The past few weeks have seen a high number of senior figures at major contractors changing jobs, including several who have been with their employers for decades.
Few of these announcements have been as dramatic as that of Adrian Ringrose’s imminent departure from Interserve. The news that the longest-serving top 10 contractor CEO would be leaving was contained in a market update on Monday.
On Tuesday, another update revealed Interserve had been served notice of termination on its Glasgow Recycling and Renewable Energy project. Viridor, the client on the project, said Interserve had “repeatedly failed to meet contracted delivery milestones” and was now forecasting that it would miss its contracted long-stop construction completion date.
Mr Ringrose is relatively unusual in construction because he came from outside the industry, rising quickly to become chief executive of Interserve at just 35 in 2003. Also unusual was that he remained in the post so long – relatively common among the many family businesses in UK construction, less so when they are public companies.
Interserve itself is unusual in that it rode out the recession more smoothly than many of its rivals, maintaining decent profits and turnover and successfully offsetting the construction downturn and risks with its FM and services divisions.
But in the past two years Interserve’s approach to diversification seems to have been less well judged. Its expansion in commercial development has met with mixed success – hitting the headlines when Chinese developer Wanda One retendered its £900m One Nine Elms scheme after originally selecting an Interserve and China State Construction Engineering Corporation JV as preferred contractor. However, this week saw its replacement, Balfour Beatty, become the second preferred contractor to pull out of the scheme.
But it was Interserve’s move into energy-from-waste that has, by Adrian Ringrose’s own admission, caused the biggest problems, and prompted the decision to publicly state in August that it would be exiting the EfW sector. Interserve’s share price fell on Monday with the news Mr Ringrose would be leaving – but it fell further once the Glasgow notice of termination emerged on Tuesday.
At a time of great political change – and considerable uncertainty – it may be inevitable that the construction industry experiences change too. The business leaders we are seeing move around are likely to be a symptom of that.
The challenge – and the opportunity – for the industry is to lead that change, rather than having change thrust upon it.