Designs on change

There is a lot of building work going on in that part of central London, known as Fitzrovia, where the engineering and design consultancy Arup is based. As you approach the company’s HQ you find the word Arup pasted up everywhere on the scaffolding and hoardings. The company is growing, extending its office space, turning Fitzrovia into Arupovia.

Philip Dilley, Arup’s new chairman, exudes calm. He must be used to the (temporary) disruption that construction work can bring. His office is glass-walled and bright. Blinds keep the spring sunshine out – although he is kind enough to ask at one point, with a structural engineer’s attention to detail, if the sun is getting into the interviewer’s eyes.

Mr Dilley – tall, slim, with a full head of tidy white hair – is an Arup lifer, brought in to the business straight after completing his engineering degree at Imperial College, London, 33 years ago. In more than an hour of conversation his calm slips only once, when he sees that a slightly fuller version of his CV has been sent out than he had intended. Otherwise, he is coolness personified – remarkable, since we are meeting on his first day in charge.

Mr Dilley, 54, emerged as the new chairman from a shortlist of three. Not that there was any blatant jockeying for the top job, he says. As an unlisted company owned by a trust, Arup is free to do these things quietly. “There’s not a competition in the sense that we put ourselves forward,” the new boss explains. He says he had not even known at the time who the other candidates to succeed outgoing chairman Terry Hill had been. The board of trustees, made up of former main board employees, retired employees and some current staff members, made its selection, and that was that. With his long experience of leading projects in Europe and Asia as well as in the UK, Mr Dilley was a natural choice.

The new chairman is happy not to be running a public company. Not having shareholders means “we can take a very long-term view of where we head”, he says. Take away the shareholder value mantra, he adds, and “you start to ask what the firm is for, which is quite an interesting subject …I think it’s obviously for the benefit of our clients, because without clients you don’t have a firm, but it’s very much for the benefit of us, our people, and past people, and it’s for the benefit of the world, because we connect with our communities very strongly. So it’s a little bit different, I think, from the plc [public limited company] culture.”

Arup’s culture has grown and deepened steadily since it was founded by the Danish engineer Ove Arup in 1946. Today, the company has more than 10,000 employees worldwide, and earned fee income of just under £800m ($1.2bn) in its last financial year. It divides its work under three headings of “planning, design and management consultancy across the built environment”, although Mr Dilley wants to place a renewed emphasis on the design aspect.

“Good design is the hallmark of Arup,” he says. “And I’m promoting the concept, which I don’t want to drift off, that everything we do is designed …We recently did the whole of the operational readiness of Dubai’s new airport terminal, which is the thing that went wrong at [Heathrow’s] T5 and it’s gone very well. Now that, to me, is good design. There are no drawings in it at all. What you see in the terminal is not Arup work, but getting it to work was.”

Joined-up thinking matters, Mr Dilley says. That is why he is also reorganising Arup’s business units to reflect the markets in which they operate. Separate industry practices and teams will work together under four main sector headings: industry/energy resources; social infrastructure (schools, hospitals and other government work); property; and transport.

Calm and orderly, just like the new boss. But Arup is an unusual sort of business, and beneath the sensible exterior Mr Dilley is prepared to consider some more unusual approaches.

“We will take on people that don’t quite fit the mould,” he says. “We will take on opportunities that don’t quite fit the business plan.” In this Mr Dilley is living up to principles set out by the company founder (see below). “He said that if a good person walks past the door, invite him in. And I really do believe in that. When I had my design group a few years back I used to bring in people who were kind of experiments.

“I wouldn’t have told them they were experiments,” he adds. “For example, we employed a mathematician. Now, I can’t put a mathematician on a project and charge a client for him. He’s still here and he actually studied engineering subsequently and he’s now an engineer and a mathematician. But he’s taken us to places that we’d never have got to otherwise.

“We want there to be discontinuities, we want there to be interesting parts that don’t quite fit in, we want there to be things that take us places where we didn’t expect to get to. That’s part of my job now, I think, to prevent it becoming totally orderly. It’s part of the culture.”

To help stop things getting too predictable Arup has also changed the way it manages its people. Like others it has a performance appraisal system. But it has recently abandoned the old model, which involved setting out four objectives for each employee for the year ahead.

“We don’t want there to be [only] four objectives,” Mr Dilley explains. “It means that you’ll never get the fifth one. We want to have a discussion and look at where you might head over the next year. I’m really saying to people: we would like you to do this, but do it your way and give us some pleasant surprises on the way.”

But before this all gets out of hand, the engineer re-establishes a bit of control. “There’s a balance here,” he says. “I wouldn’t want all our clients to read your article and think, ‘God, it’s complete chaos!’ We want people to have objectives that meet the overall intentions of the company, of course. But I don’t want them to feel constrained.”

Discipline married with creativity characterises Arup. It is an approach that has lain behind several famous Arup constructions: the Sydney opera house, but more recently the “bird’s nest” Olympic stadium in Beijing as well as the “water cube” aquatic centre for the same event. There has also been the occasional setback, such as London’s Millennium (please don’t say wobbly) Bridge. Mr Dilley sees a bright side even to this public embarrassment. “I think it did us some good in a way,” he says. “The fact that we put our hands up and said, look, it’s not right, we’ll put it right, and the fact that we then did I think did us some good.”

There is one other, usually unspoken, but generally overriding priority for the new boss: sustainability. “Everything we do has sustainability intrinsic to it.”

Mr Dilley ends by sharing his quietly radical vision. “In the property world when you apply for planning permission, be it for a huge new development down in the City or an extension to your house, you have to submit a map with a red line around it, a red line saying that ‘this is the site’. You’re not allowed to do anything outside that red line; you’ve got permission inside the red line. If we’re going to have sustainable infrastructure in our cities, our thinking has got to cross the red lines. There are things that have to evolve.”