Balfour Beatty’s new “Build to Last” programme promises a shake-up of back-office functions and removal of duplication across a complex group structure – for instance in IT, finance communication and legal departments – that seems likely to result in a wave of redundancies.
The rationalisation programme is being presented as a way of preserving resources for front-line activities, and forms part of a “culture change” programme designed to simplify and reinvigorate the 36,000-strong company.
The group’s full-year results are being presented on 25 March, when a spokesman indicated that further details of the cost savings and efficiency savings targeted by the programme would be revealed.
A key figure in the Build to Last programme is former Qinetiq executive Alan Horden, who took up his position of head of business process reengineering at Balfour Beatty in early January, arriving alongside new chief executive and Qinetiq alumnus Leo Quinn.
Horden, whose LinkedIn profile describes him as a turnaround specialist, will play a role in improving business processes in bidding and project delivery, and will also head the Build to Last programme office.
New hire: Alan Horden
Former Qinetiq executive Chris Billimore has also been appointed interim chief information officer at Balfour Beatty.
The Balfour Beatty spokesman said: “We are simplifying our structure and enabling functions. Each different division has an HR, IT, finance, communications, legal and procurement function. In the UK we will be looking at efficiencies in both the construction ervices and support services businesses. But this is about enabling functions – we are not looking at frontline delivery.” The programme will also seek to rationalise suppliers of services, such as IT and office supplies.
In the UK, Balfour Beatty currently has three divisions: Construction Services, Support Services, and Infrastructure Investments. The spokesman indicated that it in future this would change, with Balfour Beatty viewing itself as a business with a US business, a UK business, and a globally-managed investments business.
Build to Last also includes a focus on improving internal bidding disciplines. “This is about improving the methodology we use to decide what we will bid for. Clearly we’ve had issues in a number of contracts bid on a margin that was too low, or on plans that we couldn’t deliver,” he said.
One initiative highlighted is the “My Contribution” campaign to identify and implement employee-led innovations, modelled closely on the similar “My Contribution” campaign that ran at Qinetiq.
There it was judged a success, with the company’s 2014 annual report recording 797 ideas being put forward in 2012, 1431 in 2013 and 1697 in 2014.
The campaign offers a structure for employees to put forward business improvement ideas, which are then supported with the necessary resources, for instance from the HR, marketing or legal departments. Their progress and financial contributions to the business are then tracked.
My Contribution has already been launched in Balfour Beatty’s US business, and will follow shortly in the UK.
Commenting on the initiative, Jason Farnell, a management consultant at CR Management, said that Balfour Beatty’s position had similarities with other Tier 1 ccontractors currently struggling to deliver projects on viable margins.
He said: “In the recession, the large companies lost sight of their own internal processes and controls, the very things that have promoted their growth and success in the past. In order to restore their profitability and rebuild their reputations these major contractors will need to see a return to discipline and control which will need to be driven from the top down by committed boards of directors.
“Balfour Beatty has an incredibly strong brand within the industry and by promoting this cohesive plan for control it is signalling the way to others that a return to prudent, efficient management is the way forward.”
