Industry Update
Opinion Article 5 April 2019

AETHOS Takes a Deep Look at Leadership in The (US and UK) Restaurant Sectors

Understanding the Talents and Traits of High-Performing Restaurant Executives

By Thomas Mielke, Managing Director, AETHOS Consulting Group London and Andrew Hazelton, Managing Director at AETHOS Consulting Group

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Thomas  MielkeThomas Mielke
Andrew   HazeltonAndrew Hazelton

The tech era has highlighted the importance of data mining and has made this process critical when it comes to decision-making and even tactical execution. It is easy to assume that evidenced-based insights and models would only apply to business metrics and issues, but the burgeoning science of Human Resources shows that "big" data can help in "big" ways as it pertains to hiring the right talent for the right positions for optimally effective organizations. And in the restaurant sector, a high-performing operations leader is necessary for the success of the business and operation.

AETHOS Consulting Group, the leading global hospitality-focused human capital and leadership advisory firm, conducted survey research and reviewed data to uncover common traits while also comparing leadership longevity in the restaurant sector as compared to that of the lodging sector:

  1. AETHOS' latest US-based research focused on Restaurant Operations Executives and evaluated a curated group of high performers in senior operations roles using its proprietary 20|20 Skills™ psychometric assessment. In doing so, AETHOS discovered a common success profile. The research revealed that the superstar leaders are characterized by a mixture of marked and nuanced competencies across the categories of Execution, People and Cognitive Skills.
    Explains Andrew Hazelton, AETHOS' Philadelphia-based Managing Director and author of this study, "The successful executives keep their 'threats' in check by maintaining self-awareness, perspective and realistic expectations of others. And, more than ever, how results are achieved is a significant part of the equation for an individual's personal success and the company's culture and brand equity." For more of Hazelton's article visit this link.
  2. AETHOS' London-based Managing Director Thomas Mielke has also studied traits in successful restaurant executives to determine how to properly apply these skill sets (or place the individuals themselves) in the lodging discipline. With a hotel's restaurant and bar offering suddenly in the limelight now more than ever, the lodging sector is increasingly focused on how to turn the business around and boost profitability. Generally speaking, restaurant businesses (in hotels) have tweaked concepts, lured guests with celebrity chefs, altered layouts and rolled out open lobby concepts. Increasingly, though, attention is being diverted to replacing senior leadership with executives from the restaurant industry.

    "The number of times our international clients in the lodging sector have sought assistance to poach and retain senior executives specifically from the system chain restaurant or contract catering industries (and even the retail sector) has probably quadrupled in the last 24 months," shares Mielke. "Hoteliers have identified certain skill sets and character traits that these 'industry outsiders could bring to the table and that could be helpful in the accommodations discipline."
     
    Yet, says Mielke, "not all players in the hotel and lodging sector are as open to take on board senior leaders from other sectors, nor do they appreciate what it takes – financially speaking – to secure some of the talent."To review Mielke's SWOT analysis and read the article in its entirety, click here.

  3. A separate research study by Mielke looks at the longevity of the UK-based Restaurant CEOs. A review of the leadership teams at some of the UK's prevalent fast casual and casual dining restaurant operators appears to indicate that spearheading a restaurant company is a "very hot seat" with far more instability as compared to CEOs in lodging, for example.
    Looking at the average tenure of an organization's last two CEOs, as well as at the tenure of the incumbent CEOs, and analyzing the CEO-'churn rate,' Mielke reviewed the dining operations companies and determined:

    - Approximately 25% of the CEOs surveyed have been in their role for a maximum of 1 ½ years; besides a few long-standing industry veterans, there are a number of senior executives who have fairly recently joined their organizations. In fact, since 2016, there has been a reliably high number of changes in the C-Suite, typically around five per year;

    - The average tenure of the last two CEOs is meant to provide and additional measure of the stability of the leadership teams at the UK's leading system chain restaurant organizations. With an average of nearly five years across the surveyed companies, the sector is miles behind the hotel industry and even more unstable as it relates to the C-Suite. The tenure of incumbent hotel CEOs already stands well above that figure, with more than nine years;

    - The CEO "churn rate" indicates the turnover during a three-year time period for the organizations included in the study. Notably, several restaurant brands have a churn rate of 100% (or more), indicating that there is a revolving door of CEOs joining and leaving organizations. In fact, this is the case with nearly 25% of the surveyed companies. An additional 25% have a churn rate of 67%. In other words, these companies have had two CEO changes in the last three years. Read this for the further details of this study.

Thomas Mielke

Thomas Mielke is a founding member of AETHOS Consulting Group, and has a track record in successfully placing senior executives at leading hospitality companies across the EMEA region. He is an AESC certified consultant and is working together with travel wholesalers, real estate developments firms, investment companies and sovereign wealth funds as well as leading restaurant brands in identifying key talent and has joined forces with clients in establishing compensation schemes as well as organizational structures and workflows.

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Andrew Hazelton

Andrew Hazelton is Managing Director at AETHOS Consulting Group. An experienced recruitment consultant, he has over a decade of retained executive search experience in a variety of industries, including hotel, restaurant, gaming, cruise, timeshare, real estate, and technology. Prior to joining AETHOS Consulting Group Andrew was with HVS Executive Search and spent six years with Korn/Ferry International.

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