Sir Rod Aldridge
The best way to learn is to have crack people around you
Sir Rodney Aldridge founded Capita Group in 1987 after a management buyout from the Chartered Institute of Public Financial and Accountancy (CIPFA). He built it to become a FTSE 100 company. Today, his focus is on improving the education system that let him down, through the Aldridge Foundation.
Many entrepreneurs have, with hindsight, a galvanising moment; something that motivates them to build and sustain a business. For Sir Rod Aldridge, founder of FTSE 100 outsourcing group Capita, it was failing his 11-plus. Packed off to a low-ambition secondary modern, the school sought to ‘mark time’ rather than develop him as an individual.
This early rejection, and the fact that he didn’t seem to fit in either at school or in the workplace, defined his thinking. His recent autobiography ‘You’re better than they think you are’ shows how he managed to redirect the anger he felt at being written off as someone who wouldn’t do very much with their lives.
Instead, he has done rather a lot with his life. The germ of Capita came as he worked in local government, where he qualified as an accountant with CIPFA, ultimately becoming its technical director. He orchestrated a management buyout and created Capita in 1987. The buyout saw him raise money against his home, risking everything to becoming a pioneer in outsourcing services.
It was a risk worth taking. Capita hit a rich seam. It joined the FTSE 250 and then the FTSE 100. Someone who had invested £1,000 at flotation would have had £125,000 by the time Sir Rod retired in 2006. This makes him a rare breed of entrepreneur – someone who has managed a business through every step of the journey, from start-up to scale-up to flotation to major listed company.
How did it happen? He was in the right place at the right time, but says he knows when the right time was. Capita shaped a new market – white collar, back office services. It came from nowhere to be everywhere and defined a new generation of public services. He still finds it ironic that, in the eighteen months prior to starting Capita, he was turned down for fifteen jobs, often for lack of business experience. Had he been offered any one of those jobs, he’d never have started the business.
Equally ironic – as the only son of a union-supporting factory worker and a member of the Labour Party – was that it was the Conservative government who helped his enterprise ignite. 30,000 people moved from the public to the private sector from the 1980s onwards.
Sir Rod attributes his success to a deep understanding of the market and the solutions that his clients wanted. He also created an entrepreneurial culture, which was flexible and non-hierarchical: “One of my strengths is that I have no fear of appointing people who are better than me. I built three senior teams at different stages and, each time, I considered the executive culture very carefully.” He had an open culture, designed to allow talent to thrive: “Our clients liked working with us. We were having fun.”
“The best way to learn is to have crack people around you. Entrepreneurs believe they are the centre of everything and that’s a massive weakness. A lot of it is about honesty.” He says that established rivals generally underestimated them, which helped.
However, he admits he never got his work/life balance right and became out of touch with the real world. While he went to his children’s sports matches, he found the business all-absorbing. “It sucks you in,” he admits.
Equally, deciding when to leave was tough and he believes he got it wrong by about eighteen months. His final regret is getting involved in politics. He agreed to lend money to Labour in 2006, prompting a media frenzy over government contracts and Sir Rod’s resignation. He admits he was naïve and, at the age of 58, he assumed his greatest successes were behind him.
This proved premature. He has gone on to create fourteen academies through the Aldridge Foundation, which was built to help young people reach their potential and improve their communities. He says: “Students that had never dreamt of going to university are going. One of our students had been excluded from every school and is now at Cambridge.”
He has been concerned about the unhealthy gap opening up in education and its impact on social mobility. One of his academies is near the site of Grenfell Tower and lost five students in the tragedy. It was on the top 10% of the most deprived roads in the country, while a few roads down are streets with the top 1% of wealth. He has been shocked by what he has seen.
He went back to his own school, Portslade, many years later and found that ambitions were still low. People wanted to be bricklayers or hairdressers. He says: “It is not as easy to transform a school as it is to transform an organisation. We are trying to encourage the government to think beyond exam results to employability, people who can fit into a team.”
It turned out his greatest achievements were not behind him and he received a knighthood in 2012 for services to young people. He says the last twelve months have been incredible and he still sees that there is much left to be done.
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