Wates chief Paul Drechsler has been hired to shake up the century-old family business. And he just loves to natter about it. He tells Angela Monaghan all about framework deals, services, Dublin, PFI schools, his workers … and Eric Clapton.
This man can talk.
“Where are you from? I’m from Dublin.
Do you have any family in Ireland? You really should go …” To interview Paul Drechsler is to attempt to interrupt him. But this ball of energy, who has been chief executive of Wates since September, oozes Irish charm, greeting all comers with a hearty handshake.
Drechsler is sitting in an office at One London Wall in the City, where Wates is one week from completing a fit-out for law firm Osborne Clarke. He beams with pride at the job his team has done: after spending 24 years in the chemical business with ICI, it must be refreshing to work in an industry where the results are so visual.
On comes the charm, as Drechsler proves he has done his research. “Wates is in the process of restoring Birmingham Town Hall,” he says, knowingly – Building’s founder, Joseph Aloysius Hansom, was the architect of that landmark.
Drechsler adds that he has read Building every week since he joined Wates: “I wanted to learn about the industry.” He seems to have learned fast – but he had little choice. Brought in to modernise the 107-year-old family firm, he must complete a review of the business by the end of March. The aim is to reset sales and profitability targets until 2010.
Over the past 10 weeks he has visited more than 40 of the company’s construction sites across the UK. “I have met customers and staff and listened to their views on the industry and Wates,” he says. “That’s my source of learning.”
The 48-year-old started out at Trinity College Dublin, where he graduated in engineering and science before joining ICI. Drechsler does not seem phased by the change of sector. “I have always been focused on people as a means of success and I had a lot of experience of the construction industry as a client at ICI.”
I have always been focused on people as a means of success. I have met customers and staff and listened to their views – That’s my source of learning
Other senior executives might have been reluctant to join a private family firm, steeped in tradition and potentially set in its ways. Drechsler admits that he is held to account by his shareholders every day, but says he has been encouraged to run the business as he wishes. Announcing the appointment earlier this year, chairman Andrew Wates stressed that Drechsler would be given a free rein: “We are in a range of different fields as a company and we want to focus on selected areas. Paul would help us do that. There would be no point in recruiting someone like him if we didn’t give him the space to do that.”
Although the review of the business is ongoing, Drechsler has decided where Wates’ future lies. He aims to make long-term framework agreements 90% of its workload, rather than the 60-70% it achieves today. It counts John Lewis and Marks & Spencer among its loyal clients, as well as Birmingham and Leeds councils and IT firm Logica.
He also wants Wates managers to chase higher margins – profit as a percentage of work done is notoriously low in construction, often below 1%. Drechsler says he wants to drive the social housing, interiors and retail business hardest, “not because they are services based [services tend to achieve higher margins than pure construction work], but because we’re bloody good at them”.
At ICI Drechsler jetted around the world, but he is happy to stay on home ground for the time being. Out of a total annual industry spend of £74bn, Wates is doing £600m of business: “So there are still substantial opportunities in the UK.”
But it is not just strategy that gets him going: he also loves the nitty-gritty and, as ever, it’s difficult to stop him yakking about projects. He raves about a PFI scheme in Merton, south London, where 154 phases across six schools were carried out in two years, and a £55m social housing project with Whitefriars Housing Group that was one year ahead of schedule. This detailed knowledge has sprung from that 10-week tour of sites. He has met more than half of his 1300 employees.
As he leaves One London Wall, he’s still talking away. Chatting about how he relaxes, he has got onto the subject of his favourite musician, Eric Clapton. “I’m fanatical about music. My purchase of the month is the Live Aid DVD. It is the best collection of live music, with 10 hours and an outstanding Queen set.”
As Drechsler finally sets off, he offers two pieces of advice: “Buy the Live Aid DVD, and get that trip to Ireland booked.”
From Edward to Paul: The history of a family firm
1897 Edward Wates and his brother Arthur set up Wates
1920s and 1930s Edward’s sons, Norman, Ronald and Allan, expanded the company by pioneering speculative housebuilding
1940s The company built aerodromes, army camps, factories and developed a speciality in constructing precast and insitu reinforced concrete barges and floating docks
Post-war The company used this knowledge of precast concrete to develop high- and low-rise industrialised housing systems and built more than 60,000 houses and flats using the techniques
Turnover was £581m (up 15% on 2002), with a 37% increase in pre-tax profit to £13.3m and a 14% increase in net worth to £47.5m
Paul Drechsler’s potted biography
Born 16 April 1956
Family Married with three children (two sons, one daughter)
Career Joined ICI in 1978. Became chairman president of ICI Brazil in 1992. Through the 1990s is chairman or chief executive of a number of subsidiaries, becomes executive director of the group in 1999. Joined Wates in 2004.