Mitie boss Ruby McGregor-Smith: "Failure is never an option"

ARCHIVE: The FTSE 350's first female Asian CEO saw the outsourcer through the financial crisis.

by Jack Torrance
Last Updated: 20 Aug 2020

Failure is ‘never’ an option, Mitie’s outgoing boss Ruby McGregor-Smith told MT back in 2010. Today she’s standing aside, following a downbeat trading update that caused a crash in the outsourcing firm’s share price last month, wiping millions of pounds off its value.

To be fair, her replacement has already been announced so the wheels of succession must have been in motion for a while. But it’s a sour note to end on for McGregor-Smith, who has been a director of Mitie since 2002 and CEO since 2007. Now a baroness (and dubbed the ‘prickly peer’ by the FT), she has overseen a near-doubling of the company’s revenues since taking the top job. Below you can find MT’s profile of her from three years after she took the helm.

Outsourcing is a difficult game to be in at the moment. After waves of scandals engulfing the likes of Capita, Serco and G4S and in the spirit of austerity, the public sector is not as loose with the purse strings as it once was. And as Mitie noted in its update last month, market uncertainty (not least that caused by the Brexit vote) has put businesses’ spending decisions on hold too.

Fortunately for Mitie, McGregor-Smith’s replacement Phil Bentley is no stranger to a tough job. In his seven years running British Gas, Bentley faced the wrath of the public and the press as energy prices soared. The Evening Standard recently described him as the most ‘vilified businessman in Britain’ – no mean feat in a field that includes Mike Ashley, Philip Green, Fred Goodwin et al. Bentley even went toe to toe with Newsnight bulldog Jeremy Paxman. Once you've been through that, turning around a struggling outsourcing business must seem like a walk in the park. 

This interview, written by Emma De Vita, first appeared in MT's January 2010 issue

A windswept Ruby McGregor-Smith pushes open the glass doors of the Thames-side Runnymede Hotel and scans the foyer. Frankly, she doesn't look the usual FTSE CEO type. For a start, she's female, under 50, and Asian. Wearing a soft black suit, she is laden down by a well-loved bag so heavy it nearly cripples me when I carry it during the photoshoot. The usual props of the female CEO are absent - no power suit, no statement handbag, and no coterie of PRs.

While her corporate peers slash costs, eke out savings and slam the brakes on spending, Mitie (pronounced 'mighty'), the outsourcer that McGregor-Smith has headed since 2007, is bucking the market. In November 2009, it reported a recession-busting 12.5% rise in first-half profits to £42.3m on revenues of £801.1m. The previous year, it made a profit of £80.5m on a turnover of £1.52bn. Not bad for a company that hasn't been around 25 years yet. Mighty Mitie indeed.

Within minutes, it's clear McGregor-Smith has the heebie-jeebies. She doesn't like the limelight. In fact, she's adept at avoiding it, rarely giving interviews. Stanmore, the London suburb she grew up in, may have spawned Billy Idol and Matt Lucas, but the last thing McGregor-Smith wants is to stand out. She has chosen the right industry. Outsourcing is a low-profile, low-glamour business that doesn't attract big, flamboyant egos. Some might call it dull.

McGregor-Smith doesn't play the part of the typical CEO star either. She's down-to-earth, gentle, enthusiastic. And considerate: apologising for moving our meeting from her office in Bristol to this hotel near her Ascot home because she's recovering from a bug. Her matey behaviour makes me warm to her, but her apprehension (she asks several times whether she's doing OK) makes me feel like patting her hand and telling her that everything is going just fine. I wonder what she is so anxious about. Just how many dark secrets can a suburban 46-year-old accountant, running a successful outsourcing company and married to a man called Graham, have?

It wasn't until McGregor-Smith became the first-ever FTSE-250 Asian female CEO in 2007 that she was pushed, blinking, into the media spotlight. 'Of all the things I have found very challenging in my career,' she confesses, 'the most challenging was the media interest. Suddenly, it was brought to my attention that I was a bit different. Those who know me well know that the one thing I never like is being thought of as different. I just want to be part of the crowd.'

She found the press exposure pretty traumatic. 'Two and a half years ago, I probably wouldn't have been able to sit down with you.'

Stray into personal territory with McGregor-Smith and the shutters come slamming down; keep the chat about Mitie and you can't get a word in edgeways. 'I love, live and breathe outsourcing,' she says, without a hint of irony. Doesn't she think the sector is a bit boring? 'No!' she protests. 'Outsourcing is the best thing in the world!' Then she laughs, embarrassed, realising her enthusiasm has got the better of her. 'If you're into outsourcing, you're into outsourcing in a big way,' she chuckles. It's hard not to be impressed by her passion, and I think I understand the attraction: it's her 54,500 staff who work behind the scenes to keep our lives ticking over.

'We take the issues away from a business,' she explains, so they don't have to worry about the unsexy back-office stuff. Mitie's employees are security guards at M&S and the British Museum. They work for Eurostar and BAA. They clean RBS (and what a messy job that must be), Great Ormond Street Hospital, government departments, town halls and the Tower of London. It's a good thing somebody likes doing it.

Outsourcing is the child of recession. The sector was born in the downturn of the '80s and grew throughout the '90s on the back of PFIs and PPPs. Now the drive for cost-savings has accelerated - and outsourcers are taking advantage. McGregor-Smith is bullish about Mitie's performance last year: 'I'm really delighted, because it is a tough time to be in business, but outsourcing has always been positive during recession.'

Mitie is much smaller than rivals Capita and Serco, so she is focusing on growth. Much of this will be organic, through the bundling of work with existing clients and their need to comply with new energy requirements. The rest will come through acquisition.

Last year, Mitie pulled off its biggest deal yet, paying £120m in cash for Dalkia UK. 'When it came up for sale,' says McGregor-Smith, 'we were very keen to get involved, because Dalkia has a carbon-care and energy-management side we think is going to be important to all our clients.' The acquisition is a critical part of Mitie's growth strategy as organisations face new government legislation on carbon emissions. But the recession has put pressures on margins.

'That's normal,' she says. 'We should expect that in a recession - that everybody would be asking for more for less.' It's forcing Mitie to be more selective about the bids it makes and to focus on re-tenders. She rejects, however, the notion that a return to economic stability will signal an end to outsourcing's golden age.

Mitie (which stands for the catchy 'Management Incentive Through Investment Equity') was founded in the late 70s by Ian Stewart and David Telling, and floated in 1988. It encouraged entrepreneurs to bring it their ideas. Mitie would take a 51% stake, in return for providing the support systems, and would then buy out the remaining 49% after five years, paid for in Mitie shares. Now, the focus is on consolidation. As the group has grown, McGregor-Smith admits that it is probably too big to handle lots of start-up ventures, but that doesn't mean the entrepreneurial spirit has died. 'There's a great sense of development in Mitie,' she says, 'so that if you are looking after a contract or an area of the business, you feel that it is very much yours.'

Read more: 'I'm still here, living proof that sometimes it's OK to admit to your fallibility' - TalkTalk boss Dido Harding

Outsourcing has matured in the past five years. 'Clients are looking for more integrated work, not just single services,' she explains. Mitie might have a contract with one of the banks, for example, and deploy 2,000 people across the UK, cleaning its branches. 'If they then say, "while you are there, would you check that the lights still work, and can you make sure that the landscaping is done properly?", if you give all of that to one contractor, you've got one set of systems. If you give that to three contractors doing it differently, you've then got to manage three different ways of doing things. Efficiency is driven by giving more work to one set of people.'

McGregor-Smith joined Mitie as group finance director in 2002, drawn to it by the two founders. Stewart was chief executive. Telling, the chairman, was battling with the cancer that was to kill him in November 2003. 'I felt they had a real passion for a sector I had a passion for,' she explains. 'I knew I would work with them well and I thought we could do fantastic things with Mitie - and we have. When I joined, it had revenues of £500m, and we're up to £1.8bn this year, and we've doubled the number of people. I am proud of the group's achievements.'

Stewart, now chairman, has said McGregor-Smith was very supportive at the difficult time surrounding Telling's illness. 'We have welded together as a team. It's unique, it really is.'

I ask her what kind of chief executive she is. 'What does that mean? What's a normal one?' she counters anxiously. 'You have to be yourself and focus on what you're good at. And you have to make sure you've got the right team.'

As soon as she got the top job, she tore down her office walls. 'I'm not into hierarchy,' she says. 'I don't want to be defined by being a CEO. I have to be able to relate to all of those people in Mitie, so I have to understand it, live it and breathe it. And you can't do that in an office behind lots of glass, can you? You wouldn't come to head office and ask: "Where's the CEO?" You'd ask: "Is Ruby around?" You'll even find me on reception occasionally,' she says mischievously.

The one thing that motivates McGregor-Smith is people - encouraging, supporting and pushing them. It's all about the team, which in part explains her reluctance to give interviews. If she's not in the Bristol or London office or with shareholders in the City, she's spending time with operational staff. 'What I enjoy the most is making a real difference to people,' she says, whether that's clients or employees. She gets a kick out of watching people come up through the ranks. She's proud of the fact that those who joined the business at the bottom when it started are still there. 'We are very encouraging of people, because that's what we're about. What people buy in outsourcing is people.'

McGregor-Smith started both Mitie Stars, a recognition programme where employees can win up to £15,000 for having done something special; and Mitie's Got Talent, its version of The X Factor - minus the hissy-fit judges. She had judged the finals two weeks before we meet.

Apparently, it was a close call between an Elvis impersonator, a rock band and a ballroom dancer. 'I was really choked that we've got all this talent,' she says. Do I see tears welling up?

McGregor-Smith attributes her success to being driven, pragmatic and ambitious for Mitie. She has no tolerance of personal failure. 'I've always been hugely competitive,' she says, suddenly serious. 'And I've got more competitive as I've got older. I don't do failure very easily.'

Is she scared of failure? 'No, I just won't do it,' she says. It's not an option? 'Never was,' is her curt reply. 'I take it all personally,' she elaborates. 'I don't separate the way I feel at work from everything else in my life. I feel really quite gutted if we don't get something right.'

McGregor-Smith has a tendency to speak in long, tentative sentences. She's always checking I understand what she means, scared a comment might be misconstrued. 'Channelling negative experience into positive is my biggest career lesson. Ten years ago, I wasn't like that. I dwelled too much on when we didn't get things right, now I focus on what's positive. And that has made me more happy with me. It's probably age - I'm more confident now I'm in my forties.'

CEO at 43 is young by any standards. 'I always wanted to be successful,' she admits, 'but I never knew quite what that should be.'

Born in Uttar Pradesh, India, she moved to London aged two, when her mother joined her father. Originally a lawyer, he had gone overseas to train as an accountant. She studied economics at Kingston Polytechnic, then joined accountants BDO before going to Serco in 1991 and staying for nine years in various financial and operational roles.

'My experience at Serco was hugely important to me because it was my first main job in industry. Did I know when I became an accountant that I had to go into outsourcing? No. I did it because I thought it would be good to do. So I joined this very young company called Serco in a very young industry that no-one had heard of.'

Yet McGregor-Smith's acute single-minded competitiveness is tempered by a desire to have fun on the way up. '[A job] has to be really enjoyable, and if it isn't, then I don't think anyone would get the best out of me.'

But can outsourcing really that much fun? She thinks it is. 'I am totally driven by the people around me, so if I work with them well, then I do well, I enjoy myself.'

She was at Serco with its future CEO Chris Hyman, though she's not in touch with him anymore - perhaps because of a natural rivalry.

McGregor-Smith's biggest pressure point of her career was when her two children were very young. She took time out and went back to work part-time. 'Of all the times when I needed more support during my career,' she says, 'it was then - in terms of self-confidence and coming back into the workplace.'

Does it frustrate her that there are so few women at the top of business? 'What I hope is that if women with children choose to be in the workplace, they are given the same opportunities. What would matter to me is that someone gets a similar role to me in 10 years' time and the press make no big deal about it.

'I never want to be distinguished by being a woman,' she adds. 'I want to be me, an individual who brought a certain set of skills to a company. My finance director is female, which is quite unusual, and the rest of our executive team are male. We all bring different skills. You'd feel paranoid if you went in thinking about that from a female angle. You are just part of a team.'

She met Graham, her husband of more than 20 years, during her accountancy training. Until three years ago, he worked in private equity, but now spends more of his time at home looking after their children. 'When I became CEO, we decided one of us would need to be around more,' she says. 'He has always been massively supportive of my career. When I had doubts, he was absolutely sure I could do whatever I wanted to do.'

Her parents live 40 minutes away. 'I've got a very family-driven culture because of my parents,' she says. 'My children are everything.'

Did having children affect her outlook on life and her career? 'Yeah, completely. It took me time to work out how I could get the appropriate balance with them and my work. But I've done that, and Mitie is massively supportive.'

Does she get any free time? 'No, because if I'm at home, it's all about the children. I do five-kilometre competitive runs - that's the time for me.' And then there's new puppy Polo.

It's the moment for the photo shoot. While lights are set up in the hotel foyer, she chats to the two maintenance men whose work we've interrupted. Cracking jokes, she suddenly looks at ease. Mitie's chief executive is in her element - she just wants to be one of the boys.


1963: Born 22 February, Lucknow, India. Educated at Bentley Wood School, Stanmore, and Kingston Polytechnic (Economics degree)

1985: Joins BDO Stoy Hayward

1991: Moves to outsourcing company Serco

2000: Joins SGI, which is subsequently sold to Babcock International

2002: Group financial director, Mitie Group

2005: Group COO at Mitie

2007: Promoted to chief executive


1. To take on Mitie's bigger rivals Serco and Capita

2. To make sure the company continues to grow as the recession eases

3. To continue making smart acquisitions.

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