october 2009 issue
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The Keyser File
The Project Starts Here
Stantec has ballooned into a global, multi-disciplinary powerhouse. But the consulting giant is about more than growth, its innovative system of start-to-finish accountability demonstrates
by Tom Keyser
Freelance Columnist
It’s a charge that’s frequently aimed at major players in any field: they’re resistant to change, too clumsy and slow to respond to new and innovative ways of doing business.
Maybe that’s true for some sectors. But it doesn’t apply to consulting engineers.
Case in point: During the last 10 years, many of the most important global names have embraced a new kind of strategic management model, enabling them to offer clients broadened services that include strategic planning and advice on project economics, risk assessment and capitalization.
It’s hard to miss the big Stantec story. The Edmonton-based company has grown from a gleam in the eye of the late Don Stanley, P.Eng., to a multi-disciplinary giant that employs more than 10,000 people across North America.
Less in the public eye is its home-grown Strategic Management Business Unit, which has blossomed from a handful of experts in 2003 to 20 economists, financial analysts and MBAs. Many of them also enjoy an engineering background, by the way.
What the unit provides is front-end advisory services to clients — long before capital is approved for the projects they have in mind.
“According to the traditional model, most of Stantec’s activity on a given project has taken place only after the capital expenditure has been approved by the client,” explains Gerry Devine, P.Eng., one of the senior leaders for the Strategic Management practice. “Once approval has been granted, we would move forward for implementation.”
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THE BUSINESS END |
‘End-to-End Accountability’
The approach is changing. “What’s happening now is that the engineering company’s function is being pulled forward in advance of capital-expenditure approval, in a manner that minimizes the client’s downstream risk during implementation.”
It’s an integrated approach that Mr. Devine, who has an MBA, calls “end-to-end accountability.” He believes strategic management has boosted Stantec’s customer-service quotient as well as the bottom line.
Mr. Devine and his colleagues point to an international project undertaken for the water authority in Barbados, where Stantec has nurtured strong, long-term relationships with government.
Ian Morrison, P.Eng., also a senior leader and also an MBA, gives the background. “There’s a severe water shortage on the island, and the water authority recognized it would need to improve reservoir management, as well as find some other way to increase the flow of potable water available for the residents,” he says.
During preliminary brainstorming, Stantec strategists recommended a reverse osmosis plant as a technical solution. Next question: where do we go from there?
“We did an ownership analysis as well as a regulatory and feasibility analysis,” says Mr. Morrison. “We identified the problem and suggested the solution.
“And then other questions emerged. How is the client to structure the opportunity as far as the ownership analysis goes? Where will the financing come from? How are we going to supervise the tender once it’s established and how do we take things to the end of the process?”
Stantec came up with a start-to-finish roadmap, after enlisting the help of technical groups within the company.
Financing was particularly ticklish. Should officials in Barbados resort to traditional debt financing to backstop the project? Or would it be more efficient to raise capital from private sources?
“We determined that a private-public partnership was the appropriate method of ownership,” says Ian Morrison, P.Eng., a senior principal with Stantec. “Now we’re in the process of putting it out to tender. When the time comes to move forward, we’ll have drawn up the transactional documents, completed the legal and regulatory analysis, and provided the entire scope of services, including assisting with evaluating the tenders. And we’ll supervise installation once it’s underway.”
It All Started Here
Stantec is particularly proud that its strategic management team evolved organically within the Edmonton office and expanded to Calgary and Vancouver, after the decision was made to formalize the group as a core service. The plan was to hire the appropriate people and build the unit as an integrated part of the whole.
“Unlike some other engineering companies that have entered into management consulting, we did not buy an outside firm to provide the skill sets we were looking for,” explains Mr. Devine. “We did it from the grassroots level, hiring the people we needed.
“That way, the culture remained one of integration within the company’s complete spectrum of services. This is an Alberta story.”