The case for decency in leadership with Rick Lee from Willmott Dixon

Jacqueline Conway  00:00

The organisational peak is a perilous environment. It’s more complex and challenging than anything that’s gone before. And as a consequence, both executive tenure and corporate longevity are decreasing. To survive and thrive at the perilous peak, executive leaders need to balance their functional leadership or focus on execution with enterprise leadership, that is ensuring the organisation adapts and our new world. That’s what we’ll be exploring in the advanced executive leadership podcast. Welcome. I’m your host Jacqueline Conway. I’m the founder and managing director of Waldencroft, a consulting practice dedicated to helping executives and executive teams anticipate, navigate and lead at the paperless peak.

In episode 43 of the podcast, we explored the idea of running a business for more than just profit, and tied it to this idea of ethical leadership. We continue on that theme today to look at decency in organisations as a guiding principle for our behaviour. And as a framework for decision making.

It was the New Jersey Senator Cory Booker who said, small acts of decency ripple in ways we could never imagine. In this election year in the US, and in the UK, decency seems to be a somewhat old fashioned word, something that belonged to another era. And yet, I believe that it’s a vital component of good leadership, and is central to companies acting We’ll I’m joined by Rick Lee today, who’s the Chief People Officer of Willmott, Dixon, a company that puts decency at the heart of everything they do. And I’ll pick up this episode for the last one left off about place, as humans are located in the place. And the quality of those places has an impact on our ability to lead a meaningful life and to be in touch with an authentic desire towards decency and leadership.

Rick Lee  02:20

Thanks for having me. You know, I appreciate the the opportunity. So I’m the Chief People Officer at Walmart Dixon and we are one of the largest privately owned construction companies in the UK. So I’ll start with a little bit about about Willmott Dixon. Then I’ll talk a little bit about our, our journey and then talk about, you know, what it means to be kinda like a family lead business. So we’ve been trading since 1852. We employ 3000 people, we have over 40,000 people in our supply chain, Rick Wilma, he’s he’s fifth generation Walmart, family. He’s the executive chairman. And he leads from the front making sure that we have a purpose beyond profit. So we aim to put something back we aim to leave a legacy. But you know, I think above all, we build or maintain buildings for customers, who care about the people who use them. Places where people learn places where people are healed, places where people relax and look after their health and well being. I mean, that’s it. That’s our business, Jacqueline, that’s, that’s what we’re about in terms of our strategic journey, because, you know, one of the things that is levelled at fam family, you know, led businesses or own businesses, let’s take it head on is that they just get stale. You know, and that could be levelled at us, because we’ve been trading, you know, for for over 170 years. But our journey has been refreshed in key ways. Four key ways. So firstly, it used to be John Wilmore and sons. That was the business name, but but Rick’s Father Peter, Wilma, he came to, to realise probably in the 50s and 60s that you know, we needed to refresh we needed to bring outside management in. So he went into partnership with Ian Dixon who became Surrey in Dixon, and that’s when it became Walmart, Dixon. So that was the first step in the journey. The second was was partnering, that now that’s a strange sounding word, but But basically, it’s about how do you take the conflict out of construction, so that customer supply chain contractors aren’t always fighting and suing each other? How do you work in collaboration? So that was the next stage in our strategic journey and that was led by Sir Michael Latham, who wrote the partner report for the industry on behalf of the government. He joined our board as a non Exec. Then, you know, we we came To realise that, you know, you can’t keep doing business in in ways that were out the planet that were our people were our customers were, you know, we have to leave something for our children. So we went on the sustainability journey, and we invited So Jonathon Porritt, who’s formerly of Greenpeace to join our board, and he became a non Exec. And then last, lastly, we’re now focusing on on improving diversity and inclusion. So people can come to work as who they are, without wearing a mask, we can take those strategic steps without being bent out of shape by short term pressures on cash and profitability.

Jacqueline Conway  05:43

Sounds as well that what the organisation has been able to do is to change in the places that it needed to change. But to retain something important whilst doing that, because I guess, when we’re changing, we’re not changing everything all at once. And, and the trick is to know what to change and when to change it. And where has that wisdom come from? I mean, is that in the way that you have conversations? Is that in the way that you understand the marketplace? Because it sounds like in that journey, there’s been a number of really important punctuation points. How did you know which of those pivots to make when you did it?

Rick Lee  06:29

Good question. I think it partly comes down to instinct, and the instinct of family members, but but also their board colleagues, because, you know, we only have one family member currently on our board. And that’s Rick Wilmore. And I think if you take the diversity, journey, diversity and inclusion, for example, I think Rick realised over time that the world was changing, the world was rightly changing, certainly in the in the Western world, Jacqueline, you know, the US and the UK in particular. And the expectations were changing, you know, people began to, I think, rightly expect that they would be treated equally, respectfully, and be made to feel welcome, whoever they are, and wherever they’re from, in their workplace in the same way they expect to be treated like that in society. And so, you know, Rick could see that bit, that big shift. And so we looked at our own workforce and thought, Ah, we’re predominantly male. You know, we were like the industry when we started back in 2008 17% women, whereas juggling in the workforce as a whole 48.6% are women. And we’ve got a skill shortage, and you think you must be missing a trick. So Rick could see that shift, he could see that we had a skill shortage, he could see that customers, particularly public sector, customers were demanding their contractors reflected the communities they built in. And he stepped up and said, right, by 2030, we are going to be gender balanced. 50% men, 50% women, and he was the first contractor to do that.

Jacqueline Conway  08:17

And how are you doing against goal?

Rick Lee  08:20

So we started at 17%. We’re now 31.5%. I think once we get to about 40%, the industry average is still only 16%, by the way, so we’re double the industry average. I think once we get to 40%, we’ll get to a tipping point, a fantastic tipping point where where women will see other women at senior positions, we’ve got four women on our main board, and you know, that they will think well, if they can do it, I can do it in I can do it in that company. And I can do it in that industry.

Jacqueline Conway  08:54

Fantastic. Because of course, construction does have a reputation for being, as you see, I mean, it’s not just male dominated, but but perhaps it has a reputation for, for not being at the cutting edge of diversity, more generally.

Rick Lee  09:10

It does have that that reputation, it is not as attractive still, it’s better, but it’s not as attractive still, to young people, particularly young, diverse people. And we are changing that. You know, there’s still a perception that, you know, if I walk past a construction site, and I’m a woman, I’m going to I might get wolf whistled, you know, and they’re kind of predominantly male places of work. So I think it’s beholding on beholden on all of us in the industry to demonstrate, you know, firstly, that we we are attractive to young people. So for example, there’s a bricklayer who lives in Norfolk and she has a tick tock account, and she posts on on their her daily experiences of life on site as as brick layer, she has 700,000 followers. Now, you know that that is we can use social media to shoot and she loves what what what she what she does. So, you know, I think we, we are an industry that is becoming increasingly conscious of the impact that we have on the environment. We know that’s important to young people. And in Wilmot Dixon, we have a zero tolerance probe. We expect anybody who’s passing outside anybody who works on our site, to be treated respectfully, and made to feel welcome. irrespective of their background.

Jacqueline Conway  10:46

Can you say a little bit more about the kind of long term view that you take? And how does that how does that play out in terms of the sorts of strategic decisions that you make in the, in the C suite? And at board level?

Rick Lee  10:59

It’s a good question, Jacqueline. And you know, I’m not I’m not kind of knocking PLCs at all, I’ve I’ve worked for two. And, you know, and the people that run them are just, you know, good people rocking up and trying to do what the rest of us are doing, do a good job and pay our bills. If I can put it like that. That’s all they’re doing. But they are subject to particular pressures. And if you compare family, businesses or family led businesses to PLC, there are probably two or three key distinctive things about family led businesses that do play out over the long term that make them a little bit different. The first is that they don’t, and this is Harvard Business Review research. So I’m not I’m not making this up. They don’t earn as much in boom times as family led businesses, but they outperform their peers, particularly PLCs. When things are tough. That’s the first thing. The second thing is they take a conservative approach to risk they are not prepared to if you like, bet the company on one huge shiny project or venture or activity or investment, that’s the second thing. The third thing is that they don’t carry as much debt. And if they acquire business, they businesses, they tend to be modest acquisitions. So that that kind of plays out over over the long term. Those are financial things. And there are a couple of people, things that I can come on to talk about.

Jacqueline Conway  12:31

I’ll be keen to hear about those people things because I’ve got a very specific question in mind. But but let’s go to the first of those, which is that perhaps it doesn’t, those organisations don’t perform as well, in the boom times. It’s so the analogy that came to mind as the tortoise and the hare, there’s a sense of playing a much longer game, it feels much more mannered, and, and peaceful than the sort of Sprint that potentially happens when there’s the promise of big bucks in the short term. And, I mean, I guess we are just going to fold in the people side of things, that sort of leadership is quite different from, the sort of leadership where if you take at the other extreme, the kind of Silicon Valley tech startup, you know, starting to make promises, and have huge valuations before they’ve even really created anything. And, and the sorts of people that are interested in those things, and who lead well in that environment would probably not lead very well in an environment, which is much more steady, even though that it can. I mean, we’ve already discussed the fact that that doesn’t mean that it can’t be innovative, but that it is a much more steady piece.

Rick Lee  13:54

Yes. I think I think that’s true. And and it’s actually quite an important point. Because, you know, for me, the kind of ethical leadership, if I can put it that way. There are four things that I think ethical leaders, you know, do but you know, first of all, what is an ethical leader, or I use decent as well, I think they’re interchangeable. You know, someone who leads with integrity, with honesty with kindness, which is often a strange word, sometimes a strange word in management circles, ingenuity, tenacity, humility and common sense and they don’t take themselves too seriously. So that for me is an ethical or decent leader and they they’ve got four things to do. They have to find and appoint decent or ethical people as leaders in their organisation. They have to then make sure that they find an appoint decent ethical people to work in that organisation. That’s the second thing. The third thing is they need to have the right structure for those people to to working, and they need to rigorously measure and take feedback to know that what they’re doing in those three areas, pointing decent leaders appointing decent people having the right structure that is working?

Jacqueline Conway  15:18

And how do you know, you are pointing decent leaders and decent people?

Rick Lee  15:26

Well, we probably have two sides to that to that coin. So the first side for us, is the cultural side. You know, and it’s always a two way street jack that, you know, we that, you know, somebody who gets interviewed by us has to feel that we’re right for them as well. But you know, we have to feel that they are right for our organisation that, you know, they’re not going to do anything risky, they’re not going to do anything crazy. They’re gonna treat people decently. That’s the cultural side, the second side, and we do explore this quite regularly as rigorously is their competence. Do they actually know what they’re talking about? And that’s, that’s the kind of the rider that I’d add or add on to what I’ve said, and that is the decent people as leaders who know what they’re doing decent people who work in an organisation who actually know what they’re doing, because that de risks and make sure that our customers get what they’re looking for.

Jacqueline Conway  16:25

Let’s go to the structure point, then. So can you say a bit more about then how are you structured the infer that whether it’s ethical or decent leaders and people, you mentioned, the structure was the kind of third components that what specifically is it about structure that that you deploy?

Rick Lee  16:45

We have six regional businesses, and they’re based around around the country, we do not let those businesses grow beyond a certain number of people. If they get too big, we split them. And the reason for that is that we expect each Managing Director, regional managing director to know everybody by name, and to know something about and that’s why we do that. And one of the things that we ask our people in our people satisfaction survey is, you know, is your Managing Director and your, your directors, are they approachable? And do they listen? And we ask our people to score them? Wow. Okay.

Jacqueline Conway  17:30

And so is that based on the Dunbar number, the Dunbar number is so he’s an Oxford academic who came up with this idea that beyond communities beyond 150 People start to break down because it becomes too difficult to know each other. And so this magic number of the perfect size of a business unit or something is, according to Dunbar is 150

Rick Lee  17:58

Yeah, the reason that I laughed was kind of too too low, because the dumb man doesn’t doesn’t trigger. But the the 150 I think from kind of studies in tribal societies say that’s the biggest tribe could get before communication begins to to break down. That used to be our limit. We’ve stretched it a bit now. But we still find it work. So we’ve raised that to about 250. And that’s still okay. It used to be 150. I think the important thing there for me is that because their businesses are small enough, it makes communication it makes alignment with if you like corporate objectives, so much easier. And because we very carefully select each of those leaders and make sure that they are decent, ethical people who actually know what they’re doing. We tend to find that they carry a lot of respect. So in our recent people satisfaction survey, 98% of our people said they’re proud to work for Wilmer x in their regional business. 97% said that they would recommend Willmott Dixon or their regional business to somebody else and the one that is really important to me that is important. One that’s really important to me, is 98% of our people said I feel welcome included and accepted for who I am at work.

Jacqueline Conway  19:27

They are amazing statistics aren’t really that that’s quite something. I mean, what what else is happening to give you those kinds of numbers? Because that’s actually really really rare to have those kind of high 90s

Rick Lee  19:41

It is rare, and it’s a good question. I think one of the things I think that’s happening is is our our low people turnover. And I mentioned that you know, there are some people aspects for you know, family, businesses and long term management as well as the financial ones. And one of them is that they tend to retain their talent or their people much more than their competitors. So our people turnover is 4% The average length of service of our people is is 8.3 years. The average length of service of our board is about 25 years. And, and generally we had we had one woman, Joan who worked in our finance department who when she left her over 50 years service and there’s there’s a there’s a story about Joan which may be kind of illustrate something about ethical decent leadership. Anyway, we knew there was going to be a heavy. So Rick sent a note out to people to say, look, just don’t come in tomorrow. You don’t have to work from home if you can. And he knew that some people couldn’t work from home. This was long before teams, and all this sort of stuff. Anyway, heavy snowfall. You know, it’s early in the morning, Rick opens his curtains, he looks out the window and thinks, ah, heavy snowfall, but he likes a challenge when he’s driving. So he jumps in his car escapes. And he gets to work for five to nine to find Joan at her desk. And Joan had walked six miles in the snow that morning to get to work. And he said, Joan, you didn’t have to, to come in you really? She said I did. Mr. Wilmot. I’m treated. Well, I’m treated kindly. I’m paid to do a good job. That’s why I came in today. And I think that’s why she came in every day for the 50 years that she worked for us.

Jacqueline Conway  21:40

That sounds wonderful. And is it a little bit paternalistic?

Rick Lee  21:45

Is it paternalistic? I think it’s something that we need to be aware of, as an organisation. And we we are sensitive to trying to make sure that we get the right balance between looking after our people looking after our customers looking after our shareholders. And I think in any business, that’s a very fluid relationship into relationship. I think in any business, you make adjustments from time to time, and you make adjustments in response to financial performance, you make adjustments in response to customer feedback, you make adjustments in response to feedback from your people. It is something that we are aware of, like any business, we make adjustments from time to time.

Jacqueline Conway  22:31

Okay. And in some family businesses, so you’ve mentioned that Rick Willmott is now the only member of the family on the board. Yes. In in some, I guess. This is not to say that it’s a criticism of family businesses. One of the things that creates the longevity, is that family members then take on roles, senior roles within the is that is that a tradition that has endured in Wilmott Dixon.

Rick Lee  23:06

It is I think, one of the features for us, though, is that there are and I think there probably always have been only a few family members who actually work in the business. So Rick has has, you know, taken up the mantle of of executive chairman, that’s been a very recent thing. And he works hard to surround himself with a board that’s complimentary. And that for us is very important. We build complementary teams, because we think no one person has all the answers, and it makes the business stronger. So Rick’s very keen on that.

Jacqueline Conway  23:49

As you as Chief People Officer, what’s, what’s front of mind for you right now? What are the things that are on your agenda for 2024?

Rick Lee  23:59

I think, for me, it’s about making sure culturally that we continue some of the good things or the approaches that were adopted during or before, should I say the the pandemic. So, before the pandemic, we did a lot of face to face working. We found it was collaborative, we found it was creative, we found it build teams, and this year, we’re going to get back to more face to face working. I think that’s really important while still, you know, getting the balance and still enabling people to work from home from time to time. I think that’s important skills is important, particularly the Building Safety Act. The Building Safety Act was bought in by the government in response to the Grenfell tragedy. That’s a very important thing for us this year. And making sure you if you remember I talked about that that The dynamic and sometimes adjusting and being aware of the paternalistic side of things, you know, this year, I think, is to make sure that we’re rigorous and supportive with performance management, people are clear about what they’re expected to do, you know, they’re supported to, to deliver it. But you know, the expectations are very clear. So that’s a little adjustment that we’ll be making this year. And then then I think just carrying forward our diversity inclusion work and expanding it out to other characteristics other than just gender, all the stuff that we’ve done on on gender diversity that’s taken us from 17% to 31.5%. That will help us when we’re looking to increase our ethnic diversity, when we’re looking to make sure that you know, people who, who have neuro diverse gifts can feel accepted and accommodated, in our workplace. So we’re going to be expanding that out a bit more.

Jacqueline Conway  26:06

You talked earlier on about a really beautiful phrase, which was people, places where people heal, places where people learn places where people care. And so that sounds like, you’re not just making your decisions about which projects to go for on the basis of whether or not you can do it, and whether or not it’s financially viable. But there’s something more than that, would that be right?

Rick Lee  26:39

Yes, that’s, that’s very true. We like to work with, with like minded customers. And one of the things that the our customers, you know, say, to me, when I talk to them, is I look, we know you’re a commercial organisation, and we know you need to make profit. What we don’t like is when you know, people that work for us take a very commercial approach, and they’re hard nosed, and they’re a bit aggressive. We don’t like that. We like the fact that the, you share our goal, you know, we want the best place of healing, we want the best place of learning, we want the best place of leisure so that people that come, they, they they enjoy it, and they are well served by it. And the other thing customers tell me is we like doing business with your people. They’re just nice, decent people. And And if we’ve got a problem, then they’ll politely listen. And they’ll either sort it out or say, we can’t sort it out this way. But maybe we could do it this way.

Jacqueline Conway  27:44

And so many companies don’t do it that way. I mean, there’s so many organisations out there who, you know, we hear about these massive overruns, don’t you on projects, where you think and you alluded to earlier on, where the relationships broken down. And so everything’s in the contract. So yes, you’re picking things apart in the contract. And in some ways you hear so much about that, that it would be easy to think that that was the one the way to go about it. And yet, what you’re talking about as an organisation that is, has a great longevity is profitable, as successful, and yet is able to operate from really dif a very different values, position to start with. So that the contractual piece of course, we’ll be there, but would be a secondary to relating person to person.

Rick Lee  28:43

An example on the people side, Jacqueline, because you know, I liked your phrase about kind of going to the contract, not it’s a nice thing to do, but it’s a very common thing to do. And, and we were kind of faced with some similar choices about do we go into people’s employment contracts during COVID. Okay, so to two key things. So like anybody else in the construction industry, you know, we were facing five financial sort of challenges. Customers were turning work off, you know, people weren’t sure, should they keep the sites open to the closing site? Should they close some sites, but you keep other sites open, you know, that kind of critical infrastructure, and all that sort of stuff. So, you know, we were faced with having to make pay cuts. And the question was, how do you go about that? And one option that was discussed was that you and I need to get a bit technical here, but you make a unilateral variation to someone’s contract, by way of economic force measure. In other words, you have to take a pay cut, and we’re going to give you a pay cut, because if we don’t, you know, we might go bust. Now it probably wasn’t as serious as that for us. But that is how you would do that. And I said, I don’t like that. You know, we implore A decent people, let’s not get all contractual with them. Let’s just say to them, Look, things are pretty tight. This is going to be temporary. It’s going to be modest. But would you be prepared to accept a pay cut? We started on Monday morning, by Friday evening, 99.9% of our people had said, Yes, we will. And they weren’t pressured apart from one person who said, No. And then we said, look, you’re the only person left in the entire company. You know, so they had a think over the weekend and said, and said, yes. So because we have decent leaders who know what they’re doing, we employ decent people who know what they’re doing, when times get tough, you’ll get a decent response.

Jacqueline Conway  30:41

Is there any other anything else that you’re doing in Willmott Dixon, that as well as just legacy, but anything else that you’re involved with, that you sponsor that you fund that tries to give back

Rick Lee  30:55

It comes back to an earlier point that I was making, and that is the people that work in in business are a community, they are a subset of the society that the people who work in the business live in. And, in our society, it’s seen as increasingly important that we live in a sustainable way that leaves something for our children, and, you know, our children’s children. And so, you know, we’ve we’ve kind of, you know, we’re a part of that. And I think that’s where business can really make a difference, because we employ people who live in society. So you know, if we change the way we treat people, if we change the way, that’s decently and with respect, if we change the way we do business that’s in a, in a sustainable, responsible way. And if we do business in a straightforward way, that doesn’t, if you like, trick people or trick money out of people, then you know, the people who work in that business, you know, we would hope they would take some of that out into their communities.

Jacqueline Conway  32:00

There’s something that’s so important around local community, you know, organisations that are you talk about your kind of regional structure, in organisations that are located in the region, and therefore, they kind of have skin in the game. It’s not a case of parachuting in and then going, coming back out. And it doesn’t really matter what you leave behind. But there’s a sense that it matters, because because the people who construct the buildings that you make, live in those societies, perhaps use those buildings, whether it’s hospital or a school, or whatever it might be, the children might go to school there. And therefore, there is this deeper sense that there is more meaning in the work.

Rick Lee  32:45

I think that’s very true. And a lot of the kind of the local work is is done for customers who want to make sure that a lot of the materials are locally sourced, a lot of the labour is locally sourced. And and as you say, you know, we often have site managers who will be driving their their children to school, it could be the school they’ve built, or they drive past the school they built on, they’ll say mummy or daddy, but then they look. Wow. That’s amazing. Did you do that? And they say, yeah, no, of course, obviously. It’s it’s a big team. But we want people to feel that way.

Jacqueline Conway  33:25

Why do more organisations not do things the way that you do it? Do you have a sense of that?

Rick Lee  33:32

It’s a good question. I think it probably come comes back to a couple of the thoughts that we talked about earlier, the basic ingredients are the same, you know, they’re they’re people who try to do a good job, and earn and pay their bills. But the the constraints that get put on on organisations or the opportunities that organisations take and have are defined in many ways, by their governance structure, that’s just the way it is. So a PLC that has to give quarterly updates to investors or to war to the stock market will be be driven by a very particular set of pressures. And all they’re trying to do is respond to the pressures. And, you know, family led businesses are not subject to those quarterly update pressures that they are responsible to shareholders. But the shareholders may take a longer term view on how much income they’re expecting and over over what period of time. So, I think, for me, it’s it’s about the constraints and the opportunities that governance structures present more necessarily than the raw ingredients in terms of the people that work in them. Yeah, having said that, you know, we work hard to make sure that we find people with a good mix. competence, character, and chemistry. So competencies you’re good enough to do to do the job and play the game. Character is the sorts of things that I was talking about the integrity, the ingenuity, the honesty, the kindness, the humility, the not taking yourself too seriously, that’s character. And we’re looking for people with those characteristics. And those characteristics can vary between people. That’s just, that’s just a fact. And the chemistry is it helps. If you actually like each other, I can have, you know, a bit of a laugh every, every now and then just to make, you know, because we spend so much of our waking time at work, if we’re in paid employment, so it helps if you actually like it, and you like the people you work with.

Jacqueline Conway  35:48

Which actually brings me beautifully to my last question, which is, so what do you like best about it?

Rick Lee  35:55

I think I like being treated like a human being and not a human resource. I really do. So I’ve worked for a couple of large PLCs. And in one of those PLCs, they they used a reference indicator system. So mine was HRR2. And you know, I asked what is HR two? And they said, well, Rick, it’s the human resources department, employee relations, job number two, we’ve got four jobs. And they said, You will be no not by your name, but by that reference indicator. And I said, Why is that and they said, well is taken from the American military, you know, if if you’re transferred or die, so your successor can get your mail. So I literally felt like a number and not a name, and I don’t feel like that at WilmoreDixon. I appreciate the straightforwardness. I appreciate the honesty, I appreciate the humour. I appreciate the integrity that gels with me.

Jacqueline Conway  37:02

I think Rick told a really compelling story of an organisation that’s rooted in decency, as it strives to make a contribution to society alongside profit. And it speaks to me, because the decency that Rick talks about is both authentic and woven into all aspects of the business at Willmott Dixon, because we know we have a deep sense when a company is values washing, when it says what’s important in nice slogans and marketing statements, but then it just doesn’t hold up to any form of scrutiny. And likewise, when we see the real deal, it’s obvious. If you’ve enjoyed today’s episode, it would mean a great deal to me if you could like and subscribe to the podcast and to tell others about it. I’d like to thank Pippa Barker, Sarah Ballantyne, and Lauren McAlpine for helping to make this podcast happen, and a special thanks to Rick Lee at Wilmott Dickson.