Few industrialists can boast the depth of experience of Sir John Parker. After a glittering career spanning several decades he is seen as one of the country’s most respected executives, having been chairman of blue-chip companies such as mining conglomerate Anglo American and National Grid.
But when he looks back on his achievements, it is not his experience of running FTSE 100 companies that enthuses him most. Sir John might be best known as a businessman, but before that he cut his teeth as an engineer. And it is this period of his life that he recalls with relish.
“I was born into a farming family but I determined very early on that I didn’t want to do farming as a career,” he says. “At school, I was pretty good at maths and science and I had great teachers who were the inspiration behind my enjoyment of those subjects. And engineering gave the chance to apply them in a practical manner.”
Back in the early 1960s, when Sir John set out on his career in Belfast, there was only one place where he wanted to work: the giant Harland and Wolff shipyard that dominated the city. He landed on his feet – the company offered him the chance to become a student apprentice, earning while he was learning. He was employed part-time for six years across all departments while completing his studies in naval architecture and mechanical engineering. Those were the days when industrial leviathans like Harland and Wolff offered the best apprenticeships in the business. Sir John acknowledges that he benefited from a technical grounding that was second to none. “I was given tremendous development by the company, working my way through all of the engineering and technical offices and many of the other departments in the shipyard,” he says.
“Eventually I joined the ship design team. When an enquiry came in, we were tasked with producing the conceptual design. It was fascinating, because then Harland and Wolff was one of the largest shipyards in the world, so there was an incredible variety of ships.”
One of the earliest projects he worked on was the design and build of SS Canberra, an ocean liner commissioned by P&O. Canberra was something of an oddity: instead of being mechanically coupled to the propeller shafts, the ship’s steam turbines drove large electric alternators which provided power to electric motors which, in turn, drove twin propellers.
They were the most powerful steam turbo-electric units ever installed in a passenger ship; at 42,500hp (31,700kW) per shaft, they surpassed SS Normandie’s 40,000hp (30,000kW) on each of the four shafts. This gave Canberra a speed of 27.25 knots (50.47km/h). Canberra also had a bow propeller for manoeuvring in port and for docking, and was the first British passenger liner to use alternating current as power.
Sir John was inspired by playing his part in bringing the Canberra to life. He recalls: “I had a modest role, really, it being very early days in my career in the drawing offices. I was in charge of the deck covering plan, which determined what galleys, lounges and cabins went in. I also had to go on to the ship when it was being outfitted to check on progress. That really brought me into contact with the rest of the yard’s workforce. I was very inspired by that ship.”
After extensive ship design and research experience, Sir John went on to hold senior management positions in technical, production and ship sales departments at Harland and Wolff. During his time there, the yard broke new ground, winning the contract for the world’s first commercial liquefied natural gas ship, the 28,000m3 Methane Progress. It was also a time of transition. The yard was moving from mainly manual-based production processes to embrace emerging computer-controlled cutting techniques.
Sir John says this process required technical and people management skills in equal amount.
“At the time, computers were just being introduced. Previously many of the intricate ship shapes were made by cutting around wooden templates. But computers were taking over, and training the workforce was a fascinating process. The workers were thrilled with the opportunity to do something new. And they adapted to it fantastically and so it was very rewarding.
“That brought me into contact with skilled technologists, and it started me on the development of my own leadership skills. From that experience I went on to manage the technical drawing offices, which produced all the manufacturing automation and the working drawings at the shipyard. Then I became the boss of worldwide ship sales and ran the estimating department. When I look back on it now I realise that working at Harland and Wolff gave me a very enriched practical and academic experience. It turned me into a rounded, applied engineer at, in my late twenties, an early stage in my career,” he says.
His fast-tracked development hadn’t gone unnoticed. By the age of 32, he had secured his first big leadership job – managing director of Austin and Pickersgill (Shipbuilders) in Sunderland. The yard was enjoying a golden period, having established a standard ship design called the SD14. Refinement of manufacturing techniques under Sir John’s tenure saw Austin and Pickersgill building one of these 14,000-tonne general cargo vessels every 27 working days. A&P quickly became Britain’s most profitable shipyard.
Three years later, in 1977, Sir John was lured away from Sunderland to London by the government to head the British Shipbuilders Corporation (BSC), a publicly owned body founded as a result of the Aircraft and Shipbuilding Industries Act, which nationalised all major shipbuilding companies in Great Britain.
It wasn’t a move he particularly relished and it was a challenging time of his career. He says: “I got hijacked out of Sunderland, I didn’t really want to leave A&P. It wasn’t my natural choice.
“But, saying that, it was an incredible challenge. BSC had more than 85,000 employees, yet the whole nationalisation process had been done in such a rush that there was no corporate plan and no chief executive. I was put in charge to set up marketing worldwide and then I was finally asked to become board member responsible for all of the shipyards. It was a nightmarish job because the market was falling like a stone in the 1970s after the oil shock.
“That tested my management credentials, and very importantly it brought me into contact with government for the first time – it was such a shock to the system, I had no experience before of politics, I was green. We had some very difficult challenges in that job.”
The industry was losing a huge amount of money and so Sir John and his management team were forced to implement a massive amount of restructuring. But despite inheriting such a mess, they brought BSC back to break-even within three years. Shortly after achieving that milestone, he was asked by then prime minister Margaret Thatcher to go full-circle and return to Northern Ireland to save Harland and Wolff from bankruptcy. The yard was running out of work fast and the government was desperate to turn the business around.
“It was a huge decision to go back, as the bombs and bullets were fairly active in Belfast at that time,” says Sir John. “Also, the yard’s markets were falling like a stone. So I told the government I would give it a go, but that I wouldn’t go back for more than three years. Quite frankly I had no idea if I could rescue it or not.”
The yard was in a worse state than he imagined. It needed a new strategy, diversifying from purely merchant ships into other areas such as the design and build of naval vessels and offshore engineering structures. The strategy came from Sir John’s father’s assertion that a “three-legged stool stays stable on uneven ground”.
The yard was also repositioned to cope with the construction of more technically advanced ships, such as dynamically positioned floating oil production, storage and offloading vessels. Heavy investment was made in new computer-aided design technology and in the retraining of the naval architects and engineers. Slowly but surely Sir John and his team started to turn the yard around.
“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.”