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Fri 24th Feb 2017 - Friday Opinion
Subjects: Drinks in the City, what we can learn from the US market, and courageous coaching
Authors: Glynn Davis, Ian Dunstall and Chris Edger

Drinks in the City by Glynn Davis

I was in my early 20s and had travelled down from the north to attend an interview for a job at the investment banking arm of Barclays in the City of London. My aim was to be a stockbroker and the only place of relevance was the Square Mile, where the world’s financial power was concentrated.

The middle section of the interview consisted of two Barclays executives taking me to a nearby wine bar and downing two bottles of decent-quality red wine and a sandwich. It seemed their examination of my capabilities included whether I could hold my drink. As a student in the preceding two years, I had honed my skills in this department and become pretty adept. I travelled back by train that afternoon thoroughly convinced this was a satisfying career path to pursue.

What turned out to be a successful interview led to eight years of City life. While plenty of the work proved to be tedious in the extreme, I could never complain about the fact the job provided an opportunity to spend many hours drinking at lunchtime and continuing in the same vein after work.

This was great fun for a time but when I switched jobs to a US financial institution there wasn’t quite the same acceptance by its management of the traditional extended liquid lunch. They sort of put up with the Brits’ boozing habits while the US employees largely avoided the practice.

The recent news that insurance firm Lloyd’s of London has banned its 800 employees from consuming alcohol between 9am and 5pm is merely an extension of what I’d seen coming into play in the mid-1990s. My own career path took me from finance into journalism, which I found to be just as boozy as the City had ever been. It is noticeable to me today that the younger journalists coming into the media industry do not seem to do business in pubs and bars with the same vigour and thirst as previous generations.

What both these industries rely on is personal relationships and, even though alcohol clearly has its dark side, I have always found it to be a major contributor to cementing working relationships. And pubs and bars – as well as restaurants – are neutral locations where both parties are on an equal footing and in a domain where social undercurrent leads quite naturally to gaining a better understanding of the person on the other side of the table.

I can understand some of the thinking behind Lloyd’s move and other businesses that have initiated similar alcohol bans but it seems to me to be far too blunt an instrument and looks to be treating adults in a rather childish “boss-knows-best” kind of way.

Such actions chime with other factors around drinking, including the now five-year-old Dry January phenomenon, which has always struck me as faintly ridiculous. What is this one-month abstinence really going to do for you? However, regardless of my own derisory view of Dry January the fact is it seems to have gained traction. CGA found 20% of consumers now take part in this so-called detox.

Chief among them is the younger demographic, with 28% of 18 to 34-year-olds jumping on the bandwagon, compared with a mere 14% of the over-55s. Probably like me they feel it suggests those Dry January participants have been unable to control themselves during the previous 11 months, notably during December of course. Evidence of such weakness can be seen from the fact many people fall off the wagon as the month progresses.

Against this backdrop – and undoubtedly appealing to the younger abstainer – comes the launch of the UK’s first alcohol-free brewer. Nirvana Brewery reckons there is sufficient demand for non-alcoholic beer all year round and it is attempting to bring tasty, full-flavoured beers to the category for the first time, which they say reflects the diversity of alcoholic craft beers finding favour with younger drinkers. I’ve no idea if their belief such demand exists will prove correct. Either way, I wish them well with their new business and hope they achieve much success.

If such an option had been available when I had my interview in 1988 – and I’d taken it rather than joining in and enjoying red wine with the Barclays bosses – I suppose it would have made little difference as to whether I got the job or not. But I have to say it would have been a lot less fun at that specific lunch and the thousands I’ve enjoyed since, during which I’ve conducted business over a couple of pints of (alcoholic) beer or a bottle of wine.
Glynn Davis is a leading commentator on retail trends

What we can learn from the US market by Ian Dunstall

Like many in the industry, I have been a regular pilgrim to the US restaurant market to observe and admire the latest brand innovations. Brands such as Cheesecake Factory, Houston’s, Seasons 52 and PF Chiang have been important in my continued education of hospitality excellence.

However, the US market is maturing and has some key structural challenges. What is happening and what can we learn to protect our UK brands and businesses against comparable challenges?

Study US restaurant sector news feeds and it’s clear the nation’s industry is in a significant long-term malaise – in October the casual dining segment was reported to be in its 16th straight month of decline, while quick service was in its seventh straight month of decline.

Previous trend analysis has indicated there has been a structural demand shift in the market away from established quick-service restaurant (QSR) and casual dining brands into the emerging fast-casual sector – but even this sector is showing evidence of slowing growth as the market matures and competition between the emerging fast-casual brands intensifies with scale.

For years we have admired the continual scale and growth of the US restaurant industry. It appears that, in the short-term, maximum capacity has been reached. While demand is at best static, the inflow of attractive new entrepreneurial concepts in the US continues to attract the interest of consumers. And these exciting new competitors are share-stealing from established large-scale brands that are well into middle age and beyond. 

Many popular brands are now 50-plus years old. As an extreme example KFC – a relatively successful example of positive evolution – is almost 87 having been founded in 1930. Many of these brands, especially in the QSR and casual dining segments, have grown into scale institutions (many casual dining brands operate between 800 and 2,000 locations and QSR between 2,000 and 7,000 locations – McDonald’s has 14,000!).

As the market toughens, Darwinian principles imply survival of the fittest, but these brands have become too large to fail. Inevitably, some of these brands will contract. Eventually, at least one of them will expire.

Credit the brands that have managed to continually reinvigorate and reinvest to remain relevant but some of the older casual dining and QSR brands are starting to look tired and their proposition is at increasing risk of losing relevance and attraction to the modern US consumer.

We have long observed the intensity of US competitors and the propensity for US diners for high-frequency, out-of-home “meal replacement”. This has been fuelled by intense promotional discount to encourage higher visit frequency plus a relatively high focus on carry-out (or even drive-thru) convenience to encourage the “on the move” refuelling market.

However, in the process some of these brands have lost the experiential and sensory magic of the overall experience. Value for money is not simply about low price – it’s about the service, ambience, personality, quality and price. This transforms a hospitality-based business from a commodity to an experience.

My observation on recent US visits is that many of these traditional scale brands have become transactional and too charmless and functional. They have transformed from the unique to the ubiquitous. 

Are new trading opportunities the answer?
Facing the challenges of declining core demand, US restaurants are chasing new channel opportunities – office catering services, take out, express lunch and delivery.

These are important and positive opportunities – done well they provide incremental revenue and increase the relevance and reach of the brand for more customer occasions. And brands have to adapt their offer to remain relevant, when and how consumers want to access the offer.

The risk, however, is that the brands lose the focus and obsession to drive their core brand experience and daypart focus. The challenge is how to ensure these do not dilute the core role of the dining experience, otherwise the brands experience a further role shift – from a hospitality experience to a refuelling stop.

We also observe this trend in the UK. As core lunch hour and midweek evening occasions diminish, brands have sought to grow breakfast and, more recently, delivery services. The challenge is to use these new opportunities as incremental trading opportunities and not to dilute the focus or quality of the core dining occasions.

Rebalancing the export trade
It feels the tide of restaurant innovation is also turning. There are still great US exports such as Five Guys and Shake Shack arriving from across the Atlantic but, in counter balance, some of the UK’s brightest and best are heading west. In New York, the “shiniest” brand I recently observed on many prime estate street corners was Pret A Manger, which now has almost 50 sites in central New York. Pret is a fabulous example of a brand that has remained true to its core brand principles and continues to execute the offer to the highest standards. Other successful brands entering the US shores include YO!, Wasabi, Nando’s and Wagamama.

Still leading in technological innovation
The US brands have been relatively early adopters of technological applications to enhance business efficiency, to the benefit of both operators and guests, from high-temperature ovens for faster cook times to guest technology to improve order and payment processes (“beat the line” pre-ordering apps are the relative norm in many sectors).

One recently observed extreme of technological evolution is Eatsa, billed as the “first fast food chain in America that requires zero human interaction”. When customers enter Eatsa they order food at an iPad kiosk, then wait in front of a wall of glass cubicles where their food appears when ready. Hidden behind the wall, kitchen staff prepare the food. When an order is ready, an employee places it in one of the cubicles. The door to that cubicle then lights up with the name of the customer who ordered the bowl. When the futurist John Naisbett (Megatrends) forecast the future impact of technology on our lives he described it as “high-tech/high-touch”. While Eatsa is an interesting trial of the technological extremes, does removing all human interaction with customers tear at the soul of a “hospitality” experience?

Lessons learnt for the UK market
Historically, the US market acted as a barometer of the UK hospitality market. So what lessons can we learn from the current US malaise to influence our UK businesses? Firstly, lets applaud how the UK market has come of age. It is a compliment to the UK industry that so many UK brands are exporting into the US and we are relatively less impressed by US brand evolution now there is so much positive concept development in the UK market.

However, the current barometer indicates the UK market is rapidly changing, with the stable economics of the past five years being challenged in many areas of demand and supply. The winning UK brands in this more challenging new world will be those that retain their fanatical focus on the unique magic of their individual brand experience. 

While being open to new trading opportunities, they should not be over-promiscuous and become a “jack of all trades” – the winning brands will ensure they nurture the core essence of their brand and ensure any new trading opportunity does not compromise this core experience focus. They will also understand the true meaning of giving value to the guest. It’s not about lowest price – it’s about a competitive price that enables the guest to afford to access the quality of the total brand experience.
Ian Dunstall is a brand consultant supporting brands and startups in the foodservice market. He will be a speaker at the Propel Brands Masterclass on Friday, 10 June

Courageous coaching by Chris Edger and Tony Hughes

In the second section of our forthcoming book, eMOTION! – How Inspirational Leaders Mobilise Superperforming Teams, we explore the critical role inspirational leaders play in “leader-coach roles” – coaching and mentoring subordinates to higher levels of performance. It is our belief a key component of the inspirational leader’s weaponry is their capacity – as a leader-coach – to master what we call “courageous coaching”. What is it, why is it important and how do we recommend they do it?

What do we mean by courageous coaching? This is our definition:

Courageous coaching takes place in a trusting one-to-one learning context where great leader-coaches help coaches raise their self-awareness and build accountability by challenging self-limiting mind-sets, mobilising behavioural change and personal progression.

But what is the significance of each component of this definition?

Courageous coaching: A process in which inspirational leaders drop their “expert leader” or “performance management” persona (a courageous act in itself!) to challenge and move false pre-conceptions of coachees

Trusting one-to-one learning: Space outside normal “performance reviews” where, with no hidden agendas, the focus is purely on personal development and increased effectiveness

Great leader-coaches help coaches: Where the leader-coach facilitates and guides a coaching (and mentoring) process designed to improve and progress coachees’ goals

Raise their self-awareness: Focusing on uncovering “blind self” and false preconceptions that might be holding them back

Build accountability: To generate genuine ownership of a clear aim, solutions to overcome interference and a plan of execution

Challenging self-limiting mindsets: Reframing and breaking down false misconceptions of limitations and barriers

Mobilising behavioural change and personal progression: Leading to lasting behavioural change and sustainable progress

Why is it important? At an organisational level promoting a courageous coaching culture enhances general leadership skills and improves communications and relationships, generating a more harmonious, innovative climate. At an individual level it helps managers to establish clarity, meaning, learning, well-being and positivity. It is particularly important in sectors such as multi-site hospitality where – due to dispersal and distance – area and site managers are required to come up with solutions themselves, without reference to higher authorities. The techniques they learn from courageous coaching – by either doing it or being a recipient – heightens their levels of self-awareness and accountability, increasing their sense of resourcefulness and self-sufficiency.

How do inspirational leaders learn from it? What skills do they need and what process should they follow? From a skills perspective they require a fair degree of emotional intelligence, which will enable them to question, listen, mirror, probe, clarify, summarise and display a fair amount of agility and intuition. The process we suggest is our “build-raise” process of courageous coaching, which enables leader-coaches to raise the awareness and accountability of coaches.

Build rapport – at this stage, the leader-coach clearly sets expectations, defining respective roles and responsibilities, emphasising the coaching sits outside the normal performance review process. The important thing here is a fair degree of personal chemistry is established to enable an honest, open and challenging exchange.

Uncover aim – now it is the role of the leader-coach to help the coachee to surface a goal that is aspirational, tangible, realistic and clear to them. Coaching is “coachee driven”; it only works if the coachee is pursuing a goal that is meaningful to them. The art here is uncovering a legitimate aim that is impactful and measurable. Often coachees are unable to “see the wood from the trees”. The job of the leader-coach is to act as a dogged facilitator in establishing a goal of substance.

Identify interference – now the leader-coach must help the coachee identify the main barriers to them achieving their aim. In doing so, (s)he must establish their scale, importance and relevance. It is at this point (s)he must challenge self-limiting attitudes and behaviours, helping to create a sense of perspective and insight. Very often the greatest barriers to progress lie within ourselves rather than outside forces. It is at this point the leader-coach can help coaches expose their “blind self” and begin to understand how they themselves are their own worst enemy in reaching their goal!

Locate solutions – having isolated the main sources of interference, the leader-coach can unlock hope, confidence and energy by challenging the coachee to locate solutions that will enable them to move things forwards. It is important the coachee feels as if (s)he has located appropriate solutions, as this will drive the accountability to implement them (a key outcome in dispersed multi-site hospitality contexts).

Determine execution – if the aim that has been established is measurable, the interference to its achievement nullified through a number of viable solutions, a simple plan needs to be drawn up and agreed to ensure its execution. Here the leader-coach encourages the coachee to draw on all available support and resources to ensure success. Challenging milestones and timescales are set, with a follow-up meeting or call to evaluate progress scheduled for later on.

In the book we obviously go into great detail on appropriate questions and coaching “tactics” (highlighting key “reframing” and “magic” questions that can shift feelings and perceptions). But the key point we make is this. Coaching is not a “soft, cosy chat” – it is a “hard” challenging intervention that should follow a specific process. Whatever subject the coachee alights on – career progression, personal effectiveness, performance enhancement or conflict resolution – it is the job of the leader-coach to facilitate discussion in a courageous and challenging way. Courageous coaching is an essential tool for the inspirational leader, promoting a culture of self-awareness and accountability among the recipients; essential in multi-site environments where the inspirational leader is often absent, too busy or does not have the answer to every problem!
Professor Chris Edger is a multiple author on retail leadership and Tony Hughes is a luminary of the European foodservice scene

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