Capita

Capita plc, a UK-based business process outsourcing and professional services company with approximately £3.0 billion in revenue (2022) and over 50,000 employees, was struggling with a legacy of over-expansion, excessive complexity, and weak governance. The company operated through 70+ fragmented business units with inconsistent management practices, reporting structures, and performance standards. A series of profit warnings in 2017-2018 revealed that management had limited visibility into the true performance of individual contracts, with some loss-making contracts continuing for years without identification. The company's share price had fallen over 80% from its peak.

Under CEO Jon Lewis (appointed 2018), Capita implemented a comprehensive governance restructuring. The 70+ business units were consolidated into 6 divisions with clear P&L accountability. A standardized Contract Lifecycle Governance framework was introduced, requiring quarterly profitability reviews of every contract above £5M in annual value. Monthly operating reviews with a consistent template were mandated across all divisions, replacing ad-hoc reporting. A central Portfolio Review Board was established to assess all contracts against return thresholds, with authority to recommend exit from unprofitable engagements. The company introduced a standardized risk and opportunity assessment framework, and created a Chief Transformation Office to coordinate the governance changes across the organization.

Capita identified and exited over 30 loss-making or below-threshold contracts within two years, improving portfolio margin by 200+ basis points. The number of business units decreased from 70+ to 6 clear divisions. Monthly operating review compliance reached 98%. Contract-level profitability visibility improved from 40% of revenue to 95%. Free cash flow improved from negative £67M to positive £50M over three years. The governance reforms supported a return to revenue stability after years of decline. Capita's operating margin improved from 4.2% to 7.1% over the restructuring period, driven primarily by better portfolio management rather than revenue growth.

New CEO leadership with mandate for transformation; consolidation from 70+ to 6 divisions; standardized Contract Lifecycle Governance framework; Portfolio Review Board with exit authority; Chief Transformation Office coordinating cross-divisional change; monthly operating review templates with consistent KPI definitions; investment in contract management systems and financial reporting infrastructure.