BDMs: leadership is the key criterion

It’s one of the areas of the pubco world that was once again brought into sharp focus by the recent Business, Innovation and Skills Committee (BISC) report, which was critical of the quality of BDMs.

While some observers have decried its credibility, given the one-eyed nature of some of its observations — and certainly its take on BDMs per se is not one I recognise — we would be foolish to ignore the underlying message and not commit to the further evolution of our businesses.

We have an opportunity to mitigate the impact of BISC by providing further evidence that the model and our businesses have moved on from when MPs started looking at the licensee-pubco relationship in 2004. A key way for the industry to do this is by demonstrating the quality of the people we are providing to support licensees and their businesses.

On the issue of BDMs, and the wider point about operational support, to a degree the industry has been playing catch-up with itself, to a degree. The tenanted and leased model of the larger companies in the industry was principally one of buy-and- build, which until the economy turned in 2008, had been dominated by mergers and acquisitions. The financiers were sitting in the middle, devising strategy, while operators were kept at arm’s length, out in the shires, running the business.

When the game changed many companies were slow to re-align their ethos and some are still stuck in the past.

Now it is the operators, and not property and strategy folk, who are at the heart of the business. This is a fundamental change and it is increasingly clear that success is now dependent on the quality of operators — namely BDMs.

Some companies have failed to spend the appropriate amount of time and money in recent years recruiting and coaching the main players. It would be an interesting exercise to compare the amount of money that has been committed to property and capital investment projects with the amount deployed to investing in people, particularly the BDM role.

The big question for me when it comes to BDMs is: are we equipping them to be no more than glorified administrators for our businesses or are we empowering them to be genuine business developers? If we are really serious about helping licensees to develop their businesses and themselves, then we have to elevate the position of the BDM.

This has been a key driver of the Admiral business over the past 12 months.

Autonomy​

It would appear that most pubcos broadly fall into one of two philosophical camps when it comes to the level of scope and jurisdiction extended to BDMs: central control and command versus frontline empowerment.

Whilst central control and command is appropriate and necessary for managed-pub groups, high-street retailers and identikit franchisors, I don’t believe it really works for tenanted and leased pubs. Or rather, if a company does operate along those lines,

it severely restrains and limits what can be achieved or the positive change that can be wrought to estate performance.

At Admiral we believe a substantial degree of autonomy is necessary in order for BDMs to function properly. To realise growth in a tough market requires a fleetness of foot — quick decision-making — by those best placed to make the required judgement calls. Naturally, because of this approach, finding and recruiting the right individuals with the associated characteristics and behaviours we are looking for — is harder.

The necessary attributes for a BDM are wholly different from those for area managers — in either pub retailing or general retailing — and in my view are far more demanding, requiring a more sophisticated and experienced individual.

Speaking from a personal perspective, I was lucky when I took my current role at Admiral, in that there was an extremely capable core of high-performing BDMs. In the past 12 months we have recruited others to augment this excellent group — and what has been interesting is that we, like other companies taking the same approach, have been able to attract very high quality individuals who want to work in environment where they are not just implementers, but are strategists too.

This is not about pay, although we do make budget (and therefore bonus) targets realistic and attainable, based on a bottom-up, not top-down, approach.

It is not the best use of time for an operations director to be task-managing a BDM to death. The BDM must be the one who identifies the problems and the opportunities within his or her patch, identifies the solutions to address both, and then leads the implementation.

The person best equipped to recruit tenants, appraise rents identify capex opportunities or, frankly, predict when a licensee will need our help, is not anyone at the ‘centre’, but the BDM who owns the relationship for Admiral with a particular licensee and his or her pub. That’s the difference between an implementer and a genuine decision-maker.

We work hard to give BDMs space. We don’t monitor pub visits or install tracking telematics in their cars, and keep paperwork and report obligations to an absolute minimum. We trust them to determine all of the above and hold them accountable for the strength of licensee relationships and performance of their pubs.
The power of three​

We talk about three key areas when meeting prospective BDMS, although in reality there is just one characteristic we recruit against:

• Technical competence:​ they must know the workings of the pub business inside-out and be able to talk competently about them, such as product range and category management, price and price-laddering, food, labour scheduling, marketing and PR, events, the workings of the profit and loss account and so on.

• Relationship-building:​ BDMs must have the skills to build a meaningful and productive relationship. There is nothing wrong with warm and friendly as long as it’s grounded in commercial reality. The BDM who is rigid, structured and cold is as bad — probably worse — than the BDM who is warm, engaging but unfocused. Like technical competency, the ability to forge sound and positive relationships is non-negotiable.

• Leadership:​ the first two areas — technical competency and relationship-building — are really a given. An awful lot of BDMs meet the requirements of these first two areas, but what separates the top performers from the rest is the ability — and emotional intelligence — to encourage, support and motivate 40-45 independent business people to change, adapt and evolve their businesses and behaviours. When recruiting for this linchpin role, we assume the first two qualities and recruit based on this third principle.

Marriage of convenience​

It is very tempting for BDMs to organise their interactions with licensees in accordance with what is convenient for them rather than what suits the licensee. However, in my experience little and often is much better than infrequent and long when it comes to business meetings. Licensees are busy people who get pulled in many directions. They also tend to be extravert and gregarious, so their willingness to sit in long, sweaty meetings surrounded by paperwork and P&Ls is limited. Understanding and working in line with what suits a licensee is crucial.

We look for people who have been there, seen it and done it — more than half of our BDMs have been licensees themselves. Real experience adds real credibility and also means that BDMs are tuned in to the demands and challenges of the job.

They understand the importance of emotional support: the BDM who is on-site at 7am after receiving a call at 6am from the licensee to say they need help because something has happened at the pub overnight builds huge emotional credit that helps to cement a positive and commercially productive relationship.
The coffee call​

Whilst we want focused leaders, the foundations of the relationship have to be set and reinforced. In this modern world of pub retailing there is a certain amount of snobbery and disdain for the “coffee call” — an unannounced visit, undertaken without agenda, which some people in the pubco world regard as a complete waste of time.

We regard the coffee call as an extremely important part of the overall relationship. Licensees like to see BDMs in their businesses, especially at peak trading on a Friday night or Sunday lunchtime. It is an important facet of building the rapport necessary to be able to effect a positive impact on a licensee and their business, and being able to provide specific feedback based on actual experience is key. It is immediately obvious to me when I’m with a BDM in someone’s pub whether they have the rapport and respect necessary to be effective.

Communication​

What drives licensees to distraction is a lack of clarity around what can and can’t be done. If you mean no, say no. Disputes or problems arise where there is ambiguity or a breakdown in communication around what has been agreed, or what a BDM said he or she would do on behalf of the licensee or pub. Scale and long chains of command can be a barrier to clarity and communication, and is something we try to avoid. We work hard to eradicate unnecessary formality and hierarchy in general, and focus on quick decision-making.
Formal development​

While I firmly believe we have many of the best and most experienced BDMs, we are committed to helping them develop where appropriate through ongoing mentoring and coaching with senior BDMs and operations directors. We are also committed to working with the BII to ensure that the behaviours discussed here are reflected in the finalised BDM training programme: it’s as much about the ‘how’ as the ‘what’. Formal development or so-called ‘classroom’ time for BDMs is important in light of BISC, but it needs to be set in the context of a wider programme.
To conclude...​

There is clearly much more to say, but in essence our approach to the BDM role is one that involves being highly demanding at the recruitment stage in finding business leaders whose values will match our culture, then reinforcing the attitudes and behaviours we expect, and giving them the support and freedom that they need in order not to be implementers, but genuine business developers.

Because fundamentally — and it’s a truism — the only way we can build a successful business in the long-term is to attract, recruit and support successful licensees.

Kevin Georgel is managing director of Admiral Taverns​