Exporting our Future

A few things have happened over the past few weeks which have made me look at the impact of this recession differently.

I have been to the Middle East several times recently and had quite a few discussions with young people from within the construction industry.  At the end of last year a close friend of the family emigrated to Perth, Australia.  At the beginning of this year a friend who I had worked with throughout the BSF programme emigrated with his whole family to Canada.

When in the Middle East, I have met so many people who have moved from the UK to make a new life.

Only last week one of our young architects in our Newcastle office decided to emigrate to Canada where they are crying out for young professionals.

My concern is not the short term, but more the long term impact this will have on UK PLC.  Lots of our brightest talent is leaving the country.  In the future we will pay the price for this.

Whilst in the short term, it is great there is a market for our skills but once they are gone they are gone.

Much of the historic success of our country has been built on our engineering and construction skill. Once it has been exported it is difficult to get it back.

Our government needs to make staying in the UK attractive to our young people and must give them exciting and creative opportunities if we are going to be a respected knowledge base across the world.

The Holiday Book Review

Regular readers of my blog will know that my holidays are a time for me to catch up on my reading. The weeks before I go away I build up a store of books on my iPad and work my way through them. I am not a fan of fiction but enjoy reading peoples stories, particularly related to business.

On this holiday we have travelled to Gran Canaria again.  We always go for the hotels which are full of Germans as you are guaranteed good service.  This time the hotel has a wider European feel...it must be that everyone in Europe is ready for a break.

My reading this holiday has been eclectic to say the least.  I have read Shaun Ryders autobiography, Karen Brady and Anita Roddick’s story, as well as Boomerang and a book by Alastair Campbell.

The Shaun Ryder book is an amazing story, however there is a theme throughout.  He spent at least 20 years up to his eyes on drugs.  Clearly he had a tough upbringing and was a product of his background.  The story has a happy ending however as he has clearly met a woman who looks after him and he is now focused on important things in life, rather than only drugs.

The Alastair Campbell book talks about happiness and his fight with depression.  I am a fan of Alastair Campbell as I think he has a brilliant mind.  A really thought provoking book.

I also read boomerang which is a must read.  It is an up to date view of the impact the banking collapse has had across the globe.  It covers Greece, Iceland, Ireland, Germany and America.

When you follow the stories it is unbelievable that we let this happen.  In Iceland you had fishermen becoming corporate bankers with no experience.  Our government recommended that our local authorities invest in this country.  Unbelievable.

The story in Ireland is a little different in that the government made a huge mistake in underwriting the banks debt and ultimately crippled the whole country.  The German story is that they invested in all of these countries and therefore couldn't possibly let them fail.

The Greek story is the most unbelievable.  They lied their way into the Euro by creative accounting and took full advantage once they were in by borrowing and spending more.  They overpaid public sector workers and didn't collect their taxes.

Boomerang is a great book, a quick read which you will find fascinating.

I also read the Karen Brady story as well as the Anita Roddick story.  It's a coincidence that I ended up reading about two successful business women.  Karen Brady is a really driven individual and clearly a workaholic and a great business woman.  I would imagine she has had to make many sacrifices and only time what the impact will be in years to come as the relationship with her children develops.

Anita Roddick’s couldn't be more different.  I think her success happened by accident.  She was clearly a very spiritual lady and driven by her values.

The book was written in 2000 and it wasn't long after this that she sadly died.  When you read the book now, she was clearly way ahead of her time.  All of the things companies such as M&S and Sainsbury’s are doing now in relation to the environment, she was promoting 15 years ago.

There have been several other books, all too sad to mention, but a good mix on this holiday.  The benefit of the iPad is you can take 20 books without having to worry about your luggage allowance!

Mike Ashley v Geordie Faithful

What a story Newcastle United has turned out to be this year. I think what has happened at the club since Mike Ashley took over has been fascinating.

It gives the supporters a real problem. For the last few years they have criticised Ashley for just about everything he has done. Unfortunately for the supporters, he is having huge success with the club, not equalled in 15 years. As well as success on the field, the business has never been in better shape.

What are the supporters going to say or do now? I have always been a supporter of Ashley and said I would judge him on results. Well, where we find ourselves now is that his decisions have been proven right. When he sacked Chris Hughton I said I would judge him on his replacement. I think Alan Pardew is a great manager and has a great team around him. I think most of his tactical decisions have been sound throughout the season.

In relation to the sale of Andy Carroll, again I said I would judge the decision on the replacement. There is no doubt now that selling him was the deal of the season and Cisse has been a revelation.

I think the success this season on the pitch has been down to the team spirit. There are no stars in the team such as a Shearer or a Carroll. I think the influence of Coloccini and Gutierrez has had a huge settling influence and brought maturity to the dressing room.

Off the pitch, Mike Ashley has been single minded and stuck to his plan. Despite criticism, he got rid of expensive problem players such as Nolan and Barton. He is committed to only buying young talent, with future potential and value. Ultimately, he is patient for success.

For those who are not as patient, such as Manchester City or Liverpool, spending £240 million has not provided the answer. Our problems next season will come from the very same clubs. They will undoubtedly pursue our players and our manager. Mike Ashley is a trader and if the deal is good, I have no doubt he will sell.

I also think that if we get into the champions league, Ashley may look to get out himself. He will have to weigh up the cash benefit against the European profile for sports direct.

If we get to the Champions League the renaming of St James Park may be another master stroke, if a big sponsor such as Qatar Airways comes forward.

All of this success is a little embarrassing for the supporters. Mr Ashley got it right and the 54,000 Geordie Faithful got it wrong! Maybe because he made dispassionate decisions, rather than getting wrapped up in history and tradition, he has been able to take the club forward.

Despite this he will always be seen as an outsider and will never get the recognition for what he has achieved. I suspect Mike Ashley couldn't care less. Newcastle United is an investment and something to do with the kids on a Saturday afternoon.

Another Trip to Qatar

Just before I headed off on my Easter break I had a few days in Qatar. I continue to be fascinated by this place.

I was out there talking to a client about a retail opportunity.

Before I get on about Qatar....the previous weekend I had been to the Westfield shopping centre at Stratford on the Olympic Park on a scouting mission before going to Doha. If you haven’t been it is really worth a visit when in London. It makes the Metro Centre or Trafford Centre look so 1980s. It is more than just a shopping centre and is more of a destination, with lots of leisure activities as part of the centre. We were there late in the evening and it was buzzing.

With the Olympics only weeks away all of the international retailers were making a real effort with their stores.

Anyway back to Qatar. At the moment there is lots of talk and huge plans. Without doubt there are billions to be spent. I think however the country is a big social experiment. At present it must be the biggest export market for UK skills. We have filled the country with construction and oil professionals who are all working tax free for their futures. None of these people see a long term future in the country.

All of the work is being carried out by Indian labour...they will not stay beyond the construction work.

Most of the Qataris work in government pushing paper around. They really would rather be in the malls spending their cash.

The ruling families are building a fantastic infrastructure for the country but they need to also build knowledge. As they invest in their country they must work hard on the knowledge transfer. They must encourage the indigenous population to work with the Europeans and Americans to learn new skills before they all leave.

The country has to develop its own entrepreneurs and thinkers, as well as building roads and railways. To put things in perspective, our country has been developing for hundreds of years. In reality, Qatar only started its journey 40 years ago.

I admire what they are trying to do and I look forward to following their progress over the years ahead!

New Dawn

I am sitting in our Leeds office overlooking the River Aire which brings to mind that further down the river was Carey Jones leading architectural practice in the North of England.

Unfortunately last week Carey Jones Northern Business went into administration. This is particularly sad and poignant to me personally as when I was a student Carey Jones was the pathfinder practice in Leeds.

They were a very commercially focussed practice and delivered some great buildings over many years.

Being a north easterner I am particularly fond of both of the buildings which they completed behind Central Station.

The business as strong as Carey Jones failing in this market is an indication of how difficult business is within this recession.

The loss of an organisation such as this has a personal impact on so many people as well as impacting on loss of skills in the industry.

Many more businesses have been lost in recent months with names such as Brown Smith Baker one of the oldest established architectural practices no longer trading.

I am sure the reasons are many and varied and maybe in the future someone may look into what right and wrong things for a construction related consultancy business to do through a recession are.

One thing is for certain that there is still a long way to go for everyone and we are far from out of the woods. The practice of architecture which I joined in the 1980’s no longer exists and the market which our new graduates enter is completely different.

One of the attractions when setting out on the journey to be an architect was to own your own business. I think that in the future this will be increasingly challenging. It is also the case that after many graduates have seen the challenges of their colleagues in recent years it may be that owning your own business is not what it is thought to be.

I believe in the years ahead the polarisation of construction consultancy will continue. There will be a need for small nimble practices who produce beautifully crafted architecture.

At the other end of the scale there will be global businesses providing skills across the globe at the highest level.

The current market place is speeding up this transition and polarisation and we sit and face the fall out from this adjustment month on month.

From a personal perspective it is sad to see this evolution occur however I am also excited by the opportunities which change in the industry can bring.

The depressed nature of the construction industry has forced individuals and companies to consider things which several years ago would have been unthinkable. New technology and procurement routes are encouraging innovative thinking which I believe will ultimately improve the product which we deliver to our customers as an industry.

Embracing Innovation

Over recent months I have sensed a change across the construction industry in its approach to innovation and new ideas. Previously everyone seemed very focused on delivery and tasks meaning there was no time or reason for making things better.

There seems however to be a change in attitude. I think people now fall into two camps when it comes to innovation and change.

There are those who will never embrace change at all. There are lots of reasons for this ranging from fear to previous experiences. There should be no criticism of this and people who have become experts in what they do will always be sceptical of embracing alternatives.

The other group however are open to ideas and change and understand the benefits. Generally they get frustrated with the way things are done and can see there are alternative ways. There is a growing number of people and organisations who are embracing innovation. I think much of this is down to the current marketplace and the need for businesses to be able to demonstrate value without increasing cost.

At _space our purpose has always been to make life better and it has been at the core of what we do for several years. This has meant we are always looking to do things better and are never satisfied with the norm. This approach has applied to making lives better through the buildings we design but more recently our focus has been on finding better ways of doing things.

This can be a lonely and frustrating position to take at times. Some of the approaches we have been developing we have been pursuing for years. We have faced a lot of negativity when we have shared our thoughts. This however has not stopped us from pursuing our beliefs. I know that the stories of Dyson and KFC were littered with rejection in the early days.

We have been an early adopter of Building Information Modelling not because we like technology or gadgets but purely because we can see how it can improve the process of construction. It is not perfect and has lots of faults but it is always easy to find a reason not to do something. We believe however the reasons to do something far outweigh the reasons not to. We are seeing benefits every day.

There are still those who just don't have time to consider something such as BIM. They will continue to do what they do well but they are already dying a slow death and don't know it. I liken these companies to HMV and Kodak who have seen a slow demise over several decades.

BIM brings with it lots of opportunities far beyond design and build and the entrepreneurs in the property industry will see these first and embrace them. Some of them we know about now and others haven’t shown themselves yet.

It is always great to meet people who are interested in talking about a new way and we have found we are coming across more and more of these people. These people are not only in the private sector but also the public sector and include designers, contractors and clients.

We have also been looking at ways of reducing construction cost and energy use. For the past two years we have been developing our Spacehus products. Initially there was a cold response to such an approach. The feedback was that it could be built cheaper with bricks and mortar. We are now however coming across people who are talking about value and are understanding the long term benefits. I think once the momentum builds with offsite construction we will see a real change in attitude.

The quality of buildings will improve considerably along with their performance. With the further development of BIM we will see a real understanding of lifecycle cost and performance over the years ahead.

Let's hope the momentum continues!

Holiday Reading

Several times over recent years we headed off for some sun over the holiday period. This year we headed off to the Canary Islands and were lucky enough to have fantastic weather for 7 days. It as a great opportunity to truly unwind, reflect on the previous year and look forward to the year head. By having a few days off for Christmas before in the UK I found myself totally unwound with a very clear mind. It is something that I can strongly recommend.

As with most of my holidays for those who have followed my blogs in the past I usually spend the time reading what most people would consider very boring books on entrepreneurship and business. I am fascinated by the stories of people who have made a change. I often intersperse this with the more traditional business management books as well as recently getting into economics.

This holiday was no exception and I had quite an interesting mix. I previously read Steve Jobs biography but decided to re-read it on this trip. I also read Richard Branson’s latest book as well as the latest offering from Allan Leighton. To finish things off I read the book about Bernard Madoff and his £65 billion fraud.

What I should also say is that all of these books were read on my iPad which saved the usual fear of excess baggage fines at the airport.

Richard Branson’s book is an interesting read and explains his evolving view of how a business and capitalism should change for the new millennium. ‘Screw Business As Usual’ sets out his thoughts on how business should consider the environment and look to give as much back to communities and people.

This is the overarching theme of the book and once you have sussed this generally the book states lots of case studies of companies which have done good over recent years. I am a great supporter of this approach but I did find the book slightly repetitive. There is also the nagging issue at the back of my mind that Richard Branson was writing this book whilst sitting on his Necker Island with his private jet standing by. I guess he sits in a far more comfortable position than many of us who are working hard to sustain our own businesses and the livelihoods of those who work with us.

The focus of Alan Leightons book was how business leaders make decisions. I found this a very quick read and really interesting. He has snippets from leaders such as Terry Leahy of Tesco’s and Adam Crozier ex of the FA.

There is also some excellent personal insights from his time at the Royal Mail which are very interesting.

The Madoff story is an incredible one. I could not help think how did he manage to sleep at night. It was clear that Bernard Madoff was considered an upstanding member of the community whilst he was stealing millions from his friends and colleagues. The scale of the fraud is spectacular and it is hard to imagine how he managed to achieve it without assistance of others.

Over the years I must have read hundreds of books on management and business but I do think that the Steve Jobs story is the ultimate business book and nothing comes close. Not only is the book fantastically well written it tells the most amazing story of Steve Jobs.

Steve Jobs has several stories but his most impressive is the fact that in 1997 he returned to Apple which was very close to bankruptcy and by 2010, 13years later had turned Apple into the most valuable publically owned company in the world.

As a sideline he had also built Pixar and ended up owning 7.5% of Walt Disney.

He is clearly a very odd personality and having read many books on the best way to build businesses and manage people Steve Jobs defies every single rule. He was obnoxious and insulting with little empathy for others.

However his incredible focus on detail and quality encouraged people to achieve things they never thought they could.

In relation to business stories I think it will be a long time before there is a one that can match that of Steve Jobs and Apple.