Are house builder CEOs fit for purpose?

Is the size, design and more importantly, build quality of new homes getting any better? Judging by the number of complaints they receive and various online comments the answer is a resounding NO! Only this week a Bellway Homes buyer was forced to move out of his house because it was declared structurally unsound after an incorrect (weak) mortar had been used. A Taylor Wimpey buyer could not move into his new home for TWO MONTHS because of the extent of snagging defects included potentially dangerous electrical installation. According to the unfortunate new home buyer, a Taylor Wimpey regional director even told him that “we’re here to deliver profit for our shareholders” adding: “we don’t build perfect houses”.

Whilst planning and building regulations stipulate minimum standards, it would appear that no house builder is prepared to go beyond the absolute minimum quality standards. When a new home buyer complains they are often referred to the NHBC’s booklet “A Consistent Approach To Finishes” and told that it is “within tolerance” The author has written to Persimmon’s Jeff Fairburn, and Taylor Wimpey’s Pete Redfern to ask what measures they are personally going implement improve the quality of their product. Neither has replied!

So with CEOs apparently only driven by profit and share prices, we thought it would be worth a look at examining whether those who are in charge of Britain’s largest plc house builders are in fact, fit for purpose. It can be seen that with one exception, they have not had a University education. In addition, only three have any experience of actually managing a building site, two of these actually started their own companies!

More often than not, the main skill or pre requisite required is that of being able to count! CEOs with an accountancy background far outnumber any other discipline. As accountants, they know the price of everything and the value of nothing. So is this the explanation why so many of the CEOs appear to care so little about the quality of the homes their companies build? They just don’t know how and what systems and procedures they need to create to improve and control quality. Without a higher education together with site-based managerial experience, how can they even begin to attempt to drive quality standards higher, even if they had the inclination to do so?

Let’s face it, in the current climate, even a monkey could manage to report record profit rises and increased sales. The property market is being artificially stimulated by the 20% Help to Buy state subsidy and a semi-permanent low interest rate policy from an election fearing coalition government, prepared to whatever it takes to be re elected. Apart from perhaps after the war, it has never been easier for house builders to make money.

So how many of the bean counting  plc house builder CEOs would be able to name the seven processes of management?

Forecasting – Planning – Organisation – Motivation – Co ordination – Communication – Utilisation.

Not many!    Otherwise they would be making their profits by adding value to their product, improving quality and upping specifications, rather than from planning gain,  land speculation and government initiatives like the Help to Buy subsidy!

The CEOs of the main house builders get paid around 40 times more than their site managers earn.   Do they work 40 times harder?   Produce 40 times more value?    Contribute 40 times more to the company?   Well no one is brought in to do their “work” when they go away on holiday for three weeks in August or two weeks skiing in February!

The main men,  CEOs of Britain’s largest house builders:

Mark Clare 1Name: Mark Clare
Company: Barratt CEO since 2 October 2006
Age: 56
Qualifications: Graduated from Portsmouth Polytecnic
Background: Accountancy
Telecoms, Airports, Defence electronics, and 12 years at British Gas/Centrica becoming Finance Director in 1997

Pete RedfernName: Pete Redfern
Company: Taylor Wimpey CEO since July 2007
Age: 43
Qualifications: Bsc 1st in Mathematics University of Warwick
Background: Accountancy
Trained as an accountant with KPMG. Became financial director of Rugby Cement. Joined Wimpey in 2001

Jeff Fairburn 2sName: Jeff Fairburn
Company: Persimmon CEO since April 2013
Age: 47
Qualifications: None
Background: Trainee.
Started his career as a trainee quantity surveyor with Persimmon 24 years ago and has worked on sites.

Ted Ayers BellwayName: Ted Ayres
Company: Bellway CEO since February 2013
Age: 51
Qualifications: (Not Known)
Background: Joined Bellway in 2002 as regional MD

Tony PidgelyName: Tony Pigley
Company: Berkeley CEO since 1976
Age: 66
Qualifications: None
Background: Left school at 15 to start his own haulage and plant hire firm selling the firm to Crest Homes and becoming a Building Director. With Jim Farrer he founded Berkeley Homes in 1976

Greg Fitzgerald Linden CEOName: Greg Fitzgerald
Company: Galliford Try (Linden) CEO since July 2005
Age: 49
Qualifications: South Devon College of Arts and Technology 1982
Background: Midas Homes 1992 – 1997

Steve MorganName: Steve Morgan
Company: Redrow CEO since 2009
Age: 61
Qualifications: Liverpool Polytechnic
Background: Trainee as a site engineer.
In 1974, Morgan borrowed £5,000 from his father to buy his employer which then became Redrow. Left in 2000 and returned again in 2009.

DR Bovis CEOName: David Ritchie
Company: Bovis CEO since 2008
Age: 44
Qualifications: BA Hons
Background: Accountancy.
Joined Bovis from accountants KPMG in July 1998 as group financial controller. Group MD in 2007.

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