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Big By Design: Stantec

Edmonton’s Stantec has grown from 600 to 13,200 employees and spread across the world, all through better design

Sep 1, 2014

by Peter Burrows

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Illustration Steve McPhee
V250 Rank: 37
Chief Executive Officer: Bob Gomes
2013 Revenue: $2.2 billion
Number of Employees: 13,200

When Bob Gomes joined the Stanley Technology Group 25 years ago, it was a 600-employee, privately held company operating mostly in Alberta. Its work focused on the design and engineering of municipal water systems. But, driven in part by the collapse of the Albertan economy following the National Energy Program in the early 1980s, Stanley Technology started down a path of massive and continuous change. “Alberta became a difficult place to do business for a few years,” says CEO Bob Gomes. “Leadership saw that you had to be diversified, and that started the trek of being in more geographical locations and in more sectors.”

“We don’t operate our business – I hate to say it – to keep shareholders happy. We operate our business in accordance with our strategic plan.” – Bob Gomes, CEO, Stantec

So that’s what Stanley Technology has done. It began by branching into new operational areas, including architectural design, transportation and environmental services. More recently, it has become a major player in energy services, in particular the midstream business. It now does the bulk of pipeline design in Alberta and B.C. It has also developed specialities in the construction of deep mine shafts, hospitals and power projects. At the same time, the company has grown from its Edmonton base to have offices across the country, around the U.S. and in several countries beyond North America. “That provides a great base to provide the consistency that can withstand any kind of retraction in services or a problem like we had in 2009 when the economy on both sides of the border suffered,” Gomes says. “We weathered the storm from 2008 until 2012 fairly well.” The changes have been good to the company, which has seen a steady rise in its enterprise value and its stock price.

At the same time, Gomes says the company has hardly changed at all since he arrived: it’s still about building close ties with the communities it operates in, and it’s still all about design. “We don’t develop software. We don’t do construction. We don’t invest equity in projects,” Gomes says. “Our only assets are our people.”

The real growth phase started after Stanley Technology bought its first U.S.-based company, in Phoenix, in 1991. In 1994, the company went public. Since changing its name to Stantec in 1998, the company has acquired close to 100 other companies, almost half of them south of the border. It now has more than 13,000 employees in 230 locations across the globe. “I don’t think a lot of Albertans know that,” says Gomes from his company’s head office which is, for the time being, still on Jasper Avenue in Edmonton. “They still see Stantec as a good Alberta firm doing lots of projects here. This is where we started, but I don’t think a lot of people understand what we’ve accomplished coast to coast in Canada, first off, but also what we’ve accomplished across the U.S.”

What they’ve accomplished in the U.S. is to gradually climb the list of top design firms, as ranked by the Engineering News-Record. By revenue, Stantec now ranks 17th on the list of the top 150 design firms worldwide (that’s up from number 19 a year ago and puts the company third in Canada, behind SNC-Lavalin and WSP Global). And Gomes sees nothing but room to run. He points out that California alone has a bigger population than Canada and that the Texan economy is bigger than Canada’s. He also notes that the infrastructure design space they operate in remains fragmented in the U.S. “The largest firm in the space has only a five or six per cent market share in the infrastructure industry,” he says. “We have about two per cent, so there’s lots of room for further consolidation.” Then there’s the international market. Today, Stantec has just 300 employees outside North America, primarily in the Middle East, England and India, but 96 per cent of the company’s revenue still comes from Canada and the U.S.

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Stantec designed the half-kilometre expansion of the passenger terminal at Edmonton International Airport, breaking up the long corridor with a series of architectural details

Some of that growth will come through natural accretion, but Gomes says the company will continue its purchasing spree, so long as the fit is right. “Of the acquisitions we’ve done, more than 80 per cent of them have gone well,” Gomes says. “That’s an amazing record. Every company has a different personality, but we always look for firms that are culturally similar to us: firms that are focused on design and that are focused on the communities they’re in. That tends to eliminate a lot of the cultural issues.”

The latest change to be announced by Stantec is the consolidation of its five Edmonton offices into one new building in downtown Edmonton. The company will likely move into new digs in the arena district in 2019, consolidating its 1,500 Edmonton based employees.

Stantec is celebrating its 60th anniversary this year, but the company has no plans for a big blowout party. “We’re not playing it up too much because some of the companies we’ve acquired in the U.S. have over a 100 year history,” Gomes says. “We’ve branded them as Stantec but we don’t want to not honour the history and legacy in some of these locations.”

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