inspiring sustainable growth of cities and infrastructure

23rd November 2015

that is the way forward

Earlier this month, Future Cities ME sat down with industry leaders to discuss the role of multinationals in the GCC construction market. During the discussion we examined areas where collaboration can be increased and global knowledge and experience shared within a local context. As expected, the interchange gave rise to the key themes of inspiring developers and local governments to build sustainably, but interestingly, also how multinationals need to recognize and understand local requirements better and not be focused only global trends in order to create local projects successfully.

The discussion, which is part of the Knauf program for building better communication in the industry, was attended by the following:

Andrew Body

Managing Director – Mouchel

Issam Ezzeddine

Design Director – NEB

Christian Vasquez

Architect & Executive – NEB

Stephan Frantzen

Partner – P&T Architects

Joe Saghbini

Director – Dewan

Clinton Bull

Associate Director – SSH

Lee Evans

ASTM Technical & Training Manager – Knauf

Roberto Pignato

Regional Sales and Marketing Manager – Knauf

Do multinationals need to do more to understand local and regional markets?

Stephan Frantzen: Yes, you always need to know more and need to improve. It’s very important to understand the local markets you work in and create connections. P&T have worked all over the world, and you have to do your homework. It’s all about the planning of the plan. You don’t know what’s going to happen when you go to unfamiliar places but if you are well prepared you have something in your arsenal so that you can move very fast and understand the important things that could effect what you are doing. Homework, respect for culture and understanding the way people work, then engaging with them, these are key. When you do expand and open an international office, its important to understand that you have to engage with the whole city or country you will be working in. That is critical. Our company was formed in 1868. Since then we have always reinvented ourselves to suit the time and place. Andrew Body: It is not necessarily to do with multinationals or about being in the Middle East. It’s about connecting with clients. Different clients move in different ways and as Stephan mentioned: “homework”. Effort is important. Clients in Taiwan are different to those in Riyadh, but then we have 3 clients in Riyadh, which operate very differently from each other. For me, it starts with trying to instill the importance of the client’s focus through the organization. If you are doing that then it doesn’t matter where you are. If I am going to do the job, and do it in a way which will delight the client…. I need to first understand my client.

Roberto Pignato: What do you do if the client is wrong Andrew?

Andrew Body: You have to be honest, but you need to understand the local practices and do it the right way. But it’s not only about local practice. No one likes to hear that they are wrong. The message is the same wherever you are from.

Roberto Pignato: Absolutely, it is about understanding. We are working with consultants, contractors and sub-contractors who sometimes are sure they are right. But it can be a lack of understanding of the local requirements that can lead to the wrong decisions.

Joe Saghbini: We need to make sure that we have open dialogue, to really understand. I think it is really important that we listen. Sometimes multinationals have more experience than the country they work in but they need to listen, only then by opening dialogue can they bridge the gap between what is done globally and what is done locally.

Clinton Bull: The multinationals need to think differently when they come into a new region. I am sure we have all seen it. A multinational has a system that they have successfully used before and want to implement that in a new market. A company that is based in Australia may want to work everywhere in the Australian way. The approach is different, the arrogance nauseating, and in the first client meeting they sit and discuss what they will do without understanding the local requirements. This doesn’t work. We need to build relationships and understanding. When you go into new cities and markets you need to understand the local culture before you set up, otherwise you will be rejected. Multinationals need to be patient and take time to gain local knowledge.

Lee Evans: I think it’s important to keep up to date with local requirements. These can change very quickly, it’s not just about setting up out here and then moving forward. You need to stay abreast off all the changes with the civil defense and legislations locally.

Do Multinationals companies need to fulfill the needs of local standards?

Christian VASQUEZ: Local standards are very important, we cannot skip the local standards. But it is not just the local standards but we must work with the local authorities on the updates on the standards and collaborate with the different authorities to make sure these are best. Regulations are changing regularly and which means there is something still wrong. It is our duty to collaborate and make sure that the changes are positive.

Andrew Body: We need to think of our position. Local governments want to innovate and raise standards. That’s why they want multinationals, but you have to be careful that you don’t come across as arrogant saying, ‘Yes that might be your standard, but that’s not how we do it in New Zealand.’ That just doesn’t work. To get approvals we have to understand the standard, over time when you develop relationships you can help influence new standards. It is also important not just to see design standards, but also things like Health and Safety, we do a lot of work in KSA and our challenge is to make sure there is a Mouchel standard on our sites, not just a local standard. The legislation requirements may have a lower threshold for Health and Safety outside of Dubai, but we need to ensure that we have a Mouchel standard. That is what a multinational can bring to the region.

Issam EzzEddine: I worked with a UK consultant, the policy of this UK consultant was hiring 90% UK Citizens in this region. They faced complications within the business between themselves and the authorities. After six years, they had 20% UK Citizens, the reason is you have to hire people to be a link between the business and the public, owner or client. Hiring Local people and different nationalities plays a significant role in meeting local standards.

Lee Evans: We have to safeguard from arrogance, I am from the UK and have problems working with other UK citizens. They may be used to UK standards, but it doesn’t mean that they should always be implemented. The same is true of other nationalities that I have worked with. However, rather than mixing between different standards, American, German, British, what would help is creating stronger local standards that were based upon European standards. For Instance, someone from the UK has probably never worked with American standards and that becomes a problem.

Joe Saghbini: The fact that we have people from so many different countries here and everyone is bringing their own standards. This does create a problem in a relatively young market. The market needs some time to find balance, a big American consultant will push for American standards. The market will mature with fewer dramatic changes over time and this will create its own local logic and standards. It is important that if you try to adapt you need to be flexible. It is our responsibility to inform the client of these changes and be the communicator between the authorities and the client on legislative changes. Constant communication and anticipating change is the challenge for consultants.

Clinton Bull: One of the challenges we face as a consultant regarding regulations is, you will have a client based in a certain region, which is repeat business so they are used to working in a certain way. Then you go to another region with the same team and client but because of different standards the same product is now 20% more expensive in the different region. We make sure we are very upfront with our clients, every region is very specific in terms of certain requirements. The same hotel will not work in every region because of the different standards, these expectations need to communicated earlier on. We can’t simply copy and paste into different regions.

How can multinational firms share knowledge from other markets to improve standards within the GCC? Do we share knowledge from the GCC globally?

Stephan Frantzen: In our profession (Architects) we never do the same job twice. We are actually doing a project with a hospital in Riyadh and the same in Jeddah but they are completely different. We need to offer different analysis, and do the homework before we put pen to paper. We need to understand the standards and regulations, and only then can we bring in what we know from other regions. We did a 70-storey tower in KSA where there wasn’t much regulation or other towers in area. So then we could bring experience from outside the region. This way the knowledge is spread. Within our company we have an internal exchange of knowledge where we can take the experience of Smart Cities in South East Asia and incorporate that here.

Joe Saghbini: It is clear that the projects we are working on here are large scale, probably larger than anywhere else in the world. That is something we can share, the big projects, which are undertaken here, and the lessons learned can be used in smaller projects. We need to also understand that it is not always a good plan to try and impose something we have done here to another market. We have to maintain a balance between the local market experience and trying not to go over board.

Andrew Body: I think it is different in different cases, as an example, in New Zealand we got really good at road maintenance and the 4 things you worry about is water, water, trucks and then water. If you try and share that with Abu Dhabi or Doha it doesn’t quite work! You can share some things and not others. Intelligent transport solutions are areas where you can take knowledge from other areas and implement them here. We have to pick what we share, as some things just do not make sense.

Issam EzzEddine: There are challenges in the region we face. For example, we use steel structures globally yet locally we still rely upon concrete. This doesn’t always suit the project. So we need to work closer with the authorities to share the knowledge from other markets to show why other techniques are more beneficial. We all want to bring knowledge to the region, but in some areas there are obstacles.

Roberto Pignato: It is the same to shift from brick and blocks to light weight solutions. For you as an architect it adds value, as it is lightweight from the foundations to the top. Yet it is almost impossible to convince people to go from brick and blocks to this. In Europe, it only started 10 – 15 years ago, so it may take some more time here.

Joe Saghbini: It is the age of the market. It is a younger market. We also need to understand the decisions are made by many factors, cost of labor is not the same, the amount of space is not as restrictive, so the reasons to change are not as pressing. We can come up with new solutions, which are not always traditional ways of constructing, but we must be brave enough to propose this. As consultants we always look to innovate, but at the same time we need to win projects.

Clinton Bull: It depends on the client’s appetite for innovation and looking at different techniques. We have been fortunate to work with some fantastic clients, for example the Opera House in Kuwait we are doing at the moment. We have exhausted 2 years of the entire worlds titanium supply just to do the roof. The client wanted something, which also happened to be expensive, but still went with it. We want innovation, we want to push the envelope, but sometimes when we present these ideas, the client has ‘X’ amount budget and wants the quickest ROI. Then there is the other extreme. There are very few clients who say ‘we really want this iconic structure, we know its expensive but lets do it anyway’.
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