Written by Holtby Turner
With introspection dominating the beginning of the year for many construction companies, following the collapse of Carillion, predicting what lies ahead for the sector is no easy task.
Friends and clients in the sector take the view that that change must and will come. But there is no clear consensus as to its shape and form. No other sector would accept the thin margins Contractors operate on as good business. According to The Telegraph, the 10 biggest companies in the sector – including Balfour Beatty, Carillion and Kier – had combined annual revenues of £31.9 billion in in 2017, but together made a pre-tax loss of £52.9 million. Improved margins over growth is the new gospel. Yet with Carillion’s collapse charging tales of private companies profiteering from public purse-strings (and getting their comeuppance), cries from construction about unfair returns are likely to fall on deaf ears.
So, who is championing the issue for the sector? Which individual is championed within Construction and known and admired by outsiders as the sector’s visionary leader? Heralding the message about the broader benefits a strong UK supply-chain has on the wider economy is an important job. But where’s our Steve Jobs or Elon Musk? Where are leaders with both the voice and vision as to how Construction will influence the modern world – not just for the industry’s benefit, but for everyone’s?
At the moment, you couldn’t blame heavyweight leaders for battling down the hatches and weathering out the storm, praying we’ll get the basics right and that Government will see the light. Problem is, steadying the ship and hoping for the best isn’t going to be enough in my opinion, not if the changes the sector wants is a true partnership and improved margins.
As Toby Turner highlighted last month in his piece on lost leadership, to ramp our margins and recalibrate the sector, we need leaders who build trust. Carillion has not just caused financial collapse, but a crash in levels of trust across the built environment. I think it’s too much for one public figure to achieve, nevertheless, who might that spokesperson be, who could capture our imagination and help rebrand our sector? We couldn’t even unilaterally agree a name in the office.
There is good visibility of construction’s leaders in the sector, Mark Reynolds at MACE, Leo Quinn at Balfour Beatty and Haydn Mursell, quietly galvanizing Kier. Who can deny the story of Laing O’Rourke as inspirational, still pushing boundaries with modular manufacturing? Yet could they influence public debate in the way Richard Branson or James Dyson do? Tricky to say.
Andrew Davies, however, could be one example as the former CEO of Wates and future CEO of Carillion (before the lenders pulled the plug). Considered one of the best in the industry for what he achieved at Wates, interestingly he came from outside the sector. Maybe the construction industry needs to think more laterally as to how it identifies and recruits talent.
Leaders must have charisma and vision, as well as that down to earth manner which epitomizes construction’s “for the people by the people” character. Understanding how to develop and deliver a consistent strategy for the setting up and delivery of complex projects is a given but doesn’t necessarily have to be an inside job.
Whilst no one person has all the answers we need to climb out of the chaos, I personally believe one person can inspire others to come on board, for rebuilding trust must come from Construction as a whole to carry impact and offer long lasting stability.