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EXCLUSIVE Interview with Martyn Freeman, MD of FM at Mitie

26 November 2015

In an exclusive interview with PFM, to be published in its entirety in December, Martyn Freeman, MD of FM at Mitie, ponders whether FM is now ‘old hat’ and suggests it may need to reinvent itself. Here's an excerpt:

Every so often, Martyn Freeman gets away from it all at his holiday villa in Spain. He uses it as a retreat from the pressures of his job, but also to catch up on reading, sleeping and boating on the Costa Blanca. As Managing Director of Mitie’s facilities management business, Freeman has a big job on his hands. And, given the competitive nature of the FM industry, it’s no surprise that he needs a bit of downtime in sunny Mediterranean climes.

But as competition gets ever more intense, and pressure grows on outsourcers like Mitie to continually find new ways to innovate, Freeman is going to need those breaks more than ever. “FM is a competitive environment – you always have to be at the top of your game from an innovation perspective,” he says. “As soon as you’ve invented something, someone copies you and takes it to the next level. There's always someone snapping at your heels, which is why there probably isn't one company that’s dominated the UK market.”

Freeman points out that there isn't a single organisation that’s taken 15, 20 or 30% of the market – they all have smaller pieces and most end up going head-to-head with one another. Does he find that challenging? “Yes. It keeps me on my toes. You’ve always got to go forward with one eye looking behind you. The commoditisation of the industry is challenging in that, if you want to be competitive when bidding, you can’t always offer what you'd like in terms of what’s best for your people. I think that’s a shame.”

Freeman is talking about the so-called ‘race to the bottom’, which, unsurprisingly, he appears to abhor. “I think FM – even integrated FM – has become commoditised in many respects, particularly if procurement teams are only focused on the cost of a service. Sometimes that takes away the scope to add value or provide great services and innovation. It won’t make us a great strategic partner to our client and I certainly don’t think it helps our people.”

The commoditisation is all part of a process that’s changing the perception of FM, Freeman says. He recalls a conversation with a potential client who was telling him how much he valued his supply chain, seeing it as an extension of his own organisation. “He was saying all the right things about how he valued services and I was proud, thinking ‘This is fantastic – exactly the kind of client I want to work with’. I asked what he considered a fair return, to which he replied between 1-3%. To me, that was a reflection of the value a potential client was placing on great organisations providing great services.”

Freeman says that it’s naïve for people to believe the sector can survive on margins of 1-3%, ‘because it can’t’. “That is not a sustainable margin and it goes to show that that is the type of financial return people want to place on crucial services, such as looking after data centres, working at height with electrics or providing security 24/7. A margin of 1-3% is not right for our sector and we need to help educate the client base. FM needs to stand up for itself; we should only work with clients that want to work with us as organisations, rather than the obsessing over the bottom line.”

It’s difficult not to empathise with Freeman’s frustration, although he clearly isn't looking for empathy – just good, solid business solutions. One solution that he touts is that the FM sector needs some sort of makeover. “Maybe FM has become ‘old hat’. It needs to reinvent itself, to brand itself differently. I also believe that ‘FM’ isn't necessarily the right classification of the industry anymore.”


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