From being branded a troublemaker after only five months at university as an engineering student to selling PD Naidoo & Associates (PDNA) to a global engineering group: this may very well be an exemplary story of leadership, entrepreneurialism, endurance, commitment, investing in Africa and all the attributes needed to succeed in life.
Dempsey Naidoo was born in Chatsworth, Durban. He describes his childhood as happy, normal and though there were only five siblings in the family, he remembers their two-room house always filled with more than 20 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 more. Naidoo said 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 their use.
He said: “I was targeted as a troublemaker 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 father manhandled him in front of a professor. Naidoo said: “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 a unit of Murray & Roberts, as a junior estimator, for R100 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 on June 12, 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 in life. He said: “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.”
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 South Africa. But another plan surfaced, which was to apply for a UN bursary – a pivotal moment and decision in his life. As he said: “An uncle gave me the idea: write to the UN, 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 was awarded 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’s civil engineering department, where he worked from 1981 to 1986, a difficult time in South Africa’s 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 said: “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 managing director of McDonald’s South Africa, Greg Solomon, explained to us in a previous article.
While building his career at Anglo, 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,” Naidoo said.
In 1986, he helped create Technical Alliance in Lenasia. Naidoo said: “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 prominent businessman in the Indian community decided to build a head office in Lenasia. Quite possibly, it was the first architecturally designed and engineered building in the suburb. He put R7 million on the table and gave the job to Technical Alliance and a few other black practitioners. Naidoo said: “He made one request – that we would all run our practices 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 to 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 whom he could mentor after hours.
This visionary businessman brought new thinking to his community. Naidoo said: “We became mini-celebrities within Lenasia, and we were called upon for discussions and much more.”
Naidoo’s career evolved and the engineering firm grew, mostly because the winds of change blew. As they say, timing is everything. Government contracts streamed in and the 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 the firm full-time.
Naidoo added: “The next decade – from 1996 to 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 percent of annual turnover.”
But it wasn’t easy. Of course it never is. The team was 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 to a business, and as Naidoo explained: “If you know the professional services environment, you always stress because you wait for payments from big companies or the 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 said: “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.”
South Africa was attracting foreign direct investment; the honeymoon period had started. A company called Peter Brett Associates arrived on the doorstep. The group liked PDNA and bought 10 percent of the company. The company 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 R12 to a dollar. Naidoo said: “They turned tail and ran, back to the UK.”
But PDNA continued on its course. The water unit is now doing a R1.2 billion project for Eskom, and it has General Electric as a sub-consultant. The company was the chief structural engineer for Soccer City, and much more.
They started a company called PD Naidoo International, to replicate the model of people empowerment. This includes a 20 person indigenous office in Mozambique, with Mozambicans. The first five or six individuals, after being training in South Africa, were sent back. Today PD Naidoo Mozambique is run by a Mozambican citizen. The group is doing the same in Botswana.
“We are… 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,” Naidoo said. He tries to remain true to his UN bursary commitment, which indicates integrity.
The company encourages each one of its staff members to explore opportunities beyond just earning a salary. Naidoo asks the staff: “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. The group created a formal PDNA Academy, which looks after professional training of engineers in terms of their development and it looks after the creation of artisans for the country. It even teaches youngsters to weld.
Naidoo paid tribute to the great people he has 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… 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. Of late, PDNA has been approached for partnership on large-scale infrastructure projects. Naidoo said: “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. UK-based Mott MacDonald recently bought PDNA, 100 percent. The leadership has been retained in the tie-up 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… They’ve got some excellent leaders in their Rivonia office, so we’ll be combining with that,” Naidoo said.
The test ahead will be making sure that the culture of PDNA stays intact. After all, there is a great history to it.
Adriaan Groenewald, a lead contributor to the BR Leadership Platform, is a leadership expert and managing director and co-founder of Leadership Platform (www.leadershipplatform.com/ or follow him on Twitter: @AdriaanG_LP). Send comments to [email protected] or to Business Report editor: [email protected]