The Dark Side of Work Life: Employee Burnout 134 Employee burnout is an organizational danger. The following article details its symptoms, causes, effect, and preventative measures. BY JAKE APPELMAN, DAN WOOLDRIDGE, AND TIM SPIKER This Quarter: A Focus on Rainmaking Dear Reader: Rain is the friend of farmers and sometimes the foe of those in the construction industry. So why have we focused this issue on Rainmaking? Professional services firms have used the term for years to connote business development. The great rainmakers are those who bring work to the firm. Rainmaking is not only serious business; it is the backbone of business. Making rain is the business of every business leader, whether contractor, design professional, manufacturer, or supplier. In this issue, we bring you some experiences and tools for your rainmaking efforts. Our own Randy Giggard discusses the potential profit in conducting good research. This research, he says, can be used to set business development and marketing plans. Business development opportunities for the healthcare market are explored by Mark Bridgers. His article describes four potential future scenarios based on researched trends in this market. In terms of business-development personnel, the project superintendent or “salesmantendent” has the greatest ability to impact the project, says FMI’s Gregg Schoppman. He reveals the emerging role of project superintendents. In The Journey to an Envisioned Future, Colonel Arthur J. Athens teams up with FMI’s Tim Spiker to share how an organization can use an envisioned future to create direction and energy for the organization. 2005 issue 3 FMI QUARTERLY I 5 We have also included a roundtable discussion of program management. Dennis Doran describes how public and private owners as well as architects, contractors, program managers, and consultants have used this new concept. In another team effort, Ken Roper and I collaborated on an article describing how a focus on people, roles and responsibilities, resources, reward systems, and measurement systems will ensure your strategic plans gain traction. From our mergers and acquisitions group, Steve Darnell illustrates the various integration philosophies, using key acquisitions in the engineering and construction industry as examples. Ralph James demonstrates a behavioral approach to construction productivity. Finally, three members of our leadership group — Jake Appelman, Dan Wooldridge, and Tim Spiker — highlight the potential organizational danger of employee burnout and how you can spot it and avoid it. In addition to these features, we provide shorter articles in four of our departments. Here’s hoping that your crops and gardens get the rain that is wet and that your backlog is refreshed by the rainmaking that is green. Sincerely, Jerry Jackson FMI Quarterly Publisher and Senior Editor 6 I identifying text goes here My colleague, Hugh Rice, was recently designated as a recipient of the Golden AZINE G Beaver Award. Hugh has been my business S MA partner and an active member of the construction community for 32 years. In my role as publisher and senior editor of FMI Quarterly, I would like to acknowledge his achievement. We do not normally use this publication as a vehicle for patting ourselves Y OF TBM: TUNNEL BUSINES TES on the back, but this is the industry’s OUR acknowledgement of significant contributions O C T made by one of its members who is also a PHO key leader in FMI’s growth and development. The Beavers is a social, honorary organization made up of contractors engaging in heavy engineering construction. The Golden Beaver Award recognizes men and women for their achievements and contributions to the heavy construction industry in the categories of Management; Supervision; Engineering; and Service and Supply. Five worthy individuals were presented Golden Beaver Awards at the 50th Annual Awards Dinner held Friday, January 21, 2005, at the Century Plaza Hotel in Los Angeles. More than 2,100 members and guests attended the black-tie event where Former Oklahoma Congressman J. C. Watts was the guest speaker. As chairman of FMI, Hugh received the Service and Supply Award for Golden Beaver award winners (l-r) John Shimmick, Management Award; Hugh Rice, Service and Supply Award; Keith Jacobson, Supervision Award; INC. Y OF THE BEAVERS David Nash, Special TES Award; and OUR O C Robert Nichol, T Engineering Award. PHO Hugh Rice accepts the Golden Beaver Service and Supply Award. 2005 issue 3 FMI QUARTERLY I 7 his leadership with FMI, making it one of the industry’s most prominent construction consulting firms as well as his VERS INC. formation of FMI's Mergers and Acquisitions Group, which has completed more than Y OF THE BEA 450 transactions. TES OUR John C. Shimmick, chairman O C T of Shimmick Construction PHO Company Inc., Hayward, Calif., Beavers officers (l-r) Alan L. Landes, received the Management Vice President; Ralph G. Larison, Senior Award. Keith Jacobson, vice Vice President; Patrick B. Kenny, President; president of operations of and James D. Waltze, Secretary-Treasurer. Massman Construction Co., Kansas City, Mo., received the Supervision Award. Robert D. Nichol, P.E., president and CEO of Moffat & Nichol Engineers, Long Beach, Calif., received the Engineering Award. Rear Admiral David J. Nash, U. S. Navy (Retired) who recently joined BE&K Inc. of Birmingham, Ala., received a Special Award for his 14 months of challenging service running the infrastructure reconstruction efforts in Iraq. The following comments are what a few of Hugh’s friends and colleagues had to say about him and his service to the industry: “Hugh’s prominent position among construction- industry leaders reflects his many personal strengths. He is simply smarter, more diligent, more persistent, and more resourceful than many other highly successful professionals in this business. It’s unique to work with a resource who clearly understands the big picture on critical issues, and that can also devour the details. With Hugh Rice, clients get it all in one package. FMI associates get a role model of