星空传媒

In 1994, for the first time anyone could remember, Wates posted a loss. It wasn't much, less than a million, but it would have gone down like a kipper under the floorboards for this reliable family firm approaching the end of a century in business. Morale was already shaky because the 1991 recession had decimated the workforce by as much as 50%. Worse, as the market began to recover, Wates was not winning what it felt to be its share of the new work.

"We put it down to the market," says Aamir Ahmed, engineering manager for Wates at the time. "We just weren't getting the price right or coming up with the winning formula."

If they'd asked they might have discovered some problems with their reputation, Ahmed says. A bit too claims focussed, or at least a little too willing to exploit opportunities. But nobody was asking. Relieved to have jobs, most people were just lying low. A group psychological block had taken hold.

Then something strange happened. First Ahmed and others noticed that dozens of the company's top management kept disappearing together for days. At the same time, a new mood became apparent. Grey, middle-aged men began to smile more. They seemed more upbeat and confident. Suddenly, all the boundaries began to loosen as senior people appeared more willing to talk.

And their talk was strange.

It had started earlier when senior Wates people were exposed to the Californian management theory teaching that says results depend entirely on good relationships. Put simply, to get big results you need big relationships. Wates needed big results. Shareholders, long suffering through the recession, were getting impatient for a return. The problem was that Wates was not big on relationships.

"The recession had left us navel-gazing," says Rod Bennion, then managing director of the construction business. "Everyone was afraid of losing their jobs. At a time when we needed creativity there was no incentive for raising your head above the parapet."

The recession had left waits navel-gazing. We needed change

Rod Bennion

Workshops work
Throughout 1995 and 1996, 40 of Wates' top managers attended a series of three-day workshops on personal and organisational transformation.

"It was incredibly liberating," says Bennion, who took a lead role in designing and organising the sessions. On the face of it Rod Bennion doesn't seem the type you'd find in a personal transformation workshop on management theory. He is a Wates lifer, having joined the company in 1964. He cuts an austere figure. Former employees describe him as controlled, with a precise aura of senior management and a habit of gaining advantage in conversation by exploiting long, uncomfortable silences. They are right. But appearances are deceiving. Bennion was committed to the workshops. He even owned up to the charge of being a scary conversationalist. "I'm a deep listener," he says. "My intense listening could be intimidating. I was made to realise that a big part of communication was how you occur to people. The workshops helped me change that."

As personally liberating as the workshops may have been, the point of them was still the bottom line. Around this time Bennion started talking about "achieving non-linear results through open dialogue management", which is consultant-speak for making a lot more money quickly, rather than building on last year's results in meagre increments. Wates management were thinking outside the box.

After each workshop, the top management would talk about what they were learning. On the ground, staff treated their rejuvenated managers with a predictable mix of cynicism and excitement. Some passed it off as a fad. Others, like Aamir Ahmed, liked what he heard. "To me it was just about conducting business with the same values you use in everyday life," he says. "I wanted to be part of it."

In October 1996 Bennion and colleagues began to spread the message beyond the top managers. Two-hundred and fifty Wates workers, from post clerks to project managers, were invited to their first three-day workshop. This is when it started to bite: two-thirds of the Wates headcount in a nice hotel represented a big commitment of time, effort and dosh. They were all invited back again, to an even nicer hotel, in March 1997.

It was down to these 250 to spread the word to colleagues. Aamir Ahmed says the success of that depended on the person doing the describing. "Some people talked a whole load of gobbledegook, others launched into business-speak and others just froze," he says, pointing out that for those not invited to the workshops it was a bit threatening to be on the receiving end of culture change. Some rejected the message. The majority thought it made good sense but was unrealistic in construction. And a third group, what Ahmed calls a "large minority", felt it was worth driving forward. Ahmed was among that group, and Bennion appointed him as an agent for change.

To me it was just about conducting business with the same values you use in everyday life

Aamir Ahmed, former Engineering Manager, Wates

For Bennion the way forward was clear. Wates had to shift from the unforgiving world of competitive tendering and increase its share of repeat work with serious clients. It needed to get in front of the right people, impress them, and deliver results, which would guarantee more work. It needed better design capability. All this is easily articulated, but harder to execute with a workforce whose talents had been dimmed from years of recession and a frozen, hierarchical culture.

Progress pilgrim
Bennion had to get to work with this large minority. "You don't spend time on the blockers. You go with the ones who want to lead change with you," says Bennion, who admitted he'd had to fire some who refused to make their action and rhetoric synchronise.

Things began to change. Wates stopped giving people cars to argue about and gave them allowances instead. A new hit squad was formed called the Value Creation Unit. This roving band of architects, engineers, estimators and cost planners had the job of coming up with ways of delighting clients beyond what was called for, such as surprise extra classrooms for an education trust. Turnover rose and profits kept pace until 2000, when they dipped below 拢6m for the first time in two years.

In that year Sir Christopher Wates stepped down and an outsider to both the family and the industry, oil executive Struan Robertson, took the helm. Robertson had been head of BP's operations in Asia Pacific. Wates' experience in the early 1990s may have been harrowing, but it was a Sunday stroll in comparison to BP's turn-of-the-decade turbulence. BP fired its chairman and chief executive in 1992, and cut its 117,000-strong workforce in half before launching a five-year cultural revolution of its own.

Robertson liked what he saw at Wates 鈥� a no-blame culture, plenty of innovation and an open style of management 鈥� but he did recognise that the link between behaviour and profit was still too fragile.

New strategies
Robertson knew what to do. A layer of management was removed so that project staff reported directly to the board. He insisted on monthly performance reviews and encouraged managers to intervene more. Finally, building on a previous experiment in Wates' London region, he scrapped the autonomous regional structure and re-organised the business along market sector lines. Robertson also created the chief operating officer role for Bennion, and tasked him with building the processes that supported Wates' new market strategies.

Quiet, austere, determined: 鈥淢y intense listening could be intimidating,"

Bennion

It worked. Since 2000 Wates' profit has increased by 50%, dramatically closing the gap between it and turnover.

But was culture change necessary? Five years of introspection? The time and money spent on workshops? The hotel bill alone would have given pause to most. Couldn't Bennion, as Wates' construction boss, give some orders? After all, what's wrong with good, old-fashioned, doing as one is told?

"We could have tried, but frankly we've seen others fail," he says of the industry-wide bid to capture new markets and adopt partnering techniques. "The key thing was how open we were with each other. We had to demonstrate there were no sacred cows. With hidden agendas, how could you move forward?"

Robertson backs him up. "I couldn't have done it without all the work on behaviour. I'm speculating but it's likely I would have encountered a more defensive organisation. I would have had trouble with the hierarchy."

Small change?
But how deep has culture change been at Wates, and will it last? Compared to Peter Birse's efforts to change his company by encouraging a personal transformation of every single employee, you could say it stopped just below the epidermis at Wates. Insiders are cautious. One said that while Wates is at the forefront among major contractors, 'on the move' is a better description than 'arrived'. "It's patchy," he says. "There are pockets of world class and pockets of mediocre." Aamir Ahmed, who left Wates in 2001 to set up his own change consultancy (with Wates as a major client), rates success at 65% to 70%. The challenge will be to protect the fragile new culture from dilution brought on by new recruits, and to retain those staff who built it over five years.

Bennion retires next month. And Struan Robertson, having created the chief operating officer's post, is now shutting it down, replacing it with something called a Construction Delivery Director. This person will be responsible for making every Wates project excellent.

Confident he's leaving a company that is vibrant and well-led, Bennion says he's retiring with "huge satisfaction". It's unclear, though, how much retiring he's going to do. Do any digging and there he is, head down in the engine rooms of significant movements. He's been active in Be's education committee. He chairs the Construction Industry Trust for Youth as well as St Christopher's Hospice. Plus he's got all this culture change experience. So will he be setting up his own consultancy?

A long, uncomfortable silence ensues.