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The Caterer Interview – Dennis Hogan, Compass Group UK & Ireland

20 February 2015 by
The Caterer Interview – Dennis Hogan, Compass Group UK & Ireland

You've been heading the UK & Ireland business for a year now. How has it been?

It's been great. I knew [my predecessor] Ian Sarson pretty well before I got here and fair play to him, I sort of feel like he gave me a winning hand. He has built a very strong team and invested in some areas, particularly around retention and sales growth. I was fortunate enough to arrive as the economy improved and the first year, from a business standpoint, really couldn't have gone better.

We had record new business and retention, which is at just over 96% across the business. That's considerably higher than what we've been averaging historically.

The marketplace in the UK is very competitive. There's a lot of geographic density and everybody seems to know each other. I noticed right away that our team was very respectful of the competition - they're very humble but very committed to delivering. Probably my first impression was 'Wow! we are really talented.' When I got around the business I saw great people and innovation.

What has particularly impressed you?

The innovation from a customer service standpoint. So, for example, the introduction of [our reception services business] Rapport, three years ago. Rapport takes the front of house, or guest experience as they call it, and they really try to make it proactive and anticipatory. It's almost like the kind of service you can expect in a five-star hotel - that concierge approach of 'what can I do for you?' - and it really makes a strong impression on our clients. Our team was so enthusiastic about what Rapport is doing that my colleagues in the States are
interested and we're having dialogue about how we can take it over to them.

The Rapport/Restaurant Associates partnership has been very powerful and I think it's why we've had such tremendous retention.

Even though it might not be a high turnover business, it's quite impactful. Another area that impressed me when I got here was how much we're trying to foster around the culinary. We recently launched our Hidden Chefs cookbook, which is a compilation of recipes by chefs from across our executive dining business, Restaurant Associates. We get tremendously engaged in developing and celebrating our chefs. We have apprentices, junior and senior chefs who are involved in competitions, we were well represented at Salon Culinaire and the Culinary World Cup, and Nick Vadis won the Chef of the Year award at last year's Foodservice Cateys. We've won a lot of awards, but for me, it's not as much about the recognition as it is about how very aspirational it is for our chefs.

Were you appointed to the role with a particular remit in mind?

What we had in the States, which I've really tried to foster here, is a growth mentality, because growth brings with it so many great things. If you're in a contracting business, you're not adding resources; you're just trying to figure out how to save money. When you're growing, it allows you to reinvest in your business in whatever supports the client, be it innovation, culinary or marketing, for example.

When you're growing, you're developing your people. When you open a new account you can give a bright, young, high-potential person the chance to flourish. Growth becomes self-fulfilling. As I sit here, 12 monthslater, I can tell you that across our business all of our sectors are growing, which is good news.

Can you give me some specifics?

We're doing especially well with our retail offer in healthcare, which is growing at a double-digit rate. We've partnered with Costa and other brands and we are the market leader.

Our education business is also growing double digits, thanks to some great contract retentions, such as Bournemouth University and the University of Derby. We are also winning significant numbers of new independent schools and academies. The local authority business is going through tremendous expansion too, thanks in part to universal free school meals, and so all of that has fuelled our growth.

Has this growth led to specific areas of investment in the business?

One area is the introduction of a new mobilisation team at the start of last summer. When you're trying to create a growth culture, you can talk about it, but to actually do it requires a bit of a leap of faith. Our new mobilisation team is dedicated to opening up these new accounts that we're winning. When we're talking to clients about new prospects and opportunities, we'll bring somebody from the mobilisation team to tell them what we do, which offers comfort and reassurance that we'll pull it off and do it well.

How would you describe the company's position in the marketplace?

You can track it on a lot of things. Eurest is a big B&I business for us and it's a market leader. This year Eurest won well over 50% of its bids, which is the highest percentage of wins that we've ever attained. That reflects our investment in how we go to the market and being a bit more intelligent about it.

One of the best practices we brought over from the States is territory planning. This is where there might be five opportunities in a particular market. Two of them, while they would be quite interesting, we're probably not going to win because our offer is not as compelling as somebody else's. But if we put our resources and efforts against the other three, then these are the ones we're very likely to win.

Compass continues to be the biggest operator in the marketplace, but there's also the argument that size can be a barrier to agility.

Which do you think is closer to the truth?

I've tried to empower people so that they can make decisions and own their business. When you do that, it really brings engagement. On
the one hand, Compass is a big business and we have a lot of resources. We have a depth of training courses, chefs, mobilisation teams
and innovation that we can bring. On the other hand, we can be quick and nimble because we're empowering people to act locally and
make the calls. If I'm sitting in an ivory tower, trying to dictate, I'm not going to be successful.

I've been in this business for 18 years and it's a relationship business. The first thing we try to do is establish what's important to the
client. We don't try to bring a pre-packaged, this-is-what-you-get offer. We often say that if you've been to one Compass account, you've
been to one Compass account, because they're each unique, customised and tailored to what's important to that client. We try to balance the resources and scale that we have by going down to a micro level. I don't think we'd be at more than 96% retention if we weren't giving people what they wanted.

You came from the North America division to the UK and Ireland, where the market has been much more challenging. How are you continuing to slow the rate of decline?

Our business is pretty simple. If you win more business than you lose, you will grow. That dictates what happens the following year because you have that roll. We're consistently winning more than we're losing. Ian Sarson brought over the retention programme from the States and that has really become embedded. We have a team dedicated to going to our accounts 12 to 18 months before they may be out to tender. They listen objectively to the client with a fresh set of ears.

If there are opportunities for us to get it right, we then have the next 12 to 18 months to really strengthen that, so when it is time to re-tender we're the logical option. We've emulated that programme and it's worked very successfully.

We had one business that had an exceptional retention year and that's our sports and leisure division, Levy Restaurants UK.

We retained Chelsea, we extended our joint venture with Twickenham… in total we retained over £150m of business and achieved a 99% retention rate within Levy. With new business, it's comes down to celebrating the success of sales and creating that sales growth culture. For sales to be successful, it really requires a good partnership and trust between operations, sales and finance.

The finance team needs to respect that the operators are going to deliver and the operators need to believe that the sales team are going to present them in a way that reflects what they're capable of. If you have that trust, you win, because it comes across to the client.

How do you benchmark your performance?

For the past couple of years we've worked with a company that independently engages with our clients and measures their satisfaction. I'm really proud that our scores have consistently risen over the past 12 months quite dramatically. That tells me that we're listening to
clients and we are giving them what they need.

We measure it on six or seven different metrics, but fundamentally, it's about whether the client is engaged and if they have a loyalty to us. Is the relationship trusting, or is it transactional? Is Compass a big business that is a bit cold and hard to deal with? Our goal is to be seen as a trusted partner. That's the goal for anybody in our industry.

You've had huge success with your chef collaborations, notably with the Roux family, and the opening of City Social with Jason Atherton. How does that benefit the business?

We have forged strong partnerships with our consultant chefs; the knowledge, experience and talent they bring is a real motivation. These partnerships inspire our colleagues to be the very best and embrace new trends to deliver world-class food and service to our clients. Our clients really value these relationships, which are also a great chef recruitment tool. Chefs see we are working with renowned chefs and want to be part of our team.

We're exceptionally proud of the fact that City Social won a Michelin Star in its first year of opening and most recently achieved three AA rosettes; it's a fantastic example of the quality we're delivering and we're always looking to develop our chef partnerships further.

Compass employs around 60,000 people across the UK and Ireland. How easy is it to source the amount of talent you need?

We're training 2,000 apprentices; we have a graduate programme; we invest in a scheme for single-site supervisors called Supervisor Passport; we have a unit manager programme called Accelerate; we have Evolve, an 11-month programme for general managers looking for the next step up; and we have a senior leadership programme called Tailored to You, which is a bespoke training programme that
offers mentoring, leadership training and motivational speakers. The development of our people across the spectrum is huge.

We have also made significant investment in our back of house systems, especially around recruiting and the process. The key is to reduce the number of days it takes, from the time we identify a need to bringing a person in.

Compass was the biggest winner at the 2014 Foodservice Cateys, winning Procurement Team of the Year, theCSR Award, Chef of the
Year, B&I Caterer of the Year and Front of House Team of the Year. How has such industry recognition benefited your teams?

It's incredibly meaningful, on multiple levels. First of all, it's an objective, third-party evaluation, so it's not just us saying we're doing well; it's somebody else saying we've benchmarked you against others and, in this particular instance, you stood out. That means a lot.
Internally, people work so hard and to get that recognition and public acclaim is very rewarding and motivating. With clients, it
gives us credibility. The clients know they'vebacked the right partner.

I say that, but our competitors have also won awards. We push each other and it raises the bar across the industry, which is very healthy. We know we're only as good as our last meal and our clients' confidence in our ability to listen and deliver.

Compass career

Dennis Hogan joined the UK & Ireland business in January 2014 from the company's North America division, following 17 years with Compass Group. During this period he held a number of operational and finance roles including, most recently, CEO of Canteen Vending Services for Compass Group North America. Prior to moving into contract catering in 1996, Hogan was the chief financial officer for
a retail start-up in Washington, DC. He also worked on strategic planning and product management for American companies MCI Telecommunications and Digital Equipment Corporation.

Compass Group UK & Ireland - vital statistics

  • Annual turnover £1.8b
  • Employees 60,000
  • Customers 3 million served daily
  • Meals 1 million served daily
  • Locations 10,000

Brands 14forty, Chartwells, Compass in Scotland, Eurest, ESS, ICM, Instore, Keith Prowse, Levy Restaurants, Lime Venue Portfolio, Medirest, Payne & Gunter, Quadrant, Restaurant Associates, Radish Events, Rapport, VSG and White Oaks

Contracts won in 2014

  • Retentions Surrey Cricket Club (Kia Oval) Levy Restaurants UK, £50m over five years
  • HMS Drake ESS, £7.6m over five years
  • Salisbury Cathedral Levy Restaurants UK, £6m over six years
  • Bournemouth University Chartwells, £23.5m over 10 years
  • Metropolitan Police Specialist Training Centre ESS, £3.75m over five years
  • The Range Instore, £60m over three years
  • Somerset House Levy Restaurants UK, £90m over 15 years
  • University Hospitals Bristol Medirest, £3.8m over two years
  • Twickenham Joint Venture Levy Restaurants UK, £300m over 10 years
  • University of Derby Chartwells, £9m over five years
  • Wellcome Trust Restaurant Associates, £5m over three years
  • Essar Oil UK 14forty, £8.85 over three years

New wins

  • Garsons Garden Centre Instore, £2m over five years
  • CBI - Restaurant Associates, £540,000 over three years
  • Homebase - In-store five years (multi-million pound; value undisclosed)
  • London Borough of Hounslow Council Chartwells (joint venture worth £6.1m a year)
  • Dolphin Drilling ESS, £10.5m over three years
  • Griffith College Compass Group Ireland €6.25m over five years
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