Chris Cole: Growth? It’s non-negotiable

In the battle between Chris Cole and WSP, the corporate machine is winning. “What happens is this,” says the structural engineer’s chief executive, in his chirpy south London accent, “you build a business and as it grows, some of the things that are dear to you - for me it’s being on site, talking to people, meeting clients - become a tussle to keep hold of. When, like with WSP, you get to 10,000 or so people, you have so many demands on you that you get pulled away from the things you love. In the end, the company wins. And rightly so.”

One thing’s for sure: WSP needs Cole’s full attention now more than ever. The firm issued a profit warning earlier this week after suffering a significant fall in public sector work and being forced to write off £5m worth of work in Libya. The group will now undergo a £4m restructure. And among all this, Cole must still see to the day-to-day task of keeping up with clients and delivering an extremely ambitious target: boosting the company’s turnover from its current £700m to reach £1bn by 2015.

Cole is confident of success, and he believes the only way to achieve it is to grow. He is eyeing bolt-on acquisitions worldwide and hints at future plans for consolidation. “The industry will need to consolidate,” he says. “And WSP has always been a consolidator.”

Adding depth

Profit warning aside, the firm is no stranger to expansion. WSP is arguably the world’s best known multidisciplinary engineer and over the past 30 years has grown from being a UK group with one office in Surrey to operating in six major world regions.

The first element of Cole’s growth strategy is for the group “fill in the gaps” in locations where WSP already operates - expanding through depth rather than breadth. In short, Cole’s plan is to make sure that the group offers just as many services in the US, Australia, Middle and Far East as it does in the UK and northern Europe.

Cole’s focus on WSP’s existing global success is no surprise. The group already has the biggest global footprint of any UK construction company with £480m turnover coming in from overseas, an order book worth £908m and 9,000 staff in 200 offices across 35 countries worldwide. It has won work on some of the biggest global projects around, including the World Trade Centre buildings in New York, the Shard in London and the Shanghai Business Park in China.

“Diversity has put us in a good position during the downturn,” he says. “The Shard aside, the UK has been challenging. Having said that, we have had success in the private sector. Not everyone has been as fortunate. The private sector in London is improving but it was always a pipe dream that it would move fast enough to fill the gap left by the public sector downturn. Talk about optimism - that’s at the very end of the spectrum.”

He adds that having just 30% of the group’s £700m turnover coming from the UK business has been vital in keeping the group stable: “It’s not just about the UK anymore,” he says. “Yes, London is extremely important. It’s like a country in a country, but there is a world beyond the UK that companies like ours derive the majority of their turnover from.” Indeed, about £262m has been pouring in from the group’s European business - most from the firm’s outfit in Scandinavia. “We are not there by accident,” says Cole. “Northern Europe has some of the best rail and infrastructure expertise in the world.”

The sectors that will be the biggest growth markets for WSP are rail, infrastructure and energy. “The plan now is to build up the business as a multidisciplinary company worldwide,” says Cole. “We don’t offer the depth of skills across all of our range and sectors so we elected that this was where our growth was going to come from. Australia is a good example. We went in four years ago but we don’t have all the skills necessary - mining skills, or infrastructure skills. We only really have real estate skills. So it’s an unfinished model.”

Finishing these models requires making acquisitions. Cole is eyeing bolt-on acquisitions and is clear that this is top of the group’s agenda worldwide: “Growth is non-negotiable. The way we grow is generally through acquisitions,” he says. “We will continue to grow in this way. There is an appetite for bolt-ons in Australia, where we need more mining expertise; North America, which we have identified as somewhere we want more infrastructure than we do now; and Scandinavia.”

Consolidation

Cole isn’t just keeping an eye on acquisitions as global gap fillers. “When you get to a certain size, you have to find growth. Maybe that growth will come from expansion into the areas I mentioned - or it might be one particular transaction.”

So is there anything immediate on the horizon? There is a long pause before Cole says carefully: “We are always in talks with firms we think might be good to consolidate with. But not in relation to one meaningful transaction. But we’re looking at the landscape all the time.

“Consolidation continues to be an option for large consultants,” he explains. “It is possible that, in the not so distant future, we’ll have a group of a few very large consultants and then a big gap before you find a very large number of smaller ones. Look at what happened to the accountancy firms - they all merged and consolidated to the point where now you only have the big four really. And then lots of small firms. Medium is not a place to be in this industry at the moment.”

It’s all about the clients

Underpinning any strategy for growth is Cole’s insistence on going out and meeting clients: “All of this means nothing if you don’t have a good relationship with your clients,” he says. “It’s fundamental to success. If you don’t have a business that recognises what client service means both commercially and professionally, you don’t have a business, really. You can be as technically brilliant as you like and full of innovation but unless you understand that embedded dynamic of what the client wants, it doesn’t matter.

“Clients have a choice all the time. And part of that choice is working for people they trust and people they like to work with.”

Liaising with clients is clearly something he enjoys: “Fancy spending your life in your office, dealing with the problems that the industry creates, without getting out there and having some stimulus from clients and projects?”

However, as Cole turns back to his computer screen, it’s just as clear that WSP comes first and so, for the moment at least, he is prepared to let the office win.