Lording it

Wilfrid Lord had good reason to be worried this time two years ago. Like many other small contractors that rely heavily on local authority work, the firm regarded the advent of long-term partnering-style contracts in the public sector with a sense of foreboding.
This was not because it was opposed to the principles involved, but because it realised this new approach to procurement tilted the balance heavily in favour of the big national players when it came to winning the work.
At the time, Wilfrid Lord had never won a contract worth more than £1m. And 85% of its business - mostly housing refurb - was coming from local authorities, which were beginning to package more work into large, long-term deals.
The contractor felt a fresh approach was needed to its procurement strategy. So, in November 2001, following a recommendation from Willmott Dixon's head of partnering Jim Marler, the firm contacted Construction Best Practice (CBP) for advice.
Fifteen months of benchmarking and business process analysis later, Wilfrid Lord won its first major partnering deal - a five-year, £30m contract with First Choice Homes, Oldham's ALMO.
From facing an uncertain future, the contractor is now dealing with the happier problem of how best to manage this sudden upsurge in workflow. And it is planning to use the Oldham ALMO deal as the basis for further expansion.









<F06E> What was so different about Wilfrid Lord two years ago?
In 2001, the business was basically led by whatever came through the door. We were working to lowest price on all our tenders, and were not very selective about who we worked for. Most of our work was public sector, but relatively small in terms of contract value.

<F06E> You wanted to do something about the situation. What did you decide to do?
An increasing amount of work was going down the partnering route. Our market base was shrinking, and we could see that our turnover would start to fall soon if we didn't secure one of these big local authority partnering deals. And all the time, we were seeing new, national players start to appear in our market.

<F06E> What happened when you contacted CBP?
It was doing a benchmarking pilot for SMEs in conjunction with the National Federation of Builders. We met CBP's Canute Simpson who showed us how to collate and analyse the benchmarking data. Then we compared our results with the other 170 contractors in the pilot of similar turnover, and looked at our strengths and weaknesses. We came out well on finance and profit, but not on growth: we relied on the same old clients, not on training and marketing. That was at the end of 2001.
The following June, we did a CBP Best Practice Explorer session (online), looking at 24 sectors of best practice to see how well we engaged with each. We identified three key areas to work at - business processes, team working, and supply chain and partnering. From there, with the help of Canute and Clive Turner, also from CBP, we set up a plan to deliver improvements.

<F06E> Did the plan work?
By then, we'd started applying for a few partnering contracts, but without success. The problem was, the day-to-day issues of running the business kept getting in the way. We were spending so much time applying for partnering contracts; probably a tenfold increase compared to applications for traditionally tendered work. Areas like community cohesion - typically local employment and training programmes - were unfamiliar to us and required a lot of research. It's important with somewhere like Oldham that you're able to understand local social and cultural issues, especially given the racism problems it has had recently.

<F06E> What did CBP suggest to do next?
It devised this plan known as Hoshin, a Japanese strategy that aims to get all employees in a company to understand and work towards achieving the company's long-term goals. CBP thought it critical that we worked as an integrated team internally because, when you're dealing with potentially sensitive clients in the social housing sector, it's important all your staff understand your agenda.
The action plan it formulated was vast, but much of it came down to basics that we hadn't properly addressed before, such as giving people proper job descriptions, having a clearly defined organisation structure, and providing better internal communications.
More importantly, it also defined who was going to deliver and how. CBP felt we would work better if we were restructured into individual, multi-skilled teams. So we are restructuring into four vertically-integrated teams, each headed by a business director who will manage a whole project including the painting and refurbishment.

<F06E> You did, of course, finally land a big partnering deal. How did that come about?
The people at First Choice Homes (Oldham's ALMO) had good experiences of working with local SMEs. They had decided they would package up their work, rather than be beholden to a single major contractor, so they're working with ourselves, Connaught, and another local firm, Emanuel Whitaker. From their point of view, of course, that means they'll be able to benchmark us against each other, as well as use local resources.
First Choice had a very good procurement process, with plenty of feedback, including an open day for contractors, and we gelled really well with them personality-wise. We later found out our price wasn't the cheapest, so it was heartening to see that wasn't the most important issue for them. Not all local authority clients have been like that though.

<F06E> So after Oldham, are you looking for similar partnering deals?
We'd like to land one more large partnering deal, but the opportunities don't come around so frequently. We've had plenty of practice applying for them now though, so we're reasonably optimistic. Our five-year business plan is to get up to £18m - and it would take only one big contract to get there.

<F06E> Any plans for diversification into other markets?
We'd like a broader mix of business - we're too dependent on social housing. Health has a huge amount of work at present but we do very little. Schools may be a market worth looking at because of the way they're funded now - they spend much of it directly. The industrial market has shrunk massively though, and private commercial work is generally beyond our range - not that we'd necessarily want it though. We've seen the pressures involved with working for a developer from the subcontracting we do as a painter.

<F06E> What's your biggest worry?
That the government might stop spending on the social housing market, because that's 85% of our work.
But beyond that, keeping all our staff happy. We employ 160 people directly and we're taking on more as our turnover grows. One of the things we're looking at doing following the restructuring into four teams is giving each of the directors who head up those teams a stake in the company (currently the only shareholders are from the family). We want to give everyone in the business the feeling that they're going somewhere. <F0A8>