The return of the founder? Creativity and customer in hospitality



A few weeks ago, my colleague Elliott caught up with Andy Laurillard, co-founder of Giggling Squid. Andy’s Thai restaurant chain is one the restaurant sector’s few Covid-19 success stories, having transitioned seamlessly to delivery while always keeping its employees front of mind. Amazingly, it is currently performing better than it did this time last year.

While there are many elements which have contributed to Giggling Squid’s success, one point that resonated particularly strongly with me was that Giggling Squid is still led by Andy, who co-founded the business in 2002.

Indeed, in recent conversations with Chairs of businesses across the hospitality sector and beyond, many have told us that their founder CEOs are performing better during Covid-19 than their non-founder counterparts. In short, as one Chair observed to me, founders are closer to their customer, know intimately every lever they can pull within the business, and are often more naturally creative in their approach.

The merits of founder-thinking are well documented. A recent study from Bain & Company found that the values that founders instill in their companies have a significant impact on long-term commercial success. As such, founder-led businesses which are driven by purpose are better at disrupting the market, achieving differentiation, and engaging employees and customers alike.

As one might expect, Giggling Squid is not an isolated case, and other great examples can be found across the hospitality sector. The Indian restaurant business Dishoom, for example, is still run by cousins Shamil and Kavi Thakrar and has disrupted the market by modernising the Indian restaurant concept. Most recently, Dishoom has adapted to social distancing and delivery without losing sight of the impeccable customer service and atmospheric dining experience that makes it unique. It is difficult to imagine this being achieved without founders in place to spearhead the new vision and remain focused on company values.

Oakman Inns is another compelling example. Founded by Peter Borg-Neal, now Executive Chairman, the pub group has enjoyed significant trading success upon reopening after lockdown with like-for-like sales up over 40% for the 13 weeks to October 4th. Although Oakman will have undoubtedly benefited from its suburban locations, it is a relentless focus on its values driven by its founder that has enabled the business to outperform the market.

Image credit: Oakman Inns

Over the last decade, as the hospitality sector has matured, naturally many founders have stepped away and been replaced by a generation of corporate CEOs – many of whom have trained in best-in-class hospitality ‘schools’ such as Yum!, Whitbread or M&B. In the main, their presence and leadership has been wholly positive – enabling businesses to scale in a profitable, consistent and structured manner. That being said, the absence of the founder has in some cases led to a vacuum of creativity, vision, passion, and customer understanding, all of which are critical in today’s rapidly changing world.

An obvious remedy to this is to inject innovation and entrepreneurialism through hiring. As such, we have seen hospitality companies bring in chief innovation officers, chief creative officers, and chief concept officers to varying degrees of success. In May 2020, for example, the JAB Holdings-owned café chain Panera Bread hired Eduardo Luz into the role of chief brand and concept officer. Speaking on the appointment, the company’s CEO cited Eduardo’s aptitude for innovation as a key driver behind the appointment. No doubt, a large part of Eduardo’s role will be to challenge the status quo and provide a source of internal disruption to ensure Panera keeps ahead of trends.

“Hiring in entrepreneurial thinking is a viable solution, but one that works best in a business whose culture is receptive to change and new ideas. If there is already an entrepreneurial spirit that exists within the organisation, businesses often just need an external agent to advocate for creativity and be the impetus for change.” 

Hiring in entrepreneurial thinking is a viable solution, but one that works best in a business whose culture is receptive to change and new ideas. If there is already an entrepreneurial spirit that exists within the organisation, businesses often just need an external agent to advocate for creativity and be the impetus for change. Wagamama, which has outperformed the casual dining sector for many years long after its original founder Alan Yau left, is a great example of this. Celebrating difference and inclusivity is embedded right the way through Wagamama, and this open-mindedness has resulted in an appetite to try new things and a tolerance to risk more often found in founder-led businesses.

Cousins Shamil and Kavi Thakrar. Image credit: Jon Cottam

We’ve also seen mid-scale companies hire creative board members to advise on company strategy and creative direction. One benefit of adding creative thinking to the board’s remit is that non-executives will typically be able to distance themselves from day-to-day operations to think holistically about the company’s position in the market. The effectiveness of successfully implementing change, however, is still dependent on overall company culture.

In the travel sector, it has been interesting to see how the market has responded to Saga’s former chief executive (and son of its founder) Roger De Haan stepping in as Chair, and investing £100m into the firm after leaving the business in 2004. Since the announcement over summer, Saga’s share price has soared despite the second lockdown – demonstrating confidence in the move and an expectation of the value Roger can unlock.

While innovation may have previously been thought of as a nice-to-have, Covid-19 has proved that businesses which can’t adapt quickly will be outrun by more innovative competitors. Ultimately, whether through a founder or otherwise, creating an environment of entrepreneurialism and innovation will be key to success in today’s fast-moving, turbulent market.

sam.seigler@thembsgroup.co.uk | @TheMBSgroup