Latest:
Keeping the customer satisfied
00:00 21 Jun 2000
|
Long before Latham and Egan, and long before buzz words like
'partnering', 'transparency' and 'joined up thinking' became
industry jargon, Steve Hindley, chief executive of the Midas Group,
was aware success in the construction business lay in teamwork and
long-term relationships with customers.
A civil engineer by profession, Hindley is in no doubt of the impression Midas, whose headquarters are based in Bristol, has made in the construction industry over the past two years.
From a construction company few had heard of outside the south west, the group has become one of the top 50 UK firms in the business. Nearly half the group's turnover has been secured as a result of having embraced partnering relationships - targeted to rise to 70% by May 2002.
Hindley feels the time is right for the group to blow its own trumpet and demonstrate how to succeed in construction's brave new world.
"Many within construction have lost their way because they are failing to build long-term relationships with their customers. If they dedicated themselves to keeping customers happy by delivering below budget and on time, they might not waste so much time looking for new work," says Hindley.
So confident is the chief executive of the group's policy he is dismissive about traditional means of procuring new work, such as competitive tendering.
"Unless there is a genuine prospect of building a relationship with a customer, we are sending away over 50% of what we receive. Competitive tendering is a mug's game."
The company's transformation began in 1998 when Hindley and Mike Hocking, then both working at E Thomas, a subsidiary of Mowlem, decided to go for a management buy-in of Midas Construction.
"We saw Midas as a useful vehicle. It was the right size and had the right culture," said Hindley. "We are extremely lucky that the original founder of the business, Len Lewis, offered to act as venture capitalist, staying involved with the company as non-executive Chairman in a three year agreement which completes in May 2001."
From a construction firm which did not take on jobs worth more than £1m or outside the south west, the Midas Group has more than doubled its staff and is now undertaking work worth £13m in East Anglia for blue chip customers like St Ives.
"Midas has moved way beyond its south west origins to undertake major contracts elsewhere in the UK and Ireland," says Hindley.
In the past two years Midas has gone from being a £23m company to one with a current turnover of £80m. How was this achieved?
At Hindley's instigation, the group initiated a five-year financial plan, which aims to achieve an operating profit of £1m at year end on 31 April 2001, with a target of £2m for 2001/01 and £3m for 2001/02.
To help achieve these targets, the group divided into five businesses. These comprise its core construction and restoration operations, along with development, property services and a fledgling environmental division. All of which will ensure that by May 2004 Midas is on target to have a turnover of £150m, with profits of £5m.
Hindley does not see this as unduly ambitious. "The firm was making £23m in turnover when we arrived and it immediately went to £45m. In the financial year just ended we have achieved £73m in turnover."
Hindley attributes his motivational ideas to a former colleague of his, Harry Robinson.
"Harry was a tremendous mentor. If you went to him to say you had got the company on a £50m tender list, he would not have been impressed. He saw it as putting all the company resources on the line, what with estimating costs and the like. However, if you had said you had negotiated a £50m deal - now that would have impressed him."
According to Hindley, deals can be achieved by negotiation and by building long-term relationships with customers.
"People only negotiate with friends. Unless they know you and trust you - why should they negotiate with you? In our line of business, the only security you have are your people. Midas is just a group of people. We don't own our buildings and cars. Without our people we're nothing."
Midas believe that a major factor in its rapid progress has been its record of attracting high-calibre employees who the company says have left 'the industry's major players - and the 'dinosaur' approach - to work with forward-thinking and like-minded construction professionals who embrace change.'
Despite rumours to the contrary, Hindley dismisses charges of causing ill-feeling in the south west by poaching employees from other companies. "We have never head-hunted people," he says.
And with the emphasis on educating company employees on the importance of building relationships with clients, Midas is creating teams of people to run the business on a nationwide rather than regional basis.
"While we have a regional structure, I want to move business to the customer. If a team has got a customer, you deal with that person, unless it suits your purpose to do otherwise."
Following the example set by the manufacturing sector, Midas means to invert the traditional pyramid of management structure. Instead of being managed by the executive at the top, the business will be led by teams of people who in turn will be supported by the management.
"It's not a new idea," says Hindley. "But you are never going to get very far unless you've got the customers."
According to Hindley, an important way of building relationships with clients is by getting involved in local industry and becoming a familiar face in the community.
"I tell our people to go and spend their time in their local chambers of commerce.
"You don't try to sell people anything, but eventually you come into the realm of people thinking 'who is that guy I keep meeting?'. So when they need a building job done, you get that call before it goes to tender."
Hindley is quick to point out that educating employees is as important as educating the business world.
"Why does the rest of the world hate construction? It seems crazy - construction is our greatest asset. That is why here at Midas we intend to grow into a service-led group. Amec and Amey have done it successfully and I believe it is the only way to add value to the business."
Making the business world understand what value is to be had in construction is part of Hindley's long-term desire to float Midas on the stock market, along with grooming a successor.
"By the time the business is big enough to float, we will be looking to find someone to pass it onto," says Hindley. "If anyone out there is interested in taking it on, give them my telephone number."
BOXTEXT: What do customers want? How to exceed expectations
Cheaper Buildings Reduce Costs
l Value engineering
l Reduce wastage
l Improve productivity
Price Certainty Improve Accuracy - Predictability
l Less competitive tendering
l Selectivity
l Supply chain management
What do customers want? How to exceed expectations
Faster and On Time Improve Programme Times
l Better planning
l Leadership
l New methods
Quality l Right first time
l No defects
l Systems/Controls/Efficient
l "Good housekeeping"
What do customers want? How to exceed expectations
Enjoyable Relationship Gain Confidence
l Nice people to do business with
l "Hang out with customers"
l People do business
- not companies
l Nobody negotiates with a stranger
l After care
What do customers want? How to exceed expectations
Single Point of Contact Direct Relationships
l Design: Build
l Project management
Non-Adversarial Approach Improve Communication Skill
l Know our customers well
l Trust - win/win
l Giving value
l Problem solving - not creating
A civil engineer by profession, Hindley is in no doubt of the impression Midas, whose headquarters are based in Bristol, has made in the construction industry over the past two years.
From a construction company few had heard of outside the south west, the group has become one of the top 50 UK firms in the business. Nearly half the group's turnover has been secured as a result of having embraced partnering relationships - targeted to rise to 70% by May 2002.
ADVERTISEMENT
Hindley feels the time is right for the group to blow its own trumpet and demonstrate how to succeed in construction's brave new world.
"Many within construction have lost their way because they are failing to build long-term relationships with their customers. If they dedicated themselves to keeping customers happy by delivering below budget and on time, they might not waste so much time looking for new work," says Hindley.
So confident is the chief executive of the group's policy he is dismissive about traditional means of procuring new work, such as competitive tendering.
"Unless there is a genuine prospect of building a relationship with a customer, we are sending away over 50% of what we receive. Competitive tendering is a mug's game."
The company's transformation began in 1998 when Hindley and Mike Hocking, then both working at E Thomas, a subsidiary of Mowlem, decided to go for a management buy-in of Midas Construction.
"We saw Midas as a useful vehicle. It was the right size and had the right culture," said Hindley. "We are extremely lucky that the original founder of the business, Len Lewis, offered to act as venture capitalist, staying involved with the company as non-executive Chairman in a three year agreement which completes in May 2001."
From a construction firm which did not take on jobs worth more than £1m or outside the south west, the Midas Group has more than doubled its staff and is now undertaking work worth £13m in East Anglia for blue chip customers like St Ives.
"Midas has moved way beyond its south west origins to undertake major contracts elsewhere in the UK and Ireland," says Hindley.
In the past two years Midas has gone from being a £23m company to one with a current turnover of £80m. How was this achieved?
At Hindley's instigation, the group initiated a five-year financial plan, which aims to achieve an operating profit of £1m at year end on 31 April 2001, with a target of £2m for 2001/01 and £3m for 2001/02.
To help achieve these targets, the group divided into five businesses. These comprise its core construction and restoration operations, along with development, property services and a fledgling environmental division. All of which will ensure that by May 2004 Midas is on target to have a turnover of £150m, with profits of £5m.
Hindley does not see this as unduly ambitious. "The firm was making £23m in turnover when we arrived and it immediately went to £45m. In the financial year just ended we have achieved £73m in turnover."
Hindley attributes his motivational ideas to a former colleague of his, Harry Robinson.
"Harry was a tremendous mentor. If you went to him to say you had got the company on a £50m tender list, he would not have been impressed. He saw it as putting all the company resources on the line, what with estimating costs and the like. However, if you had said you had negotiated a £50m deal - now that would have impressed him."
According to Hindley, deals can be achieved by negotiation and by building long-term relationships with customers.
"People only negotiate with friends. Unless they know you and trust you - why should they negotiate with you? In our line of business, the only security you have are your people. Midas is just a group of people. We don't own our buildings and cars. Without our people we're nothing."
Midas believe that a major factor in its rapid progress has been its record of attracting high-calibre employees who the company says have left 'the industry's major players - and the 'dinosaur' approach - to work with forward-thinking and like-minded construction professionals who embrace change.'
Despite rumours to the contrary, Hindley dismisses charges of causing ill-feeling in the south west by poaching employees from other companies. "We have never head-hunted people," he says.
And with the emphasis on educating company employees on the importance of building relationships with clients, Midas is creating teams of people to run the business on a nationwide rather than regional basis.
"While we have a regional structure, I want to move business to the customer. If a team has got a customer, you deal with that person, unless it suits your purpose to do otherwise."
Following the example set by the manufacturing sector, Midas means to invert the traditional pyramid of management structure. Instead of being managed by the executive at the top, the business will be led by teams of people who in turn will be supported by the management.
"It's not a new idea," says Hindley. "But you are never going to get very far unless you've got the customers."
According to Hindley, an important way of building relationships with clients is by getting involved in local industry and becoming a familiar face in the community.
"I tell our people to go and spend their time in their local chambers of commerce.
"You don't try to sell people anything, but eventually you come into the realm of people thinking 'who is that guy I keep meeting?'. So when they need a building job done, you get that call before it goes to tender."
Hindley is quick to point out that educating employees is as important as educating the business world.
"Why does the rest of the world hate construction? It seems crazy - construction is our greatest asset. That is why here at Midas we intend to grow into a service-led group. Amec and Amey have done it successfully and I believe it is the only way to add value to the business."
Making the business world understand what value is to be had in construction is part of Hindley's long-term desire to float Midas on the stock market, along with grooming a successor.
"By the time the business is big enough to float, we will be looking to find someone to pass it onto," says Hindley. "If anyone out there is interested in taking it on, give them my telephone number."
BOXTEXT: What do customers want? How to exceed expectations
Cheaper Buildings Reduce Costs
l Value engineering
l Reduce wastage
l Improve productivity
Price Certainty Improve Accuracy - Predictability
l Less competitive tendering
l Selectivity
l Supply chain management
What do customers want? How to exceed expectations
Faster and On Time Improve Programme Times
l Better planning
l Leadership
l New methods
Quality l Right first time
l No defects
l Systems/Controls/Efficient
l "Good housekeeping"
What do customers want? How to exceed expectations
Enjoyable Relationship Gain Confidence
l Nice people to do business with
l "Hang out with customers"
l People do business
- not companies
l Nobody negotiates with a stranger
l After care
What do customers want? How to exceed expectations
Single Point of Contact Direct Relationships
l Design: Build
l Project management
Non-Adversarial Approach Improve Communication Skill
l Know our customers well
l Trust - win/win
l Giving value
l Problem solving - not creating
ADVERTISEMENT
Most Viewed Articles
ADVERTISEMENT