Article - Issue 48, September 2011
Sir John Parker FREng
Sir John Parker FREng
Sir John Parker has chaired a diverse group of organisations over the last 20 years. Now, he is embarking on a new role as President of The Royal Academy of Engineering. He talked to Michael KenwardOBE about how his engineering background has helped shape his business experience.
Most people, having completed nearly 50 years in their profession, would opt for an easier life and rest on their laurels. While Sir John Parker certainly hopes to spend more time with his three young grandchildren and to sail his 46-foot yacht, he’s not yet considering the idea of retiring.
Sir John is due to step down this year from his position as Chairman of National Grid, a post he has held since the company’s creation in 2002. But he is still relatively new as chairman of Anglo American, his fifth FTSE500 chairmanship, which he joined in 2009 during troubled times for the mining and minerals company. And, in July, he was elected by the Fellows of The Royal Academy Engineering to succeed Lord Browne of Madingley as their President.
At the helm
In his career, Sir John has been on the boards of nearly 30companies and organisations. All have had one common theme: they all have had engineering as a part of what he describes as their “critical lifeblood”. It may not be the chairman’s job to get into the nitty gritty details of a company’s engineering ventures, but he has always taken a deep interest. “I want to be an informed chairman,” he says.
National Grid has massive engineering infrastructure and has recently completed the building of an £800 million new LNG terminal on the Isle of Grain to import 20% of the UK’s gas needs. In Brazil, Anglo-American is building the world’s longest slurry pipeline to carry iron ore 520 kilometres from a mine that can produce 27 million tonnes of ore a year. “It is a remarkable story full of great engineering achievements,” he points out.
He is also on the board of DP World (Dubai) the world’s third largest container port operator, another business with massive engineering infrastructure. Nearer to Sir John’s original vocation, shipbuilding, he is on the board of Carnival Corporation, which brings him closer to his initial career as a naval architect. “We have got 100 cruise ships carrying nearly 10 million passengers every year”.
Even his time at the Bank of England between 2004 and 2009, where he was Chairman of the Court of Directors, was not devoid of engineering. “Do you know that the Bank of England has a wonderful power station in its vaults for emergency use, and its own water supply?”
All of this impressive record at the forefront of business and engineering grew out of Sir John’s early life helping out on the family farm. “I was always more interested in the machinery than the hard work of running a farm. And at school, I was mathematically inclined and lucky to come under the influence of a great science teacher and a great headmaster, who was a very good mathematician”. The school successfully prepared the young Parker to win a student apprenticeship with Harland and Wolff, then one of the world’s leading shipbuilders.
As a student apprentice studying naval architecture and mechanical engineering at Belfast College of Technology and at Queen’s University Belfast, the young John Parker worked throughout the shipyard – the drawing offices, structural offices and production. “Over six years of study and training, I emerged as a practical engineer and naval architect”. Then it was another five years or so in the shipyard’s design team until, at around the age of 28, Sir John’s bosses gave him the job of installing a brand new technology, computers, in production.
“I had the wonderful title of Numerical Applications Manager. At that time I was one of the few people in the business with any experience of computing”. Even so, his bosses were, Sir John admits, taking a chance when they handed such an important task to such a young engineer.
“Harland and Wolff was a very progressive company then,” he explains. It was one of just two European companies at the cutting edge of bringing computing into production. “We put in the first numerical control cutting machines in support of the new building dock of 1.2 million-tonnes, the biggest in the world at that time.”
The move into computing also took Sir John into night shifts: that was the only time that he could get a slot on the computer at Queen’s University – an ICL 1902 he recalls. “I would take my punched cards in at one o’clock in the morning, get my punched paper-tape output and drive to the shipyard in the middle of the night. We ran the tapes through the automatic drawing machines, which were completely new technology at that time, to prove the tape was correct. Then we took it down to the workshop and at 2.30 in the morning, we would start cutting plate”.
Before numerically controlled cutting machines, ‘loftsmen’ made wooden templates for parts and laid them out on large steel sheets, much like dressmakers lay out paper patterns on cloth. Then it was down to manual cutting to create the parts.
Leaving the factory floor
The young Parker’s success with this project put him on a fast track to rise up the management hierarchy. His executive career started as Managing Director of Austin Pickersgill shipyard in Sunderland at the age of 32. He returned to Harland & Wolff, where he was Chief Executive between 1983 and 1993. In all, he served for nearly 30 years as chief executive of a range of businesses. Sir John’s career as a chairman dates back to 1994, when he took on the role at Babcock International Group.
For all his many years at the helm of sizeable businesses, Sir John rarely troubles the headlines, unlike many chairmen of publicly listed companies. “I don’t like doing puff pieces. I would rather let delivery speak for itself,” he adds. He then laughs approvingly about one article that quoted him as saying “I prefer to stay at submarine depth”. The same article also described him as “probably the most highly regarded chairman in British business”, a reputation polished by his performance at Anglo American. The company brought him in because a rival had put its “tanks on the lawn”, as he puts it, and the company “was under a huge attack”, fighting off a £20 billion takeover bid. “I was parachuted in to get them off and to give the company a new sense of direction.”
What skills does an engineer bring to a company’s board? “First of all engineers are numerate. We are trained where to put the decimal point. I think that engineers have an ability to feel if something is right, or doesn’t look right. I don’t mean that in a moral sense but in a business sense”. It seems to have worked. “I have been so fortunate to have had the good sense to have come through life as an engineer and being able to create a lot of value for shareholders”.
The importance of engineers to a business also influences Sir John’s approach to the companies he helps to run. “In any company that I go into,” he explains, “I start in the board room. Is it fit for purpose? But quite quickly I gravitate to talking to the engineers because they are the ones with a real corporate memory of the company. On my first day in Anglo, I went to South Africa to our big engineering and research centre because it is the mining engineers there who are at the beginning of the process”.
Sir John also highlights other areas where engineering is all important for a company’s board: safety and the environment. He traces his own interest in these issues back to his days at Harland and Wolff. His work took him to Japan to see what made its shipbuilders so much more productive than their European rivals. “The one thing I learned very early on in my visits to Japan was the enormous attention they paid to safety management as a driver for productivity. Their philosophy was that a safe environment is an efficient environment.” So they had suspended air hoses and acetylene burners that had to be pulled down. “Nothing was littering the workshop floor”. That was also the most efficient way to do it, points out Sir John.
As other businesses have found in recent years, getting safety right isn’t just about the feel- good factor. It also influences productivity and can easily hit the bottom line. “If you think of the disruption that an accident can cause you and the cost of that accident, it is a very, very large sum of money. Safety management has remained an absolute cornerstone of my management philosophy,” says Sir John. “Every board meeting, wherever it is, the first item on the agenda is safety and our impact on the environment.”
The environment and safety are important factors in guaranteeing a company’s ‘licence to operate’. Make too many mistakes on these fronts and you soon run into local difficulties. This also applies to what Sir John describes as “social engineering” when he talks enthusiastically about Anglo’s local activities in South Africa.
The day after talking to Ingenia, he was due to fly off for a one-day visit to South Africa where, as well as catching up with the progress on an asset optimisation programme, he planned to visit a fair that would give local suppliers an opportunity to sell themselves to Anglo and other mining companies. One of the businesses on show was Zemelea, a job creation company that Anglo has backed as a part of its moves to increase employment opportunities in the region. “We have created over 10,000 jobs and we have promised the government that we will create a total of 25,000 in the next few years.”
Through such initiatives, Anglo has done a great deal for the many parts of South Africa where it operates. Sir John talks of the grim comparison between developments built by Anglo and the run-down shanty towns just a few miles away. “The reality is that big business can make huge contributions to society and that, in turn, depends on the skills of our engineers”.
With engineering being so important, why don’t we hear more about this sort of initiative? Do engineers put enough effort into selling their story? As a community, says Sir John, they prefer to allow their output to speak for themselves. They build airports and railway stations and see them as wonderful engineering structures. They don’t think of portraying themselves as great contributors to society,” he says. Then there are the engineers who end up running businesses – and there are plenty of them – but who rarely mention their profession.
With his own admitted preference for working at submarine depth, Sir John clearly includes himself when he says of all engineers, “We are not automatic seekers of publicity. Maybe we should take responsibility for ourselves more heavily to explain our profession”.
As the new President of The Royal Academy of Engineering, Sir John has already broken surface. Within days of his election, he told the Financial Times that: “If we are to have an economy which features a greater amount of technocratic horsepower, then the supply of young people who set their sights on becoming engineers needs to be increased”.
This is one of the areas that Sir John plans to tackle. He also hopes to establish closer links with the Royal Society and has had meetings with its new President, Sir Paul Nurse. He has talked to the Government’s Chief Scientific Adviser, Sir John Beddington. “We are all determined to work positively together to do what we can to promote science and engineering to young people and to convey to them the sheer excitement of studying these subjects and applying engineering sciences in everyday life,” he says.
Visualisation of the sinuous bridge which will provide access to The Royal Academy of Engineering’s renovated building. Apprentice engineers from Babcock International’s shipyard in Rosyth are currently fabricating the bridge as part of the company’s contribution to the Academy’s development campaign, chaired by Sir John Parker. The bridge is due to be installed in early 2012
Forum for the future
He is also looking forward to the redevelopment of the Academy’s premises: he chaired the committee that has so far raised £10 million for the Academy’s building and education purposes. This successful campaign includes contributions from Fellows, engineering businesses, as well as from the finance and legal sectors. Perhaps this is a reflection of the wider recognition that engineering matters to the UK and deserves support. It will cost £6.5 million to turn the public areas of the Academy’s building into what Sir John envisages as “a national asset for engineering”. Speaking at a reception marking the start of his term as President just before the arrival of the builders, he looked forward to the creation of “a high quality forum in which we will debate the issues that matter and celebrate the achievements of engineers, showing what engineering is and what it is to be an engineer today”.
Perhaps for the first time since Sir John picked engineering as a profession, even politicians now seem to appreciate the importance of devising policies that support making things in the UK. Does he really believe in the government’s rediscovery of manufacturing? “I think that there is a genuine recognition, particularly with the decline of North Sea oil, that there is a critical need to have an expansion of other activity that creates wealth, alongside the strong financial sector. We have got to lead our recovery through engineering, technology and innovative design”.