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Employee ownership fuels UK Designer Mott MacDonald

ESOP

Employee ownership fuels UK Designer Mott MacDonald

By , July 17, 2017
Employee-ownership-fuels-UK-Designer-Mott-MacDonald

According to a recent story by Engineering News-Record Mott MacDonald and its management are firm advocates of employee ownership –

“As his U.K. competitor Atkins, which went public in 1996, now prepares to become part of Canadian global design-build giant SNC-Lavalin Group in a just-completed $2.6-billion acquisition, Keith Howells, chairman of engineer Mott MacDonald Group (MMG), recalls a conversation with the CEO of another onetime British design giant, Scott Wilson Group, that also was targeted for purchase from abroad, just four years after its 2006 stock-exchange listing.

The then 5,500-employee firm, bought by U.S.-based URS Corp., now has disappeared into giant AECOM after the firm bought URS in 2014. “I remember talking to Scott Wilson’s Geoff French, and he said, ‘As soon as you go public, you might as well put up the FOR SALE sign,’ ” says Howells.

Amid the churn in the British design world—upheavals that also extend to firms elsewhere—Howells aims to steer MMG to future growth firmly cemented in the employee-owned culture it has nurtured since its 1989 start as a blend of two U.K. water and transportation engineering stalwarts.

The firm sees employee ownership as central to its market and workforce management maneuverability and to its long-term investment in cutting-edge technology, which it hopes to build into a decisive competitive advantage.

“We’re very firmly in the employee-owned camp, and we want to stay that way,” says Howells, a 40-year MMG veteran in the top job since 2011. “People are willing to go that extra mile. They have a vested interest in the success of the business.”

Even with market gyrations in its four regions, the now 16,000-person firm posted about $2 billion in design revenue last year.”

In planning MMG’s trajectory, a lot rests with its powerful shareholder committee. Only about 20% of staff are shareholders, but ownership is coveted: At the annual July share sale for select MMG employees, there is typically a “95% uptake,” says DeNichilo.

Howells and other C-suite members own a total of just 5%, with the firm’s 75 senior leaders owning no more than 12%, he says.

The firm “obviously has to make a profit to be a sustainable business, but it’s not at any cost,” says Denise Bower, a University of Leeds engineering professor and MMG shareholder adviser. “They are very collegiate in their decision-making … with a strong degree of buy-in.”  Melanie Graham, human-resources manager for MMG North America, claims “a retention rate of over 90% for senior staff.”

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Craig West

Craig West

Managing Director | Succession Plus

Craig West is a strategic accountant who has over 20 years’ experience advising business owners. His background as a CPA in public practice, provided invaluable experience in the key issues of concern to business owners. Following 6 years of study to gain two masters degrees, Craig focused on Capital Gains Tax (CGT) for business sales advising on strategic management of tax issues. This experience formed a very strong view that business owners (and often their advisers) were unprepared and unaware of the steps required to prepare a business for exit.

Craig now acts as a strategic mentor for mid-market business owners and has written four critically acclaimed books on employee incentives, succession planning, asset protection and exit strategies. Craig has conducted numerous seminars and keynote presentations throughout Australia & internationally, including adviser education programs for the Institute of Chartered Accountants and CPA Australia.