Wilson Connolly's new non-executive deputy chairman plans to revolutionise UK housebuilding using the techniques he learned in his day job – as Asda chief executive.
PIMP. The word shouts out from a five-foot-high cardboard leek that stands near Allan Leighton's desk. "It stands for Product Improvement Panel," explains the Asda and Wal-Mart Europe chief executive with a straight face. "Tasters compare the flavour of our fresh produce every week and suppliers that have improved get a green PIMP badge."

This gimmick is typical of the jaunty, slogan-based management style with which Leighton has sustained the Asda success story, started by his predecessor Archie Norman in 1992.

Leighton made the story his own last year when he brokered Asda's acquisition by US retail giant Wal-Mart for £6.7bn. The historic deal also earned him the position of president and chief executive officer of the European arm of £87bn-turnover Wal-Mart and a reputation as the hottest property in retailing. So, it came as no surprise when he was tipped to head a team bidding to take over the ailing Marks & Spencer last month.

The surprise came when he instead accepted a non-executive deputy chairmanship at Northamptonshire-based housebuilder Wilson Connolly, and then announced that he was going to transform the UK's fifth-largest housebuilder into "the best housebuilder in the world".

Behind the rhetoric, Leighton has a sound plan of action: razor-sharp supply-chain management, research and development of faster construction methods, buying up suppliers to achieve vertical integration and selling 10% of homes over the Internet. The goal is a 20% return on capital – pretty ambitious for a firm with an operating margin of just under 12%, in an industry where the highest margins are 16-17%.

How did a family-run housebuilder best known for its two-bedroom starter homes manage to sign up such a star player? Leighton's reasons for joining are personal and professional. He is a big fan of Northamptonshire County Cricket Club, which is chaired by Wilcon chairman Lynn Wilson; Wilson was also Leighton's predecessor as a trustee of his son's Oakham School.

Leighton had been a non-executive director of Wilcon since 1995, and when Wilson asked him to step up his involvement last month, the offer proved irresistible. The company was performing strongly, having reported a 42% rise in operating profit to £20.3m and built 2100 units last year. Its average selling price also jumped 20% to £90 000. He also saw it as a chance to prime its young team (managing director John Tutte, design director John Weir and finance director David Lawther) to lead a revolution in housebuilding.

"You have two choices in this world: creep or leap," he says, portentously. "I think this industry is about to explode; it will just get completely reinvented. I am a change agent, and I have an intuitive feeling that we can lead this change. We will develop the most efficient supply chain in the world for the housebuilding industry."

The reason Leighton foresees an explosion is clear: the government predicts a demand for 4.4 million new homes by 2016. But what does he mean by "reinvented"?

One way he thinks this will happen is through a revolution in ownership. "Many owners of housebuilders are at the point when they either pass the business down in the family or cash in," he says. But the day of the family business is over. Within three to five years, "there will only be three or four of the top 10 housebuilders left", he reckons.

The firms that prevail will be the ones that follow his prescription for success; the rest will go, he says. "Since I was appointed and announced my vision of rationalisation, vertical integration and 10% of business on the Internet, our rivals have gone into a tizz," says Leighton. "It has shaken the industry up, and that was what it was designed to do."

The City agrees that rationalisation is inevitable, but analysts doubt it will happen at the speed and scale envisaged by Leighton. One says: "To date, there have only been small deals in the housing sector, so history does not support what he says. However, pressure on land supply will make acquiring land via the corporate route as attractive as doing it on the open market."

Housebuilding is about to explode; it will just get completely reinvented. We will develop the most efficient supply chain in the world

Tall, slim and sandy-haired, Leighton has a steely, expressionless gaze that no doubt works wonders at the negotiating table. Softly spoken, with a Midlands accent, he talks the talk of a business guru, sometimes sounding like a walking manual of trite US management slogans. Here are a few: "Brands or businesses don't die; people kill brands." "Winners focus; losers spray." Whether he absorbed it at Mars, where he spent 18 years, or at Harvard (where he did a business degree and still teaches) or, more recently, at Wal-Mart, Leighton clearly speaks his new bosses' language.

So, how will Leighton fit in his new role at Wilcon with running the UK's third-largest retailer, not to mention Wal-Mart's European operations? The super-energetic Leighton, who is also a non-executive director of BSkyB and a non-executive deputy chairman of Leeds United plc, has a simple answer: "The more I have to do, the more time I find to do it." Perhaps it's because as a self-confessed "e-fanatic", Leighton attends to all his businesses from a single computer screen.

Leighton certainly seems relaxed, sitting back in his chair and outlining his plans to turn Wilcon into a lean, mean building machine.

Leighton says his Wilcon revolution "will be driven by having general management capability, as well as the raw ability to do two things: buy land well and translate that land into credit".

How will he do it?

Leighton is taking care of the first of these by "coaching and mentoring" a new young team at Wilcon, in anticipation of Wilson's retirement in two years. First, he transferred Asda's touchy-feely, open-plan office environment and flat management structure to Wilcon. Then he set about instilling the Asda and Wal-Mart philosophy of assiduous supply-chain management. As he puts it: "You need to get it up and sell it. It is no different to the retail business. Managing the supply chain in a very sharp way will make a big difference," he says.

He adds: "There has always been thinking in the housebuilding industry that there are no synergies or procurement benefits – that's rubbish. I think there are huge synergies in scale and buying benefits. At Asda, we have built stores faster and cheaper and with less defects by really, really managing the process."

Under his guidance, Wilcon has just invested £3m in software that will link up its sites and allow it to cut costs by streamlining its procurement and accounts operation.

He is also encouraging Wilcon to invest in R&D, building on its experiences constructing the ultra-green Integer house that featured in BBC1's Dream House series. "If it's good innovation, only 50% of it will be right, but you've got to do it to learn anything," he says.

He also has corporate activity in mind – the suggestion is that Wilcon will start by looking to buy smaller, regional firms. A little further down the line, Leighton foresees mergers between UK and European housebuilders and, in five years, with their US counterparts. But first, other housebuilders will have to start thinking as big as Wilcon. "There is nothing of any scale in housebuilding. Nothing showing any innovation. Unless you have something that is worth £1bn of market capital, why should anyone invest any money in you? For any housebuilder to get any real support within the marketplace, it has to build some business with some scale to it."

Personal effects

Age 46 Where do you live and who with? In a Georgian house in Boston Spa, Yorkshire, with my wife and a son, who is at school. My other son is in a band and has just set up a record company. My daughter is studying Russian and Business Studies at Leeds University. What do you do to relax? I used to be in the Brackley Morris Men, but I haven't done if for eight or nine years. I only put it on my CV originally to get noticed and I never took it off. I run five miles five times a week and then I do three bouts of three minutes with the punchbag in my gym at home. I imagine it is whoever has pissed me off that day. What is your favourite building? St Pancras. What are you reading? Who Moved My Cheese? An Amazing Way to Deal with Change in Your Work and Life by Spencer Johnson. What music are you into? Travis, Tonic, Goo Goo Dolls, Semisonic. What is your favourite Asda product? Asda champagne – it’s £11.99 a bottle.