Lessons For Business Start-Ups

Lessons For Business Start-ups

Kier Group Plc, a large construction business that, like Carillion, is also a provider to government construction projects has been in the news following revelations of its troubled financial situation.

Kier Group was the second largest construction company in the UK behind Balfour Beatty. After the failure of Carillion, the company took over some of Carillion’s employees and contracts to work on several smart motorway projects and the HS2 high-speed rail project. Kier Group’s problems started to come to light in 2018 with a rights issue where the open market shares came to be worth more than the rights issue shares exposing the issue’s underwriters with losses. The problems faced by Kier have led to announcements of restructuring and job losses IN AN ATTEMPT  to keep the company viable.

What can Business Start-ups learn from Kier’s Experiences?

Although Kier is a long-established business, founded in 1928, the primary lesson from Kier’s problems is that companies need to ensure that they can walk before they run. Kier’s expansion in the 21st century has been mainly through acquisition. Revenue growth has not been organic, based upon the competencies of the management team and workers but by adding other businesses, often failing ones to their core.

Acquisitions seem to have led to a lack of focus upon building upon the success of the core business but instead, a need to focus upon correcting the failures of the acquired operations; as one employee put it, “A very forward-thinking company that has the technology of a 00’s start-up.

Business is screaming for improvement and streamlining, “too many fingers in too many pies?” A common theme running through comments about the business by current and former employees was of disorganised management who seem to be putting out fires rather than developing a coherent culture and growing the business. In essence, the managers are managing failure, not success.
A successful business, especially a start-up, will almost invariably have a laser-sharp focus upon the purpose of the company and they implement focus by building a culture in which all members of the team have a shared vision. Without these, no matter how large the business becomes, eventually, the outcome is failure.

I do not think that Kier would go into liquidation, but lessons should be learnt from the Carrilion saga.

The UK need companies like Kier who provide great infrastructure projects.

The company has lots of assets and just need to step back and restructure.

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Robert Taylor



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