FMI | Construction & Engineering Industry Insight
Posted on March 22, 2017 by FMI CorporationAcquisitions have always been a means to maximize value and create a sustainable competitive advantage for engineering and construction (E&C) firms. However, acquisitions of any size are a major undertaking for both the acquirer and the target. Substantial financial returns are required not only to create stockholder value, but also to justify the enormous investment of managerial time and effort that goes into a takeover. A handful of E&C firms have been active and masterful acquirers; putting these firms aside, acquisition results for the masses have been mixed. Often, the rationale is flawed, or the post-acquisition strategy ill-executed in cases where the strategic relationship does not last. Acquisition fever, failure to recognize the costs of an acquisition, or a flawed understanding of the target company has derailed many plans for expansion. Within the E&C industry, acquisitions are a vital driver of competition and growth among varied players. However, the post-acquisition strategy of each can differ significantly. At one end of the spectrum, the parent company allows the acquired firm to operate entirely as an independent subsidiary – we term these ‘operators.’ At the opposite end, the parent company works to fully integrate the culture and processes of the acquired firm into their own, effectively expanding the parent company – typically known as an ‘integrator.’ While either strategy will work, it is important to note that successful acquirers make a very conscious decision about where their strategy falls on the operator-integrator spectrum. They are successful acquirers because they have a defined acquisition integration strategy.
This post was posted in Investment Banking and was tagged with Mergers and Acquisitions, Acquisition search best practices, construction, NRCI 2014 Q2, engineering blog, construction blog, construction acquisitions, acquisition construction industry
Posted on March 15, 2017 by FMI CorporationToday’s global engineering and construction (E&C) industry is changing rapidly. Barriers to global trade have been reduced significantly, enabling capital, labor, goods and technology to flow freely across borders. This has increased business opportunities exponentially across the globe. However, globalization has also vastly increased the complexity of the E&C business environment. Changing customer demands and new funding mechanisms are driving industry players to diversify and seek mergers and acquisitions in new markets around the world to gain access to new expertise and project opportunities. This new global context presents unique leadership development challenges for companies in the construction and engineering fields. Grooming leaders who can look beyond traditional, domestic borders and adopt a global mindset takes time and requires an entirely new learning approach.
This post was posted in Center for Strategic Leadership, Talent Development and was tagged with Global leadership, globalization, Operational excellence, construction blog, construction global, global construction
Posted on March 8, 2017 by FMI CorporationThey say that construction and engineering are male-dominated fields, but is that really the whole story? To answer that question, we believe that leaders must look well beyond counts of employees from different demographic groups and gain holistic views of their organizations. For example, diversity metrics include measures that capture the characteristics of the workforce (e.g., the percentage of the workforce that is female). And while race and gender are the two demographic characteristics most focused on in the workplace, diversity is defined as the differences and similarities that include, for example, individual and organizational characteristics, values, beliefs, experiences and backgrounds. Put simply, not all demographic characteristics are federally-protected classes, but states, municipalities and organizations may choose to protect a broader set of demographics.
This post was posted in Consulting, Center for Strategic Leadership and was tagged with engineering blog, construction blog, women in construction, diversity construction, inclusion construction, international women's day, women construction, women engineering
Posted on March 1, 2017 by FMI CorporationMuch has been written about millennials and how they differ from previous generations in their approach to work – and careers in general. Indeed, we see millennials often unfairly saddled with the dubious reputation for being entitled, disloyal, self-centered or optimistic go-getters, but it turns out that they are actually not that different from their older work colleagues. In fact, in our recent study “Millennials in Construction: Learning to Engage a New Workforce,” we found that millennials are indeed very dedicated and loyal to their companies and want to do more than just punch a clock and take home a paycheck. They are looking to add value, make an impact and find meaning in what they are doing. Company leaders can leverage these realities by ensuring that their young talent has a clear sense of purpose and an understanding of their roles within the larger plan. According to our findings, when the company’s vision is inspiring and clearly communicated, millennials are 25% more likely to stay longer with the company compared to those who don’t understand the company’s vision and direction.
This post was posted in Talent Development and was tagged with construction industry blog, Attracting people to construction, employee retention, FMI Management Consulting, Human Resources, oil and gas market strategy, engineering blog, construction blog, millennials in construction
Posted on February 24, 2017 by FMI CorporationThe fact that most construction firms are struggling to find qualified people is old news. To be sure, much of the blame for the labor shortage problem can be laid at the feet of the Great Recession, when job demands changed dramatically and many downsized workers left the industry for good. The trouble is, these workers have yet to be replaced with workers of equal or better skills. So what can be done? The industry has responded to the challenge by treating it as an “asset” problem. Applying the same principles they would to a construction project, employers have brought a hammer-and-nail solution approach to something that requires more thought and consideration. Companies are putting big dollars into training programs focused on sharpening employee skills and competencies. But just how effective is all of that training?
This post was posted in Center for Strategic Leadership, Talent Development and was tagged with Attracting people to construction, employee retention, employee development, Training investment, FMI Management Consulting, Human Resources, oil and gas market strategy, construction blog, millennials in construction
Posted on February 14, 2017 by FMI CorporationAny principal of a construction firm will tell you that cash is king. There is little room for error when it comes to feeding the cash cycle. Why not apply the same focus and fervor to collecting the monies that are owed to your company as you do to installing the building components for which you bill? Often, too much of the responsibility for collecting receivables is shifted to the accounting department. When accounting investigates the nature of an account and the reason for delinquency, it is often determined that the client has withheld payment because it has yet to receive consideration for payment as outlined in the contract. Examples range from a significant deviation from the schedule of values to failing to deliver as-built drawings.
This post was posted in Consulting and was tagged with construction industry, Construction cash flow, Cash flow management, Relationship building, construction firm blog, collections construction, construction best practices
Posted on November 1, 2016 by FMI CorporationWhile there are no cookie-cutter solutions for ownership transfer, there are some viable strategies to consider when it’s time to successfully hand over your company’s ownership to the next generation. As baby boomers move into retirement and millennials continue to make their way into the workforce, the issue of ownership has become acute among many of the nation’s engineering and construction firms. If owners cannot find the talent to manage their firms following their (eventual) retirement, they will lose the ability to dictate how ownership will be transitioned. With these dynamics in play, it is increasingly important for owners to start planning early and focus on the long-term development of the next generation of leaders.
This post was posted in Consulting, Investment Banking, Center for Strategic Leadership and was tagged with Ownership Transfer, Succession planning, construction, NRCI 2014 Q2, construction ownership transfer, construction succession management, fmi icons, fmi industry icons
Posted on October 26, 2016 by FMI CorporationIn their book “Execution, the Discipline of Getting Things Done,” authors Larry Bossidy and Ram Charan focus on a single element of successful companies that is so often overlooked: the ability to execute. And while some engineering and construction companies would say execution is their core strength, others would argue that many of them fail to do this well. To borrow from the book, execution is the main reason companies fall short on their promises. It is the gap between what a company’s leaders want to achieve and the ability of their organizations to deliver it. The superlative companies in our industry have linked together three key components—the people, strategy and operating plans—that provide the details of execution. Many company CEOs would like to “think strategically” and let other managers do the dirty work of executing the plans. More often than not, however, the best performing companies are those where the CEO takes a passionate role in execution. To achieve the latter, here are the seven behaviors that matter as you learn to lead others to create a culture of execution:
This post was posted in Consulting, Center for Strategic Leadership and was tagged with executing strategy, FMI's Mergers & Acquisitions Advisor 2014 Q1, construction, NRCI 2014 Q2, business execution, execution in construction, execution in engineering, execution business
Posted on October 10, 2016 by FMI CorporationIn today’s team-based, fast-paced work environments, the ability to communicate effectively over several channels and provide ongoing feedback is key to success. Feedback makes you aware of how you are doing and what you can do to develop and improve. It builds trust in your relationships. The topic of feedback is hot in today’s marketplace. Employees are eager to know what is expected of them, how they are doing, and what they need to do to receive greater responsibilities and rewards. Employers are also eager to implement feedback tools and systems so that they can determine how they are doing in the eyes of their customers and employees. Best-of-class organizations also use feedback to help identify areas of success and developmental opportunities for their upcoming leaders. Here are five reasons why:
This post was posted in Consulting, Center for Strategic Leadership, Talent Development and was tagged with leadership, construction industry blog, team building, oil and gas market strategy, engineering blog, construction blog, agile leadership, feedback in workplace, feedback construction, feedback team development', 360-degree feedback, feedback leadership, team development, construction and engineering
Posted on September 29, 2016 by FMI CorporationThe race to cultivate and transition leaders into executive positions is on. Is your company ready for the challenge? With 10,000 baby boomers retiring every day, the construction industry is in a race to fill vacant leadership seats with candidates who are as competent as they are agile. Defined as the power to move quickly and nimbly while thinking on your feet and acting decisively, agility helps leaders tackle the challenges of today’s business environment while also thinking about the bigger picture and planning for the future. Based on extensive observation, research and practice around leadership, FMI has determined that Peak Leaders—those who exemplify what it means to be a leader—exhibit eight key behaviors. This framework can be used to identify, support and develop agility in your own leaders:
This post was posted in Center for Strategic Leadership, Talent Development and was tagged with leadership, strategic leadership, Leader selection, construction leadership development, leadership development, engineering blog, construction blog, construction management, construction leadership, leadership style, construction field leader, agile leadership, agile construction, agility, agile, talent development construction