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Henry Pitman

Henry Pitman has a proposition for you. 鈥淲e鈥檙e constantly looking for teams of really good quality people from our competitors who鈥檝e had enough of working for large faceless organisations,鈥� says the founder and chief executive of Tribal Group.

If the name isn鈥檛 immediately familiar, that鈥檚 probably because Tribal is a relatively new company 鈥� albeit one that has in five years achieved a turnover of nearly 拢250m and grown to employ more than 2000 people across 60 offices nationwide and become a major presence in the delivery of public services. To say Tribal has grown quickly hardly describes the frantic acquisition trail that has seen it absorb more than 40 companies since March 2000.

All of which suggests it is unlikely to remain an unknown for very much longer in the field of construction. Tribal's 400 strong property services division is already active in the hospital PFI, LIFT and Procure21 programmes and it has set its sights on 好色先生TV Schools for the Future.

Not one to rest on his laurels, Pitman intends to double the division鈥檚 size within five years, which is why he is keen to promote the benefits of joining Tribal to 好色先生TV鈥檚 readers 鈥� particularly those consultants with experience of public sector markets. Down from Tribal鈥檚 headquarters in Gloucestershire for a day of management meetings in central London, he delivers his sales pitch: 鈥淲e think we can give people quite an interesting career opportunity. We encourage them to join us and they set up either a new office for us or a new income stream. We鈥檒l back them, give them the budgets and support them to build a business. That鈥檚 reasonably unusual.鈥�

A question of upbringing

Pitman is a blue blood. His great-great grandfather invented shorthand in 1837, and the family has been involved in education ever since, most famously through the publishing company it sold in 1983. Henry has an Eton education and an early career in property at Savills behind him, so doesn鈥檛 that make him an unlikely player in the field of public services? Indeed it does not. 鈥淚鈥檓 chief executive, but we鈥檝e got 2000 people, many of whom have spent their entire career in the public sector before joining Tribal.鈥� He adds: 鈥淚鈥檝e probably been involved in the private sector delivery of public services longer than most people in the market.鈥�

He has certainly capitalised on New Labour鈥檚 willingness to involve the private sector in public sector management and delivery, and gained a significant advantage by being quick out of the blocks: Tribal claims to work with 80% of secondary schools, 75% of local authorities and 90% of NHS organisations, providing services from consultancy, PR and recruitment to IT support, specialist healthcare and teacher training. The company defies easy comparison 鈥� 鈥渘obody is like Tribal鈥� says one stock watcher 鈥� but it is of broadly the same species as the sprawling Capita, though one-tenth of its size.

鈥淓very business needs support with its property, its IT, its staffing, its communications and so on, so we try and do all the things that wrap round an organisation that aren鈥檛 necessarily part of the core activities,鈥� says Pitman. 鈥淭he intention is for us to provide more of an integrated service to our customers than a pure property company could, and as a result our hit rate on contracts we bid for should be slightly higher.鈥� Tribal currently wins one in three of its tenders, he adds.

As we move forward with the third Labour term, we will see more and more opportunities for the private sector to deliver public services. It will be difficult to know what鈥檚 public and what鈥檚 private

Also sitting in on the interview is Mike Nightingale, chair of specialist healthcare architect Nightingale Associates, who joined in May 2002 and now heads up the architectural division of Tribal Property Services. Following Pitman鈥檚 sales pitch, he is equally keen to beat the Tribal drum. Since merging with Tribal, the practice has expanded from 100 staff to 300, in the process becoming the third biggest architect in the UK.

This growth has been achieved partly by absorbing firms such as education specialist Ash Design but also through recruiting teams of experts. The first was a team of healthcare architects from Capita based in Cardiff. This, Nightingale says, is in keeping with Tribal鈥檚 policy of expanding from regional bases. 鈥淚t鈥檚 a federal philosophy. We like studios of about 30 architects and we want to fill all the gaps in the country. You can get a facelessness in these massive great offices with everyone being multidisciplinary.鈥�

Stitching it all together

The stock market, however, is less sanguine about the pace of Tribal鈥檚 growth and its ability to assimilate such a diverse portfolio of skills, and also about a perceived arrogance on the part of Pitman himself. Tribal鈥檚 shares peaked at nearly 拢4, but fell to a low of 117.5p earlier this year after several profit warnings and a delay in signing a major NHS contract. 鈥淚t鈥檚 seen very much as an acquisition vehicle and not as a business,鈥� says one analyst. 鈥淗e hasn鈥檛 come from a related background 鈥� it smacks of something stitched together for financial reasons.鈥�

Perhaps in response to such criticism 鈥� although he doesn鈥檛 admit it 鈥� Pitman has consolidated the company into six divisions and is keen to emphasise a new focus on organic growth. But he also points out that the company鈥檚 share price has risen 20% since the beginning of the year, and maintains that Tribal鈥檚 rapid growth has been the key to its success. 鈥淭here was a concern in the City that we were too acquisitive but we would defend that very hard. We spotted an opportunity in a consolidating market and it was important for us to use acquisitions to create the critical mass and more importantly the range of services that will allow us to bid for bigger contracts.鈥� He cites in support the company鈥檚 biggest win to date, a 拢214m contract for subsidiary Mercury Health to build and operate five NHS treatment clinics that was signed last December after an 11-month wait. The company also won a four-year, 拢50m contract with Ofsted to inspect 7000 schools.

鈥淲e also believe there are consolidation opportunities,鈥� he adds. 鈥淲e鈥檙e still a relatively small company in a massive public sector market. As we move forward with the third Labour term, we will see more and more opportunities for the private sector to deliver public services. It will be very difficult to know what鈥檚 public and what鈥檚 private.鈥� The market is indeed massive 鈥� analyst Kable says it was worth 拢32bn last year, and predicts it will hit 拢40-60bn in 2006-07.

Pitman says that continued growth is vital to securing a greater share of these riches. 鈥淲e believe that scale matters in the public sector markets. As government procurement gets bigger and more sophisticated, there will be room for fewer and fewer of the small players. We recognise that the barriers to entry in these markets will get more difficult and that our property business has to get to a certain size. People are recognising that you鈥檝e got to build a building that will really help improve the quality of public services and that鈥檚 where we can help contractors. We can bring deep knowledge of markets.鈥�

And here鈥檚 the recruitment pitch again. 鈥淟ots of companies who joined Tribal had done well in their regional markets but were unable to win the large-scale government opportunities that are now around. You do need a biggish balance sheet and a range of skills to have any hope of playing in that market.鈥�

From our point of view, Tribal was a godsend really 鈥� you get a bit isolated after a while if you鈥檙e in one discipline

Mike Nightingale

This is one of the reasons that Mike Nightingale took the plunge. 鈥淔rom our point of view, Tribal was a godsend really 鈥� you get a bit isolated after a while if you鈥檙e in one discipline, so where we were doing major PFI projects for 拢300m, as an architectural firm you start getting really scared about all the liabilities. Also, it鈥檚 a much broader offering 鈥� it has skills in IT, consulting and PR alongside the property skills. It means we can go and pitch for a school and take a teacher along.鈥�

For example, Nightingale says that in January the firm submitted a bid for a 拢120m PFI hospital in Walsall that combined its own experience in the healthcare field with that of consultancy Secta, equipment supplier MTS and PR company Atlas.

Tribal intends to appoint a chief executive to the property division within the next six months 鈥� Pitman says they are looking at internal and external candidates. The appointee will oversee the expansion of the division in its core markets of health and education and the development of the Urban Futures unit in housing and regeneration. Pitman says the company is exploring opportunities created by other divisions 鈥� for example, entering the prisons market by building prisons and setting up training facilities for reskilling convicts.

So what can teams joining Tribal expect? Pitman promises a degree of autonomy uncommon in large companies. 鈥淲e believe in backing individuals and giving then autonomy to run their business. The freedom to grow and innovate is paramount.鈥�

Prospective recruits to the Tribal cause attempting to glean a sense of the man they鈥檙e throwing their hats into the ring with may be disappointed. His brief biography states only that he is 42 and married with two children and he rebuffs questions about his lifestyle or preferences: 鈥淚 don鈥檛 talk about my favourite films, books, breakfast cereals 鈥︹��

Colleagues praise his vision and dedication, but Pitman is a reserved presence and rigorously discusses Tribal鈥檚 future plans in terms of 鈥渨e鈥� rather than 鈥淚鈥�. He believes that what differentiates Tribal is that 鈥渨hen our people get up in the morning they want to improve the lives of people affected by the public services we deliver鈥�, but he is unwilling to discuss his own motivation 鈥� 鈥淚 prefer to talk about the organisation鈥�. He does, however, mention his four years spent on the board of a training company, which he said gave him an insight into education.

When pushed, he says: 鈥淚 am personally interested in it, yes. We all spend a lot of money on our public services and it鈥檚 really important to get them right.鈥� Although, he adds smiling: 鈥淭he great thing about public services is that they can always be improved.鈥�