Three months after taking on his first director role in 2008, Paul Fox had to make seven people redundant in one day. He didn’t know if the business would survive another month.

Six years later, the specialist subcontractor Merryhill Envirotec is back in growth and has just reported its best month ever in business.

Mr Fox’s outlook has changed in that time, too. The managing director appreciates that business is cyclical and that he may have two more recessions to live through before he retires. Now he is focusing on long-term planning

“You have to allow people to thrive without worrying they’re going to be in trouble”PAUL FOX, MERRYHILL ENVIROTEC

STRATEGYKATIE BARKER

and communication to give clients and staff alike confidence that the business is here to stay.

No matter what size of business they are running, all leaders of construction companies need to adapt their leadership style to suit the economic climate they are operating in.

With the construction industry emerging from recession after six years, what should leaders be doing differently now?

of that strategy. Roger Barker, director of corporate governance and professional standards at the Institute of Directors, says good leadership is specific for individual companies.

“What the board is looking for from the leadership team is the ability to put into reality the strategy and mission of the organisation,” he says.

“It’s about delivery and execution, the strategy of which has been defined by the board.”

Difficult times can have their advantages. Interserve chief executive Adrian Ringrose says the downturn forced people in the company to rethink the way they did things.

“We had to make changes in many aspects of our business to cope with the recession,” he says.

“They say war is the mother of invention; in business, a downturn is when you need to start challenging the norms and to force yourself to think differently.”

This, he says, encouraged a culture in which innovation was important and, significantly,

people weren’t “afraid to make the odd mistake”.

Mr Fox says: “You have to allow good people to thrive and make their own decisions, to risk-manage their own section of the business and move forward longer term without worrying they’re going to be in trouble for getting the smallest thing wrong.”

Leading environmentCreating a culture that encourages innovation, communication and development, while moving away from the instinct to blame when things go wrong, is not easy to create – and much of this comes from the leadership team.

“A no-blame culture is very important at each level of an organisation; it’s also very important between the CEO and the board,” Dr Barker says.

“There has to be an atmosphere of trust so people feel they can be transparent and open about their problems and they’re not going to be blamed for them. In that

case the board and the leadership team can do something about it because they know about it.”

When the economy picks up, as it is doing now, company strategies change – and the focus of their leaders must change, too.

Dr Barker says switching from recession to growth strategy can be a challenge emotionally for leaders, particularly if they have invested heavily in implementing a difficult strategy over the course of several years. “Experience shows it can be quite difficult to be an effective leader during both phases of the cycle,” Dr Barker says.

“If you have spent the last seven or eight years building up a business in a particular economic environment, and then you’re told to fundamentally dismantle your strategy and go on a different path, from purely an emotional and physiological point of view it can be quite difficult.”

This doesn’t automatically mean a new leader is needed, but that companies needs to consider this carefully when moving from one economic landscape to another.

“A lot of it is to do with how

Should communication with staff be different?

What techniques must they employ to maximise growth, compared with those they used during the downturn?

Battening down hatchesDuring a recession, business leaders often feel that they need to consolidate; the focus is on survival and the outlook may feel shorter term. Jon Fenton, chief executive of geotechnical specialist subcontractor Van Elle, says: “Pre-recession, we were battening down the hatches, looking at ways of saving money and looking at ways to do things more efficiently.”

When the economy is struggling, a company’s business strategy will be different and leaders have to be the embodiment

successful the organisation is: if the organisation is successful and continues to be successful that gives you a high level of credibility and puts you in a strong position to remain leading the organisation,” Dr Barker says.

Post-recession role shiftMr Fenton sees his role changing as the company comes out of recession. “I have to put my head above the parapet, look into the future and maximise the opportunity that we’ve got.”

Once growth is on the horizon, leaders need to have “a very clear eye on resources”, says Wates chief executive Andrew Davies, who took over as the contractor’s chief executive in January this year.

“Do you have the right resources, do you have the right people, can you access those people, do you have the right skills and can you access those skills in a cost-effective way and a sensible risk environment?”

Once again board support, communication, judgement and courage all come into play for those steering their company through periods of change.

“You’ve got to be a good communicator,” Balfour Beatty Construction Services UK chief executive Nick Pollard says.

“That’s about clarity of message, simplicity, and distilling the message. Listening carefully is

growthLeading

Recovery will provide just as stern a test for construction leaders as the recession did. So what will make for exceptional leadership as growth returns?

“I have to put my head above the parapet and maximise the opportunity”JON FENTON, VAN ELLE

Feature: Professional developmentcnplus.co.uk/news/analysis

“A no-blame culture is important at each level and between the CEO and the board”ROGER BARKER, IoD

“Mangers do things right, but leaders do the right thing,” is how Balfour Beatty CSUK CEO Nick Pollard sees the difference between leadership and management. Both are vital to businesses, but while one is about process, outcomes and the ‘what’, a vital component of leadership is communicating the ‘why’.

“Management is about dealing with the here and now,” Skanska UK president and CEO Mike Putnam says. “Leadership is about creating a compelling vision and guiding the organisation to that future.”

Though the two are intrinsically linked, most leaders feel there is something personal about leadership. “It’s about inspiring people to go in the direction, pace and manner you want them to,” Interserve CEO Adrian Ringrose says.

“It is different from management; they are related to and dependent on one another but leadership is about the heart and management is more about tangible outcomes.”

Management vs leadership

METHODOLOGY

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for

Left to right: Adrian Ringrose, Interserve; Mike Putnam, Skanska; Nick Pollard, Balfour Beatty CSUK; Andrew Davies, Wates; Paul Fox, Merryhill Envirotec; Alan Kay, Costain; Roger Barker, Institute of Directors; John Fenton, Van Elle

cnplus.co.uk/news/analysis20 | 13 June 2014

important, too; really thinking through what [staff] are telling you, and then asking enough questions to reveal what they really mean.”

Communicating the strategy effectively throughout the organisation is vital, as employees appreciate understanding where a business is heading and leaders receive better insight on which to base decisions if the channels of communication are open.

“A key thing is simplicity in the organisational structure,” Dr Barker says. “Make sure important information gets to management team; the easier that information flow is the better, the fewer levels of management it has to go through the better.”

Paint a visionLeadership coach Tim Robson says a leader’s ability to paint a picture of the future and the purpose the organisation shares is hugely important (see comment, page 22). “This is even more

“It doesn’t matter if it’s tough times or good times, the same qualities are required”NICK POLLARD, BALFOUR BEATTY

critical as companies come out of recession and into growth; leaders need to help people see where they fit in as part of a brighter future,” he says.

“That’s about more than results, growth and numbers; it’s about overall impact and personal contribution.”

It’s extremely important when coming out of a downturn that, while leaders focus on growth and returning to profit, they also attempt to learn the lessons of the challenges experienced.

“Cost controls need to be in place during periods of growth to maximise opportunities,” Mr Pollard says. “It’s about being as effective as you can be all the time.”

Even when companies navigated the recession well, communicating with employees about the changing market and opportunities is critical.

“My priority continues to be to making sure we have the right people in place to deliver on our

matter what the message. “It doesn’t matter if it’s tough

times or good times, the same qualities are required,” Mr Pollard says, “Ethics, integrity, and courage to do the right thing.”

“It’s all about the people you’re inspiring to follow you,” Mr Ringrose says. “It’s about inspiring people to go in the direction, pace and manner that you want them to.

“Leadership is more about setting the tone, direction, pace, values, an example – and also recognising this is a team sport and no role is more important than any other.”

Consistency is also vital, as that is the way leaders will gain the trust of the company’s employees. “You’ve got to be authentic,” Mr Pollard says.

“As a leader you can’t show up differently on different days – you should always look and feel the same to your people, and encourage the same principles and values. If you’re like that then you’ll build the confidence and trust of people, and that leads to mutual respect.”

Embodying principles This means living the values you promote every day, honouring your commitments and promoting the company externally as well.

“I believe you need to be prepared to stand up for what you believe in and hold true to those values at all costs,” Mr Putnam says.

“Never compromise on your ethics or your values. Do what you say you will do and live up to your commitments.

“It’s easy to become consumed by internal matters. I’m committed to being externally focused and make sure I spend a significant amount of my time with clients and promoting the company.”

Effective leaders know too the value of spending time with their staff. As coach Tim Robson says: “Leaders need to give their people their time.

“Time and attention are scarce commodities; when a leader gives adequate attention to the needs of an individual while pointing back to purpose, their people know

commitments and to take advantage of new opportunities,” Skanska UK president and CEO Mike Putnam says.

“I have adjusted my messages to the organisation to reflect the new economic reality.

“I am encouraging my people to look for growth opportunities, while remaining mindful to the risks of skills shortages, inflation and supply chain capacity.”

Pervading attributes Of course, many of the core characteristics that make a great leader remain constant no

It’s vital leadership teams are backed by an informed and competent board of directors, but until recently many of those taking up director roles were offered little training. “I got onto the Institute of Directors course to become a chartered director shortly after being appointed as a director; that helped me a lot and taught me a lot,” Costain group technical and operations director Alan Kay says.

“It makes you more confident – you’ve been through a lot of the scenarios, you understand what’s expected and the consequences of the decisions you’re making.”

The board is crucial in creating good corporate governance; it sets

the strategy and chooses the leadership team. “At the centre of it is the board of directors: this is the group which is ultimately accountable,” Institute of Directors director of corporate governance and professional standards Roger Barker says.

“They have to define the strategy of the organisation and pick the team that will make it a reality – that is the core of corporate governance.”

The board also provides a level of objectivity coupled with company insights. “That’s why they are at the centre of corporate governance –their unique position,” Dr Barker says. “On one hand they have some objectivity but also have access to information so

Crucial director role demands targeted trainingGOVERNANCE DIRECTORS

that they can form a view which is in the interest of the company.”

While more firms do now offer training for directors, it’s the next generation that will benefit from understanding what being a director actually entails. “Training should be done before people reach [director] stage and we as a business are starting to do that so they are better prepared for these positions than their predecessors,” Mr Kay says.

But not offering training for directors is akin to asking a worker without the correct qualifications to drive a crane. “If you don’t train them, it’s putting people in a position you shouldn’t put them in,” Mr Kay says.

“Leadership is about setting the tone, direction, pace, values – and also recognising this is a team sport”ADRIAN RINGROSE, INTERSERVE

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cnplus.co.uk/news/analysis22 | 13 June 2014

they matter and what they’re engaged in is important, and these days it can be done in minutes and seconds not days and hours.”

Mr Ringrose says: “People can acquire knowledge and skill, but what you need is for them to give their best and they feel valued, respected, recognised and they feel they’re worthwhile. We all appreciate a thank you, you walk an inch taller and you think, ‘I’m going to try even harder’ – the difference is motivation.”

Ways to motivateMotivating people is not just about saying thank you though; many different things motivate employees, particularly in the construction industry where the work done leaves behind a tangible asset.

“Growth isn’t the thing to try to motivate people around – high performance is,” Mr Pollard says. “There are some other motivators too aside. In construction that’s often about legacy – legacy comes in the form of great projects, so the quality of the pipeline of projects is motivating.

“They are also motivated by doing a first-class job, pleasing their customer, and by the fact that we don’t just leave an asset behind; it is so much more than that.

“Training apprentices, small businesses with whom you’ve traded and having engaged with the community – those are

permanent and lasting legacies.”“It’s essential to invest in your

people,” Mr Putnam says. “That means investing in

their personal and professional development, as well as the physical environment in which they work and create opportunities for them. This is key to creating a sustainable business.”

Tackling skills gapsInterserve also offers employees a range of training and upskilling opportunities with clear progression paths for staff.

Mr Ringrose is adamant that the construction industry needs to address its own issues when it comes to skills.

“I’m fed up of hearing people in industry whinge about skills; you have to get off your backside and do something about it, and if that means making a contribution to a pool that might be ultimately wider than our employees then so be it,” he says.

“That’s upskilling the system as a whole and that can only be a good thing in the long run.”

Reinforcing the message to employees that they are part of something wider than their immediate team is also vital for leaders when managing both recession and growth.

“We’re all better off because we’re part of that bigger family,” Mr Ringrose says.

“It’s an important thing to remind people that your story is an important story, and it’s part of a bigger story that helps sustain the business over the long term.

“How do you do that? You get out, you see it first hand, listen, observe and you thank people.

“We build buildings and infrastructure that society relies on; we’re not unique but what our people do matters and I’m really proud of that and proud to be part of a team that can make that happen.

“Sharing that enthusiasm and pride one on one as well as one on 80,000 is all part of the mix.”

It’s the responsibility of any leader to create an environment where employees feel able to bring their best selves to work, and companies that give sufficient attention to this have a greater chance of getting the most out of their people.

True leaders trust in the talent they have available to them and provide sufficient freedom for their people to execute and exercise their role. Leaders also need to be able to describe the purpose of an organisation or team beyond the standard business plan.

Often we get obsessed with what we need to do, what did we do last week/month/year and what’s on our list. But sustainable performance comes when we understand why we’re doing it in the first place and feel part of something bigger.

This is true regardless of sector or team size and is even more critical as companies come out of recession.

Act and articulateA crucial action for leaders now is to articulate what they’re trying to achieve and describe every person’s contribution. People buy into the promise of what’s coming rather than just the job or task they’re completing, so leaders need to spend time articulating these things and reminding people why they’re doing the things they’re doing and how they add up to a bigger story.

People find it increasingly difficult to give up time for team-building exercises because they feel so busy, but it’s exactly those things that might enable people to be aligned around a vision or project.

Often we relegate face-to-face, informal communication to a ‘nice to have’ when we’re a little less busy, which is never going to happen, which means we never do it.

But when a leader gives adequate attention to the needs of an individual while pointing back to purpose, their people know they matter and what they’re engaged in

is important – and these days it can be done in minutes and seconds, rather than days and hours.

Busy seductionMany of us are seduced into busyness; if we seem busy and our schedules are really full then we must have been effective – and I think the recession mindset simply fed that environment. But busyness can become a self-fulfilling prophecy.

The challenge for leaders is to recognise that busyness can be an enormous distraction. A leader’s job is not to be busy; it’s to have clarity of purpose and provide something people can follow. Leaders must be ahead of their people or there’s no direction to clearly head in.

I’d also encourage leaders to advocate a strengths-based approach; too many of us seem programmed to focus on weaknesses, despite research consistently showing that focusing on your strengths and training them like a muscle creates a better return than by focusing on weaknesses.

The ‘well-rounded leader’ is a myth. I don’t think many of the best leaders we remember are well rounded. What they are, though, is clear on what they’re good at – and they surround themselves with people with complementary skills.

So right now, good leaders should back themselves, articulate their vision and give their people freedom to carry out their roles effectively.

When those sorts of people feel able to show up in their work each day, it feels a lot less like work and the results can be amazing.

Tim Robson is the author of Showing Up: How to Make a Greater Impact at Work

“A leader’s job is not to be busy; it’s to have clarity of purpose”

Top tips for effective leadership

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“Never compromise on your ethics or your values. Do what you say you will do and live up to your commitments”MIKE PUTNAM, SKANSKA

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