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The new Atkins diet

Profile Keith Clarke

Atkins has been through troubled times. Chief executive Keith Clarke told Antony Oliver why engineering must be at the consultant's heart.

In October 2002 the world fell apart in the Atkins boardroom.

Problems primarily associated with its new backoffice computer system - which left the firm unable to issue invoices, pay staff, service clients or control its finances - saw the giant consultant plunged into turmoil.

Then chief executive Robin Southwell had to go. Finance director Ric Piper had already left, but the Atkins stink cost him his new job at Trinity Mirror before he had even started. Chairman Mike Jeffries was rushed back in to prop up the firm as its share price fell from £7 to 50p almost overnight.

A difficult year later and some nine months ago, Keith Clarke was tempted away from a very serious job running contractor Skanska's European businesses to take on the vacant chief executive role at Atkins. Having had a very long hard look at the business he is excited about the future.

What went wrong at Atkins?

'First of all it was selfinflicted - we cannot blame anyone else for what happened, ' says Clarke. It is clearly not the first time he has been asked this question.

'We couldn't bill clients or pay staff - we became blind, ' he concludes after a rapid recap of the 'enterprise resource programme' backoffice computing fiasco. 'But at the same time the corporate plan was top line growth as an international solution provider.'

Years spent in contracting with very big firms - Trafalgar House, which became Kvaerner and then Skanska - mean Clarke has a very clear understanding of risk in business.

Specifically he understands how an excess of enthusiasm can see construction firms quickly lose control.

'We chased turnover because that was the plan, ' he explains.

'The trouble is that the cash soon goes out of the door, the risks to the business go up and you start losing money as turnover and overheads start to get out of control. We saw a lot of effort being put into areas that were not our core skills.'

Clarke has a very direct manner. His style is to simplify complicated issues and explain things as he sees them. He is also clear about what he wants and how long it might take to do a decent job. At 52 he reckons this could be his last big corporate role.

When he arrived at Atkins, he says, the lack of clarity leapt out at him, particularly the fact that no one could describe to him, in a simple way, what the firm did.

'People kept telling me it was a really complex business that is hard to understand, ' explains Clarke. 'Now, I've worked in complex organisations - most recently at Skanska, which was based across many countries, many businesses and many cultures in Europe. That was complex.

Atkins isn't complex. Untidy maybe, but it isn't complex.'

Achieving clarity about what the business did was vital not only to ensure that it was operating in a way that would match its core competences and business objectives, but also to ensure that, as a public listed company, the market was properly informed about what it was doing and planning to do.

'I don't think anyone had really taken the time to think about it, ' Clarke says of Atkins' strategic vision. 'The stock price went up as a service provider and no one noticed the problems until things started going wrong.'

Now, as Clarke puts it, Atkins is 'getting back to the knitting' - in other words technical expertise and delivering solutions to clients based around technical understanding of their needs.

Clarke points out that £1bn of Atkins' £1.2bn annual turnover is centred on engineering and the planning, design and enabling of projects for clients.

But the common perception, particularly in the city, was that Atkins was more of a facilities manager, he says.

'Before I joined Atkins I didn't know that it was the largest engineering consultancy in the UK, the largest multidisciplinary consultancy in Europe and the eighth largest design firm in the world, ' he says, 'Atkins just didn't say it.'

Putting engineering back at the heart of Atkins is his goal. This is the firm's greatest asset and also its most important resource for delivering solutions to clients and taking the business forward, Clarke says.

'The skills we have can give us sustainable growth, ' he says, pointing out that Atkins has a very large number of technical people working across a large number of sectors. 'The idea that technical solutions will be found without engineers is simply wrong, ' he adds.

Clarke makes clear that Atkins' future growth will not come from pushing turnover.

Organic growth will be the key. Success, he says, will be when staff turnover drops below 15% and profit goes up - 10% is the margin target - through providing a better service.

'It is a competitive market - competitive in terms of quality rather than necessarily cost. We have to invest in our people and our skills, ' he explains. 'We need to continue to do a better job - to continually improve our product rather than just work harder.'

Clarke is visibly excited about the Atkins challenge and particularly working with the staff who he has spent the last nine months learning to understand. While there is still much change needed he says he likes the firm's culture, which he describes as highly professional with a mix of public sector morality and private sector buccaneering.

But specifically he is excited about working in consulting, as he believes the sector holds the key to delivering the needs of society in future.

Having the skills to help clients solve complex problems is what will matter and he believes that firms like Atkins will increasingly be in demand.

'That is why it is not a contractor's world. We must understand that the worst thing for any client is having to build something, ' he says, highlighting the growing need to understand clients' businesses. 'Our job is to get people to understand that this is the new game.'

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