Our strategy
To deliver stakeholder value through a focus on sustainable profitable growth.
This goal will be achieved by a seven-point strategy:
1. Clients Deliver value to our clients by providing world-class service;
2. People Recruit, motivate and retain the best talent in the industry;
3. Risk Take a long-term view to protect our business and manage risk;
4. Responsibility Act responsibly and build a reputation that enhances our brand to all stakeholders;
5. Integration Leverage our strong position to secure more integrated and larger scale contracts;
6. Profitability Focus on growing a profitable business, maintaining margins;
7. Acquisitions Supplement our organic growth with selective acquisitions
1. Clients
Our clients are at the centre of everything that we do. If we do not have satisfied clients who are prepared to make a positive recommendation about MITIE we do not have a sustainable future.
From their first day with us, our people are trained to think about our clients’ objectives. What does the client want from MITIE? How can we contribute to their business and organisational issues?
Our clients expect us to deliver value for money. In this economic climate, we continually evaluate our cost base to ensure that we are deploying resources efficiently. This applies to all areas of our business and we run a lean business to make sure that our clients feel the full benefit from our efforts.
Our clients represent the future of our business so we make sure that we have the best possible relationships with them, understand the issues that affect them and regularly engage with them at all levels. To make sure that we are getting it right we conduct client satisfaction surveys to check that we are providing a quality service and are in tune with our clients’ strategic direction.
2. People
It is easy to say that our people are our greatest asset but they really are. We are only as good as the people that prepare our client strategies, manage projects and facilities, and deliver services.
As they are so important to us, we have a three-part people strategy.
Firstly, we make sure that each employee has the best possible career journey with MITIE. We have a consistent approach that reinforces our culture and values. We evaluate skills, identify gaps and provide appropriate training and support to ensure success. We use a performance management process so that we can be fair in our measurement of performance and appraisal. This encourages good levels of performance and minimises employment risks.
Secondly, we have an integrated Human Resources (HR) team structure to provide a professional and efficient service that meets the needs of our people and the future requirements of the business. We employ specialists in key areas including the management of TUPE, pensions and employment law.
The third part of our people strategy makes sure that we will have the right talented people for the future. We have a structured approach to succession planning, reward and incentivisation, leadership, management development and professional development. It gives us a motivated MITIE team that is determined to outperform the market.
The result is that we have a very people centric business with a strong leadership and management style but with the flexibility to drive the Group forward.
3. Risk
We take risks everyday as part of our daily life. In business it is our duty to understand the risks we face, appreciate the impact that those risks may have on our people, clients or wider stakeholders and to devise appropriate strategies to manage, mitigate or eliminate these risks. MITIE does all of that and we then ensure that everyone in the business understands their role in our risk management process and can behave accordingly.
Having an appropriate risk management process does not mean that we are so measured in our approach that we lose competitive advantage. We classify our risks into four areas, strategic, operational, financial and compliance. Strategic risks are those that could affect our long-term strategic objectives. Operational risks arise from our day-to-day activities, which, if not managed, could affect business performance. Financial risks have a direct impact on our financial position and compliance risk covers risks that relate to legal and regulatory sanctions and damage to goodwill arising from failure to comply with applicable laws and regulations.
The assessment of risks is part of our culture. Every MITIE business has a risk register that identifies the particular issues relating to that part of our operations and activities. These are consolidated into the overall MITIE Group risk register, which considers our high-level risks and is reviewed and considered by our Board. Our risk management team conducts regular reviews and assessments to ensure that our risk identification and management processes remain relevant to the shape of our business, the wider market conditions and most importantly that any risk mitigation strategies are being followed.
4. Responsibility
Corporate Responsibility (CR) has always been at the core of the way we work at MITIE and is an essential part of our culture. Our success for over 21 years has come from having a responsible business model that has responded to the ever-changing requirements of an increasingly wide group of stakeholders. CR is part of our business strategy because it helps us to deliver sustainable profitable growth.
We have five pillars in our CR framework.
Health and Safety is critical. We employ over 50,000 people and good health and safety performance is vital for their wellbeing and improves business performance.
Community engagement is also important. Our people want to work for a company that is recognised for helping to make a difference to the lives of others, whether that is through our volunteering programmes or charity work.
The environmental agenda makes it imperative for us to manage and reduce our impact on the Environment. We also support our clients to improve their energy efficiency, reduce waste streams and improve cost efficiency.
Focusing on our People helps to improve business results. We train, develop and reward our people well, which improves retention, motivation and stability.
We develop our Service Delivery capabilities to support the needs and core businesses of our clients and the changing market. This helps to maintain our long-term relationships and contributes to the successes of our respective organisations.
5. Integration
MITIE is an integrated business. Integration is important for efficiency and supports our client proposition of seamless service delivery. All of our businesses use common systems and processes and are transitioning to a common financial and HR platform. This is important because as clients ask us to provide a wider range of services they want to be dealing with just one MITIE team that operates the same way.
Integration however, is more than systems; it is also about attitude, ownership and leadership.
Increasingly, our clients want us to be integrated with their own operations so that we can help them to achieve their business and organisational goals. They want a seamless service that reinforces their corporate image, so that their employees and clients can’t tell where they stop and we start. This is crucial and allows them to maintain a complete focus on their core business areas and activities.
6. Profitability
Ultimately, the objective of any commercial organisation is to be profitable. MITIE has a 21-year track record of continuous profitable growth. We have a total financial focus on profits and cash. In these markets with changing risk profiles it is still important to achieve revenue growth through taking market share, but it is crucial to maintain profit margins and be paid on a timely basis for the work we have performed. Our cash conversion target is 90%.
We manage our financial performance with a series of key performance indicators that are consistent and applied throughout the business.
7. Acquisitions
We have a low market share in all of our markets. We expect to grow organically by taking market share from competitors but we are also well positioned to create stakeholder value through acquisition. At 31 March 2009, we had no net debt and undrawn committed funding facilities of £220.0m out of a £230.0m total facility. This gives us the financial capacity and flexibility to make selected, value enhancing acquisitions should the Board consider this to be appropriate.
Our approach to acquisitions remains conservative. We are looking for quality businesses with strong management teams that complement or fit within our existing business and operate in growth markets.