The failure of Network Rail to complete major construction projects on schedule, resulting in New Year chaos on the railways, will doubtless be subjected to close scrutiny by the regulator.
But whatever the conclusion of that post-mortem, the news headlines of early January will remain in people’s memory. Network Rail told frustrated politicians and commuters that the difficulty it faced was due to ‘a lack of specialist [skilled] engineers’.
The government also showed recently that it was short of an engineer or two. Its review of the need for additional nuclear capacity failed to analyse the skills requirements. It took the Royal Society of Chemistry to point out that there were not enough nuclear engineers in the UK, or possibly globally, to deliver such a programme.
Speaking the language of finance, the Return on Investment (ROI) model showed a positive return for investment in nuclear capacity, but assumed the market for engineering skills was ‘efficient’ and therefore omitted that factor from its model drivers. In the language of economics, ‘efficient’ means essentially that if demand for resources — in this case, engineers — is required, then supply will develop at a market competitive price.
It is clear there is a loss of communication between engineers and the market for their services. Essentially, engineers are not yet talking the same language as mainstream business leaders. If they choose not to engage, preferring to stay within their own comfort zone, can they really complain when they are overlooked?
So how can engineers engage in the language of investment and, perhaps more importantly, return? First, they must accept the need to adapt their language to that of their stakeholders, be it business or government. For engineers to respond to the market effectively and talk the language of business, they must develop a much broader set of skills beyond their traditional core.
Engineers have to develop their own justifications for investing time to communicate, negotiate and persuade stakeholders about issues encompassing all the elements and risks in the investment model.
Every investment decision balances a cost with a future value, and every engineer knows about solving equations with multiple unknowns. But perhaps engineers have opted to avoid developing simple financial measurement and metrics for the true value of most engineering achievements and skills.
Without the ability to derive, communicate and prove value, you lose the justification for your existence. This applies to salaries as much as to investment in skills.
Perhaps more worryingly, if, as an industry, we fail to describe the value of engineering skills using modern language, how will we inspire the next generation to train as engineers?
It may seem I am suggesting that every engineer needs to become an accountant or a financier. Not so. What I am saying is that in order to give value to core engineering and science skills, you need far more, dare I say, ‘soft’ skills.
Engineers have often complained of not being valued. In the real business world, you need to be driving the financial model, managing the key risks and elements that produce value and return — in short, all the political, communication, human resources (HR) marketing, leadership, financial and stakeholder skills that we expect to see on the boards of UK engineering companies.
In 2006, the Sainsbury Management Fellows conducted a survey of 300 of the top HR directors and chief executives in the UK asking what factors they thought were holding back engineers from sitting on the board of UK companies. Eighty per cent cited a lack of general business experience and qualifications.
Yet the lifetime value of even middle-sized infrastructure projects led by engineers as project managers far exceeds the annual turnover of typical non-engineering UK FTSE 300 companies.
So how are engineers going to bridge the communication gap? They have the opportunity through continuing professional development programmes, but is it worth it? Over the next few months, we plan to help engineers answer the question: Do you know your own Return on Ingenuity (ROI) and how can you learn to communicate it better?
James Raby is treasurer of the Sainsbury Management Fellowship
Engineers often complain of not being valued, but it is up to them to learn the language of finance and state their case to government and business, says James Raby.