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Management skills put to the test

Mott MacDonald went head to head with some of the strongest management consultancy firms in the UK to win the Islington Local Education Authority contract. Does this prove that civil engineers now have the skills to challenge these high earners?

THE MANAGEMENT skills and logical thought processes of civil engineers are well known. But it is rarely that they are applied outside the construction industry to enable a firm to win a project totally unrelated to construction.

These skills helped the education professionals of Cambridge Education Associates fight off stiff competition from Ernst & Young and Arthur Andersen to convince the Department for Education and Employment that they should run Islington LEA's schools.

However, Mott MacDonald chairman Tim Thirlwell tries to put the achievement into perspective. 'It is wrong to suggest that we are now able to compete with management consultants head on, ' he says.

'Blue-chip clients will still go to that kind of management consulting firm because of the skills and services they offer. But in certain sectors and on certain jobs we are able to give them a run. We are starting to make inroads into their business.'

But winning the Islington business is certain proof that the competition can be matched. And the incentive to go after this kind of work and the fees on offer is there.

'Our main interest is to provide full services to clients but it is also true that management consulting can command higher fees, ' says Thirlwell. 'The fact is that we do not just do engineering - we already do quite a bit of management consulting for clients, particularly on private finance jobs and DBFO roads.'

However, maintaining technical skills within an engineering consultancy is vital. To ensure this happens many firms are working on staff development strategies to match the new demands of the workplace.

Hyder Consulting chief executive Tim Wade says he has divided staff development in his business into two streams. 'We discourage people from thinking that the only way to get on in their careers is to move into management, ' says Wade.

The first stream focuses on the technical and professional skills, allowing engineers to develop and progress through the organisation from the operational side of the business. This includes having an understanding of finance and people and also how to go about getting the next piece of work from the client.

But a second stream focuses solely on the management of the business and hives off those with a particular bent or management skill. Consulting is one activity that he says comes naturally to this group.

'The industry as a whole is moving towards solving problems for clients, ' he says, 'Here the earnings are more long term. We seem to be going back in time - civil engineers have become known as designers; in history they were very much advisers.'

But Wade points out that the skills needed on any project range from financial modelling at one end to technical skills at the other. 'In theory it is true that we are in competition with pure management consulting firms but in practice it is more likely that we will work with them.'

While working more closely with the client can generate stable earnings over a longer period, Wade also says that margins on this type of consulting work are certainly attractive.

But he is also clear that he has no plans to move away from the engineering and infrastructure sector.

'We do not want to go further down the management consulting route, ' he says.

'While we seek to offer advice in all aspects of businesses, we are predominantly an infrastructure related business.'

WS Atkins, on the other hand, is perfectly happy to tackle any business that it feels offers a return. Divisional director in the management and industry group Bob Hayward says that Atkins already runs the payroll management for local authorities as well as running many other management processes elsewhere around the UK.

'I perceive that more and more of Atkins' work will be along these lines - we cannot always compete with small businesses simply on design so we now have to do other things, ' he says.

Hayward believes that on technical projects, civil consultants can be better positioned than management consultants as they have to outsource the necessary technical skills.

'I think our strength is that we have these resources in-house and we have a better understanding of people's complete businesses, ' he says, 'Management consultants, by and large, provide just a small component of the total study. The civil engineer seems to have a better knowledge of how the component pieces fit together in business.'

While Hayward recognises that their approach to spotting business solutions gives management consultants the edge at the moment, he is also convinced that the experience gained through value engineering and PFI projects is helping firms such as Atkins catch up.

But Hayward is also convinced that Atkins' technical base and experience across a wide sector is the key to its success. Being a civil engineering consultant is therefore its prime strength.

'We are not advertising ourselves as management consultants. We realise that the bigger money is elsewhere but then the risks increase, ' he says. 'I ardently believe that unless you have experienced something you should not be managing it.'

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