RSK’s Alan Ryder on how to manage rapid expansion

It’s hard to beat RSK for the diversity of its operations. From building care homes in the Falkland Islands to extracting oil from waste sludge in Iraq, this UK-based engineering and environmental consultancy now employs some 11,000 people worldwide. After doubling in size through the Covid-19 pandemic, its ambition is to get even bigger, according to its founder and chief executive, Alan Ryder.

Ryder admits he cannot possibly know what is going on across his company, which now turns over £1bn a year on a rolling basis, adjusted for acquisitions. How does he plan to lead it through such continued rapid expansion? There must be a risk that acquiring multiple businesses at pace will dilute, or even pollute, the strong RSK corporate culture that he has built over more than three decades. Why push so aggressively for growth?

As befits a man who wants to head the world’s largest provider of “sustainable solutions”, Ryder resorts to a botanical simile. RSK is “like a pond of lily pads,” he says. “And where you get the real benefit is where one lily pad abuts another lily pad. So instead of individual pockets of expertise . . . we can get two or three lily pads intersecting and we bring the expertise from these guys, these guys and these guys together.”

Building such a large and diverse body of expertise within the group produces “a unique offer to the customer”, says Ryder, combining “people that wear white lab coats and do front-end research . . . consultancy folk with their smart shirts on [and] people that deliver the solutions on the ground and wear hard hats and steel boots”.

This cross-fertilisation of ideas and expertise is one reason size matters, according to Ryder. Another is that scale impresses and reassures customers, staff, funders and the owners of the many companies RSK buys.

Certainty — as well as size — is also one of the lures for other entrepreneurs to sell to RSK. “We’re looking to buy businesses where founders have grown them,” he says. “They accept the inevitability of old age and needing to do something with their business and want to see it transition to other people, perhaps other senior colleagues to play a bigger role. But they also want to take some money off the table to help with their retirement, but stay involved in their business.” It is a strategy similar to that used by Warren Buffett, who, like Ryder, mostly allows founders to maintain their brand and autonomy even as their companies become part of the Berkshire Hathaway investment company he heads.

Like all good entrepreneurs, Ryder, now aged 61, has a well-polished origin story. His PhD from Aberdeen university was about the environmental impact of pipeline construction. He and his PhD supervisor Bernard Kenworthy, who died in 1994, set up RSK in 1989 to advise on applying new environmental regulations to cross-country pipelines. The “S” at first stood for another lecturer, who got cold feet after the branded stationery had already been printed, and later for another shareholder Sue Sljivic, who retired in 2021. She helped set up the office in Cheshire, north-west England, where RSK is still headquartered, near the end of the 411km ethylene pipeline from Scotland to Ellesmere Port that was one of the company’s first projects.

Ryder comes across as a down-to-earth boss. The headquarters is a modest low-rise building set among suburban homes. His own office is cluttered with dressers filled with his parents’ extensive collection of antique ceramics, shaving mugs and moustache cups (to which he adds from time to time). On one side is a vintage hi-fi he “couldn’t bear to throw away” and a wind-up gramophone that he turned into an automated drawing machine when he was bed-bound by a childhood illness. Asked to describe a typical day, Ryder says “there’s usually a lot of email involved”. His biggest challenge? “Financing growth.” Elon Musk, he is not.

He says he is calm about RSK’s use of debt finance, including £1bn from Ares Management, the private capital group, even as economic and financial pressure increases. If interest rates became “sillily high”, as in the 1980s, such a funding structure could become unsustainable. But he values the stability of debt finance, compared with the uncertainty of public or private equity, where “the minute you’ve got the equity coming in, [investors’] thought is, ‘How am I going to get it out again? Who am I going to sell it to?’”

Ryder shares the driving ambition and strong risk appetite of more colourful founders and entrepreneurs. Perhaps mingled with his parents’ collector genes, these traits have helped him assemble a global empire, touching every large market except the US (too crowded with consultants, too litigious, and “too American”, jokes Ryder).

Oil and gas companies remain stable customers, but the industry accounts by now for only roughly 2.5 per cent of sales, against more than a third of revenue from water industry projects, 16 per cent from property and construction and 12 per cent from activity in the renewables area.

When we didn’t have enough cash in the bank to pay suppliers on time . . . That was really tough

His group uses the UN’s sustainable development goals as a framework for its strategy, and Ryder is frank that he has no “phobia” about dealing with fossil fuel or mining companies. “We need oil and gas and we need precious metals, so mining needs to be done sustainably and well, and natural resources need to be protected in our pursuit for nickel and cadmium for our batteries. I don’t think the responsible thing is to walk away from those difficult sectors and say, ‘Oh, no, you’re a dirty industry and we don’t have anything to do with you.’ I think our job is to help them be as good as they can be and deal with the environmental problems that they have to deal with as well as can be dealt with.”

He does, however, let staff choose whether they want to work on such projects, a philosophy first established in the 1990s when RSK took on controversial work in the nuclear sector.

Ryder sounds similarly pragmatic about the question of how to manage such a diverse company as it continues to grow at speed, based on trust in 200 senior managers who he says are not afraid to challenge him.

RSK has been thrown off a growth path once before. The financial crisis hit in 2008 and nearly stopped his expansion ambitions dead. The group had tripled in size, from 300 to 900 staff, “and everything looked like it was an upwards trajectory”. A potential public listing was on the horizon. The financial crisis scuppered that plan, bringing a cash crunch and forcing a retrenchment and lay-offs. Ryder recalls the stress of leading the group “when we didn’t have enough cash in the bank to pay suppliers on time . . . That was really tough, when you’re taking calls from your mobile phone company that wants to turn off your phone if you don’t pay the bill”.

After more than 30 years and with such ambitious expansion plans, Ryder shows no signs of retiring. He is the largest shareholder in the group with 40 per cent of the company, with employees holding most of the balance. What about succession plans ? Ryder is at first jokily evasive (“Well, I’m immortal”) but eventually admits he has left the name of a potential successor in an envelope.

As for submitting to a takeover, he thinks he would “lose a lot of friends” and sleep no better at night if he were to sell out. In 2017, at a leadership retreat at a management school, he asked senior executives whether RSK should sell to a competitor if it had the chance. “Somebody put their hand up and said, ‘Look, Alan, it’d be easy for us to get a job with one of those other big firms, and if we wanted to work for them, we’d go and work for them. So we work here at RSK because you are, and we are, different to that. So, you know, we don’t want that.’” 

He adds: “Occasionally we get approaches [but] it hasn’t appealed to me because I think there’s still so much for us to do.” Much of the future growth will come from acquisition, some from ideas generated internally. Bright staff have, over the years, convinced Ryder to add “lily pads”, that include SkyVision International, offering aerial pipeline surveillance since 1994, to, more recently, Nature Positive, a biodiversity assessment service. “What you don’t want to do is turn round to an individual and say ‘No thanks: you know, that’s a great idea, but not for us.’ I like to say to people, ‘That’s a great idea. We’d love to help you.’”

Asked about the risk that RSK will simply sprawl out of control, Ryder responds, with genuine incredulity: “Why would you want to prevent growth?” He would not try to acquire something so distant from RSK’s existing businesses that there was no opportunity for symbiosis. Other than that, though, Ryder’s ambition, like the family china collection, seems to have few limits and “if the pond gets full, then you need to think about getting a bigger pond”.