Two years after taking the helm of troubled Grontmij’s UK operations, John Chubb is confident that problems are in the past and the road ahead is clear. Mark Hansford finds out more.
When John Chubb was ripped from his sabbatical and asked to take the reins at Grontmij as managing director for its UK & Ireland business in October 2010 he knew he was in for a tough time.
The firm’s Dutch parent was struggling, the UK operation was loss-making and redundancies were sweeping across the company.
Frankly, he’d have been forgiven for knocking back the offer and returning to his life passion - restoring classic motorbikes in his garage. Arguably the only thing going for it was that Grontmij’s Leeds HQ gave him the chance to make some long overdue trips to Elland Road to watch his boyhood team Leeds United in the flesh.
But the engineer in him was seduced and he took up the task. And two years on he’s delighted that he did. “I like it. I like being around engineers,” he states.
“It’s been a fairly hard two years but I’m celebrating. The numbers, the staff, are all growing, so I’m like a dog with two tails,” he says.
Final accounts for the 2011 show an operating loss of £14M on a turnover of £65M, but most of that was down to restructuring and reassessing the value of acquired companies. Losses at a trading level were nearer £3.5M, against a £4M loss in 2010. Going forward, Chubb expects his business to be profitable in 2012.
“It’s a big number,” he says, referring to the 2011 loss. “But what I can say is that we are trading profitably for the first half of this year, we are growing revenues and we are recruiting.
“In 2012 we will be profitable and that is a significant turnaround from a £4M loss in 2010,” he says adding: “We will see that upward trajectory carrying on for the next three or four years.”
The turnaround is down to a clear strategy that puts engineering and engineering innovation at the heart of everything the company does, and is testament to Chubb’s passion for engineers.
“I am passionate about engineering because I is one,” he says, placing deliberate emphasis on the “is”. You can’t argue - after all how many managing directors out there would spend a year’s sabbatical tinkering with motorbike engines.
“It’s been a fairly hard two years but I’m celebrating. The numbers, the staff, are all growing”
An electrical engineer by training, Chubb found himself on said sabbatical after his former firm VT Group was acquired by Babcock in March 2010. At the time he was managing director of the environment division, leading the integration of its energy from waste and nuclear businesses. Four years with VT Group, a brief spell with BT and a successful 20-year career in the Royal Navy all go to highlight why Chubb bleeds engineer. And why he just couldn’t resist a challenge.
“I had decided to spend a year restoring bikes. I’m an old mod and it’s what I do. But then Grontmij approached me,” he says, recalling that there wasn’t a moments doubt. “I understood absolutely that the business was in a challenging position and that the market was in a challenging position. But I know the UK is a good market,” he insists.
Good, maybe, if you have a plan. And he had one. But as a football aficionado like Chubb knows, having a plan is one thing and getting the chance to enact it is another. He references Liverpool, where new manager Brendan Rodgers is trying to instil a style of play based on passing and ball retention, as a great example. “As a manager I can understand that Brendan Rodgers has got a three-year plan and that’s brave, as football managers don’t tend to get more than six months,” says Chubb.
After then football managers, unless the results are coming, find themselves first with the dreaded “vote of confidence” from the board, before facing the axe soon after.
Fortunately for Chubb there has been no vote of confidence as first he moved to rebalance his team with the players he needs and then started building it with new signings. And, as with any team rebuilding, it wasn’t easy.
“First we had to match the workforce to the workload we had,” he explains. Understandably, that was quite difficult to do.
“We have looked very hard at ourselves and taken out significant layers of management,” he explains. “We also had a very structured office reduction plan and that will end at the end of this year. It has been a really tough year,” he accepts.
Tough indeed, but it got the firm to a size from which it can now grow its skills base with front line engineers.
“Ultimately, you can’t cut your way out of trouble. You have to try and grow your business,” he says. This, Chubb has done by capitalising on its core markets of water, transport and building services, focusing on its clients - after all, “they are hurting too”, as he puts it - and, fundamentally, “by creating a good place to work”.
“We can’t forget our people; our engineers,” he says. “I am an electrical engineer and have to admit that I don’t understand what some of our structural engineers do. But I am learning and I have tremendous respect for them.”
Learning and development
To that end, spending on learning and development has been upped and there is a renewed focus on the firm’s graduate training programme. “If we are not developing our graduates then we are failing because they are our future,” he says. “We want to bring them up through the business.”
More senior engineers are also being recruited, hopefully attracted by a company culture that is set up to deliver and reward innovative thinking.
“It comes from a relentless focus on our clients,” Chubb explains. “If we have got a £2M job, the first question we ask is: “how do we make it £1M”? And we have a reward structure for that kind of innovation and challenging of designs,” he says. “We reward our engineers for that.”
Innovation is a much talked about concept, but at Grontmij there are real examples; only last month Dŵr Cymru Welsh Water presented Grontmij and its construction partner Morgan Sindall with its first award for innovation for their novel pipe lining technique for rising mains.
Chubb is particularly excited about his firm’s Energy Factory Concept, an energy innovation aimed at helping water companies in the UK become more energy sufficient, by reducing their energy demands and maximising the energy potential from waste water.
The concept was originally developed by Dutch water boards in response to a challenge set for the industry to achieve energy efficiency and generation targets by 2020. Grontmij has been involved in the Energy Factory Concept since the first project was implemented, acting as lead consultant and pioneering the concept that utilises waste water as an energy fuel, transforming conventional power-hungry sewage treatment plants, into energy generating assets.
“We have looked very hard at ourselves and taken out significant layers of management”
“What we are seeing is clients everywhere demanding quicker and cheaper.
“The Energy Factory is an example of where, through bringing innovation and European expertise, we are enabling water companies to deliver better,” Chubb says.
That quest for savings spans across sectors and plays to Grontmij’s strengths, says Chubb. “The Highways Agency has many challenges,” he says, referring to the government’s demand that it save 20% on the capital cost of every project. “That plays right into our culture.”
So while things remain tough, Chubb is confident Grontmij can grow. “We see the UK as a good market. It is one of the biggest in Europe, and we like it. Yes, it’s difficult; yes, it’s tough; you’ve just got to be smarter and get the innovation in,” he says.