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Workplace Futures: McGregor-Smith lays out FM challenges

Author : David Strydom

14 February 2013

The Workplace Futures conference recently held at the Crystal in London produced some invigorating, challenging presentations. David Strydom analyses MITIE CEO Ruby McGregor-Smith's opening address.

Talk about a rip-roaring introduction to the facilities management market – Workplace Futures was what some would call a 101 industry guide to everything about everything.

It wasn't that all-encompassing, of course - this market is clearly far too complex and vast to be covered in merely a day - but it came close. For a newcomer such as myself, Ruby McGregor-Smith, CEO at MITIE, painted an interesting picture of what the industry looks like now and what she hopes it will look like in the not-too-distant future.

This was my first sight of a dynamic woman who has been lauded as the face of the future - a force to be reckoned with. And, indeed, her presentation delivery and content suggested somebody who knows where she's going and has very clear ideas on where the FM market should be going, too.

''Since joining she has seen MITIE grow its revenue from half a billion to 1.9 billion, continuing its track record of profit and revenue growth,'' said conference chair, Martin Pickard (aka the FM Guru), adding ‘she is an inspirational speaker and a pin up for the FM industry'.

''So much for equality in the workplace is all I can say,'' the opening speaker chuckled as she walked on stage. Then, casting a sideward glance at Pickard: ''I’ll get you back for that later.’’

But it wasn’t long before the laughter and jokes evaporated, replaced with a more sober analysis of the many challenges facing the industry. ''What really worries me is what I call a lost decade in innovation,'' said McGregor Smith. ''Since 2008 investment in new products and ideas in the UK has fallen £24 billion which is not great for any industry, let alone ours.’’

She zoned in on the complications around IT in the workplace as a particular bugbear. ''IT has become the bane of my life… it’s a really challenging subject because we’re spending huge amounts of money on back office systems and front-end systems.’’ She pointed out that for many employees the IT they operate on outside their work environment is 'significantly ahead' of the IT they operate on in their work environment.

‘’In such a changing world with respect to technology, we need to think of many ways we can harness technology to help us, particularly in some of our service lines. I look at some of our clients in the retail and other sectors and think our industry needs to catch up.’’

Then there are other changes. ‘’When I joined MITIE there was lots of single-service procurement; that’s certainly shifted. We’ve had to take a single-service group and work out how to run integrated financial contracts today.

’’The shift from single services to bundles to multi-services to packages of work that clients want done in a very bespoke way is incredibly different. Again, I think we’re going to see that shift continuing. More than half our work is delivered in a more integrated way. We think that will significantly change again going forward.’’

McGregor-Smith emphasised energy. ''I was talking to a retail client the other day who told me the rising cost of energy in future would overtake the rising costs of everything else in terms of building and infrastructure. How do we as an industry deal with that in an emerging world where not many people understand the challenges of industry?’’

With respect to healthcare, McGregor-Smith pointed out MITIE recently bought the fourth-largest home care provider, Enara, and now has 6,000 care workers working for it. ‘’That again, in terms of a growing market, is hugely exciting; we’re the first large outsourcer to buy in that space.’’

Finally, McGregor-Smith touched on an issue that resonated with her. ‘’It’s incredibly important we focus on talent, and getting the right skills at all levels. And I’m particularly passionate about equality in the UK. It really matters to me; it’s not just about gender, it’s also about race, disability and age. I think it’s a route we can take to be quite different from everybody else.

''Yes, we should focus on our young people in the workplace but the challenges around equality are quite significant and I’d ask you all individually to seriously ask what you can do about that. We’re all role models for somebody and we need to ensure the next generation has a fairer, more equal workplace to go into.

''Don’t underestimate the challenges of twentysomethings seeing obstacles in their workplace, whether it’s a young woman who wants to start a family or somebody who’s concerned about their race and the fact that they don’t fit in.’’

McGregor-Smith also provided some astonishing statistics: the FM market contributes to 8% of GDP while 3.1 million people work in the sector (10% of the workforce). There's a supply chain of more than 250,000 SMEs. Typical outsource savings on many contracts can be 20-40% of what clients spend. ''We should celebrate these facts more than we do. Good publicity is really important.''

She walked off the stage to hearty applause. Clearly, many agree with her points and suggestions. Now it remains for them to be implemented.

+ Ruby McGregor-Smith was appointed as Chief Executive of MITIE Group in March 2007. She joined a small number of women holding the position of Chief Executive in the FTSE 250 and is the first Asian woman to be appointed in such a role. Ruby is a Chartered Accountant. She joined MITIE in 2002 as Group Finance Director. In 2005, she was promoted to Group Chief Operating Officer and in 2007, to Chief Executive.

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