Civil engineer Adam Green has been running the whole of Carillion Infrastructure Services and its £1.5bn turnover for just over a month. Interview by Jackie Whitelaw.
The most telling comment in our quick question and answer session (see box at end) with Carillion infrastructure MD Adam Green is his comment that construction has yet to see the worst of the recession.
In his interview he went further. “Civil engineering’s recession isn’t here yet,” he says.
”Usually as a sector we are first in and last out. The fact this was a financial crisis before it became an economic one means we avoided being first in, but looking forwards, 2011, 2012 and maybe 2013 look like being tough years.”
“Looking forwards, 2011, 2012 and maybe 2013 look like being tough years.”
Adam Green, Carillion
Green was speaking before the latest political row about how much public spending needs to be cut and ahead of hints that transport spending could take a big hit. So he was right to be wary.
“As an industry we depend on a number of things coming through to help us be recession proof − Crossrail, the Highways Agency’s managed motorways, Network Rail’s Control Period 4 spending, nuclear new build, and utilities investment,” he says. If ever there’s a time for an industry to start lobbying hard about the economic and employment benefits these investments bring, it is now.
Carillion is a fascinating mix of some of the biggest names in UK construction. CarillionInfrastructure MD Adam Green has staff who can trace their involvement back to Tarmac,Wimpey, Mowlem and most recently Alfred McAlpine.
Back in 1995 George Wimpey entered into a £600M asset swap with Tarmac where Wimpey disposed of its construction and quarrying businesses in return for Tarmac’s McLean Homes.
Carillion was created in 1999 when Tarmac split its construction and materials activities with Carillion becoming an independent construction business and Tarmac focused on materials and quarrying.
Carillion bought Mowlem in 2006 for £313M and then Alfred McAlpine in February 2008 for £600M. The group employs over 50,000 people and turns over around £5.2bn.
However, running a good business isn’t just dependent on enthusiastic government spending.
If you can tie up long term with the right clients, adopt a sensible risk strategy and make some prescient business planning decisions it can all help ride out the worst of recession.
“In Carillion we stepped up our planning for recession a year ago,” Green says. He had just taken on most of the Carillion Infrastructure business of civil engineering, roads, rail and labour agency Sky Blue back then, before acquiring the last piece in the puzzle − utilities − in May when Roger Robinson retired.
“It was a question of focusing the business on the things that matter and knowing what we don’t do. It’s not being risk averse but knowing what we do well and so mitigating risk for the customer.”
Quietly building solid links
So in terms of Crossrail, for instance, Green says he’d love to pick up a couple of the station construction contracts − but not the tunnels. “We’re good at complex civil engineering jobs; we manage our cost and profit very carefully and we’ve built big stations − Canary Wharf for example and we’re currently building Dalston on the East London Line. But tunnels are not our skill set.”
Carillion Infrastructure has been quietly building solid links with big ticket clients like Transport for London, Network Rail and the Highways Agency. The company’s reputation for delivering quality on budget is winning it more and more work as recent major wins like the Airdrie to Bathgate link for Network Rail and work on the Birmingham Box for the Highways Agency attest.
“We’ve already secured a substantial proportion of the work we are targeting.”
Adam Green, Carillion
Workload for 2009 and 2010 is good. “All the indicators are about normal; we’ve already secured a substantial proportion of the work we are targeting, putting us in a relatively strong position.
“Our focus is on quality and we will not chase revenue, so we’re not being too racy in terms of volumes and our expectations are at a sensible level.
“The key to managing the business successfully through the recession is predicting when the public sector is going to switch off or tone down and we sense that is 2011/12.
“We have had a low profile,” Green says, “but we’ve just been getting on with the job.”
Five recent wins
- Airdrie Bathgate line Network Rail
- Birmingham Box (above) Highways Agency
- North London Railway infrastructure project Network Rail
- East London Line maintenance contract Transport for London
- A1 Dishforth to Barton widening and upgrade (with Morgan Est) Highways Agency.
What sets his business apart, he believes, is a real commitment to process improvement − the lean thinking that keeps going over and over a project stripping back layer after layer of cost. And collaboration. “I have a diverse business and the key to delivering best value is working together in the best way.” This means collaborating internally, and externally with suppliers.
While some builders are reverting to bullying their suppliers Green says that is not Carillion Infrastructure’s way.
“We need to invest in our supply chain through thick and thin. Having worked the ICE 5th and the claims culture, I don’t like it; it’s not a sustainable way of working.
“Collaboration is most important for me to be able to deliver to the customer. We think that is what sets us apart from our competitors.”
Adam Green, Carillion
“Collaboration is most important for me to be able to deliver to the customer. We think that is what sets us apart from our competitors.” He’s also willing to adapt to suit his clients. “We are driven by customer need and if you want me to reorganise, I will. We like to be bespoke.”
In terms of reorganisation, a case in point is the integration of the Alfred McAlpine business within Carillion Infrastructure.
“The acquisition of McAlpine brought us around 2,000 extra great people. We looked back on what we learned from the Mowlem acquisition and integrated the Alfred McAlpine business quicker and more extensively, effecting a full bottom up redesign. And we did it in just over eight weeks.
“I adopted a strategy of overcommunication,” Green says with a grin. “People might have got fed up with my emails but they couldn’t say they didn’t know what was going on.
“We had great people in spades and we built on that, and the fact that people are willing to change.”
Some of them are being asked to change again as the hot spots in Green’s regional business move about. Scotland and the south east are ramping up while the east and the west are stable.
“We are persuading some people to move, particularly to the south east. Outturn this year in the south east is looking like three times what we predicted.”
At 39, Green is already a major player in construction and if things carry on as they have been he’s on a path to becoming one of the industry’s grandees.
But like most civil engineers high profile is not what is driving him. “I don’t get turned on by stature,” he says. “It’s not the title, it’s the work.” Recession or not he is intending that there is going to be plenty of that.
Adam Green in 60 seconds
How are you coping with the downturn?
A lot of effort has gone into testing recession-proof markets and we target the right markets for us.
Have we seen the worst of the recession?
In construction probably not.
What are Carillion’s short and medium term prospects?
Business as usual for us. We are holding our planned position. We are constantly reviewing the markets and working closely with our key customers.
What needs to be done to keep Crossrail on track?
The industry needs to get behind Crossrail and highlight the considerable benefit it will offer the economy.
Do you believe in climate change?
I believe in working in a sustainable way − the way that we work in Carillion has always been driven by sustainability − it’s one of our key differentiators. Graduates are now more attracted by companies which have a strong sustainable work ethic and our past performance has put us in good stead.
What are you doing to cut carbon emissions?
We have a commitment to reducing our direct carbon emissions by 50% by 2010 from our 2006 baseline. We are striving to take the cost out of our business − with sustainability being a key driver − it’s a win/win situation as being sustainable not only helps the environment but it makes good business sense. On a personal level I rode my bike from my home in Oxford to the HQ in Wolverhampton during our sustainability week.
Who do you admire in construction?
For me it’s more about values than names. I like to work with people in an open and collaborative way as I believe that’s the best way to get the most positive results because it helps to create a culture for innovation.