Learn from the good and great

25 January 2002 by
Learn from the good and great

Encouraging higher standards will create benefits all round, says Bob Cotton.

When we were establishing the Best Practice Forum at the end of last year we came across this remarkable statistic: "The bottom 25% of companies are achieving profit levels one-tenth of those achieved by the top 25%."

This seemed to us a staggering finding. If this is true of industry generally, how true must it be of the hospitality industry, with its 300,000 separate establishments of many different sizes and type, most of which are owner-operated, all of them geographically widespread?

Here's another statistic we found: "The top 25% of companies require three times less overhead than the bottom 25%. They need three times fewer indirect staff and require half the number of managers."

It was against this background that the Best Practice Forum was formed by six of the industry's leading trade associations, led by the British Hospitality Association.

A government grant of £1.4m over five years is pump-priming the initiative, which we have branded Profit Through Productivity. Its purpose, simply put, is to encourage hospitality businesses to measure their practices and operational performance against the best, and to then adopt - or adapt - best practice in their own organisations.

What has been the catalyst for this initiative? There is no doubt that the Government is concerned about industry standards. It recognises that we have some of the best hotels and restaurants in the world, but it is convinced there are many establishments that can improve - to their own advantage, and to the country's advantage.

Why is this so important to Whitehall? Because the UK is a high-cost economy and our prices are often seen to be high in comparison with other destinations.

So, if the UK is to maintain its share of world tourism, it must be seen to give better value - and better value can only be provided through rising standards, greater investment in facilities and human resources, and higher productivity.

Profit Through Productivity is primarily concerned with the last of these. But by encouraging higher productivity (which means organising employees to work better, not harder) businesses will inevitably improve profitability. Then they will have more funds to improve facilities and standards, and more cash to invest in their future.

This may sound too simplistic to be true, but I am positive that in five years' time, when more than 5,000 businesses will have been through the Profit for Productivity programme, we will be able to point to some remarkable success stories.

Wise readers will contact Hospitality and Leisure Manpower (020 8977 4419) to see how they can boost profits from an initiative that can reap such benefits.

Bob Cotton is chief executive of the British Hospitality Association

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