Pathfinder

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shows the way Wolves & Dudley managed arm Pathfinder runs 475 pubs and employs 8,500 people. Chief executive Ralph Findlay and retail development...

shows the way Wolves & Dudley managed arm Pathfinder runs 475 pubs and employs 8,500 people. Chief executive Ralph Findlay and retail development director Sharon Rehbock tell The PMA Team how it set about modernising its culture Any company's biggest asset is its people. Goes without saying doesn't it? The bigger the company though, the harder it is to keep the lines of communication from top to bottom open. The bigger the company, the greater the effort needed to maintain an open culture. In Wolves & Dudley's case, recent history made the problem of people management even more challenging. There were two large acquisitions to integrate ­ Marston's and Mansfield ­ followed by a year spent fighting off hostile pursuit by Pubmaster. Many observers argue that decision-making, under its former chief executive David Thompson, had become far too centralised. "The company desperately needed to devolve decision-making down," says one. "The business had become much bigger and needed a different approach with greater focus on its three main areas of operation." It was August 2001 when the company was able to make the organisational changes required to manage a business whose scale had catapulted upwards. Along-side separate tenanted and brewing divisions, the company created its Pathfinder division to focus on the unique challenges of running managed pubs. "We're structured now so we can achieve operational excellence in each of our three areas of business ­ beer, tenanted pubs and managed pubs," says chief executive Ralph Findlay. "So we've got teams of people who don't worry over-much about what other people are doing ­ they worry solely about their bit of the business. It's meant we're a lot more flexible in our decision-making. I think the decisions happen at a level that's closer to our customers." Indeed, the vital signs at Pathfinder are healthy. Its very clean like-for-likes ­ encompassing 100% of the estate ­ were 3.6% up at the last results. Food sales have grown from 17% to 28% of total sales in the past three years. Its "Service-that-Suits" food-led concept has grown to almost 20 sites and the modern community pub concept, Bostin Local, where food accounts for up to 35% of sales, is soon to open its 100th site. And there's a £35m capital investment programme that aims to open 20 new managed pubs a year. These headline figures are an easy and useful health check. But the top-line sales gains have been underpinned by radical culture change, a raft of initiatives that have sought to make Pathfinder a more inclusive organisation, where good ideas can be embraced. A non-exhaustive list of new management initiatives includes attitude surveys, strategy roadshows, retail awards, a good idea scheme and Christmas gifts for all staff. There's been a host of changes in the way Pathfinder communicates with staff at the sharp end, with a newsletter, a fortnightly operations brief and regular video briefings. A "Back-to-the-Floor" scheme and managers' lunches have been particularly fruitful exercises. "They've proved the most innovative thing we've done," says Sharon Rehbock, director of retail development. "It's actually caused us to rethink a lot of the processes we had in the business and helped us to understand what motivates our 8,500 staff." Back-to-the-Floor has involved 120 headquarters staff working shifts at Pathfinder pubs. The process is, by definition, a humbling one. One member of head office personnel who turned up to work a shift was ordered to go and buy a decent pair of trousers. "It was a bit of divine revenge for that particular manager who hears our lectures on retail standards," says Rehbock. But "Back-to-the-Floor" is a chance to hear first-hand the strong opinions of managers about how processes can be improved. Returning staff were formed into groups and given a tight timetable of 100 days to institute change in a programme dubbed "Mission Possible". And change there has been on micro issues, taking in everything from making date-labelling of food easier, to streamlining the induction of new staff. Manager lunches began last year. Twice a month, groups of 12 to 20 managers sit down with senior staff to talk about their businesses. Not surprisingly, these lunches can stretch well into late afternoon. "We thought it would provide access to the senior team for a whole range of people who might not normally get it," says Rehbock. "We have roadshows to explain strategy to staff, but these are people who simply can't ask a question when there's 400 people in the room. "We get a really good idea of what's going on in our pubs with these lunches. I think it's helped to break down the barriers. We can't always wave a magic wand to sort out issues, but managers are very willing to participate if they know we are keen to listen and there's a process in place." This communication can even lead to direct action, a willingness to act immediately on a good idea. One manager invited Rehbock and other senior managers to come and consider his investment ideas. "It wasn't consistent with the line management principle, but we thought, this is what we're here for'." A £150,000 scheme is now under consideration to change the trading style of his pub in Burton to make it more food-orientated. Managers' lunches have also led to changes in a variety of areas ­ the wine range has been increased and the repairs procedure, a constant bane of a pub manager's life, has been tightened. Manager turnover has dropped from 28% to 20% as the various changes have kicked in. Pathfinder hopes the introduction of a refreshment at work scheme will boost retention levels among part-time staff. A 20% discount scheme that applies to staff visiting other pubs was launched last autumn. It has since been extended to all 2,000 of W&D's pensioners. In the coming weeks a 50% discount on food and soft drinks at work offer will be launched ­ part-time staff can participate after six months in post. "We know the critical point for part-time staff is six months," says Rehbock. "If we keep people after the six-month point, they tend to stay with us. So we're hoping this will reduce part-time turnover. More generally, the response to the 20% scheme has been fantastic. Staff say they are bringing their families into our pubs more often." Pushing the pub patio to reach its full potential Pathfinder is embarking on "Project Patio" ­ a £1.4m plan to improve the outside areas of 70 pubs. The company decided that many pubs in its estate would benefit from a substantial investment in external landscaping, tables and umbrellas as well as additional heating and lighting. The £20,000-a-pub investment comes after last summer's warm weather saw substantial trading gains at pubs in the estate that had decent outside facilities. Currently, Pathfinder is completing its patio and garden investments at the rate of nine pubs a week. Rehbock says: "The patios will be heated and well lit, so hopefully we can extend the season back into spring and autumn. It's about creating a room outside. People are getting very used to going abroad and sitting outside and they like that experience. We think it's going to transform the look of these pubs, and provide another great reason for people to return. There's a big opportunity here to take more money. "The investment in gardens and courtyards at Pathfinder pubs will be accompanied by the launch of full service for customers outside. This also gives us a massive opportunity to increase sales. We think we can train our staff to offer this kind of service in a quite informal way. It's important we offer that nice Continental-style approach ­ and avoid that English way of being a bit awkward about service." Pathfinder is also investing in opening 500 letting bedrooms in its managed estate within two years ­ a huge increase on the 100 it has now. A total of 40 sites will see a £5.2m investment this year. Pathfinder aims to create rooms that are one notch up in quality terms from the traditional Travelodge-style room, reopening rooms above its pubs that have fallen into disuse. New-build site

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