Contractor’s ‘Build to Last’ strategy designed to help firm bounce back from tough trading period
Balfour Beatty has launched its recovery strategy, entitled ‘Build to Last’.
The construction group said the strategy - which revolves around four key principles, ‘lean’, ‘expert’, ‘trusted’ and ‘safe’ - was already being rolled out across the firm and senior appointments had been made in areas including IT, commercial, project execution and business process re-engineering to deliver it.
Balfour chief executive Leo Quinn, who joined the company last month, said the strategy was designed to help the firm bounce back from its period of tough trading.
Quinn said: “The group’s recent trading makes it imperative to gain early momentum in our transformation plans. Whilst further challenges remain, there are clear opportunities to achieve improvements in cash generation and profitability in the near term.
“Balfour Beatty has great strengths across its portfolio – not least in its Investments division, where recent transactions underline the ongoing ability of this business to create value. I continue to believe all our operations should achieve industry-standard performance against what appears to be a beneficial market environment.
“Longer term, we will shape a group with leadership in key markets, driving best-in-class performance from a platform of strong capability, leaner processes and robust execution.”
Balfour’s ‘Build to Last’ strategy
- Lean – Deliver rapid performance improvement by strengthening financial controls and transparency and simplifying the organisation with detailed indirect cost reduction plans, plus the launch of the My Contribution productivity initiative (metric: operating profit and operating cash generation)
- Expert – Ensure the attraction, retention and development of key employees and sub-contractors by investing in training and talent to enhance engineering, project management and delivery capability (metric: engagement survey)
- Trusted – Strengthen the successful execution of projects and services through disciplined stage-gated bidding, contracting and risk review processes (metric: customer satisfaction)
- Safe – Prioritise safety at all levels and for all employees, sub-contractors, customers and communities (metric: zero harm).
A number of steps have already been taken across the UK and the US to give the programme rapid traction, including:
- Creation of the Build to Last programme office with UK and US workstreams and a benefits tracking system
- Following strengthening of the Board, new appointments to the senior leadership team in targeted areas, including IT, commercial and project execution, and business process re-engineering
- Alignment of all leadership incentives to key programme goals
- Consolidation to leverage key UK functions to remove duplication and improve efficiency, resulting in significant reduction of layers and cost (subject to consultation) in areas not related to front line delivery
- Rollout of a cash generation drive through planning and training to project level in the UK and the US
- Detailed procurement initiatives commencing with key suppliers and areas of direct and indirect spend, with the potential to deliver meaningful and growing savings over time
- Streamlining the Group property portfolio to reduce costs.