Wednesday, September 2, 2009

O'Rourke culture clash opens up management rift

A management split is opening up at Laing O'Rourke as an "old guard" of company loyalists bids to seize back day-to-day control of Britain's largest private contractor.

Contract Journal understands chief operating officer Tony Douglas and his team face a backlash from O'Rourke veterans over his management style.

Douglas has assembled a large group of loyal managers since taking on the role in July 2007.

But a source close to the company revealed: "Tony is being marginalised on day-to-day operations despite the excellent profile he developed.

"Tony was brought in to create change in the old ways and is now paying the price for doing just that."

CJ understands that Douglas was scheduled to be appointed as chief executive of the company between April and August this year, but no appointment has yet been made.


ORourke culture clash opens up management rift


Another O'Rourke source indicated that company stalwarts have started to advocate a "back-to-basics" policy in a bid to return to the formula which made the company successful.

One insider said: "Tony has surrounded himself with a team of people - several of which came from his old company BAA."

But these executives are now thought to have fallen out of favour, as a team of O'Rourke veterans - including Mike Robins, Steve Hollinghshead, Barry Dye, Paul Collins and Anna Stewart - coalesces around Ray O'Rourke.

The insider close to O'Rourke's inner circle said: "These people have been with Ray almost since day one and he can rely on them in times like this when the market is tough.

"There has been a bit of a policy of recruiting people from outside construction but that hasn't proved a success. Construction is a very special industry and you need people who know how it operates to survive."

The news comes a week after details of Laing O'Rourke's financial results emerged. Its annual review for 2009 showed a revenue of almost ВЈ4.1bn for the year, but with additional "managed revenue" this rose to ВЈ5bn.

Earnings before interest, tax, depreciation and amortisation (EBITDA) was ВЈ161.5m after exceptional items.

In his chairman's statement for the year ended 31 March 2009, Ray O'Rourke said: "In Europe, we have continued to make strong progress under the stewardship of Tony Douglas and a leadership team strengthened by a number of senior appointments.

"The organisational effectiveness achievements he has brought to the business are considerable."

A Laing O’Rourke spokesman said: “Ray O’Rourke and Tony Douglas continue to enjoy a first-class working relationship and to suggest otherwise is wholly wrong.”

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