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An Atkins' diet to suit all tastes

PROFILE

After recovering from a potentially fatal identity crisis in the mid-1990s, Atkins has returned to its design roots.

But as one of the UK's top three employers of architects, do not try labelling the company a consulting engineer, writes Phil Bishop

ATKINS is one of the best known of Britain's many internationally recognised consulting engineers. But it has always been reluctant to accept the label 'consulting engineer', considering this too narrow a description of its capabilities.

This has not always made things easy for Atkins, and the company has in recent years suffered from an identity crisis.

In the aftermath of its Stock Exchange flotation in 1996 - it is listed as WS Atkins Plc - it sought to present itself as a support services company, much as erstwhile contractors Amey and Jarvis did, seemingly fearful that too obvious an association with dirty work like engineering and construction would not play well in the City. For a while Atkins was advertising on buses, seeking to become a household name. It had lost its sense of direction.

'Maybe flotation was a bit of a watershed, where Atkins started to be seen for other things like facilities management - cutting grass and cleaning windows, ' says newly appointed chief operating officer Norman Schunter.With 35 years' service, Mr Schunter easily qualifies for the Silver Circle, Atkins' club of employees with 25 years' service - currently about 140 strong.His most recent role was as group managing director of Atkins design, environment and engineering department and he has overseen giant projects around the world, including Thames Town in Shanghai and Durrat Island in Bahrain.This makes him a good man with whom to discuss the direction of Atkins past and present.

If the truth be told, Atkins has always been predominantly a civil engineering consultant but equally has always been much more than this as well.As early as 1950 the company's services included mechanical and electrical services engineering, material handling - it designed the world's first rubber-tyred gantry crane - and architecture, as well as civil and structural engineering. By the 1960s it was calling itself a 'planning, engineering and management consultant' Today it employs a massive 5,400 civil and structural staff worldwide but there are a further 8,400 who are not civil or structural engineers.Not only is it the country's largest employers of civil engineers, it is also one of the top three employers of architects, with 180 chartered architects in the UK and many more overseas.Through its subsidiary Faithful & Gould, it is also a leading employer of quantity surveyors.

This diversity of expertise explains not only why it does not like to be labelled as a consulting engineer but also why so many others fail to understand it. Even today newspapers described it variously as a 'schools company' (London Evening Standard), a 'rail engineer' (Daily Express) or - technically accurate but no less helpful - a 'support services company' (Financial Times).Under new management for the past 18 months, Atkins is trying to address this issue. It has abandoned its flirtation with hiding its engineering core business behind what the City for a short while considered sexier stuff, like facilities management. Instead, it wants to tell the world loud and clear all about the full range of its activities.

Atkins has experts in almost every conceivable niche, from acoustics to zoology, so not only can it design a piece of infrastructure but also manage a project from conception to delivery and beyond.The strategy, says Mr Schunter, can be encapsulated in three words: 'plan, design and enable'The latter encompasses project management, facilities management and 'downstream activities' This strategy represents a return to the firm's roots. Company founder Bill - later Sir William - Atkins came from a contracting background and was as much an entrepreneur as an engineer. In 1988 Sir William, by then retired and in his '80s, wrote in his history of the company: 'In the construction industry it has been recognised that the combination of the separate entities of architect, engineer and quantity surveyor did not necessarily lead to management control and that some overall control was desired, providing management separate from execution.The general contractor stepped into this role with his competence in, and understanding of, site management.Yet, when it comes to very large-scale works, it is the separate, experienced project managing firm that is required; that has been, and still is, our market.'

The development of Atkins as a multi-disciplinary project manager began early under Bill Atkins.He was later succeeded by another contracting man, former Costain boss Terrel Wyatt, who was in turn succeeded by Mike Jeffries, an architect who had been with Atkins' architectural division, Sheppard Fidler, since 1975.

Things started to go wrong for Atkins when it lost sight of its core business. In 2001 it took a step too far in the facilities management market.

It could design schools, it could manage their construction, it could look after the buildings when they were finished, and it could even cut the grass.Then it decided it could actually run school operations.This was a bad move.

'We were not delivering and we got criticised, rightly so, ' says Mr Schunter.

Things then went disastrously wrong when Robin Southwell was appointed chief executive in 2001 from BAe Systems, outside the construction industry.

'2002 was meltdown, 'Mr Schunter says.'We were embarking on a new strategy, we tried to bring in new IT systems and brought in a new chief executive who tried to take the company in a direction not based on our core competencies.

'We went from £70 million in the bank to a £125 million deficit when he left in October 2002.The IT system failed.We weren't invoicing so we weren't getting any cash in.'

The share price had peaked at 965p before Southwell's arrival.The day he left they were at 43p and the company was on the brink of bankruptcy.

With Mr Southwell ousted, Mr Jeffries - by now chairman - returned to day-to-day control until a new chief executive could be found.A year later, in October 2003, Keith Clarke, formerly of Trafalgar House and its successor companies Kvaerner and Skanska, was recruited as chief executive.

By refocusing on core competencies, Atkins returned swiftly to financial health.The financial year 2003-04 saw turnover rise 33 per cent to £1,242 million, making it more than twice the size of rivals like Mott MacDonald or Kellog Brown & Root, and three times the size of Arup.

Mr Clarke says when he arrived he found little that needed changing.He strengthened the board, he says, with the appointment of former chief of defence staff Admiral Lord Boyce and Engineering & Technology Board chairman Sir Peter Williams as non-execs, together with former Powergen chief executive Ed Wallis to succeed Mike Jeffries as non-executive chairman, but there was very little reorganisation needed.'I brought in virtually nobody from the outside on the management, because we didn't need to, ' he says.

Financially the focus is now on profitability rather than chasing turnover growth and on pursuing what Mr Clarke calls higher skills business while scaling back the FM work, which now accounts for just 4 per cent of turnover.

'We are going back to planning, designing and enabling works, with the emphasis on planning and designing, because that is what we've always been good at, ' he says.

'It was a pleasant surprise, in a way, that we didn't need to reinvent the business.'

Big, small, worldwide

STEELWORKS, power stations and transportation projects, including the Channel Tunnel, have been the mainstay of Atkins since its foundation by Bill Atkins in 1938.

Recent and current major projects demonstrate the scope of the company's multi-disciplinary skill base.Today Atkins is developing the masterplan and detail design for part of the Thames Town project in China.The whole project is for 11 new 'English-style' towns to be built around Shanghai.

In Bahrain Atkins is designing a £1 billion development for a string of islands, linked by bridges, with 1,800 villas and associated leisure and retail facilities and a centrepiece marina.

This Durrat Island project is intended to rival Dubai's Palm Island as a billionaire's playground.

Chief operating officer Norman Schunter cites this project as signature Atkins, a prime example of the company's capabilities, 'bringing its design flair to bear' Peter Bruce, an architect who heads Atkins design, environment and engineering arm in Scotland, offers a more humble alternative that he believes showcases Atkins at its best - a footbridge in Glasgow, and this despite the fact that the project architect is not Atkins but Richard Rogers.The £40 million Broomielaw to Tradeston Pedestrian Link is now halfway through the design stage.Atkins is responsible for engineering, landscaping and hydrology and is supplying architectural support. Subsidiary Faithful & Gould is supplying project and cost management services.With its core team in Glasgow, Atkins is calling on specialist expertise from Atkins water engineers in Warrington, structural engineers in Oxford, geotechnical engineers in Epsom and Scotland, landscape engineers in Epsom and quantity surveyors in Edinburgh.'It's a fantastic example of how we can use our technology and systems to build a high quality product, 'Mr Bruce says.