Developers and Other Clients

We work for quite a number of different clients, but their projects are to a degree, very similar. We do projects of that type because we have experience and expertise in doing them. They are familiar to us. Because of that similarity, we tend to look at all of our clients as being similar as well. It is a simple thing, but perhaps not a wise thing, for us to make that assumption. Our unconscious thinking being that if the projects are similar, the clients must be similar.

It is a simple assumption, and under most circumstances, does not create problems. Similar facilities require similar engineering, after all. The degree of detail and documentation may be different, but a certain body of engineering work is necessary to allow the facility to be built. And so we persist in our naive perception of our clients.

But in fact our clients are very different. To the extent that we recognize differences, we personalize them. Both they and we are human beings, with the likes, dislikes, biases and prejudices that are common to that condition. As a result, we easily see differentiation among our clients based on their differences as people, rather than on their differences as organizations. But there are profound differences among our clients based on the type of organization that they represent. Too often we are blind or indifferent to those differences. And those differences can have a material affect, on our business, as well as on our ability to successfully execute projects.

The type of projects that we do require substantial financial commitments on the part of the client. As a result of this simple fact, our clients tend to be large publicly owned corporations. Those corporations usually have mature organizations with well developed procedures and protocols for handling the complex financial, legal and organizational issues involved in building, and more importantly operating, complex and costly facilities. To an extent, we are not even explicitly aware that these procedures and protocols exist. It is simply the environment that exists in which we do projects. It is like asking the fish about the water, and having the fish answer, "What water?"

But there are other types of client out there, and for which we work. One of these other types is what I call, the developer. Developer organizations are often just a few individuals, sometimes a single individual. Their business plan usually revolves around recognizing a business opportunity, determining the facility necessary to capture that opportunity, raising the money to build the facility and then building it. Once built and operating, it is sold to a larger organization, with the developer on to the next opportunity.

Since it is our desire to be a successful business, as well as a successful project driven engineering company, we must take into account the different imperatives that drive the developer client organization as opposed to the large corporate client organization. The first step is to recognize that we provide a different value to the developer than we do to the corporate client.

In the case of the corporate client, we provide the spectrum of resources necessary to accomplish the desired result. The mature organization of the client knows what it wants to do, how to do it and the constraints within which it will be done. That client simply needs some organization to provide those resources in an efficient and cost effective manner. The developer organization is looking for something different. They are looking for the knowledge of what needs to be done. Crudely put, the corporate client is looking for muscle, while the developer is looking for brains.

But here is the trap for us as a business. The scale of work done by the corporate client, as well as the dynamics of that organization, require that large and sophisticated outside organizations actually accomplish the work necessary to execute the project. Not only must the project be built and put into revenue generating service, but the client organization itself has a commitment to operating that project facility into the future. The operation of that asset and similar assets creates potential liability with many stakeholders. Thus the need to proceed on projects in an orderly and measured manner according to the procedures and protocols of the corporation. Thus an organization like ForeRunner employs people engaged in executing those projects for their clients in the manner expected by those clients.

In contrast, the need of a developer is for the basic design and to just get it done. Often the need for that basic design is driven by the financial organization providing funds to the developer. Professionally done high level drawings are as much a part of the business plan presented to potential financial partners as is the pro forma. Once a workable design is in place, many developers will become a DIY (Do It Yourself). Given that the goal of the developer organization is to create an asset that can then be sold, project execution is driven by expediency and short term considerations.

An interesting metaphor for the difference between developer client and corporate client might be that of auto racing. Working for the corporate client might be viewed as being in a car rally. Performance is measured by hitting all the milestones at the correct speed and time. Working for a developer client might be viewed as a drag race. Getting from start to finish is the sole criterion. The car may well be throwing parts all over the track and on fire, but crossing the finish line in the shortest time is the only thing that counts.

Thus working for developers can be a difficult game for engineering companies. Engineering companies often give away their ideas, or sell them cheaply. The idea being that they will capture the client with their ideas, but will then be able to sell the manhours necessary to execute the ideas. This strategy is a real loser for the engineering company in working with a developer. The developer is looking for the ideas, and if they can get them for free, so much the better.

Peggy Noonan and Kaitlyn Marie

I must tell you about a major change in my life and, as it happens, the subject of this post. My oldest daughter, Suzanne, has made me a grandpa. There is a new girl in my life. Her name is Kaitlyn Marie and her picture is alongside. As I am sure you will agree, she is beautiful. And as you can also see, she has a sparkling personality. 

We haven't been formally introduced, but I have fallen in love from afar. When we do meet, I know that she will immediately bewitch me. I have always been a sucker for pretty girls with flair. Just ask my wife and daughters.

Though I am new to it, I suspect that being a first time grandpa is different than being a first time dad. Having been a dad, I remember it as being very immediate. It comes like an avalanche and leaves you gasping for air. One day you are a carefree child in a man's body. The next you are an adult. The humdrum things of your life are suddenly changed beyond recognition. There is this little person that is totally dependent on you. What had been a drive to the grocery store in normal traffic and a simple suburban home yesterday, was now an environment full of danger. Drinking a few beers after work now seemed like very risky behavior in case something happened.

I am very new to the gig, but I think grandpa's have a different perspective than dad's do. I probably won't put the pacifier in boiling water when Kaitlyn drops it on the floor or the dog licks it, unless her mother is looking anyway. We did that for Kaitlyn's mom, Suzanne, who was our first. But as our family grew, we just couldn't keep that up. Which helped us learn that kids are pretty tolerant of dirt and germs.

But grandpa's worry too, just about different things. Which brings me to Peggy Noonan. Ms. Noonan, who was once Ronald Reagan's speechwriter, writes a column for the WSJ that I look forward to every week. She has a rare gift of putting into words what we, as a society, are feeling. At least those of us who are of a certain age and cultural sensibility. Last week she titled her column, "Remembering the Dawn of the Age of Abundance". Coming at the same time as Kaitlyn's birth, it affected me powerfully.  

Ms. Noonan is old enough, as am I, to remember when we didn't live in an Age of Prosperity. Back then, the nightly news carried pictures of burning US helicopters in the Iranian desert, Soviet tanks rolling unopposed through Afghani villages and lineups of blindfolded hostages in front of AK-47 wielding students. Inflation roared through our economy, we waited in lines a block long to fill up our cars with exorbitantly priced gasoline and our cities were crime infested warrens that had seen little new construction in decades. Our wise men told us that things would only get worse in the future because our culture was a failed one that would be replaced by cultures better able to cope with a world of declining resources.

Then things began changing. Slowly we dug our way out of the funk we were in. We started to believe in ourselves again. We worked, we invested, we dreamed. Once more our country became a beacon of freedom, a place where people came because they wanted a future for themselves. 

Our economy boomed because we were inventing things. We celebrated entrepreneurs like Bill Gates and Steve Jobs who were building exciting new industries. Our economy was growing in productivity by leaps and bounds. Inflation was stopped in its tracks, our cities got cleaner and safer, energy became cheap. The Soviets were chased out of Afghanistan, the Berlin Wall was pulled down and Francis Fukayama wrote an influential book about the end of history because Western Civilization had proven itself so superior that it could have no credible future competition.

But then we started to read our own press clippings. We started to live beyond our means. Yesterday's luxury item became today's necessity. We created the "aspirational consumer"; that is someone who was living beyond their means, but who hoped to someday be able to afford the lifestyle they were living today. I think we know in our gut that we will not return to that economy anytime soon. Our political class is busy enacting reforms eerily reminiscent of the late 1960's which led us into the economic horrors of the 1970's.

Kaitlyn will grow up in this future that we are now creating. Most of the news today is bad and there doesn't seem to be any bottom to the economy in sight. The danger level in the world is rising sharply as political opportunists realize that the world's policeman has gone home. Our government is out of new ideas and falling back on failed ideas from the past.

But like Ms. Noonan, I am optimistic about the future. The excess of the past years needed to come to an end. There is a lot of poison that needs to be drained from the system. We need to find our way again and will try many bad ideas until we are ready for good ideas. We will have foolish leaders until we again develop wise leaders. We will get back to basics. We will rediscover our greatness and Kaitlyn will grow up and live in a great country.