Professional Engineering

“It was losing about £40 million a year when I got there and we finally got it back to a break-even situation,” he says. “Then Mrs Thatcher stepped in again and privatised it. I was about three or four years in at the time and couldn’t leave the team of people I’d built up. So I did a deal with government to bring in shipping magnate Fred Olsen from Norway, and he still owns a large part of it. I had only planned to come back for three years but ended up staying nearly 10 years, leaving in 1993. That was a big turnaround job.”

That job sent his career into overdrive. Sir John joined Babcock in 1993 as chief executive and chairman during a period of significant turnaround and transformation. Babcock had outdated products and a complex organisational structure, with seven sprawling divisions. It was on the verge of bankruptcy and haemorrhaging cash. 

Sir John’s job was to secure its immediate future by instigating an emergency rights issue and implementing a strategy of selling assets. The business was also refocused by slimming it down. By the time he had finished, Babcock was made up of just two divisions – naval engineering services and materials handling – but, importantly, it was back in the black.

Other high-profile management roles followed. In 1997, he became a non-executive director of British Gas which led to his becoming chairman of the Lattice Group on its demerger from BG Group in 2000. Lattice merged with National Grid in 2002, with Sir John becoming chairman of the combined company, National Grid Transco. 

He was appointed chairman of P&O in 2005, leading the shipping group’s agreed sale to DP World (Dubai) in early 2006.

Throughout his career, Sir John’s management style has been labelled as either “firm but fair” or “iron fist in velvet glove”. He bristles at such stereotypes, but does admit to having certain traits that have helped get him where he is.

“Everyone wants to put you in a box when it comes to things like this,” he says. “Of course it isn’t possible to do big jobs like I have without having to make big decisions. But what you need is clarity in terms of where you want to end up. You need to have a vision and you need to have a very clear strategic route how to get there.”

The nature of the work he has undertaken means he has had to oversee large-scale job losses. But he insists that business restructuring isn’t all about cutting employee numbers – it has to come in tandem with investment in the right areas. 

“At Harland and Wolff we invested in new technology at the right time to create a new future for the company. And at Babcock we bought the Rosyth dockyard to give it some real meat with 10 years’ workload to provide a solid bedrock for the future. So while I’m a great believer in having to massively restructure, I believe in investing in the right things. Hopefully I’m always fair – I’m measured and always try to think things through.”

Now Sir John has embarked on the latest chapter of his illustrious career, having replaced Lord Browne as the president of the Royal Academy of Engineering in the summer, to serve for a three-year term until July 2014. 

Part of his remit is to position the academy as the first port of call for engineering knowledge and insight for politicians, media and other opinion formers.

“The top engineers in the country aspire to become a fellow of the academy,” he says. “It’s a great resource for government as a source of expertise, especially at this time when it is planning for growth and looking for ways to rebalance the economy. I believe that our fellows can make a very important contribution to that debate because engineering is going to be at the heart of the recovery.”

He believes that government finally appreciates the role that engineering and manufacturing play in wealth creation, but worries that not enough technical talent is coming through the academic base. “Engineers are part of the solution and we need more of them,” he says. “The loss of our polytechnics means we are also lacking adequate numbers of technicians, who are also critical to any engineering business. The reality is we need more technical horsepower in the economy to drive it forward – and the academy has a number of initiatives to address these issues.”

He was particularly pleased about the recent setting-up of the Queen Elizabeth Prize for Engineering, a £1 million award to recognise outstanding advances. “That comes back to government recognition of engineering and that Britain should be seen as an engineering leader. I’m optimistic. The Queen Elizabeth Prize for Engineering represents an exciting profession, and one that adds huge value to society.”