This City analyst-driven quest to understand what makes companies tick has eliminated the previous logic of complementary activities.
For construction, though, the principles of specialisation and polarisation actually make a lot of sense. In our industry, the real issue is positioning. Where and how does a company position itself?
Positioning goes hand in hand with the creation of a brand name. To have a brand, one needs to have a defined product or activity and this can be achieved only after careful positioning of the company. And, in turn, the clarity of the company's position is vital in defining its place in the market, the type of staff it needs, the training it offers its employees, its geographical reach and its long-term business plan.
In recent years, construction companies have sought to reposition themselves, but this is usually easier said than done. Often this sort of grass roots change also requires a change in company culture, and this is not a simple matter.
Positioning or repositioning is a continuous process – that is the reason for its many pitfalls. It is crucial to differentiate between the goal and the strategy leading to it. Changing strategies is understandable and is usually a reaction to external political and economic circumstances. This is competent management of change. Changing the goal – the vision, the ultimate positioning – of a business is different. That final position needs to be carefully defined and truly understood by everyone involved.
Only when the whole workforce identifies and embraces this vision can we talk about company culture. Lack of clarity, contradictory descriptions and putting change for the sake of it on a pedestal are all dangerous. You cannot expect staff, confused by different interpretations of where the company is heading, or what it wants to be, to remain enthusiastic and loyal.
Whatever position you choose, you must consider the clients you target all the time and the staff you need to keep
Once the company has been positioned, all efforts can and should be directed towards continuous improvements and innovations, producing tangible evidence of a change in attitude as well as strategy.
Quoted companies are in a particularly difficult situation. Although they need to have full support and determination from their staff, they follow with trepidation any reaction from the stock market. Share price fluctuations often have little to do with the merit of the company's chosen positioning but obviously affect the thinking of the management. It may cause doubts and weaken their resolve.
When it comes to assessing the outcome of a repositioning plan, I believe that the views of clients are much more important than share price. The share price will rise if the company, having positioned itself correctly, succeeds in its goals. One-off triumphs may yield short-term gains but it is sustained success that builds reputations. You can easily see some benefits to not being quoted if you look at companies such as Bechtel or Sir Robert McAlpine.
Looking around UK construction, it is very apparent which companies know their position, have developed a company culture to support it, have sought to change and are now in the process of adjusting their culture to suit their new vision. And whatever position you choose, you must consider the clients you target all the time and the staff you need to keep and want to attract.
Trade contractors have other clients and a different staff philosophy from companies that deliver whole buildings. But we should never forget that we are partners striving for a common goal. Too often, the eventual outcome of a project is determined by the worst performing partner. And this includes the client.
Postscript
Sir Frank Lampl is president of Bovis Lend Lease.
