Jim Scott made millions on megaprojects. Now he’s warning against them
Posted on September 07, 2023 | By Ashley Fitzpatrick | 0 Comments
Jim Scott trained as a millwright in Central Newfoundland, grew into construction project management, then made the jump to owning his own business as a third-party contractor at age 44. Moving from one heavy industry project to the next, he eventually sold the business, Standard Consulting Inc. (SCI), at age 53, a multi-millionaire.
Encouraged by friends and family, he tells his story in Seventh Son: My Road to Success, available now from Flanker Press. As he recently told Atlantic Business Magazine, he doesn’t see the book as a roadmap for others to follow. He actually argues against large-scale projects, particularly multi-billion-dollar “megaprojects”—or at least the management approach to such projects.
“I personally believe megaprojects are not the way to go,” he told ABM. He explained he doesn’t believe they always offer the best set of opportunities for local people looking for a share of overall investment, particularly small contractors.
As his memoir describes, after offering snapshots from his formative years, Scott was based in Grand Falls-Windsor at the start of his career. He sought trades work in British Columbia and Alberta. In 1988, he took a millwright’s position with the Iron Ore Company of Canada (IOC) and moved to Labrador City, beginning a long relationship with the mine operator. Though he was caught up in a layoff in the early ‘90s, tied to the kind of downturn common in the cyclical sector, Scott was invited back time and again. Through the years of expansions and contractions, he also found himself working on construction of the Hibernia offshore oil project, the Terra Nova offshore oil project and in the U.S. on the Big Dig project to expand Interstate 93 (I-93) in Boston. That was even before the launch of SCI. His later experiences as a private contractor included time on large projects at the Come by Chance oil refinery in Newfoundland and Labrador and construction of Vale’s nickel-copper-cobalt processing facility in Long Harbour.
From 2006 to 2010, SCI grew from a one-person payroll to 12 employees, offering mid-management services for large projects. “The end of the next year, 2011, I had 20 people; by the middle of 2012, I had 30 people on my payroll,” Scott said. SCI had offices in Labrador City and St. John’s, and around $4 million in revenue in 2013. In the grand scheme of private contractors for project management and support services, SCI wasn’t large, but Scott and his team did well for themselves.
In 2015, SCI merged with Cima+, though the value of the deal is not disclosed. Scott continued to work with Cima+ after the merger and retired from the business in 2021. He has since launched a new company, Scott Consulting Inc.
Scott said he doesn’t think the original SCI evolution would be a typical story today. He suggested megaproject investments come with “too much bureaucracy” and work packages so large they can be a challenge for locals to bid on.
He said work package sizes need to be broken down into smaller segments in order for smaller local companies to take advantage of opportunities to be suppliers and managers. At present, package sizes are put together by megaproject managers focused on cost management but Scott suggested smaller packages would be easier to control.
He described publicly-funded megaprojects as deserving of the greatest consideration when it comes to cost-benefit analysis. “When you get into (these) megaprojects, you’re getting government involved … And I don’t mean no disrespect, but a lot of government people have not been in that side of it. So they really, truly don’t understand the magnitude of what they’re getting into and they rely on corporate level people in these big organizations … they sing their own praises,” Scott said.
Beyond megaprojects, Scott’s book also shares his experiences moving from frontline work to engineering firm advisor to construction management and finally incorporation as a third-party contractor, with the start of SCI in 2006.
While happy to talk about his personal success, he said the financial risk is the main reason we don’t see more tradespeople following a similar path. “The first thing that an independent contractor has got to understand … is that if there is a downturn, consultants go first. They are the first out the door,” he said.
Not everyone wants to be the person handing out layoffs or perhaps being trapped with “no backup” as the wheel of fortune turns, he explained.
In his own case, Scott said part of his reputation, how he secured work, was rooted in his early hands-on experience, particularly time in the mines in Labrador. “I knew the mines so well. And the work—I physically did it as a millwright, so I knew what (we) needed to be doing,” he said.
Apart from using early career experience throughout your working life, he also writes about the importance of education. Scott’s father died when Scott was in his mid-teens, and he left school shortly thereafter, at age 16, with a Grade 8 education. Leaving school early, especially to help support family, was a not uncommon decision in Newfoundland and Labrador at the time. Yet, it was a decision Scott came to regret.
“Education is the key to everything,” he said, describing how he undertook training as a millwright and later re-engaged with adult basic education, before going on to study business administration. He credited his studies, from one-off courses between jobs to more difficult goals, as playing a part of his long-term success.
“You need to get your education (…) Once you got it, they can’t take it from you,” he said.
And all the way along, he suggested others in the trades perhaps looking for a change, take every problem someone mentions to you as an opportunity to offer a solution. From there, he suggested, you may find your own successes.
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