Emerging Careers in Sustainability Consulting

Read an interesting overview of the career opportunities in sustainability consulting; both in traditional management consulting as well as with new boutique consulting firms (article on Triple Pundit). I think the E&C consulting industry is also a viable source of career opportunities as well.

(note: I posted a column on this market trend in the spring; CNET published an article on "Green is the new opportunity in consulting").

Both management consulting and engineering services firms (or engineering & construction firms; 'E&C's) are investing in sustainability practices. Management firms are building practices in environmental risk management, sustainability strategy (including organizational design, change management, as well as process design) and carbon management strategy.

The global E&Cs, such as Bechtel, CH2M, URS Corp, have some type of 'sustainability' practice. In many cases, this service offering is focused more on CSR reporting and strategy development; both growing segments.

I work with the global E&Cs as part of my practice, and I believe the bigger opportunity for 'talent' to enter this field is to focus on specific segments such as: buildings / facilities, energy development, water, transportation, and environmental. 'Sustainability' is being incorporated into many of these markets; with most of the interest coming from clients who want to manage their energy costs, minimize use (and costs) associated with resources such as building materials and water; and also manage environmental risks associated with past and current practices.

I actually think there is more potential for professionals who focus on these specific market opportunities in the short term, as industries such as process mfg, discrete mfg, energy development, retail, and real estate, for examples, are all turning to E&Cs for solution development and deployment. Read more!

Quick review of "Profit from the Peak" book: significant investments in sustainability and infrastructure?

I was provided a copy of "Profit from the Peak" from John Wiley & Sons, a new book on the history of fossil fuel development, and the associated investment opportunities that take advantage of emerging energy development as well as in targeted segments of 'traditional' oil & gas (i.e. discovery, development, refining, and distribution).

Just started reading it a week ago, but noted an area of particular interest: how the maturation of oil field development and 'peak oil' have spurred incredible investments in infrastructure (including development of sustainability / alternative energy projects).

There is a general consensus that we are past 'peak oil' (the optimum rate of production), and discovery of new major oil fields is not anticipated. Therefore, Middle East countries, who are awash in royalties, are now investing in and building infrastructure for refining, chemicals production, and distribution (will they invest in the retail side?).

This level of investment in infrastructure by Middle East countries such as Saudi Arabia, Dubai, and Bahrain is simply amazing. These countries are investing in engineering & construction services to the general level of $350 billion in the near future. The reason for this investment level: the oil producing companies in the Middle East have determined that they if they can control more of the downstream lifecycle for oil & gas, they can substantially increase their profitability, compared to that associated with oil production. And with production and development investments not predicted to rise appreciably given the state of peak oil, this is the time to invest in other parts of the lifecycle.

And that requires skills and labor in engineering design, construction, and operations; along with significant requirements in materials (i.e. steel, cement, networks / telecom, monitoring systems, chemicals, etc).

What does this mean for the AEC sector, and for sustainability (specifically alternative energy development)? Some thoughts:

• Many of the global AECs are currently very active in the Middle East, and have set up new operations / offices there. The talent required to deliver on these projects is coming from multiple locales: India, China, EMEA, US. But talent availability remains a bottleneck.
• Given the huge level of investments and associated demand for talent, many of these global AECs are somewhat strapped for talent here in the US. One executive told me that between the two markets of Iraq rehabilitation and UAE development, that the US market for them has become secondary.
• The 'greenfield' opportunities (building new facilities, as opposed to retrofitting older ones) means that owners are very open to new technologies and designs; particularly those that will optimize use of precious resources in the area, such as water. Two primary sustainability markets are benefitting as a result: alternative energy development (solar PV), and water treatment, distribution, and recycling.

What does this mean to cleantech start ups? Build relationships with practitioners in the leading global AECs; not the corporate development or business development leaders. Why? The practitioners, in most cases senior program managers with client relationship and deployment responsibilities, are the ones who can make decisions on integration of new technologies, since their clients are the ones will who pay (as opposed to investment on the part of the AEC firm). I think this applies to early stage cleantech firms as well, that may still require success in a 'test bed' or pilot demonstration before scaling to a larger infrastructure project.

Interesting reading....may post again on other topics in this book.... Read more!

Column on Cleantech.com: "Driving Cleantech Growth via Engineering & Environmental Channels"

I authored a column on Cleantech.com this week, link is here; column is below.

Don't reinvent the wheel — cleantech startups should engage E&Cs.

The cleantech sector and its subsectors is now reaching a critical mass, in terms of investment momentum, public awareness and numbers of viable prospects. A number of segments, such as solar, are already in a land grab mode, where participants believe rapid client acquisition is the primary activity to ensure company success.

The current market dynamics are similar to those from the early growth & maturation phases of Information Technology a few short years ago. There are a number of lessons we can take away from the growth demands and strategies experienced in that sector, including the value of the Environmental Consulting and Engineering & Construction (E&C) channel in accelerating the adoption of technologies.

Similarities to the software/tech start up market?

There are a number of similarities between the cleantech industry and the software/tech start up industry. They include:

- Founders: Like many software start ups, cleantech start ups are usually founded by strong engineering and academic individuals, who are not necessarily strong in market strategy and sales.

- Investor experience: While there are a handful of investors with deep domain expertise in specific technologies, many new investors do not have that same level of expertise. We have seen evidence of this with the rapid influx of capital into this nascent sector.

- Need for reference accounts: Creating demand in the market requires the identification of strategic accounts where successful referenceable pilot projects can be deployed.

- Go to market strategy: Demand fulfillment may be met via a direct sales force, or via indirect sales & deployment channels, dependant upon a number of factors, including the complexity of solution, the role of the technology in a business solution, and degree of access to markets & decision makers.

- Alliances and partnerships: when the technology and team are an integral part of a larger solution (such as engineering design & construction of a desalination plant, for example), the development of a partnership ecosystem is required, in order to integrate and deploy solutions across key sectors.

The environmental consulting and engineering & construction channel

Cleantech start ups may build their own sales forces to sell solutions, but most of the time their technology is just one part of an overall infrastructure or building/facility solution. Another sales approach is to build indirect sales & deployment channels.

I suggest the key to success for many cleantech start up companies is to effectively leverage the environmental consulting and engineering & construction channel (that is, the services firms that provide consulting, design, construction management and facility operations) to sell and deploy solutions, thereby accelerating cleantech adoption.

Here’s why:

- Solution requires a range of engineering expertise: Clean technologies in most cases will require specialized engineering that can be provided by the services team in the cleantech company, but will also require traditional engineering design & construction management expertise.

- Target customers already work with E&Cs: Target verticals that may adopt cleantech include process and discrete manufacturing, transportation, telecom, government, real estate and infrastructure. Companies in these verticals rely upon global E&C firms to build business cases, develop conceptual and detailed designs, manage construction operations, and in many cases, actually operate facilities as well; E&Cs are 'trusted advisors' for capital expenditure projects.

- E&Cs are already engaged with cleantech: E&Cs have vetted a number of clean technologies, especially in waste-to-energy, green building and wind and solar power. But projects, training, and alliances with cleantech vendors are scattered at this point, creating opportunities for new vendors to step in. Cleantech execs should familiarize themselves with key strategic initiatives at global E&Cs today in order to build an ecosystem of focused and trusted partners.

- E&Cs are actively seeking new technologies to leverage: Why? The desire to capture higher margin consulting projects (which could include cleantech due diligence consulting, for example) in what is traditionally a low margin business, as one reason. Driving more growth and market share in core markets of water, building design (including building information modeling, or "BIM'), IT (for ‘green’ supply chain management, for example) and energy development, is another reason. Their question is: can cleantech serve as a ‘catalyst’ for more E&C growth?

Sales strategies

What are some key takeaways for sales and growth strategies for cleantech companies?

- Business development and strategy should focus on building a partner ecosystem and driving sales from these channels, especially with larger engineering & construction firms. The business development team should have strong domain experience in core tech areas, but should also possess a very good background in developing a go to market strategy with a significant alliance/channel component, possess a good rolodex or set of relationships with a broad array of E&C business unit executives and certainly have a consultative sales approach.

- The alliance & partner development process will involve roadmap & technology discussions with key E&C practice leaders. Within most global engineering & environmental firms there are thought leaders (individuals and groups) that take the lead in developing and disseminating technology for new business opportunities within the company.

- Target key executives within E&Cs. The corporate strategy executive (in itself a relatively new role for the E&C industry) is chartered to leverage internal expertise and nurture emerging growth opportunities across the enterprise, and as such, is a natural ‘executive sponsor’ for a cleantech partner.

- Develop a network of investors and key advisors that have relationships both within E&Cs as well as at their target client accounts

Leveraging the E&C channel should facilitate more rapid growth and quicker profitability for cleantech companies. Keep in mind that the E&C industry can be conservative at times and is focused on the total engineering solution, of which cleantech plays a part. Your objective should be to communicate the value your technology (and expertise) provides to both the E&Cs and their target accounts.

Read more!

Integrated Tech / Services business models

Recent blog postings (link is here) in the greentech media have highlighted the investment opportunities for clean technologies integrated with downstream services. These services may include traditional consulting such as strategic planning and auditing, as well as more engineering design, construction, and especially operations or asset management services.

Discussions with executives at global Engineering & Construction and Environmental Management companies indicate that some firms are now positioning service lines in energy efficiency to take advantage of new technologies, as well as integrating new water treatment technologies into their water treatment and distribution practices.

Licensing relationships are currently being employed with the larger energy mgt and water treatment equipment manufacturers (think GE, Honeywell, Siemens, et al), but the real opportunity is discovering the start up or privately held cleantech companies; those that may not have the brand and marketing horsepower as the larger aforementioned equipment companies, but have innovative clean technologies, and also may be easier to work with (and license technologies from).

Looking at the water market, a good example could be new advances in filtration technology for water treatment. An E&C may position itself in the planning stages of a project to perform technology due diligence, and then also integrate newer technologies into the downstream engineering phases, thus driving additional value from optimizing (and possibly re-engineering) plant & facility design.

These business (and investment) opportunities reminded me of the real estate site evaluation market that was hot in the late 80s and 90s. Service providers (particularly E&Cs) had a great business in providing site evaluations for buyers who needed due diligence and perhaps extra negotiating power for acquiring commercial and industrial properties. The evaluations (or audits) allowed the service providers (engineering & construction, environmental) to then drive follow - on work: HVAC, environmental assessment & remediation, structural engineering, etc. While new and innovative technologies were not necessarily part of this business model, the use of front end audits and due diligence services allowed E&C firms to position themselves for downstream engineering and consulting services / revenues.
Read more!

Scaling Solar tech.....quickly.....

Read an interesting post in Earth2Tech about the challenges in scaling solar technology businesses to a large (and hopefully ready) market; link is here.

Solar is now in a "land grab" mode; with the race to grab as many customers as quickly as possible. Makes me think that if demand is there, then the key to scale is to build out your channels as efficiently and effectively as possible.

The key channel to leverage? Correct: the engineering & construction (E&C) industry.

Many of the solar tech vendors have focused on smaller buyers (i.e. residential owners, smaller real estate companies). While those entities have served as thought leaders, the market itself has moved mainstream. The challenge is to secure larger clients (corporate real estate and facility owners, and builders & owners in heavy industry). I think the key here is to leverage channels that can both sell and help deploy solutions across key verticals; and get your technology out to a large audience as fast as possible.

Clearly, the E&C industry is poised to sell such solutions, although culturally, it is not their mindset to do so; this is a very conservative industry that has traditionally not driven additional revenues from technology sales (unlike the system integrator industry).

But, there is a strong desire on their part to provide thought leadership to their clients around emerging technologies, including those in solar and energy development. E&C's can leverage this knowledge to provide a valuable differentiator for business development purposes in competitive 'bake-offs'. Also, it may provide a mechanism to drive higher margin consulting and engineering design services; which are certainly welcome in what is a low margin services industry. Read more!

"Our Opportunity Management System is Crap"

... a VP at a publicly traded E&C firm recounted to me recently....

He was talking about their CRM system, but it made me think about the challenges of selling professional services and aligning required technology across a global enterprise (in some companies that can be described as loose confederations of feudal kingdoms) in the global environmental and engineering design industry.

So what 'opportunity management' objectives are critical to E&C firms?

• Improve service delivery (responsiveness to RFI / RFPs)
• Improve margins (identify those prospects who may require higher margin consulting services, and also those do not cause AR headaches)
• Increase revenues (allow for wider range of services to be delivered to key accounts)
• Assure alignment with strategic objectives for growth (reporting and analytics)
• Provide mechanism to build stronger relationships and partnerships with clients

I think improving margins may yield the highest and most rapid ROI for any BPR work and enabling technology deployment in opportunity management. Many of the global E&Cs are already targeting higher margin consulting in mining, environmental sustainability, and energy efficiency services, which should also help drive 'downstream' revenues in engineering design and construction management.

The CRM toolsets being used today? A whole 'nuther subject...from spreadsheets to SaaS....

Read more!

E&C Strategic Initiatives: keys to partnering & selling

Have had discussions with strategy executives at two global environmental consulting firms recently, around some of the key initiatives that they are funding:

• Capturing higher margin businesses, from organic growth as well as M&A efforts
• Growth in targeted markets of water (CSO, distribution systems) and energy mgt
• Identifying and investing in emerging business lines of revenue

Of particular interest to both execs was the ability to leverage technology, both information technology as well as 'cleantech', to drive new revenue streams. As with most global engineering & environmental firms, there are 'pockets' of expertise, design centers, or practice groups that take the lead in developing and sharing IP around leveraging technology for new business opportunities. The corporate strategy executive (in itself a relatively new role for the E&C industry) is chartered to leverage that internal expertise and and nurture growth opportunities across the enterprise.

What does this mean for IT and cleantech start ups that wish to sell into and partner with the global E&Cs? I believe business development and strategy at these firms should focus on building a partner ecosystem and driving sales from these channels, especially with larger engineering & construction firms, who serve as the 'trusted advisors' to end user industries (such as gov't, process mfg, and discrete mfg). The sales process will involve roadmap & technology discussions with key practice leaders, as well as development of corporate strategy executives who may provide executive sponsorship.

The cleantech & IT start up business development team should have strong domain experience in core tech areas, but should also possess a very good background in developing a market strategy with a significant channel component; a good rolodex or set of relationships with a broad array of E&C business unit executives; and certainly a strong consultative sales approach. Read more!

Visualization Solutions to Leverage BIM / 3D Modeling

Have had the chance to discuss market opportunities with a couple of visualization solution vendors recently. I think this type of solution (integrated hardware / software, advanced optics, interactive displays) is close to the 'tipping point' in terms of market acceptance and use, in the engineering design, environmental / sustainability, and building construction industries. These solutions have already been effectively deployed in energy development, life sciences, and educational & museum sectors; where there is a strong need and interest in viewing 2D and 3D environments in an 'immersive' setting.

With the advent of 3D modeling and BIM (Building Information Modeling) throughout the E&C industry, there is now a greater demand for presentation solutions to fully leverage the collaborative and insightful nature of these technologies. There are a number of technology firms that are innovative solutions, including Mechdyne, Perceptive Pixel, and Elumenati, that have already developed visualization centers for energy, engineering design, and other infrastructure projects.

Some of the advantages for AEC firms for adopting use of these visualization solutions:

• Optimize collaboration between disparate workgroups, especially during design phases
• Faciliate stakeholder input, and thus minimize potential miscommunications and scheduling issues
• Opportunity to differentiate their brand and provide a competitive advantage on bids
• Display and leverage the power of 3D Modeling technology in CAD systems
• Complement the trend towards centralized engineering design centers

One E&C executive I spoke to recently mentioned that visualization technology was a critical component to their strategy of centralizing engineering design:

"We are moving towards a 'service center' approach for design engineering, where we can not only deliver services, but also work collaboratively with clients"

Read more!

Moving IT from a Cost Center to a Revenue Center

I have had many discussions with CIOs and VPs at leading engineering & construction firms about strategies that allow the IT department to be more responsive to business unit needs, as well as assisting in the development of revenue generation. I'm not sure there is any 'silver bullet' for acheiving this, but I can recount some strategies deployed by a variety of firms; each might provide some value.

Establish a working group of IT and Business unit executives

These groups are usually informal without specific reporting lines or cost center allocations. A key component is identifying a number of champions and giving them flexibility to work between business units and the IT department itself, in order to identify and develop best practices in collaboration, data management, and asset management, for examples. The inviduals involved are usually senior or executive level from both the business and IT side; the goal is not to discuss specific features & functions or toolsets, but to review the overall business drivers, competitive advantages (and disadvantages), resources available & required, and align technology needs to that landscape. A key advantage of this arrangement is that the business unit leaders get to exchange ideas on what technology solutions are working with what vendors, with the IT executives facilitating that exchange of ideas. IT then can build consensus much faster on technology purchases, as well as leverage its purchasing power with vendors.

Empower IT at the business group level

The IT department at one global E&C has worked closely with two of the major business units in growing their revenues, and have been incorporated into specific bid opportunities. In particular, we have seen instances where the E&C client (industrial and government) seeks an E&C to partner with its internal team, and create a seperate business unit or company to program manage and construct a new facility. In these cases, IT's ability to communicate its mission, training program, IT investments, preferred toolsets, and flexibility to adapt quickly to new business process needs is paramount to success.

In most of these cases, the corporate IT group serves as more of an advisory role to the business unit teams, and also provides more oversight around back office systems and network management. The business unit IT team takes the lead for revenue generation opportunities and associated requirements at that level.

In a similar vein, I have talked to a VP of HR at another E&C, who has told me that they are playing an integral role in proposal development and bid presentations; in these cases, the HR team is providing value by demonstrating that the E&C has an effective program for attracting and training professionals who may be incorporated into the clients projects (which are multi year and multi million $$ in size).

Create a knowledge management network

Every firm has a number of practitioners and leaders that take it upon themselves to develop new services and revenue streams, and serve as leaders of change across the organization. Given the growth of a number of E&C firms via acquisition, these 'champions' can reach across business unit and IT departments, and streamline integration efforts (of technology, organizations, and culture).

I have worked with one company that has funded a senior level professional to build a knowledge management network, with a budget for specific business process and technology development. Their focus is initially around advancing 3D modeling and BIM processes beyond just buildings, and into plant and industrial design. Members of the working group initially are 'champions', with the goal of including key engineering managers in each business unit over time. Read more!

Some Notes on the recent ENR Outlook 2008 Conference

I attended the ENR Outlook 2008 conference last week in Washington DC (http://www.construction.com/event/ConstructionBusinessForum-Fall/default.asp), and found a number of topics of interest; paticularly around adoption of new technologies. Some general thoughts:

1. Rapid adoption of Analysis Tools

Richard Fox, COO of CDM (http://www.cdm.com/) talked about market drivers in the water industry (supply, distribution, quality, treatment). Of particular interest to me was the use of new tools to measure and improve upon sustainability as well as the use of risk assessment and management tools. I believe this will open the door to new opportunities where E&Cs may differentiate their offerings and provide more value to clients in terms of energy mgt, compliance (government and NGO) and even brand management, by leveraging 'analysis' technology to key toolsets.

2. Private - Public Partnerships

Much has been discussed in regards to creating a positive investment environment to attract private capital to fund major infrastructure programs. Clearly, Europe has taken the lead in this arena, as many municipalities have outsourced the design, build, and operations of utility systems. I have worked with a couple of the major E&Cs who have experience rapid growth in their international operations, especially in outsourced operations & maintainence contracts. Each company is leveraging either external or internal investment sources to fund these deals, and to help structure terms (capital, ROI, performance requirements). They have also organized seperate P&L centers to manage the operations. One would think that should the market open up here in the US, these companies would have significant experience to leverage. Read more!

Accelerating adoption of Cleantech through the Engineering & Construction channel

Thinking through some of the key issues facing the cleantech industry, it would appear that as a whole, this industry (or sections thereof) will need to rely upon established channels in order to evangelize and deploy solutions across key sectors.

The engineering, environmental & construction industry (that is: those services firms that provide consulting, design, construction mgt, and facility operations) is an industry that could be leveraged effectively to accelerate adoption:

• Multitude of cleantech: solar, nano, intelligent energy mgt systems, biofuels (requiring a range of domain expertise, but consistent engineering design expertise)

• Target industries to adopt are traditional verticals: process and discrete mfg, transportation, telecom, government, infrastructure

• These industries rely upon the global Engineering & Construction firms to build business cases, develop conceptual and detailed design, manage construction operations, and in many cases, actually operate facilities as well

• E&Cs have invested in specific 'cleantech' projects, usually around biofuel design - build; wind and solar power, BUT: projects, training, and alliances with cleantech vendors are scattered; no consistent strategy

• Opportunity exists to foster relationships, invest in training, and build alliances with E&Cs; specifically business units that are targeting specific verticals or those that are focused on new energy technologies

I would be interested in hearing from those in the cleantech industry (entrepreneurs, investors) as to their thoughts on this channel strategy.

Read more!

Market Drivers in the Engineering & Construction and Environmental Markets

I have been working with a couple of major software vendors who serve the AEC and environmental management market industries; providing market strategy and business development services in the E&C and EHS sector.

(Note: I could write a whole series on business development strategies targeting an industry that traditionally is very conservative, is leery of any expenditure that cannot be passed on to the client, and has executives who are trained geologists and civil engineers…….sub-note: I am an environmental engineer, so I can talk about that last topic…).

I typically work with C-Level or VP – level executives, and have collected a significant amount of feedback on trends and strategic initiatives. These companies can be found on the ENR (Engineering News Record) Top 50 list, and they provide services globally into the infrastructure, transportation, federal / municipal government, and discrete mfg industries. Over the coming weeks (months?) I will provide some interesting anecdotes (well, interesting to me….) regarding technology adoption and business process changes facing the E&C industry.

But to summarize, here are the primary market drivers:

• Abundance of Work
• Scarcity of Talent
• Outsourcing by clients
• Consolidation of the industry
• Risk Management

The combination of an abundance of work worldwide, across all target market sectors, along with the shortage of trained talent (and the forecasted attrition of talent as experienced engineers retire), opens the door to technology- enabled productivity gains. These solutions may include richer, more intelligent toolsets and visualization technology (such as ‘BIM’: Building Information Modeling), as well as re-engineering of work flow across multiple, dispersed teams worldwide; leveraging advances in collaboration, design review, and content management technology.

As an executive from an ENR 25 company told me last week, “Given our dispersed structure of offices, work-sharing and effective file sharing is critical, especially as we adopt BIM”…

Read more!

Been away for a while....

Thought I would revisit the blog arena, after being away for a while working on projects. Given that my primary market focus has been in the AEC and environmental / sustainability markets for the past 2 years, I am focusing this blog on those sectors, and the market drivers, business process changes, and new technology adoptions that are enabling change.

I hope to provide insights and maybe even some pithy comments in the weeks ahead, especially around 'real world' examples of technology - enhanced productivity gains in this industry segment. Read more!