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Morning Briefing Strap Line
Fri 9th Jun 2017 - Friday Opinion
Subjects: Generating awe by building great teams, digital reshaping the foodservice landscape, food policy matters and the supplier market place
Authors: David Singleton, Glynn Davis, David Read and Ann Elliott

Generating awe by building great teams by David Singleton

Over the past 35 years I’ve grown to love the hospitality industry that I fell into by accident, replying to an ad placed in my local post office window – “commis waiter required”. I had no idea what it was, but I liked the hotel and at the interview I talked about how I loved working in a team and one day I would love to lead one too. 

I was a kid at the time and wasn’t really sure what I was letting myself in for, but one thing that struck me then was with so many guests who were blowing big budgets on leisure, business and entertainment shouldn’t they be having a better time than the one they were having? Shouldn’t their service levels be greater? Shouldn’t the maitre’d be more engaged with the guests rather than looking after himself? I wanted to know why guests had to wait so long for their room service meals, check in at the desk and why we were being taught to be so unnecessarily stuffy. 

It was the start of a long career where working in high-performing teams has taken a common drive that’s taken me around the UK, across America, and into Russia and the Middle East. Industry leader Tony Hughes together with Professor Chris Edger recently collaborated to write their second book together – “Inspirational Leadership, Mobilising super performance through eMotion”. Chris invited me to contribute and then reflect at their Leadership Masterclass about how to generate awe through building great teams. In my preparation and in conversation with Chris he said “inspirational leadership is about capturing hearts, making people care enough to display outstanding service behaviours”. Together with the inspiration of others, it helped me shape my ten-point principle. 

It was Jim Collins who said: “How can you build a team so happy that when they wake up in the morning they want to go on living forever?” My daughter’s eyes rolled (again) when I first talked to her about what I was writing about. “Dad, c’mon what course have you been on now?” she asked but when I explained our responsibilities as a leader she understood more, even making comparisons in her own workplace now that she’s a teacher herself and leading a challenging team of her own. 

Have vision
As a leader, you have to know who to recruit, thinking carefully about what your vision and strategy is for the business, project, task you’re about to embark on. Avoid taking the same team with you as you change your own roles; enrich your own self by recruiting and developing new teams as you move into new roles. There will always be the select lieutenants who are right for the job and can inspire the wider team around you, but be selective and remember the team you’re leaving behind you. If you have a clear strategy for your business, only then can you build a high-performing team 

When recruiting, hire for personality and values. Hire people you really like who share your vision and drive. Recruit people who light up the room with their knowledge, vision and personality. Recruit the best people in your field, they are always more expensive, but worth it. Recruit people with integrity, humility and values. Induction matters. Your team should be wedded to your vision and strategy, they may be instrumental in its creation, but regardless of this make sure their induction immerses them into the business and you can rely, trust and believe in them to deliver the task in hand. 

Engage
You have your job as a leader because you were an instrumental and inspiring manager, or team player. You might have been a high performing restaurant manager, retailer or chef. However you got to where you are now, never forget your rookie skill, never forget how you got there and take time to walk the floor inspiring future leaders. Have them teach you about their role, show humility, have them show you how to make a great flat white, ask them how you can make their job better, learn about their family and thank them for awesome work, great efforts and their results. Always cheer progress and take time to coach those who need it.
 
At the centre of your business is your customer. Build a customer-centric organsation – be revolutionary and put people before numbers. One of the most important things you could ever do is to ask your customer “on a scale of one to ten would you recommend…”, go on to ask why and make sure you use what they tell you to transform processes, recipes, service levels and behaviour. The net promoter score is about as important as your PNL. Talk about what your customers are saying at the same time as you review your daily numbers. 

As you walk the floor, talk to your customers. Your business will never be the same one year to the next – make sure you evolve your team with your business and tweak your strategy accordingly. Be rigorous, not ruthless with succession planning. Having rigour is different to being ruthless. Being rigorous means you’re being thorough with your short and long-term thinking. Some leaders might think that being ruthless is smart – it’s the opposite and will disengage the high performers who care about what you’re doing. 

Enthral
To build a business that outperforms your sector you have to build a super charged engine with thrust. It’s not easy, but once you have a well engaged, aligned and motivated team you can take it to the next level. It will require a lot from you as a leader. High-performing young people don’t need managing – they need guidance, support, motivation, unconditional empowerment and trust. 

If you have successfully recruited, immersed and developed your team, you should have a team of leaders who inform you of their actions, rather than seek permission to. Build a leader-leader team. Make your team feel really, really good. Empower it to make decisions – after all, you’ve brought it all this way engaging it with your strategy, the rigor of its personal development and coaching along the way. Trust your team – avoid controlling it with micro-management. Rules are in place to control – your leaders have been a part of your success and growth so trust and empower them. They are there to do a job, you have your own. 

The inspirational author of “Exponential Organisations”, Salim Ismail, says: ‘“Trust beats control, and open beats closed.” Today’s workers, particularly those who are younger, demand autonomy, flexibility and openness. More and more, the work that people do requires advanced creativity, imagination and problem solving. You don’t get innovation in command operations. Instead, trust your labour force, give it freedom, and use modern technology to monitor and track its progress. Focus on what’s important and ensure you’ve established a culture where your team’s performance gets rewarded. Above all, be a humble leader. Have passion, desire, respect and will as a leader. Have energy, ambition, drive and humility. Have will for your team’s success. Serve and encourage your team so it succeed in ways it never thought possible. 

Work in ways that are not about you as a leader, but in building a happy work place, a learning and value driven culture. Build trust, thank and take care of your people, talk with your people, listen to them and make sure they have everything they need and more to do their job creating a people and customer-centric happy workplace. 
David Singleton is vice-president of Al Tayer’s hospitality group, based in Dubai

Digital reshaping the foodservice landscape by Glynn Davis

One thing I can be absolutely sure about is that everybody who is reading this column will have had their lives massively impacted by digital. For starters you would not even have received this article in the first place without email. It’s hard to think of any area of our lives that is not being affected or disrupted in some way or other by the internet. 

One area that should not be underappreciated is the impact it has had on the way we consume – both in terms of what and where. The ability to pull your phone out of your pocket and watch, buy, listen, and communicate via social media channels is having a profound effect on how we consume pretty much everything – including food and drink. 

It is possible to find out exactly which are the hottest new bars or restaurants and also which dishes and beers are the newest must-consume releases available. This cycle of desire is being fuelled by the sharing of experiences on social media. Digital has massively accelerated the demands and appetite for the newest, latest, most limited, and hottest products. This is undoubtedly great for the consumer who has never had it so good in terms of the choices available. 

But this has its downsides for anybody involved in the leisure and hospitality industry. There is a growing feeling that ongoing success will revolve around an almost constant reinvention of the proposition. The street food and food truck phenomenon, along with the food markets, are built around giving the customer a wide choice of cuisines and to constantly change the mix. Jonathan Downey, co-founder of London Union – that operates various food markets – says the customers at his market in London’s Canary Wharf only have one question – what foods are coming next?

The dream for many street food vendors is they will graduate onto running their own restaurant in good old bricks and mortar on the high street. As well as the onerous costs involved, such a move will likely require them to significantly expand their offer beyond the original concept that probably revolved around a single dish and its variants on that theme. Being subsumed by the newer kids on the food truck block offering the latest must-eat dish must be a constant threat for many businesses – especially when they’ve taken the decision to ditch the valuable capacity to be mobile and have instead planted their flag in a fixed piece of real estate.

The beer industry is also being disrupted massively from the constant appetite for the newest thing. The traditional way to operate a brewery involved producing a small core range of beers and to supplement these with a seasonal beer each quarter. The core beers would account for as much as 80% of sales and these brands would be the cash generators that basically kept the lights on at the brewery. 

This is not the case with many of the newer breweries that have sprung up in recent years. They have built their models on producing a constant stream of new beers to satisfy the new pattern of digitally-fuelled consumption. Some of the more popular brews will be produced on a frequent basis but we are not talking about them representing anything like 80% of sales. Regardless of how good some of these beers are, there is now a mentality among a growing band of drinkers that they have to be constantly on the hunt for the next new beer. 

Not only is this putting great pressure on the models of the established operators but it throws into question the issue of brands. Whereas it was all about building big beer brands, the situation for the craft brewers is arguably much more about them building a brewery brand. Have we gone past the zenith of the big beer brands and the focus has now shifted to the brewery being brand and it produces myriad beers? This is a seriously important question that many large brewers will be asking themselves and if they are not then they really should. The one thing we can be sure about is that the consumption of food and drink is inextricably linked to digital and its disruptive capabilities look set to constantly reshape the foodservice landscape.
Glynn Davis is a leading commentator on retail trends

Food policy matters by David Read

We recently held the first of a programme of small “consultation dinners” with foodservice leaders, chaired by Helen Browning, chief executive of the Soil Association, who is assembling a commission to advise the government on the future of UK food policy once we leave the EU. If this sounds dull to you that might not be surprising. But you would be wrong.

The UK hasn’t really had a food policy since 1973. When we entered Europe we became a part of the EU’s Common Agricultural Policy (CAP), and we have been subsidising our farmers to an average level of more than 50% of farm incomes ever since. But that important piece of legislation called “the side of the Brexit bus” and its promise to divert the £350m a week to our NHS conveniently forgot to mention a huge slice of it passes straight back to our farmers in the form of farm subsidy, and rural investment schemes.

But this is just one part of a complex set of changes as we leave the EU. We discussed these at our dinner, and one of the most critical conclusions we reached is our quiet backwater of the agrifood sector needs to engage more fully in the policy of UK food if it is to have the kind of supply chain it wants and needs in the future. So, here’s why. 

Cost
The most recent CGA Prestige Foodservice Price Index shows food and drink inflation for caterers is now running at 6%. The good news is it should begin to ease over the remainder of the year. Last summer’s Brexit driven correction of 15% to 20% against major currencies will gradually wash out of the inflation numbers as the new import prices become the norm. 

But the cost of labour in agriculture and food manufacturing may rise if immigration restrictions are not pragmatically implemented, leading to higher prices for the 54% of our food that’s grown in the UK. We also import 27% of what we eat today from the EU, which of course is on a tariff free basis. Hopefully this status will survive, but our withdrawal from the single market gives us no guarantee. 

We are net contributors to CAP, so we will “save” about £2bn a year by not being in the EU. Apart from farmers there are very few that want the retention of a subsidy system on the basis that it doesn’t incentivise efficiency and innovation, so we lag competitors like the US for example. But equally, revolutionary subsidy changes could destabilise supply, remove production and drive price upwards. There’s much rhetoric about super-low prices from opening up of other supply markets through new trade deals, but tariffs and fluctuating exchange rates bring risk with them too.

Security of supply
There is a further risk the government will be keen to flex its trading muscles, withdraw subsidies and allow UK farming to “find its own level”. One can certainly argue that removal of subsidy will help Britain to forge new trade deals with non-EU states. The EU is so heavily committed to agricultural protectionism that its ability to sign trade agreements with developing nations is restricted. If the UK adopts a different approach, opening up its markets to food exports from, say, Commonwealth nations, it could gain significant new access for UK businesses.

We should be cautious though, as it’s in our interest to maintain a strong farming industry at home – no government can afford to play fast and loose with food security. After all, most developed countries, whether inside the EU or not, maintain at least some public funding for farming communities. Perhaps the time is right for Britain to replace CAP with a smarter and more innovative system. We could for example, put more emphasis on paying farmers to tackle specific environmental problems, or to boost training and skills in the workplace, or to invest in research and development projects that boost innovation and productivity.

Soil and the rural environment 
Finally, let’s not forget the countryside is a national asset that we need farmers to invest in and protect. If we allow farming to wither on the vine we not only destroy jobs, and food security, but we put the countryside itself at risk. Of critical importance is the health of our soils after decades of intensive chemical laden farming. Some are now suggesting that at the current rate of decline we may have less than 100 harvests left as a nation.

The food and drink sector is the UK’s largest manufacturing sector. But because of the fragmented nature of the catering sector we are simply not at the table right now. In December last year, 25 chief executives of large restaurant businesses wrote an open letter to Theresa May imploring her to help on a wide range of issues from business rates/living wage to availability of EU labour. Yet the huge issues threatening our supply chains did not even get a mention. As a sector foodservice needs to become much more involved in protecting the supply chains that will be essential to survival in the challenging years ahead. 
David Read is chairman of Prestige Purchasing 

The supplier market place by Ann Elliott

I am sure many in the sector are already a bit tired of hearing how challenging life is going to be for operators in the next 12 months and how there will be “blood on the carpet” (to quote a senior industry financier) in the near and mid future.

If the future does look a bit bleak for operators, it is looking just as bleak for food and drink suppliers. How are they going to survive if their clients are not opening more sites or driving more sales or winning more loyalty from customers? How are they going to thrive if their clients want them to move from an “added value” strategy to a lowest cost base model with higher discount levels? 

At the same time as our market is looking to drive +4% like-for-like sales to combat cost increases, the retail market is not having a great time. This has resulted in more and more suppliers piling into the hospitality sector, hoping this sector can fill some of the gaps in the achievement of their overall sales targets. These suppliers are not going to find it as easy as they might think – retail thinking doesn’t always apply in this sector. 

It’s not a comfortable scenario. So, what can suppliers do? How can they grow market share in difficult times? The successful suppliers we work with (including food, drink, tech and services) are doing a number of things:

1. They are specialising. Some have seriously considered expanding their offering in order to appeal to a broader customer base but those wining new contracts seem to be specialising and focusing – cutting out less profitable lines (and, indeed, clients) and saving costs at the same time. They believe that operators want suppliers who know what they are doing and do it well. The more specialised a supplier is, then the more likely it is that operators will value their contribution, use them and retain them.

2. They are getting back to basics. I have heard this phrase many times in recent weeks from operators that have stopped expansion, put refurbishments on hold and have cancelled new initiatives and innovation. They are relentlessly scrutinising every line on their PNL. Suppliers are doing the same. 

3. They are helping operators minimise the impact of cost increases. This is where they can continue to add value. This is certainly happening on the menu engineering front where expensive products are being substituted for cheaper ones, plate presentation is being revisited, pricing is being scrutinised (not always increased) and/or items are being take off a dish and priced separately. Suppliers have real experience to offer here.

4. They are working together with operators to drive covers. Some drinks suppliers I know are working totally collaboratively with their customers to run consumer research, develop customer footfall strategies and to implement plans. They realise they both have issues if covers decline and it’s a problem better solved together than not solved at all. The impetus has to come from suppliers and they have to have genuine new ideas and solutions. I have also seen many suppliers working together too – believing they are stronger in partnership then running solus.

5. They are continuing to market. Ironically, we have seen supplier marketing budgets increase not decrease. The focus is very much on inbound marketing rather than on conventional outbound activities. They are spending their time (and budgets) on really identifying their areas of expertise, writing content around these expert areas and then publishing this content in relevant routes to market where operators will find them. This often comes hand in hand with a very critical view of their website and their SEO – often changing their digital presence to become more customer and less supplier orientated.

6. They have clarity around their USP. Suppliers who are totally clear about the benefit they bring to operators, can demonstrate this benefit clearly and can articulate it in a sentence are getting meetings and winning business. Those that are more woolly are not. 

As usual, there is some fantastic best practice out there to follow.
Ann Elliott is chief executive of Elliotts, the leading integrated marketing agency in the hospitality and leisure sector – www.elliottsagency.com 

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