Bovis and Lend Lease: The full story!

Oh, to be a fly on the wall… We’re not quite talking the level of intrigue surrounding what Marco Materazzi said to Zinedine Zidane, but I bet most of the industry would love to have heard the exchange of views between Bovis Lend Lease boss Bob Johnston and his UK construction chief, Jason Millett, which, as we reported last week, resulted in Millett’s departure.

Anything that happens at Bovis attracts interest. It’s in the premier league of contractors and, like anybody in the public eye, when there’s a bit of drama we want to know about it. This unedifying aspect of human nature is what makes the likes of Closer and Heat fly off the newsstands.

But the departure of Jason Millett is the latest twist in a long-running saga of ups and downs, and comings and goings at Bovis since the Aussie property firm Lend Lease bought it six years ago. The rumour that the two are likely to be demerged is never really out of circulation (though for the record can I say I don’t think it’s likely at all). And, while Bovis Construction in the UK has traditionally been the most profitable bit of the business, six months ago it announced a £14m write-down, associated with its refurbishment of the BBC’s Broadcasting House in London and the Bridgewater Place scheme in Leeds.

Bob Johnston vowed in Building two weeks ago to sort out the problems and bring the two cultures closer together – and the departure of Millett could well be part of that process. I understand that Millet was asked to stay but was unhappy with proposals to split his bit of the firm up into a construction arm and a PFI division. The two men are understood not to have had a natural empathy anyway (Millett was appointed by Adrian Chamberlain, Johnston’s predecessor). Millett was also based in the North – not a great way either of winning client friends among the southern-based development mafia, from which Bovis has a massive workload.

One of the issues within the firm for some time now has been whether it’s a fully paid-up member of the high-rolling risk-bearing contractors clan, or still has fee-based contracting at its heart. The latter is where traditionally Bovis made its name, whereas Lend Lease is from the first tribe. About 70% of its work is now risk-based contracting – just six years ago this was the proportion of construction management. The market has moved, CM is out of fashion, making it inevitable that Bovis would have needed to change, even if the Aussies hadn’t have taken it in their direction. But this type of contracting needs different kind of skills – and as the write-downs show, Bovis has not avoided the dangers it brings.

Also, traditionally Bovis has been a paternal sort of outfit and, in Sir Frank Lampl, it had a high-profile leader who staff admired and looked up to. The more anonymous and aloof style of Bob Johnston is at odds with this culture. Johnston also has quite a job on his hands bridging the North/South divide. In the North, Millett's departure has gone down badly.

Let’s not forget though that Bovis has a full order book – it’s still a great business. But somehow its public persona can still be one of being in a transitionary period six years on from the sale. It’s time now for the cultures to be blended together – hopefully bringing out the best of each, from the top to the bottom. Solving problems by swapping the team manager only works so many times.