Last month I made a blog entry titled "State of the ESA Industry". In it I described what EDR has been seeing since the much-discussed credit crunch began over the summer. Long story short, there's fewer Phase 1 projects being conducted right now as compared to last year while at the same time the number of environmental consulting firms in the market continues to increase (e.g. less work being shared by more people).

We estimate the decline to be in the 10% range right now. Nearly all of this decline in transactional volume (so far) has been isolated to a specific sector of the commercial real estate market: CMBS. The result is that firms with clientele heavily concentrated here are bearing much of the burden. The flip side of the coin is that firms focused more on portfolio lenders, law firms, government and corporations are actually seeing year-on-year increases in transactions. We think this is where the growth will be for the next year.

It has been well documented that the small balance loan market is expanding rapidly. While definitions vary, I would broadly describe this market as having two general characteristics. First, mortgage originations are sub $2 million. Second, the lender retains the loan (and relationship with the borrower) rather than selling it.

Many environmental consultants have also recognized this as a growth area and are aggressively marketing services to it. These services are not full Phase 1 assessments but are more limited in scope and often involve no site visit. Instead, the service is more of a desktop review. The end result for the consultant is a service that, while less expensive than the full Phase 1, is often more profitable. As a side benefit, a certain percentage of these desktop reviews will uncover a condition that leads to a more detailed assessment. Based on recent changes in ordering behavior from the industry, this segment of the market appears to be expanding between 10-20% compared to last year. Further, but somewhat anecdotal, evidence of this growth is being heard within EDR's Solutions Group. Here, requests for desktop review templates has increased sharply over the past several months indicating an interest to automate these reviews as much as possible.

Over the past few months EDR has been attempting to implement a more structured process for conducting performance evaluations throughout our company. So far results have been mixed and I think the reason for this is that it isn't completely clear what the true purpose of performance evaluations is.

The term "performance evaluation" itself conjurs up all sorts of negative connotations. At some level it implies that Person A (who has all the power) tells Person B all the things they he/she should do to improve (while Person B sits back and takes it). Over the years I have been on the receiving end of these "talks" and have always found them, shall we say, less than motivating. The reason for my opinion is that they really never were "talks" where a back-and-forth dialogue was taking place between two people. Instead, I was always being talked to.

I think there is simply one overriding reason for conducting performance evaluations; to overlay an individual person's goals and skills with the company's goals and skills to determine how well they are aligned.

Of course, to actually do this means that one must know what the company's goals and skills are and what the other person's goals and skills are. The former should be relatively simple provided that a company's management team has done its job in communicating the organization's mission, values, goals and strategies in a clear way. The latter is more difficult because it demands a personal, one-on-one dialogue between two people who perhaps don't have a history of communicating at this level. Doing this requires a high degree of trust and, as we all know, trust is something that must be earned and takes some time to develop between people. But when it does happen, people are able to break through things that had been barriers and achieve results they hadn't thought possible before.

At the end of the day, a manager's role is to help others, both customers and employees, attain their goals. No more and no less.