< PreviousThe Construction Users Roundtable 11 INDUSTR Y LEADERS A Message from the CII Director There’s rarely a day that goes by where I don’t hear from someone in our industry explaining how the demands on their time are continuing to accelerate (and pile up). So, the thought of adding one more activity to their busy calendar – especially if it involves an industry group like CII or CURT – may (for some) seem unbearable. Really, why should the professionals in our industry cram time into their already too-hectic schedules to be involved in something like CII or CURT? I believe being engaged in an industry group might actually be the most important activity that an employee can do for themselves and for their organization. According to American Business Magazine, 85 percent of all business failures occur in firms that are not members of their trade association. While I’m sure that there are many explanations behind this statistic – the reason that resonates most with me is the old adage that, “you can’t innovate in a vacuum.” Understanding the wider context, challenges, and opportunities of an industry, can only happen when you are engaged with people and other organizations – including peers, competitors, and customers, whether in your specific sector or in another. So, I’d like to share with you what I believe are the top benefits that you can gain as an individual by being a member of CII or CURT. As a follow-up in the next issue of The VOICE, I am going to list what I feel are the key benefits your organization can realize as a result, so be on the lookout for Part 2! And, for those of you reading this article who don’t belong to CII or CURT (by the way, you should belong to both), I’d encourage you to relay these benefits to those around you to help you justify why your organization should participate: Benefits for the individual employee – or, what will I gain that I can’t find on the internet? 1. Develop thought leadership Ninety-nine percent of innovations are not unique, but rather, unique combinations of existing ideas. Being on a committee or research team, or attending a conference, exposes you to the newest ideas and approaches that you can build into something new, innovative, and valuable. Remember, there’s a lot of value for you amongst your colleagues for being the “go-to” guy or gal if you can apply the knowledge that you gained by engaging with CII and CURT. 2. Networking and building trusting relationships I’ll admit that I don’t like the term “networking” because I generally equate that with “schmoozing” and other similarly negative behaviors. So, for me, that’s not a benefit. Instead, I prefer the fact that you can build trusting relationships. The big value here isn’t in the immediate – like winning a contract – but rather occurs when you least expect it or need it the most. I could provide countless examples, but the common theme here is that it’s amazing to witness what people in CII and CURT do to help each other out. 3. Education and learning Certainly, there are educational benefits to attending webinars, courses, and conferences. But, I think the main benefits are more subtle. Things like understanding how industry issues are perceived by peers provides an opportunity for you to learn and grow. Mentorship is another (whether traditional or reverse) – again, there’s always so much to learn when you have a diversity of people, thoughts, and ideas present regarding different issues. When you really understand the latest concepts, it often can provide you with a level of standing and reliability in the minds of your clients and customers (whether internal or external) that is invaluable. In the U.S. alone, there are more than 7,800 industry associations, professional societies, and labor groups. Most are working to advance the careers of their volunteers and improve the performance of their member organizations. Without a doubt, the capital projects industry is amidst some tectonic shifts unlike anything in the past. Digitalization, globalization, and changing workforce demographics are creating massive opportunities (and challenges) for organizations willing to understand and embrace these issues. I firmly believe the best place to prepare yourself and your company for what’s next is CII and CURT. For those of you who continue to be actively involved, I offer my most heartfelt thanks! Dr. Stephen Mulva Director of CII Why be a Member (Part 1)? Understanding the wider context, challenges, and opportunities of an industry can only happen when you are engaged with people and other organizations – including peers, competitors, and customers, whether in your specific sector or in another.The Construction Users Roundtable 13 ●●● GET TO KNOW CUR T Connecting With CURT’s Board of Directors “What are your biggest concerns for the industry going into 2020 / how can the CURT organization help construction companies with their primary concerns?” Jim Ellis CURT President SABIC General Manager, Global Engineering and Project Management Houston, TX “It’s no secret that there are not enough young people joining our industry; this is one of our biggest challenges. CURT is passionate about turning the tide, which can be seen by the level of importance we place on having young professionals involved in our organization and on our Committees. The more we welcome them, listen to them, respect their opinions (even when different!), and learn from each other, the more our industry will benefit.” Jim Ellis serves as Global Senior General Manager of Engineering and Project Management for Saudi Arabia Basic Industries Corporation (SABIC), one of the world’s leading and largest chemical and materials companies. Prior to assuming his current position with SABIC, he retired from the DuPont Company after 33 years of service, where he held numerous positions in business development, technology, operations, engineering and project management globally. Gregory L. Sizemore, Esq. CURT Executive Vice President THE CONSTRUCTION USERS ROUNDTABLE Cincinnati, OH “I think top of mind for everyone in the industry is ensuring we have an adequate level of skilled trades people to ensure the projects that are planned are able to be executed safety, on budget, and on time. CURT has been working hard on this issue and we have several resources available to help companies address it. I urge you to contact our office to learn how CURT can help.” Gregory L. Sizemore has over 30 years of construction industry and association management experience. In 1989, he started Sizemore & Company LLC, a construction industry association management and staffing firm. Sizemore holds a Bachelor of Science in Economics and a Master of Science in Industrial and Labor Relations from the University of Cincinnati. He earned his Juris Doctor from The Northern Kentucky University College of Law, and is a licensed attorney in the State of Ohio. He is a frequent guest speaker at industry events, where he represents “the voice of the owner to the construction industry.” Arthur Limper Board Member MERCK & CO., INC. Director, Construction Safety – Global Engineering Services Whitehouse Station, NJ “My biggest concerns for the industry going into 2020 are two-fold, with serious concerns on available experienced craftsmen and especially the availability of experienced and trained contractor and CM supervision and safety professionals. With the current demand for these trade and construction professionals, we are seeing more and more challenges and lack of available experienced professionals. CURT can help construction companies with these concerns by continuing to lead in raising awareness around market conditions; focusing on craft, safety, and supervisor availability; and also requiring the levels of training, experience, and certifications required within the building trades and supervision.” Art Limper has over 40 years of construction management, project management and safety program management experience in the commercial, heavy industrial, oil and gas, chemical, and pharmaceutical industries. He has been with Merck & Co., Inc. for over 15 years and currently is responsible for Construction Management and HSE Management Systems for Merck Global Engineering Services. Donna Parry Board Member PROCTER & GAMBLE Global Construction Leadership Team Cincinnati, OH “My biggest concern is that companies engaged in construction won’t aggressively lead transformation of the industry. Change is inevitable; we can’t go on as we always have. The economy doesn’t support the cost, the workforce isn’t available, and owners require swift execution to be competitive. We will lead change or change will happen to us; that second option isn’t good. Some companies are stepping up with innovative strategy and digital tools. Others are not. We must engage the industry more broadly and at every level, impacting the daily life of every person from the field to the boardroom. CURT’s superpower is our members: forward-thinking companies and principled, impassioned thought leaders who strive together to win together.” Donna Parry serves on the Global Construction Leadership Team at Procter & Gamble. Donna’s 33- year Procter & Gamble career has spanned Control & Information Systems, Project Management, Capital Systems Management, and Construction Management. She has held manufacturing and engineering roles in various consumer products categories. Donna’s P&G experience includes facilitating their North American Construction Safety network and responsibility for global Construction Management training curriculum and standards. Her current position focuses on Construction Management and Safety for a major project. continued on page 1414 The VOICE ● Issue 4, 2019 GET TO KNOW CUR T Eddie Clayton Board Member SOUTHERN CO. GENERATION Contracting & Workforce Development Strategies Manager Birmingham, AL No quote is available at this time. Eddie Clayton has been an employee of Southern Company for 37 years. He works with the Craft Labor Relations team in the Operations Services group. His responsibilities include supporting the Southern Company’s generating fleet and construction projects with labor market analyses, providing guidance and support with appropriate contracting and contingency staffing strategies and providing support to workforce development initiatives necessary for Southern Company to meet its indirect hire needs. ● Angela Skow Board Member AON Senior Account Executive Dallas, TX “One of my biggest concerns is the construction workforce. Even with added training, technology and the help of AI, our industry is facing a labor shortage. We just do not have enough skilled shovel ready workers. This is why CURT continues to address this issue by collaborating with partners like NCCER, and working with our robust Workforce Committee. We continue to work towards solutions and tools that our members can use, including Labor Risk Management (LRM) program, and workshops on topics such as modular/offsite to reduce labor needs. Having Committees dedicated to the issue of workforce and offsite will help our members prepare for future challenges.” Angela Skow is a Senior Account Executive with Aon’s Construction Services Group in Dallas, Texas. Angela joined the Aon organization in 2019 and in her role, Angela supports construction industry clients by providing solutions and services to manage risk and financial impacts. Prior to joining Aon, she served as a Vice President, Large Account Practice Leader, for Zurich, in the Dallas office. Angela was with Zurich for more than 13 years. Before assuming her role at Zurich, Angela was with Argonaut Insurance Group for over 20 years, where she served in an underwriting and management roles working with risk management accounts. CURT's Board looks forward to meeting you at the National Conference in Chandler, Arizona, February 10-12, 2020. Register at https://nc.curt.org.16 The VOICE ● Issue 4, 2019 Following are updates from all of CURT’s Committees. Visit www.curt.org for more information on each Committee’s focal point. Committee Conversations INTERNATIONAL COMMITTEE Gary E. Tomczak Co-Chair INTERNATIONAL PAPER Director, Capital COE Chris Dummermuth Co-Chair MERCK AND CO. INC. EMEA Director of Project Delivery In October 2019, CURT members met in Dublin, Ireland for a European Construction Industry Symposium on Digital Construction Empowering Construction Jobsites. Thank you to event sponsor PM Group for their support. Topics of discussion included the evolving impact of owners in building safety culture; digitizing complex project handover documentation; how do BIM, Lean, and advanced work packaging all fit together; and Lean construction and the Last Planner system. Attending events like this one are important because they provide unparalleled networking opportunities and the chance to share common challenges with colleagues and receive near-instant feedback and suggestions. This is especially important for companies that are building or retrofitting facilities in another country. We look forward to connecting with you at our next meeting. Stay tuned for dates! LEAN PROJECT DELIVERY COMMITTEE Al Schwarzkopf Co-Chair MERCK AND CO., INC. Associate Director - Engineering Robert Wagner Co-Chair PROCTER & GAMBLE Family Care GBU Construction Manager The 11th Lean Construction Summit was held in September in Charleston, South Carolina. Our focus was on Building a Successful Integrated Team – Characteristics of Partners in a Strong Team. Attendees spent the day learning how to build high performance teams…fast; how to fulfill procurement requirements when building an integrated project team; and how to take modularization to the next level with multi- disciplinary teams. The day wrapped up with a roundtable discussion on the challenges and rewards of team development, and what are the characteristic of successful teams. As you’re reading this issue, we’ll be handing out Project Excellence Awards at the Awards of Excellence Gala in November in Clearwater, Florida. This award was created in 2016 to recognize project teams for outstanding delivery of capital projects. If you know of such a team, we urge you to submit an application for the 2020 awards cycle. Applications will be available on the CURT website in Spring. Planning is underway for the next Lean Construction Summit. We’ll provide details as soon as they’re available! SAFETY COMMITTEE Chris Fought Co-Chair MERCK Associate Director, Construction Safety for the Americas Kevin Owsiany Co-Chair JOHNSON & JOHNSON Director, Project Management The response to our last Safety Summit, held June 2019, was very positive. Attendees found benefit in the topics discussed, which included sessions on OSHA, marijuana/drug testing, and recognizing impairment. We’ve already begun to plan for the 2020 Safety Summit. Check back next issue for more details. We last met in September 2019 and during that time, we discussed what topics and initiatives we would focus on in 2020. We have lots of exciting ideas for the future and hope you’ll join us on the journey to Zero Injury. If you have knowledge to share, or you’re simply interested in learning more about safety, please reach out or, better yet, join us for a future Committee meeting. They’re held in conjunction with CURT’s member meetings. WORKFORCE DEVELOPMENT AND INDUSTRIAL RELATIONS COMMITTEE Eddie Clayton Co-Chair SOUTHERN CO. GENERATION Contracting & Workforce Development Strategies Manager Ed Luckenbach Co-Chair AIR PRODUCTS AND CHEMICALS, INC. Manager – Field Execution Team Our Committee met in September 2019 to discuss what we accomplished in 2019 and where we would like to focus on attention into 2020 and beyond. One of our main objectives, is to facilitate the use of CURT’s new Labor Risk Management (LRM) Program, which is a full-service contractor pre-qualification and risk analytics system that is designed for owners to effectively evaluate contractors for workforce training and development capabilities. Issue The Construction Users Roundtable 17 GET TO KNOW CUR T 3, 2019 of The VOICE features an update on this topic on page 25, and we’d encourage you to read it to learn how this program will help with labor management. You can access the magazine for free on the CURT website. Other goals for 2020-21 include identifying, recognizing, and promoting best practices and effective methods for workforce recruitment; improving the perception and image of the industry with influencers and prospective new entries into the industry; and supporting and engaging in the implementation of the action items included in the Restoring the Dignity of Work advocacy document. You can download this document on the NCCER website (www.nccer.org). We really encourage you to read this paper. If you’re facing workforce challenges, or if you have workforce solutions, we would welcome you on our team. Please reach out however works best for you, or join us at our next meeting. OFFSITE CONSTRUCTION COMMITTEE Bill Lewis Co-Chair SABIC Senior Manager, Projects Construction, Global E&PM Mike Brewer Co-Chair FREEPORT- MCMORRAN INC. Director, Global Project MM Depending on when you’re reading this issue, you’re either at our Offsite Construction & Modularization Workshop, or the event has wrapped up. Don’t despair if you missed it – our next one is already on the calendar for August 26, 2020, in Philadelphia, Pennsylvania. Back to the 2019 event… We were excited to have discussions on the benefits of truck and barge shippable module solutions; how to identify, plan and manage critical milestones on an offsite/modular project; the uses of pre- stressed or pre-cast concrete; cost certainty and budgeting; and the scheduling advantages of modularization. This will be our first modularization workshop where our primary focus is on truck and barge shippable modules. These smaller module units open many opportunities in relation to brownfield and retrofit projects. When properly applied, we have realized significant reductions in cost and turnaround schedules. We look forward going through the feedback and comments from this event. PROCUREMENT AND CONTRACTS COMMITTEE Rodney Long Chair DUKE ENERGY Director, Sourcing, Major Projects Sourcing The Procurement Committee met in September during the CURT quarterly meeting in Charleston, South Carolina, and welcomed several new members to our Committee. The initial discussion focused on aligning the Committee name to better describe the focus of the group. Going forward, the Procurement and Contracts Committee will be the new name. A roundtable discussion of topics of focus was next on the agenda, as well as possibly working with the other Committees on common areas of interest. By extending our scope to include contracts, we discussed that not only does this include types of contracts and how they are written but could also include what member companies are doing in contract management. The Committee would like to extend an invitation to others who have an interest in Procurement and Contracting to join us at upcoming meetings to continue the discussion. As we look to increase our membership, we are open to not only those in procurement or supply chain roles but would also welcome members with a background in legal, project management, project controls, and other disciplines. If you have a desire to help share lessons learned or experiences that you have had in procurement, we would like your input and look forward to meeting you soon! In closing, I’d like to say thank you to Mathew Daniel, Honda of America, for Co-Chairing this Committee since its creation. Thanks for all your hard work, Matt! TECHNOLOGY AND PRODUCTIVITY COMMITTEE James Boileau Co-Chair ZURICH Construction Segment Director Ryan Fertig Co-Chair VESTAS Head of Construction, U.S. Real Estate Drones, BIM, wearables, robotics, 3D printing, data analytics, blockchain – we’re excited about all the possibilities. Our Committee is newly-formed and eager to explore how technology intersects through all of the different areas CURT is focused on, including all the Committees highlighted in this spread. Some of our key focuses right now and into 2020 are creating an Owners Technology Blueprint; working on best practices that include assessment, implementation, and measurement; and working towards our first Summit, to be held next year. If any of these topics are of interest to you, please join us at our next meeting. There’s an article in Issue 3, 2019 of The VOICE (page 24) which discusses our focus areas and goals. Join us if they interest you! YOUNG PROFESSIONALS ADVISORY BOARD Colton Brown Chair APTIM Superintendent/ Field Manager If you have young professionals working within your organization, I urge you to explore the benefits of their attendance at an upcoming meeting. If you want them to lead your company and the industry, they need training outside of their daily roles. Summit agendas are full of content that will help them grow as professionals, and have included sessions on speaking in front of large groups, how young professionals can benefit from job rotation programs, the benefits of mentorship, and how to develop quality professional relationships. Please get in touch with the CURT office to learn more about how being a part of CURT’s young professionals network can benefit you! And stay in touch by joining us on Facebook at www.facebook.com/ groups/216417488377887. ●18 The VOICE ● Issue 4, 2019 AAt the beginning of the year, the Wall Street Journal released the poll results from a survey that asked 73 economists what they expected from the economy. The survey revealed that in the collective minds of economists, there is a 25 percent chance of recession in the coming year. According to the Journal, this was the highest level since October 2018, and a significant increase from 2017, when respondents said there was only a 13 percent chance of a recession. While there may be a recession in the near- term, most economists have already been proven incorrect. “A further deterioration in the trade Pessimistic Predictions, OR Optimistic Outlook By Anirban Basu, Chairman & CEO, Sage Policy Group, Inc. Many economists and business leaders envision recession in one year, but the data doesn’t necessarily support this prediction. For the latest forecast, be sure to attend Anirban Basu’s keynote address when he takes the stage at the 2020 CURT National Conference, Monday, February 10, in Chandler, Arizona!The Construction Users Roundtable 19 ON THE COVER dispute with China, combined with a deeply divided U.S. government and a conclusion to [special counsel Robert] Mueller’s investigation could sap all the energy out of the economy,” said Bernard Baumohl, Chief Global Economist at the Economic Outlook Group. The trade disputes persist of course, but the Mueller investigation has had, and will likely continue to have, no material impact on the economy. Other economists were concerned about inflation. Most envisioned worsening inflationary pressures emerging as the root cause of a downturn. In the context of full employment and a 50-year low in unemployment, wage pressures were set to drag inflation higher, prompting the Federal Reserve to further ratchet up interest rates and borrowing costs until the economy began to shrink. See Exhibit 1. But rather than worsen, inflation moderated due to a number of forces, including a weakening global economy and a strong U.S. dollar. While the Federal Reserve raised key interest rates nine times between December 2015 and December 2018, they have cut them twice since. The simultaneity of full employment and low inflation is precisely the state of affairs the Federal Reserve seeks and many economic actors want. For now, the economy continues to perform well. Still, many perceive coming storms. While forecasts of recession have yet to come to fruition, the economy has softened. Last year, the U.S. economy expanded 2.9 percent, buoyed in part by tax cuts enacted in late 2017. During 2019’s initial quarter, the U.S. economy expanded 3.1 percent on an annualized basis. The economy then downshifted to two percent during the second quarter, with many economists expecting growth for all of 2019 to be closer to two percent than three percent. Job growth has also slowed. Over the past six months for which there are available data, job growth in America has averaged 150,000 jobs/month. During the prior six months, the monthly average stood at 196,000. In August, the nation added 130,000 net new jobs with June and July estimates revised lower by a combined 20,000. The result 1.0% 1.2% 1.4% 1.6% 1.8% 2.0% 2.2% Ju l-12 Se p- 12 Nov-12 Ja n- 13 M ar -1 3 May-13 Ju l-13 Se p- 13 Nov-13 Ja n- 14 M ar -1 4 May-14 Ju l-14 Se p- 14 Nov-14 Ja n- 15 M ar -1 5 May-15 Ju l-15 Se p- 15 Nov-15 Ja n- 16 M ar -1 6 May-16 Ju l-16 Se p- 16 Nov-16 Ja n- 17 M ar -1 7 May-17 Ju l-17 Se p- 17 Nov-17 Ja n- 18 M ar -1 8 May-18 Ju l-18 Se p- 18 Nov-18 Ja n- 19 M ar -1 9 May-19 Ju l-19 Core PCE Index 12-Month % Change July 2019: +1.6% YOY -800 -600 -400 -200 0 200 400 600 800 200220032004200520062007200820092010201120122013201420152016201720182019 Net Change (000s) August 2019: +130K would have been even worse but for the creation of 25,000 temporary Census jobs. But even this can be easily explained away. Employers are suffering increasing difficulty securing workers to fill job openings, resulting in slower monthly employment creation. One could argue that the emerging softness in job creation is not due to falling demand, but to the dwindling supply of human capital. As of writing this article, there are still 7.22 million unfilled, available jobs in America. There have been almost precisely six million unemployed Americans in recent months, which means there have been approximately 1.2 available job openings for each unemployed American. That is a powerful indication of a strong U.S. labor market. See Exhibit 2. Predictably, the tight labor market is producing meaningful wage gains for workers; which in turn is helping to provide sustained fuel to the nation’s consumer spending-led economy. Through August 2019, year-over-year wage growth has met or exceeded three percent for 13 consecutive months. As indicated by the Wall Street Journal, a worker with a 40-hour-a-week job earning the average hourly wage from August 2017 (when it was $22.11) through August 2019 ($23.59), would have experienced an annual salary increase from about $44,000 to $47,000. Construction The construction industry added 14,000 net new jobs in August. Year-over-year, the total number of construction jobs is up 2.4 percent; or rather, 177,000 jobs. That represents an impressive tally for a number of reasons. Ask any contractor about their circumstances and they are likely to break Exhibit 1. Core PCE, July 2012 – July 2019. Source: U.S. Bureau of Economic Analysis. Exhibit 2. Net Change in U.S. Jobs (seasonally adjusted), August 2002 – August 2019. Source: U.S. Bureau of Labor Statistics. continued on page 22Next >