I have spent the past week on vacation in California. Let me start by saying that I think about California very fondly. I spent the first 10 years of my married life, as well as the first 10 years of my career in the energy business in California. Three of my children were born here. I like California. To be honest, there isn't much not to like.
But California is different. California reminds you of that neighbor in your youth. Tall, blond, athletic and popular. Life was easy for them outside the classroom. In the classroom no one knew whether they were smart or not, because being smart wasn't cool in any case. They charmed the teacher. On tests and homework they had eager and willing help from those wanting to enter their golden circle. They breezed through college and just when faced with the uncertainty of the "real world", a remote elderly aunt passed on leaving her entire fortune to them. Despite their undeniable superiority, they weren't arrogant or bad mannered. They were just very likable. And it seemed the world had been created to be their private country club.
They lived in a different world. And that is California. We in the Rocky Mountains cherish the beauty of our mountains, but California has mountains too. Higher ones in fact. Everything that we have, they have more of it. Not only do they have more of it, but it is better too. We can only look on in helpless admiration and envy.
In the past, we made a curmudgeonly virtue of our envy. We put bumper stickers on our cars telling Californians to go home. But we have admitted our envy and little is now seen of that misplaced defiance. We now fund advertising campaigns for Californians to come and rescue our falling real estate values by buying our houses as vacation homes.
One soon learns that California is a green state. They are making great strides in reducing carbon emissions and becoming "sustainable". Everywhere there are signs and reminders that California is seeking environmental purity. My daughter and son-in-law live in a large city in Southern California. While the city is in near bankruptcy with dangerously failing infrastructure, they will be severely penalized if they do not properly sort their garbage into various "recyclable" bins.
Given California's history, I am sure that they will successfully meet their goals for carbon reduction and "sustainability". Driving through California one sees many utility corridors. Great corridors where large pipelines and electrical power lines bring our energy into California for their use. Not that they really need the energy, just like everything else, they have more energy reserves than we do. They just have chosen not to use theirs. After all, producing energy can make such a mess.
And to add insult to injury, foreign energy sources compete to supply California as well, thus keeping us in our place. If we don't help the popular kid cheat on the pop quiz, we will lose them as a friend and have to eat lunch with the rest of the nerds.
Looking at California, one can only conclude that God plays favorites.
Friday, June 27, 2008
Monday, June 9, 2008
Project Storm Clouds
We are considering a project with a client and I must say that it should be a great project. The project itself is right in our sweet spot. The client is solid with the two basics that every client must have. They want to build something and they have a lot of money. And I should add that they also possess the great intangible that is necessary in a great client. They like working with us and the personal relationship is solid, at least so far.
It should be a situation where everybody comes up a winner and life is beautiful. But my honest assessment is that we are both getting ready to walk into a deep and dark canyon of perilous events. It would be tragic to watch a good relationship turn into a sour and contentious one because we place people in impossible situations, i.e. projects beyond hope of redemption. I have seen it happen so many times and I would hate to see it happen again. People that once enjoyed each others company and trusted each other become bitter and vindictive. People and companies that once thought well of each other and operated in an atmosphere of trust spread vicious rumor and delight in finding fault.
Just as a strong wind and dark clouds on the horizon are a warning to the prudent traveler, so the prudent project manager watches the client's weather. The storm clouds on this client horizon are ominous and dark.
One of the storm clouds centers around the old standbys, budget and schedule. Of course the client will not share the details of his CAPEX. God forbid that we actually know anything about those deep secrets. But we listen when the client talks and we see the project stop and start. It is almost certain that the budget is being deliberately starved to meet a needed rate of return by reducing the cost and shortening the time before revenue starts. This fits because the schedule is being shorted significantly below what reasonable people would estimate.
Of course, most projects don't have enough money or enough time. That is just business as usual. We all know that if you give a project team adequate money or time they will just waste it. But what really concerns me is the evidence of fear within the client organization. I have been on many projects with clients driven by fear. I don't have any memory of where we, or they, were successful.
The second major storm center on the horizon is the client procurement group. They have enormous power within the client organization and they will buy everything on the project. They are all nice people and of good moral character, but they exist in their own world. They buy on price and do not see the need to involve engineers in purchasing decisions. While I have no evidence, I would be willing to wager fairly large amounts of someone else's money that they see expediting and shop inspections as a waste of money. I would also bet that client procurement hasn't the people or resources to do so even if they thought it necessary, having previously earned brownie points with their executive management by cutting waste.
The third major storm center on the horizon is the client operations group. It is a pretty safe bet in an operating company that Operations is an important player. Experience to date indicates that operations won't be involved in any meaningful way in the design of what is to be built. While this is pretty much SOP, we usually get at least lip service from the client about how important and necessary operations input is. With this client, the operations group is silent and headquarters is cavalier about the silence.
This makes me worry about how much good will or understanding exists between operations and the "home office." In the absence of good will or understanding, I have usually found either active hostility or indifference. Both are deadly to projects. Unless the project is a true "greenfield" project, there is an established operating entity that will take over the operation of the project to be built. Once the project moves to construction in the field, that project starts to move under the control of the operating folks. They can delay it, they can change it or they can use it to get what they want from the "home office". Any of these possibilities are catastrophic to a project already on the margin.
But all the above is not fact, it is only my guts rumblings. Brave and bold men operate on their gut. I am just a timid engineer trying to manage the storms of the energy business. There are many good people who rely on this company for their livelihood. If we just do cream puff projects, we will soon run out of work and those good people will have to look for another job. At the same time, some of the best projects we do are those we don't do.
It should be a situation where everybody comes up a winner and life is beautiful. But my honest assessment is that we are both getting ready to walk into a deep and dark canyon of perilous events. It would be tragic to watch a good relationship turn into a sour and contentious one because we place people in impossible situations, i.e. projects beyond hope of redemption. I have seen it happen so many times and I would hate to see it happen again. People that once enjoyed each others company and trusted each other become bitter and vindictive. People and companies that once thought well of each other and operated in an atmosphere of trust spread vicious rumor and delight in finding fault.
Just as a strong wind and dark clouds on the horizon are a warning to the prudent traveler, so the prudent project manager watches the client's weather. The storm clouds on this client horizon are ominous and dark.
One of the storm clouds centers around the old standbys, budget and schedule. Of course the client will not share the details of his CAPEX. God forbid that we actually know anything about those deep secrets. But we listen when the client talks and we see the project stop and start. It is almost certain that the budget is being deliberately starved to meet a needed rate of return by reducing the cost and shortening the time before revenue starts. This fits because the schedule is being shorted significantly below what reasonable people would estimate.
Of course, most projects don't have enough money or enough time. That is just business as usual. We all know that if you give a project team adequate money or time they will just waste it. But what really concerns me is the evidence of fear within the client organization. I have been on many projects with clients driven by fear. I don't have any memory of where we, or they, were successful.
The second major storm center on the horizon is the client procurement group. They have enormous power within the client organization and they will buy everything on the project. They are all nice people and of good moral character, but they exist in their own world. They buy on price and do not see the need to involve engineers in purchasing decisions. While I have no evidence, I would be willing to wager fairly large amounts of someone else's money that they see expediting and shop inspections as a waste of money. I would also bet that client procurement hasn't the people or resources to do so even if they thought it necessary, having previously earned brownie points with their executive management by cutting waste.
The third major storm center on the horizon is the client operations group. It is a pretty safe bet in an operating company that Operations is an important player. Experience to date indicates that operations won't be involved in any meaningful way in the design of what is to be built. While this is pretty much SOP, we usually get at least lip service from the client about how important and necessary operations input is. With this client, the operations group is silent and headquarters is cavalier about the silence.
This makes me worry about how much good will or understanding exists between operations and the "home office." In the absence of good will or understanding, I have usually found either active hostility or indifference. Both are deadly to projects. Unless the project is a true "greenfield" project, there is an established operating entity that will take over the operation of the project to be built. Once the project moves to construction in the field, that project starts to move under the control of the operating folks. They can delay it, they can change it or they can use it to get what they want from the "home office". Any of these possibilities are catastrophic to a project already on the margin.
But all the above is not fact, it is only my guts rumblings. Brave and bold men operate on their gut. I am just a timid engineer trying to manage the storms of the energy business. There are many good people who rely on this company for their livelihood. If we just do cream puff projects, we will soon run out of work and those good people will have to look for another job. At the same time, some of the best projects we do are those we don't do.
Thursday, June 5, 2008
Old Lessons Relearned
I got to spend a small part of yesterday working on what I hope is soon to be a construction site. As you may know I am hoping to build a house in the woods west of Denver, actually a place called Conifer. Last fall I cleared the timber from the driveway and house building site to be. Prior to clearing the area, I had a land surveyor do a topographic survey of that area to be cleared. I also had an architect work with me to develop house plans for the site, using the topographic survey.
Yesterday I went out to look at clearing some additional area in the trackless forest. In doing so, I used distances on the survey to locate some spots on the site that had been cleared. It turns out that the house is not where I thought the house was. Of course being a consulting engineer in real life, my immediate, almost programmed, response is that it is all on paper and changes are easy. But then the owner part of my brain kicked in and I had a tantrum moment thinking about the well known failings of contractors, surveyors and consultants.
The fact is that everybody did their job. But the project manager was a little out to lunch. The surveyor did an accurate job of surveying the topography of the site, but there aren't a lot of natural tie points to give somebody on the site an easy way to orient themselves to the drawings. If you can't orient yourself, you will orient yourself anyway. If the human brain doesn't have any facts, it will create a story. I did in fact have a story rather than an orientation. The surveyor, like most all service oriented people, did what the project manager asked him to do. The project manager should have asked for more.
But the real killer was that somebody did make a mistake. It simply boggles my mind that somebody made a mistake, but it did happen. There was a tree with a bright orange ribbon around it. It was located at a strategic point on the site and allowed easy identification of the front of the house. It was not supposed to be cut down. A specific conversation between the contractor and the project manager was had at the beginning of the tree clearing job. That conversation occurred beside the tree and was specific about the need to not cut it down, with many fingers pointing out the large orange ribbon.
But it did get cut down. The contractor, called to task, disremembered the conversation. The architect wanted justice done, the tree replaced and the contractor blackballed. The project manager hemmed and hawed. It was all business as usual.
While the architect fumed, the project manager remembered. Although the project manager in question has a real talent for hemming and hawing, he also remembered the wise practice of construction management and inspection that he had often advocated. And he was convicted by his own failure to practice his craft well.
Yesterday I went out to look at clearing some additional area in the trackless forest. In doing so, I used distances on the survey to locate some spots on the site that had been cleared. It turns out that the house is not where I thought the house was. Of course being a consulting engineer in real life, my immediate, almost programmed, response is that it is all on paper and changes are easy. But then the owner part of my brain kicked in and I had a tantrum moment thinking about the well known failings of contractors, surveyors and consultants.
The fact is that everybody did their job. But the project manager was a little out to lunch. The surveyor did an accurate job of surveying the topography of the site, but there aren't a lot of natural tie points to give somebody on the site an easy way to orient themselves to the drawings. If you can't orient yourself, you will orient yourself anyway. If the human brain doesn't have any facts, it will create a story. I did in fact have a story rather than an orientation. The surveyor, like most all service oriented people, did what the project manager asked him to do. The project manager should have asked for more.
But the real killer was that somebody did make a mistake. It simply boggles my mind that somebody made a mistake, but it did happen. There was a tree with a bright orange ribbon around it. It was located at a strategic point on the site and allowed easy identification of the front of the house. It was not supposed to be cut down. A specific conversation between the contractor and the project manager was had at the beginning of the tree clearing job. That conversation occurred beside the tree and was specific about the need to not cut it down, with many fingers pointing out the large orange ribbon.
But it did get cut down. The contractor, called to task, disremembered the conversation. The architect wanted justice done, the tree replaced and the contractor blackballed. The project manager hemmed and hawed. It was all business as usual.
While the architect fumed, the project manager remembered. Although the project manager in question has a real talent for hemming and hawing, he also remembered the wise practice of construction management and inspection that he had often advocated. And he was convicted by his own failure to practice his craft well.
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