“Quick but measured” is how Andrew Hooke, chief operating officer of PA Consulting Group, describes the London-based firm’s push into the Middle East. From virtually a standing start three years ago, PA now has four offices and more than 50 staff based permanently in the region, serving the Emirates, Saudi Arabia, Qatar, Oman and Bahrain.
The firm now derives about 6-7 per cent of its £400m ($643m) annual revenues from the region, and Mr Hooke sees no reason why this should not reach 25 per cent in the medium term, even as other regions also grow.
PA has had to be realistic in deciding where to expand, and how to do it. As a unitary company rather than a global federation of country-based partnerships, it can make decisions quickly, says Mr Hooke. “The decision-making processes here are more like a company than a partnership,” he says. “It is largely up to a small senior management team to decide whether we enter this market or bid for that piece of business.”
The trade-off, he says, is that decision-making in a federated consultancy will go through a more formal process, take longer and any initial investment that results might be larger and more structured.
PA’s size creates constraints, too. “We have to be focused and limited – we can’t go everywhere,” says Mr Hooke. “If we are entering a new market, it is usually as a greenfield investment, whereas other firms may have something there already – for example, an auditing arm.”
Another important principle for the firm is to expand geographically on the back of sold work, building the infrastructure behind that, rather than sending someone out to a region with a pot of money and giving them, say, three years to make a go of it. PA’s approach is “a prudent way of managing a business development process,” says Mr Hooke. “We are a significant company but there are others with bigger war chests than we have.”
All these factors played a part in PA’s decision to expand in the Middle East. Along with many other European and US consultancies, its traditional markets were maturing even before the financial crisis. One obvious new market, China, was largely discounted because of worries about how quickly PA could get payback but also because, as Mr Hooke puts it, “it struck us as a single bet”.
Targeting five countries in the Middle East, as well as India, has spread the risk. In the Emirates, Dubai has developed a little more slowly than expected, causing the firm to refocus quickly on Abu Dhabi, but Saudi Arabia has been the “one that has taken off”, says Mr Hooke. Big projects such as work with EADS on Saudi Arabia’s new border control system are playing to PA’s technical strengths in areas such as identity management and biometrics, but also draw on its expertise in organisational development and change.
As Mr Hooke says: “We’re trying to pick areas of capability that are genuinely exportable.” What it does not want is a “fly-in” firm where Middle Eastern business is served predominantly by experts brought in from Europe or the US for specific projects. That, says Mr Hooke, is not the way to build trust, which he believes is “absolutely fundamental” to success in the region.
PA’s medium-term plan is to have a 50/50 mix of expatriates and locally hired Arabic-speakers working in the region – and it is recruiting everyone from senior partners to analysts straight out of university.
“We haven’t had the brand positioning of other firms, so initially we were working a couple of paces behind,” says Mr Hooke. “We have caught up, although we still need to strengthen the brand [in the region]. “There is probably a whole bunch of talent that we haven’t found yet.”
Summing up the importance of the region to PA’s global strategy, Alan Middleton, chief executive, says: “The Middle East is an important part of PA’s international business presence. Our success is built on a clear strategy of applying proven skills to the local market. For example we took core capabilities developed in areas such as identity management and transforming the performance of organisations to clients in the Middle East.
“No matter where you are, clients are looking for trusted advisers and our success in the Middle East is built on trust and our reputation for delivering change.”
You can read the article in full here and also read PA’s comments in the ‘Business of Consulting’ report on the value of consulting here, on offshore consulting here and on financial services here.
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