Executive interview: Arup's Paul Johnson
02-Oct-08
Erin Gill talks to the head of global environmental consulting at Arup
Boasting about his achievements isn’t Paul Johnson’s style, although he is clearly proud of the work he’s been involved in during his 22 years with Arup. Originally trained as a botanist and with a PhD in applied ecology, Johnson joined Arup in 1986, charged with developing its environmental consultancy services. “Up to that point, Arup had not really been engaged in the environmental market place. It had begun to consider the problems of building on difficult sites, and issues relating to dirty land and dirty water – that sparked a greater interest in environmental concerns and a realisation that the firm didn’t have the spectrum of environmental skills it increasingly needed,” explains Johnson. “We no longer see ourselves as primarily an engineering firm. We changed our view on that many years ago. These days, we describe ourselves as a company dealing with design, engineering, sustainability and business.”
Environmental consultancy has been Johnson’s line of work since the days of his doctoral studies at the University of Liverpool. “An environmental consultancy unit had recently been set up by a couple of the guys who were a year ahead of me, with some of the lecturers. This was one of the first university environmental consultancy units,” explains Johnson, rightly pointing out that academic consultancies like the one at Liverpool represent one of the original sources of the UK environmental consultancy industry. “Quite a few of the universities began to offer consultancy services in the 1970s. The University of York had a unit dealing with colliery spoil, the University of Sheffield also had a unit, as did Newcastle and University of East Anglia.”
Leaving the past behind and focusing on the commercial challenges facing Arup today, Johnson expresses great respect for other large, multidisciplinary consultancies as well as a desire for the sector as a whole to remain diverse. “I don’t disrespect any of our competitors,” he says. “They all employ good people. I’m pleased to see the industry grow, and be healthy and successful. I would hate to think that the environmental consultancy sector might lose its essential diversity or its ability to bring people on and to allow companies with different approaches and capabilities to succeed. I don’t mind the competition – it’s great for us and it’s great for people being educated in the field and entering the sector.”
Collaboration
Johnson also points out that Arup frequently works in partnership with other consultancies on major projects. It is working with Atkins on London’s Crossrail and with Jacobs on the new Forth crossing in Edinburgh. In the past, it has worked with Halcrow on the Channel Tunnel Rail Link and with Hyder on Highways Agency work. “In an ideal world we would like to do everything ourselves, but with some of these very big engineering projects it’s necessary to team up with other firms. On Crossrail, we have merged our environmental capabilities with Atkins very effectively – they had more strengths and availability in some areas and we had them in other areas. We make a good team.”
A belief in the benefits of co-operation – and in a diverse, competitive environmental consultancy sector – does not, however, mean that Johnson doesn't have well-developed views about what makes Arup a strong and unique player in the field. He’s eager to point out that Arup is owned by its employees – via a trust – which means the company is financially independent. This independence is seen by many within and without the company as having been a key factor in developing Arup’s reputation for taking on challenging and creative projects, and for being involved the design of a long list of iconic structures. The list of big name structures Arup has had a hand in designing includes Sydney Opera House, Amsterdam Public Library (the largest public library in Europe), London's Swiss Re office building (better known as ‘the gherkin’), and even the UK’s most prized piece of public sculpture, Antony Gormley’s Angel of the North.
“The independent nature of our company is sometimes difficult for people outside to perceive, but I think it becomes clear when they talk to us. We try to offer staff independence of mind because if you encourage people to think freely, it gives them the opportunity to show innovation,” says Johnson. “We’re independent of shareholder demands, we can’t be taken over by investment companies or speculators, we look after our staff, and we grow in an organic way.”
Facts and figures
Organic growth, rather than growth by acquisition, has been Arup’s approach. Twenty years ago the firm employed about 2,500 people, now it’s more than 10,000 globally, with around 400 environmental professionals – the majority of whom are based in the UK. There has been some small-scale acquisition but very little compared with the acquisitive programmes pursued by other large players in the sector. According to the latest annual accounts lodged at Companies House, Arup's group turnover and pre-tax profit margin both increased by double-digits in the financial year 2006/07 – to £572 million (2005/06: £475 million) and 5.4% (2005/06: 4.4%) respectively – indicating a company that gives every appearance of being in good health. Due to the multidisciplinary nature of many of the projects Arup’s environmental team are involved in, more detailed figures about the size and profitability of its environmental consultancy division are not available. However, it is estimated to contribute over £25 million to Arup’s annual turnover.
Coupled with independence is Arup’s focus on integration – Arup is the antithesis of a silo-managed company with each division pursuing its own agenda. Johnson’s environmental specialists work with staff from other areas of the business all the time and a free flow of ideas from one discipline to another is an expectation, rather than the vain hope of a couple of members of senior management. “I think Arup is one of the few firms that has the ability to integrate a wide range of services to deliver a single project, everything from engineering to sociology,” says Johnson.
One project for which Arup made good use of the diversity of its skills and the willingness of its staff to collaborate is the Dongtan eco-city project in southern China. Arup has produced a masterplan for the city, to be built in the Yangtze river delta, close to Shanghai. “A lot of creative thinking went into the masterplanning project. It wasn’t just drawing a nice picture of what a settlement might look like,” says Johnson. “It was about integrating urban design with all the other disciplines – landscape, ecology, energy, waste, transportation, public health, community/social issues, employment, governance. We weren’t designing a flat thing that we would then walk away from, we were trying to understand how an eco-city could really work.”
The Dongtan project has, as Johnson acknowledges, “captured the imagination of many people around the world,” however, Arup is just as keen to deploy its expertise on the challenges that face existing urban environments. “New urban development is a fraction of urban development as a whole, and it’s probably more important to develop techniques for retrofitting existing cities, to make them more sustainable, more livable spaces,” says Johnson. As central London’s traffic streams past the window behind him, Johnson comments that “there’s a hell of a lot of city out there and huge upgrades are necessary”. Once again, Johnson believes that a multidisciplinary approach must underpin any retrofitting programme: “Retrofitting doesn’t involve just one discipline within a consultancy. You can’t retrofit urban environments without considering financial issues as well as environmental, social, infrastructure, energy, transport. It’s about bringing everyone together to think about how cities should work in future.”
With all this talk of an eco-city in China and Arup's involvement in the UK’s largest infrastructure projects, such as the Channel Tunnel Rail Link and Crossrail, it is easy to forget that the company also works on a small scale. One current project that particularly excites Johnson is tiny. In fact, it’s so tiny that a quick conversation with an Arup press officer confirms Arup may not actually be charging the client, a small development corporation in England, anything at all. The project involves the development of educational material about urban sustainability issues for school children aged about 8-11 years old. “If we don’t educate children of that age we’re never going to see improvements,” observes Johnson. Whether this project leads to bigger, fee-earning work remains to be seen – clearly that would be Arup’s or any consultancy’s hope – but it’s no surprise to hear that the Arup staff working on the project are passionate about it. It may be a tiny piece of work, but it ticks so many of Arup’s favourite boxes with its focus on the potential for improving the functioning of urban environments.
Economic concerns
Meeting, as we did, the week that Lehman Brothers went under and the US government took emergency action to protect the remainder of its banking industry, discussion about the challenges posed by economic malaise was inevitable. Johnson was cautious but confident about Arup’s ability to succeed during a period of economic turmoil. “What might be an economic concern in one geography is not necessarily an economic concern in another. And economic concern can effect one area of the economy and not others,” he observes. While the housing sector in the UK “is in a pretty dire state,” there are other areas of UK environmental consultancy that remain strong. “There is still demand for corporate services – companies still have to provide information about their environmental performance as part of the annual reporting process, and that is not going to change.”
Johnson also believes that during difficult times environmental consultants are often employed to help companies become “leaner and fitter”, which includes services to examine and reduce energy usage and demand, waste management and “other factors that influence a company’s interaction with the world in ways that cost them money.”
Like other environmental consultancies operating internationally, Arup is increasing its focus on areas of the world where economic slowdown isn’t an issue. “The Gulf isn’t exactly constrained by the problems in the USA,” says Johnson wryly. Unlike some of its competitors, Arup hasn’t poured huge resources into the Middle East, but it is nevertheless keen to win work there. “The types of work that attract us in the Middle East are related to urban development and the infrastructure that flows from it, including tourist development. With tourism, the challenge is not kill off the golden goose. It’s happened in so many places, you have a wonderful place but people almost always over develop. We’re interested in being involved in projects where our advice might help strike a balance between the client’s desire to maximise development and our view as a consultant about what is sensible, including what’s sensible in terms of environmental protection. With tourist development there is the question of legacy – if there are protected species there now, will they still be there when you’re done?”
Infrastructure drives expansion
Arup is also focusing on China and India. In the case of the former, Arup has some experience, not least its work on the Beijing National Stadium, also known as the “bird's nest”, which was unveiled during the 2008 summer Olympics. “People talk a lot about working in China, but not a lot of consultancies have done much work there. India is another huge economy and Arup is only just embarking there. We’ve opened an office in Mumbai and work is starting to flow in.” Johnson is reluctant to talk up Arup’s work in China, India or Russia too much, but surely the company’s reputation for working on mega-scale infrastructure projects and iconic buildings must be a help when it comes to attracting the attention of would-be clients in such newly-confident economic powerhouses.
Discussing Arup’s geographic expansion, Johnson admits that environmental consultancy services aren’t usually the driving force behind Arup’s decision to open an office in a new location. “It’s usually a large infrastructure project that will support a new office first, and then others services, including environmental consultancy, come in behind it,” he says. This makes sense, and it’s also a reminder that development rather than, say, clean-up remains the driving force behind Arup’s success.
The dominance of development brings us to the question of the role of environmental consultancy in an age of environmental degradation. Johnson is clear about where he stands: “We are here to facilitate development. That’s what environmental consultants do. We’re not environmental pressure groups or regulators.” However, he knows and is pleased that environmental consultants have a desire to limit the damage done by development. “Our job is to advise in a way that encourages development with the least environmental cost and damage possible, and to try to mitigate or put back more than is taken. I’m sure that if you talked to any environmental consultant, they would say the same,” he says. Yet the pace of the development taking place – when considered on a global scale – worries Johnson. “There’s a strange dichotomy: everyone knows we can’t continue to develop at the pace we’re developing and everyone knows there’s environmental damage being caused to a huge degree, but nobody can make the decision not to do it.”
It is this rush to develop that worries many environmental consultants, even though development is one of the – if not the – biggest factors driving growth of the sector. “You only have to think about the rapid, large-scale housing development that took place in the UK in the 1960s and 1970s to be reminded that mistakes were and still are made. Mistakes will always happen, that’s one of the things that keeps people like us working, cleaning up after them and trying to prevent them in the first place. We say we’ve learned from the mistakes of the 60s and 70s, but as consultants we’re not always able to prevent them being repeated.”
Once again, Johnson sidesteps the opportunity to talk up he and his colleagues’ influence and ability. Clearly, he feels more comfortable presenting what he judges to be a reasonable and honest perspective, one that acknowledges the limitations of the profession. Despite this ‘no-hype’ approach and Johnson’s commitment to co-operative and collaborative methods of working, he also comes across as someone in possession both of a steely determination and, just possibly, a deeply competitive streak. No doubt, it is a combination of qualities that Arup must value highly.
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