MITIE Security

Source: Exec Digital UK

Date :04/06/2007 10:34:41

Service with passion as MITIE brings security provision into the 21st century

MITIE Security is one of the UK’s leading providers of security solutions with the capability to deliver solutions or integrated guarding and electronic security services that meet the needs of its clients. James Hurley met Managing Director Jeff Flanagan to discuss the company’s impressive growth, its forward thinking approach to people management and how a de-layered management structure is reaping rich rewards

Written by James Hurley & Produced by Kiron Chavda

Security has traditionally been perceived as a rather insular industry dominated by former police officers and ex-service personnel. Yet private security work provides growing opportunities at all levels for those without any police or military background, and MITIE Security’s Managing Director is a superb example of someone with a CV and skills set not commonly associated with the security industry succeeding at its highest level.

Jeff Flanagan began his working life as an engineering consultant in 1982, but his desire to seek career progression saw him quickly move into accountancy in 1984. A long and successful spell at KPMG followed, before he made the unconventional leap into security by becoming finance director at the Executive Group, a cleaning and security firm. By the time MITIE acquired the company in November 2003, Flanagan had overseen its turnover grow to £42 million from £17 million in 1997.

A flat management structure and the personal touch

MITIE Security provides a complete range of security services including static guarding, mobile patrols, keyholding and alarm response, gallery attendants, consulting and remote monitoring services for its clients. Over the past 12 months, it has grown to become the UK’s second largest security services provider, tailoring its services to the specific needs of its clients. The company prides itself on its highly trained, motivated and empowered workforce, and since the company employs 11, 000 licensed security officers on the ground, the management of these people is crucial to MITIE’s success story.

“We have a non-hierarchal, de-layered management structure,” explains Flanagan. “We have the absolute minimum number of layers meaning that management is very close to the operations on the ground. This is crucial in terms of attention to detail and maintaining the personal touch.”

While countless organisations claim an advantage that comes from the quality and dedication of their employees, Flanagan is insistent that in MITIE’s case, this is more than just semantics. “Our core product is our security officers and this recognition is at the heart of our People plus ethos. We’re unique in that sense in that we try and instil a true sense of ownership in our staff to create a motivated workforce. We’re trying to build a culture which ‘says yes’.”

Flanagan’s philosophy is that every person in the team is different. “While teamwork is important, there comes a time when trust must be placed in the employee. I like to give people autonomy and respect. My managerial style is the complete opposite of dictatorial. Every manager must lead by example. It’s better to judge people on what they do rather than what they say.

“If anyone is asked to name an excellent security company, MITIE always comes up,” he says. “We have a reputation as an outstanding provider. Our ambition is not to be the largest company in terms of turnover, but to be a leading recognised provider of security. If people want to work with you, it informs a sense of pride. That goes as much for the management team as the people at the coal face. In order to get our message across to our 11, 000 officers we have to look for industry recognition and the right caliber of people at management level.”

MITIE Security employees are invited to join a ‘save as you earn’ scheme, and have the opportunity to win “handsome prizes” at MITIE Security’s annual awards dinner. The sense of ownership and belonging that is instilled in the company’s workers means that staff turnover is kept to a minimum, even if it can’t be avoided completely. “With the officers, there’s always an element of churn,” Flanagan admits, “but our management team has a very low turnover.”

“MITIE Security has been a very successful business that has grown by finding the right people and incentivising them in the wealth creation process,” says Flanagan. “We get our people to do what they’re good at, which is building the business and customer care. The primary focus of MITIE is people, in terms of recruitment, motivation and care,” he says.

Organic growth and acquisitions

MITIE Security has been enjoying a very strong period of both acquisitive and organic growth for some time now. In 2005, the company acquired both Midlands based The Watch Security Ltd and electronic solutions provider Intruder International Ltd. The purchase of The Watch, a manned guarding and electronic security business, completed MITIE’s national footprint in the security sector, while the acquisition of Intruder has helped the company compliment its manned guarding operations with the ability to provide an integrated electronic security solution.

In total, MITIE spent £82.8 million on security acquisitions in 2005/06. By far the most significant of these purchases was that of Initial Security Ltd (ISL) in March 2006 for £74.8 million. This strengthened MITIE Security’s regional operations and added specialist aviation and retail work to the company’s portfolio. Initial Security was a major national provider delivering guarding services at over 2,000 sites and more than 6,000 staff transferred to MITIE Security as part of the acquisition. “We now have 26 offices nationally which gives us complete geographic coverage across the UK mainland. We’re dominated by guarding but we want a broadened service offering so we can truly have an integrated security solution,” says Flanagan. “If a client came to us wanting an end to end solution that combined consultancy, physical security, manpower and electronic security we have the capability to offer that.””

The long term benefits of the Initial Security acquisition will be numerous, yet integrating the two businesses has been a busy and at times frustrating experience. “It has been bloody hard work over the last year, but we’re in a very good position now,” Flanagan says. A year of transferring staff, standardising systems and procedures, including making the combined businesses work with a single roster and scheduling system, is no mean feat and the softly spoken Welshman acknowledges that it has been a “very, very tough twelve months.”

The coming year is likely to be more straightforward, as MITIE Security looks for a period of consolidation. “In terms of growth, we’re looking at a year of growing completely organically. It’s highly unlikely that we’ll buy anything, unless it’s something that could take us into a new geographic area or a niche market. Certainly, there will primarily be an organic focus.” Where does he see this growth coming from?

“We’re looking to make decent inroads in retail,” he says. “We’re building up a very good reputation there. In the last twelve months we’ve picked up Marks & Spencer, Somerfield, and work from Boots and we already work with Tesco.”

For large, multi-site customers, MITIE Security combine national account management with local flexibility, ensuring that security is effectively managed across all of its clients’ UK sites. Flanagan anticipates the company’s improved ability to offer a ‘National Account’ service to its clients provides further opportunities for growth. “We haven’t really targeted big national contracts. We’ve reacted when opportunities have arisen to win these contracts but that’s very different from pro-actively going after that business. That will be a central marketing focus, but of course those sort of contracts are not quick wins. You have to groom those customers over a period of time and establish credibility and reliability. Over a three year period we’ll gain momentum in this respect.”

A significant recent success in this area saw MITIE Security appointed as the

exclusive manned guarding supplier to HM Courts Service and the Tribunal

Service nationwide. MITIE won seven contracts, which are worth in excess of £20 million. The company will provide security to the nation’s magistrates, crown and county courts, building on a successful 15-year relationship

between the two parties.

The company is clearly doing something right - in November 2003, the security division was turning over approximately £38 million and it’s now annualised at around £255 million. “We don’t like to lose customers, explains Flanagan. “Through outstanding customer care, allied with a very strong sales force, an organic growth model is formed. And organically we’ve outstripped anyone in the sector, big or small, over the last three years. Broadly speaking, this is down to the fact that, by and large, we don’t lose business.”

Changing perceptions

During his time at KPMG, Flanagan spent four years in North America. His experience of a business culture with a completely different service ethic has informed his desire for the perceptions of the security industry to progress, both internally and externally. “There is a whole different set of values over there. Soft services are focused on the values of the organisation that they’re dealing with. There’s a lot of focus on customer care and mirroring the objectives of the customer. Here, the industry views itself as a commodity. The key thing is whether customers are buying on price or not. In my view, we need to stop customers from viewing security in this way and move the focus towards the value added aspect.”

Flanagan sees the security industry as too introspective and self interested. He believes it needs to promote itself as offering exciting careers and a long term investment for its customers. MITIE Security is working hard on marketing itself along these lines. However, it’s an industry wide challenge, and Flanagan would like to see more support from the British Security Industry Association (BSIA), who in his view could promote the industry more proactively. “There are a lot of ex-military and former police officers working in this industry. There’s nothing wrong with that but we shouldn’t always be recruiting along these lines. We want to be taking on graduates as trainees as well as recruiting the best people from any industry. There seems to be some reverse prejudice in the industry against people who are accountants, graduates or lawyers. I’m anti-prejudice full stop, and we recruit based on what people can do, not what their background is. I find it strange that people always choose to label one another.”

The industry has recently made some positive steps, not least the enforcement of mandatory SIA (Security Industry Authority) licenses for all security officers. For MITIE Security however, this has had a negligible effect. “Since we’re operating at the high end of the industry, it has had little impact on us,” says Flanagan. “It is a first step towards unifying standards but there’s a long way to go.” MITIE Security’s parent company is already a long way ahead of the industry in general when it comes to diversity in its senior ranks - the company is the only FTSE 250 company with an Asian female as one of its senior executives; Indian-born Ruby McGregor-Smith, 43, was named CEO of MITIE Group Plc in March. If the security industry can heed MITIE’s example, there are sure to be a lot of positive changes in the coming years.