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WSTA Summit: Procurement and leadership at the head of global transformational change

Published:  16 September, 2021

Having contingency plans and not relying on the rest of the world in order to manage risk was one of the key messages from this morning’s WSTA Industry Summit briefing, Recalibrating the ‘Norm’, with Lorraine Copes, founder of Be Inclusive Hospitality and George Yip, Emeritus prof. marketing & strategy, Imperial College Business School.

The topics from the discussion were far ranging, from the continued importance of home deliveries (“when people go back to work, there is still going to be the last mile problem,” said Yip) and the importance of representation in marketing (“Until the BLM movement took flight, many people had never seen a person of colour advertising a drinks brand,” according to Copes).

However, one of the key takeaways from the session was the necessary change needed to put issues around supply chain and procurement at the ‘top of the table’.

“Throughout my career, supply chain and procurement has sometimes been deemed as a more operational role and not strategic,” said Copes.

“What came out of Covid is that procurement is now at the forefront of conversations around businesses and profitability, in its rightful place. It really has identified the lack of transparency and control. I often call the supply chain a global village: 55% of all food that is supplied in the UK comes from abroad, and for beverages, it's at 80%. For non-food, it’s a similar number. What currently doesn’t exist is contingent solutions that are closer to home.”

Yip agreed that Covid has highlighted long-term inefficiencies which were brought to light off the back of a wave of “tremendously disruptive” circumstances around the world.

“Companies have had to deal with thinking about duplication, re-shoring and simplifying their supply chains. The question is, is that temporary or should they really invest in restructuring?” he said. 

This morning’s discussion also raised interesting points around staffing and leadership.

Asked whether people in leadership roles, often in sectors such as hospitality where cults of personality thrive, need to amend their management styles, Yip said that leaders need to get the balance right between operational and emotional intelligence.

He gave several examples of leaders who had led by example and incited positive change by taking affirmative, often theatrical, action.

“McDonald’s CEO Ray Kroc would always stop and pick up litter on the approach to a restaurant. Of course, he could not personally pick up all the litter for all the 1,000s of restaurants, but he was setting an example to staff.”

What becomes much more difficult is when you need to change the business model, he said, and that’s where emotional intelligence comes into play.

“A great example [comes] from China, which used not to be known for quality. About 25 years ago, the CEO of a manufacturer of major appliances decided to do something about it, by staging a moment of theatre. Instead of giving lectures or sending out memos about product quality, they one day pulled out 11 workers and 11 faulty washing machines with minor defects, gave each one of them a sledgehammer and together, they smashed the defective machines. It became a legend in the company. What a powerful way to send a message about quality,” Yip said.

Yip also made the distinction between emotional and operational intelligence. Someone like Apple co-founder Steve Jobs, he said, who wasn’t known for approachability, nevertheless was able to cultivate emotional intelligence within a company by introducing things like toys around the office.

“They had things like bows and arrows with foam tips and the meeting rooms are called The Land of Oz. All those things and the free meals are like a pirate flag, which creates a sense of loyalty among rebels. The company itself has very high emotional IQ.”

Covid, he added, has given businesses the opportunity to reflect on these internal practices and consider ways to change a company’s culture.

“Every business has some aspect of it which is out of date. Change is always going to be costly, but [there’s a case for saying] ‘never let a good crisis go to waste’. Use it to break down internal barriers to change,” he said.

Does a strong, happy and healthy working culture have to come from the top down then, or from the bottom up?

Copes, who was asked about her time working with the notoriously volatile Gordon Ramsay, said: “I didn’t know him in his twenties, but he was known for that bullish style which was notorious in kitchens in the nineties. That still exists in some places but overall, really, it has died a death. We have a better understanding now of what it takes to get the best out of people. Vision and communication is important, but empathy and occasional vulnerability are good leadership traits.”

She added: “Setting The Table is a great book by Shake Shack’s founder. The lesson basically is look after staff and the profits look after themselves.”

Recalibrating the ‘norm’ took place this morning as part of the WSTA’s second digital summit, following last year’s decision to host the event online due to the pandemic. The aim was to discuss the macro versus micro perspectives in business which can help to stimulate positive growth and long-term transformational change.

You can read our report from yesterday’s morning briefing here.