My message to the new Enterprise chief

Simon Townsend breaks an industry CEO trend in that he has a degree in agriculture and a post-graduate qualification in brewing. He certainly loves pubs and cask ale.

But there is little chance he’ll confess that such a large, powerful, property pubco, squeezing suppliers and retailers, has brought all the woes of the world upon the sector and the best decision for humanity is to split it up, sell off its assets and join the Liberal Democrats. 

So if I were to offer guidance to Simon what would my top 10 tips be?

1. Leave the dog at home. Don’t bring it to work. It was never pleasant to see employees faking excitement because Ted’s pet pooch took a fancy to their left leg.
2. Open a gulag in some desolate part of Britain (Lincolnshire would do nicely) and send some — but not all — of your divisional directors there and re-educate them to respect your publicans more than their share options. 
3. Let operations be run by operations, not​ by your credit-control department. The power of the latter over the former is at the crux of your failure to establish good relations with your licensees.
4. Target your regional managers on their business support and retention levels, not on their form-filling ability. One respected tenanted pubco director says a BDM cannot do his/her job properly with any more than 40 pubs; your guys often have 50-plus (48 officially). Other pubcos receive accolades — you don’t.
5. When it comes to AWP machine income, no-one could accuse your company of being one-arm bandits because you took it with both hands! However, old habits die hard, so let the machine tie go.
6. You have many superb performers but with your regional managers ‘firefighting’, they are often neglected. After 20-plus years, where are your licensee champions? Invest in improving this situation. Reduce regional manager and area churn. You can’t keep chopping and changing and hope to establish and maintain trust. Your roadshows are a good initiative for improving relationships but you need to work more at these.
7. Rents are not, in my opinion, always set fairly because you do not ensure either of your surveyors who sign them off has visited the pub. Only your company could produce a ‘fair rent’ proposal of £80,000 per year for the George on the Green in Holyport, Berkshire, and it be determined via the Pubs Independent Rent Review Scheme (PIRRS) at £38,750. Employ more qualified surveyors to set fair and sustainable rents.
8. The company loves RPI — Retail Prices Index — on rent increases but, in a declining market, RPI is an onerous burden, especially on wet-led pubs. Cutting publicans’ profitability on an annual basis is shortsighted and inevitably self-defeating. Scrap RPI.
9. Now we get to the minimum a tenant/lessee should expect to earn annually from the business. Ten years ago you announced it should be £20,000. Today it is still £20,000, so whatever happened to RPI? Accepting that it should be (inclusive of RPI) almost £30,000, instruct your regional managers to do profitability checks and — provided the pub is run competently — adjust the discounts to guarantee at least £25,000 per couple. Yes, you will take a hit in the short-term but the company will be far healthier in the future by reducing business failure.
10. Your predecessor famously claimed “not to do PR”, except he did, but with a flair for it we have not seen since Marie Antoinette. You have publicans rubbishing you to MPs with a vocabulary that ranges from the ‘F’ to the ‘C’ word, yet you have given them £100,000-plus in terms of support, dropped their rent and increased discounts — but kept quiet on the matter. Come out of the ‘no comment’ closet and be totally transparent.

Enterprise Inns is the largest company in the tied sector so should be one that sets standards and offers leadership. It needs to be supportive, not aggressive, and listen more.

Many predict it will be business as usual, but I see it as an opportunity for real change and hope that it’s an opportunity Mr Townsend takes.