Chartered Management Institute: In My Opinion

Garvis Snook, CEO of Rok and a CMI Companion, blames backward working practices for underperformance in the UK construction industry.

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Last Updated: 09 Oct 2013

A dog, a wife and a mulberry tree, the more thee beat them, the better they be. So says the ancient rhyme, and in my industry, at least, there seems to be a belief that metaphorically 'beating' subcontractors is also the way to get the best out of their workforce. The result is an industry that is responsible for nearly 10% of GDP yet has a reputation for unreliability in terms of cost, time and quality. At the heart of this lies a failure by managers to build employee engagement.

Fifty years ago or so, builders and contractors in the UK had vast labour forces that they'd developed over many years. The core skills of these labour forces were highly valued. It was normal to sub-contract only highly specialist trades. Labour laws were flexible; if there was a period of poor weather, insufficient work or if any employees were ill, the employer could send them home at a moment's notice and re-hire them when circumstances had changed. This allowed the employer to keep costs under control.

With growing unionisation of the workforce, pressure built for better terms and conditions. Employers were forced to concede. By the mid-70s, the workforce had gained many of the privileges enjoyed today. Or at least, those who remained directly employed did, because the industry's leaders came up with the most damaging wheeze: they encouraged the labour force to become self-employed, citing freedom and reduced taxation as inducements. So employers regained flexibility of resource, with the added bonus of greater certainty on cost, because they needed to pay only for work actually done.

The trouble is that the distance between the customer and the person who does the work has been widened by layers of contractors, their subcontractors, and subcontractors to the subcontractors. Is it any wonder that so often a customer's dream becomes mired in poor quality, increased cost and late delivery?

It is often said that you get only what you pay for. That is certainly true in the subcontracting game. I once heard of a housing site where 12 bungalows were flooded after a severe frost, because one subcontractor had installed the plumbing system with a short cold-water spur left in place for the central heating subcontractor to connect its system to. Neither sub-contractor insulated this spur, because neither felt responsible for it. The pipe burst, and the damaging flood was the direct result.

Training for future generations has also suffered, as the resource flexibility so prized by the main contractors forces short-term thinking among sub-contractors. It's no coincidence that the construction industry is alone in the UK in having a statutory training body with levy-raising powers - established in an attempt to stem the tide. Yet the average age of the workforce rises every year.

After 30 years in the industry, I found myself with an opportunity to demonstrate a different way of working. I put my ideas into action using the remnants of a failing traditional contractor as my starting point.

I set out to create a building company that stems from a belief that we are a service industry. Our role is to assist our customers in realising their dreams and ambitions through buildings. By being a service industry, we recognise that only people can deliver good service - in which case, we have to create an organisation that serves our people first. Employees need to be loved, wanted, recognised and rewarded for their contribution to our corporate goals.

Put simply, by making work an enjoyable and fulfilling experience for our people, they do the same for our customers. That leads to customer loyalty, better returns and stronger organic growth. It requires direct employment of the skilled labour force and cannot be achieved via sub-contracting.

It sounds simple, and there are many companies around the world that took their ideas from a similar philosophy, including South West Airlines, Google, Apple and, in the UK, Asda and Timpson. All are modern businesses. My problem has been that our industry is the oldest in the world, and ways of doing things are steeped in tradition. The mistrust between bosses and workers is more deep-rooted than the V-sign that harks back to the English archers' victory over the French at Agincourt.

We launched Rok in March 2001 and have since grown from six branches to 60 and from 500 to 5,000 people, all bound by a shared vision, a common culture and a set of values that drive our behaviours. It hasn't always been easy and, at times, people revert to old ways of trading, but with every day we get stronger in our belief that engaging people is the long-term sustainable route to success.

Most people instinctively know these days that to get the desired reaction from wives and dogs you need to treat them with love and respect. I have no idea whether treating a mulberry tree in the same way will improve its productivity, but at Rok we sure as hell know it does with our people. I just hope the rest of our industry catches on soon.

CV: Garvis Snook has been in the construction industry all his working life, as both a subcontractor and an employee. He has been chief executive of building and repair firm Rok since its launch in March 2001. He was named Chief Executive of the Year, 2007 and Property Entrepreneur of the Year, 2008.

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