The MT Interview: Chris Hyman

Resolutely fit, abstemious, religious, the CEO of service-supply firm Serco - 4th in our Most Admired Companies list - is an unusual businessperson in an unfashionable sector. Surviving 9/11 reinforced his belief in 'people first, profits second'. Just don't call it outsourcing.

by Chris Blackhurst
Last Updated: 09 Oct 2013

On my way to meet Chris Hyman, I realise it's early Monday evening. Tomorrow is Tuesday and he will not eat anything at all. Every Tuesday, without fail, he fasts. I'm thinking on this and the considerable difference in our repective girths when I greet him. He's whippet-thin for someone in his early forties. Me, well... let's not go there.

It's not just abstaining one day out of seven that gets him in such shape - after all, he could gorge himself senseless on the other six. But Hyman is not the sort to indulge in such out-of-control behaviour. A top athlete in his youth, who once ran 100 metres in 10.8 seconds, he has remained resolutely fit ever since.

That's only part of it, however. He doesn't drink, doesn't swear. He's devoutly religious, attending the Pentecostal church in Surrey, where he lives, and giving 10% of his salary as a tithe to the service of God.

It must be a church with a very good roof, because, as the years have gone by, the amount Hyman donates has risen inexorably. As chief executive of Serco, the service-supply company, he earned £1.1m last year, up from £700,000 previously. Yet by the standards of the stock-market, chief-executive company he keeps, his pay is relatively low. For Hyman and Serco are stars, coming a remarkable fourth in this year's MT's Britain's Most Admired Companies list, an impressive rise of nine places on last year. Serco is right up there with the giants of the corporate world, mixing it with established household names. Its top-five placing is one of the stories of the 2007 ranking.

By now, you may have got some idea of Hyman. But if I also tell you he is just about the most committed person I have ever met, you will get more of the picture. He stopped sprinting seriously because he knew he couldn't win gold. These days, he races Formula 3 motor cars (he cried when he came fourth in his first event - 'I felt such a failure').

That's not all. He has recorded his own gospel album in America, sleeps only four hours a night and goes jogging at midnight and 6am. Hyman is married to a South African and they have two young children. His favourite book, seriously, is Michael Schumacher's Driven to Extremes.

When he plays tennis with his wife he does a full, hard serve, and when he goes go-karting with his son he has to beat him too. When we meet, he tells how he's just been on a holiday to Yosemite with the family. They did a lot of walking but, he says almost shamefacedly, even he drew the line at taking his children up El Capitan, the 1,000m high rock formation that's a favourite challenge for climbers. He did part of the great peak himself, of course, and you have to think that, as he climbed, a bit of him was severely disappointed that his offspring weren't accompanying him.

Oh, and he has a beatific smile, talks 19 to the dozen, is charming and, to boot, wittily self-deprecating. To say Hyman makes me feel inadequate is an understatement. After seeing him, I found myself seeking solace in an indecently large meal washed down with more than one glass of wine. Stop, I wanted to cry, but I couldn't. That, presumably, is the difference between Hyman and the rest of us mere mortals.

Clearly, he is able to transfer that considerable energy and focus to Serco. Its growth has been phenomenal. It's the company that operates prisons and organises the prison vans, runs traffic control centres, manages trains, looks after schools, maintains the aircraft of the Queen's Flight at Northolt, and sets the time for the speaking clock and the BBC's pips, using the signal from the National Physical Laboratory's atomic clock.

Serco's most recent contract wins include: the running of Business Link London, an information and support service for the capital's 600,000 small and medium-sized firms; the provision of services to the new NHS Forth Valley Acute Hospital in Falkirk; the operation of the Yarl's Wood Immigration Removal Centre in Bedfordshire for the Home Office; and a £50m, five-year deal to help with the running of the Ministry of Defence's facilities in Gibraltar.

Those are just UK public-sector contracts. In the US, it has recently received a boost to an order to supply IT and engineering management to the US Postal Service. Serco has also just picked up two projects for the US Navy and Army. In Dubai, it has been declared the preferred bidder to manage the new Metro system.

The list goes on - and on. From its small, modern headquarters by the River Thames in Richmond, Serco employs more than 50,000 people across the UK and the world, to work on more than 600 contracts, mostly public-service. Business is booming. In the first six months of this year alone, turnover grew 9.1% to £1.35bn. Profits were up 16% to £52m.

Serco has achieved the extraordinary hit rate of winning more than 90% of the contract rebids and renewals it applies for. On new orders, it wins one out of every two.

'It's been a good year,' concedes Hyman. 'I guess I'm pleased because, yes, we continue to grow the business, but also it's some of the things we're winning that is so exciting.' He cites by way of example the US defence projects. 'In the past, we would never have secured that quality of work. Now, we're being recognised around the world.'

He's happily talking like this in an open-plan room. He's the chief executive but he isn't shut off, on the top floor or in a grand corner suite. His desk is right next to those belonging to his top executive team. On one wall is a giant, flat-screen TV. It could be the office of a hip advertising agency. The meeting room, known internally as the Goldfish Bowl, is entirely glass-fronted. Everyone can see in. Clearly, this is part of the quest to establish a transparent, egalitarian environment.

But Hyman's early life was far from inclusive. He's a South African Indian who grew up in Durban in the apartheid era. But there's not a trace of his origins in his speech. 'My accent is confused,' he laughs. 'I'm confused.'

His family were incredibly hard-working. His father, the son of a waiter, runs seven businesses, including used cars, where he maintains strict ethical standards, not dealing in stolen cars or ones where the clocks have been turned back. They are also devout Christians.

One of the few non-whites to make it to the University of Natal, Hyman went on to join accountant Arthur Andersen, before moving to London in 1989 to be with Ernst & Young. After South Africa, he says, the UK was a breath of fresh air and he claims never to have found his race to be an issue. 'My parents brought us up in a certain way. They told us that God created everyone. You do the best you can and you will be spotted.'

In 1994, he was head-hunted by Serco to be its European finance director, although, as he puts it: 'I found Serco - the company fitted everything I was looking for.' When he joined, annual turnover was £238m. In 2006, it was £2.5bn.

On 11 September 2001, he was in the World Trade Center. He was on the 47th floor when the plane hit, talking to Serco shareholders. They got out - but not the people in his previous meeting. He does not like talking about that terrible day. 'It confirmed my faith. It renewed my zest for getting the balance right and made me realise that time is not always your own. It made me think about my family and my health more - and about putting the balance back. You know, it's not a bad thing, to step back sometimes.'

At Serco, he worked closely with Richard White, the previous executive chairman, then his successor, Kevin Beeston. Since September 2007, Beeston has moved to become non-executive chairman, leaving Hyman as CEO.

It's a role he clearly loves. He talks about Serco with almost evangelical zeal. It is, let's face it, a firm that most of us have never heard of, doing work in the decidedly unfashionable area of public-sector outsourcing.

He shakes his head. 'It used to be called outsourcing but we've moved on so much. Now we talk a new language, about partnerships, of making things better, of delivery.' Serco, he maintains, is discerning about what it does. 'We don't want to be in every market. Only the ones where we can make a difference.'

It isn't first and foremost about making money, he insists. 'We want to improve schools, reduce offender recidivism, get the trains running on time.' I find myself nodding in agreement. I've heard this sort of stuff before, standing at the back at political-party conferences during the leaders' speeches. Hyman seems made for the centrism of Tony Blair, Gordon Brown and David Cameron.

But whereas Blair struggled to deliver - with Brown it's early days, and Cameron has to show what he is made of - Hyman really does seem to be making strides. 'When you make change, nothing keeps change going more than both the heart and head being motivated by that change. You need to inspire through oratory but you also need to be fixed on a goal, such as a bonus if you succeed.' He says this without pausing, a born communicator.

He's tried to mould the company according to his high-principled values - so that's putting people first and profits second. If that seems to investors to be negligent, it isn't. His is a people business, and if he gets them working right, his customers are happy and profits follow.

'It's about bringing the provision of services into your life. We want you, the customer, to think of us as part of you. I'm here to go the extra mile, to develop an organisation that has integrity, is robust, where non-performers want to perform and are trained to perform.'

About 90% of Serco's workforce are themselves former civil servants. 'They come to us not just because of the pay but because of the freedom we afford them - the freedom to think.'

Hyman believes fundamentally that 'the phrase "public service ethos" is not a made-up slogan. But too often, in government, the premise is that the civil servants are the problem. They say: "Let's give it to a company and see how they fix it."

'In fact, they've got people working for them who have ideas and commitment, but all they think they've got are people who work 9 to 5 and want a job for life.'

At Serco, 'nobody starts at 9 and leaves at 5. When you put freedom in, and investment and leadership, you get a wonderful surprise.' Do that, he says, and 'every day you will get low-hanging fruit'.

He leans forward. 'You know, it's very easily forgotten that prison staff, train drivers, scientists, whoever, chose to do the job before we offered them a job with us. They're doing the job because they want to do it. What they often lack is the means to do it well.'

His employees speak of finding fewer layers of bureaucracy and more interest and responsibility under the Serco umbrella. 'Whenever I hear that, I'm singing from the roof-tops.'

He's constantly on the move, circulating among Serco's staff. 'I'm in this office about four days a month. The rest of the time, I'm out. I do 100 flights a year. I see 200 staff at a time. No managers or directors are allowed. It's just me and them.

'They can tell me what they want, about anything. I've also got "tellchris.com", where they can e-mail me any concerns. I also hold regular dinners - the rule is they're for 10 people in the company I've never met.'

His mobile phone number is published so staff can contact him. Do they? 'Not very often, but when they do, they feel strongly about it - it's a big deal to phone the boss. But if we don't get it right, I deserve the calls. When they do, I meet them. I never reply straight on e-mail. I want to see the person, see the whites of their eyes. It makes a huge difference, seeing the whites of someone's eyes - it can really move me.'

The management approach that leaves dealing with the lower ranks to the human resources department is not his. Neither is the tendency, on securing a new contract, to immediately begin recruiting from elsewhere. 'We've got the people. They already work there. What we do is remove the dross in their jobs.'

Serco has always operated at the higher, more sophisticated end of government work. Its first main task was assisting with the ballistic missile early-warning programme. Then came the huge growth in private finance initiatives and public-private partnerships. Despite the explosion in activity, the company, he says, has stayed resolute. 'We've got to have the best systems, run by the best people.'

The sort of business that Serco is engaged in - providing the staffing to run much of the country - is still a forgotten industry, looked down upon in some quarters. 'It frustrates the life out of me. We know we have the best financial services industry in the world, and that is great - but we also have the best support services industry in the world and nobody knows about it. In the US, they're clamouring for what we do. Here, when we first listed, the FTSE put us under "miscellaneous, unclassified" because it didn't know what to do with us. Now we've got our own section, "support services".'

Are there jobs Serco won't do? 'There's not a sector we won't go in, but it's a question of the service we can provide and whether we can make a difference and make money. Those are the two requirements: making a difference and making money.' If a contract is losing the company money - and it does happen - he pursues zero-tolerance. 'We fix it or we give it back - we don't hang on to it.'

The making-a-difference aspect is crucial. It goes to the core of what he preaches. Before Serco bids for a contract, the managers involved must make a presentation to an independent team within the company. 'They must say what they will do that is different from the existing people running it and they must say how we will leave it when the contract ends.'

City analysts, he says, are always asking him for a pie-chart showing Serco's geographical spread. 'I'm not interested. What determines what we go for is whether it's a single, one-off opportunity or a market. If it doesn't present the chance of a new market why go there?'

The obstacle is not so much finding the growth potential as ensuring the company has the right staff. 'The restriction is always the people. For us to go somewhere there has got to be growth, with the appropriate margin, and the terms and conditions have to be acceptable for our people to do their jobs properly and safely.'

The average group-wide profit margin on a public-sector contract is less than 5%. 'The day my customer says "that looks a bit rich" is the day I've got a problem. I've got to please the customer on price.'

Serco no longer does catering, where it used to compete against Compass, or cleaning and security, where it would come up against Rentokil. 'We sub-contract those activities, but we don't do them ourselves.'

There's no limit, he says, to how large Serco can become. 'As we've grown, our systems have got cleverer and the people have got bigger. It's not a question of always wanting more people, it's a question of having bigger people. We can quadruple and it won't affect the model at all. We could become a multinational with hundreds of thousands of workers and it still wouldn't matter.'

The company has only a toehold in the US and it has no business at all in India, China, South America and in Africa (apart from a small joint venture in South Africa). But the growth doesn't need to come from overseas. 'In the UK, the procurement of public services is £600bn per annum. If you take out the provision of equipment and just look at people, you get down to £200bn - and we're £2.5bn.'

He makes it sound easy. Can it be that simple? What does he worry about? Quick as a flash (he is articulate and persuasive and nothing seems to stymie him), he answers: 'Two things. One, complacency. The day we forget what keeps us out of trouble is the day we're in trouble. We treat every day as urgent and we will really nail poor performance. Two, cockiness. I worry about a bridge too far. If we don't keep ourselves on the ground we can no longer smell the coffee.'

He adds: 'When I go round, I will say to our senior middle managers: "You see him or her, they're not ready. You must spend time with them." If I see someone who is cocky, a huge red light flashes - they will damage the company.'

Of course, jobs are outsourced - sorry, that word again - to save money. That often means a tight contract and some job losses. 'Our rule on redundancies is that we make the changes on day one. You lose credibility if you don't do it on day one. We go in, we speak to the people, we decide. Drip-drip is a disaster - you lose credibility and you lose trust with the new staff.'

He expects of his colleagues the same exacting standards he applies to himself. 'If they say, "It's unbelievable that we're not short-listed", and they spent 18 months working on a bid, I will say to them: "You didn't know your customer well enough." If one year into a contract the customer says it wants to change, I say to colleagues again: "You didn't know your customer." They have to know their customer. They have to eat, sleep, drink their customer.'

It isn't a question of numbers and money, he says. 'Anyone who just spouts statistics will never get a job here. It's about being able to build relationships and wanting to make a difference.'

Similarly, 'People who make mistakes operationally - they can stay; people who make mistakes and don't follow our values - they can't stay'. And, he adds: 'I recruit from the heart first, then I check with the head. I don't expect people to be the same. They don't always have to agree, but they do have to agree where our values are concerned.'

He may be chief executive but he is not averse to taking time and repeatedly visiting a project that for whatever reason isn't working.

Recently, he repeatedly went back and forth to Cornwall, where Serco was running an out-of-hours doctor service. It wasn't functioning as well as it should. It wasn't a major deal financially but that wasn't the issue - Hyman wanted to get it right.

Regularly, he addresses his senior managers. 'We start with the values and what they mean. I've got two messages I always want to impart. When we're looking to take the business forward, stop looking for yards. At the top end, it's inches that count.

'And get up close and personal. It's not what Chris Hyman can do, it's what you can do. I say: "The day you need me to inspire your people on a contract is the day you and I need a conversation." You need to be personal with leadership.'

It's inspiring stuff and the cynic in me wants to doubt him. But it's said with such certainty and obvious sincerity it's impossible to do so. Critically as well, the financial results and the stellar performance in the MT Most Admired don't lie.

Across the office, his PA is coming towards us. It's late. She reminds him he's got a dinner to attend. He'd better go. Not least because tomorrow is his day of fasting.

FOUR CHALLENGES FACING HYMAN
1. To keep growing Serco at the same rate without diluting quality
2. To expand the company internationally into new markets
3. To restore people's faith in public service
4. To not run out of steam
HYMAN IN A MINUTE
1963: Born in Durban, South Africa. Attended Gandhi Desai High School,
Durban and University of Natal
1989: Joins Ernst & Young in London
1994: Headhunted by Serco to become its European finance director
1999: Made group finance director
2002: Becomes Serco chief executive, working under executive chairman
2007: Executive chair scrapped; Hyman is CEO with a non-executive
chairman

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