Sir James Wates: 'Integrity underpins everything we do'
Coming from a family-run business that dates back to the end of the 19th Century and having worked his entire career in the construction industry, Sir James Wates CBE has built a reputation for respecting legacy and looking to the future.
Sir James joined his family firm, Wates Group, in 1983 and has been Chairman since 2013. During that time, he has helped to grow the company into one of the largest family owned construction, property services and development businesses in the United Kingdom, with notable past projects including the construction of Alton Estate in Roehampton (1958), Dulwich Housing Estate (1972), an extension of the Victoria & Albert Museum (2017), Sandwell Aquatics Centre (2021), and Wellington Place in Leeds (ongoing since 2013).
Awarded the CBE in 2012 and knighted in 2019 for services to business and charity, Sir James is also Chairman of the Institute for Family Business and a non-executive director of Argent Services LLP.
Driven to give back to the industry that has been so good to him and his family, in 2018, Sir James was appointed by the government to chair a coalition group developing corporate governance principles for large private companies.
The resulting Wates Principles, which encourage companies to ‘Adopt a set of key behaviours to secure trust and confidence among stakeholders and benefit the economy and society’, are a key point of pride for Sir James. “The feedback I get from people is that they find the principles really helpful. They’re a template for good business which is what we’re all hoping to achieve,” he says.
In an exclusive interview with Campden FB, Sir James Wates talks about the weight of legacy, preparing the next generation and construction’s need for total disruption…
LAYING THE FOUNDATIONS
The Wates Group was established in 1897, it has been a century or so of extraordinary turmoil. How did the family firm get to where it is today?
My great-grandfather Edward was one of seven children. He left school at 15 and started his own house clearance business and then started a furniture business with his brother Arthur. In the early 1900s, they started building houses because they saw a market emerging. They bought a plot of land in Purley and built a few houses and that’s how Wates Homes was born.
The brothers survived the travails of World War One and really rode the boom of speculative house building in South London. Between the wars, they built swathes of property across South-West London and then, in 1936, they started a construction company, which proved to be very timely, because that construction company then got very involved with the war effort.
Having had hands-on experience as concrete builders, that set them up very well post-war. In the late 1950s and early 1960s, my father's generation really drove the business forward with the housing and construction agenda and international expansion.
During the property crash of the early 1970s, we retrenched back to the UK. We survived, and then started to prosper again. That’s really when my generation got involved.
I joined the business full time in 1983 and four of my cousins joined subsequently. We’ve been governing owners since the mid 2000s and, since then, the business has continued to grow and develop.
Like many businesses, we've had ups and downs over the years, we've had recessions, pandemics and wars… The challenges keep coming at us.
Do you feel the weight of that legacy on your shoulders?
I certainly don’t see it as a burden, I see it as a great opportunity. It has given me a very fulfilling working life.
However, you don't want to be the one who drops the ball. My generation want to pass on a stronger, more sustainable business to the next generation, and hopefully they can then take that legacy forward.
Did my great grandfather set out to build a dynasty? I don’t think he did. But once you get into multi-generational ownership, you then start to look beyond the short term.
Looking forward is very much embedded in our way of being. We're obviously focusing on annual results, because you have got to have targets. But it's what lies beyond that, setting out the stall for the future, that’s most important. We want to make sure that we have the right people playing the right tunes at the right time, both from a family point of view and a non-family point of view.
You've worked in construction your entire career. Was it always the intention to join and build the family business?
I can never remember ever wanting to do anything else. I've always said how incredibly lucky I am. I didn't want to be a soldier, a fireman or a policeman, I just wanted to be a builder - and I really wanted to be a builder in the family business. I feel incredibly privileged to have had a family business to go into and build what has been an incredibly fun and fulfilling career.
BUILDING THE SUPERSTUCTURE
In 2000, the Wates Group appointed a non-family chief executive for the first time. What was the reasoning for extending beyond the family with that appointment?
It came down to timing, capability and confidence. Although I’d been in the business for 20 years by that point, with the ambition we had for the business, I don’t think I would have done as good a job if I had stepped into the chief executive position myself.
We thought, ‘If we want to satisfy the ambition to grow this business, we need to bring in outside help’. And that's what we did.
I think he had the most difficult job of any of our CEOs, because he had to come in and effectively break the mould and take the business to a new level.
Did people really believe that family were letting go of the day-to-day running of the company? It's only when he really took that on and we supported him to do it that people saw that we were serious about having an even more focused, professionally run, well-managed business.
Do you feel that Wates Group should always be a family business?
Yes, I think being a family business gives us a competitive advantage. Clients know that in ten or 15 years, we’ll still be there and the client can pick up the phone to us. I think it’s very important for the firm to remain family-run, we're very proudly a family business and we intend to remain so.
EXTERNAL WORKS
You’ve been quoted as saying that ‘Construction needs total disruption’, how can the industry better evolve?
There have been various reports over the years saying that the construction industry must modernise or die. Unless we actually, really do things differently and disrupt the industry, we’ll end up drowning it.
We've got to take cost out of the industry. We've got to make it worthwhile for investors to take a risk in the sector. And, if we want to truly decarbonise, we need homeowners to demand that developers push green technology.
It's a combination of carrot and stick. The stick to me is regulation. The carrot is increased profits - profit is not a bad word, I think sometimes people shy away from that.
We're investing £200,000 a year to respond to some of the UN’s Sustainable Development Goals. One of our big things is the greening of cities. People want better places to live and I think we can be part of the solution. We're partnered with local authorities and we're building major regeneration schemes, which is a great opportunity to make things better.
How do you feel that this disruptive mindset could help to alleviate their crisis and revitalise the industry?
COVID-19 made us take a cold, hard look at ourselves. Productivity dropped off a cliff because, although the industry was told to keep going, we had to apply socially distanced site operating procedures that were quite restrictive to efficiency.
Interestingly, as we learned how to deal with the pandemic, we actually became more efficient. I went on one project which went up to 114% productivity because of the way the site was managed and the social distancing rules that were put in place. COVID made us look at how we how we can make things better. Sometimes you need a kick up the backside and I think the pandemic to some extent gave the industry that kick.
It has been said that you “Feel passionately that good business, well done, is a force for good for society.” As such, your own hard graft has been rewarded with a CBE and a knighthood. What are your main drivers for giving back and paying forward?
When I got involved with the Construction Confederation, the treasurer at the time was Malcolm McAlpine, who was a third-generation member of the McAlpine family and former chief executive of [building company] Sir Robert McAlpine. He said something that really resonated with me, “We're incredibly privileged to be in the industry we're in and we're incredibly privileged to have our own business. It's nice for us to be able to put something back by offering support.”
I really took that on board. Giving back is probably easier for a family owner to do, because we can take the time and the space to make it happen. Whereas, if your executives are doing that, you might be a bit concerned that taking their eye off the ball around the business.
We made a decision as the family owners 15 years ago to set up the Wates Family Enterprise Trust, which sees the owners of the business giving up a portion of their earnings for charity purposes on an annual basis. It has been incredibly successful.
The Trust goes alongside the Wates Foundation, which was set up by my grandfather and his brothers in 1966 and has been an incredible success story in terms of what it has done and how it has helped society.
Meanwhile, I remain engaged with The Prince's Trust and I'm Chairman of the Institute for Family Business (IFB). I want to continue to put things back in because of the privilege that I have. Having this wonderful business, it's right and proper that we should always continue to put back.
THE HANDOVER
Between you and your four cousins, who also work for the Wates Group, you have 18 children…
My youngest son is, to my great pride, following my career route. He's working on site at the moment, loving every minute, getting up early in the morning and getting home exhausted, which is exactly what a 25-year-old should be doing!
His elder brother is in the industry, living and working in the United States, but he wants to come back and work with the firm - that will be great. I think the two of them will work very well together.
We're optimistic that from the 18 children the five of us cousins have, we will have a core group who will be wanting to be involved in and work in the business.
You’ve devoted your life to the practice and cultivation of ethical leadership in both the business and social sectors. What are the life lessons you would pass onto the next generation?
Be true to yourself… I think you have to be able to look yourself in the mirror every morning and like what you see. I think integrity underpins everything you do. You have to stand up for what you believe in. You have to stand alongside people, you have to stand behind people and you've got to give your all in everything you do.
My grandfather gave me a copy of Rudyard Kipling’s ‘If’ when I was 16 and I pretty much live by everything in it… ‘If you can fill the unforgiving minute. With sixty seconds' worth of distance run, Yours is the Earth and everything that's in it, And - which is more - you'll be a man, my son!’
