Market Leaders Pick Their Market Leader: Who's the builder most worthy of house room?
Wednesday 08 September 1999
Group Chief Executive
I HAVE been involved for more than 40 years in an industry I thoroughly enjoy. My principal responsibility is to produce good returns for the shareholders but I enjoy the contribution that creating good housing can make to the built environment.
We are not a one-man operation, and it is important to ensure that a good blend of key management skills is applied effectively within our strong team. Although competitive, this is a people industry with major housebuilders well-known to each other. On occasion, the best results can be achieved by sensible collaboration between competitors. I would highlight David Wilson, chairman of David Wilson Homes, as someone who continues to perform within the industry with a well respected product and consistently sound profit margins.
THE UK housebuilding industry is going through a period of rapid change. Today's major operators are all dedicated homebuilders and they are taking an increased share of the market through consolidation and large-scale land investment.
External product design, internal layout and the specification of the majority of new homes has improved over recent years and now offers far superior accommodation over second-hand properties. With this in mind, forward-thinking companies no longer have a rigid range of homes and readily alter elevations and external materials to blend with the environment. I see the industry moving forward by sharing resources in areas such as construction research and development, training, health, safety and environmental matters as well as in all areas of sustainability.
Fortunately, there are visionaries in the industry, such as Martin Donohue chief executive of Westbury plc, who share this view and have a desire to make it reality.
IN THIS business it is vital to keep your head. You've got to be a decent negotiator, because we constantly come up against obstacles when we're purchasing land or negotiating terms with the vendor or when dealing with planners, architects and customers. Combine these skills with imagination, drive and enthusiasm and you have the qualities necessary to being able to do the job at the highest levels.
Obviously, I admire Tony Pidgley, managing director of Berkeley Group who I think is second to none, but I am also a great admirer of people who are adventurous in the development process. The person I admire the most for this is Harry Handelsman of the Manhattan Loft Corporation. In the early 90s, he saw how the US-style loft market took off and imported it into this country. In effect he pioneered the whole London loft development process. He also revolutionised the South Bank and Wardour Street.
His approach to converting lofts and retaining original features was a whole new concept. I also admire his use of avant-garde architects.
LIKE MANY professionals on the outside, I regarded housebuilding as the poor relation of the construction industry - it always seemed more interesting designing and building hospitals and schools than houses.
But when I started in this industry, it got under my skin very rapidly. One of the skills necessary to my particular role is being able to identify opportunities and to maximise the potential profitability of a project. I think the quality that contributed to my own personal success is a determination to set goals and achieve them. Single-mindedness probably best sums that up. I get a huge buzz from the whole process of clinching a land deal and seeing it through from start to completion.
Who do I admire within the industry? There are several individuals who have influenced me over the years, some closer than others, but I'd rather not name names.
David Wilson Homes
THE BUOYANT housing market is not a repeat of the feared Eighties boom. Increased London house prices should not dominate perceptions countrywide. But the industry does need dynamic planning, major cash and new tax breaks to create places people want, leafyish, quietish - and safe.
I feel a huge responsibility to create value to support a lifetime's mortgage repayments. So flexibility to plan and replan to maximise land use is a crucial factor in our business. One person we all admire is Lawrie Barratt, now life president of Barratt Developments for his sheer energy in creating Barratt during his working life and coming out of retirement to rebuild it before retiring again.
WIMPEY HOMES has around a million homes under its belt. That makes lots of people who have, or know someone who has, lived in a "Wimpey", a double- edged sword. People know our homes are well-constructed, but their image of us can often be rooted in the past, not today's reality.
The customer is leading us down the road of innovation and change as lifestyles change. Being at the forefront of that change provides the buzz. Two people I admire are our recently retired chairman Joe Dwyer who had the vision to see the future of the Wimpey Group was as a focused homebuilder, plus the bravery to make that vision a reality, and Lawrie Barratt who successfully introduced marketing to the industry in the Seventies.
THERE ARE always new and exciting challenges in my business and day-to- day problems are rarely the same. For this reason, entrepreneurial flair is helpful.
The manufacturing industry has changed tremendously over the years and there are further advances which make it a very exciting time for us. We must meet the challenges of advancement and implement the changes in the manufacturing process to our advantage.
To do this with some degree of success demands, again, flair and vision to keep ahead of the competition in terms of product design. There are many people who made specific contributions to the industry, one of whom is Lawrie Barratt, now life president of Barratt Developments.
THE ASPECT of the industry that appeals most to me is the challenge of providing housing. It may sound simple but day by day you constantly come up against challenges: the needs of the client; negotiating the planning system; governmental regulations.
It is important we understand the desires of the purchasers and how they are changing. The most important factor affecting their home decisions is the way in which lifestyles have changed. People aren't necessarily having their 2.5 children and may even work from home so the home model isn't the same as it was even in the Eighties.
One man who has been a success is Tony Pidgley, the Berkeley Group managing director. He has taken the company from the start and built it up into one of the largest housebuilding companies in the UK. They are always half-a-step ahead of everyone else.
Crest Nicholson plc
HOUSEBUILDING IS a rollercoaster of a business, fast moving, in the public eye, controversial and relevant, touching the lives of us all. It's not a job choice for those who like a quiet life or who cannot accept criticism, for much of it is justified. In spite of all this, I love the business for its unpredictability and the opportunities it offers.
No one has a safe seat at the top; changes come so fast that tomorrow's winners will be those who adapt best to a new environmentally oriented marketplace. Those who succeed will have the rare privilege of achieving that success through improving the quality of life in our towns and cities and conserving the environment. Berkeley, Laing and Countryside are moving in the right direction.
Group Chief Executive
OUR BUSINESS depends on the placing of the right product in the right location. To excel, you need to be imaginative, forward thinking, and make entrepreneurial decisions. You need to see the opportunities in a site which at first looks as if it is just a plain piece of land. I'm from a construction background and thoroughly enjoy seeing a bare site transferred into a nice development for people.
One of those I admire in the industry, is Mike Robinson who was managing director of Wilcon when I knew him and I learnt a great deal from him. Another is the recently retired Joe Dwyer, the former chief executive of Wimpey. I admire him for being so brave in the orchestration of the merger of Wimpey with Tarmac. He had the balls to suggest that Wimpey move out of pure contracting. He is also still very much involved in the trade.
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