United Utilities is going to be Philip Green's last executive job. He isn't about to name the date, less than a year into the role. But his mission is to make a good company great. Michael Taylor reports
It seems strange to start at the end, when he's only just made a start, but Philip Green is quite clear about what how he wants to be remembered as chief executive of United Utilities. At 52 he has plenty of energy, but he fully intends to retire at 60.
"I hope this is my last executive job," he says, without putting a timetable on what he has to do.
"This is a good business, but it isn't a great one yet. It can be," he smiles.
Since he took over from John Roberts - Mr North West - Green has been getting on his soapbox, trying to meet 80 per cent of the staff in his first year and trying to make them feel proud. He's been donning his wellies, hard hats, colourful jackets and visiting facilities and installations all over the North West.
"I've been asking people what a great business will look like; it should be recognised as a great place to work by your family, your children and your mates," he says.
An effervescent character with a cheeky wit and tactile manner, and clearly quite a bit going on behind his probing stare, he looks like someone who likes to have a bit of fun in business.
"I want to lead a highly motivated workforce, engaged at all levels, meeting all targets the regulator sets for us - that's a great company. It's doable, but it will be a tough challenge," he says.
He recognises that unlike in his previous chief executive jobs at Reuters and P&O Nedland, the very essence of this business is providing a vital service - the water supply - and that the company is a custodian of the environment.
The business also has a unique ability to make the biggest possible difference to people, to give them life.
"When I arrived at United Utilities I found a business that has a very important role in society. It's the first time I've had a job in one of those.
We've been out to Ethiopia working with people building a water supply. It really is a different world," he says.
There are some passionate people in the business, Green has found. He has enjoyed meeting them, but feels there is much to do. "It's underperforming," he states, bluntly.
He has some frustrations with the "civil service" nature of the business and really dislikes the cubbyhole layout of the corporate head office at Dawson House, Great Sankey, and plans to move. He's working on a public exhibition of the plans for a new corporate headquarters.
"I hate it here. I hope we're all out of here by the end of the year," he says. But the business doesn't plan to move its head office to London. It will remain the North West's top quoted company and the sole regional representative in the FTSE 100. "I like the North West, but we're a national and international company. We have no plans to close our head office and be based in London. None at all," he says.
He recognises the unique status of the business in the region, but won't be throwing himself into voluntary roles and regional boards like Roberts, sitting as he did on the boards of The Mersey Partnership and its Mancunian equivalent, MIDAS, as well as the CBI and the North West Business Leadership Team.
Green says he has plenty of other fresh challenges: "Most businesses have three stakeholders: staff, customers and shareholders.
This one has a fourth, the regulator. And in OFWAT measurements we're in the bottom half of all of them. When it comes to tackling customer complaints we're 19th out of 23."
When it comes to staff, he says he needs to energise them. "What our staff tell us is that 37 per cent of them are fully engaged with the aims of the business," he says. "I expect that to be 60 per cent. So, there is enough hard data around to suggest that our performance is average at best.
"For us it's important to get the balance right to provide a high-quality product to the people of the North West. There is good stuff going on in waste water, for example."
One of the solid legacies bequeathed to Green from Roberts was the relative popularity of United Utilities' share price and a strong profile in the City.
This was helped by a determination from Roberts to maintain the dividend stream, which made it a popular stock among funds and a safe harbour in turbulent times. But it also meant Roberts could more comfortably seek debt and rights issues.
"There's no point in worrying about the share price too much," says Green. "We can do something about what we think the drivers of the share price are. We pay some of the highest dividends in the FTSE 100 and for many that is very important. We've got a capital delivery programme to spend £35bn over five years, but we will measure the success of that in other ways than a straightforward financial measure."
When we spoke, speculation was rife about contact centre subsidiary Vertex, which has now reached the stage where private equity buyers are once again sniffing round. The latest being 3i.
Green won't be drawn, but says:
"Merrill Lynch have been doing some work for us that will take months, not years, and in due course we'll form a view. It's not black and white.
The business has come out of the core. We have a service business and service is something we should maybe do ourselves. Then we assess the interest in Vertex. But Vertex is doing well. We have 2,000 staff, including in India and they give the business a competitive advantage."
Internationally, United Utilities has had a patchy track record overseas, losing fortunes over the years in risky joint ventures in Argentina, the Philippines and eastern Europe.
Therefore, despite his leadership of an international shipping business at P&O and with DHL before that, Green still has no real desire to jump into any new opportunities. "I'd rather get what we have performing better. I'm mindful of mistakes in the past, so I've nothing dramatic to look at internationally in the short term." he says.
With barely a year on his clock at United Utilities the business is still ticking along nicely. There have been no nasty surprises.
"I like seeing people perform better. Our customer service is poor," he says, before correcting himself. "I should say it was poor, but it's getting better.
One of my guys can now show me a graph that shows me that over the last two years we've moved from 50 per cent to 85 per cent."
There's more to come from Philip Green. He's enjoying his job and, although he may have met a lot of staff, there's plenty of City meetings to come yet. He certainly isn't in the mood for retirement.
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