Turnaround King Jon Lewis on revival of Government contractor Capita

Vision: Jon Lewis is turning Capita 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 clean 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 some of our PCs,’ says Lewis, 60, wincing at the memory of its creaking infrastructure. 

The public may wince too: Capita’s work includes everything from collecting the BBC licence fee and London’s congestion charge to running Army recruitment. 

Many in both the City and Whitehall were at the time convinced Capita was a lost cause – as rival Carillion would later become. Lewis, back then embarking on his fourth turnaround and arriving after a series of profit warnings, says he had not fully realised the scale of the task. 

He is far more chipper now in his first interview since the ‘very, very challenging’ restructuring finished last year. His sense of relief is palpable after admitting the outcome ‘could have been very different’. 

‘Let’s remember this is a business that is integral to the fabric of the UK,’ the Welshman says. ‘That may sound like a grandiose statement, but we engage with 50 per cent of the population of this country in some way or form virtually every week. 

‘We, collectively as a board and as a leadership team, have saved the company so that we can continue to do that and do it better than we’ve 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 such as O2. 

A recent Royal Navy contract handed Capita the task of modernising whole training systems that included simulation technology. 

In the process he has slashed Capita’s own staff numbers from 73,000 to 52,000 and reduced debt to more manageable levels. 

But it’s the change in culture at the group that, for him, is the real transformation. Part of this stems from setting up a consulting division – which he now compares to businesses such as Accenture. 

He has also overhauled the way Capita deals with clients. He says: ‘In the past we would decide which [contracts we wanted to work on] then bid for them.’ 

The group would ‘then deliver the contract and not one iota more’. 

‘We didn’t manage relationships with our clients in the way that other businesses or Big Four professional services firms might, there were no partners that would own that relationship.’ He insists things have moved on and is mystified why Capita is still compared with the likes of Serco and Mitie rather than a rival to Deloitte Digital, Accenture and Infosys. 

The reality seems to be that its reputation – and an unfortunately crude nickname, ‘Crapita’ – may take more time to shift. 

Did they think about renaming and rebranding the group? Yes, he says. But this was quickly dismissed when their research found that clients didn’t have a problem with it. 

‘When we started this transformation five years ago, if you’d done a Google search on ‘Crapita’ you’d get quite a few hits. You get far fewer hits today,’ he offers. 

But he adds: ‘The way to addressing that is not through some superficial change of company name. That’s just putting lipstick on it.’ For all Lewis’s enthusiasm, how ever, the share price has remained stubbornly low – at 25p. The group is worth around £430million – a fraction of its former value and significantly less than the 97p at the time of 2018’s £700million emergency rights issue that Lewis launched to help stem losses. 

He responds simply that it has been a ‘very challenging’ time for investors. 

But he rattles off a list of things he still wants to do – growing the group’s business divisions at the rate of the markets they each serve and erasing Capita’s debt. ‘At that point one may pause and say, ‘Is it time to go off and do something else?’ But we are not there yet.’ 

When do you think you will be? ‘Well, I can’t give a timeframe on all that.’ 

He is optimistic that its stock will hit the pre-rights issue price in the next year or two. Whether the market will be convinced is another matter. 

Lewis – perhaps not surprisingly for someone rejuvenating the business as a consultancy – has a habit of speaking in the jargony language used by many bosses. 

He uses the word ‘transformation’ on repeat and admits he’s most likely to be found saying the phrase ‘Are we delighting that customer?’ around the office. 

That, and his fathomless enthusiasm, is perhaps partly explained by the 20 years he spent working in America. 

A geologist by training, he spent two decades at US oil services behemoth Halliburton. His time there came to a bruising end when he was passed over for the top job – a career low point, he says. ‘I was on the succession plan there for many years,’ he says. 

‘There were six of us, then five, then three and then two. I got to the two, I didn’t get to the one and had devoted years of my life to the belief that at some stage I would be CEO of that company. 

‘When that kind of prospect is dangled in front of you, you pretty much give your life to that company.’ 

Now, he seems to have found peace at home as well as – relatively speaking at least – at work. 

Raised in South Wales, Lewis went to a local comprehensive where he met his wife of 37 years. He arrived at Capita via a short stint at another oil services group, Amec Foster Wheeler.

His family now live in a vicarage in the same village that he grew up in, and where he is devoting much of his spare time to redoing the garden. 

‘I bump into people I was in infant school with, I bump into people from my comprehensive school, and it’s nice to have those connections still – they don’t know what the hell I do. It’s kind of grounding, actually. 

‘I’ve come home, really, and I love it.’

This post first appeared on Dailymail.co.uk