Vision: Jon Lewis is popping Capita right into a high-tech outsourcer
Jon Lewis looks pained as he describes the mess Capita was in when he joined five years ago. Branded the ‘Turnaround King’, Lewis was parachuted in to wash up the bloated Government contractor which he says spent too long indiscriminately buying other firms and racking up debt while continuing to pay handsome dividends to shareholders.
He was most shocked by the toll that years of neglect and underinvestment had taken.
‘We didn’t even have cyber security on a few of our PCs,’ says Lewis, 60, wincing on the memory of its creaking infrastructure.
The general public may wince too: Capita’s work includes every little thing from collecting the BBC licence fee and London’s congestion charge to running Army recruitment.
Many in each the City and Whitehall were on the time convinced Capita was a lost cause – as rival Carillion would later change into. Lewis, back then embarking on his fourth turnaround and arriving after a series of profit warnings, says he had not fully realised the dimensions of the duty.
He’s much more chipper now in his first interview for the reason that ‘very, very difficult’ restructuring finished last yr. His sense of relief is palpable after admitting the final result ‘might have been very different’.
‘Let’s remember this can be a business that’s integral to the material of the UK,’ the Welshman says. ‘Which will sound like a grandiose statement, but we engage with 50 per cent of the population of this country not directly or form virtually every week.
‘We, collectively as a board and as a leadership team, have saved the corporate in order that we are able to proceed to do this and do it higher than we have ever done it before.’
Since arriving in late 2017, he has sold off large chunks of the business and strived to position Capita as a high-tech firm. Away from staples like traditional call centres, and into artificial intelligence and running chatbots for the likes of firms corresponding to O2.
A recent Royal Navy contract handed Capita the duty of modernising whole training systems that included simulation technology.
In the method he has slashed Capita’s own staff numbers from 73,000 to 52,000 and reduced debt to more manageable levels.
But it surely’s the change in culture on the group that, for him, is the true transformation. A part of this stems from organising a consulting division – which he now compares to businesses corresponding to Accenture.
He has also overhauled the way in which Capita deals with clients. He says: ‘Prior to now we’d determine which [contracts we wanted to work on] then bid for them.’
The group would ‘then deliver the contract and never one iota more’.
‘We didn’t manage relationships with our clients in the way in which that other businesses or Big 4 skilled services firms might, there have been no partners that will own that relationship.’ He insists things have moved on and is mystified why Capita continues to be compared with the likes of Serco and Mitie relatively than a rival to Deloitte Digital, Accenture and Infosys.
The fact appears to be that its fame – and an unfortunately crude nickname, ‘Crapita’ – may take more time to shift.
Did they give thought to renaming and rebranding the group? Yes, he says. But this was quickly dismissed when their research found that clients did not have an issue with it.
‘Once we began this transformation five years ago, if you happen to’d done a Google search on ‘Crapita’ you’d get quite just a few hits. You get far fewer hits today,’ he offers.
But he adds: ‘The approach to addressing that will not be through some superficial change of company name. That is just putting lipstick on it.’ For all Lewis’s enthusiasm, how ever, the share price has remained stubbornly low – at 25p. The group is value around £430million – a fraction of its former value and significantly lower than the 97p on the time of 2018’s £700million emergency rights issue that Lewis launched to assist stem losses.
He responds simply that it has been a ‘very difficult’ time for investors.
But he rattles off an inventory of things he still desires to do – growing the group’s business divisions at the speed of the markets they each serve and erasing Capita’s debt. ‘At that time one may pause and say, ‘Is it time to go off and do something else?’ But we aren’t there yet.’
When do you’re thinking that you might be? ‘Well, I am unable to give a timeframe on all that.’
He’s optimistic that its stock will hit the pre-rights issue price in the following yr or two. Whether the market might be convinced is one other matter.
Lewis – perhaps not surprisingly for somebody rejuvenating the business as a consultancy – has a habit of speaking within the jargony language utilized by many bosses.
He uses the word ‘transformation’ on repeat and admits he’s most certainly to be found saying the phrase ‘Are we delighting that customer?’ across the office.
That, and his fathomless enthusiasm, is maybe partly explained by the 20 years he spent working in America.
A geologist by training, he spent twenty years at US oil services behemoth Halliburton. His time there got here to a bruising end when he was omitted for the highest job – a profession low point, he says. ‘I used to be on the succession plan there for a few years,’ he says.
‘There have been six of us, then five, then three after which two. I got to the 2, I didn’t get to the one and had devoted years of my life to the assumption that at some stage I can be CEO of that company.
‘When that type of prospect is dangled in front of you, you just about give your life to that company.’
Now, he seems to have found peace at home in addition to – relatively speaking at the very least – at work.
Raised in South Wales, Lewis went to a neighborhood comprehensive where he met his wife of 37 years. He arrived at Capita via a brief stint at one other oil services group, Amec Foster Wheeler.
His family now live in a vicarage in the identical village that he grew up in, and where he’s devoting much of his spare time to redoing the garden.
‘I bump into people I used to be in infant school with, I bump into people from my comprehensive school, and it’s nice to have those connections still – they do not know what the hell I do. It’s type of grounding, actually.
‘I’ve come home, really, and I like it.’
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