ECC Conference

ABJ Onsite

The Perfect Storm

The mood at the 41^st Annual Engineering and Construction Contracting (ECC) Conference was mostly light and jovial, as old friends reconnected and new friends were introduced. But every now and again, the air in the room got a little more sombre, as members recalled what had happened to the industry over the past year. Depending on the size of the company, some businesses had been rocked; others simply had to delay projects or reorganize budgets. In all cases, members had felt the impact from a downward market and it was clear the audience was looking for some hope for the future.

A lot can happen in a year. At the 2008 conference, the group gathered to celebrate continued success and profitability in engineering and construction, covering topics such as giving back to the industry and bringing in new graduates. No one knew that, just days later, Lehman’s would go bankrupt, the Bank of America would purchase Merrill Lynch, AIG would receive its first government bailout and the rest of the market would follow suit.

Understandably, then, this year’s conference—held from September 9 to 11—brought owners and contractors who were disappointed, uncertain about the future and anxious for business to pick up again. In response to these concerns, the ECC built their event around the theme, “The Perfect Storm: Navigating through the Turbulence of Risk and Change,” bringing in various business leaders to speak to pertinent issues.

While the subject matter did reflect the tumultuous times, not everything was doom and gloom. For starters, the conference was located on a beautiful acreage just outside of Austin, Texas, at the Hyatt Regency Lost Pines Resort.  Far from cookie-cutter, the accommodations showcased Texan terrain, history, hospitality and home cooking. Enjoying everything the conference had to offer was a group of almost 500 industry members—an encouraging attendance, recession or not.

As for the speakers, their messages were as optimistic as they were realistic: even if we’re not yet out of the mire, things will improve. In the meantime, we should be taking charge and finding opportunities for success.

Learning from each other

The ECC conference is organized in such a way that values peer-to-peer interaction, collaboration and feedback. In all three plenary sessions carrying the Perfect Storm theme, there were panellists on stage to discuss what their companies were doing to address changes. Multiple perspectives provided a variety of ideas about strategies for the present, as well as advice for next steps.

The first session, “Same Storm, Different Ships: Will Owners Plot a New Course,” catered to the unique perspective of owner companies, featuring panellists from Shell International, Eastman Chemical Company, ConocoPhillips and Chevron Project Resources. The discussion included how owners’ business models are changing to account for long-term growth and sustainability, as well as day-to-day issues, such as budgets, asset management and project development.

“Same Storm, Different Ships: How Will Contractors Respond to Winds of Change,” was the second session, which reached out to the contractors’ experience. Three panellists from Zachry Holdings, Bechtel and J. Ray McDermott spoke about adjusting their approach to emerge better-positioned in this market and the future market. In addition, they talked about how their businesses are responding to changes in the owners’ “new course” and how it implicates the contracting sector.

The final conference session, “Thought Leadership on Risk and Change,” was led by two deans from preeminent business schools, Mays Business School (Texas A&M University) and Jessie H Jones Graduate School of Management (Rice University). This discussion looked at the business community as whole and talked about the latest and best thinking surrounding the management of risk and change. Linking academia and industry is something the ECC has been committed to for quite some time, as the knowledge shared is valuable for both parties.

Keynotes

In between sessions, meals and networking breaks, ECC members had the pleasure of sitting in on four dynamic presentations from the keynote speakers. While there was audience involvement in the form of questions and electronic polling, it was really a chance for members to sit back and absorb the knowledge and experience of other professionals—even those outside of the engineering and contracting industry.  

Professor Jeffery Garten from Yale School of Management kicked off the keynote presentations with his views about the economic recovery and what we should expect in the short term. His feeling is the market will continue to recover gradually, but will not reach the same level of profitability as in 2007. In other words, he argued for an inverted ‘J’ recovery. A big sigh of relief came when Garten talked about continued urbanization and the need for engineering and building on a global scale. That said, Garten also mentioned how economic growth isn’t likely to be lead by the United States, and that Asia will be a major player in years to come.

Speaking on Thursday afternoon was Rich Karlgaard, Publisher and Forbes Columnist, who provided interesting economic insight from a media perspective. His thoughts on the recession were that media have a done the public a huge disservice for blowing it out of proportion, causing more uncertainty and panic than warranted. In Karlgaard’s mind, our economic situation is most akin to the 1970s recession (both in unemployment rates and stock prices), but it hardly mimics the 1930s. He said there’s a chance of a ‘W’ recovery that will be caused by inflation in the next two years, and warned about the need to be smart with investments. But he ended with the reassurance that this, too, shall pass.

Friday morning brought John Hofmeister, Founder and Chief Executive of Citizens for Affordable Energy, a Washington-based public policy advocacy firm that promotes sound U.S. energy security solutions. Hofmeister spent some time talking about the increasing prevalence of energy and environmental trends, and how the necessary infrastructure needs the E&C industry—some more good news. As population grows, the demand for energy also increases. Right now, much of the traditional infrastructure is aging and needs maintenance and upgrades; furthermore, newer energy sources require new and often different infrastructure than what exists today.

Coach Jack Lengyel ended the conference with his dramatic and inspirational story. For those who don’t remember, Lengyel was the Marshall University football coach who stepped up after the tragic plane crash that claimed the lives of the eight coaches, 25 teammates and five crew members. While Lengyel isn’t necessarily a business expert, his message was one of determination, commitment and leadership, encouraging ECC members to find opportunities in hard times and that perseverance pays off.     

Breakout forums

The last element to the ECC conference was the breakout sessions where the members gathered into smaller groups to discuss issues that matter to their businesses specifically. Each person had the opportunity to attend three of eight forums, tackling topics such as labor law changes, the direction of alternative energy, navigating millennials, LEAN construction and leadership during turbulent times. 

In these sessions, members heard from industry experts and then had a round-table dialogue about their own experiences and observations. The forums provided arguably the most value for attendees, in terms of relevance, personal interest and networking opportunities. The feedback coming out of these sessions was overwhelmingly positive.   

Stay tuned

After two full days of everything engineering and contracting, the conference ended on a hopeful note—one that was encouraged by increasing urbanization and signs of a market recovery.

ECC Chair, Alan D. Thomas, reminded members not to lose themselves in economics and to stay focused on core industry values, such as safety and quality work. He voiced how important it is to maintain a solid reputation and work ethic, so members can come out of the recession well-positioned for growth. After all, a lot can happen in a year.

About the ECC Association

The Engineering & Construction Contracting (ECC) Association is an organization of owners, contractors and suppliers committed to improving the outcome of capital projects and improving the global competitiveness of all members. Fundamental challenges and opportunities are addressed from a strategic perspective. Industries include energy, process, industrial, and general manufacturing.

The ECC attracts executives and high level managers as well as project and engineering professionals of companies involved in capital projects. ECC activities impact and serve the interests of a broad cross section of the process, refining, pharmaceutical and power industries. To learn more about the association, visit their website at http://www.ecc-conference.org/.

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