Along with Rick Maggiacomo, I had lunch with one of our key clients last week. He was pissed. Somewhat happily I guess, he wasn’t pissed at EllisDon, he was pissed at the entire construction industry.

I will try and summarize an hour of his frustration into a few sentences. He said basically this: You builders come into meetings with the clients, with the design consultants, with the whole team, and you all have more knowledge about how to make my project successful than anyone else in the room, and what do you do? You sit there. You sit there, and wait for the client and the designers to make decisions. Then you say “OK, fine”, and you go away and price things out, and if it comes in over budget, and the project fails, it’s not your fault, because you were just carrying out instructions, pricing what you were given. Except, it is your fault: You had the opportunity to lead, you had all the knowledge, yet you just sat there.

We had a vigourous discussion, not just about our failings but about how change was needed at his level as well. I have no intention of sharing that discussion widely.

But I will say one thing: If somebody’s going to be upset in order to make a project successful, it doesn’t bother me if it’s the people at EllisDon. It doesn’t bother me if it’s the consultants. I don’t really care who we upset, as long as it’s not that fellow who was sitting across the table from me and Rick.

The process needs to change. Roles need to change. Change upsets people. That’s life. But the next time we meet that client for lunch, he’s paying, and Rick and I are going to savour it. Because we are going to earn it.

Everyone knows that the Dubai market has crashed. Six months ago, EllisDon was desperate for people; within the last six weeks, our professional staff of 215 people has dropped to below 150, and our key client is in trouble – very painful developments for many people. Here’s a bit of good news:

Our management team there has spent zero time whining or making excuses. In fact, their cheerful, determined optimism has been instructive for me this past week.

They have found quickly that Saudi Arabia is still healthy, even prosperous, and have three new initiatives in play there – I believe two of the three will likely succeed. I spent a day with them in Qatar, where they have identified opportunities in Project Management (our sponsor told us that we would fail coming in as a contractor, but there are likely good PM opportunities, including working directly for the government) and have been approached by a successful midsized contractor who wants to team up with ED to obtain – guess what? – our systems, our experience, our engineering - our intellectual capital.

And of course, Abu Dhabi remains healthy and promising. Amid the current pessimism, we have picked up a new project there, and continue to build a strong relationship with Mubatala (Emirate’s largest developer).

Then we met an architect, Bill Karr, whom I found inspiring (he has a project in Faluja, Iraq, that he visits by driving across the border, remotely, in a beat up car with a three day beard and no security). He made clear that it is the conventional markets that are suffering, and identified PM opportunities in Syria, Morocco, Turkmenistan, and even Ethiopia – where the government is planning on building two million(!) homes.

Here is the message that team is teaching everyone else at EllisDon: Get out of your comfort zone. This means each one of us. Alberta is slowing, Saskatchewan is rising, we need to be there right now. We seem to be terrified of Water and Waste Treatment. Why? There are good opportunities with Canada’s First Nations tribes we have not sought out. We need to lift our eyes, put on our hiking shoes, and get moving.

If we want employment security, profit sharing, and increasing share prices, we are going to have to get way out of our comfort zone.

Lastly: I want to salute all of EllisDon’s employees in Dubai. Hang in there, we will be growing again soon.

Dateline - Saudi Arabia: Fast, Fluid, Flexible in the Mid East.

EllisDon also owns a luxury resort in St. Lucia called Windjammer Landing. You should, of course, spend the entire recession there, but that’s not the point here.

These are tough times in the resort business, as you would guess. As soon as people start feeling financially insecure, they cancel their vacation.

(BTW, resorts tend to be the first business to come out of recessions as well: After about a year or so, when people realize they aren’t about to lose their jobs, and they have been stuck in their house for an eon of months, their spouses tend to say things like ‘Take me to the sun, or take me to a divorce lawyer’. But that’s not the point here.)

The point is this. We resort owners like to put ourselves into a death spiral. Our occupancies drop, so we cut prices. Tour operators (who are run mainly by the airlines) call us and say ‘Everyone else is cutting prices, you better cut yours or be left in the cold’. So, lamblike, we obey. Consumers aren’t stupid. They figure out pretty quickly that they can wait until the last minute, because the longer they wait, the lower the prices are. As they wait, the resort manager panics, and cuts prices further. Then the tour operators call all the other resorts, and beat them over the head to match the idiot who just cut his prices below cost. So they do, and the consumer – so incentivized – waits. We actually reward the consumer for harming us. And good for them I say – if we are going to be so stupid, we deserve our fate.

I have never seen such obviously illogical, self destructive behavior by business owners in my life, except maybe in the construction industry.

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