Apex project director tom harvey loves his job. We find big rewards in working for the UK's fastest-growing contractor. But it can be risk...
Are you sick of working in a vast organisation where the rules are inflexible, the bosses are distant and the possibility of changing things is virtually nil? Maybe you should consider moving to a small company.

As it happens, a punchy little contractor in the south east is looking for two new project directors this year. But beware. Apex Contractors has been billed as the fastest growing building contractor in the UK, having made the Sunday Times Fast Track 100 list for the second year in a row. Apex grew 70% on average since 1998, and joining this company may be a bit of a white-knuckle ride.

But that's been the story of founder Kai Midgley's business life. Back in 1985, 24-year-old Midgley founded a roofing company with an older, trusted family friend, who shafted him by disappearing when the company got into trouble. The money was rolling in, but Midgley hadn't realised how much was rolling right out again. Some debts were joint and Midgley was personally in the hole to the tune of £160,000.

He determined to pay the debts by starting another company, farming out small refurbs to any subcontractor who'd still work for him.

"I was basically just a middle man, adding 10% on top for me," he said. "I'd say to the subcontractor: 'Look I promise I'll pay you when they pay me.'"

Being so close to personal bankruptcy gave Midgley a holy terror of financial mismanagement. He geared Apex toward recession-proof business in the form of refurbishment work assigned by loss adjusters and also refurbs for pubs, local authorities and banks. He vets his customers thoroughly after a bitter knock in 1995 when a client went bust owing him £100,000. He appointed a non-executive director from the banking sector to ensure some sound financial management. He won't work for another contractor. He knows what they're like. "It's a masculine, devious and unfair trade," he says.

The strategy has worked. The company has 116 people, a turnover of £8.5 million, an A2 Dun & Bradstreet credit rating, and about £750,000 in the bank. Despite its rude health, you can almost smell Midgley's fiscal Puritanism. The Apex head office is a frugal, creaking floor above a modest Ford dealership next to a little Pentecostal church off a side street in Welling, near Dartford, Kent. Chairman Midgley shares an office with managing director Michael Paul and director John Foster.

It's clearly a great company to work for. Only two project directors have walked away from the company in 10 years. Everybody gets a bonus, according to Apex's net profit.

Now here's the rub. Apex is teetering on the brink of major culture change. Midgley wants to keep growing fast because, without a bigger turnover, Apex can't compete with major contractors for big refurbs in the City. But as it grows Apex will struggle to maintain the close, family feeling that everyone loves.

chains of command
Last year Midgley scrapped a management structure in which the three main project directors ran autonomous business units. This didn't work because stronger units ended up subsidising weaker ones. It also meant there was open competition for tenders.

Midgley wanted to unleash the entrepreneurial spirit he thought everybody had. In the early days he toyed with a more radical plan.

"My idea was to set it up so that every project director got to keep 50% of whatever they made. It would have been like a franchise. I was giving them the kind of deal I thought I would like. But not everybody is comfortable with that."

So director John Foster advised Midgley to promote the strongest project director, Michael Paul, to managing director, and unify the others into a single team with individual specialisms.

"This gives it a unity of direction," says Paul. "We're not chasing each other for jobs any more. When a tender comes through everyone has an input, and everybody reports cash flow back to the group. Also this way the younger guys can see the bridge over to management."

Midgley believes this is an expandable model.

Rights and responsibilities
Apex operates a 'retractable leash' form of control over its project directors. They are expected to use their initiative, but also have strict constraints. They're expected to help win business by being aware of clients' plans for the future, and by completing each job in a way that makes Apex the obvious choice for the next one. But they cannot reel in any new clients or contracts over £50,000 without the board's say so. They are free to run their projects however they see fit, but with clear instructions not to overload subcontractors, for instance, and to report cash flow rigorously.

Apex behind the scenes: working on a white-knuckle ride

Before joining Apex four years ago, Tom worked for a small family firm in Brighton, refurbishing pubs and hotels. “Although I was doing very well, you get a feeling that if you’re not part of the family there’s a limit to how far you can progress,” he said. He’s glad of the move, saying that Apex offers an unusual atmosphere. “It’s vibrant, more positive. You never get any negativity. Communication is everything. It’s an open house.”

He’s also given a freer reign commercially. Last year he introduced a line of subsidence remediation work, which accounted for £50,000 in revenue per month. He reckons that side of the business has doubled since then.

Midgley, keen on maintaining a fast pace of growth, ups the ante every year for his project directors. Harvey feels the pressure, but maintains he’s not overworked, averaging a 40-hour week. He gets paid above average but maintains that he is worth it.

He gets ideas by talking to colleagues and also at college, which he attends part time. Recently he organised a football match between two surveying practices in an attempt to get people talking to each other and to win work.

A surveyor, Neal joined Apex two years ago from a company he liked because it felt like a family, and which he left because it lost that feeling when it was sold. He’d been with a new company for a month when he got the call about Apex. He liked the sound of it so much he packed his new job in.

Neal says the directors are highly approachable at Apex and that he’s not concerned in the slightest that it will grow out of its familiar shape.

More than anything, Apex provides a sense of security and business confidence.

“What amazes me about this company is how commercially aware they are. The fact you’re sitting here doing an article, for instance. My former bosses could have sorted something like this out but Kai actually does it.”

As the board eyed the approach to the £25m turnover mark, it realized its accounts function had to grow beyond book-keeping. So Raj, then a consultant in the charity sector, was headhunted to think strategically about financial management.

Of everyone he appears to be the most excited about the company. He’s got his eyes on the financial director’s post in a big, mature Apex. “I look forward to coming to work every day,” he said. “It is such a buzz, like being a football supporter.”

His main effort now is building financial models that will force project directors to be more rigorous about analysing risk and reward.

“This is brilliant weather, for instance,” he said, waving out at that the bright, freezing January day. “Plenty of burst pipes. Calls from loss adjusters. But how profitable is that volume? And we pay subcontractors in one month while we have to hang around two or three months to get paid by the insurance companies. Is that the sort of work we want?

“Apex were smart enough to know they needed somebody with a financial brain and now I’m exposing them to the sweets. I want them to feel the hunger, like me.”

Source

Construction Manager