When Tim Bacon speaks about brain drains and replenishing talent pools, you sit up and take notice. The founder of Living Ventures has been at the forefront of making the UK’s hospitality sector a more attractive place to work. His company has been placed in the Sunday Times Best Companies to Work For list multiple times. In short Living Ventures has become a byword for staff-training excellence.
Over the past two years, this has been highlighted further with Sue Crimes, Chris Hill and Simon Potts, who have spent on average 14 years with the company, each securing private funding and launching three Living Ventures-developed brands into the national consciousness with Gusto, New World Trading Company and The Alchemist respectively (see box opposite). Indeed, you could argue that Bacon and his erstwhile business partner Jeremy Robert’s best piece of talent spotting is sitting next to him while we talk. In Paul Moran, the group’s managing director, the company has the perfect advertisement of how they spot, listen to and develop talent.
But, and it is a big but, Living Ventures has also become a victim of its own success. “There has been a brain drain from the company-owned estate, to the financed estate, which is the right way of doing it. The point is unless you replenish that pool that process will not continue. We have created a vacuum. We have to solve that problem and at present we haven’t got an equivalent of Paul, Simon, Chris or Sue coming through.
“So we put a six month stay on developing anything new to focus on the people inside the business and look at how to bring new people in. Sometimes you have to do that and there have been a couple of times in the past where, as a business, we have consolidated for a year at a time to refocus. And it is primarily about the people and making sure that when you do press that development button again no one gets stressed out by it. If you don’t do that and the people aren’t capable or there to see those plans through then you have to start firefighting.”
A change of mentality
Moran admits it is a significant move for the organisation and has required a change in mentality. He says: “It is great when you have the talent pool there, but in this industry you have to have the ability to adapt to the variables and changes that are happening around you. Where we are and what we want to do in the future – we are going to have to change the way we do it.”
Bacon continues: “There was another layer of talent, but they went through as the number twos and teams under Chris, Sue and Simon and rightly so. The problem is that in the Living Ventures estate we took our eye off the ball and did not bring through enough people and did not concentrate on the excellence that should be coming through the company-owned estate. At the moment, from a people point of view, it is not where it needs to be. The best way is bringing in some strong leaders and back filling from there.”
As a company that has always been, rightly, held up as one of the best in the business in terms of recruiting, engaging, developing and training staff, it has also found that the industry has caught up with it on this key battlefield.
Moran says: “There are generational gaps coming through across the sector. There has always been a vehicle in the background driving the next generation of talent, whether it be TGI Friday’s, Whitbread, M&B, at present you could argue that Living Ventures is the only company carrying on that tradition.”
Having reset the company, it is now looking to spread its net wider in terms of unearthing that next generation of talent, and through the success of Hill, Crimes and Potts and their respective brands, they have a compelling case to make.
Bacon says: “Chris, Sue and Simon were given their own managing director positions, they have been trained as managing directors and effectively bought us out of the businesses that they have been placed in charge of. They have also been given shares in those businesses.”
A share options scheme
In essence, the company is offering a share options scheme, with Living Ventures offering the operations venture capital. “We are developing a brand around an individual,” says Bacon. “This sort of process of actually having two flying brands, two coming through and two in conception is something I like the idea of. The way you structure the chairman, chief executive and managing director lines so that there is this three into two principal just gives a lot more freedom, thought and expression in the roles.
“What I am looking for is that 28 to 35-year-old who is hungry and wants to create his or her own business. They want to be at the beginning of that process. Basically they will be given a brand, trained how to run that brand and become the managing director of that brand. They may first grow into an operations director role, then designate managing director, but with a view that they have the ability to be able to grow into that position over a period of time and then in affect buy Living Ventures out of that asset when they get to a certain size – anything between 15 and 25 units – that is our business model. That is what we will do with NWTC, The Alchemist and Gusto.
“You are bringing through six different brands at any one time and it keeps it interesting for the whole team. The question is where do you find those individuals, how do you find them in this market. It may not be in this market. It has to be someone that is passionate and has that leadership ability as well as the ability to motivate and get into the heart of what we want to do.”
Moran says that the company will recruit for specific brands, but that doesn’t mean that, over time, they won’t swap. He says: “For example, for Artisan we would look for someone to run that brand specifically and take it to 15 units. They would come in on a proper salary as a designate, with a view to having shares in that business and grow to what Chris, Sue and Simon are doing now. Similarly with Australasia, although we think we have someone for that, and the same for any brands we will bring through.”
When the company has attempted to bring people in externally, the culture built up across existing employees has kicked back against it. Indeed Moran is one such example. Unhappy with who had been brought in above him back at the start of his time with the company, Bacon called his bluff, moved said senior member staff aside and told Moran to do the job himself.
Bacon says: “If there is a spark in there from someone inside the existing team who wants to have a crack at taking on their own business you will find that in that process. The same way I did before with people like Sue and Paul. Once they see someone there to compare against, then they step up and agitate. I like a bit of agitation and we don’t have enough of that at present. We might find some great people externally, but I hope we will find some people from within. I am always looking for a reaction.”
Transforming the group
Bacon admits that the transformation in Living Ventures over the past two years has been fairly dramatic in the way it has repositioned the business and refocused its forward momentum, breaking it down into brands and getting finance houses to understand its processes. He says: “They are all quite happy to back Jeremy and myself as one big company, but to get them to back individual brands was quite a difficult process. That took time. All that emphasis has been on those three brands. Now it’s time to get our own house in order.”
That house as Bacon puts it, has provided and will continue to provide the best support for anyone wanting to take on their own business. Moran takes up the theme: “When they start they are very operationally led, but when we bring them into a brand, with them taking it on in mind, we start exposing them to different aspects of the business but it is pretty much mentored all the way through at the start.
“It is very individual. There is no cookie cutter approach and not everyone has the same journey. Obviously with Simon, two years ago he was a general manager. That said he was a general manager of Australasia, which is a big business, a new business to us. It was something that was formulated. Part way in to his role at Australasia, I started to get him to be more of an orchestrator rather than an operator within it and challenged him on different levels. At that point, when we knew we were going to be doing Manchester House, I then made the decision to move him into ops. He was at that point running two very different businesses – very high profile.
“It never comes into play which brand will suit which individual. We are totally de-tached in that regard. We work with and promote the individual. The vehicle they go with is more to do with when they are ready to take that step. The thing with Chris and Simon is that they moved into the vehicles they are in charge of the days both the respective deals were done. They could have gone with any vehicle. The talent base/skill set should be there for that to happen.
When we were talking to private equity and saying this is the right person, at that point when we are introducing them to him, Simon had never worked in The Alchemist and Chris had never worked in NWTC. As far as the private equity house is concerned, they are investing into Living Ventures. But like any private equity house they have got one eye on the exit door anyway. As soon as you sign the paper they are looking at milestones for the exit door. When that comes around, Living Ventures won’t be the thing spoken about, it will be all about these guys and this team because we will deliver you a team from managing director down.”
Australasia next for finance
Bacon states that Australasia will be the next brand that will go to finance. He says: “We need to get the right team in place for Artisan and there are a few structural issues we need to get right, but we haven’t really focused on what is already a phenomenal business.”
Bacon admits the reset of the business has been “good for the soul – to get back into the operations and have a really good look at what is going on”. He says: “If the business requires it and you don’t have the right people in the right place, particularly for a company like us, then you have to come up with a strategy that takes you out of that space. I can’t think of any other company that works like us. The idea of taking someone, giving them their own business with a view to them buying us out in around five years, and everybody in the business knowing that, I believe is unique and positive. By turning it on its head and actually seeing a sale as a positive rather than a negative, you get the entire team invested in the principle and incentivised. If there is a brand that isn’t working, you may delay it or develop something else. You need to be pragmatic in your approach.”
Bacon describes the recruitment drive that the company is on at the moment, as finding “new quarterbacks”, which seems quite apt for a head coach who knows a thing or two about developing specialist and winning teams.
