From being branded a troublemaker after only five months at university as an Engineering student to selling PD Naidoo & Associates to a global engineering group – this may very well be an exemplary story of leadership, entrepreneurialism, endurance, commitment, investing in Africa and all attributes needed to succeed in life.
Dempsey Naidoo was born in Chatsworth Durban. He describes his childhood as happy and normal and although there were only five siblings in the family he remembers their two-room house always filled with more than twenty people. His Dad was the inspiration in terms of education. He was a teacher but also a leader in society – people came to their house to deal with not only educational but also personal problems, sporting issues and much more. Naidoo says of this: “So that gave me a spark – there is something about education that puts you in a position to help others.”
He thought his real reason for living was to be a professional soccer player. While studying Civil Engineering at the University of Durban Westville he played soccer for a couple of teams. About five months into his studies he ran into trouble when he wanted to use the sporting facilities. There were boycotts in place so the authorities objected to them using it. He says: “I was targeted as a trouble maker and quite honestly it was a totally repressive, oppressive environment.” He dropped out of university.
His parents were bitterly disappointed, even to the point where his Dad manhandled him in front of a Professor. Naidoo comments: “And that left an abiding feeling of how much I had disappointed him, and he being my hero, I didn’t want to ever disappoint him again. I decided whatever move I made from that day on it would be to make my parents proud.” He worked for a year at Ilco Homes today within Murray and Roberts, as a Junior Estimator, for R 100 a month. He applied to colleges in the UK and was accepted at Oxford Polytechnic to do the Higher National Diploma. Of course he did this with a hidden agenda of playing football there. So 12 June 1976, he left the shores of South Africa for the first time as an 18 year old, four days before the Soweto uprising and had to sit and watch one-sided media coverage of South Africa “burning” to the ground. That was difficult. In short, soccer did not work out and plan B took over.
Naidoo boarded with a lower to middle class English family where he feels he started his education of life. He explains: “They gave me a huge lesson in “humans are humans” – no matter what colour you are, you are a human being first. And so today I follow a philosophy of Humanism as opposed to any one religion – I think that’s where it grew.”
His funds dried up at a time when Margaret Thatcher was in power and raised fees for overseas students considerably. The prospect was to pack up after one year and head back to SA. But another plan surfaced, which was to apply for a United Nations bursary – a pivotal moment and decision in his life. As he explains: “An uncle gave me the idea – write to the United Nations, you’ve got a good story, not many kids in Africa, black, coloured, indian or even white for that matter study Civil Engineering, apply for it, you might stand a chance. So I did.”
He was called for a short-listing and they gave him a bursary. An informal prerequisite was that he would go back to Africa and apply his engineering skills to uplift communities, in some way. He completed the studies and returned home having been recruited by Anglo American Civil Engineering department, where he worked from 1981 to 1986, a difficult time in SA history. Within a year he was married to a long-time friend, Jackie.
Naidoo applied for the management trainee programme at Anglo American. On this fast track journey he met leaders like Bobby Godsell, Clem Sunter and others. Of this journey he comments: “It was stimulating to the extreme, and threatening but rewarding. I can’t tell you how much I benefited personally.” Exposure is so crucial during one’s personal development, as the current MD of McDonalds SA Greg Solomon explained to us in a previous article.
While building his career there he also got involved in community infrastructure matters, because at work “they were teaching me about pipelines and roads and sewers and houses, hospitals and offices. And they were hard task masters and very good mentors. I learnt a lot”, says Naidoo. In 1986 they created a Technical Alliance in Lenasia. Naidoo says: “It was a social movement to try and help our community. It was something to help us go into schools and teach maths and science because it was still a problem, but it was also a chance to try and do engineering or technical projects in our society.” His interest in getting involved in broader society would prove to be pertinent to his success.
In late 1987 a very prominent business man in the Indian community decided to build a Head Office in Lenasia. Quite possibly it was the first ever architecturally designed and engineered building in Lenasia. He put R 7 million on the table and gave the job to Technical Alliance and a few other black practitioners. Naidoo says: “He made one request – that we would all run our practises under our names so that the community got to know us as role models – he made that a condition. So I created PD Naidoo”, which, with permission from his employer, his wife managed from home in the day and he contributed after hours. He wanted to remain true to the UN bursary commitment of investing back into the community, which is why he also encouraged his wife to employ youngsters that he could mentor after hours.
This visionary businessman brought a new thinking to their community of what professionals could do for them. Naidoo comments: “We became mini-celebrities within Lenasia, and we were called upon for discussions and much more.”
Naidoo’s career evolved and their engineering firm grew, mostly because the winds of change blew. As they say “timing is everything”. Government contracts streamed in and their organisation became a partner of choice for the doyens of the Afrikaans engineering industry. He took the courageous leap of faith and resigned to join their firm fulltime. Naidoo says further: “The next decade – from 1996–2006 – I can only describe as a blur. I don’t know where the years went. We grew phenomenally each year, in excess of 25% of annual turnover.”
But it wasn’t easy. Of course it never is.
They were always under financial stress, reinvesting everything back into the business, putting pressure on personal circumstances and even relationships. The business almost closed down three or four times. They learnt what lack of cash flow can do for a business, and as Naidoo explains: “if you know the professional services environment, you always stress because you wait for payments from big companies or government and you carry a 90 day payment cycle – even today. So money was always an issue – we got good work but we never got paid on time.” And he has a view of the role banks played: “I can’t say that our banks and institutions, even in the new South Africa after 1992, were very good at supporting professional services start-ups.” They simply struggled through it with their own money and their own funding and followed a rigid discipline of financial control. He brought in discipline, quality control, safety standards, all of the things that big companies do but in a small environment.
And from a leadership point of view he says “it’s how to manage rapid growth – there’s no book that teaches you that. And the dangers of cash-flow management – you tend to look at turnover, you tend to look at the jobs you have but you tend to forget that there’s cash that you need.” And he adds: “Great leader’s lead great people.”
South Africa was attracting foreign direct investment – the honeymoon period had started. A company called Peter Brett Associates arrived on their doorstep. They liked PD Naidoo & Associates and bought 10% of the company. They started diversifying, marketing and attracting larger projects in water, roads, transport, and so on. The partnership was good for about 18 months, until the rand fell to about R 12 to a dollar. Naidoo says: “They turned tail and ran, back to the UK.”
But PD Naidoo continued on their course. Their water unit is now doing a 1.2 billion rand project for Eskom, and they have the great General Electric as its sub-consultant. They were the chief structural engineers for Soccer City, and much more.
They started a company called PD Naidoo International, to replicate their model of people empowerment. This includes a 20 person indigenous office in Mozambique out of Mozambiquan kids. The first 5 or 6 individuals, after training them in SA, were sent back. Today PD Naidoo Mozambique is run by a Mozambiquan citizen. They are doing the same in Botswana. Naidoo comments: “We are very much into looking at expansion but we want to leave a lasting footprint of people that can work in their own country. We will bring our skills, we will lend it to them, we bring our experiences, we’ll even give them financial support, we give them bursaries, we train them here and everything, but they must go back, like the United Nations did with me.” He tried to remain true to his bursary commitment, which indicates integrity.
They encourage each one of their staff members to explore opportunities beyond just earning a salary at PDNA. Naidoo asks their people: “What can you do for your colleagues, what can you do for your community, how can you grow?” And this system of what he calls social capitalism has taken root. They created a formal PDNA Academy, which looks after professional training, engineers in terms of their development and it looks after the creation of artisans for the country. They even teach youngsters to weld.
Naidoo pays tribute to the great people he had around him: “They stuck with the vision, they stuck with the mission, and they said, like I said, one day there will be a reward. It might not all be material, but you will have a place in the history of South Africa where your legacy, even in the small engineering fraternity where they will remember that companies like PDNA had to overcome enormous obstacles – people pressure, training pressure, winning work pressure, financing pressure – all of those things – but yet we will shine through and when you shine through, people recognise what you’ve come through. And we are there right now.”
The engineering industry is consolidating. Africon merged with an Australian company and is now called Aurecon and there are many other examples lately. Of late PDNA have been approached for partnership on large scale infrastructure projects. Naidoo explains: “We were far too exposed as a medium sized company for some of the projects that were coming our way, and we needed a bigger brother or sister – we needed a bigger company. And we needed a global brand.” A strong global partner seemed inevitable.
Mott MacDonald recently bought them, 100%. Their leadership have been retained in the merger to make sure it comes together: “My leadership team has been selected to lead largely the African expansion for this group. I will be heading it up. It’s a great accolade that these people have got all these leaders internationally, yet they would trust their growth in Africa to a largely African team. They’ve also got some excellent leaders in their Rivonia office, so we’ll be combining with that”, says Naidoo.
Their journey continues and one can only hope that with the advent of a larger international shareholder the culture of PD Naidoo & Associates will remain. They seem committed to this, which is a good start.
BR: Throughout this remarkable journey, what is your greatest leadership lesson?
Naidoo: Keep close to your people at all times. Always have a plan for the future. Back yourself.
BR: What is your message to budding entrepreneurs?
Naidoo: Have bundles of passion and perseverance. “Failure is the stepping stone to success.”
BR: What is right and wrong in our society when it comes to moving forward with a business? What assists and what resists business growth?
Naidoo: Society in South Africa has adopted the “fast buck” mentality to business. Sustainable business must ride out many cycles for it to be resilient. We do not have a culture of developing and supporting good entrepreneurs. We talk the talk with little planned commitment.
BR: You do lots of business with government. How serious a problem is corruption when it comes to securing tenders? In short, what is the solution?
Naidoo: We need a professional civil service who must realise their jobs are to deliver to the people of South Africa, especially the poor. We also have willing “corruptees” in the private sector which is a growing problem.
BR: How do you plan on sustaining your current organisational culture?
Naidoo: You can only make a difference by showing people the benefit of your business style and culture and then hope it catches on. However we must remain open to new global ideas as well in order to advance. There is nothing like success to breed good structure and ideas.
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