Building a great Ethos
Harry Leech sits down with the MD of one of the most successful and innovative firms in the Irish Construction Industry. Greg Hayden of Ethos Engineering.
“We’re doing ok at the moment, but we’re not resting our laurels”, is Greg Hayden’s assessment of the incredibly successful M&E consultancy that he heads up, Ethos Engineering.
Sitting in the penthouse HQ of Ethos in Sandyford, this is clearly something of an understatement but unlike many business leaders Hayden seems to have managed to balance an intense ambition to build a great company, with a very likeable and down to earth personality.
The truth is that Ethos is more than just “doing ok” — founded in 2005 with six people, the company now employs more than 80 staff at its Sandyford office and generates turnover of more than €6 million per year, and is growing at phenomenal rate.
Like many companies in the industry the progress has not been linear, but unlike most, Ethos managed to do something that seemed almost unthinkable in the industry through the dark days of 2010 and 2011 — grow during the recession.
The company has also won numerous industry awards, including the Consultancy of the Year award at the Irish Construction Industry Awards in both 2015 and 2016, as well as the prestigious CIBSE Employer of the Year 2015 for UK and Ireland (medium category).
Hayden admits that one was a bit of a surprise — it is a big UK award and an Irish company winning however good its application was, didn’t seem on the cards.
“We went over there with the attitude that we would put in a great application and learn from the experience for the next year, but we ended up winning the thing!”
The ethos behind Ethos
A business leader with a long record of success in the industry, Hayden left what at the time was a great job — he was MD of a large multi-disciplinary firm with turnover of €24 million to get back to what he knew best, M&E design. It was an area which he believed could be done better in the local market.
“We started in 2005 — around that time I found that the reputation of M&E consultant engineers was quite poor in Ireland. I thought there was a better way of doing things and I found a couple of like-minded people who felt the same and wanted to work to a higher standard.
We started with the philosophy that it would be our design, that we would hire good people to do the job well, and that our drawings and specifications which are our products at the end of the day, would have all of the information on them so that contractors could price the project correctly and clients were not hit with variations at the end.
Really that’s what M&E consultants should always do, so we were essentially getting back to what the core business of M&E engineers and doing it really well. We just felt that we could do things better than they were being done at the time in the industry”.
Luck and big breaks
While the success that Ethos has had is clearly down to multitude of factors, Hayden is quick to acknowledge that there was some good fortune and some big breaks while the company was getting started.
“From the start we got lucky — our first design was for a €180 million healthcare project. The same developer told us ‘you’ve done a great job there — I have another little nixer for you’. That ‘nixer’ turned out to be a €450 million mixed use development.
We only had eight employees at the time, so it was a great deal of faith in a small start -up company. There were quite few developers around at that time with big visions and there was a lot of great work happening”.
And then there wasn’t.
“Three years after we started with just six members of staff, we were up to 35 employees. It was 2008 and almost out of nowhere, the wheels fell off the wagon in the industry.
We tried everything; we tried three day weeks, we tried reduced salaries, but eventually we just couldn’t keep people employed and we had to trim back to just 10 people.
The downturn hit us hard — as well as losing 75 per cent of our staff we also lost about €2 million of debts that weren’t paid to us. That was from clients who had always been good payers.
It was hard at first, but the only way out of it was to tell yourself that that was the cost of doing business — otherwise you would be lying awake at night thinking to yourself ‘this developer owes us half a million, that developer owes us half a million… What are we going to do?’
Instead of worrying about it, we had to put it behind us. We were only really able to take that approach because we had invested during the couple of good years back in the company. It was the only way we were able to take that approach”.
I tell him that it was a very mature approach to take — for a lot of young companies being stung like that would have taken them out of business immediately.
“There were a lot of nail-biting times”, he concedes but “we took things as far as we could and in most cases once things started to go legal, it became apparent that the people who owed us money were in a bad place and all we were going to do was take them out of business altogether, and the only person who would win would be the lawyers.
As a result we tried whatever possible to not go down the legal route, we tried to cut a deal and if we would we got 30c in the euro. To be honest the experience made us better in the long run, because I suppose we were so keen to do the work and so keen to do good work that we gave people perhaps too much credit.
We tightened up our system as a result. Thankfully we have won a lot of business from blue-chip clients in recent years and while they might not pay you for 60 days, you know they are going to pay you and we can always track where the payment is on their systems”.
“There just wasn’t enough work in Ireland, so we found ourselves in the Middle-East — Saudi Arabia and UAE. We were quite successful in the Middle-East and won quite a few contracts with the Ministry of Health in Saudi Arabia. That really helped us keep bums on seats in Ireland.
We also worked in North Africa — we won a large project in Libya January 2011. Just before Gadaffi got overthrown. We were lucky as we were on the ground just a week before it all kicked off and managed to get everyone out safely.
We were helped tremendously by Enterprise Ireland who opened a huge amount of doors for us — I can’t speak highly enough of them based on our own experiences. They understand how important it is to connect Irish companies with global partners and they have the contacts to do so.
Through the Enterprise Ireland ‘Leadership for Growth’ programme we were able to develop a five year plan for our business to grow and operate more efficiently. We came out of it with a five year business plan which has been tremendously helpful, that was in 2010.
So how has the plan gone, I ask him?
“In our first few years we went from less than a million in turnover in 2005 to over €3 million in 2008, but with the onset of the recession that contracted massively.
Our five year business plan from 2011 was to get back up to €5 million and to go from 10 people to over 50 people, and it gave us a structure and a strategy to get there. We managed to hit that target in four years.
Getting abroad allowed us to start employing again and because of that we were one of the first M&E consultants to start employing again.
Hayden says that winning work abroad also made winning business at home easier.
“When we were going into meetings for work in Ireland, having that work abroad meant that you didn’t come across as desperate for work — the client you were talking to wasn’t the only show in town and the client knew you had a pipeline abroad and would be more likely to still be around to see out his project if you were successful”.
Blue Chip Clients
Ethos Engineering have a stunning client list and some of the biggest names in international business have put their trust in the Ethos team for EMEA offices and data centres.
The reputation and the work are imperative of course, but the MD also emphasises that doing things by the book pays off in order to land big companies.
“We have always had meticulous accounts and done things properly — we haven’t been greedy and have reinvested heavily in the company.
When big international companies look at us they see the work that we do, they see the contracts that we are winning at home and internationally and they look at our accounts and see that they are fairly strong — that gives those companies confidence that we are a safe pair of hands.
Once you start to work for big international blue chip clients and you have them on your CV, then other multinationals know that you are doing things right. Winning a landmark project for one large American FDI company at the time during the recession, which was probably the biggest project of its kind at the time in Ireland-was definitely a break through moment.
Equally, other design team members realise that we are a team player and a successful project for us is only when it is successful for the client and the whole team. Where things go wrong it’s your attitude and willingness to correct them regardless of who’s at fault.
We were building a reputation and on the back of that we won a lot of data-centre work for some confidential clients who knew they were in good hands. Success breeds success to a large extent and that is a message we want to impart to our staff and enable them to drive that success to the next level.
Ethos is clearly a company with big ambitions and Hayden and his management team know that having the best company means having a work culture that breeds a great team dynamic. Hayden says that hiring people and retaining them is one of the things that Ethos is keen to crack.
“It’s a whole different environment out there now — from 2010 to 2015 it was all about survival, while success from 2015 to 2020 will largely be driven by retaining and incentivising staff. Before it was good enough to give people a job which meant they didn’t have to emigrate.
Now it’s about the job, the package, creating a good environment to do good work and giving them a career path. We pay a little above industry salary and incentives like subsidised gym membership, full yearly healthcare checks, flu jabs, mentoring, CPD, further education, supported chartership route and team building social events, but it’s about much more than that — it’s about the whole package.
In 2014 when things started to improve a lot of our competitors started offering large incentives for people to move from Ethos, but if you get into a price war, all it is doing is inflating prices over the industry.
Rather than start a price war that would damage the industry as a whole, Ethos decided that growing the overall pool of talent would benefit everyone and took out a serious of what Hayden describes as “seriously cheesy, but also effective!” ads in press and online channels that appealed to expats in Australia, Canada and further afield.
“From 2014 to 2015 we put a drive on getting people home from abroad and it has worked. We’ve been talking to one or two really good people every month, and they have built up great experience abroad, and are bringing new ideas of how to do things that we are then able to implement in the Irish market.
They also have friends and contacts abroad and once they have their feet under the desk and realise that this is a great place to work, they are feeding that message back to them. We have hired about 20 staff who were based abroad in the last year and that is likely to increase.
What is really interesting is that many of the people who had moved away when the recession hit told us that they were worried about coming home to the stuffy consultancy environment, but because we are innovative and forward thinking, they have told us that the Ethos environment is much more of what they have been used to in international companies they have worked with, which is good to hear.
One of the biggest changes that Ethos has made is implementing a ‘hot-desk’ policy, meaning staff does not have an assigned desk and there is practically no paper in the office.
It has many advantages, not least freeing up space in the HQ for their ever expanding staff, but as Hayden explains, it wasn’t an easy sell at first.
“We did a survey and it turned out that at any one time 50 per cent of our staff was out on site, so as a result we have moved towards a hot desk policy, as it means we can use our office space more effectively.
It is a huge culture change though — in the Irish psyche ‘I own this desk’ is as ingrained in the Irish as ‘I own this piece of land!’ and there was a huge reaction to it initially, people didn’t like it at first.
Once we implemented the clean desk policy and invested in a good canteen for staff they began to see the benefits of it and now it looks really good and people are very used to it and really enjoy working with it.
Ethos is the Irish and founding member of a European M&E consultancy group of over 2500 engineers to share knowledge and best practice across its European membership. Through Ethos’s work at home, abroad and also through their talent pool that have worked in international markets, Hayden feels that the company has been able to innovate and improve and has fast fostered a global outlook.
“If we ever stand still we are in trouble — we are always changing and innovating how we do things here. Not all of the ideas we do have worked out but if they don’t we drop them quickly and move on — if you are going to fail, fail fast! But the amount of ideas that have stuck have helped improve our business phenomenally”.
We are looking for opportunities abroad, following our clients into Europe and a potential UK acquisition. We want to be able to bring work back into Ireland and not be dependent on the local market entirely.
On a national level we are involved in data-centres, pharmaceuticals, healthcare, mixed-use developments, schools, prisons and corporate headquarters, some very exciting projects.
“In this business you need to be in as many sectors as possible so that when one is down, the other is up and that level of diversification, within Ireland and outside Ireland, should make us robust enough to be able to deal with anything that is thrown at us”.
Given Ethos Engineering’s success to date, I don’t doubt it.
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