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Broad spread of talent helps C Spencer grow

ROADS & BRIDGES

C Spencer has built a reputation for building bridges the length and breadth of Britain. But, as operations manager Alan Jones tells Steve Menary, constructing bridges is just one of the firm's strengths

COMPANIES founded, run and owned by the same person can suffer from excessive control from on high.

But Charlie Spencer's liberal approach at the civils contractor that bears his name has led to restructuring into an astonishing 28 separate business units.

This figure is even more surprising given that C Spencer was turning over a relatively small £34 million when Mr Spencer made the move two years ago.

His decision has certainly paid off. In the year to January 2005, turnover leapt to £62 million and pre-tax profits doubled to £2.2 million.

'Charlie is a man of few words but quite an original thinker, ' says Alan Jones. 'Entrepreneurs see a complex route through something simple and a straight road through something complex.' Mr Jones's official title is operations manager but he describes himself as a 'bid manager' and co-ordinates the jobs that C Spencer's 28 units decide to bid for.

'We have a big meeting every Monday morning where we decide who is best suited to bid for what, ' says Mr Jones.

These units range in size from teams of just three designers to larger groups of around 20 people that of ten work together but are not linked in any formal way.

Mr Jones says: 'The only analogy I can draw is how consulting works, by drawing in people from other areas.

'Where consulting goes wrong is that the resources are in an off ice and you r biggest ambit ion is to become office manager. When that happens, you generally lose your best consultant and gain a terrible manager.

'Our teams move around and are responsible for their own pricing. They might not have specific estimators, they might be quantity surveyors, but each team is responsible for delivering its own business.

'Teams interact and draw in resources from each other like the 50 design people we employ and that is what has delivered the growth.' Perhaps unsurprisingly, Mr Jones, Mr Spencer and Gary Thornton, who shares the managing director's role with the firm's founder, all have a background in consultancy.

Mr Jones worked at Travers Morgan, Mr Spencer worked as a consultant before doing marine contracting for Birse out of the group's original base at Bartonupon-Humber, while Mr Thornton worked with the now defunct Humberside local authority.

C Spencer, which is based in Barrow-upon-Humber in north Lincolnshire but has offices in Glasgow, Newcastle-upon-Tyne, Leeds, Hull and Hatfield, is best known for building bridges.

Work on the Forth Road Bridge, structures such as a retracting bridge at the Big Idea innovation centre in Irvine and a first excursion abroad to build a ship navigating bridge at Vasteras in Sweden have attracted most attention, but this area only comprises about 20 per cent of the turnover.

Since being set up in 1988, C Spencer's idiosyncratic structure has evolved slowly but Mr Jones traces the spur to Network Rail's decision to stop using management contractors.

'We were working as a delivery contractor underneath a management contractor when Network Rail changed its procurement, ' he says.

'We took on the role of design, project management and delivery as it was recogn ised that management contractors were not adding any value. That suited us as we're not a company that subcontracts out its risk.' Around this time, a continuing dearth of mechanical and electrical contractors led to another shift in the development of the group.

Mr Jones says: 'We were finding it difficult to find good M&E contractors. They were failing us in giving good client satisfaction so we brought all that in-house by acquiring one of the few good ones we had found.' Mr Spencer's acquisition of Sheffieldbased Northern Electrical for an undisclosed fee remains the firm's only acquisition.

Northern Electrical had 30 staff but the deal enabled C Spencer to build up a 100-strong team of M&E staff, who are shared between the 28 different units.

Shifting to doing more work in-house has seen the workforce balloon. When Mr Jones joined in 1997, C Spencer only had 60 staff but today employs more than 600.

That is a large number of people for a £62 million turnover contractor but Mr Jones sees this as the only way forward.

'We recognise that there will be winners and losers among those teams. Some will be successful and some not and some may have to sub to a lead team, ' he says.

The firm does turn to outside companies for some skills, such as masons and plasterers, to work on an increasing amount of restoration on listed buildings but, if th is increases, these skills will also be brought in-house.

With turnover expected to hit £80 m illion next year but so much work done in-house, this could suggest that the apparent surge in workload is due to double accounting ? putting main and subcontracts both through the firm's accounts ? but Mr Jones insists not.

'We're not double counting, ' he says, without sounding defensive. 'The reason we're doing more and more work in-house is because that's what the clients want to see.

'The idea of these teams is so that we can get closer to the client; that the person who prices the job will be closely involved throughout; that what you see is what you get.

'There's all this talk about adding value but you've got to understand what the client wants before you can do that. There's all this measurement of performance like key performance indicators but there's no point scoring high in something the client doesn't actually want.' This is why C Spencer does not reward its staff based on how much a project made but how satisfied the client is.

Having Mr Spencer as owner and chairman makes these offbeat approaches easier. The recent decision to share the managing director's role with Mr Thornton is a sign that Mr Spencer is tak ing more of a back seat but he is st ill only in his early 50s and not about to step down yet.

'Unt il quite recently we didn't have a formal business plan and Charlie hasn't set any targets or hoops to jump through, ' says Mr Jones, who at 61 is st ill full of enthusiasm.

'What we wanted to do was remove internal barriers.

What it's about, what Charlie Spencer recognises, is that it's difficult for a company to grow with one controlling mind.

'We have vigorous accounting procedures but the whole point is that you don't want to suppress people.

You need to release the creative flair of people and give them a structure to hang that talent on.'