17 February 2011 – If you are an infrastructure company with few hundred staff, maybe 500, you may get a call from Chris Cole, founder and chief executive of the giant WSP global engineering group.
In 2007, this UK-based company purchased local engineers Lincolne Scott, credited as one of the forerunners of the sustainable property movement in Australia, especially through its then head, Che Wall.
Now Cole is back for a second bite at the Australian market.
Cole says it’s not a bad pond to be fishing in. In terms of a sustainability agenda, he says: “Australia is seen to be on the front foot.”
So far WSP has been more than happy with its acquisition of Lincolne Scott.
“In Australia we’re blessed with a company that is quite mature in sustainabilityand its carbon reduction agenda,” Cole told The Fifth Estate last month, in between client meetings and presentations of the five-year plan to the Australian crew.
Reaching the wider world
“And we’ve used this company to leverage those skills into the wider world. We’ve moved people from Australia to America and to London.
“We saw this business as a business that was ahead of the game and we’ve transferred those skills and that CV to the rest of WSP.”
Australia has also been a happy hunting ground for new blood with similar credentials: the new head of global sustainability for WSP is Australian Paul Tyne, a former Lend Lease operative.
So what exactly does Cole have in mind in terms of growth?
Currently, the company stands at a massive 10,000 people worldwide, but that’s still a far cry from peer groups such as AECOM with its 40,000 staff on the payroll, or the huge US-based Jacobs, with a similar number.
With a turnover of about $700 million, Cole says WSP probably ranks in the top three in the UK, top five or six in Europe, and about 15th globally.
Not bad considering that when the company listed on the London Stock Exchange in 1987 it numbered a slim 100 people.
It’s plans? By 2015 to be at about 12,000 to 13,000 staff worldwide with a turnover of $1 billion or so, Cole says.
Don’t mistake Cole’s intention here: this is not naked ambition at play for its own sake. Rather, it’s a cool response to what he sees as compelling economic forces that dominate today’s landscape.
The growth needs to be targeted and strategic. What Cole wants first and foremost is infrastructure capability to add to the full service offering that he believes is critical to WSP’s future.
The power of Oz
It’s a good time, says Cole, and Australia is the right choice.
Economically, the GFC isn’t over, but he says the situation has stabilised. In the UK, the economy is “arguably going down still.”
“You enjoy an economy here that is one of the better ones; one of the only economies in the world that’s had rising interest rates in the last 24 months.
Cole says Australia is attractive in the first place because it’s a different economy.
“It’s driven by different dynamics … by minerals and resources,” he says.
“Geographically, it meets our regional diversification [needs]; that’s why we came down here. There’s been a recession and a liquidity problem, and if we hadn’t been affected like everybody else we’d probably be further down the road of acquisition in this country.”
The era of the engineer
Huge opportunities exist for engineers who can align themselves strategically with big changes underway globally, Cole says.
In his view there are three major drivers: urbanisation, transportation and climate change.
“More people are moving to the cities, and cities are getting larger,” he says.
“A lot of people think we are moving into the era for the engineer because of the need for more cities, more transportation … and when you think of the railways, they’re enormous high-speed freight railways.
“In 25 years the Middle East will have railways all over it. And everything we do now has to be addressed in a sustainable way.
“My view is that businesses have no option but to address the whole issue of climate and sustainability. It’s a compelling business dynamic. What you believe as a person is another matter.”
Extreme weather events such as the Queensland floods and the severe weather in Europe, whatever their cause, will further add to the demand for engineers.
“There will need to be more preparation for extreme weather events because we will learn from them and react to them,” Cole says. “It’s what happened in London after the floods of the 1950s – we built the barrages afterwards.”
However, there’s a proviso to sustainability. In Cole’s view, “everybody expects a company to have a sustainable agenda, but it has to be affordable.
“How far you go [in sustainability] is very much a value-add equation.
“I deal with clients around the world and I can tell you that in recession they are less far less likely to spend money on sustainability. It’s a fact of life.”
Cole reserves judgement on weather events and their significance, but says that makes no difference in the drive towards sustainability, nor in his company’s determination to recognise and respond to it.
“We’re having severe weather events, but we’ve had them in the past and when these happen, people want to protect themselves against a future occurrence.
“The trouble is, we don’t know what was happening 300 or 400 years ago; we’re blessed with so much media coverage now.”
Cole says in 1987 the UK had the worst hurricane in 300 years.
“You get extreme weather; I mean people skated on the Thames 200 years ago. We haven’t done that since.”
Australia, too, had floods “as bad or worse” than the recent Queensland floods, in 1974, Cole says.
“One thing for sure is that we have every evidence now that our clients, whoever they may be, find this an increasingly important business imperative and [if that is so] then it’s absolutely imperative for WSP to be embedded in the subject.
“There is no downside in being on the front foot, walking the talk. There’s only an upside. It’s either neutral or up.”
The growth strategy
The whole idea when WSP listed was to have access to capital and have a vehicle for “the aspiration of growth and scale that I had,” Cole says.
“We’ve achieved some of those objectives by using a public company vehicle to acquire a number of businesses to complement the organic growth.”
The recession of the early 90s helped to underscore the value of that strategy.
“In the early 90s we had a very serious recession in the UK and that provided evidence, if you needed it, that being in one economy or one company was quite a vulnerable place to be if you want to grow; it’s OK if you’re a niche business.
“The experience of that recession underpinned the strategy to be multidisciplinary … It’s an unfinished project, interrupted by the recession.”
Right now is the time to move, he says.
“We have the finance. But it doesn’t mean we want to spend it. As it happens we’re starting to look for businesses in Australia.”
Cole has none in his sights, just yet. But the search has only just begun.
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