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Morning Briefing Strap Line
Fri 10th Jul 2015 - Friday Opinion
Subjects: Why brands perish, mixed feelings on pub food, and health and alcohol
Authors: Chris Edger and Tony Hughes, Glynn Davis and Paul Chase 

Why brands perish by Chris Edger and Tony Hughes

Why do brands falter and die? One aspect involves “common typologies”. There are four leadership types who “blow up” food service brands, all with distinctive characteristics:

The clueless: This type of leader is completely unsuited to either running a food service brand or lacks the skills to manage a brand during its transitional phase of development. With regards to lack of tacit expertise of the industry, it is not uncommon for brand owners – in order to seek “new perspectives” – to go outside the sector to hire new leaders; in spite of all the evidence (both practitioner and academic) that promoting talent from within or across the sector from similar concepts is the most fool proof way of safeguarding a brand’s future. Sometimes hires have been made from food retail, for instance, but these new recruits – steeped in knowledge of “functional retail” – lack a recognition of the centrality of “service performance”, “on-site production” and “emotional connectivity” within a hospitality context. Tangible factors such as range, availability, quality and price are the main drivers of customer satisfaction in food retail. Intangible attributes such as service, sociability and environment are just as important within food service. Also, often leaders from a food retailing background – where brands are highly systemised brands and “homogenised” – cannot cope with the heterogeneous nature of food service; they are insufficiently attuned to the fact that “one size cannot fit all” within this context. Lacking these insights, the clueless leader wrecks the emotional dynamic of the brand by searching for solutions based more upon efficiency than effectiveness. With regards to the wrong leader being in place at the wrong stage of the brand’s life cycle, the point was made earlier on in the book that each role during the various transitions must be matched by appropriate leadership skills. Whilst it is possible in some instances for some leaders to fulfil multiple roles, the likelihood is that owners of decaying brands “negligently persevere” with the wrong leaders with the wrong skills at wrong time in the brand’s development, resulting in dire consequences for all concerned (ie employees, customers, shareholders, suppliers, communities etc).

The reckless: This category of leader jeopardises the future of the enterprise by making high-risk decisions in an effort to achieve preposterous stellar growth and/or generate dubious shareholder “value creation”. Unsuitable assets are acquired for the sake of the appearance of scale (the notion of expansion being conflated with growth) or complicated exercises in “value engineering” are conducted. The reputation of the brand is diminished rapidly by vainglorious “financial” rather than “industrial” strategies that end in unmitigated disaster. It is not that the leader in this instance is “clueless”; rather they possess a dangerous combination of a lack of self-control and a low boredom threshold. They seek immortality by “putting all their chips on red”, and – in some instances – they get away with it on the first or second occasion. Inevitably, however they get found out. To the reckless, taking risks is a form of aphrodisiac – it is a stimulant that they crave in order to feel energised, excited and alive! But why are these chancers in a position of authority in the first place? Likely explanations include brand owner greed (the fact that they buy into “wrecker’s” vision for their own self-serving financial purposes), executives dangerously morph into this category through boredom (they have been in position too long) and/or they are subject to a complete lack of corporate governance (checks and balances that thoroughly review key strategic decisions). Whatever the reasons this type of leader comes with a strong health warning; they should not be appointed in the first place or stopped in their tracks before they do irreparable damage!

The egoist: The egoist is probably one of the most common leader typologies connected to failing food service brands. This individual has an almost improbable and delusional sense of infallibility. Their lack of self-awareness coupled with a misguided belief in “divine superiority” drives them to make decisions without consulting others whose views and opinions they regard as derisory or “unworthy”. Soon the egoist has created an organisation that relies upon them for all the answers; decisions are deferred or delayed for fear of retribution or being cast out of the “circle of patronage”! The all-powerful monarch with a sense of unbridled self-destiny has surrounded him/herself with compliant followers who have learnt to flatter and preen the leader’s sensitive ego rather than draw their attention to unpalatable truths. But because the “egoist” is in it for themselves rather for the long-term prosperity of the brand (the “project” is about them rather than the common good) the brand is usually doomed to failure. Following conception no successful brand can be the entire preserve of one man or woman. Engagement and innovation can only be sustained through a feeling of common purpose and public recognition of the contribution of others. The egoist cannot see or recognise this, eventually – even though they are surrounded by sycophants – they are left isolated and become detached from the truth. At some point a “regime change” will occur and all those that the egoist believed were close colleagues and confidents will spurn and ignore them! 

The toxics: Our final category of failing brand leaders (although not totally mutually exclusive to the types outlined above) incorporates the consciously venal! These sociopaths have managed their careers successfully because they have been outstanding at “managing upwards”. They are nasty usurers who – unlike unself-conscious egoists – plot, scheme and dissemble deliberately to get their own way; whatever the human consequences. Lacking any empathy for the feelings of others they actively seek to “divide and rule” – deliberately setting brand members up against one another through gossip and misinformation. They do this because they believe that it augments and strengthens their position; they become indispensable puppet masters – the only people who can lay claim to being able to control the unruly rabble (which they’ve created!). Toxics are hard to catch and dispatch because they are sly and mendacious. As they are used to preying on the insecurities and fears of others to control them they are artful in “seeing off” any challengers by deploying equally ruthless tactics (ie whispering campaigns challenging their moral probity and good character). But in the end, their game play hangs them “by their own petard”. Toxics run out of people, the brand runs out of energy and they run out of track! At some point their tactic of blaming everybody else for poor performance loses credibility and they become the victim, along with the brand which is probably “too far gone” for redemption.
Professor Chris Edger teaches multi-site management at Birmingham City University. The article above is extracted from a forthcoming book on brands life cycles he is co-authoring with Tony Hughes, the former managing director of restaurants at Mitchells & Butlers and currently a non-executive director at The Restaurant Group
 

Mixed feelings on pub food by Glynn Davis

Needing a place for breakfast in Manchester last week the JD Wetherspoon near my hotel was an obvious choice as its eggs Benedict with unlimited filtered coffee refills is a bargain and decent quality. Clearly, I wasn’t the only person in town with the same view because at 9.30am that Friday it was extremely busy with diners. The odd pint was being drunk but the majority of people were drinking coffee or tea with their breakfasts.

This level of food consumption is not unusual for a Wetherspoon’s pub and dry sales account for more than half of group turnover (including drinks sold as part of a meal occasion) – and this is a figure that is continually rising. But nobody would really describe the chain as a food-first operator because to most consumers it is at heart very much a drinkers’ pub with extremely competitive alcohol pricing. This ability to offer a strong food offer without it impinging on the drinking fraternity is one of the company’s most compelling characteristics. You could argue that it has the size of venues to enable it to do this more easily than other operators but when you consider the massive volumes it handles then it is still an achievement to not have its pubs overrun with food and to keep all camps happy.

Achieving such a balance has not been the case at many pubs. When I read last week that the Michelin-starred Galvin brothers had set up a pub company and were, not surprisingly, looking to focus on the food offer I had mixed thoughts. Yes it’s great that such stars of Michelin and brasserie-style cooking want to improve the food lot of pubs – much of which the brothers think is still not that great. But the downside is that so many quality chefs before them have gone into the pub sector and turned boozers into restaurants. I’ll admit it now I very much dislike the “gastro-pub” term and wrote a piece in April 2007 for an industry publication that looked to call time on the term. It was more a wishful plea for an end to the phenomenon than a real belief that the bubble was going to burst (it still hasn’t).

I wasn’t the only naysayer at the time though as Michael Belben – the man who invented the gastro-pub model with chef David Eyre when they took over The Eagle on London’s Farringdon Road – suggested with some sarcasm that if he opened another venue he would have the gastro bit removed from the name and it would be simply called a pub (offering good food). All too many times there is some false belief by licensees with high-end gastro-pubs that they are actually running pubs. They seem to have convinced themselves of this and hold onto the fantasy that anybody can just pitch up for a couple of pints of beer and enjoy a single plate of food sat at their bars. (In contrast to booking a table many weeks in advance and having the full three course Michelin star treatment).

Often this fiction will involve a couple of token bar stools where you could sit but I think you might often stick out like a sore thumb (even if the two seats were actually available). I’ve sympathy for the likes of Tom Kerridge who did genuinely want to run The Hand and Flowers at Marlow as a casual pub where you could just turn up for a drink and then take a table for dinner if you felt like it. Two Michelin stars put paid to that and you now need to book months in advance. Hence he opened another pub in Marlow, The Coach, which apparently is a real pub. But for how long? It’s undoubtedly the no-booking policy that helps it avoid a diary full of reservations.

The reality is top food from classy chefs will attract the masses and these chef proprietors are quite rightly profiting from their great skills. But I’d prefer to call these food establishments restaurants. They just happen to be housed in buildings that were formerly pubs. One reason they are called gastro-pubs is because this helps convey a feeling of casualness and absolutely everything – rather annoyingly – has got to be casual today. Put Michelin-starred food in a pub and strip off the tablecloths and people are much more comfortable than in the more starchy traditional venues.

So what about the pub – the real pub? What we really need is just great bar snacks. Those traditional delicacies that so many more pubs are now thankfully starting to do much better through more carefully sourced and higher quality ingredients. Scotch eggs, pork pies, local cheeses, charcuterie, and sausage rolls are not exactly rocket science but they certainly beat a so-called gastro-pub if I simply want to pop into a place for a beer and maybe have a little food to complement the drink.
Glynn Davis is a leading commentator on retailing trends

Alcohol and health by Paul Chase

Firstly, thanks to all those who emailed me about my article last week on low-risk drinking guidelines. I will write more fully on this subject in the next edition of Propel Quarterly. In my last article I made the statement that it had been established scientifically that all-cause mortality was lower in regular, moderate drinkers than in people who never drink, and a number of people have asked for the name of the study that information came from. There are numerous such studies, but the one I used was a meta-study from America by Augusto Di Castelnuovo, et al titled: “Alcohol dosing and total mortality in men and women: An updated meta-analysis of 34 prospective studies. Archives of Internal Medicine, 2006, 166, 2437-2445.”

I also stated that moderate drinkers were less likely to die from heart disease and from cancers than “never drinkers”. Again, there are numerous such studies that validate that statement. One such study is by American researchers Moore, R, and Pearson, T that is titled: “Moderate alcohol consumption and coronary artery disease. Medicine, 1986, 65 (4), 242-267.” In relation to cancers there are numerous international studies, exemplified by these two: Lee, JE, et al. “Alcohol intake and renal cell cancer in a pooled analysis of 12 prospective studies. Journal of the National Cancer Institute, 2007, 99, 811-822.156.” And Rashidkhani, B, Åkesson, A, Lindblad, P, and Wolk, A. “Alcohol consumption and risk of renal cell carcinoma: A prospective study of Swedish women International Journal of Cancer, 2005 (December 10), 117(5), 848–853.” Yes, I know, I need to get out more, but I hope this is sufficient to reassure the doubters!

And whilst we’re talking about health, the old nonsense of alcohol-related hospital admissions seems to have reared its ugly head again. On 25 June a Daily Mirror headline screamed: “A million people in hospital due to alcohol every year as admissions soar.” Well, even by Daily Mirror standards this was pretty poor. Firstly, the figure used was the so-called “broad measure” of alcohol-related hospital admissions, not people admitted to hospital. Secondly, the Department of Health now recognises this measure is a blag and now calculates hospital admissions related to alcohol at around 333,000. We know that “frequent flyers” – people who are admitted numerous times – means this represents about 75,000 to 80,000 people admitted – not 333,000 and certainly not one million. When will lazy journalists start doing their job and properly researching their stories? That was a rhetorical question of course!

Meanwhile the health lobby continues to plug away promoting policies that seek to reduce population levels of consumption in the erroneous belief that there is a direct, linear relationship between levels of consumption and alcohol-related hospital admissions and health harms. This is demonstrably untrue. In England and Wales consumption has fallen by nearly 19% since 2004, but hospital admissions and deaths continue to rise (albeit to nothing like a million). But in Scotland the fall in alcohol consumption has been mirrored by a fall in alcohol-related hospital admissions and a fall in alcohol-related mortality. This is indicative of a much more complex relationship between consumption and health than is implied by simplistic whole population models.

It was good news when a recent announcement from the European Commission indicated that alcohol policy was to be decided at national level and not prescribed by Brussels. This will mean that the World Health Organisation, which is thoroughly infiltrated with left-wing, socialist, healthist ideologues, and which the European commission usually slavishly follows, will not be able to impose a pan-European alcohol-related “health strategy” on the UK. Meanwhile we are on the cusp of knowing the outcome of the European Court of Justices’ decision on the legality of minimum unit pricing (MUP). This is due to be announced on 3 September. This of course is not about policy, but about law. I hope the result will resolve the issue of MUP and prevent this policy being adopted. This would put an end to the nonsense of the Celtic tail wagging the English dog and to local politicians trying to introduce this in their council areas; broad decisions made by narrow minds was never going to have a happy ending.

And one amusing note to finish on: having written last week about the claim that any level of alcohol consumption raises the risk factor for cancer, I came across an article in the Daily Mail citing a study that claimed that your risk of developing skin cancer was raised by 33% by drinking just two glasses of orange juice, or other citrus fruit, per day. Really? Yes – this was a study done over a 26-year period whereby 100,000 people were sent regular questionnaires to assess their lifestyle factors, medical history and diet. The surveys author, one Dr Shaowei Wu from John Brown University in Rhode Island, would not recommend cutting back “at this time”, adding: “We need much more research.” He clearly knows a lucrative bandwagon when he finds one. So, bang goes “five-a-day”!
Paul Chase is a director of CPL Training and a leading commentator on on-trade health and alcohol policy

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