Tim Hammond took over as chief executive of Elior UK in January, appointed to succeed Mike Audis. He joined from Barchester Healthcare, which taken together with his trusteeship of the charity Age UK gives him a real insider’s understanding of Elior’s care
homes business.
Q. What job did you want to do when you were still at school?
A. A train driver at five, but things became a little more refined later. I started my final year at Oxford doing maths but not really knowing what I wanted to do. I looked at the City, but culturally that didn’t suit me. I realised I wanted to join a company that actually did things.
Q. So what did you do when you left?
A. Joined Unilever as a marketing trainee and spent six years with them, at first on detergents with its Lever Brothers brand before moving across to its food division where I worked on the retail side of brands like Mattesons and Wall’s. After that I worked with the consultancy McKinsey as a strategy analyst for hospitality organisations. Then I moved back to Unilever where I worked for a further 10 years at director-level jobs, including moving with our three-year-old son and 12-week-old daughter to Cairo for three years to run the Egypt subsidiary.
Q. How did you get into hospitality and catering?
A. In 2001 I got the chance to join Whitbread and worked on the 25th floor of their Citypoint offices – it was the year of 9/11. I spent four years as corporate development director working with David Thomas, a couple of years as MD of TGI Fridays – Whitbread was the UK franshisee – and then took over as MD of Barchester Healthcare. This introduced me to the premium end of the care home market where the hospitality element was a fundamental part of the business. Your aim is to try to make it a wonderful home for someone. Older people prefer gardening, shopping and dining and the eating experience is something every resident can do and should be able to enjoy.
Q. How did you get the job at Elior?
A. Like a lot of things in business it began with a phone call to ask if I was interested in applying. I looked at the business and saw it included a real variety of catering from business and industry (B&I), to stadia, care homes, education and concessions. It also operates sites like the National Maritime Museum at Greenwich where there is a café offer downstairs and an upmarket restaurant upstairs. As a business mix it appealed to me.
Q. What were your first impressions of Elior as a business?
A. It’s a company where the name’s not well known – we operate as Azure in the stadia market and Avenance in the B&I sector – so my first decision was to combine them and focus on one name, which we think will create benefits. Great service needs training etc and we’d like the good things we do to be flagged up under one name. In the first two months we went and asked clients and consultants what they thought. It turns out they think Elior is a bunch of damn nice people, but they had a feeling we could achieve more. We have loyal clients who like us, but not much of a profile in the wider industry. The average staff turnover among contractors is 40%, but at Elior it is 20%, which reinforces the idea that it is a nice place to work and offers good service to customers. It struck me, though, that as an industry we put too much emphasis on cost-cutting or winning the next sales pitch. Why can’t a contract caterer have an approach more focused on offering good service? I want to turn our strength in customer service into a reality and a perception. A number of catering companies do a good job delivering food and drink, but there’s room for fantastic food done with brilliant service. And that takes us into our new strapline: ‘Elior – because the whole experience matters’.
Q. What were the strengths you identified when you joined?
A. There is lots of good corporate social responsibility (CSR) stuff, we’ve got very good staff retention and 50% of senior management roles are held by women. You want diversity in the workforce and this to feed through into all business discussions.
Q. What did you see as the areas to work on?
A. We need to be more commercial. It was making a profit before, but there are always opportunities to do it better. And we need to make sure we use best practice; our clients expect nothing less.
Q. How have you got to know the business since you joined?
A. It’s fundamental for the chief executive to get out and talk to staff and clients. When you talk to clients it gives you more of an idea of the job you’re doing locally because their views will be shaped by what we’re doing for them. I’ve also met and talked to consultants because they provide a disconnected market view with a bit of insight and flavour. I’m quite a fan of consultants; I think they’re a great conduit for good and bad feedback.
Q. How does it work being part of a French-owned group?
A. We’re part of the Elior Group which has its headquarters in Paris, but this is majority owned by the British investment firm Charterhouse. I am, though, taking some French lessons to help me join in the ‘café du commerce’.
Q. Is your retail experience with TGI Fridays relevant to Elior?
A. Hugely – I would say about 90% of it. So much of what we do comes back to the service chain. If you want customers coming back again and again then you need the right frontline people, the right training and the right leaders and that’s as true for care homes and staff restaurants as it is for High Street restaurants. At TGI’s every store has to provide feedback every month which is compiled into a league table. When it was first done it had a dramatic effect on behaviour, staff became competitive and some that thought they were doing alright suddenly realised they had work to do. There was one outstanding example of a store that went from somewhere near the bottom to near the top. That’s all relevant to Elior and we’re already introducing a customer satisfaction measurement into a lot of sites. Even in a B&I environment you’re operating in competition because staff usually have other options when it comes to food and drink.
Q. What’s your vision for Elior over the next five years?
A. There are three different elements. Firstly, I want it to be absolutely the best place to work. We’re already on the Sunday Times ‘One To Watch’ list as an employer. Secondly, I want us to have far and away the best reputation for customer service, which includes the food of course. There’s the reality of delivering that standard of service and then there’s the work to get the message out. As an example, take our contract through Azure at Brighton and Hove Albion’s brand new American Express Community Stadium. We’re doing an exceptional job and getting enquiries from other clubs as a result. And thirdly I want to look at opportunities to go on the acquisition trail. I’m not in a rush, but there are a number of good, interesting companies in the industry and as a potential buyer I think we’ve got a reputation as a welcoming business.
Q. What are the major challenges to you achieving your vision?
A. Well, like (former US President George) Bush was told: It’s the economy, stupid! Out of home eating is currently in serious decline. Fast food and pubs may have shown small growth, but all the other sectors are in year-on-year decline, including many in the contract catering sector. In fact, 2011 is the first year since 1977 in which we’ve seen a real decline in personal disposable income. We’ve got price inflation but no wage inflation. That’s the challenge. If there is good news, it is that the worst measures have already been taken.
Q. How will you measure your success at Elior?
A. The easiest bits to see are top line growth – are you achieving it? But I believe retention is better than new business. Outside of that the key is the stakeholders. How do staff see us as a place to work and how do customers and clients view us? Surveys will help us get a handle on this and offer insight on where we can do better.
Q. Elior has announced a number of recent gains. How is business?
A. We’ve made a number of gains, but more important has been the £80 million of business that we’ve retained through contract renewals or extensions. A typical example is Glasgow Rangers FC where we’ve not only got a nine-year extension to the catering contract but we’ve also been appointed to offer support services that means the overall £35 million contract is now much bigger.
Q. Is the tough economic environment prompting more interest in outsourcing?
A. There’s no clear picture. People are looking at it, particularly in the public sector, but while some clients want to bundle outsourced services into FM contracts, we’re also seeing unbundling where clients want a specialist caterer to look after the foodservice. You have to remember that the financial year only started six months ago and many of the public sector budget cuts are phased in over the next four years. Having said that, more people are looking at outsourcing. The care homes sector, which is currently mostly in-house, offers a big possibility for contractors, and Elior would certainly be happy to look at a straight catering contract, a purchasing agreement or even providing a supervisory role over a multi-site in-house operation.
Q. How are you coping with food price inflation?
A. We’re working with suppliers. We’ve not issued any edicts, but we want dialogue and we want them to be competitive. It’s not about beating up your suppliers, but rather asking questions about the frequency of deliveries and making supply chains as efficient as possible. We also challenge ourselves on whether we’re giving customers best value. Should we, for example, be offering a value option on the menu or on our sandwiches selection.
Q. Are you an economic optimist or pessimist?
A. A Mediterranean country having a debt implosion is my biggest concern. If we stay clear of that, then I’m an optimist. Debt is cheap, so that’s a positive. When money’s cheap and available economies can fix themselves.
Q. Is the future for Elior more in FM?
A. First and foremost we are a catering company, that’s what we’re good at. In some situations we can deliver more value to a client by taking on more services because it’s only one company, but we’re not putting any special effort into pitches for FM.
Q. Elior did not get any Olympic contracts. Was that a disappointment?
A. We didn’t actively bid for any. The decision was taken before I joined, but I think the company felt we should be focusing on our existing customers who will need feeding during the event.
Q. What industry trends do you foresee in the coming years?
A. Offers generally will have to be better value or cheaper because people simply don’t have the money? More specifically, I see soup concepts as increasingly popular. We’ve developed one called Umami which is already in a few client sites and offers customers the chance to choose a stock, say British or Asian, and then add to it their choice of vegetables, noodles etc. It’s healthy, quick and cheap. Ethnic trends will remain strong and healthy eating will be more important for contractors than on the High Street as staff look to us to offer such options. Nutritional labelling on menus is with us, but could significantly deter innovation among caterers if they have to provide detailed information on all dishes. Government is aware of these concerns and a sharper definition on that in the Responsibility Deal would help more caterers sign up to it, though Elior will pledge itself to the goals in any case.
Q. Who in business do you most admire?
A. I’ve been most influenced by Mike Beer, an academic and consultant, who ran sessions at Whitbread on how large organisations talk to themselves. I really like his ideas about getting honest feedback from staff and on the different ways of hearing it you can use to help you constantly evolve as a business.
Q. If you hadn’t had your career what would you have liked to do?
A. Nothing else. I really enjoy what I do. For two years now I’ve been a trustee for Age UK and perhaps in 10 years or so I might end up spending more time on something like that.
Q. What food do you like?
A. I’ve got very catholic tastes. I absolutely love Indian food, the chicken and vegetable dishes, and there’s some lovely food from other parts of Asia – Thailand, Vietnam in particular. I also eat a lot of fish