Saturday Profile on Allister Langlands: Passing the baton with some aplomb

Published on Friday 22 August 2008 23:11

Allister Langlands ASERIOUS test of any business is whether it can make the transition from being fuelled by the charisma of its founder to being a successful company in its own right.

While it is difficult to imagine Virgin without Sir Richard Branson, companies like Walt Disney or, in Scotland, Chivas Brothers, have grown beyond even their founders' most ambitious visions.

Wood Group, the 2 billion Aberdeen oil and gas services group, is on the cusp of such a change. Founded by John Wood as a fishing business, it was actually his son, Sir Ian Wood, who made it into the global engineering success it is today. It was Sir Ian who, after he made a visit to Houston's booming oil and gas industrial belt in the early 1970s, asked himself why he couldn't replicate that success in the UK. Now a FTSE 100 company, with 28,000 employees, Wood Group is an Aberdeen institution, if not a Scottish or even a British one.

But at the age of 65, Sir Ian could no longer be both its chairman and chief executive, so his successor, Allister Langlands, took the helm as of 1 January, 2007.

At the time, Langlands admitted Sir Ian would be a hard act to follow. An accountant by training, when Langlands was in his early 30s he became Deloitte's youngest partner. Born in Forfar and a graduate of Edinburgh University, he moved to Aberdeen where Wood Group became a client. When the group needed a finance director in 1991, Langlands was recruited to join the team.

During this time it was very much "the Sir Ian show". It was his family's company after all. He was knighted in 1994 for services to industry. New territories and business streams, like well technology and gas turbines, beckoned. Business was good. In 1999, Langlands was appointed deputy chief executive to Sir Ian with a view that, eventually, he would take over the reins. The board was gearing itself up for major change. One aim was to float the business on the London Stock Exchange, which the management team under Sir Ian did in 2002. It was one of the biggest that year, achieving a valuation of over 1bn.

Another was to break the group's reliance on the North Sea market. In 2000, 90 per cent of the group's revenues were from the North Sea. That year the firm pulled off an ambitious 75 million acquisition of Houston-based Mustang Engineering, which gave it entry to the Gulf of Mexico, Brazil and west Africa – adding to its organically growing operations in Europe, Asia Pacific and South America.

Now 80 per cent of the group's revenues comes from the "rest of the world", most notably the US and Canada, Asia Pacific, Africa and the Middle East.

There are clearly people who have waited longer for the top job. Langlands insists his eight years in the No 2 spot was borne with patience. "I can assure you you never heard me muttering," says Langlands. Nothing like that of, say, Gordon Brown waiting to take over from Tony Blair as PM. It was a very busy time. He ran the business alongside Sir Ian.

His succession was even delayed. In 2004, the company experienced one of its most challenging years ever, issuing two profits warnings. The collapse of Enron had a disastrous effect on the market of its US-based gas turbine division. According to Langlands he volunteered to take on the job of turning the gas turbine business around. It wasn't until January 2006 that he came back to his deputy chief executive role full time. In March of that year it became clear what he had done had worked, with a welcome 39 per cent growth in profits. A new head of the gas turbine business, Mike Papworth from Rolls-Royce, was found. The view to the top was clear.

"Allister has taken over a very challenging role from somebody as charismatic and well known as Sir Ian," says Geoff Runcie, chief executive of the Aberdeen Chamber of Commerce. "Allister is a quite an unassuming character."

Although Langland's shadow may yet fall short of that of his chairman, he is evolving the way the group is doing business to better fit its global outlook.

"Wood Group is promoting itself more aggressively than they have in the past and that is coming from Allister's guidance," says Runcie.

"The industry based here in Aberdeen is now globally very active and it is now marketing its proposition on global stage. Charismatic leadership is vital to a point but at the end of the day Wood Group, with expansion plans across the world, have to set their wares out."

In the past 18 months there is no doubt Langlands has had a firm grip on the business. In October of last year the company unveiled plans to leave its headquarters of 25 years and move to a new purpose-built 60m building on Aberdeen Harbour.

Langlands also led the group's biggest deal since Mustang, the 65m acquisition of IMV, a Calgary-based engineering group specialising in oilsands extraction. Extracting oil from sand is a dirty and very expensive business. With IMV, Wood Group has an effective and potentially less resource-intensive method of refining oilsand. At the time he said the oil price would likely have to stay over $60 a barrel for the investment to be worthwhile, which, despite recent falls in the price of oil and gas, still looks prescient.

The company also broke into the FTSE 100 when drinks group Scottish & Newcastle went private after being bought by Heineken and Carlsberg. Langlands modestly underplays his elevation to the elite chief executive club, saying it was just luck he was in the right seat, and that the signal of progress was something the whole of the management team could be proud of.

Although the chairman's office is next door to Langland's, the two men seem to have agreed clear demarcations between chairman and chief executive roles. Sir Ian likens his role to looking down from a helicopter rather than being in the woods. Langlands credits his "wise counsel" and is genuinely grateful he can send Sir Ian out to share the relentless travel schedule that must be maintained to keep a global business like Wood Group going.

"They are different personalities," says Martin Gilbert, chief executive of Aberdeen Asset Management, which has been a major backer of Sir Ian's vision from its very early days. He says although Langlands has a different style to Sir Ian, he is no less respected among investors.

"Ian is the guy that drove the company from a very small company to a big business. He is very driven, very detail oriented and clearly extremely able.

"Allister is probably less intense, more relaxed. An accountant, that is a different skill set from the one that Ian had."

Langlands rebuffs the notion that Wood Group will merely stay the same; rather he plans to stick to the principles of the group's founders. Where Sir Ian envisioned his company reaching around the globe from Aberdeen, it will be Langlands who now makes sure it will continue to happen.

"I don't think he will change the business.

"It will be evolution rather then revolution," says Gilbert. "He will be pretty good."

BACKGROUND

ALLISTER Gordon Langlands, 50. Born in Forfar, Langlands is married with three grown children and two young sons, age nine and seven. He keeps fit playing squash and five-a-side football, although preferably with men his own age.

Next week Wood Group will kick of the oil and gas reporting season with its interim results on Tuesday.

• 1976-80 – University of Edinburgh MA Economics.

• 1980-87 – Deloitte Haskins & Sells – Edinburgh.

• 1987-88 – Deloitte Haskins & Sells – London.

• 1988-91 – Deloitte Haskins & Sells/Coopers & Lybrand – Aberdeen. Appointed Partner in 1989 (at time youngest Deloitte partner in UK).

• 1991-present – John Wood Group PLC. Chief executive since January 2007. Deputy chief executive 1999-2007 and, for some time, group director responsible for Wood Group's gas turbine business. Group financial director 1991-2000.