Gas Mark Nine: The energy chief who's turning up the heat on his electricity rivals

Business Profile: Centrica's heir apparent still only half way through the transformation of British Gas
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The Independent Online

Mark Clare is digesting the results of a customer satisfaction survey showing that his company is the worst in the country at handling complaints. Not surprisingly, the managing director of British Gas is keen to accentuate the positive and he points to another of the survey's findings which shows that, on a different measure, it ranks seventh best in terms of looking after its customers.

"It is a bit like those surveys which used to vote Boy George the best dressed man in Britain and the worst dressed man. But the straight answer is that even if we are seventh best that is nowhere near good enough," he says. "We have done a hell of a lot to lift the performance of the business but the reality is there is a lot still to do. We are only half way through the transformation of British Gas."

Mr Clare reckons it will take another two years to complete the job by which time, if everything goes according to plan, he should be slipping neatly into the shoes of Sir Roy Gardner, the football-mad chief executive of British Gas's parent company, Centrica. Mr Clare, a closet Leeds United supporter in his earlier days, was appointed deputy chief executive of Centrica and heir apparent two and a half years ago and he does not disguise his ambition to take over the top job when the time is right.

He has even adopted the footballing metaphors of Sir Roy (who chairs Manchester United when not running Centrica) and converted his wife and children into Reds fans. "We are the best energy provider in the country. But I don't think we would claim to be in the Premiership overall in terms of delivering customer service, unlike the best retailers and financial service providers - Tesco and First Direct - who lead the way," he said.

The AA, for instance, which Centrica bought four years ago, remains a "substantially stronger brand than British Gas", Mr Clare says. "It is a step above us in terms of the service it provides so that means there is a lot of learning going on to understand how we can drive up the performance of British Gas."

The son of carpenter who left school at 17, Mr Clare skipped university and instead became a trainee accountant with GEC. He joined British Gas in 1994 at a time when it truly was the most-hated company in the land, pilloried for its poor service and a byword for the worst kind of snouts-in-the-trough corporate greed.

Had he not opted for bean counting, then he might have ended up as as a computer boffin or perhaps an engineer. "I enjoy taking things apart and putting them back together again. In my youth I really loved to mess around with computers so I guess if I hadn't gone down the accountancy route I would have probably gone down the technical, engineering route."

He drives a BMW 7 series - not because it is the height of executive car fashion but because it is "the most modern, best-engineered piece of kit out there today".

Mr Clare loves to take things apart so much that he recently spent a day at one of British Gas's three training centres dismantling and reassembling condensing boilers. It is now a standard part of all executive induction training. Not content with that, Mr Clare also dons his blue overalls and accompanies service engineers on home visits or spends an afternoon listening in to the traffic at one of the company's call centres.

"If we go out dressed as engineers or apprentices then we are going to understand a lot more about what our employees do. It's all about changing the culture of the organisation so that we are much much more focused on the customer," he said. The prize is a large one. British Gas has 16 million customers but 24 million "product relationships" as it likes to call them. Apart from gas and electricity it now sells householders everything from telephone and plumbing services, to appliance repairs, home security and personal loans and could soon be venturing into the mortgage equity release market and roof repairs.

In short, Mr Clare says, if British Gas gets it right then it will be by far the biggest engine of growth for Centrica in the years ahead. The size of the "British Gas machine", as he calls it, is daunting: 26,000 staff, five giant call centres with 9,000 operatives, 6,000 gas engineers and 5,000 more in the process of being recruited.

With that sort of firepower, Mr Clare reckons British Gas can be a fearsome competitor in any market it chooses to target. But he is in no hurry to diversify even further. "To be honest, we are constrained by resources hence the recruitment drive. There is no problem with electricians but there is such a shortage of gas engineers that we are having to bring people in and train them from scratch."

As for British Gas's core business of selling gas and electricity, it is really now a question of hunkering down and hanging on to the customers it has got. The energy market, Mr Clare says, has changed radically in the last two years as the rate of customer "churn" slows dramatically and suppliers concentrate on adding value rather than volume.

Even though British Gas is still adding customers at a net rate of 5,000 to 10,000 a week, it employs only half the doorstep sales staff it did two years ago.

"We are putting a lot of our investment into retention where we get a much bigger return because it costs far less to retain a customer than to acquire one," Mr Clare said. "Now we look at what customers we want to acquire and where we have existing relationships with customers, how to extend them rather than just trying to sign up the next person who walks through the shopping centre."

Telecoms - a market where British Gas only has 400,000 direct customers - is an obvious area for adding more business. But Mr Clare, more than anyone, knows how tough it is trying to dance with an elephant in the shape of the dominant player, in this case BT. "Clearly there is a big opportunity for growth but we have got to be sure the economics work," Mr Clare said. "I know Carphone Warehouse and Tesco are piling in but the issue is whether we have really got the right ingredients for a competitive market or whether the playing field is still slanted towards the incumbent."

Mr Clare works hard, but his wife makes certain that he always takes his five weeks holiday a year, preferably as far away from the UK as possible. The last time he took a break in Europe, it turned into the "holiday from hell" after he was called back to negotiate a deal. This summer the family are going to Australia.

Centrica is about more than just British Gas. As well as the AA and the financial services group Goldfish (whose future is less certain), it also encompasses the fourth biggest energy-supply business in North America and, back home, big upstream and trading operations. But the blue flame of British Gas is at its heart and Mr Clare knows that the brighter it burns, the closer he gets to the chief executive's office.

"People around me have always said I am very ambitious which I am," he admits. "But Roy has a lot of energy and a lot of vigour and I don't see him slowing down at all, if anything he pushes to go faster. The way I look at it is to focus on the job in hand and do it as well as I possibly can until the next opportunity comes along."


Position: Managing director of British Gas and deputy chief executive of Centrica

Age: 45

Pay: £626,000

Career: GEC Marconi, STC, British Gas (joined 1994 as group financial controller)

Hobbies: Playing tennis, watching sport - particularly football and motor racing

Family: Wife is a teacher, three children. Son aged 19 and two daughters aged 17 and 7

Happiest moment: "When my wife announced there was a third on the way. At first I thought 'Oh my God', but my youngest is absolutely wonderful. She gives me a completely new outlook on life."