Kevin Watson took over as managing director of the NEC Group's catering arm Amadeus last July from his previous role of operations director. He tells Janie Manzoori-Stamford about his plans for the business and the lasting legacy left by the company's experience at London 2012
You were appointed managing director just in time for the London 2012 Olympic and Paralympic Games. Was that less daunting because you were already in the business?
My brief coming into the role was about landing a number of large projects, such as investing heavily in systems and structure and driving the business externally. There was already a team in situ looking after Olympic Park North. On my appointment I had to put my arms around it.
How did it go?
Every contract caterer had their challenges, as did all types of service provider working on the games. It was all built on that one-off event, with no longevity or relationship. Staffing and the supply chain were both challenges, as was Locog. I've worked with easier clients. We lost £7.7m, but we went for the contract because we'd just rebranded to Amadeus and we knew it was quite a scalable business.
The Olympics was an opportunity to shine a spotlight on Amadeus and get people talking about the brand and concept. We may have stretched ourselves; we may have been a little bit optimistic about our own scalability for an event of that size, but strategically it ticked every single box. A lot of people come to us now to ask us to deliver their event or catering on the back of the Olympics, which is a great legacy.
What did you learn from the experience?
We used the games as a test-bed for a few new systems that we've invested in and it was a great trial, giving us real clarity on what we need to work and focus on. If we had the time again, we'd do it in the blink of an eye. We won't shy away from volume any more. We had 86 restaurants over more than 30 different concepts and we've taken that learning straight back to the core business, and poured it into the Oak Kitchen, for example.
It drove the development of that concept. We looked at the sales mix, the product range, what the consumer wanted, and found that the demographics were very similar to what we have in our venues. Those learnings are the real legacy.
The financial figures from the games have led to speculation that Amadeus is for sale. Is it?
It is two years since you joined Amadeus, during which time there has been a lot of change at the top. First, MD Sally Davis stepped down after more than 20 years with the company, and Alyson Cawley, who was appointed interim MD, then left the business. What's been going on at the NEC?
A lot of this happened in roughly the same six-month period as the rebranding of the business to Amadeus. It was part of the strategy to introduce Amadeus nationally. The previous senior management had some great length of service and had done a fantastic job getting the business to where it was, but it needed someone to look at it through a different lens. They were looking for someone to address opportunities in the existing business while putting together a proposition for the direction in which it will grow in the future.
The reporting lines in the business were quite siloed. We had separate departments for cheffing, operations and human resources, as well as some great group support services within the NEC. But there was a real lack of accountability at the time, and I'm all about accountability.
Why is accountability so important, and what did you do to ensure people take ownership?
Culturally, accountability drives autonomy and the confidence to make decisions and not the non-stick shoulder attitude whereby individuals might think "not my problem, talk to someone else".
We reviewed the structure, which in turn, sadly, meant that there were redundancies, but they were very minimal. Three people were made redundant at the end of 2011 at the beginning of the senior restructure. We then worked on pockets of the business, starting with procurement, then people resourcing - an essential department in a business that is very event-led - then operations and, finally, sales. That resulted in another five redundancies at end of 2012.
Throughout that period of change there was a real drive to instil accountability and measurement in the team by identifying ownership and giving autonomy and responsibility. To me, that's very important. Despite the redundancies, we actually increased our head count - it was far from a cost-saving exercise. It was about aligning people to the right role in the business.
Foodservice has been a core part of what the NEC Group does for a long time, but it seems that in recent years, with the advent of Amadeus as a stand-alone brand, that there has been an increasing emphasis placed on this element of the business. What was the driver behind that strategy?
Within the group there are several divisions and they're constantly challenged with growth. Realistically that's fairly limited within a venue. But Amadeus is truly scalable and can be as big as our aspirations. It is very much the strategy to grow nationally outside the NEC Group.
What does the strategy involve and what is the timescale?
The very clear vision is to get to more than £50m annual turnover by 2016, which we aim to achieve through three different revenue drivers, starting with organic revenue growth in our home venues. Our new retail concept, the Oak Kitchen, is already delivering double-digit growth. We're addressing that culture of lethargy in a captive audience and driving the retail side of things by selling to customers, not serving customers.
Next, we're focusing on new business outside the home venues, but we're going to be very selective. We only want to align Amadeus with the right type of client. The NEC is arguably mass catering, and we're driving all the disciplines and skills that make up a good retail caterer. We want to take those strengths and communicate them to the external world. Instead of a shotgun approach to tendering and identifying new business opportunity, we're looking down a rifle scope for venues that have quality and innovation high on their agenda. It'd be great to remove the shackles of the Midlands-based perception.
And finally, we're looking at potential acquisitions, whether that will be to grow our current market share or to diversify. We'll be looking at the talent and value of a business on which we can overlay our systems, principles and culture to add value. It could well be national and it could take us into markets that we're not in currently.
What sectors might you look to diversify into?
We're growing our market in the heritage sector, as well as the arenas and exhibition market and we'd maybe look at leisure destinations. If you consider our skills and what we do all day, every day, you could define arena destinations as leisure.
What is the annual turnover of the business? How has that changed in recent years?
Last year our annual turnover was £45m. If you take the Olympics out of the equation it was about £30m. It's been quite static, but the good thing about the diversity of our venues is that if the exhibition market is down, the arena or event market might be up. A broad-brush revenue split of our business would be 15% for events, home venues at 65% and external venues 25%.
You've introduced a new procurement strategy at Amadeus. What are the priorities?
To keep it relative, we're a small business really. We don't have the buying power of one of the big boys, so our USP is going for innovation and quality. Clients that want a white van to turn up with frozen hamburgers don't want us - that's not the business we're in. We have more than 100 chefs with a huge depth of knowledge and skill and we want to utilise them to their full potential. And we did so much work in terms of sourcing and sustainability for the Olympics that it carried through to the rest of the business. Our procurement decisions are driven by our refusal to compromise.
A caterer sometimes decides what the customer wants, but there's arrogance in that approach. You've two ears and one mouth for a reason. Customers have a voice. Put the effort into getting and analysing the information and it's not that demanding to work out what you need to buy in the future.
The UK has been in a prolonged period of economic uncertainty. What is the best way for foodservice operators to respond to that?
I've worked for arguably the largest and the smallest catering companies. I've also been a client. With those insights, it's about transparency and how the caterer genuinely shows their costs and controls to the client. That's an important way forward for credibility - food costs, labour costs and transport costs - all those things that are challenging the caterer currently.
If you have that candour with your client in the first instance and you can genuinely show where the challenge is, I've found that in my experience most clients are receptive to discussion. If you're unable to be that transparent, it's very hard for a client to understand and appreciate the issues.
What are the main issues faced by caterers at the moment?
The ongoing incremental cost-base increases that we're all aware of. We're unable to just pass that on to the consumer. Margins will shrink and it's made it more and more competitive. Through that shrinkage of margin and increased competition there could be a temptation when tendering to be a little bit more optimistic on the revenues to secure the business.
That's all at the client's expense in the long term. What I won't knowingly do is take that approach for a short-term win only to be sitting in front of a client six to 12 months down the line having quite a challenging conversation about not hitting forecasted numbers.
What we have - me and Amadeus as a whole - is a candid, credible approach to both tendering and client management. We can look anyone in the eye at any time with supreme confidence that we can deliver what Amadeus has sold.
AMADEUS VENUES AND EVENT CONTRACTS
Coventry Cathedral - St Michael's
Coventry Transport Museum
Hampton Court Palace Flower Show
Library of Birmingham
Tatton Park Flower Show
The International Convention Centre
The National Exhibition Centre
The National Indoor Arena
The National Sea Life Centre