The Company Without Limits

Australia’s Lend Lease Corp. is responsible for some of the world’s most spectacular buildings. It’s also a leader in mutual funds, computer services, and other far-flung lines of business.

Five years ago, Stuart Hornery and Malcolm Latham stood half a world away from home, at the lip of an abandoned limestone quarry about 20 miles outside of London. As they surveyed the barren landscape, the two men didn’t see one of Europe’s industrial wastelands, a 240-acre chalk pit pocked with limestone holes and derelict cement works. Nor did they envision a traditional shopping complex of the sort that had been proposed for the site. Instead, they saw what any pioneer venturing into new territory sees: a chance to make an impact on the world, or at least one corner of it, by defying the limits imposed by conventional wisdom.


These two pioneers were ambitious executives: the chairman and the director of special projects, respectively, of Lend Lease Corp., Australia’s leading real-estate company. For Hornery, 59, who has led the $6.3 billion company for more than half of its 41-year history, and for Latham, 62, who is known to Lend Lease’s 4,500 employees as the company’s “tribal elder,” the quarry offered the chance to create a new kind of civic space — one that would be more a community center than a shopping center. The design would not only provide state-of-the-art form and function; it would also create meaningful connections with the local culture. The landscaping would not merely decorate the area; it would also restore this part of Kent (a county known as the Garden of England) to its former green state.

These big ideas quickly gave rise to tangible action. Less than three weeks after that initial visit, Lend Lease signed a deal to take over the site that Blue Circle Industries, a British cement company, had been struggling to develop for eight years. Lend Lease inherited a preapproved development plan — and then proceeded to scrap everything but the project’s name: Bluewater. Hornery and Latham quickly set up camp in a rented office space in London and pulled in about half a dozen of the company’s best retail, property, and project-management minds, along with Eric Kuhne, 47, an influential American architect.

This group was charged with fleshing out a dream brief; the result was a break-the-mold project charter called “The Bluewater Factors.” Today, the former quarry is a jaw-dropping landmark: At once futuristic and mythological, Bluewater features a glowing-white roofscape that rises out of the chalk-hill basin like some once-and-future city excavated from limestone. It stands as one of the largest shopping complexes in Europe, with 1.6 million square feet of retail space, a 13,000-car parking garage, some 50 acres of parkland, seven lakes, and more than 1 million trees and shrubs (all imported from Germany). A sprawling triangle composed of three two-story malls houses 320 retailers from around the world. The Bluewater Factors permeate the place: The mall’s “shopping streets” spill out onto the surrounding landscape, and each mall features a “leisure village” that integrates its shopping area with nearby recreational space. There are health clubs and restaurants, as well as a cinema complex. Welcome halls are outfitted like luxury hotels, complete with full-time concierge staffs.


Bluewater’s scale was matched only by the speed of its completion. Lend Lease’s 250-person development team, along with 40 contractors, countless subcontractors, and more than 20,000 construction workers, guided the project from initial conception to the final leasing stage in just 1,628 days. The project came in two weeks ahead of schedule, on budget, and fully leased. Since the grand opening of Bluewater, in March of this year, an average of more than 75,000 people per day have visited the complex.

Welcome to life at Lend Lease, a company that thinks impossibly big — and then delivers reliably. “With Bluewater, we bought a piece of land in the middle of a property slump and launched the biggest project in the history of the company,” says Latham, who, before joining Lend Lease in 1989, had helped develop Canberra, Australia’s capital city (he was the head of Canberra’s National Capital Development Commission). “We had the audacity to try to create something that had never been seen in Europe — and the confidence that we could realize that dream. We have the skills required to build something from nothing.” According to Hornery, “Every project we take on starts with a question: How can we do what’s never been done before?”

Let’s build something from nothing. Let’s do what’s never b been doneefore. These are the rallying cries of 21st-century competition. In an economy marked by more change than ever, more technology than ever, and more capital than ever, companies have more opportunities than ever. In the new economy, the only limits to growth are those of imagination and of execution. Lend Lease has turned transcending limits — limits defined by industry, geography, or capability — into a core competence. “We want to create things that are extraordinary, feasible, and valuable,” says Ann McCallum, 31, an executive at Lend Lease Corporate Solutions and one of the company’s most influential change agents. “Everything we do has to fit all three criteria.”


The company’s track record over the past 41 years has been nothing short of extraordinary. Founded in 1958 by the Dutch socialist Dick Dusseldorp (whose initial goal was to build public housing in Australia’s Snowy Mountains), Lend Lease has become a real-estate juggernaut of the first order. In 1959, it laid the foundation for Sydney’s world-famous Opera House. Today, it is building the Newington Olympic Village, which will house more than 15,000 athletes and officials during the 2000 summer games, in Sydney. After the Olympics, the Newington facility will become a 225-acre residential community, complete with 2,000 apartments as well as houses, stores, schools — much of it solar-powered. The company also has a 50-50 joint venture with Fox to build Fox Studios Australia. The facility’s already-built world-class soundstages are booked years in advance: The Matrix, a cyberthriller starring Keanu Reeves, recently wrapped to make way for Mission: Impossible 2, starring Tom Cruise. The project also includes a “creative campus,” which supports film and TV activities, and which will be integrated with a spectacular retail-and-leisure precinct that is set to open this October.

Real estate is where Lend Lease started — but that is hardly where it remains. The company is one of the fastest-growing fund managers in Australia. Back in 1985, when Hornery and his colleagues acquired a musty, 98-year-old life-insurance company called MLC, the reaction was “Just what do real-estate executives know about insurance?” Lend Lease’s answer was to mix actuaries with engineers, financial analysts with project managers, and to pioneer a low-cost model of providing retirement plans and investments. Today, MLC manages assets worth $20.4 billion and accounts for more than half of its parent company’s total profits. Lend Lease has also become a leading player in the business-services industry: As a founding partner of IBM Global Services Australia, one of the largest it-services companies in the Asia-Pacific region, Lend Lease is staking out the market for e-business in the southern hemisphere.

Does all this diversity seem hard to swallow? Coca-Cola doesn’t think so. Early this year, Lend Lease beat out several global players to become a strategic partner with Coke, charged with building all of the soft-drink maker’s bottling plants in Southeast Asia. It is also designing Coke’s new Sydney headquarters, managing Coke’s 401(k) plan in Australia, and running the World of Coca-Cola museum in Las Vegas. The financial markets have registered their approval as well. Lend Lease shares have delivered a compound annual growth rate of 24% over the past 40 years. In the past year alone, the company’s market value has increased from $5 billion to more than $6 billion.


The best indicator of Lend Lease’s future growth prospects is its growing population of young talent. Put simply, Lend Lease is seen as the most exciting company to work for in Australia. The average age of its 3,200 Australian employees is 31. Roughly 40% of its people are less than 26 years old. “It’s great to work for a winner,” says Susan MacDonald, 35, a 12-year Lend Lease veteran, who serves as the company’s asset-management director for Europe. “The buzz you get from Lend Lease is really what sets it apart. It’s tremendous to be part of an organization that has a constant stream of wins but that doesn’t sell itself down the river in the process. There’s a purpose behind what we do.”

Preserving that sense of purpose is the major challenge facing Stuart Hornery. “We face a daily struggle to maintain our core values — to keep going against the tide,” he says. “It takes leadership and confidence to keep going as an organization that dares to be different.”

Bold Dreams, Master Plans

Malcolm Latham couldn’t believe his ears. He was sitting in a lecture hall at the University of Sydney, listening to the American architect Eric Kuhne hold forth on how modern architecture had cheated society. Its elite theories and sterile styles, Kuhne argued, had stripped buildings, and even entire cities, of “the most essential ingredient of art: the ability to tell a story.” In Kuhne’s fervent appeal for a new “civic architecture,” Latham heard echoes of some conversations that had been going on inside Lend Lease. For the leaders of that company, the future of the property business involved contributing to communities, creating robust human experiences, and designing new and better ways of working.


Kuhne’s insights were blowing Latham’s mind. He leaned over to his wife and whispered, “I have to meet this man,” and the architect’s sister, sitting nearby, overheard him. It took one meeting between Kuhne and Latham, and another meeting involving Hornery, for the three of them to strike a collaboration. But what should Kuhne and Lend Lease collaborate on? “We [Lend Lease] asked ourselves, Where are we most at risk?” recalls Latham. “Where do we want things to change, and how big is the jump we have to make?”

So Latham and Hornery asked Kuhne — a former city architect for Fort Wayne, Indiana and the leader of an international consulting firm that focuses on the integration of architecture, landscape, and urban planning — to take over phase one of Darling Park, the largest commercial oceanfront development in Australia. The $1 billion project featured two office towers, a hotel, and a series of vast public areas abutting Darling Harbour, one of Sydney’s leading tourist destinations. Kuhne’s challenge was daunting: to connect three massive towers, all designed by Harry Seidler (Australia’s top modernist architect), with a people-friendly public space. His commission from Lend Lease was simple: Do something different to create a world-class work-and-leisure environment.

Doing something different at Lend Lease starts with creating something called “the brief.” On January 26, 1991 — Australia Day (the national holiday) — not long after their initial meetings, Hornery, Latham, and Kuhne met to develop the brief for Darling Park. They dreamed up innovations in landscaping, workplace design, and labor relations. The result: a celebrated civic space that features vast gardens and pocket parks, all of them lushly landscaped with indigenous flora and fauna. Cleverly designed pedestrian bridges and other forms of human-scale infrastructure connect downtown Sydney with Cockle Bay Wharf, a vibrant restaurant-and-shopping precinct bordered by a fig-tree-lined promenade. The office lobbies and public spaces resemble those of a great hotel — with plush leather sofas and chairs, warm rugs, espresso bars, and concierge services. Offering phones and computer hookups, these spaces have become destinations not only for people who work in the towers but also for Sydney’s residents.


While building Darling Park, Lend Lease also tackled the dysfunctional relationship between development companies and Australia’s heavily unionized construction workers. Job opportunities in construction are generally limited to those with specialized skills. It’s nearly impossible, for example, for a carpenter to acquire the skills and the accreditation needed to get a job as a carpet layer. The Darling Park team came up with the idea of “skills passports” — documents that workers could use to cross the boundaries created by labor regulations. Darling Park workers could shuttle among Lend Lease jobs throughout Australia, apprenticing in new skills — and getting a stamp in their passport for each job. By the end of the project, most workers had been trained in as many as four different trades. This program not only enhanced the workers’ prospects; it also generated goodwill toward what could have been a contentious project.

According to Latham, the audacious thinking behind Darling Park is typical of how Lend Lease does business: “If you went back to our original brief, it would be revealing in the sense of going beyond what had been done before — and instructive in terms of showing how our system works.” Latham sketches a graph to explain that system. The vertical axis represents value; the horizontal axis represents time. A line rises sharply from the starting point and then flattens out. Latham draws a vertical line through the peak of the curve. The region to the left of the line, he says, is the “dream-creation zone”: “Most value is created at the beginning of a project — in the first six months of a large property project, for example. As time goes on, you get fewer and fewer big leaps in innovation. But innovation is very possible if you start with a dream. That’s how every project at Lend Lease starts.”

There’s another graph that’s popular inside Lend Lease. It gets displayed at every strategy meeting and at every leadership conference. This graph depicts two curves. The top one, which ramps up quickly, represents the company’s annual growth target of 15%. The bottom one, which is less steep, depicts the actual business forecast. The space between the two lines is called “the gap” — or, more colorfully, “the jaws of death.” “Our challenge is to double this business every five years,” says Peter Scott, 45, who has run two units at Lend Lease — first Civil & Civic, the original construction company, and now MLC, the financial-services business. “That kind of challenge stops people from playing incremental games. This place is fundamentally different today from what it was five years ago. That’s why it’s a great place to work.”


Fast Work, “Careening Careers”

How does Lend Lease manage to be consistently successful, even as it dares to be persistently different? The company’s break-the-rules spirit is grounded in one back-to-basics insight: The best way to keep transcending your limits is to stick to a core discipline. At Lend Lease, that discipline is project management. “We don’t just use project management on projects,” says Hornery. “Project management is the way we go about our business. It’s a strategic attitude that we all have.”

Debbie McNamara, now 26, picked up her attitude as most Lend Lease recruits do — in an intensive apprenticeship with an experienced project manager. In her case, that manager was someone responsible for developing MLC’s relationship with the financial advisers who sell its products. About a year later, at age 23, McNamara was tapped to be a project manager in MLC’s fund-management division. Her assignment: Work with the division’s frontline call-center group to simplify business processes, to reinvent job descriptions, and to change attitudes. As the project moved into its final stages, McNamara packed her bags and headed to a new continent and to an entirely different business. As a retail-delivery manager on the Bluewater project, McNamara had 12 months to help 30 retailers make the transition from lease to grand opening.

Today, McNamara and her Bluewater peers are scattered around the world — in part so that they can disseminate their knowledge and the benefits of their experience to new project teams. McNamara has had five jobs in as many years. “Lend Lease is comfortable with taking risks on people, so you make big leaps quickly,” she says. “That’s exciting, but it’s also a little scary, because you end up with responsibility for a team of people and for serious results.” But Lend Lease doesn’t push people without providing a safety net as well. Says McNamara: “I learned two things on my first project: how to manage relationships, and how to manage risk. That has carried me through all of my projects.”


In her career at Lend Lease, Susan MacDonald has had seven different roles. At age 28, for example, she went from managing a small shopping center to taking full responsibility for a 700,000-square-foot retail property. “The basic operating procedure here is that people don’t stand on titles,” she says. “They don’t stand on position, and they don’t stand on precedent. It’s all about ideas. And it’s all about credibility: How do you perform in the heat of a project? That’s incredibly energizing — and brutal. People either love to work for Lend Lease or absolutely hate it.”

Peter Scott loves it. One afternoon nine years ago, he picked up the phone. A Lend Lease executive was on the line: “Come to our meeting tonight,” he said. “There’s an important announcement that’s going to affect you.” Scott showed up for what turned out to be a discussion about radically reorganizing the company’s management structure: “Stuart [Hornery] sat at the table and said, ‘Let me tell you what’s going to happen: John’s going here, Fred’s going here, Jill’s going to do this, and you’re going to do that — boom. We need to refocus, so I thought we’d just stir the place up.’ People were moved from one area of expertise to another in an instant,” Scott recalls. He was shifted from a job as head of one major project to a post that gave him responsibility for all projects. A year later, another Lend Lease executive came calling. David Higgins, 44, who is now the company’s CEO, invited Scott to take over MLC. “This is a deliberate strategy,” says Scott. “It’s invigorating — and it’s also intimidating, because you’re constantly being pushed outside your comfort zone.”

Outside their comfort zone is where Lend Lease people spend most of their time. In place of a human-resources department and a series of career tracks, Lend Lease has a dynamic internal talent market that propels people into what Latham calls “careening careers.” Lend Lease people zigzag through 5, 6, or even 10 distinct postings — often in as many years. That pattern applies to the company’s twentysomething up-and-comers, just as it does to elder statesmen such as Malcolm Latham, who arrived at Lend Lease to take a job as a “lowly project manager” on a residential development in North Sydney. A few years later, he found himself running the $2.6 billion General Property Trust, Australia’s largest REIT (real-estate investment trust) — even though he had no relevant experience. Latham was equally unprepared for his next job — overseeing special projects in Lend Lease’s financial-services division. Today, he plays mentor to the company’s young project managers.


In her seven years at Lend Lease, Ann McCallum has shifted jobs at least as many times as Latham has. Recruited out of the University of Sydney’s graduate architecture program, she spent a year as a site engineer in Lend Lease’s interiors-construction business. Then she took on a series of project-management roles in that same line of business. Soon she was tapped to organize the massive relocation of Lend Lease’s far-flung Sydney-based businesses into a central headquarters — and in that capacity, she got to know a wide range of the company’s leaders. Meanwhile, McCallum got involved in the company’s Youth Council, a group of under-30 employees (now called Genesis) that helps foster personal development and networking. She took up the group’s campaign to create more robust feedback mechanisms at Lend Lease. Indeed, she made such a pest of herself that David Higgins, who was then the head of the company’s property group, invited her to work on creating a performance-appraisal system. “I was the young turk among senior people who were developing feedback mechanisms,” says McCallum. Just 18 months later, she was asked to join the board of the Lend Lease Foundation, a business unit dedicated to employee development; soon afterward, she signed on as the foundation’s CEO.

The pace of change at Lend Lease doesn’t simply shake up individual employees — it strengthens the whole organization. “Change keeps you humble,” says Peter Scott. “It keeps you from assuming that you’re the sole expert because of your position or job title. Most important, it forces you to seek help and to share knowledge. If you don’t involve people, if you set yourself up as a bottleneck, this organization will go around you.”

The first thing that Scott did when he arrived at MLC, in 1996, was to hand over the job of setting strategy to the people who did the actual work: “I went around to all the 27-year-olds and said, ‘I’ve been here a week. I have to write a business plan in three weeks. Get four teams together and come up with a plan that says what you think we should do with the company.’ ” In short order, the teams drafted a business plan for MLC. “We were a very big fish in Australia,” says Scott. “But our real competition was, and is, global: Vanguard, Fidelity, Merrill Lynch. The teams put up a bunch of charts that said, ‘Sell this, sell that, do this and not that.’ And that’s exactly what we’re doing today.” MLC set some ambitious goals — including a 40% reduction in overall costs. Says Scott: “The process gave us the tools and the courage to do things that were once seen as sacred cows. Everyone said, ‘There’s no way you can do a 40% cost reduction.’ Well, we did it — and it involved a radical rethink of how we do business. In the process, we increased funds under management by 30%, and we increased productivity by two-thirds.”


Another benefit of the MLC change program: a corps of young project managers who are poised to take their experience and their skills into new corners of the organization. Scott sent one 31-year-old woman, who ran a chunk of MLC’s process redesign, to transform MLC’s Indonesian operations. “People talk about globalization,” he says. “Well, here’s a young woman who enlisted people at the front lines to change this overseas office into a true branch of Lend Lease. When you go there today, it’s like walking down the hall here. Not only did she replicate how we do business; she overcame cultural biases relating to age, seniority, and gender. We’ve developed a powerful system: It doesn’t matter who you are or how old you are — we give people responsibility and then say, ‘Take a risk.’ “

The real power of that system is the way it enables change to cascade through the ranks. Lend Lease has very few formal layers of management or administration, so its talent network has little excess capacity. The only way for people to ensure their mobility is to become adept at building teams, at pushing their peers, and at creating a robust network of connections. “If you don’t prepare the person sitting beside you to take your job, then you’re limiting your career,” says Scott. “If we can’t pull you into something new because you’re mission-critical to what you do now, then you won’t get to move. That’s where our efficiency and our performance ethic come in: People want to move. People get into something, do it, and then move on.”

Lend Lease’s focus on work over structure, on ideas over status, makes business sense, says Stuart Hornery. “It’s no longer radical to say that the only limit on growth is people. The difference here is that we’ve always acted on the belief that if you put limits on people, you’ve already lost the game. People don’t raise the bar because management tells them to. They raise the bar because that’s an exciting way to work.”


Big Ideas, Small Details

Ask people at Lend Lease to describe the structure of the company, and they’re likely to scratch their head, look up at the ceiling, and chuckle a bit before saying, “It’s a mystery,” or “It’s an amorphous mess,” or “It’s a bloody tangle.” But Lend Lease’s people are very clear about the principles behind their organization. Most of them end up describing those principles in terms of a paradox: “We’re extraordinarily disciplined,” says Rosemary Kirkby, 49, general manager of people at MLC. “Our project-management process pushes people to deliver against very rigorous demands. Yet we have a very disobedient culture. We’re a group of rule breakers. Everywhere you look at Lend Lease, there are tensions — between creativity and discipline, between purpose and performance, between people and money. That’s the power of this organization.”

Project-control groups (PCGs) are the core mechanism through which Lend Lease blends out-of-the-box creativity with by-the-book accountability. Every major project gets a PCG, which functions like a frontline board of directors. Members of a PCG don’t work on the project day to day, but they are accountable for it. One of the first challenges facing a Lend Lease project manager is to assemble a PCG with the best possible mix of mind-sets, skills, and experiences — and that means including representatives of outside stakeholders. The PCG for Fox Studios Australia, for example, included the CEOs of Lend Lease and News Corp. Australia, as well as retailing experts, urban anthropologists, and film-industry executives from Los Angeles.

PCGs, which can include as few as 3 people or as many as 15, meet every six or seven weeks for the duration of a project. Unlike many board meetings, which are little more than high-minded gabfests, PCG meetings are serious business. Says Peter Scott, who has run two major business units at Lend Lease: “A PCG meeting has a rigorous agenda, a set of minutes, a financial review, and a dozen other reports on key aspects of the project. They are true stand-and-deliver sessions.”


But PCGs are not just about meeting deadlines and making budgets. They are also designed to sustain the kind of active, big-picture questioning that gets lost in the heat of implementation. “We make better decisions and create better products because every time we walk into a PCG meeting, we know that we have to make a case for why we are doing something in the first place,” Scott explains. “That means we’re not afraid to stop things. We’re brutal about pulling the plug and moving on — even when we’ve already spent a lot of time and money on a project.”

For that reason, diversity — of members, of experiences, and of perspectives — is crucial to a successful PCG. As the architect Eric Kuhne learned while working on the Bluewater shopping center, nothing is sacred in a PCG meeting: “The debates on Bluewater were legendary. People from wildly different backgrounds come to a PCG meeting ready to fight passionately for what they believe in. Nobody holds back. You can’t build something new without stepping on what other people believe is the best thing that they’ve ever done.”

Which is not to suggest that PCGs, by questioning assumptions, end up delaying action. “As a company and as individuals, we’re highly disciplined, on the one hand, and highly creative, on the other,” says Malcolm Latham. “If you sit in a PCG meeting, you’ll see the group move from right brain to left brain and back again within 15 minutes. Members of a PCG can accommodate those switches. And that equals magic.”

Kirkby has lived with those tensions every day for the past two years. Asked to investigate why the pace of improvement at MLC had slowed after some wildly successful change programs, she came up with an unsettling answer: “You’re ignoring a mechanism of change that’s right under your nose” — namely, the building that served as MLC’s headquarters. The structure in question was a North Sydney landmark, built in 1957. Its 12 floors had been chopped into drab executive offices and even drabber cubicle farms. There was already a plan on the table to refurbish the interior in the interest of cost reduction and rental savings — in other words, to spend “$23 million for a couple of new chairs and a coat of fresh paint,” says Kirkby. But she saw the potential for doing something far more ambitious. So she set about transforming what had originally been a property project into a “people project.”

Her brief began with one word: “Imagine.” It detailed a workplace of the future that would be built around the principles of community, flexibility, and collaboration — a “vertical village” of 1,200 people rather than a sterile building with 12 floors. That was the dream. Next Kirkby had to face reality, in the form of the MLC board. “The budgeting process here is almost ruthless,” she says. “You get used to hearing, ‘You’re not going to get this.’ And you get very good at building a compelling business case for what you want to do.” In this instance, she argued that reclaiming the building’s “civic space” for collaborative-meeting areas and lifestyle zones, and blowing up the floor plan to create flexible work arrangements, would turn the building into a “strategic tool” to be used in the quest for young, skilled talent.

The argument worked; she got her budget. Then she spent the next 12 months defending and promoting her brief against the tough finance, legal, design, construction, customer-service, and industrial-relations reviews that make up the PCG process. The result: The first stage of Campus MLC — the realization of her dream — was built less than a year after that first budget meeting.

But nowhere at Lend Lease has the interaction between dreams and discipline yielded more dramatic results than in the Bluewater project. “I’d sit in the Bluewater PCG, arguing about the importance of an authentic winter garden to the overall leisure experience,” recalls Eric Kuhne. “At the same time, I’d listen to arguments from the retail-delivery side about what it takes to get 320 shops open and profitable in short order. Then the fund managers would ask how the project would contribute to the long-term value of the property — not just for the sake of investment companies, but for the sake of the mums and dads of England who had put their pension money into those institutions. Everyone teaches everyone else.”

Lend Lease was put to the test just a few months into the project. The challenge: Would an established retailer sign on to the risky concept of building a massive shopping mall in one of the most depressed regions in England? John Lewis Partnership, a large retailer that calls itself “Britain’s most successful employee-owned business,” had rejected the original Bluewater plan out of hand. When Stuart Hornery paid a visit to the department store’s chairman, he took with him a set of 10 promises — a whittling-down of the Bluewater dream that came to be known as the “10 Commandments.” These included everything from “the finest retail mix in the United Kingdom” to “the restoration of the greenbelt” to a “partnership with local authorities and community” to “the integration of retail and leisure to create a civic sense of place that would become a destination in and of itself.” The John Lewis chairman responded with his version of what would become a constant refrain during Bluewater’s development: “Impossible. Never been done.” He did concede that if Lend Lease could deliver on even half of its promises, John Lewis would sign on.

Less than six months later, not only did John Lewis sign on — it signed a 99-year lease to become an anchor tenant of Bluewater, and it made plans to partner with Lend Lease on other UK sites. Soon afterward, Marks & Spencer and House of Fraser became the second and third anchor stores of the complex. Ultimately, more than 320 retailers — including such top global brands as Starbucks, the Gap, Warner Bros., Timberland, Original Levi’s Store, and HMV — signed on as well.

At the same time, the project’s top lieutenants, including Hornery and Latham, took their plan to every chamber of commerce, town council, police force, school system, environmental organization, and community group with in Bluewater’s 10-million-person region. When asked the inevitable question — How can we trust you? — they offered up mayors, school superintendents, and even the Australian Labor Party as references.

The members of the Bluewater team didn’t just have to convince outsiders that Lend Lease could deliver: They also had to convince themselves. An all-star cast was tapped to form the Bluewater PCG. It included Hornery, Latham, Kuhne, the CEO of Lend Lease’s European business, and the investment director of Prudential (which is Bluewater’s biggest investor). It also included a revolving collection of architects, engineers, manufacturers, community advocates, and local planning authorities; experts on construction, retail and finance; and, of course, customers. Every five or six weeks for nearly five years, the Bluewater PCG met to consider budgets, agendas, and proposals for innovation from every perspective.

Starting with its first meeting, the PCG picked apart and pushed for every one of the project’s so-called 10 Commandments, which soon evolved into an ever-expanding set of “Bluewater Factors.” Those factors included, for example, emphasizing architecture that would tap into the culture and heritage of Kent; creating Bluewater as a “day out” destination rather than as a mere shopping trip; organizing events that would put Bluewater on the “cultural calendar” of Kent; working intimately with each tenant to produce innovation in store design; and starting a cooperative education program that would involve as many as 600,000 students from the region.

“The debates were just legendary,” says Kuhne. “The level of investigation was out of this world. Each factor required an inordinate amount of research to confirm what is ‘the best’ now and what will be the best 5, 10, and 50 years out. Many times during the 5 years of the project, as we hit upon breakthroughs or innovations within the team and in the world at large, we discarded one set of standards and created a new, higher bar for ourselves to clear.”

One set of innovations involved the construction process. The Bluewater team hired 400 construction workers off the long-term unemployment rolls. In partnership with local training agencies, the team also created the Bluewater Foundation, which provided skills to 8,200 construction workers.

Bluewater not only digitized the construction site, by installing an intranet for automating the contract-approval process; it also humanized the construction area. Workers were asked what benefits they would most like to have on-site — a question they had never been asked before — and ended up with benefits ranging from an on-site chaplain to state-of-the-art showers to a diverse set of catering option. The surrounding community, meanwhile, benefited from the creation of the Bluewater Pages, a directory of prequalified local businesses (including everything form accounting firms to window cleaners) — which made it easy for the more than 40 contractors working on-site to employ locals.

A year away from the project’s due date, the Foundation shifted its focus from developing construction skills to providing comprehensive, ongoing education for those who would hold the 7,000 permanent retail jobs created by the center. The idea, says Kuhne, was not just to train retail workers for casual jobs but also to help them jump-start their careers. The UK-based team also recruited key project managers from across the Lend Lease organization. These people, in turn, recruited dozens of twentysomethings, who assisted established brands and mom-and-pop stores alike in aligning their retail approach to the Bluewater Factors.

Debbie McNamara, for example, was plucked from a customer-service project at MLC to take responsibility for guiding a group of retailers from lease to grand opening in less than a year. Her tools: a diverse team of external designers (one for each retailer) and a refined delivery process that guided the retailers through each critical stage. “It was slightly intimidating to go to established brands like HMV and say, ‘Okay, now you’ve got to raise the bard and buy into these Bluewater Factors,'” says McNamara. But not only did HMV revamp its standard storefront and create a dramatic visual landmark; it also delivered on its part of the project in just a few months. In the end, 200 of Bluewater’s 320 retailers either introduced a new design concept or created a design that was unique to this development.

For Lend Lease, the legacy of Bluewater extends beyond its successful completion. Projects at the company always have two deliverables: the project itself, and new project-management talent. “Projects are a great way to flush out latent capabilities and leadership talent,” says Latham. “With our highest-profile projects especially, we generate two or three teams in the course of a project and then send them out to run other big projects. That way, we also generate new project leaders.”

A week after the opening ceremony at Bluewater, for example, half a dozen Bluewater project managers boarded a plane bound for Seville, Spain, where they began to scout out Lend Lease’s next big European retail venture. Other members of the Bluewater team have scattered to early-stage Lend Lease projects that will focus on redeveloping the town centers of Solihull, in the British Midlands, and Dundee, in Scotland.

With each new project, Lend Lease continues to defy limits. “We are always looking at the stars,” says Latham, “even as we keep our eyes on budgets and time and other rigorous metrics. That’s the power of Lend Lease. That’s why we’re able to move quickly and confidently, and to make bets on things like that chalk pit in Kent.”

Polly LaBarre ( is a Fast Company senior editor, for information on Lend Lease Corp., email Malcom Latham ( or Ann McCallum (, or visit the web ( Except where noted, all financial data in this article have been converted to U.S. dollars.