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Morning Briefing for pub, restaurant and food wervice operators

Fri 2nd Oct 2015 - Friday Opinion
Subjects: Reviving a brand, better wine dispense and doing something for the sake of it
Authors: Chris Edger and Tony Hughes, Glynn Davies and Paul Chase

How to revive a brand by Chris Edger and Tony Hughes

Foodservice brands that have enjoyed a strong consumer franchise needn’t perish. They can avoid termination by being revived through transformational change – a process that is made easier if the organisation itself recognises the need for dramatic reconstructive surgery. The likelihood is, however, the brand will be in a state of paralysis and/or denial. Why? Brand members have either given up hope that there is any chance of reversal in the brand’s downward trajectory or, during the slow descent into oblivion, they have ignored the signs of deterioration and disintegration. They have made ample excuses for underperformance, continuing to apply tried and tested methods that worked in the past in the vain hope that the environment around them will change back to the way it was in the past. Some units within the foodservice brand might still be performing well, providing brand members in these areas with little incentive to change whilst the true state of the brand’s “sickness” might have been deliberately been hidden from the rest of the portfolio by naive brand leaders who have blind faith in the fact that things will “right” themselves.

It is into this arena that the transformational leader strides with the express objective of reviving the brand. This individual – whom we term the “reviver” – is usually an outsider. Lacking any sentimental attachment to the past, internal political loyalties or commitment to particular courses of action, the “reviver” can dispassionately assess what needs to be done and despatch their mission with “violent intent”. They confront a perilous and complex situation where the brand needs revitalising from a declining base, a process that requires simultaneous rationalisation and building activities. To this extent the “reviver” requires a subtle blend of both leadership and management skills/capabilities. They must be capable of installing a new vision and sense of hope whilst implementing new systems, routines and measures. To this extent the “reviver” needs to be both participative and “hands on” in their approach, creating ownership and accountability through involving and delegating whilst scrupulously attending to the detail of the transformational plan and its execution. Accepting this, what do we regard as being the essential activities that effective “reviver’s” should attend to do during this turnaround stage?

We believe that great “revivers” of foodservice brands do three things particularly well. Firstly, they galvanise the organisation with a sense of purpose and mission with regards to the transformational change process. Secondly, they sharpen execution within the brand through renewed focus, measurement and vigour. Thirdly, they refresh the proposition of the brand, creating a sense of vision that is consistent with the past but – at the same time – relevant to the challenges/opportunities of the present and future.

Our starting point for the transformation process lies within the “four walls” of the organisation itself. Enterprises that are experiencing (seemingly) terminal decline are populated with people who have lost confidence and belief. As foodservice businesses are “performance” orientated this pessimism has catastrophic consequences if it is “infects” the perceptions of key stakeholders and commentators (customers, suppliers, shareholders, and industry press). The “reviver” must therefore focus his/her primary efforts upon galvanising the organisation so that it regains its “mojo”. How do they do this? Academics have drawn a clear distinction between incremental and transformational renewal; the former being characterised as a patient form of continuous improvement and the latter as dramatic “shock therapy”. Nevertheless, like continuous improvement, business transformation can be conceived as a planned process.

The most cited scholar in this area – John Kotter – advocates that leaders should transition their organisation through eight key phases (grouped around three key stages of “creating the climate”, “engaging and enabling” and “implementing and sustaining”) in order to effect impactful and long-lasting change. We believe his model and its key insights are important enough to recite here given their relevance to foodservice concept revival.

Increase urgency: In order to overcome complacency, misplaced feelings of security must be eliminated through the creation of a “burning platform” (itechnological disruption or “barbarians at the gates”)

Build a guiding team: A team with a shared purpose and understanding of the scale of the task accompanied with a belief in a successful outcome should be brought together. This strong coalition should be furnished with the necessary skills, reputation and network to lead the change agenda

Get the vision right
: The team must build a vision that bridges the current and future state. The vision (“where we want to get to”) must be meaningful and compelling, underpinned by sound strategy and tactics

Communication for buy-in
: Consistent and coherent messaging concerning the change that addresses the “what’s in it for me?” question for employees must be effectively disseminated across the whole organisation

Create short-term wins: Because the change process might be lengthy and painful, “recipients” should be encouraged that the plan has positive momentum and the final destination will be worthwhile by the visibility of a number of short-term wins

Don’t let up: Gains should be consolidated but a relentless pace should continue in order to generate further gains
Make it stick: With major changes having been made, they must be made permanent by being embedded within the corporate culture (“the way in which we do things around here”)

Essentially Kotter and other academics working in the transformational change field are pretty united in the view that organisations should concentrate upon “what they can do” rather than obsessively focusing upon, or blaming, the competition for their predicament.
Chris Edger is the UK’s leading teacher and author on multi-site leadership – he teaches at Birmingham City University. Tony Hughes is the former managing director of Mitchells & Butlers restaurants division. The article above is extracted from “Effective brand leadership – be different, stay different or perish”, a book they have co-authored that will be published in 2016

Improving wine dispense by Glynn Davis

Attached to the wine list in one of my preferred local restaurants, Heirloom, in north London, was a small piece of paper that read “By the Glass Wine Specials – We are excited to now be able to offer you some fantastic wines by the glass using the Coravin system”. If you sell wine and you’ve never heard of such a system then I reckon it is worth doing a bit of investigating because it could well make a worthwhile difference to your business. It enables bar and restaurant owners to expand the range of wine they offer by the glass, which seems a sensible strategy when you consider that consumers’ appetites for wines by the glass seems to be continuing at a pace.

In a nutshell, it is a device with a hypodermic needle that pierces through the cork and as wine is dispensed it is replaced in the bottle with Argon gas. This ensures the wine is never exposed to air – and therefore does not spoil – because the bottle is effectively never opened. The shelf life of such a bottle is unlimited. Any amount of bottles can therefore be “opened” in this way, which can massively enhance the range of wines restaurants and bars are able to offer. The system allows them to offer premium wines that they would simply not otherwise be able to sell in sufficient numbers by the glass during the short window that the wine remains fresh.

On Heirloom’s Coravin list there was a modest four wines that are priced around the £10 mark – a level that sits above all the others it offers by the glass in this reasonably affordable neighbourhood restaurant. For some of the more high-end restaurants already using the system there are some pretty spectacular wines now being made available to adventurous (and affluent) diners. At London’s Pollen Street Social you’ll find around a dozen glasses of wine dispensed this way that includes some real top-end goods for the cognoscenti (and downright wealthy). It has been possible recently for instance to purchase a 75ml glass of that French classic Romanee-Conti 1999 for £109 and the likes of Italian icon Sassicaia 1997 for £39 for the same sized measure.

Being able to sell such wines by the glass serves a multitude of functions for the operator. Firstly, it is a great differentiator to offer such unique products. Secondly, for the sommeliers and their teams it provides an opportunity to pair a wider range of wines with the set menus than they typically could. Thirdly, a number of glasses will be bought as a treat by customers who would not have been able to afford the full bottle. Fourthly, it enables people to buy a 75ml measure before making a decision about taking a full bottle. Fifthly, the restaurant/bar can move more wines through their system, rather than having them sit in the cellar gathering even more dust. Finally, it is great opportunity for the employees to get to actually sample a broader mix of wines including some particularly expensive examples.

In my experience in London the Coravin seems to be appearing in a growing number of restaurants as well as specialist wine bars and even high street drinks retailers. Highbury Vintners is one such example of the latter that uses the system for its wine tasting evenings. It enables the store to introduce customers to slightly higher end wines, safe in the knowledge that they will not suffer from any wastage, which is clearly vital to all such merchants when operating on tight margins. Such businesses are able to adopt a system of this kind because it requires only a modest outlay and the ongoing costs are just down to replacement argon capsules – that contain the gas for 15 glasses of wine, which works out at about 50p per glass. This surely makes the economics stack up for even the smallest restaurant, wine bar and retailer.

In fact I was so convinced of its worth that I had a Victor Kiam moment (for those old enough to remember the TV ad) and bought a device for personal usage. And it is no exaggeration to say that it has revolutionised my wine drinking by enabling single glasses to be consumed from a variety of bottles at any one time without the feeling that the whole bottle should really be consumed that night or over the next few days before the quality starts to deteriorate. Even when dealing with modestly-priced wines this seems a sensible way to be able to drink across a variety of bottles concurrently without wasting any money and wine. Judging by the growing adoption of Coravin’s across the leisure and hospitality industry, this is a view that is also being taken onboard by a growing number of operators and customers alike. Now, where did I put that bottle of Ornellaia 2006?
Glynn Davis is a leading commentator on retail trends

Something must be done by Paul Chase

“Something must be done” is the perennial cry of those who don’t know what to do, but feel the need to give the impression they do, by doing something. The Immigration Bill 2015-16 is a prime example of this. It received its first reading in the House of Commons on 17 September and its second reading will commence on 13 October. Parts of this Bill have significant implications for any premise that has a premises licence for the retail sale of alcohol, or for the provision of late-night refreshment.

Specifically, this has to do with the penalties attached to employing people who don’t have a right to work in the UK. It is already the case under the Immigration, Asylum and Nationality Act 2006 that all employers are required to carry out checks to ensure that potential employees are entitled to work in the UK. A maximum fine of £10,000 per illegal worker can be levied on employers who fail to carry out such checks, and it is a criminal offence to knowingly employ an illegal worker. These requirements apply to all employers, including those that operate licensed premises. But under the Immigration Bill currently going through Parliament, additional penalties will be applied for exactly the same offences if they are committed by employers who operate licensed premises.

The proposed changes are as follows:

For the purpose of immigration enforcement, the Home Secretary will become a “responsible authority” in respect of applications for premises licences that authorise the sale of alcohol by retail or late-night refreshment

A person may not apply for a premises licence or a personal licence if they do not have leave to live and work in the UK (there are exceptions for premise licence holders who live abroad)

Immigration offences will be added to the list of relevant offences for personal licence applicants

Make immigration penalties (civil penalties) relevant for personal licences (in a similar way to relevant offences)

A power for immigration officers to enter licensed premises to investigate immigration offences – this applies to licences for the retail sale of alcohol and late-night refreshment

A new closure power that would allow immigration officers to close business premises where illegal working is taking place and the employer has previously breached illegal working legislation

So, why does the government think it is necessary to gold-plate the regulations relating to illegal working specifically for licensed premises? Why are we being discriminated against in this way? Are pubs and bars the epicentre of illegal working in the UK? I thought that distinction belonged to office cleaning companies, or to MPs who employed foreign nannies to mind their kids!

The context for this is the government’s failure to keep its pledge to reduce immigration to the “low tens of thousands”. This failure created the political need for something to be done – and this is “something”. And you have to wonder what benighted souls come up with this kind of nonsense and whether they are capable of thinking through the implications. Take the fact that the Home Secretary will become a “responsible authority” under the Licensing Act 2003. When an application for a new premises licence, or a major variation to an existing one, is made to the relevant licensing authority, the applicant must notify all the responsible authorities, such as the police and the fire authority (there are usually nine such authorities including the licensing authority itself). So, now the Home Secretary will have to be notified of every new premises licence application where alcohol and late-night refreshment is involved.

Well, there are some 9,500 such applications for alcohol-licensed premises every year, and I don’t even know how many applications for major variations to existing licences are made every year, but it is certainly at least as many as new applications. Will Theresa May read them all, or will there be a posse of junior civil servants tasked with this? And as a responsible authority May will have the right to make representations in respect of these applications. What might she say? That the applicant doesn’t make it sufficiently clear in the operating schedule what measures they intend to take to ensure illegal working doesn’t take place on the premises? But “compliance with immigration laws” isn’t a licensing objective, and therefore couldn’t be the basis of a valid representation from the Home Secretary in her capacity as a responsible authority. Of course, “prevention of crime and disorder” is a licensing objective, but local police are perfectly capable of making representations on this without the Home Secretary’s help!

And it seems likely also that an application for a personal licence will in future have to be accompanied by documentary proof of the applicant’s right to work in the UK. There are some 48,000 personal licence applications annually. What happened to the “red tape challenge”? Do these new regulations really take us much further than the existing legislation in terms of preventing illegal working? No! But, of course, the political imperative is for ministers to “look tough” on immigration, and a political imperative is always going to trump a logical objection. How pathetic.
Paul Chase is a director of CPL Training and a leading commentator on on-trade health and alcohol policy
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