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Name of the game

INTERNATIONAL CONSULTANTS FILE 2003

Multi-disciplinary UK consultant JacobsGIBB became just Jacobs in January. Diarmaid Fleming spoke to the man at the helm, to launch NCEI's Consultants File.

Traditional marriages usually involve a name change for one partner and corporate tie-ups are no different. On 1 January, the complete assimilation of JacobsGIBB into the parent Jacobs family was formally marked when the historic Gibb name was finally dropped.

Jacobs staff in its UK headquarters in Reading near London are now no different to their brothers and sisters in Pasadena, California - or in any other office.

To the fusty nostalgic, it might appear like a founder member of the Football League joining the American Football League. But the disappearance of the name Sir Alexander Gibb & Partners, one of the big UK consultancies, reflects more the major changes in UK engineering consulting over the past 10 or 15 years rather than any sell-out of the family silver to the Americans. A withering recession in the early 1990s has seen a raft of mergers and international takeovers, with a host of smaller firms disappearing by the wayside.

While the name change might suggest wholesale changes at Reading, in reality it will be business as usual. All the major changes which the transformation from traditional British consultant to part of a US global multinational have already taken place, while the personnel in the UK will remain under the stewardship of Peter Brettell, a man whose entire career has been with Gibb.

Any transitional jolts to working under American ownership have long gone, since the consultant was bought by US firm Law in 1989 before being sold to Jacobs in 2001. 'We already had the culture shock of being brought into the modern business world by Law, ' says Jacobs vice president Brettell. Law's trading difficulties prompted the sale, but Brettell makes it clear these proved in the end to be of benefit to Gibb. 'We were treated by Law as an offshore, more like poor cousins. There was no chance of expansion.'

The philosophy adopted by Jacobs is entirely different and the dropping of the Gibb name is part of that. The company operates as a complete entity, rather than a set of disparate groups throughout different countries.

'Jacobs is an integrated company without boundaries, and it is very important that we are seen to operate as one. It is not relevant to the development of Jacobs for one company to have a separate identity - it is not part of the culture.'

'Rather than becoming a small fish in a big pond, we'd like to be seen as the most important fish in the big pond, ' Brettell jokes. And a big pond it is too, with net earnings of US$88M on revenues of US$4bn in 2001 and 20,630 staff worldwide. In comparison, Gibb in 2000 had a turnover of US$100M in 2000, but is no small fry with 2,700 staff in the UK. Added to 1,000 in Ireland and 2,500 in Europe, the Reading office will play a key role in Jacobs' European operations. In fact the retention of the Gibb brand until now was because Jacobs had a relatively low profile among infrastructure clients in Europe.

'Staff, clients and growth are the key three areas for the company, ' says Brettell. 'Staff are our greatest asset, because effectively our business is about selling our brains by the hour. We are a relationship-based company and the relationship with the client is of paramount importance. And growth is an imperative - not top-line growth but net income growth.' Comparing the fortunes of casualties of the dot com boom, he says: 'There are lots of companies which showed huge top-line growth a few years ago but didn't grow net income and didn't collect cash. They're not around any more.'

Growth is a key driving force behind Jacobs, says Brettell.

Turnover grew by 17% to US$4bn last year from US$3.4bn in 2000, while net earnings surged by 72% to US$88M in 2001 from US$51M in 2000, although this percentage rise was distorted by 2000's earnings being down on 1999 when profits hit US$65M.

Growth has been achieved internally and by acquisition, as well as focusing on costs. Operating as distinct business units is 'absolutely against the company's philosophy' - and while one sector might be less profitable than another, all goes into one big pot.

Another remarkable feature of the business is its relatively small client base - albeit including such major names as BP and Intel. Around 70% of the firm's work is for 49 clients. A sales team operating worldwide from the US is largely responsible for winning new work, leaving others to get on with doing the business in engineering.

'The emphasis is on developing our client relationships, ' Brettell says. 'While new people knocking on the door is nice, we would want them to understand our core values. While it's a serious offence if you lose money, it's a capital offence to lose a client, ' says Brettell.

The single company strategy means appropriate resources from across the company can be brought into play, providing impressive firepower if needed.

Straight-talking Brettell forecasts organic growth in the UK to double in three years, a staggering performance if achieved.

Huge promised state investment in transport infrastructure, particularly railways, in the UK is hoped will offer rich dividends, coupled with work from core private sector clients.

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