Cuddly contracting and toadstools

The outrageous move marked a low-point in one of the more bizarre episodes in British construction. In 1997 Birse made a public apology for being aggressive in the early 1990s. Chairman Peter Birse promised a new cuddly approach to contracting and management consultants were called in to reform attitudes. Profits failed to improve significantly and Peter Birse resigned in 1999 protesting that contracting is a "bloody waste of time".

Since then managing director John Elders, along with his new, media-shy chairman, Peter Watson, have slowly regained Birse's reputation as a contractor. Now the company is making headlines for the right reasons. In the six months to October 1999 it made a profit of £2.4m and was expected to match this when it published its latest figures on 4 July.

A little less crazy

While quick to recognise the change, Elders says that there is still an imp in the Lincolnshire-based contractor. "The sentiment is still there but we're a bit more boring and staid now," he admits.

Elders is the perfect embodiment of the new Birse: positive but not bonkers. "Of what we learned, 95% was good" he says, "but some people did go a little bit over the top. It was nothing harmful, but it was a bit crazy."

Improvements that have been made since Elders took on his current role include casting off some of those crazier ideas. "We used to run a training programme called Masters of Enrolment for our marketing staff. It was a bit way-out to say the least. It was designed to break down inhibitions, and involved people dressing up in clown hats and going out into the street to enrol people into their schemes." While Birse has moved away from the crazier ideas, Elders still wants the company to buck the industry. "We have two women on the board and we bent over backwards to find them, even though we were accused of sex discrimination. You'll also find a different atmosphere in our offices, with music playing and a more relaxed dress code," he says.

Outside the office, Birse is still preaching cuddly contracting, but with a hard business edge. Birse's £30 million contract to extend the east and west stands at Manchester United's stadium, Old Trafford, will be completed a year early. The biggest time saving on the project was achieved by building a temporary 10000 square foot club shop near the ground, so work could be done on both stands at the same time. The permanent club shop was housed in the east stand and had to be moved to the west. Naturally, Manchester United didn't want it to close at any point. "The east stand was finished six months early," says Elders, "giving Manchester United 6000 extra seats for those six months. We split the £100000 saving on that between us."

Partnering was the key to that success, according to Elders. "Manchester United is a tough customer, but you really know where you stand with it. I met the financial director David Gill before the job to work out how we could both make a profit."

Sticking with competitive tenders

However, Elders stresses that Birse will not look to partner exclusively. "Some contractors say they are pulling out of the competitive tendering market and only want to partner - that's like saying I'm pulling out of 365 days a year and I want every day to be Christmas day. You can't stay lean, mean and hungry that way, you need to be geared up for a mix of partnering and competitive tendering."

Birse's relationship with logistics company ProLogis is a mixture of the two - every ProLogis job goes out to limited competitive tender, though Birse has a close relationship with the company. "We have staff in each other's offices and at any one time we are doing half a dozen jobs for ProLogis."

Despite Elders' insistence on the importance of a mixed bag when it comes to winning contracts, he admits that there is a certain type of tender Birse would shy away from now. "Our policy is to avoid disputes," he says. "If being late or over budget is going to be a big problem for the client, we would insist on working hand in glove from day one, or we would turn away from the job."

As for the future, Elders identifies the restructuring of the Birse business into three divisions as the single most significant factor in how it will keep improving results. "The aim is for each business to stand on its own two feet. We want to have a readily identifiable business in each division so that each area can be specifically targeted.

"The best way to run any business is to have a board of directors that look on the business as their own and have a clear perspective on it. It also makes it easier to attract a better quality of senior staff and keep them." And, just as important for the building division, it attracts a better quality of client.

Elders is modest about what he has achieved in the short time since he became MD, despite a pre-tax profit of £2.4 million announced in February. "I wouldn't say I have turned the business round yet, but it has started to deliver results. I'm pleased with the achievements so far, but it will really bear fruit in the coming years."