Engineering success

Four decades ago, Helmut Graumann’s friends were worried about him.

Graumann and three other senior engineers in Winnipeg’s hydropower industry — Demetrios Kontzamanis, J. Bert Smith and Dave MacMillan — had decided to leave their jobs to start their own engineering consulting firm.

Guided by the idea that strong relationships and a commitment to quality are foundational to consulting engineering, they opened KGS Group in July 1986.

“Demetrios in particular was very well-respected by (Manitoba Hydro),” Graumann recalls.

“He felt that he wanted to have a little bit more control over his career and wanted to start his own firm. He was supremely confident that he could parlay some of the relationships that he had fostered with the utility and that he could get work — and he convinced the other three of us that this was going to work out.”

The four founders believed in themselves and each other, but those around them weren’t so sure.

“My friends thought I was nuts,” Graumann says. “A lot of my friends were very, very concerned for our well-being because they thought, why are you doing this? This is a tremendous risk for you and your family. What are you thinking?”

The first year was challenging. There was no revenue, so the founders didn’t pay themselves, and none of their wives worked outside of their homes. Graumann had two young children at the time and took out a second mortgage on his house.

He believes the founders’ wives — Helene Kontzamanis, Debbie Graumann, Linda Smith and Cheryl MacMillan — deserve as much credit as anyone for getting the business off the ground.

“They stood behind us and it must have been terribly frightening for them from their perspective,” Graumann says. “I know it was for my wife.”

It’s safe to say things worked out, as KGS Group marks its 40th anniversary this year.

The employee-owned company is no longer a team of four in a small downtown Winnipeg office. Headquartered at 865 Waverley St., KGS Group has eight offices across Canada and the United States, and is in the early stages of establishing a ninth.

More than 700 engineers, scientists, technologists and support staff work for the firm, about 400 of whom are based in Manitoba.

As a multidisciplinary engineering consulting firm, KGS Group works on projects across a range of sectors, from major hydro developments and industrial expansions, to environmental remediation, municipal and transportation systems, flood protection and building projects.

The company’s success has exceeded its founders’ expectations, Graumann says.

“I think if somebody had offered us the opportunity to be a 25-person boutique engineering firm that did a little hydro work for some of the utilities here and there, we would have grabbed it.”

A source of pride for Graumann is the fact KGS Group’s biggest client today is the same one that gave the firm its big break: Ontario Power Generation Inc., which was part of Ontario Hydro until the utility was reorganized into five companies at the end of the 1990s.

Kontzamanis, who served as president for KGS Group’s first three decades, visited Toronto on a family trip during the company’s second year. While there, he made arrangements to stop by Ontario Hydro and speak with a manager.

Kontzamanis must have made an impression, Graumann says, because the utility put KGS Group on the bid list for its next project: a feasibility study for the rehabilitation of Ear Falls generating station in northwestern Ontario.

Manitoba Hydro and Winnipeg Hydro (later merged with Manitoba Hydro) were part of the agency group that administered the site.

When KGS Group received the request for proposals, the founders were disappointed to find there were five other consulting firms on the list — the five largest hydropower consultants in Canada, Graumann says.

“We had six or seven employees, including ourselves,” he recalls. “We thought, how is this going to work? We’re not going to make enough of an impression here.”

Nevertheless, KGS Group submitted a proposal. A few months later, Ontario Hydro awarded the contract to the firm. What was interesting, Graumann says, is when the Winnipeg firm received the letter evaluating the various proposals, KGS Group’s fees were somewhere in the middle.

“We were not the low fee,” he says. “We put in a legitimate proposal that convinced them that we knew what we were doing.”

After the feasibility stage, KGS Group was awarded the detailed design and contract administration the following year.

The project was relatively small compared to the firm’s current standards, but it introduced and showcased KGS Group to major hydro utilities.

“That kind of set the stage for the growth of the company and put us on the map,” Graumann says.

KGS Group has completed tens of thousands of projects since then, says Rick Martin, who joined the company as an engineer in 1988 and was appointed president in 2016.

The firm currently has around 600 projects on the go, including many in and around Winnipeg.

KGS Group has provided engineering services for landmarks such as The Forks Riverwalk, Canadian Museum for Human Rights and Canada Life Centre, and is working on the development of CentrePort Canada and Railside at The Forks.

One of KGS Group’s biggest accomplishments, Graumann says, is the firm’s involvement with the Red River Floodway.

Following the 1997 Red River flood — the worst to hit southern Manitoba in 145 years — the province hired KGS Group to look at the feasibility of expanding the floodway. The firm eventually led a group that included three other major consulting firms in Winnipeg to design and execute the project.

The floodway was originally designed to accommodate a one-in-160-year flood and the $628 million expansion increased its capacity to accommodate a one-in-700-year flood.

“We feel extremely proud of the fact that we led the charge to ensure that the city and largely the province are protected,” Graumann says.

Martin credits Kontzamanis for laying the groundwork for where KGS Group is today. He’s not only a brilliant engineer, Martin says, but an astute businessman who had a vision for the firm.

The hard work KGS Group does for its clients, the firm’s commitment to developing and retaining its employees (around 200 of whom are shareholders), and, of course, Helene, Debbie, Linda and Cheryl, have contributed to 40 successful years.

“Our potential going forward is, to some extent, unlimited,” Martin says. “I see us continuing to grow at a steady pace and expanding — Winnipeg being head office, but expanding into more cities, more areas and delivering more capability for our clients.”

aaron.epp@freepress.mb.ca