Davis Langdon’s recent purchase of architect DEGW may mark another mutation in the DNA of cost managers. But there are reasons to think it will be a problematic one
‘When is a duck not a duck?” “Well, if it walks like a duck and talks like a duck then, my friend, it probably is a duck.” This saying came to mind recently when I read that DEGW had been taken over by Davis Langdon. In spite of statements to the contrary, DEGW looks like an architect, sounds like an architect and for 99% of people in our industry, it is an architect (with a specialisation in workplace planning). Hence my surprise at the deal, which I think marks a turning point for those in the QS sector.
DEGW, founded 26 years ago by Frank Duffy and his partners, is a valued brand and at one time was talked of in the same reverential tones as Foster and Grimshaw. The thought of a practice of such stature being bought by a QS, no matter how large, would have been out of the question back then. But who would have thought that a major contractor like John Laing could end up in the arms of a concrete specialist called O’Rourke? Our industry is nothing if not unpredictable.
It is argued that “mergers” of this kind make perfect sense. The architect gains an introduction to lots of new clients and the QS can harness its newly acquired design expertise to extend its role into multidisciplinary fields that go beyond cost and project management.
However, this view is far too simplistic and ignores some basic facts. You need to examine the motives of the partners in coming together. Is it a strategic alliance or an opportunistic purchase? And, frankly, does it matter as long as the price is right and one party is cracking open the champagne?
Once other architects perceive that a QS has lost its independence and become a competitor to those advising and influencing clients on the design side, you are taking a big risk
Well it does if the work isn’t there. I’m not privy to the thinking behind the current acquisition but I suspect that it was brought about because the acquired party was struggling – indeed had gone into administration. This therefore questions how attractive the workplace planning market really is, and with firms such as ISG and Morgan Sindall already working in the space, what value does a combined architect/QS/PM practice actually have for a client?
A second problem is with culture. It is fair to point out that the idea of multidisciplinary consultants collecting complementary units is hardly original. Indeed engineers have been buying up consultancies for years, so why can’t QSs do the same? How else can they expand on the international stage?
Well, there is a great deal more to an acquisition than taking the name and the client list. I remember talking to one of the parties in the planned merger between Atkins and Pascall + Watson that stumbled at the finishing tape some years ago. One of the core reasons appears to have been that there seemed to be no real cultural synergy between P+W’s architects and Atkins’ engineers and had the deal gone ahead it may well have damaged both brands.
It can be argued that adding architecture to a multidisciplinary QS practice is no different from adding construction management or project management or facilities management to the service offering. Cost managers (including my own) have been expanding their roles in this direction for years and it was not perceived as a threat to PMs or FMs, so why should the design role be any different? Well the problem is that it has also always been important that the cost or project manager be perceived as separate from the architect advising the client. Many would argue that a consultant that takes on a well known architect would be unable to say it has the independence that is vital to maintaining credibility in the eyes of developers and investors.
If your aim is to broaden your offering as a multidisciplinary practice then why not hire individuals who have the skill to grow the business?
That is why deciding to jockey with the ranks of architects through the acquisition of one of their number is interesting. Once other architects perceive that a QS has lost its independence and become a competitor to those advising and influencing clients on the design side, you are taking a big risk – and that is why this merger marks a watershed.
If your aim is to broaden your offering as a multidisciplinary practice then why not hire individuals who have the skill to grow the business? It is not as quick, but it is cost-effective, less of a cultural shift and you can still offer a one-stop-shop. Most importantly, the perception is not there among other members of the team that you are trying to poach their work.
At the risk of stretching my earlier metaphor I think that this may well turn out to be a deal that waddles and quacks but turns out to be an albatross around the neck for both parties. Only time will tell.
Richard Steer is senior partner in Gleeds