London divisions integrated and new executive structure as contractor bids to improve consistency.
Wates Group is today set to announce a radical restructuring of its construction operations in an attempt to achieve more consistent performance.

Following a strategic review of its £320m-a-year construction business, Wates has set up a new national executive structure and is to reorganise its London-based operations.

Design-and-build arm Wates Integra, historic buildings arm Wates Special Works and Wates' London regional new-build division are to become part of an integrated London structure that will focus on specific building product lines.

The 340 Wates staff based in the capital will be split into teams specialising in historic buildings, social housing, commercial offices, education, retail, hotels and leisure, private residential and non-food retail and distribution.

Wates Construction managing director Rod Bennion said the idea of the London reorganisation was to raise margins by gaining greater expertise on certain building types. The firm currently makes margins of 1-2% at the operating level and aims to lift this by increasing efficiency on building types by teams working on a repeat basis.

Outside London, senior Wates staff are being reorganised into an executive team with direct input into the Wates Construction board.

Previously, regional chiefs reported to the main board through a single operations director. The new executive team has wider regional experience that will give those closely involved with clients and operations a bigger say.

Wates Group chairman Michael Wates said an audit among its customers had showed that it is well regarded but lacks consistency of performance.

The idea of the reorganisation is for members of the executive team to learn from each other and to spread best practice across the company. The specialist London operations will also be expected to share their experience with the regions.

Bennion said the firm had been preparing for the reorganisation for several months and that staff were happy to be moved to work on specialist building types.

Some contractors that have moved to single building-type work have met with staff opposition to the restrictive nature of the new roles. However, Wates plans to switch staff between types as the market fluctuates.

The company also plans to increase its private finance initiative work and is in a team bidding for education work. It is also considering opening an office in Scotland.

Wates and Bennion stressed that the restructuring does not involve any redundancies among the group's 1100 staff and that none of the firm's offices will close.