Osborne CEO: ‘I want to leave behind a legacy’
“Andy Steele opens up to Construction News about post-Grenfell reform, the mental health crisis and what really matters to him and his business.
For Osborne chief executive Andy Steele, business is personal.
This attitude not only reflects his own passion for the industry, but also guides his leadership of the family-owned contractor Osborne. You won’t succeed in business, he argues, if the people you work for and the people who work for you aren’t at the heart of your agenda.
Why is this important? Because Mr Steele believes construction is undervalued by society, despite its projects changing it for the better. It’s a belief driving him to make the case for construction and help tackle some of the industry’s biggest issues, from its reputation post-Grenfell to the mental health crisis facing its workforce.
In the blood
“Construction has always been in the blood,” he says.
We’re meeting at the Reigate, Surrey headquarters of Osborne – the company at which Mr Steele’s career began more than three decades ago. His mum worked for the Construction Industry Leadership Board, which opened doors for him to gain work experience in the sector. Pursuing a career as a quantity surveyor felt like a natural fit, he says, which led to him joining Osborne in 1985.
Five years later he left to join Morgan Sindall as a managing surveyor. Another five years after that came a new role as group director at Connaught, where he quickly rose to become managing director.
Little did he know that this firm would become a phenomenal success almost overnight. “When I joined, Connaught was a £60m-£70m business,” Mr Steele recalls. “When I left five years later, it was a £200m business.”
The group focused on the social housing market and its order book leapt from £200m-£300m to £1.65bn during his tenure. “It was so successful you look back and think, ‘How much was that because of me or how much was luck?’” he says.
However, he left Connaught at just the right time. In 2010, the firm went bust in what was one of the most high-profile administrations in recent times. He decided to leave the business five years before that in 2005 to replicate his achievements in a completely different playing field: the legal profession.
But Mr Steele explains that the expectations piled on top of him to deliver the same level of success were enormous. “I was approached to run a law firm [Stephens Scown Solicitors] and I thought to myself, ‘That is a really exciting personal challenge’. Would I be able to take the skills I have and move them from one industry to another? Can someone from construction go and work with very intelligent people in the legal sector?”
The answer was yes, as Mr Steele steered the group through the recession before going on to set up his own company, Access Performance Solutions, which advised law firms.
He found himself back at Osborne in December 2012 when the group approached his company to work on one of its projects. Mr Steele was asked to stay on as MD of construction, with the carrot of becoming chief executive when his predecessor, David Fison, retired. He promptly returned to the firm in 2013 and became CEO in April 2015.
All comes down to value
So why did he choose to step back into the industry? “I enjoyed the legal profession,” he says. “But in construction, you genuinely leave something behind. We massively impact people’s lives – in a positive and sometimes negative way. We’re a disruptive industry while works are ongoing… but with an intent to improve people’s lives and our environment.”
He says there weren’t that many transferable skills he could take from the legal profession, apart from the concept of delivering value instead of focusing on project costs. “Value was talked about a lot in the legal profession,” he says. “We wanted solicitors to talk about the value they would be adding for the customer instead of just focusing on the billable rate.”
This mindset is lacking in our sector, with the industry driven by delivering projects and the costs of doing so, Mr Steele argues. But recognise the value that construction brings and you’ll start to solve the major problems our industry faces, he says. “All fundamental issues the industry is focusing on, such as BIM and innovation and the skills shortage, will not be resolved if you don’t look at the fundamental cause: that contractors are not valued.”
He believes solving this starts with the industry’s biggest client: the government. “They need to recognise the value of the industry. If [construction] makes up anywhere between 7 and 10 per cent of GDP then clearly we have a significant place in the UK economy – but how many of the top 10 contractors have made any money? None.”
The undervaluing of contractors means the finger of blame is often pointed at them when a problem arises on a project – even if it is not the main contractor that made the error. “Responsibility, accountability and consequences that arise from actions do not rest with the same parties,” Mr Steele says. “A contractor will pass the risk, [but] accountability is not passed down with that. If a design team makes an error, the implications for it are, generally speaking, not as large as the implications for the contractor or client.”
“We’re changing people’s lives – hopefully in a really positive way – and our construction workers are part of this”
To address this, he suggests the industry needs to apportion risk and accountability more equitably. “The mechanics and relationships between parties need to be re-explored. We need to think: these are the consequences of your actions and the changes needed when something has gone wrong. Let’s understand what we can do to improve that.”
He cites the Grenfell Tower tragedy as an example. There wasn’t collective responsibility and accountability taken for that project in the aftermath of the fire, he says, as one of the first parties to be singled out was main contractor Rydon.
“That is the culture of the industry at the moment. We will find the outcome, when it does come, complex. A whole series of individual changes, errors, mistakes, lack of checking and compliance, and design issues might arise, and fingers will point to how the industry is run.”
Grenfell: The aftermath
What happened at Grenfell Tower shook the industry to its core – and Mr Steele was no exception. He recalls the horror of listening to the events unfolding on the radio while he was driving at four o’clock on the morning of 14 June.
“The events were shocking and horrendous,” he says. “Part of that was hearing that this building had been recently refurbished. I feared for the industry, and as everything has unfolded, I fear even more.”
Both the company’s chairman Andrew Osborne and Mr Steele refer directly to Grenfell in the group’s latest financial update. Mr Steele believes the ramifications of what happened will be significant and the industry needs to conduct a “forensic analysis” of exactly what went wrong.
“We need to pull together a team of people with expertise across our industry and dedicate them to this,” he says. “I know there are some piecemeal pieces of work going on – but if this is significant, and I think it is, we need to learn quickly. Let’s second people into an organisation and pay for this to happen.”
However, he says this learning process may take too long. He says construction must act quickly to provide a strong voice and show leadership. “Cladding has been taken down on towers across the country and people are uncertain what to do next. Doesn’t the industry need to present some clarity over what needs to be done? We need to learn. We need to understand why things have happened and learn from it.”
Efforts to learn from the Grenfell tragedy and improve the industry’s image come at a time of unprecedented activity, with the likes of High Speed 2, Hinkley Point C, Heathrow expansion and Crossrail 2 on the horizon or under construction.
However, Mr Steele points out that it is largest firms that benefit most form these mega-projects. “Typically, the procurement for most of the work for those projects is going to the larger contractors,” he says. “Does that suit us? No.”
“A contractor will pass the risk, [but] accountability is not passed down with that. If a design team makes an error, the implications for it are not as large as the implications for contractor or client”
Mr Steele argues major clients need to shake up procurement. By splitting big projects into packages that smaller contractors could tap into, he believes both parties would benefit. “We don’t want to take on projects that will have too big an impact on us as a business. There are contractors like us that could benefit from right-sized packages on these projects, and customers could benefit from the approach we could bring.”
Similarly, Mr Steele suggests there is a danger that the same contractors hold places on the majority of the industry’s major frameworks, posing capacity challenges. “We’ve seen contractors not being able to deliver on a number of frameworks. I have a concern that the same people are on the major frameworks.”
More efficient procurement within the public sector needs to be achieved by joining up different government departments. “We need to stop and think about frameworks. Government departments act and procure independently. But there needs to be someone with an overview of frameworks to join up procurement.”
Mental health hits home
In April, Construction News revealed the results of its Mind Matters survey, uncovering the scale of the issue in the sector. Construction could be facing a mental health epidemic, with one in four construction workers having considered suicide.
“It’s so shocking, it goes beyond belief,” Mr Steele says. “We can see physical health issues – but we don’t know what’s going on in someone’s mind.”
Osborne is one of six contractors who took part in charity Mind’s Workplace Wellbeing Index and its communities division managing director, Nick Sterling, opened up to Construction News about his struggle with depression.
Talking about mental health issues, or difficulties in our private lives, is something Mr Steele has learned to be more open about. “There are times in all of our lives where we go through points of stress, bereavement, or things that affect you psychologically and mentally. My mum died and my wife’s stepfather died recently. My team know about this, and they know I might not be on my A-game at a particular point.”
Mind Matters survey further findings graphic
CN’s Mind Matters surveyed 1,139 people from across the construction industry
Mr Steele thinks the pressure the industry puts on its workforce contributes to the shocking statistics. Construction workers often work anti-social hours and may have to travel long distances to deliver projects. Add to this the huge pressure to successfully deliver a project, and you have a potentially intolerable working environment.
Mr Steele suggests it is essential people feel they can talk openly about their problems. “I’ve seen the stigma attached to an individual who says, ‘I’ve got a mental health issue’. But we all have issues with our mental health in varying degrees and at varying times. Let’s just recognise it.”
Again, it all boils down to the value of our industry, he argues. As well as recognising that construction can place high demands on its workforce, it must also ensure workers know that the work they are doing is invaluable.
“We’re changing people’s lives – hopefully in a really positive way – and our construction workers are part of this,” he says. “But when one in four people have considered taking their life, we must ask: do we value people right the way through the supply chain, and do they feel valued? Clearly not.”
Leaving a legacy
It is clear that construction is more than just business for Mr Steele. His outlook is shaped by the people delivering the work and the impact construction has on the UK’s development.
So what are his plans for Osborne – and the wider industry? “Osborne is a family-owned business that is looking for sustainability for future generations. What I have to do is manage their expectations within a very volatile industry and maximise what we can achieve.”
To do this, he wants to diversify, with a focus on growing the firm’s communities division. “Construction is absolutely core to our business. It makes up just under 50 per cent of our entire business and that is still massively important. But the industry is volatile; because of this we’re looking to other sectors and managing our destiny slightly better with a mixed portfolio.”
Looking ahead, Mr Steele’s ambitions are shaped by the very thing that convinced him to return to Osborne. “When I stepped back into the industry I realised what I had been missing,” he says. “I absolutely want to leave behind a legacy.”
This article was written by Lucy Alderson and published in Construction News.