Chris Cole has been with WSP for 33 years, during which time it has developed, diversified, turned into a plc, balanced on the edge of disaster and finally grown into one of the industry’s foremost consultants. Here he tells Mark Leftly all about it.
Chris Cole is keen on the idea of a journey as a metaphor for the lives of people and companies. It’s an apt one, too, suggesting as it does hard going, difficult choices, enlightening discoveries. His own journey began in 1973 when he helped to form a four-strong firm called the William Sale Partnership; 33 years later it has grown into WSP, Britain’s eighth biggest consultant – and in three years’ time it plans to become a 10,000-strong, £750m-turnover empire.
It has been quite a trip. Cole was very much the junior partner in 1973 – he was about 20 years younger than the other three – but he has lasted the course through a stock market listing, recession, recovery and 9/11. And for the past 19 years he has been leading his firm through this uncharted territory, either as managing director or chief executive, and the 58 year old’s story of growth, growth and growth is a lesson to other ambitious firms.
“From a very early stage, my ambition was for the company to become a major multidisciplinary consultant. This crystallised in my mind in the mid-eighties and led us to going public,” he recalls.
To list on the stock exchange in 1987 was a gamble, but it was necessary if WSP were to raise the cash to grow by acquisition. It also offered the other three partners the opportunity to retire, allowing the younger man to carry the baton. WSP had grown to the point of employing nearly 200 people, but that was hardly enough to interest the City. So Cole had to woo the institutions with his hopes for the future – and then persuade them they were achievable.
The business plan was simple: diversify and grow. At the time, WSP was mostly known as a building consultancy. In the 19 years since that listing, it has grown to 6,700 people, and in its last full year accounts, turnover was £374m. Half of this growth was achieved with acquisitions, half by organic growth.
“It wasn’t planned, but it is healthy,” says Cole. “You need organic growth to ensure that your culture prevails. Our culture is of a client-focused company providing quality service, which will mean that everything – profit, order book – will be alright.”
One of Cole’s strengths as a manager is that he has been able to exert enough central control to retain that culture, despite the acquisitions. Geoff Wright, the former construction director of Hammerson, has known him since they worked on Brent Cross shopping centre in north London in the early nineties. He says: “There are few consultants with that number of staff where the chief executive knows exactly what’s going on.”
No journey is complete without a disaster. In WSP’s case it was the great crash of 1990. “It was bloody crap,” huffs Cole. As with most consultants, the double-digit margins that WSP enjoyed in the fervid Thatcher era would be no more. The problems, though, helped to refocus the business. Although Cole had dreamed of matching Arup and Atkins, it had made little attempt to emulate their international success. Now that the UK market was frozen stiff, Cole had little choice but to venture overseas.
Cantor Seinuk brought high-rise experience, which seemed like a good idea. Come 9/11, it seemed like a bad idea...
Following its clients, WSP opened offices in Asia and Africa. It also set up an environmental business that now accounts for more than 30% of group turnover. Then, once the business cycle turned up again in 1997, it splashed out £3.6m for transportation group Graham, which was based in the UK, but had offices in the Indian subcontinent. That nearly doubled WSP’s staff to 1,300 and gave it the spectrum of business streams it had always craved – transport, environment and buildings. “We were the only ones acquiring in the nineties,” says Cole. “The statistics show that less than half add value, but we certainly beat that.”
He says WSP aims to never buy more than five businesses a year, so that it has the time and resources to incorporate them into the group. “These companies that buy one a month can’t integrate them,” he says.
However, Cole’s aggressive acquisition strategy has not been free from City criticism. Between July 2000 and May 2001, WSP bought US firms Cantor Seinuk, a consultant engineer specialising in high-rises, and Flack + Kurtz, an M&E engineer, as well as paying £73m for Swedish technical consultant, J&W.
These firms had barely been digested when 9/11 occurred. “Cantor Seinuk brought high-rise experience, which seemed a good idea. Come 11 September, it seemed like a bad idea,” says Cole. The US businesses suffered hugely, while J&W was considered to be bought at a premium. Pre-tax profit slumped from £11.5m in 2001 to just £400,000.
The pressure was mounting, but Cole denies he ever considered throwing in the towel. “We’d been there before in the nineties. I knew it was a case of just tightening one’s belt. It forced us to address growing pains.”
By that, Cole means that things had been going so well that some of the firm’s structural faults, such as not having enough senior managers in place to control a large firm, had been neglected.
This was important, because as the slump ended, consultants took on bigger projects that required even more technical and managerial expertise, and balance sheet muscle. The collapse of the World Trade Centre hurt WSP, but Cantor Seinuk is working on three of the four towers that will stand in its place.
WSP is now pretty much back to where it was before 9/11 – its share price is only narrowly down on its £5 high in 2001. Cole also has a plan in place that, he hopes, will end with a £750m turnover and 8% margin by 2009. He insists he will be around until at least 2011.
But the journey still has rocky roads to negotiate. The World Bank accused the firm of corruption in Indonesia earlier this year. WSP had only two members of staff in the country, one of whom has been moved elsewhere, and it has stood by both. Cole is frustrated by the charge, but insists that it has not harmed the business: “Investigation continues in a difficult part of the world. Aid work of this nature accounts for only 1% of our business.”
Frustrating it may be, but Cole knows that the attainment of great heights is never easy.
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