An increasing number of British consultants are surrendering their independence and becoming part of larger multinationals. The prize of a greater global reach is an attractive one, but is the price too high? This week we ask: Is becoming part of a global group the best way for UK consultants to compete on the international stage?
Peter Brettell, chief executive, Gibb
There are many advantages and few disadvantages to being part of a global group. Since the shift in power towards the US, it has been essential to understand the American economy and the global reach that the major US companies have. Companies outside America also aspire to achieve this but our experience is that the volume and diversity coming out of America exceeds everything the rest of the world can put together.
I believe that a presence in the American market and linkage into the US multinationals is essential if one wants to be a major player. I have found that having a US parent is extremely beneficial. The American economy has been so strong that US operations have consistently produced excellent results. This gives a sound financial base to the company and can help offset 'swings and roundabouts' in the economic cycle elsewhere in the world. Second, our US parent company, Law, has 15,000 clients, 300 of which are in the Fortune 500 list and this gives huge leverage into the global market.
The construction industry is changing worldwide with the formation of significant partnerships and alliances, and the example set by the major multinationals is instructive. Being linked to them in their home market and forming those alliances at source gives strength to our business globally. Being able to provide a multi-disciplinary service worldwide gives meaning to these partnerships and alliances.
The greatest benefit I have experienced is the interchange of ideas and expertise from the diverse organisations and cultures that are brought together in a global group. This aspect has enriched not only the projects we have worked on and the execution of the work but also the management of the company and its ability to prosper in a competitive world.
Analysis of high performing companies indicates that global groups consistently outperform single entity competitors.
Peter Chesworth, director, Mott MacDonald
If you're an independent company which is large and profitable, there's a tremendous amount you can achieve with your own resources. Bringing in another international stakeholder is not a prerequisite for realising global ambitions - if anything it's more likely to restrict access to markets than open them up. Unless you remain the dominant player, you're no longer master of your own destiny. You are no longer free to plan long term, to decide for yourself where your best prospects lie 5, 10, 20 years' hence and to develop a strategy to take you there - along a route best suited to your particular strengths and culture.
Being independent - wholly owned by employees - gives companies the freedom to shape the sort of organisation they aspire to be. It allows them to pursue their own course and change tack if they feel the need. Independence enables companies to work with the business partners and in the markets they prefer. They are free to follow their chosen management style and to hand the company on to the future leaders they've groomed and nurtured. Above all, independent companies can put corporate, client and staff interests first without having to answer to city institutions or foreign investors with a different agenda.
At Mott MacDonald we believe our independent status has undoubtedly helped us compete internationally. It has given us the freedom to choose where to make alliances and acquisitions both to enter emerging markets and strengthen operations in expanding ones. It has enabled us to choose where to grow organically and where to acquire new skills.
Prized as our independence is, we would not categorically rule out merger or flotation if we became frustrated in our global ambitions. But we'd have to be 110% convinced there would be major long term benefits. After all, independence is like virginity - once surrendered it is forever lost.