Face to face: David Brodie-Stedman, Driver Group
Driver Group's regional head David Brodie-Stedman is opening a new office in a bid to double growth over the next three years
For a relatively small construction consultancy, Driver Group’s growth in the Middle East to date has been fairly impressive.
The company, which is based in the small town of Haslingden near Manchester in the north of England, only set up its first office in the region in Abu Dhabi in 2005, and despite the fact that the Middle East’s construction markets have offered something of a rollercoaster ride since, it has managed to keep growing throughout this first decade.
Driver Group now has almost 120 staff across four offices in the region and, in the year to September 30, 2014, it earned 32% of total revenues of $60m from its Middle East operations.
Still, Driver Group believes it can extract more from the market. It has just recruited the former managing director of Hill International’s construction claims division in the region as its new chief operating officer for Asia, Middle East and Africa, and set him some fairly ambitious growth targets.
“The mission that the CEO has given me is to double the size of this business within the space of three years,” David Brodie-Stedman tells Construction Week.
Although this is a big challenge, it isn’t one he finds particularly daunting.
“I have a track record of doing this,” he says. “In my previous job in a very similar region, I took the business from 30 people to 350 when I left. That’s why Driver has employed me.”
It helps that the business he is coming into looks pretty similar (albeit on a much smaller scale) to the one he recently left. Driver Group is best known for its claims expertise, including an expert witness service called Diales that provides reports and spokespeople for companies in contract disputes who are involved in an arbitration or other formal legal process.
Brodie-Stedman claims that one of the reasons for its growth in the region is that the experts it has at its disposal – including UK-based John Mullen – are among the best in the business.
“I think 90% of his work is in the Middle East even though he is still based in the UK. The number of disputes where he has testified is incredible. I’m very lucky to have him in my team.”
Mullen is backed up in the Middle East by the local head of the Diales service, Paul Taplin, as well as experts Lee Barry and Walied Abdeldayem.
The latter, an Egyptian national, has an ability to prepare reports and testify in Arabic, which is a skill that Brodie-Stedman feels is becoming more invaluable as arbitration chambers in the region mature and more firms choose to have cases heard in their first language.
“There is a far greater need than there used to be for dispute resolution specialists whose first language is Arabic,” he says.
Driver Group’s broader claims work has provided the foundation for its regional expansion to date, Brodie-Stedman says.
“I wouldn’t go as far as to say that businesses like Driver are recession-proof, but it’s as close as you can get to a recession-proof business. When the global financial crisis happened, it caused a lack of liquidity all the way up the supply chain.
“Through that period, countless projects were suspended. So main contractors weren’t paid, consultants weren’t paid and suppliers weren’t paid. That generates disputes at every level.
“The skill of keeping a business like ours alive through that is focusing on the right type of client. Clients that can actually pay you. There were many claims and disputes that were settled positively, but then the ultimate owner had no money.
“This didn’t happen to Driver, but there are many companies here that have been paid in apartments, unfinished apartments, shares in plots of land or ten-year, rent-free periods and things like that.”
Driver has also sought to build a project management offering in the region, which has had more success in Oman than anywhere else. It opened four offices in Abu Dhabi, Dubai, Doha and Muscat in 2005/06, but it has been the latter that has provided the greatest returns.
“My predecessor was very innovative in his thinking about the region. In 2005-06, he saw everybody basically setting up in Dubai. He thought nobody was taking any notice of Oman and set up very early there.”
As a result, he says, the company “stole a march” on many of the bigger project management companies. It secured the Ministry of Tourism, Transport and Communications and Muscat Municipality as clients, as well as state-owned energy firms PDO and Orpic.
In November last year it was awarded a $12m contract by Oman’s Ministry of Transport and Communications to project manage the entire Batinah Expressway scheme.
Batinah Expressway is a 272km stretch of road built from the UAE border to the edge of the Muscat Expressway, as well as a further 247.5km of link roads. Driver Group will oversee all 11 different contract packages and dedicate 26 of its consultants to the three-year project.
In total, the company has around 120 staff in the Middle East – half of whom are in Muscat. As a result, its project management offer elsewhere in the region is nowhere near as strong as Oman, but Brodie-Stedman is hoping that two recently-signed deals will help to change this.
In December 2014, the company announced that it had entered into a joint venture with Canadian practice MHPM to jointly target Middle East work and in the same month it revealed it had bought UK-based Initiate Consulting in a deal worth $8.1m.
The joint venture came about as a result of a prior agreement in MHPM’s home market of Canada, which allowed Driver Group to add its construction claims service to MHPM’s core project management offer in North America. In the Middle East, the pair will target project management work in infrastructure and healthcare, which is MHPM’s main area of expertise.
“In terms of strategy, that’s where we’re starting because that’s what makes them (MHPM) stand out against others. As I’m sure you know, there’s a big emphasis on medical projects here at the moment.”
Similarly, he says that Initiate’s specialisms in the airports and rail sectors will also have local appeal. The consultancy has counted the UK’s track and stations operator, Network Rail, and Heathrow Airport’s owner BAA among its clients.
Driver Group’s existing connections in the region will mean these services get in front of the right people quickly, Brodie-Stedman argues.
For instance, on the claims side of the business, Driver Group has already worked on three of the region’s biggest airport projects – Dubai, Doha and Muscat.
Thus far, the company has acted on more claims for contractors than clients, but Brodie-Stedman would like to redress that.
“As long as you are very careful about not creating conflicts then a healthy, balanced business will almost have a 50/50 split between the two. You don’t want to be regarded as one or the other.”
On the project management side, however, he is more than happy for the firm to develop a specialist niche working as an employer’s representative or developer’s manager than competing with giants such as Parsons Brinckerhoff or Aecom to manage massive schemes.
“The emphasis is on quality, strategic advice, rather than bums on seats,” he says.
Having said that, he knows he needs to recruit in a highly competitive market if he is to stand a chance of hitting the targets set for him, particularly as his plan involves opening more regional offices.
“We’re already well down the way of opening a business in Kuwait. We have people there and a registered business. We’re just going through the start-up process,” he explains.
He argues that with the recent award of major packages through the $12bn Clean Fuels project and the (recently re-tendered) Kuwait Airport project it is “an absolutely fantastic time” to be opening in the country after a five-year period of stagnation and uncertainty.
He also says the company is looking to expand its client base in Saudi Arabia, which it has traditionally served from other regional offices.
“We’re looking at some very exciting stuff in Makkah at the moment, and Jubail and Dammam. There’s enormous potential there,” he says.
He adds that a permanent Driver Group presence in the country is likely.
“What I am thinking is perhaps within 12 months an office in Jeddah, or on the east coast.”
It has serviced several Saudi projects like the Petro Rabigh refinery from the UK, but Brodie-Stedman says that “to really make a difference” a local presence is required.
“I’ve opened offices there before and they’ve been successful. I’ve no doubt doing the same with Driver would be a success.
The challenge, he says, is finding the right people who are willing to make a long-term commitment to the country,
but he adds that as long as salaries are competitive and job tenures secure, the quality of work will be enough to attract staff to the region.
“If you are working at the high end of claims and disputes then you have to be in the Middle East. Because that’s where the volume of work is. If you want to work on the biggest claims and arbitrations, you have to be here.”