Chris Campbell – CEO, Consulting Engineering South Africa (CESA)
Chris Campbell, CEO of Consulting Engineers South Africa (CESA), share the main achievements of the association over the past few years; the critical networking, facilitative and intermediary services they provide to their members and the overall industry; as well as his positive outlook on the growth prospects for the industry moving forward.
Chris, having been appointed CEO of Consulting Engineers South Africa (CESA) just over two years ago, what have been the main highlights of your term?
“With the recent political changes, our hope is that there will be more policy and political certainty, which will encourage more investment, which will then fund more infrastructure, and so on.”
I assumed the role of CEO on 1 December 2015. As an organization, we have been around for 65 years and we do occasionally undergo a process of renewal. In February 2016, we reviewed our strategy as an organization to assess how we might improve in terms of the way we conduct our business, which is to act on behalf of the South African consulting engineering industry. We also took this opportunity to flesh out our current strapline: “Your Partner in Enabling Consulting Engineering Excellence”, as well as develop a business plan around that strategic focus to see what we needed to change operationally.
There are a number of successes I would like to highlight. Firstly, we have made major inroads into establishing better lines of communication with our member companies. Notwithstanding the standard attrition that industry associations experience – whether it is because companies go out of business or people retire – we have maintained quite a stable member base with over 540 member companies nationally. To put this in perspective, we are a member of an international organization, FIDIC (International Federation of Consulting Engineers), based in Geneva, Switzerland. Comparing our member base to those of many developed countries, we are ranked sixth out of 106 member countries, so we are fortunate to have such a strong member base.
Another achievement is convincing many public sector entities to include membership with CESA or any other similar recognized industry association as a condition of bidding. This helps the clients filter bid responses. Unfortunately, we do have a practice in South Africa where companies try to ignore such requirements and still submit bids. We even have companies trying to claim such membership fraudulently, so it really serves the filtering purposes of the client and is not a deterrent of neccesity. It also ensures that there is a reliable and recognized institution that clients can approach should any issues arise regarding the quality of the services delivered and so on as we are able to launch an investigation into any complaints received, should these be members of our organization.
The challenge all industry associations face is staying relevant. I always think of the lyrics of an old song: ‘What have you done for me lately?’ That is the question we need to be answering for our members constantly.
In terms of staying relevant, what other services does CESA provide to your members?
We also play a networking and facilitation function, organizing various events to bring the industry together. For instance, our flagship event is the CESA-Aon Engineering Excellence Awards, held in August every year, to which the entire industry looks forward each year. We also organize an annual team relay competition, which accomplishes a number of things. It allows people from different companies to interact and network in a more relaxed and friendly environment, which might encourage more collaboration and cooperation within the industry. It is also a wellness initiative, encouraging employees to be more active, which is particularly importantly given the sedentary lifestyles most office professionals lead. Finally, it also offers corporate teambuilding opportunities – and ultimately, participating in this industry initiative is more cost-effective for companies than organizing internal events.
For many years, we have also run a very successful training facility called the School of Consulting Engineering, where we offer the broader bodies of knowledge that engineering practitioners may not necessarily have. As an engineer by training myself, I understand that engineering university programs are very technical. But engineers also need soft skills like communication, leadership, entrepreneurship and so on as they progress through their careers. That is what we offer through our facility.
Finally, we maintain an active and updated social media presence, from our own website to Facebook and Twitter. We are now even building a mobile app to provide our members with easier access to the various facilities and resources we offer, which will be launched in the first half of 2018.
With over 540 member companies across the country of different sizes and niches, how do you manage the diverse priorities and needs?
While the needs of our members naturally differ, there is a shared aspiration – and this is also the common challenge – on two aspects: to ensure a corruption-free industry, as well as promote better understanding of consulting engineering as a professional service and not a commodity.
There is a very strong commercial focus within the industry globally – and everyone wants a bargain! But professional services should not be viewed as commodities like apples or pens, where cost is the dominant consideration. As an industry, we more or less understand what services cost. If competition becomes too cut-throat and companies start to price extremely aggressively, companies will have to compromise on some critical aspects out of desperation to stay in business. This places both companies and clients at risk. We need to build a better appreciation of consulting engineering services as professional services, not commodities.
It has been a difficult few years for the engineering and construction sectors within South Africa. What do you see as the main growth drivers for the industry?
We conduct a Biannual Economic and Capacity Survey (BECS) as one of our flagship publications. The thread that has emerged from previous surveys shows a fairly balanced split between public and private sector work. Where public sector work is strongly driven by rules and processes with transparent governance and systems, the private sector remains very strongly relationship-based. We therefore hope that the private sector will look to see how it can open itself up to newer players. There is still the mentality of, I have worked with this service provider for a long time, things have gone really well and we have built a great relationship so why should I look for a different partner?
In terms of sectors, the largest sources of work are transportation and water. Work in the energy sector specifically is largely linked to electricity supply and distribution, not so much oil and gas.
The industry has been in a bit of a crisis over the past few years partly because infrastructure growth is so tied to economic growth. With the economic stagnation, there has been a slowdown in the construction and engineering sectors too. For survival purposes, consulting companies had diversified significantly, for instance, through having internal property investment divisions and so on, and entering multiple sectors. Many of these large conglomerates, especially among the construction companies, have now had to scale down massively and sell off various business divisions to focus on their core assets. That could well be the nature of business cycles in this sector.
With the recent political changes, our hope is that there will be more policy and political certainty, which will encourage more investment, which will then fund more infrastructure, and so on. It is a self-fulfilling prophecy. As the adage goes, if you build it, they will come! I would say we are certainly optimistic and hopeful, but cautious, as it is unwise to get one’s hopes up too high too soon. Nevertheless, we expect to see some growth within the industry soon.
Globally, cost pressures and challenging market conditions have also resulted in significant M&A activity within the engineering industry. How has this impacted the South African landscape?
There is definitely space within South Africa for a few extremely large companies, and in fact, we have seen a few global companies acquire local companies. This is positive in that if there is a shortage of work in the country, these local players can then leverage on their international footprint to look for work overseas. On the flip side, during times of downturn when large projects are in short supply, these larger, global companies tend to be much more cost-sensitive and thus are often forced to downsize more readily.
Many multinational companies (MNCs) continue to base their African offices in South Africa, which acts as a hub to service their activities in neighboring countries.
Additionally, there are also South African companies that have established satellite offices elsewhere on the continent. The international body to which we belong, FIDIC, has regional bodies as well and our sister organizations in other African countries frequently welcome South African companies to work with them in joint ventures to help build capacity in their countries. For instance, in a previous role as President of the Engineering Council of South Africa, the regulatory body for engineering practitioners, I delivered a presentation at the Ghana Institution of Engineering annual conference on the topic of capacity building within the oil and gas sector. Their challenge was that, while they had established capacity within the university to grow the skills base for oil and gas projects, the large MNCs that work on projects there were not investing enough energy into developing that. There was still an overdependence on foreign expertise. This is not desirable either in the short term or long term, for the company, the country or the local people. Companies cannot always fly foreigners into the country to maintain the infrastructure after the commissioning phase, they need to transfer these skills to the local workforce so that they can take over the projects. There needs to be more awareness on these issues and more effort invested into addressing them.
Looking forward, what are your strategic priorities for the next few years?
Continuous improvement is our aim. Certainly, we want to build more and stronger relationships with more government departments, and with the recent political developments, we are optimistic that government entities will be more receptive to such exercises.
We also look to build stronger relationships with other engineering industry associations, so that we may be able to work more closely together to better respond to the challenges and opportunities of the profession in its entirety. For instance, most of our member firms tend to be classical consulting engineering companies, while many of the companies in the oil and gas space operate through an EPC or EPCM procurement process, which involves taking on a whole lot more risk. In the future, we would like to explore increasing our offerings to this profile of companies too as such companies do belong to our counterpart associations in other countries like the US and Canada.
We are also looking to find new ways of doing things better, and to launch more innovative initiatives like the mobile app we are developing, for instance.
A final message?
As an industry, we are all very committed to a functional, equitable society that grows in leaps and bounds. To that end, we welcome any opportunity to work closer with government so that we can achieve these objectives as a country. Companies may currently be looking at their survival and growth from a micro perspective but we always welcome the opportunity to be involved in more holistic interventions in order to support growth in our economy, develop infrastructure, and lift our people out of poverty. It is all about trust and partnership.