Unique Signatures Across the Industry (Part 2)

In the last installment of this blog series on development contractors I laid out what I believe are two truths about Chemonics International.

1. Chemonics provides the "best in class" Project Enabling Environment (PEE) to its programs around the world and I believe this is ultimately what makes them such a powerhouse in development consulting ... and such a formidable competitor for the rest of the industry.
2. Despite everything I'd always believed about Chemonics the truth is that you won’t find Darth Vader walking its halls. It turns out that Chemonics is just a well managed organization with great systems, highly engaged staff and some serious talent, especially when it comes to getting big, complicated and urgent things done for USAID.

In today’s entry I continue my efforts to advance the key theme of the blog series (Every Organization is Different) by examining unique signatures accross the industry.

In order to get to next couple examples we’ll have to skip down a few slots on The USAID 50. 

The reason is that I've not yet had the opportunity to work for #2 John Snow (JSI), #3 The Partnership for Supply Chain Management, #4 Development Alternatives, Inc. (DAI), or #5 Tetra Tech. And remember, my argument is that you can’t really know what any particular company’s unique signature is until you’ve rolled up your sleeves and gone to work for them.

If you want to hear what I think your company is great at you’ll have to hire me for an assignment! Alternatively, if anyone out there is interested in taking a stab at the companies I have to skip, I’d be happy to post your thoughts on an organization’s unique signature here under your name. Just email me at Drew.Schneider.MPP@gmail.com

The next two companies that I’ll be writing about in this blog series are Abt Associates, Inc (#6) and AECOM International Development (#8). Unlike Chemonics, whose entire business is focused on development contracting with USAID, Abt and AECOM are large, diversified services companies. In other words, while Abt and AECOM both do a fairly sizable volume of development work for USAID, development consulting is only one part of each company’s overall business.

The point is worth a bit of examination.

I suspect it may be tough for some of the folks in this industry to really appreciate just how challenging it can be for a large, diversified company to do field-level development work with USAID. Working with USAID involves a lot of idiosyncratic business practices that often don’t align easily with the business practices of more traditional, mainstream professional services work. USAID does a lot of things its own unique way. Not only is USAID’s way a fairly significant departure from that of most other US Federal Agencies, its an entirely different game altogether compared to the private sector. I know this because I'm intimately familiar with the headaches that can be involved … I had to deal with them for over a decade while I was managing USAID work from inside Price Waterhouse, PwC and IBM.

Its an important thing to recognize because it has implications in terms of the insight that I'm trying to share through this blog series. The whole discussion about Project Enabling Environments (PEE) that I’ve introduced is a good example. As you’ll recall, in the last installment I argued that Chemonics’ industry leading PEE is largely attributable to its solid leadership, highly effective support units, and its clear organizational commitment to quality management systems. All very important. All very true.

What I didn’t mention in the last post, because there was no proper context for it there, is that Chemonics’ industry leading PEE is also at least partly attributable to the fact that the entire organization - from top to bottom - is purpose built around USAID’s idiosyncratic business practices.  I’ve come up with a little metaphor that I thought might help hammer that point home.

Check out the photo below. Ever seen one of these?

It’s called a "Sprint Car.” A Sprint Car has only one purpose … it goes really fast in tight little clockwise circles on a racetracks covered with dirt.  As far as cars go, Sprint Cars are pretty funky. They have different sized tires on the inside and outside which makes it almost impossible to drive them in a straight line. And, the large, asymmetric winglike thing on the roof means that a Sprint Car driver can’t really even see out the left side. You’d never see one of these things on a drag strip or a Formula 1 course, let alone a highway or your neighborhood side streets. But nothing can go clockwise around a small dirt track better than a Sprint Car.

If the only thing you ever did was drive clockwise around a small race track covered with dirt you'd definitely want to drive a Sprint Car. But what if your life was more complicated than that? What if you also needed to use your car to drive to the grocery store? Or haul the new fridge home, or pick your kids up from school, or drive them to soccer practice? What if you also needed something to go camping with a few weekends each year? and drive to Florida every summer so your kids could spend time with grandparents?

Well if that was the case you’d need something a lot more versatile than a Sprint Car … maybe something more like a Jeep. (FYI, for any trivia night players out there here’s a nice little tidbit you should file away!)

Chemonics is like a Sprint Car. It is an organization deliberately designed for the sole specific purpose of development contracting with USAID. By contrast Abt and AECOM are like Jeeps. Both companies have multiple service offerings for multiple industries with multiple clients, so they need to be a lot more versatile. The need for versatility comes at a cost. Because the large, diversified companies that work in this industry are not purpose built specifically to contract with USAID they have to work a lot harder and smarter in order to keep up with Chemonics.

Here’s what I think it all means. If you are a large, diversified company I think its a mistake to believe that you’ll ever get to a point where you can consistently beat Chemonics at its own game. I do think you’ve got to work on making your PEE as effective as possible just to stay competitive, but you need to realize that your PEE will probably never rival what Chemonics has to offer.

That’s why effective business strategies for large, diversified companies that are competing against Chemonics need to focus on what your company brings to the table that Chemonics can’t. And, whatever that is should probably also be what the folks inside the industry come to recognize as your company's unique signature.

In the next installment we’ll see how well the logic holds up.

- DS