Empire building

What if you built a global design business without a global headquarters? The radical new business model of the 139-year-old Adelaide building design practice Woods Bagot could provide the template on how to go global. By EMILY ROSS

By Emily Ross

What if you built a global design business without a global headquarters? The radical new business model of the 139-year-old Adelaide building design practice Woods Bagot could provide the template on how to go global.

Woods Bagot has more than $4 billion worth of building projects on its books at the moment, building some of the most striking, architecturally innovative projects in the world.

On its books are an urban regeneration for Liverpool, England, luxury resorts in Cyprus, Belize and Mauritius, the new business courts for the Royal Courts of Justice in London, a study centre and new business school for Hong Kong University of Science and Technology, as well as a joint venture to build the new Melbourne Convention Centre at South Wharf.

In October 2008 Woods Bagot group managing director Ross Donaldson (pictured) has travelled to Hong Kong, Seoul, Melbourne, Perth, Dubai, Shanghai, Sydney, San Francisco and New York.

He spends three out of every four weeks on the road. “We really are an international company,” he says.

Woods Bagot has 14 offices and 1000 staff around the world, and will soon open a new office in New York. The firm’s home is technically Adelaide, but the global spread of its operations has forced the company to confront an important question; where is head office?

The answer is that there isn’t one. Donaldson is adamant that he doesn’t want the firm to operate under the one-headquarter/one-boss model. Instead, the business has 49 principals distributed around the world who are empowered to make decisions and keep projects on track and on time.

“One of our key features of our business is that it is a very flat organisation,” says Donaldson.

“We delegate high levels of responsibility. This allows us to distribute the energy of the company through the places we work, it enables the terrifically talented people we have to exercise their own initiative.”

A former architect and academic who joined the firm seven years ago, Donaldson says that his role is not unlike the process of designing a building – every day as managing director he is designing a company. Four years ago, Woods Bagot changed its structure from a firm with 14 board members with shareholdings, to 49 principals with shareholdings.

The change to this model, which is seen more often in law firms, is clearly working. Business is booming, with turnover tripling in the past year and exports now accounting for more than 50% of revenue. Sales for 2008-09 are forecast at $140 million.

The fluctuations in the dollar have not been devastating for the business because the firm typically deals in six different currencies, which provides a natural hedge. “If you are only in one currency,” says Donaldson, “you can only be a victim.”

The global economic downturn is yet to affect the business. Donaldson does not seem fazed by the threat of recession and the plan is for Woods Bagot to stick to its strategy, and includes investing 2% of revenue into research initiatives.

He recently attended the World Knowledge Forum in Seoul (where Woods Bagot picked up a Most Admired Knowledge Enterprise award) and says the lesson he learnt was; stay the course.

“Some global business and economic gurus were there, and the key message that ran through is that smart companies will have clear strategies.”

Donaldson is even planning to target new markets, particularly in China, Asia and North America. “We are confident there is still lots of work to be done and the 30% drop in the Australian dollar has made bringing design work into Australia attractive.”

Donaldson believes Woods Bagot’s transformation into a more specialised design business have been a crucial ingredient in its export push. Australia’s reputation for being more relaxed than its British and American counterparts has also helped. “The worst thing you can do is have a fear factor in front of the client, and you can’t be too arrogant or they will think that you are too hard to work for,” he says.

Ross Donaldson‘s tips on how to build a great export business

• Empower staff to make decisions.
• Design work around the fact that the boss can’t be in two places at once.
• Give key staff a stake in the business and harness their collective energy.
• Stay close to the finance director.
• Spread your currency risk.
• Don’t fake the pitch – understand that the key to compelling, confident pitches for business is thorough research, market knowledge and a unique offer.
• Know what the client needs.
• Find a point of difference in the marketplace and exploit it.