Casting the net

Kate McDermid looks at the trend to recruiting outside the industry.

More and more catering businesses are recruiting their senior, most crucial, management from outside the industry. Those in favour of the trend argue, passionately, that a businessman is a businessman and, assuming he's a good one, can turn his hand to anything. Those against believe, equally passionately, that while bringing in new blood can be a good thing, already available 'home-grown' talent is in danger of being ignored.

There are numerous examples of 'outsiders' running hospitality businesses in exemplary fashion. But, as recent experience at Hilton International shows, it doesn't always work. Tommaso Zanzotto, formerly with American Express, resigned after 18 months as chief executive. It was widely assumed that Ladbroke Group would then give the job to someone inside the industry. One name being bandied about was that of David Michels FHCIMA, chief executive of Stakis, whose share price was boosted as a result. After much speculation and some jitters in the City, the job (and that of chairman-designate) went to David Jarvis, a former chief executive of Hiram Walker, the wines and spirits division of Allied Domecq.

Six months on, all seem happy. A spokesman said Ladbroke had not been necessarily looking for a hotelier as the company already had a number of executives with strong hotel backgrounds. "The company was seeking an experienced senior executive with strong management skills who was capable of operating a major, international, diverse business such as Hilton International, and taking it forward."

The trend towards recruiting from outside must either be the result of choice or a genuine shortage of top-calibre management. Roddy Watt FHCIMA, chief executive of recruitment specialist Berkeley Scott, believes the shortage argument may be exaggerated. "There is a feeling that senior people who've worked their way up through the industry may be blinkered and have not got the breadth of experience required. But that's a misconception – there are quite a number of good senior business executives around." A catering industry background may not be essential but "the hospitality industry does have its peculiarities. They can be learned but there's a risk in having a major hotel company run by a bunch of people who are not hoteliers and don't have any empathy for the business."

He has no doubts, though, about the validity of a fresh eye in the "portable disciplines" of sales and marketing and personnel. "We probably had got a bit staid. These are challenging environments and it can be healthy to bring in a number of people from outside. But the balance has to be right."

One of the most vociferous advocates of the industry promoting from within is Jacques Schneider, chairman and managing director of Profile Management and Specialist Recruitment, who believes hiring senior management from industries regarded as more progressive than catering, such as retailing, is too often being done to satisfy the City and financial institutions. "Too many of these bright cookies are being lured in on high salaries, told to make changes and then, when they set to work, find themselves frustrated in their attempts by the attitude of their senior management. They come from a place where things do change overnight, find hoteliers are not like that and as a result often believe hotel people are idiots. And if they treat them like idiots, they will behave like idiots. Sometimes, of course, it is a good idea to bring in fresh blood but companies should think hard about why and whether they are really ready."

Firmly in the other camp is Valerie Le Moignan, managing director of international recruitment specialist HLR Associates. "We find that people from other disciplines on the whole make the transition to hospitality and leisure successfully, finding it fascinating and enjoying the accompanying benefits. I'm a great believer in it. Swallow Hotels, for example, which deliberately recruits half its graduate trainees from related degree courses and half from other disciplines, finds both groups equally successful. At a more senior level, particularly in finance, human resources and development roles, you don't necessarily need to be a 'dyed-in-the-wool' professional who's been through the catering mill. I don't think that's going to set you up for the job at all."

She believes mistakes are just as likely to be made recruiting from outside as promoting from within. "But if it's the right person with the right attitude and the ability to absorb knowledge very quickly, the important thing is for them to get on with what they've been brought in to do."

Interested outsiders – and they are on the increase – would be anyway hard to stop, she insists. "We're seen now as a growth industry, a secure business for the future and it's beginning to pay better. I get a lot of enquiries from other disciplines; some from people who have been made redundant but plenty from those who are gainfully employed."

Contract catering, increasingly introducing branded operations which require a tough commercial approach, and helped by some upward movement in salaries, is certainly attracting managers more geared to the high street than traditional staff feeding. Jill Beeson, director of contract and commercial catering at Berkeley Scott, anticipates much more movement between sectors in the next few years and has personal experience of the possibilities, having moved from Grand Met to the Body Shop as an area manager in 1991 ("managing a group of people but selling pots of cream instead of meals") before going into recruitment. "At a certain level, employers look at an applicant's general management skills, not at what's being sold. Catering and retail are close; they both produce a product, market it and sell it. Companies like Pizza Hut will tend to look towards the retail sector; the hours of work – long – are similar and you're on your feet all day."

Why has catering taken so long to appreciate the talents of its sister industries? Partly, says Jill Beeson, the reason is due to a genuine shortage of good caterers, partly because those in catering have traditionally chosen to study for catering qualifications from an early age, but mostly because of radical changes in both the product and market-place. "In the last 15 years, catering has become more retail-orientated. What catering is there in the average high street or in-store operation?"

Balance is the key to getting it right, according to Raj Pragasam, managing director of resource Network and Cataforce, Compass Group UK's management recruitment arm. "Every good employer has an obligation to grow its own and that has been Compass' policy for a long time. I joined the company 16 years ago from British Gas where I was a psychologist and, despite being a non-caterer, I've worked in virtually every part of the group. There are plenty with similar backgrounds. The spectrum of opportunities in a company this size means people can move around. Caterers are multi-skilled people."

Even in a company where the senior management team has been around a long time – "the average length of service is in double figures" – he nevertheless admits that new blood has to be brought in from time to time. "But that's to complement and enhance what we already have."

That the talent is there is in no doubt. Why else, asks Jacques Schneider, does catering lose so many of its best brains to companies like Arthur Andersen and James Capel? He believes the way forward for far-sighted companies is to invest in short business courses at international universities such as Stamford or Cornell for existing management rather than look elsewhere. "Instead of frustrating people by bringing in bosses who do not last, let's promote from within and give them the opportunities."

How the outsiders are doing

The companies – mostly hotel groups – at the sharp end of the criticism are well aware that executives can be suspicious of outsiders and are working hard to overcome the problem. Pat Perridge, UK human resources director for Queens Moat House Hotels, came from BET and has a background in contract cleaning and waste management; his colleague, sales and marketing director Mike Jones, joined from Gardner Merchant but was also formerly with BET.

"We go for the highest calibre management we can find," says Perridge, "and if that comes from outside the industry, then so be it. There are cases where lack of knowledge of the industry can slow down the learning curve and it can take longer to become fully effective, but my own discipline, for example, was portable. Hotels and contract cleaning both employ unusually large numbers of people and are both service providers. The problems experienced are pretty much the same. The main difference I found is that hotels are a really nice product. Everyone likes them and everyone has an opinion about them. It's a sector where young people can achieve a lot of responsibility early on and it's a sector which is now being taken seriously."

He sees no reason why 'outsiders' could not enter the industry at senior operational level and is hoping to see it happen soon. "At hotel manager level it would also be possible if the person had a related background such as restaurants or pubs. We'd like to see it happen and we're working at it. It would bring additional strengths and experience into the business."

Hilton National wanted someone with a strong marketing background and experience in repositioning brands and managing substantial change programmes when it brought in John Bamsey FHCIMA as managing director two years ago. Bamsey, formerly with the Signet Group where he was managing director of Salisburys, started his career with Unilever, moving on to Whitbread (where he was marketing director of Pizza Hut and Beefeater) and then to divisional MD posts with Thorn EMI, Grand Metropolitan and BET.

At Hilton, he has brought in fellow outsiders David Andrew (ex-financial services market) as marketing director and Alan Grant (Initial Textile Services) as sales director and believes creating an effective team is a matter of pragmatism and common sense.

"I'm a great believer in getting the right balance. All of one is naive and all of the other is high risk. There are certain positions which demand industry experience; there are others which do not. We take the view that for specific jobs, including sales and marketing, we need to break new ground and, specifically, buy in direct mail skills which have tended to be home-grown. But outside in a market-place which has huge expertise in database management, particularly in financial services, you can buy 50 per cent more learning curve." Hotels, he said, have been too self-reliant in the past and bringing in added value to avoid missing opportunities was simply logical. "The challenge is whether there are approaches out there which work and I think the answer is yes. One and one should get together and, hopefully, make four. Any business requires a blend of experience and new blood."

Bad recruitment, though, was another matter. "You must understand what you're doing. It's not just about bringing in skills but about the mind set of an individual who must be able to say: 'There's a lot I can learn from you and hopefully a lot you can learn from me'." His role in paving the way is, he says, critical. "A major part of my job is to motivate the whole team and demonstrate how we're adding value whether from inside or outside the industry. If people are motivated and can contribute, I have a dynamic organisation which feels comfortable with change."

Bamsey, like most late entrants, loves the business. "I think it's absolutely fantastic. Recently, I've operated in retail outlets through a recession and seen revenues sliding down. But here is a dynamic, fun business which is in touch with the customer. And it's a buoyant market."

Kate McDermid