Face-to-face: Bob Hope, SSH
Bob Hope tells Michael Fahy about his five-year plan to transform SSH from a local consultant into a regional outfit with global delivery skills
Bob Hope believes that he is trying to achieve something unique with SSH – the Kuwait-based building consultancy that has tripled in size over the past three years.
Hope, who was formerly MD of Atkins’ Northern Gulf region, is trying to replicate the success that some regional contracting firms have had by adopting what he describes as a ‘hybrid’ model.
In the building consultancy market, this means combining a local firm with ingrained roots and connections, and grafting on a team of professionals from global consultancy giants, backed up by centres of excellence in lower-cost countries.
“The hybrid model we came up with came into my head when I was at Stanford University for a couple of weeks doing a course for Atkins,” Hope begins.
“What I was looking at was: what are the key threats to internationals [consultancies] in the Middle East?”
This hybrid model, he argues, provides the local ties required to win work, and backs it up with international specialists that clients can trust. However, he says, it also offers added flexibility when compared to the global practices like Aecom, WSP Parsons Brinckerhoff, or Arcadis, to name a few examples.
“You don’t have the corporate headquarters, the length of decision-making, and everything else,” he says. “So you become a more flexible and cost-efficient model for clients. There were parallels in the contracting market here that I’d observed; originally you had joint ventures with internationals, then the local partners did more to a point where the Arabtecs and Al Jabers did mega projects on their own. They didn’t need international partners anymore.”
Creating such a model is not easy for many reasons, but the key one is that in order for it to work, it needs an incentive to attract top talent away from the security of their global firms to join regional players.
Typically, this has to be equity, as simply offering more money leads to costs rising to such a degree that it would become uncompetitive.
Yet with many of the local practices still in family hands, finding one that would be willing to give up equity would have been difficult, if it hadn’t come directly to him.
Hope had been working for Atkins for around 12 years – at first in Riyadh but later building a Northern Gulf region practice that saw it opening offices in Qatar, Bahrain, and Kuwait. The division grew from a standing start to 600-700 people before the recession hit. However, after missing out on the opportunity to become the firm’s Middle East CEO, he began to look at opportunities elsewhere.
“The agreement was to move to the US with Atkins where they’d just made an acquisition. But in the end I decided to head off myself. And while saying my farewells I met Sadoon [Al Essa, SSH’s Executive Partner]. He said ‘we want to become this regional company, we have the board’s backing, we want to invest – would you come and run the company?’.”
SSH had been formed by architect Sabah Ani-Hanna in 1961. He was later joined by engineer Salem Al-Marzouk and by masterplanning specialist Charles Boswell, with the three creating a multi-disciplinary consultancy. It grew to handle some big projects, but was “decimated” by Iraq’s invasion of Kuwait in the year 1990.
“The staff went back to all four corners of the earth as expats do. But the partners sought out all of them and paid them their back wages, and about 75-80% employees came back again.
“There was a real hearts-and-minds [story]. You knew you were picking up a hell of a legacy. It was some act to follow.”
There was also a recognition among the board that the business needed to evolve, and the owners had studied different methods of doing this, including selling stakes to external investors. Yet Hope says there are risks in investing in consultancies, as their primary assets are their staff.
“They recognised that high-performing businesses had a larger proportion of employee ownership. So in a way, there was a receptive audience and that’s the bit that tipped it for me. They were willing to take this leap, which isn’t common in local businesses,” he explains.
Hope devised a five-year strategy for growth, which involves bringing in top staff from other firms and offering them a stake in the firm. So long as certain performance targets are met, the management team can earn up to 20% of the shares in the business, with the remaining 80% retained by the founders. This 20% is set to be divided among the top 16 or so individuals brought in as partners.
In turn, new senior associate and associate positions are being created, which are being incentivised by a “phantom” share scheme currently, with a view to eventually buying more equity from the founders.
Hope says the strategy’s delivery is on track. Staff numbers have increased from 300 to 1,000 in two and-a-half years as it has grown in Kuwait and Oman, and pushed into Bahrain, Qatar, and the UAE.
It has also followed up with major project wins. In Bahrain, it was recently appointed alongside Hyder to deliver the new Sheikh Jaber Al Ahmed Al Sabah Highway, which involves the upgrade of an existing North-South link from the capital Manama to the Sitra Industrial Area, Aluminium Bahrain Plant, and the Southern Governorate. It will also form part of the Future International Transportation Corridor, linking to the proposed Bahrain-Qatar Causeway.
In Qatar, meanwhile, it has landed a pair of projects to kick-start operations for an office that opened at the end of last year. One of these, Wakrah Mall, is a new, 50,000m2 site being opened for E’Emar Development & Real Estate Investment.
The other is a new Specialist Clinical Centre for Dental, Dermatology and Diabetes Services in Hamad Medical City, awarded by Qatar’s Public Works Authority (Ashghal). It will consist of six interconnected buildings linked by a shared, three-level basement.
Hope says that healthcare currently makes up around 20% of SSH’s workload, but he believes it could be expanded to up to 50%. The company plans to make Qatar its GCC hub for the service, but it has acquired a back-office team of designers in South Africa.
Another back-office team is being built within Egypt to work up designs for infrastructure projects, but Hope says these centres are about offering flexibility between offices, as opposed to replacing frontline staff, as it intends to eventually have at least 50-100 people within each of its territory.
The UAE represents the next on Hope’s list. SSH already has an office in Abu Dhabi, which started out as a project office for work it has been carrying out on the UAE Presidential Palace. At present, it has around 20 people working from a temporary office in Dubai, ahead of the opening of a permanent office in the new Dubai Design District (d3) later this year, which will require around 60 staff.
Its targets for 2016 are the opening of at least one initial office in the Kingdom of Saudi Arabia, and another in southern Iraq.
“We’re already making inroads and we’ve picked up a little bit of work [in Saudi Arabia’s Eastern Province] using Bahrain as a bridgehead.
“At the end of the day, half of the GCC market is in Saudi. But you have to be strong to tackle that, and you have to have the right partner and relationship.”
Its move into southern Iraq is more “opportunistic“, given its proximity and historic ties to Kuwait.
“We’ve got several big projects in the pipeline,” Hope says.
These were the territories set out in its first five-year plan, which will lead it towards the end of 2017. A target of around 1,500 employees was also earmarked, but Hope says he is less worried about hitting that number than he is about making sure he brings in the right people. He is also more than willing to team up with international firms from elsewhere in the region looking for a “partner of choice” in the Gulf.
“The existing SSH board really have taken a back seat and allowed myself and the management to drive the strategy, and they’ve supported us 100%. That’s starting to be rewarded.“
He adds the firm had achieved “top and bottom-line growth” in turnover and profit, as well as adding greater numbers of people to its workforce.
“There’s a real buzz about the place because it does feel like it’s our business, which is exactly what was hoped for.
“There is an appetite from the ownership if we need to get a bit more equity and widen that shareholder base,” Hope tells Construction Week.
He says this – albeit limited – model of employee ownership has promoted the right type of behaviour, where senior staff are rewarded for the overall performance of the business, as opposed to worrying about their own territory or market.
“It makes sure that you’re always looking for the best decision for SSH if you’re a stakeholder partner in it. Because it’s your business, you fight that bit harder not to lose a client.”
Hope’s plan for the second five years beyond 2017 is to expand into other parts of the MENA region. Egypt is an obvious target, but it is also working in Algeria on a new bank headquarters that will be the country’s tallest building, and Hope believes the country has huge tourism potential if its security status improves.
“You’ve got to be an optimist if you’re building businesses, and we’re optimistic because there’s lots to be done in the region.
“Obviously, there’s an eye on the oil price, but all the sentiment from people who know these things will be that the oil price will hover back towards $70-$80. I remember being busy here when it was $40. For me, I think the region has no choice but to carry on. Standing still is no good. They need to grow. They’ve got to deliver for the populations. Promises have been made and we’re here to support the governments and the people here in delivering them,” Hope concludes.
Biography: Bob Hope
Bob Hope was born in Bolton, near Manchester in the UK, and studied for his Bachelor’s degree in Construction Management at Salford University. His studies were sponsored by contractor Costain, and when he qualified in 1992, he went to work for them in London.
After five years, he moved to Dubai, working for contractor Balfour Beatty on the Wild Wadi water park and the Burj Al Arab, before joining Atkins in 2000, initially at its Riyadh office. He then became managing director for its Northern Gulf region, setting up in Qatar, Kuwait, and Bahrain.
He became CEO of SSH in August 2012. Hope also sits on an advisory panel for his former university, which set up in Abu Dhabi last year, and SSH sponsors a number of it students.