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(Source enr.com - Date 3/23/03)

By Judy Schriener

Bernard Fried, who has headed up emerging business services operations at Bechtel Group Inc., has been named CEO of Citadon Inc., one of the largest Internet services companies in the AEC industry. Fried is a longtime construction industry executive, focused largely on finance. He spent 11 years with the ABB Group in Canada, Switzerland and the U.S. before moving to San Francisco-based Bechtel nearly four years ago. He started today at Citadon.

Bechtel is one of San Francisco-based Citadon's major investors, along with Fluor Daniel and GE Power Systems.

"Our most profound desire is to delight the large-scale enterprises that are committed to us," says Citadon Chairman Rob Majteles. "We wanted someone who understood them" and also could run a dot-com company. "Bernard has the heart of an entrepreneur along with big-company experience," says Majteles.

Added to Fried's 20 years in construction operations and finance are many years in his family's restaurant business, in which he worked from young childhood on. "There's nothing more competitive and cut-throat than restaurants," says Fried.

Unlike Fluor and GE Power, Bechtel is not an enterprise customer of Citadon, meaning that Bechtel does not mandate that projects and vendors use Citadon's Web-based solution. Whether that will happen remains to be seen, but it will not be Fried's biggest concern. "I see us making a success of [Citadon], and I don't know how long that'll take," he says. "The industry is still in a shaking-out mode. The [Citadon] product right now is leading the market in this area. It's good to very good, with every chance of being excellent."

After the startling no-notice departure of former CEO Doug Sabella in February, Citadon's board and Majteles took more time about selecting another CEO. Two of Citadon's board members put forward Fried's name independently of each other, says Majteles. Fluor's was not one of them. Fluor "thought it'd be best if we got a Fluor guy, but we joked about that and got past it," says Majteles. It helped that Fried had worked at Fluor Daniel years ago before he joined the executive ranks.

Selling Fried's appointment to Fluor was "easier than I thought it was going to be," says another board member and investor, Bruce Armstrong, vice president of operations for San Francisco-based ICG. "Everybody wants Citadon to be successful." Armstrong says he is "superexcited" about Fried. "He is a seasoned general manager with an appreciation for Citadon's customer issues and the quick-paced environment," he says.

Fluor executives are at least game for Fried's tenure, if not enthusiastic. "Fluor was engaged in the search and selection of the new CEO. We are particularly pleased with the selection in that Bernard comes from the EPC industry and knows our business well," says Arnold Steenbakker, president of Fluor's New Venture Group. "Citadon continues to deliver value to us and its other major customers by helping us realize productivity gains through increased collaboration on projects. Bernard's proven record in delivering products on schedule will ensure Citadon's continued success."

Fried most recently was a principal, vice president and program manager at Bechtel Business Services. Previously, he was chief financial officer for Bechtel Enterprises, Bechtel's development and finance group. While Fried worked at the Bank of Montreal, one of his investment clients was Asea Inc., which merged with Boveri, and he worked for two years with Canada's competition board to let the merger go through. After working with the merged company in Canada, he moved to its Swiss headquarters to become global head of corporate finance for the $30-billion conglomerate. He later moved to the U.S. headquarters in Connecticut to take charge of finance for the Americas. Fried speaks fluent French and passable German, he says.

Besides Majteles and Fried, the rest of the management team at Citadon now consists of:

"Powered by..."

Competitors report that they don't run into Citadon these days along their sales routes, whereas they used to come up against them everywhere they went. Is Citadon headed for "powered-by" status at a few customers, almost as an in-house solution? That idea doesn't bother Majteles a bit. "I don't mind the characterization of ‘private label,'" he says. "People think of it as an insult, but I don't. GE wants to run our technology in their system their way. Great! We will sell them software and consulting to do that and they'll run their own marketplace on top of our capability."

Citadon is "not interested in building a generic open exchange of collaborative services," explains Majteles. "Our customers have private relationships in which they have information they want to exchange. We're going to encourage them." He adds, "I don't think we're in the same business [as our competitors]—I don't think we've been in the same business for a long time."

The board last month pared down Citadon's 2001 sales goals from more than $25 million to about $15 million. "It was a matter of sizing the company to be successful in today's climate," explains board member Armstrong. Instead of being spread too thin across many markets, we said, ‘Let's look at the core assets and what's good about Citadon,' and a lot of that was the large enterprise-class customers. Those are the brand names that can help us sell to others."

Says Majteles, "The bell's ringing for Round 4. It ain't a fight ‘til somebody bleeds. We're still game and we still expect to go 15."

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