What does an executive leadership team do when the business strategy it has designed and is successfully implementing nears the end of its planned duration? Is it time to bring in a new team and move on to something else? Retire to a life with less stress and more time? Settle into a deceptively safe extension of the old strategy?

Rebuilding Murray & Roberts has become synonymous with corporate transformation in South Africa. The process has been hard and no single part of the group has escaped the relentless pressure for change. And with just a year to go, it is the separation of Unitrans and final resolution of historic construction problems that remain outstanding.

Murray & Roberts is back in business on a solid platform for the future. For group CE Brian Bruce, the answer is straightforward. The company is ready to pursue a strategy for growth and has identified where and how to apply its value proposition. He has won approval from his board to lead this next phase of the group’s development. He calls it Globalising Murray & Roberts and is ready to devote the next five years to making it happen. He is confident that most of the executive team assembled over the past few years has the will and capacity to deliver.

THE NEXT PHASE
“Globalising Murray & Roberts will demand at least as much leadership intervention and innovation as was applied during the rebuilding process,” says Brian. “This is not an extension strategy. It builds on the success of the new performance platform and follows a carefully designed route to a new and exciting future.”

Brian has cautioned his board and colleagues that construction is not a natural global business. It is historically domestic and diverse, increasingly regional and evident in just a few companies with international extensions.

Strategy and development director Norbert Jorek quotes from research data saying, “Against a statistical model of business sector globalisation measured over a 25 year period, the construction sector in general remains well behind the starting post.

“Globalisation is more evident in construction materials and engineering so, to follow the proven formula as a serious player in global markets, Murray & Roberts now faces the challenge of scale.”

But what of existing philosophies that have defined the group’s strategy to date? Brian is adamant that these fundamental principles remain intact and increasingly entrenched in the new DNA of Murray & Roberts. “Our commitment to sustainable earnings growth and value creation is not negotiable.”

For Brian, the core business of Murray & Roberts remains contracting, from a core skill in engineering and the group core competence of industrial design. “We define globalisation in the context of our business style, where we value knowledge and solutions ahead of assets and resources. This means that we seek to globalise our reputation, not our work.”

GLOBAL MARKETS
Murray & Roberts already records about 40% of its activities serving international markets. It has contracted internationally since the 1960s, working on all five continents. The company once invested significantly in offshore manufacturing, although these assets have since been sold or closed.

Finance director Roger Rees points out that much of current international business is in the export of South African manufactured products and project activity throughout the rest of SADC. He adds: “The United Arab Emirates represents the major concentration of international activity and is the platform of our strong presence and reputation in the Middle East.”

FOUNDATION FOR GROWTH
Brian advises that he and his executive team started the groundwork for Globalising Murray & Roberts two years ago. Triggering the carefully thought-out plan was always dependent on certain milestone successes in Rebuilding Murray & Roberts. This includes the outcome of just a few long-term strategic initiatives:

• Resolution for the group’s significant stake in Unitrans
• Identification of a few key acquisition opportunities
• Establishment of an international executive resource
• Separation of international from domestic and regional operations.

The acquisition of Cementation Mining has positioned Murray & Roberts as one of the world’s leading underground mining services companies, with a strong presence in the key markets of Africa, Australasia and North America.

Murray & Roberts United Kingdom Limited has been activated by the appointment of Peter Adams as MD and Richard Pope as FD. This has enabled historic linkages between domestic and international operations to be reframed as a foundation for global growth. The group chief executive and group finance director now form the primary linkage between both aspects of group activity.

The board has approved the formation of an international advisory panel to guide it through Globalising Murray & Roberts. The panel will comprise leading non-executives from the international regions and global markets served by the group. Murray & Roberts has secured the commitment of two leading international businessmen as the initial members of this important panel. One will advise the group CE and chairman based on his many years of experience in the engineering and contracting industries. The other is deeply involved in African business and will provide invaluable guidance as we re-engage this important market sector. News on a strategic solution for Unitrans and further acquisition opportunities must wait for the next edition of Robust.

Roland Berndt

“With its strong capability in mining and minerals project implementation, Murray & Roberts is ideally positioned to benefit from this global trend,” says Roland. He adds that the group will seek mutually beneficial strategic partnerships to leverage its growth opportunities in the region.

RICHARD POPE has joined Murray & Roberts as financial director of Murray & Roberts United Kingdom. This company, based in London, will hold the group’s interest in Cementation Canada and will provide corporate management services to the group’s international operations in the Middle East.

Richard will work closely with Peter Adams, with whom he has significant experience as a financial executive in the construction sector in the Middle East, Africa and South East Asia.