It’s not May 1940, but it might as well be as far as Serco is concerned. The scandal-ridden government outsourcer has its back to the wall after a year of epic disasters (see below). So, who better to summon as a new chief, says The Daily Telegraph, than a scion of the Churchill family?
“Rupert Soames knows more than most about disaster zones.” As boss of Aggreko, the Scottish temporary power supplier, he has seen action in post-tsunami Japan and the more extreme reaches of Africa.
Soames’s background, style and somewhat fruity public-school vocabulary mark him out as an “unorthodox boss”, says The Economist. “Chaps like him generally prefer the ethereal industry of the City to the grubbier variety.” But like his famous grandfather (to whom he bears some resemblance), “he is an extroverted, mucking-in, buccaneering sort of toff, rather than the condescending and insipid kind”.
He also has some notable eccentricities, decorating his dressing table with a photograph of his business mentor, Arnold Weinstock, and keeping pet ferrets. But, by golly, he’s been effective. Analysts credit him with spotting the huge power shortfall that was opening up in developing countries and positioning Aggreko to fill the gap.
The company – whose orange generators are now ubiquitous everywhere from Glastonbury to Ouagadougou – has become the world’s largest temporary power supplier.
Friends say that Soames is “both unawed and unconceited about his grandfather”, with whom he dimly recalls playing cowboys and Indians. The fifth child of Mary and Christopher Soames (the last governor of Rhodesia), “he decided relatively early that he would plough his own furrow in business”, says Management Today.
He took a third at Oxford, where he was president of the union – largely because he was so busy running a DJ spot at Annabel’s nightclub in Mayfair. It made him ten grand and gave him a taste for business. “You’re never more in the driving seat than being on the turntables at a party.”
Soames’s first big job was at Arnold Weinstock’s GEC , then a British manufacturing behemoth. He stayed for 15 years. Weinstock – a notoriously mercurial character – clearly took a shine to him and exerted “a huge and lasting influence”.
Towards the end of his time, “Arnold made some appalling cock-ups”, says Soames. But he credits the old man for his intolerance of flim-flam and twaddle. He left GEC with Weinstock in 1997 – “for which read I was fired”, and ultimately came a cropper at his next job at Misys. “I’ve been fired twice in my life. It’s character-building.”
After 11 years with Aggreko, Soames is ready to move on. “CEOs are a bit like uranium… If they stay around too long, they can decay into something quite toxic.” At 54, he reckons he’s got one big job left in him, says The Daily Telegraph. Let’s hope Serco is the right one.
Could anyone rescue anything from this car crash?
“Serco has discovered a way to create a lot of value very quickly,” says Lex in the FT. Hire Rupert Soames as CEO on a salary of £850,000 and then watch as your market capitalisation goes up by £135m: shares in the outsourcer jumped 10% on the news.
But before breaking the champagne, Serco shareholders should pause for breath. At Aggreko, Soames built a business; at Serco he has to turn one round. And creating value out of the current car crash will be a slow process. “The worst bit? Take your pick.”
There’s the Serious Fraud Office investigation into a prisoner tagging contract, the City police investigation into a prison vans contract, a temporary ban on bidding for UK government work, trouble in Australia… Profits plunged 62% last year.
Soames reckons Serco is “on the right side of history”, given the growing trend for outsourcing. But it’s a mystery to me why he wants this job, says Nils Pratley in The Guardian. In fact, the real question about Serco – which runs prisons, hospitals and air traffic control towers worldwide – is whether it’s “too large and diverse for anyone to manage”. Soames may have to wield the axe as well as clear out the Augean stables.
Dave Greenall at RBC Capital Markets reckons his biggest asset is his “political aura”, says The Daily Telegraph. With around 15% of Serco’s revenue base up for re-bid, investors will be wanting to see the fruits of his charm.
At Aggreko, Soames was such a keen honorary Scot that he commissioned a special tartan, says The Economist. But one hassle he can now forget is independence. The pro-Union campaign is going to miss him, says Alan Cochrane in The Daily Telegraph. Few others can swat away “the gnat bites of the Nats” at Holyrood with the panache of Soames.
It may be premature for Serco shareholders to be cracking the bubbly, but Alex Salmond might allow himself a quiet slurp.