Twenty questions: Paul Pindar, CEO of Capita

Paul Pindar put outsourcing group Capita's MBO together in 1989 when he was at 3i, and joined the company eight months later. He is now its CEO
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1 What was the first lesson that you learnt in business? One of the early ones was that if there's an issue to be tackled then you should do it straight away. I'm a great believer that a small problem today becomes a big problem tomorrow. Fix challenges as soon as possible and then, hopefully, none of the problems will get out of control.

1 What was the first lesson that you learnt in business? One of the early ones was that if there's an issue to be tackled then you should do it straight away. I'm a great believer that a small problem today becomes a big problem tomorrow. Fix challenges as soon as possible and then, hopefully, none of the problems will get out of control.

2 If you didn't run Capita, which company would you most like to run? I don't believe any business is about one individual running it, it's about the team that you build at the top. If I was allowed to take some of the Capita team with me, I think there are many businesses that would be quite enjoyable to run. I quite relish the opportunity of running a business that is performing badly, preferably a large one as scale helps you run a business better. One or two high street retailers spring to mind.

3 What was the best investment you ever made - and the worst? The best investment I ever made would have to be buying shares in Capita. I joined eight months after the MBO [management buyout] in 1987 and had the opportunity to subscribe for shares, which have gone up in value about 4,000 times since then. We've had a few share splits, which make the numbers quite complicated, but if you ignore the effect of the splits, I bought the shares at 4p and they are now worth £135.

Probably the worst investment was when I was about 16 or 17 and became interested in the stock market. I plunged £626 in shares into a company called Espleytyas, which went bust three months later and I lost the lot. £626 was a lot of money for me then. It didn't put me off - but it did calm me down a little.

4 What's the best piece of advice that anyone ever gave you? It's certainly not the best piece of advice, but a piece of advice that has stuck in my brain came from the lawyer that was floating us. On the night before we floated in 1989 we were told that we were completely mad to want to be a public company and that we should carry on running as a private business. With hindsight we were completely right to float the company - I think the upside of being a public company is considerably higher than the downside - but it was a piece of advice that amused me and stuck with me.

5 Who do you most admire in the industry? If I was to look to the present day and to people in our sector I think what chief executive Cor Stutterheim has done at CMG in terms of taking the business forward is admirable. He's done a very good job.

6 What would you most like to change about your industry? Because people have seen the success that we and others have had, there are companies that are occasionally tempted in on a short-term basis who want to "give it a go". Their usual strategy for doing that is submitting a price which is not in the long-term interests of either the customer or themselves. When you enter a contract which is for five, seven or 10 years, it is quite a long-term relationship and it's not actually healthy for the customer if the supplier is making a loss. After a short period of time they lose interest in the customer and they lose interest in the service and when the customer wants the service to be enhanced or changed there's no great motivation because there's nothing in it for the supplier.

Over time the suppliers will recognise that it's a maturing industry and it is in everybody's best interest that a sensible return - not a profiteering return - is made.

7 Capita shares dropped 40 per cent earlier this year - why? We were swept up in March with the technoboom, which put our shares at quite a high level. Since that time the market has dampened down a little bit and it has bought us down with it. What has been very pleasing and encouraging is since that fall the price has picked up 20 per cent over the last month. We're not avid watchers of the share price on a day-to-day basis because part of the share price is driven by sentiment in the City, which can on occasion be somewhat black or somewhat white.

8 In terms of personal wealth, how much is enough? Sometimes people place too high an importance on the creation of money for it's own sake. Enough is when you've got the freedom to do all of the things that most reasonable people would want to do, the freedom of choosing what you want to do and when you want to do it.

9 What's your greatest personal indulgence? Nice holidays. I am a great believer that people should take all the holiday they are entitled to and I usually go somewhere hot and comfortable with my family - it's the Caribbean at Christmas and it will be Mauritius at Easter.

10 Where would you like to be five years from now? Three components make up a successful job: being successful in what you do, enjoying the company of the people you work with and being well rewarded for your work. I'm in the luxurious position of having all three of those and for as long as that continues I don't see why I and others here shouldn't continue indefinitely.

11 Capita has been described as being "boring" - what's your response to that? I think it's a tremendous compliment. It amuses us the way the City sometimes reports on industry. There are some months when the company is the most fantastic thing they've ever seen and there are other months when it's all getting very competitive and it's all very depressing. We try to run the business in a very consistent way and we don't get maniacally optimistic or maniacally depressed, no matter what happens. If you couple that with the fact that six of the seven people who sit round the group board are accountants, then we probably deserve to be called boring.

12 Why isn't Capita moving into the international market? The only real reasons for going outside of your core market is if your core market is becoming limited for growth opportunities or if you actually need to have an international offering to appeal to your UK marketplace. We have neither of those situations. The market for what we do in the UK probably measures around £20bn and our turnover in 2000 will be somewhere around the £450m mark - that's less than 3 per cent of the potential market. We haven't said that we will never go international but certainly for the next five years there is so much business to go for in the UK that that's where we are going to stay. Inevitably we will attract criticism for it but whilst we will listen to people's criticism, we won't let them run the business.

13 How will Capita cope with increased competition? Again there has been a view from the City that the competition has intensified, but that is not our view. In some ways the competition is finding it tougher now than a few years back. A few years back a lot of the services that we were providing were almost commodities, whereas the kind of services we provide now are much more complex and therefore competitors find it more difficult to actually create a direct parallel with what we do. Also having no track record and reputation is a higher barrier to entry than people appreciate. We have no complacency about the competition, but it is not something that particularly scares us.

14 How important is your personal profile for your business? Not at all - which is inconsistent with doing this interview - but genuinely it isn't. We try to be quite good students of what makes a business succeed and what makes a business fail. If you look at some of the more notable failures in the past they are very frequently where a business has been built around an individual who has had a very dominant character in the business. The single most important reason why this business is a success is because we have created a culture where there is a team ethos, where people believe that the team is more important than the individual.

15 What's the most reckless thing you have done? I can honestly say that I cannot think of any moments of extreme recklessness - which is probably a very sad reflection on me.

16 If you went bankrupt tomorrow what would you do? I completely and utterly admire anyone who starts up a business from scratch - but anyone who does it twice in a lifetime is bordering on the insane and in 1987 Capita had 33 employees and was effectively a start-up. I would hopefully use some of the skills I've learnt to get myself into a situation of running something which is large rather than going back and actually starting afresh.

17 How do you relax? I greatly enjoy being with my family. I've got two boys who are 10 and eight and the three of us are all sports fiends, so it's either playing sport, watching them play sport, or watching it on television.

18 Do you have a business philosophy? Running a business is actually very simple if you allow it to be - it's about being as direct as possible with people, communicating effectively, building a strong team, doing what you say you will do and delivering what you promise.

19 Do you have a hero? I have people that I admire, but I think that's different. I'm a great fan of Leeds United and I admire the way that the current team of the manager and the chairman work together. It's a great example of how a football club should be run. I don't have anyone I could claim to be a hero.

20 Is there a skill that you haven't yet mastered that you would like to?

I'd like to be considerably better at tennis. The highlight of a Sunday is when I manage to take a game or two from my tennis coach.

Interview by Clancy Gebler Davies

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