Bag perched on the chair, eye on the clock: Mark Selway’s easy manner belies
the fact that he hasn’t got much time. The chief executive of Weir Group,
the industrial pump and valve maker that could soon be knocking on the door
of the FTSE 100, has rattled through company results and visited his biggest
shareholders. He had good news to report – half-year profits up 85% at
£81.8m.
But Selway has other things on his mind. In a couple of days his daughter
Amanda is graduating and he has to be there. All he is thinking about is
getting back to Australia, where his family lives in Adelaide and where he
retreats two weeks in eight in corporate Britain’s most heroic commute. This
visit is doubly important because a week later Amanda turns 21.
“I did more preparation for her birthday speech than I did for our results
announcement,” says Selway. “I can’t be embarrassed in front of my daughter,
for crying out loud.”
Family life has taken place at arm’s length for almost 10 years. Seven of
these have been spent leading Weir, the 137-year-old Glasgow company that
now has a market value of £1.8 billion.
Selway left Australia in 1989 on a two-year posting to Michigan with the
car-parts maker Britax. Britain and Germany followed. For the sake of
schooling and ageing parents, his wife Cathy took the three children back to
Adelaide after a decade on tour. He is still keeping an eye out for a job in
Australia – but when his face lights up as he describes time spent on the
factory floor, you suspect he is not searching too hard.
“You know how these expat things go. The hardest thing is ever to get home,”
he says, tracing two vertical creases down his forehead with his fingers.
It is a sacrifice a go-getting chief executive might make to lead BP or
Vodafone, but Glasgow-based Weir? Well, the fact is that in the industries
where it operates, Weir has a worldwide reputation.
Back home, as a young supply director at FR Mayfield, an electrical
contractor, Selway used to order Weir’s equipment for use in the Australian
desert. “Everybody knows the Weir Group. It has a great industrial
reputation,” he says.
Right now the company is motoring. Weir lifted sales 46% to £632m in the past
six months and raised its profit forecast 11% six weeks ago. Supplying
equipment to miners and oil giants guarantees a fair wind but, under Selway,
Weir has also made a change in its strategy. Just like Rolls-Royce, it has
recognised that there are higher profit margins in market segments where
there is plenty of scope for the sale of spares.
Using the analogy of supplying razors and replacement razor blades to
illustrate his model, Selway has raised after-market sales from 25% to 50%
of the group total.
There are new markets, too. Weir sells equipment that can pump chemicals and
sand into wells to push out hard-to-reach oil and gas deposits. Such
technology is used in 40% of all holes drilled in North America these days.
The upshot of all this is that in three years, Weir’s profits have tripled and
its margins have nearly doubled. The shares have tripled in five years,
though they fell 7% on results day last week in a bout of profit-taking.
Weir’s equipment has to be sturdy and reliable, and Selway, a slightly
crumpled 49, comes across as just as durable.
“I don’t think I have seen anyone work quite as hard as he does,” says Lord
Smith of Kelvin, Weir’s chairman since 2002. “Mark is never off duty and has
a tremendous attention to detail. He worries about the smallest things in
the company.”
The pair get on famously, often unwinding over a glass of wine from Smith’s
South African vineyard. Smith sometimes takes Selway to his island,
Inchmarnock, off the west coast of Scotland. Its transformation, over the
course of a decade, echoes that of Weir. “It was overgrown when he bought
it,” says Selway. “He brought these Highland cattle in. They will eat
anything. They have eaten all the bush down and brought it back to being a
really nice island.”
Weir was also an overgrown tangle when Selway arrived in 2001. The company,
which grew out of supplying pumps and valves to the Victorian steamers built
on the Clyde, needed new purpose and leadership after stumbling through 10
months without a chief executive.
It had 42 disparate businesses. Selway sold 15, bought five and is chewing
over what to do with three more. “Lean manufacturing” is his buzz phrase. He
learnt a lot about just-in-time production, taking inventory out of the
system and rationalising while supplying Toyota at Britax. Weir staff have
toured Nissan’s plant at Sunder-land to get the idea.
“As you lean up a business, bring down the water level and expose the rocks,
you learn more and more about it,” says Selway, with the patter of
management speak reinforced by the shelf-full of business books he loves to
delve into.
He focused Weir into three divisions. After oil and gas and minerals, power is
the smallest. It supplies safety valves to nuclear plants and has just
signed three more orders from China. “When all else fails, this is the thing
that turns the power station off. Most of them will never get used in the
lifetime of the plant,” he says.
His five-year plan, since extended, was not without its dramas. Weir became
embroiled in a probe of the UN oil-for-food programme when it discovered up
to £4.3m of kickback payments added to contracts – before Selway’s time – to
supply equipment to Saddam Hussein’s regime. It expects to be hit with a
financial penalty at some point and has made a provision for it.
Selway caused a bigger row closer to home by selling Weir’s historic pumps
business in Glasgow, leaving the company with no manufacturing facility
north of the border. The Swiss company Sulzer was going to buy it but pulled
out when news of the deal leaked. A Scottish engineer, Jim McColl, stepped
in and bought it, saving jobs. Selway, treated in some quarters with
suspicion ever since he arrived, knew he would be in for a rough ride.
“These are emotional things. Unfortunately, you have to break a few things
to make them better. I expected that [the sale] wouldn’t be all that well
received.”
Weir still has 600 staff in Scotland. Further south, Selway is proud of a
Queen’s award for export that was given to its minerals plant in Todmorden,
near Halifax.
Selway was born and educated in Adelaide. His career began when he became a
graduate trainee at Dalgety, a conglomerate that had divisions concerned
with animal feedstock and air conditioning. “I thoroughly enjoyed it,” says
Selway. “It gave me access to marketing, sales and finance. I worked in
every part until I worked out what I wanted to do when I grew up.”
From there, he joined Rainsford, a family-run engineer that was sold to
Britax. Selway left briefly, but then returned to run its Asia-Pacific arm.
“He was my star pupil,” says Richard Marton, Britax’s former chief executive,
who tasked him with selling the group’s rear-view mirrors in America. The
problem came when Britax – which also made aircraft interiors and child
safety seats – struggled to break into Germany. Worried that profits would
eventually falter, it sold Selway’s division to Schefenacker.
“The price was right provided the management was intact,” says Marton, who
lost Selway as a result of the transaction. “I had him in mind as my
successor.”
For a while, Selway stayed with the Germans but never settled. “I didn’t
really do well with that culture,” he says. “I enjoy the pace of change and
moving forward, so I chose to leave.”
Perhaps he gets the desire to keep moving from his father, who worked for
Australia’s national railway company. It is something he shares with his
sister, also an expatriate, who works for Exxon Mobil.
“It gets in your blood. If I don’t get on an aeroplane after a week and a
half, something feels terribly wrong with my psyche,” says Selway. “I start
to go a bit nuts.”
How long will it continue? The board saw fit to lock him in for another three
years, which could earn him a bonus of £3.5m. Then, after a decade at Weir,
in all probability he will seek another challenge. “It is some distance off
but I have certainly got enough motivation and ambition in me to do another
turnaround,” says Selway. “It is a great blast to take businesses that
aren’t performing and turn them into first-rate companies.”
However, the chance of a full-time return home is remote for now. “Ideally, if
I was to do another one I would do it in Australia. But there are not a lot
of large engineering companies left there so, inevitably, it is going to
lead to another move offshore,” he says, a little sheepishly, as he heads to
the airport.
The life of Mark Selway
VITAL STATISTICS
Born: June 2, 1959
Marital status: married, with one daughter and twin sons
School: Westminster, Adelaide Universities:South Australian Institute
of Technology, Adelaide
First job: Graduate trainee at Dalgety Pay:£542,000
Homes: Glasgow and Adelaide
Car: Blue Jaguar XK8 convertible
Favourite music: Bruce Springsteen. "I'm an old rocker"
Favourite book: Built to Last: Successful Habits of Visionary Companies
Favourite film: The Godfather
Favourite gadget: Flybook mini notebook computer
Last holiday: Safari in South Africa
WORKING DAY
IF he is in Glasgow, the chief executive of Weir Group gets up at 6am. Mark
Selway has a quick breakfast and walks the 10 minutes to work, arriving at
7am. “The first thing I do is phone the family to find out what is going
on.” Selway then checks his mail, market indicators and the newspapers,
before beginning a round of meetings. He has 12 people reporting direct to
him, including three divisional heads. He usually finishes by 7pm.
Most weeks he will visit one or two of Weir’s facilities around the world.
“The biggest buzz I get is being on the factory floor,” he says. To keep
track of his movements round the clock, he has two personal assistants, in
Glasgow and Australia.
DOWNTIME
MARK SELWAY is a frustrated sportsman in his spare time. He loves to waterski
on the river that runs through his 80-acre estate outside Adelaide, but
worries that he is getting too old for it. The same is true when he goes
trailbiking with his children. “I can’t keep up anymore,” he says. “They
just have no fear.”
Selway played baseball until he left Australia. “It is hard to be in a team
event when you are not there often enough.” Since working in Scotland, he
tries to unwind by playing golf. Not surprisingly, he often spends holiday
time at home in Australia.
