Quarterly2008 issue 3 ’staining green THIS QUARTER A Building Green-Movement? 4 BY JERRY JACKSON OPPOSING VIEWPOINTS Coming Clean: Green Building Brings Risk of Greenwashing 6 BY JAY B. FREEDMAN BUSINESS DEVELOPMENT Storms Clouds on the Horizon 12 BY CYNTHIA PAUL MARKET INFORMATION Globalizing Green, Verde, Vert, Vihreä, Grün, Grön, Groen 17 BY HEATHER JONES GENERAL CONTRACTORS Integrity in Tough Times 21 BY RALPH E. JAMES PH.D. LEADERSHIP Maximize Your Leadership Potential 24 BY VANESSA WINZENBURG PLANNING Plans That Get Action 28 BY JERRY JACKSON PLANNING Twelve Reasons (Excuses) For Poor Job Planning 31 BY RALPH E. JAMES PH.D. QUARTERLY INTERVIEW Credit, Risk, Insurance and Surety: Zurich’s Terry Gray and Bill Cheatham 36 BY TIM SZNEWAJS 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 Rick Reese Vanessa Winzenburg Alison Weaver Will Hill Engineers & Architects Mergers & Acquisitions Jerry Jackson Group Manager Tim Huckaby Stuart Phoenix John Lamberson Tom Smith Ron Magnus Heavy Highway/Utilities Project Delivery George Reddin Graphic Designer Jay Bowman Michael McLin Hugh Rice Mary Humphrey Lee Smither International Trade Contractors Bob Wright Steve Darnell Randy Stutzman Information Graphics Ken Roper Debby Dunn Private Equity George Reddin Strategy Ken Roper Manufacturers & Distributors John Hughes Training Ken Wilson CONTACT US AT: Owner Services Mark Bridgers Residential Construction www.fminet.com Clark Ellis Surety [email protected] Lanny Harer Copyright © 2008 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 Saving the Planet, One Building at a Time: Is LEED Accreditation Worth It? 52 Two companies experienced in green building help to answer the question: Should your company start taking on green projects if it hasn’t already? BY KELLEY CHISHOLM Forecast Calls for Building Green in U.S. Nonresidential Markets 62 Growth rates across the nonresidential building segments reveal construction industry stakeholders are beginning to embrace the green movement. BY KEVIN HAYNES AND HEATHER JONES Develop Them and They Will Stay 78 The greatest source of skilled labor and field leaders will come from within, requiring firms to cultivate their own leaders and technicians in order to meet future industry demands of the future. BY GREGG SCHOPPMAN What is all that Mumbo Jumbo about Vision and Mission Statements? 88 Rather than view visions and missions as a wordsmith exercise, think of them as invaluable leadership tools that provide focus, motivation and assist in building an enduring company. BY KEN ROPER Blowing the Whistle: The Buzz on Executive Coaching 98 Executives who have been coached have found direction, purpose and confidence in achieving their goals more quickly than they would have without their coach. BY JENNIFER JONES AND JAKE APPELMAN Do Leveraged ESOPs Make Sense for E&C Companies? 108 While ESOPs offer a number of benefits, they are not the right organizational structure for all companies. If you are thinking about selling to an ESOP, consider the following criteria. BY CURT YOUNG The Rise of the General Contractor in 19th Century America 116 Guest writer and project historian Sara Wermiel shares her research on the formation of general contracting in America. BY SARA E. WERMIEL, PH.D. Delegation: A Win-Win Strategy 130 Delegation is a valuable, yet often underused, leadership tool. It reduces the leader’s workload while also empowering others to take on a greater leadership role. BY TIM TOKARCZYK AND WILLIE HEPWORTH Dear Reader: Green … the color of money. Or is it? In this quarter’s publication, we provide some thought material on the Green movement. Few agendas have had as profound or as fast an impact on American business and the construction world as getting Green. Is it substantially a product of Scuppies? (Socially Conscious, Upwardly mobile Persons … coined by Chuck Failla, author of The Scuppie Handbook) Or is the Green movement a permanent part of our futures? According to Kermit, “It’s not easy being green.” A new writer for FMI Quarterly, Jay B. Freedman, a business and real estate lawyer from California, explores the risks of building Green. Unusual for FMI Quarterly, this article is drawn from an earlier article published in Builder and Developer. The fit with our theme was too good to ignore. Jay also provides a brief article on “Greenwashing,” an appellation that you really would rather not acquire. Kelley Chisholm, a frequent contributor to FMI Quarterly, asks and answers the question of the value of LEED certification. Kevin Haynes and Heather Jones from FMI’s Research Services Group forecast and comment upon the Green market in nonresidential building. Layne Newton takes two profound trends of our time and links them in “Globalizing Green” (and other unpronounceable terms). In case Green is not part of your world (yet), we also have our usual assortment of other good reads. Another writer for this issue from outside the FMI ranks is Dr. Sara Wermiel. A historic preservation consultant, a project historian and an independent scholar, Sara gives us a look at the evolution of the general contractor from the early days of Norcross Brothers and George Fuller. For those of you who would like to understand the origins of the industry, find time to read Sara’s article. 2008 issue 3 FMI QUARTERLY ■ 5 Our Leadership and Organizational Development Group, represented by Tim Tokarczyk and Willie Hepworth, provide ways to leverage your time with “Delegation, a Win-Win Strategy.” Vanessa Winzenburg provides her departmental look at how to maximize leadership potential. Jennifer Jones rounds out the Leadership team’s offerings with her look at executive coaching. Long-termer Ralph James gives us “Twelve Reasons (Excuses) for Poor Job Planning.” Strategist Ken Roper begins a series on corporate direction and strategy with his article on “What’s all the Mumbo-Jumbo About Vision and Mission Statements?” Gregg Schoppman, our editor for all things of a Project Execution flavor, gives us reinforcement for investing in the development of our human talent as a retention device. Storm Clouds in the marketplace mean getting your business development machine operating at top efficiency. Cynthia Paul gives us some tips. Ralph James provides a second article in this issue, and this one illustrates how integrity gets challenged in tough times and what you might do about it. Employee stock ownership programs are not appropriate for all companies, but they can be an excellent ownership-transfer vehicle for some companies. Curt Young from FMI’s Investment Banking Group shares specific criteria to help you determine if an ESOP is a good mechanism for your company’s ownership transition. Terry Gray and Bill Cheatham from our publishing partner, Zurich, give us contemporary market views from the insurance and surety perspectives of Zurich. Terry is global head of construction, General Insurance for Zurich and Bill is has been head of Zurich’s surety operation. I think that you’ll find plenty to keep you busy reading, thinking and discussing many of these topics with your team. You may even find the reading a bit easier, now that we have made some adjustments to our type size and layout. What we lose in elegance, we hope to make up for with increased ease in reading, especially those of us with 40-year-old eyes (or more!). Share your thoughts on the new look, our content or what you want to see in upcoming issues. Our next issue will deal with Change Management. Until then, keep developing your organization. If we can help, we’ll be glad to participate. Sincerely, Jerry Jackson FMI Quarterly Publisher and Senior Editor BUSINESS DEVELOPMENT Storms Clouds on the Horizon Walking out of the house on a beautiful spring morning, I am instantly surrounded by sunshine, flowers just starting to bloom, grass that’s turning from wintery brown to green and fresh air. A quick glance to the west reveals dark charcoal-gray storm clouds on the horizon. Living in the prairie of eastern Colorado, there are few things between where I am and the clouds on the horizon some 30 to 40 miles away. The implication of approaching storm clouds starts a familiar sequence of events — get the cars under cover, gather up the animals, drag the potted plants in and start shutting the windows. Spring storms can either be a light sprinkle of rain or golf ball-size hail. There’s no need to rush around in panic, just a need to prepare for the potential storm. MIXED ECONOMIC NEWS Today’s economic news points to storm clouds on the horizon. I can’t tell you with certainty if the nonresidential markets need to prepare for a spring shower or hail; but I can tell you that the time to get ready is now. The residential market has been struggling for months. The subprime situation has impacted the credit markets — and consumers. The U.S. economy is dependent upon consumer spending. The old adage is: When the U.S. consumer gets nervous, the economy gets a cold. Now is the time to begin to readying your company for the potential of a softening market. Now is the time to get close to The old adage is: When existing customers, meet new customers and prepare to jazz up the U.S. consumer your selling efforts. gets nervous, the Talking to contractors across the country, we are hearing that 2008 economy gets a cold. looks to be a good economic year for many of them — especially for companies whose backlog is filled 2008 issue 3 FMI QUARTERLY ■ 13 with large projects.