Paddy & Scott’s is a true maverick coffee business. They cut out the middle-men and conglomerates; shortening the distance between coffee grower and coffee drinker. In 2016 they took on their very own coffee farm in Meru, Kenya, working directly with a family who have been growing coffee for generations. Paddy & Scott’s now produce over 30,000 cups of coffee per day: from their own fuelling stations to over 150 branded concessions. MD at Paddy & Scott’s, Jonathan Reed, joins the show to share how their coffee empire continues to expand.
In this episode we explore their flat hierarchy business, the power of reprioritising, the impact of core hires, how their reduced open days have boosted performance – and why a lot can be achieved with a humble cup of coffee.
‘Shoe Dog’ by Phil Knight: https://www.amazon.com/dp/B0176M1A44
‘Maverick’ by Ricardo Semler: https://www.amazon.com/dp/0446670553
Paddy & Scott's Shop: https://paddyandscotts.shop/
#29: Enriching Lives With Mowgli's Nisha Katona, Founder of Mowgli Street Food: https://hospitality-mavericks.captivate.fm/episode/29-enriching-lives-with-mowglis-nisha-katona-founder-md-of-mowgli-street-food
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MIchael Tingsager: 4:16
Itâs a great pleasure to have you on the podcast show - welcome.
Jonathan Reed: 4:22
Thanks for having me, pleasure to be on now on the pod.
Michael Tingsager: 4:24
Jon, for people that haven't heard about you before Paddy and Scottâs. Can you just give us the background of who you are how you ended up in hospitality your journey with Paddy & Scott, and what you guys are up to right now when it comes to coffee and making people's lives better?
Jonathan Reed: 4:42
Yeah, I've personally worked in hospitality forever since I left school I went to hotel school and spent a few years working for some large corporate hotel organizations and had a blast and had a real good time. After that, I joined a really employee-focused - employee engagement tech startup in London for 13 years, which was great. And then about three years ago, join Paddy & Scottâs, a beautiful, socially-focused Coffee Company based in lovely Suffolk in East Anglia. So we are a tiny little business with big ambitions, big energy, and a big heart. And we have our own coffee farm in Kenya, where we are doing some brilliant work in terms of using the coffee supply chain to really, really change the lives of people that work with us and work and live close to our coffee farm in the region of Mary in northern Kenya.
So it's a privilege and an honour to be involved in a business that is all about seeing change happen positively, and thinks about businesses more than just making a quick buck. So yeah, it's a great business. And I think over the past three years that I've been here with Paddy and Scottâs, we've had a lot of fun, we've experienced some really strong growth. And actually, it's just the start of our kind of startup journey as we come out of COVID, as a lot of organizations are in the same place. So we're pretty excited about what the next couple of years hold for us.
Michael Tingsager: 6:12
That's super interesting. You say like the startup journey because you started in 2007. As I remember, when I read up on you guys, Paddy & Scott was founded in 2007. And, and you see this almost like a new chapter, is that what you're saying? Like it's coming out of COVID is like, almost like a new beginning for you as the business but also for the industry?
Jonathan Reed: 6:32
Absolutely. Yeah. 100%, I think we've been around for 15 years. And in that time, you know, it's been a business that sometimes it's been a hobby, a passion. Other years, it's been a real business. And I think where we are right now is that we want to use our learnings from the last couple of years when COVID hit to really help turbocharge where you want to get to because I think without COVID, we wouldn't have invested as we have in technology, we're gonna learn some of the tools on E-commerce, we wouldn't have learned and experienced how difficult and how much fun it can be to keep the communication going really strong with customers, and with your team members remotely. So there's lots of great stuff to come over the last couple of years. I mean, obviously a lot of sadness as well. But we are, you know, really, really, I guess, reopening with a new lease of life. And that's really all about, you know, being a startup once over again, which we're pretty excited about.
Michael Tingsager: 7:30
Has your purpose, your vision, your mission? Has that been adapted to the current environment? Or is that still the same as when the business was founded?
Jonathan Reed: 7:41
Yeah, I mean, I think our what, and our whys are pretty strong. But I think what we have worked on over the past 18 months is how so, you know, we are proudly here to try and make a difference to everyone we work with. Really, that's team members, that's partners, and customer stakeholders, that's what our friends in Kenya and family in Kenya wish to say. And that's at the heart of our business. So you know, when we sell coffee to our customers and our coffee shops, we feel that we have a lot of pride in that single cup of coffee, and because of the impact, it's having around the world. So we know that let's say, back in May, when we sort of sent 1500 school meals out to India, we could only have done that, because of the support and loyalty we have from our customers and our team. And I think those little gestures that we are able to make, really set the tone for what we want to be about. And, you know, ultimately, I will say this, but I want to go home at night, see my kids, and I want them to be proud of me. And I guess look up to me, because of what I'm doing when I go to work, which you know, we'll spend a lot of time at work. And if I can play a small part in helping someone else around the world, improve their situation and their life, then I think that's a pretty cool place to be.
Michael Tingsager: 8:53
And it's super interesting. You talked a bit about you having to farm in Kenya and in my view, that's like being at the frontline of change, you know, you are actively trying to change we're not just talking about donating money, but you're actually having a place in the frontline of where change needs to have you know, living conditions for these people that work at the farm and so on. Well, what is it exactly how exactly you're approaching that running a coffee farm in, in a very different country so far away? And how does that work? Because that must give some you know, you think from a business point you oh, that that's a lot of supply chains challenges, if you own that bit of the business as well.
Jonathan Reed: 9:34
Yeah, I must, I must confess, I use the phrase our farm. And that's kind of what we love but you know, we have a relationship a partnership, if you like, with a family called the Muchombaâs out in Kenya. And the last thing we want to do, actually, in spite of what I've just said, is rock up to a country like Kenya, like true capitalists would. And by that and I guess dictate how the world is going to be from now on. So that's not all we are at all what we have is really strong partnerships, with farmers like Muchombaâs. And we try and make sure that their life experience and their work are cherished more so than if they just worked on the open market for the coffee supply chain. So, for us, we used to spend hundreds of 1000âs of dollars every year, getting large organizations to stamp out coffee, and coffee and say it was produced to an ethical standard. And we got a little bit disillusioned with that world. We still, you know, we still work with those organizations, I think, a brilliant job. But we thought, you know, the size we are, why can't we just bust that world open a little bit and go direct to source.
And rather than, you know, pay these hundreds of 1000âs of dollars every year for a stamp on our back on our coffee back? Why can't we invest that money into projects that really excited us? Such as, you know, adding water facilities to the local school, local Roof school? You know, why can't we build a science laboratory in the local school? Why can't we fund school projects? And in doing so how can we make sure that when we say we're going to donate, you know, 1500 school meals to India, how can we be sure that every single meal gets to a child that needs it? Not someone else being involved in that relationship, taking that percentage or administration fee, or whatever it may be? Which chapter? So for us? Yeah, that's really important to us.
And I think the way we've modelled the farm is a really exciting venture, you know, we would like to do more of that stuff around the world, we're looking at a few projects elsewhere. The reality is in these third-world countries, there is you know, a lack of investment, but there is so much energy and passion and pride in what they're doing. You know, and for us to go to Kenya and invest some money in agronomy to invest some money in infrastructure. And I guess, to try and work with the local community to effectively deliver brilliant coffee is, is quite a cool, obvious thing to do, if you asked me, and the benefits are, you know, for everyone clear to see, we get brilliant coffee, where the family and the local community hugely invested, we get to thank them and show our gratitude for their efforts and support their local community.
And I think our customers feel much closer to where the coffee is harvested as well as a result, because, you know, we can share the stories of successes only. Yesterday, I had a beautiful letter from the headteacher from the local school saying thank you so much for your efforts in supporting our school, you know, we've just put this multipurpose hall, we've just built this multipurpose hall. And that's not down to me or down to Paddy and Scottâs, that's down to our customers that support us and drink our coffee. It's a lovely, lovely exchange. And as I say, we think that stuff is really important. And for us, why can't we do business and use that business to create change?Michael Tingsager::
That's super, super inspiring, Jonathan, and you have been continuing to be able to do that even though you've gone through a pandemic, which I think it's really interesting as well, you haven't lost the focus on making an impact besides profit, because you know, you need to keep the business alive. When you look at your things Jonathan there's the word fueling ambition or the phrase fueling ambition or autocorrected. To what does that actually mean for you as an organization? Because you have it on your posters? You have it on your T-shirt is everywhere, it definitely means something to you.Jonathan Reed::
Yeah, well, I think, you know, I believe a lot can be achieved with it with a humble cup of coffee. And we don't see coffee as just, you know, hot black drink, we see it as fuel. And we love the idea that people can meet in our coffee shops, they can do business deals, they can be on a date, they can, you know, start stuff that could last forever be you know, relationships, partnerships, whatever it is maybe. And ultimately, our coffee and fuel can really lead to something so for us, the concept of fueling ambition is all about seeing that cup of coffee as fuel to make you feel ambitious, courageous to want to take on the day, you know, we talk about wanting to make coffee for the pioneers, the creators, you know, creative people that just see coffee as a real fuel.Michael Tingsager::
What about when you talk about you know, you've just gone through, you know, a tremendous time like the rest of the industry, the pandemic and we're probably not out yet. What have you as an MD have to unlearn I was just Paddy and Scott has to unlearn the last 18 months and besides that, you know, the only constant there is right now is change as we talked about before we went live but well what is this like the real big things here has like, thrown away from post-pandemic, you know?Jonathan Reed::
Yeah. I mean, I don't know if we've unlearned a great deal. But I think what we have done is completely reprioritize. What was important to us? So, that's, that's certainly one thing. I mean, you know, we know what it's like all of us have gone through it communicating with people that are not connected physically, is a real challenge. That's customers, that's team members, that's partners and stakeholders. So you've really had to think over the past 18 months, about how you can communicate effectively and how you can continue to kind of build engagement with people, and not just leave them there. So that's been really interesting for us. And I think I touched on earlier, but this whole concept of feeling like a startup business, again, is a real priority for us, you know, we love the energy that we have seeping through our veins and our people right now. And it feels like we've just got so much energy and so much good stuff happening that actually, we're proud of being a startup 15 years, 15 years into the journey. So if COVID has given us anything, it's a real New Energy.Michael Tingsager::
So you actually, you actually like use the, you know, the downsides of COVID and use that actually, to fuel positivity the organization. But the thing is, it's very interesting. You also, like you have this, like, every time I met you, and I read about things you're doing is that you have this intent to be, you know, a great hospitality business at what is in your view, like great hospitality, because you already talked about, you need to give more than you take in principle. But there's other things that like the ingredients to build, like, you know, in your view, a great hospitality business.Jonathan Reed::
Yeah, I mean, I think the very definition of hospitality is all about making someone's day better than it was, before they walked through the door, or before they had the interaction, or before they met somebody. And for me, this is not new ground, it's an entity. But this starts with team members and leads right through to our customers. So, you know, when our guys come to work in the morning, what are we doing consciously to make sure when they step through the door, they are going to have an incredible time with us. If they do, then chances are they're going to convey that to their guests and our customers. So I think the environment we created for them is really important. And that's about great leadership. It's about making sure people are valued. And it's about giving them the freedom to be themselves. The last thing we want to do in this business is the process of our employees. So they turn into robots, and feel like, you know, they can't be themselves. We all know there are standards, you know, operating procedures, all the rest of it. But ultimately, it comes back to great recruitment and great culture. And if those two things are correct, I don't think you need too much by way of standards and procedures, because things just tend to happen and become quite magical.Michael Tingsager::
Let's dive into you mentioned recruitment, what is the great recruitment in your what is like your principles for great recruitment, when you are what is important for, for Paddy & Scott when you're looking for these people, that's gonna help you deliver that great experience, both to your internally but also externally.Jonathan Reed::
Yeah, for me, it's all about energy, really, energy, in fact, energy is what we look for all the time. And I think, you know, we so to give you an idea, I haven't recruited anybody, really, for two or three years, I don't really interview people. I am a big fan of getting the guys and gals that already work here to interview and select the people they want to work with. So I don't think that's a particularly crazy concept. But for me, you know, you spent a lot of time at work, it's really important that I think you get to influence the people you're going to spend that time with. So why should a big boss from the ivory tower rock up and make a decision, when we're all about trying to create fun for people and create communities within our coffee shop? So I think that's something that we proudly do. It works brilliantly. You know people know what it is internally, people know what Paddy & Scott's personality is all about. They know what we're looking for. They know what's going to fit. And I dare say, they do a much better job at it than me as the MD, of selecting our people. And I'm a great believer in new people joining us and having really strong sponsors. So when they join on day one, there is a band of merry people, they're willing and waiting to make sure they are successful in their role.
And that's something we've really focused on is setting people up for success and making sure that they've got some early wins that they can achieve pretty quickly to make me feel good about their time and Paddy and Scott's and give them some confidence that they can take a risk. You know, we had sort of five or six people join us last week. And the first thing I said to them was, Listen, guys, just to let you know, you've all applied to join us as a barista, we're really, really proud that you chose us. And we're really proud to tell you that you've been at least 200, 300 people to this job. So hopefully, you can puff your chest out and feel good about that achievement, because it's a competitive world out there. And, and we're really proud to have you on board. And I think, you know, that that sort of honesty really helps. And from the, from day one, it's, it builds a culture that says, we're going to be really honest with you. And we ask you to be really honest with us.
So if this is not for you, then tell us. And you know, we're very lucky, we've been working on being hate labels. I mean, we've not been working on being a great employer, we're not trying to be the best place to work for your union. We're just decent folk. And we recognize that to be a successful business, in hospitality, it's all about your people. So why can't we create a company that people want to work for? So that's been a, you know, a journey we've been doing for the last two or three years. And then lo and behold, COVID comes Brexit comes, no one's got any staff, everyone's looking to recruit? Well, we're doing just fine. You know, we've got loads of people that want to come work for us, thankfully. And we are seemingly ahead of the game when it comes to recruiting people if we need them.Michael Tingsager::
And it's so interesting, you put that, you know, quiet, you have to take from a manager's point of view and people running units, they how much leaders are spending time on recruitment, you know, especially at the moment you have given that authority to the people, and we can come back to that in a second, how you get autonomy and so on. But how did you actually make that happen? You know, besides saying I want you to do the recruitment? Did you give them tools? How do they actually, you know, have you learned them? And some, some basic is around recruitment? Or have you just said, this is the framework? These are the principles, and what did you do to make that happen? That step of putting recruitment out to the frontline?Jonathan Reed::
Yeah, I mean, I think so we have somebody sort of century that that does the shortlisting if you like, we're pretty succinct in how we ask people, to apply for roles here at Paddy & Scott. So we, you know, we're not interested in being one of 100 roles that somebody applies for on Indeed, on cater.com, or something like that, you know, that's not really good enough, that doesn't set the tone for what we're looking for from our people. So we always asked for a one-page CV, which obviously takes some work, someone has to consciously decide, yes, I'm feeling strongly enough about working in Paddy & Scottâs I'm going to condense my CV into one page. And then we always ask for a sort of five bullet points, that tell us why you're the superstar we're looking for. Again, not particularly scientific, this is not going to blow your mind. But you would be astonished at the number of people that don't follow simple instructions. And it's relatively simple to separate the wheat from the chaff.
Once you ask for a fairly strong directive application, such as that. Then, when we get the guys to meet the shortlist, ultimately, and yes, we have to work with a team so they know what questions to ask. So we have got, you know, some questions and probing questions, but it's not a formula. And it's not a set specification of questions. Because let's face it, when you interview someone, we all know that you've already made the decision within the first 15 seconds or whatever is anyway. So let's not spend an hour talking about life and achievements and everything else, when really, we've all made our calls and our opinions clear pretty early.
So we don't overthink it. We don't ever think about your work here. Chances are you've waited for two or three years, you know what's going to work? What feels right to you? What are you looking for, from a co-worker to a friend? You know, we do ask a few little interesting questions that help us make decisions. So we all sort of say, okay, would this person be a good person to go with a beer with a go for a beer with on a Friday night? Would you want to spend time in the company? Pretty simple, yes or no? We also say if this person were to be offered another job elsewhere this afternoon before you called them, would you be gutted, Simple as that? Simple as that.Michael Tingsager::
And that, in a way sets the tone for what you just told, you know a lot about the culture as well. But how do you define you know, culture, great culture? And do you see this as your key competitive advantage? Because what you're talking about here is behaviours that inform the way you do things so I can hear you as you talk.Jonathan Reed::
Yeah, sure. So, yeah, culture for me is, is it's those unwritten rules, isn't it? They exist in an organization that makes people or encourages people to make choices that support more than just themselves. So we want to build this culture where people feel that they are given the freedom to make decisions. But those decisions work for us, they work for themselves and work for our customers. So we do try and drive high performance in our stores. In our business, we do our very best to make sure people are rewarded and recognized for great stuff. And it does help that we have a reason for being really so it does help that we are not purely asking people to come and work for us to help us make some money. I think that's, that's quite an interesting dynamic. So, you know, when I report back to the guys and talk about it as just today, actually, the multi-use sports or that we've just kind of contributed towards in Kenya. I don't I don't tell them that for any other reason. And because they've they've achieved that they've built that they may not physically put bricks in the ground. But their work has contributed hugely to that Multi-Purpose hall that is changing kids' lives in Kenya, I think that's quite cool. And I think it's really much more interesting than working for the business and just helping shareholders.Michael Tingsager::
These non-financial things, as you say, they are actually not only making the customers excited about spending their pounds with you but also like people want to join our organization where they can feel that I'm part of doing something more than just having a job and earning some money, I'm actually making some kind of positive impact because I guess we all looking because we all know that we need to be part of this change that needs to happen in the world. If it's climate change, whatever it is, we all want to find a way to live that out. And I think is that also what you hear from people as they join you. They, they feel they can do that through their jobs?Jonathan Reed::
Well, actually, no, I think people join us because we're quite a cool, fun company to work for. And I think people learn that over time. And it becomes more important to them once they're part of the fabric. So, you know, I always I've always joked that some companies, you know, they interview and they're kind of like, Oh, what, what are you passionate about, and they kind of sit there in shock when they when the applicant says something that isn't about the company, they're hoping to join or the world in which they operate. You know, people can't be passionate about something and can't be really excited about it when they don't know what it looks like or what it feels like. So for us to expect people to, to kind of understand our world and get excited about it. Before really experiencing it, it's probably a little bit ignorant. So to answer your question, no, but it builds over time, it builds over time. And you know what, everyone's different, right? So some people work for us because we pay well, some people work for us because we have lots of fun.
Some people work for us because they like coffee, they don't want to pay for it. They just can take what they want. Some people work for us, because like I said earlier, they want to go home at night, and they want to tell their kids that the work they've done today is funding something bigger than just the business, but it's changing people's lives. So whatever it is for you, Mr. or Mrs. applicant, you know, if you're right for our business, we'll do our best to engage you. We'll try and make it exciting for you. And hopefully, one of the things we do are several of the things we do that will inspire you.Michael Tingsager::
Do you have you on this journey? Have you been you know, sat down at some point and said we need to define some some some playbook here some beliefs, values, principles, people call them different things, to actually make sure you can implement this culture and do things that you do, where you actually are able to give this level of authority and autonomy to your frontline employees?Jonathan Reed::
We have. But if I'm honest, I'm not a huge fan of labels on the wall. I mean, I think lots of companies have had big bold words on the wall. And that's meant to sum up what we're all about. And I must we don't have that. We do have that. But I'm not that interested in it really, you know, I think you walk into somewhere. And you know, within 5 to 10 minutes, what sort of experience is coming, what the place is, like, I maintain, I'm damn sure that people come and trade with us come and spend their money with us. Not because, you know, they love our coffee, necessarily, that helps.
But it's probably because they see how much fun we have and how much fun our team has. And they want a bit of that they want to buy that, you know, they walk past they see the queue. Wow, that que looks like it's having fun, because the guys at the bar having some fun, and it permeates so I'm more into what it feels like the moderates than what's written down. Now, of course, we're tired of the business. So we haven't got to worry too much about the framework that sits behind it. We can just do what we're doing. And of course, as we grow a number of locations around the UK it gets harder to both define, and, and measure. But actually, the principle is this I'm when you walk in somewhere, can you feel Paddy and Scott's or not?Michael Tingsager::
Now you mentioned min growth in connection with culture, and then you just already you already have a reservation now, what is your approach to you know, growth, because everybody has to grow. That's in one way or the other if that's true location or digital sales, you know, that's, uh, you know, we all have to grow to change and actually make the world better. Sometimes we need to grow as well. How are you going to manage that? And how do you make decisions that because that's an interesting factor that comes up again, post-pandemic is this conversation about now we just, you know, we need to go and open we're launching, we need to replicate what we've done. And we need to move fast, because of the opportunities now and here, but I'm almost a little bit scared of listening to that because I could also see massive issues with that pre-pandemic when we talked about growth and a cookie-cutter way of growing hospitality business.Jonathan Reed::
Yeah, again, it comes back to recruitment, I think. Because if you get people who are a great fit, and you give them the framework, and you give them the impetus to be themselves, but within the Paddy & Scott framework, then then it tends to work. I mean, we, you know, we're very lucky, we don't have external shareholders, we haven't got to report to people that are demanding that we open up 100 coffee shops this year or anything like that. So we can, you know, we can really make sure what we're doing is done well. And for that reason, we don't need to race, we get offered opportunities every single day, to open a coffee shop here or there or to work for this company, or this relationship, that partnership. And we're really selective, we're really selective, which is difficult on the basis that none of us has made any money for the past 18 months, you're in COVID. But you've got to believe in what you are, and you've got to stick to your guns sometimes. So, yeah.Michael Tingsager::
That's super interesting, again, because you're saying it's the journey, not the outcome, in a way. And, and I think that's, that's an interesting approach as well to running a business. And I think that comes to my next thing, as, as you've been part of, you know, in a very difficult, you know, you've been there a bit more than three years and 18 months of them has been, you know, navigating through to pandemic, what has been your biggest learning, you know, maybe you can also go back through your whole career in hospitality, of when you want to build a great culture, what is the what has have been your biggest learning when it comes to that because everybody talks about this, you know, I'm going to build a great culture, but it's one of those when you start to step into that journey, it's quite complex, and sometimes a bit intangible what's going on? Yeah,Jonathan Reed::
I think being authentic is really important. So, you know, if we say we're going to do something, we are going to do it. We, the minute you kind of let someone down internally or externally, I think it's a slippery slope. So I mean, that's simple to say, and easy to say, because the world is ever-changing. But if we say we're going to do something, right, we're going to do it. The other thing I would say is, is the impact of poor hat poor hires on a business and its culture. So when I first arrived three years ago, I think there were some people in the organization that, that were phenomenally talented people, but maybe, maybe their journey had come to an end, maybe they've been here too long, or whatever it may be. And it kind of needed, some quick decisions to be made and some instinctive decisions to be made. And, yeah, I think if those decisions weren't made or aren't made, then you can really, really slow yourself down.Michael Tingsager::
Yeah, that's super interesting, because the thing actually, for many, that's actually the biggest blocker sometimes for you know, building great cultures actually not dealing with the wrong people. Because if you don't get the wrong people off the bus, the the the great people will, will leave at some point, because they will not accept being with mediocracy, I normally say, what is the leader's role in building this culture? Because there's often you know, different understanding about what a leader's role is. And you've already indicated that you know, part of the way of your building culture is actually you give people the freedom to operate with you so kindly borrowed to me at some point when we had an exchange about permission to operate, I think I call it and you said, No, Michael is the freedom to operate.
And I'm taking that on board and really using that. But can you talk a bit about that and your role as a leader to actually you know, build this authority within the company and you're actually burning down the Christmas tree in a way you know, the traditional hierarchy is disappearing in your organization, as many other progressive organizations talk a bit about that and your role as a leader and what that does to you and you spend your life in hospitality where it's been all about control the outcome, no the processes you mentioned as well. Tell me a bit more about that. And I think people would be very interesting to hear some more about that as well.Jonathan Reed::
So, as far as I'm present, every single person we employ as a leader in our business, every single individual has the ability to influence what we do have the ability to influence our customers, their co-workers, and the business, that's really, really important. So I might have someone that's, that's earning 19 pounds an hour serving coffee. And their role as a leader is to make sure they can lead their particular section, or their particular area as if it were their own. So, you know, not everybody wishes to be an entrepreneur, not everybody wants to take those risks, and start their own business. But I think most people in there somewhere, have a sense of pride, that they want to do a great job. And we just, we worked really hard to try and prize our people. We try and make sure that people take real accountability for what they're doing, and are really honest with each other. And if they see something they don't like, then they deal with it. And they don't pop off to a manager and, and moan and have politics and all that sort of rubbish. Just do what feels right. And ultimately, yeah, be a leader. We talk about leadership at all levels quite a lot. It's really important to us.Michael Tingsager::
How much hierarchy Do you have? Jonathan in the organization? How is it reasonable, the flat or are you very traditional hierarchy? Or how does it work for Paddy & Scott?Jonathan Reed::
No, I mean, we're very, very flat, very, very flat. So there's probably I mean, our board is three people. And below that, we have probably, you know, one sort of middle management tier, and then we're team members. So very, very flat, very flat.Michael Tingsager::
That's super interesting as well, if you think about the traditional way of structuring organizations in the hospitality, as I've been, I've been studying and following you on I've seen recently you've been very good at documenting what's going on out in the stores. And you talk a lot about that autonomy they have. And there was an experiment going on, I think it was last week where you want to your teams were over three weeks, and you can probably tell this better than I can reduce opening days, but they actually boost performance in that store. Can you tell me a bit more about that? That sounds really interesting, especially when we connect that with the staffing crisis as well.Jonathan Reed::
Yeah, so we have one store in particular that it was getting really, really busy. I was coming out of COVID. Lots of people were flocking to see us. And I could just sense the team was, were a little bit tired. And we kind of said, Okay, well, how can we switch this up a little bit? How can we make sure everyone's talents are best used, and that our customers are getting what they want? And we just kind of said, well, look, the weekends in this particular location aren't brilliant, you know, they're okay. But they're not brilliant. Monday to Friday is a really strong period. So how much do we get from opening weekends versus the saving we could make and the experience we give our team members by giving weekends off? And we kind of you know, we batted it about a little bit as a group.
And we said, Okay, well, let's put it to the test. If we can achieve the same sales that we used to do in seven days, but over five days, then that's that, then let's do it. That's a win for the business. That's a really, really strong into the business. So sort of the first week was was was awful. The second week, wasn't much better. And all of a sudden, in the third week, it just came together beautifully. And our sales sort of rocket. And I think I can only put that down to the energy of the team. And the fact that they had this little idea. They wanted to run with it. And ongoing. Yeah, okay. That's right. That's right. That's right. And they made it they made it work themselves. So I didn't want to say to them, Okay, we'll do it. But here's you must promote this product, you must sell this, you must do that. Nothing like that. It was purely about okay. I back you guys. And but this is a challenge.
Now. Are you up to? And seemingly they were and the sales say, skyrocketed and have done in week four as well. What am I saying? It's good, it's good. And I think it is just a bit of a different thought process. Sometimes it makes a big difference. And that's coming back to your earlier questions about COVID is what we've tried to do, you know, really look at things a little bit differently. Just because we've always opened seven days a week and because the industry senses that's the right thing to do. Maybe it's not right in this question, and maybe it's not right for this team. And maybe our customers could enjoy an experience slightly different.Michael Tingsager::
Yeah, and it's actually funny. I was in London actually this morning. Before I travel back, I just had a quick coffee with a very good friend of mine and we walked around the last couple of places there was not open where we thought we could go and grab something because they've changed, you know things because of staffing. And in a way, we said, this is also the time really to rethink if you should have been open at this time. Exactly, he isn't now that actually your customer is gonna come in and join. If there are only three people coming for lunch, there's no reason to be open, if you can actually have better energy, as you say, because, at the end of the day, hospitality is, as you say, an energy business. That's what, in principle, besides a good product, that's what we want. We want to get energy and experience from it. And that leads me to the next question, Jonathan, the staffing crisis, you know, everybody's talking about it, there's a lot of writing about it. It's the worst has ever been. Some people are missing 20% of the workforce, they need some other 10. And then as people like you guys, there's not really feeling it. But what is the way forward when it comes to the staffing crisis and where we are as a hospitality nation, and I think it's not just a UK problem, we have to acknowledge that is a global problem. But what is your view on this? And what is the way forward?Jonathan Reed::
Yes, it's a really funny one, isn't it? It's just kind of crept up overnight, hasn't it? The supply-demand issue with people? Luckily, we don't feel it as much, because we've got a really strong audience of people that still want to work for Peddy and Scott's locally where we are in Suffolk. So we're pretty lucky in that respect. I know it's difficult. The industry has always been obsessed with promoting itself as a career of choice. And I think really, is it about careers? Is that what we're trying to sell people? Why can't we just sell people a really good job, that could just be four hours a week, eight hours a month, whatever it is why we got to get so obsessed with careers? I think I think the industry is a great place to work. You can learn so much so soon, and be exposed to some brilliant stuff. I know, when I left university, I was running a restaurant and bar operation of a million quid and I was age 21. You know, where else do you get that sort of responsibility, getting people to take chances on you? No one else.
But it's not about career necessarily. It's just about a job. I'm convinced. There are a lot of people kind of moaning and with good reason. It's tough out there. I appreciate. But no one wakes up and says all you know what I want to be? I want to be an Amazon delivery driver? I don't believe so. Yeah, for me, let's focus less on the career stuff. And let's just give people a really good environment to work in. It's fascinating. Even the last couple of weeks, all these companies have come out and said we are giving pay rises 4% pay rise, well done, really good job 4%. pay rise, well, that's gonna do wonders to attract people, isn't it to your world, I would think not. So if you give people a great experience, and you turn their heads, and they want to come work for you, because they can have fun, you because you stand for something, or because they walk through the door. And instantly they feel better about their life, because of the energy they can feel in your business. I think that's, that's a better currency than a 4% pay increase.Michael Tingsager::
And I guess you're like pay is a hygiene factor that just has to be ticked off. It has to be, you know, the best you can do and be the best, you know,living wage, and, and all those and then, you know, it becomes like this hygiene factor, you're just following whatever, you know, you people need to survive. And I think, I think what I can see the people that are doing well, and what I can hear from you that you are caring for people in totality of their lives, it's not just about getting the job done and getting to work and work. It's about the totality of the lives actually making them better, you almost act a bit like a mentor. And that's when I start to see when I've interviewed other people and been quite interested in my whole career and how this works. And this is that thing, it's there's not like this, you're at work and not work you are being brought into, we're gonna make you better in your life. And you can take whatever you want from that if you want a leadership position or not. We're gonna make your life better than principle.Jonathan Reed::
Yeah, absolutely. And our leaders are very much encouraged to do that. So you know, let's say someone's having a one-hour catch-up with somebody in our world, they might spend 45 minutes talking about that individual's life outside of work, and only 15 minutes on the stuff that is work-related. Because if we can, if we can help people have a great existence outside of work, chances are they're going to come through the door and feel a million dollars and all that stuff that's going on outside. They'll forget and they'll just come with vigour and energy and that's really important. And it is individuals, you know, we've got some people here, one guy down, who has loads of entrepreneurial flair, brilliant energy, probably doesn't have the risk-taking behaviour to kind of go, yes, I want to be an entrepreneur and yes, I'm willing to put some money online and create my own business but has everything else in spades.
So last summer, we said, okay, Dan, we've got this beautiful 1970s, camper boy camper van, it's worth 30 grand or something, you go see what you can do with it, you know, we could, we could run it ourselves, we could take it to events and shows all around the country. And we can make a success of it. Or we could give it to you. And you could make even more of a success of it. And we could, along the journey, teach you how to have your own business. And you'll get exposed to, you know, to the commercial stuff, to the important facets of running a business, which of course, in turn, is going to help us when you come to work. So again, just thinking a bit differently.Michael Tingsager::
That's super interesting. And I had an interview with Tom, from Honest Burger recently where they also created an incubator program, as you said, for people who really have these entrepreneurial traits, but either need the opportunity or just need a bit of hand-holding to take those chances. And that can be very important for our industry as a future as well that we create future great hospitality leaders and owners as well as businesses. Where's the house? does the future look for the industry? You and in your lens? If you're looking in the crystal ball, how was looking in 12 to 18 months in our industry, it looks like very, you know, still very difficult if you look at all the things that are hitting the industry, and we still have, you know, a lot of things coming up ahead of us.Jonathan Reed::
Yeah, it's certainly still it's still tough, isn't it? I don't think there's a one size fits all answer to that question. Because I think different, different facets of the industry, different sizes, organizations have different challenges. What we do know is that there is still this pent-up demand for people to go and have a good time. So we need to capitalize on that. And it's tough out there. If organizations don't have the people in place to service that demand, then it gets really difficult. I think we can all see that. You know, there was the initial kind of Oh, wish, the industry is lacking people. If it's not exactly as you want it to be if your experience in a restaurant isn't perfect bear with us. I think that kind of that's that's that reality check is hit hard. I think people's expectations are higher than ever. And actually, their willingness to be supportive and empathetic of the situation the industry is in is long gone, if you ask me. So people are spending their hard-earned cash, they want to come out and play, have some fun, and they're only willing to accept excellence as far as I'm concerned, which is tough, which is really tough. But I think the future looks like a really good technology-focused approach and hospitality. I think one thing we've learned over the past 18 years, excuse me, 18 months when it comes to e-commerce is a frictionless experience.
And we try and take those learnings from E-commerce and apply them in our stores and in our business. So what can we do to enhance the customer's experience with technology? And that doesn't have to cost loads of money. The reason that cost loads of money, you just need to have bright people that are willing to see the build stuff, or at least look at things in different different different ways. So yeah, I think that's probably where we're going. We know the onslaught of supply chain issues that are coming. And again, everyone's going to have to reinvent, reinvent, review, restructure, rebuild, and just make sure that they are saying there's a lot of success and not trying to do too much. I think less is going to be more for the next 18 months.Michael Tingsager::
And that's so interesting. And I know you're like as you're saying that you know the only constant changes. And you know, we need to keep on being agile, we need to take care of our people and use technology to improve you know, the experience both for customers and internally as well. What about, you know, on you know, where do you get your inspiration from? Do you have like some influential mentors to help you to become a better leader because you know, you're running the business. Do you have somebody to challenge you? Do you have had some through history that really has been part of forming the way you think about leadership and culture and approach to business?Jonathan Reed::
Well, I guess Michael, listening to podcasts like yours is, is a bit helpless. Let's face it.Michael Tingsager::
Thank you, thank you.Jonathan Reed::
I actually think sometimes the industry is pretty guilty at looking internally for seeds of wisdom and actually, we need to look outside other sectors to try and get some inspiration for what we should be doing. So, you know, I do sort of listen to a lot of podcasts and read a lot of books, but largely none of it is to do with hospitality if I'm honest. Because I want to see what else is happening in the world when it comes to other sectors. Because I think that's, you know, the application of ideas, is where the magic happens. So if you can take those nuggets and those seeds from different areas and apply them to your business, then you're probably going to create something pretty cool. So yeah, I mean, all over the place, I have got, you know, a small number of people that I call upon on a regular basis and just chew the fat. And, you know, kind of say, if you were in my shoes, what would you do? You've been here, what did you do? So I think everyone's got, everyone should have a decent network of friends that they can, they can call on when they need some pearls of wisdom.Michael Tingsager::
You talked about you just said, I read a lot of books if you are giving a book away nine out of 10 times, what book would that be, then go to them.Jonathan Reed::
I love the book by the founder of Nike called Shoe Dog. That's a really cool book when it comes to building brands, taking risks, and being sort of relentlessly focused on what you're what you stand for. I also love another book by a guy called Ricardo Semler called Maverick. You must have read or written.Michael Tingsager::
It is behind us. I, unfortunately, didn't write that book. But yeah, I would have loved to Yeah,Jonathan Reed::
I mean, and that guy is well ahead of his time when it comes to what the future world looks like? You know, he was running engineering businesses in South America and was really incredibly transparent with his teams. It was all about, you know, you want to pay rise. Okay. Well, then ask your colleagues, all that sort of great stuff, you know. And I think that's just brilliant. I'd love to actually have not seen him talk recently, but I'd love to know how those decisions and that culture that regardless haven't had in place, many moons ago, how it's looking now see if it's still working. But yeah, really inspired by that.Michael Tingsager::
Yeah. And I actually saw him just before the summer at a virtual event. And he was no longer involved in the business. He is now retired. And I think he quite honest, said it's not the same. And it's not me to judge in a way he said, like, every Maverick. But they are, they're moving on doing their own thing. And then I looked, they're big into it. And it looked like the founder and the family had withdrawn from it, which is quite interesting. They were losing some of that autonomy that was in the organization before and some bit more old-school industrial thinking was coming back, into Semco. But I don't know enough about it. But I was like, you know it was very sad to see that if that was true. But he was quite open about it that he said that it's very difficult to practice this if you don't believe in it as a CEO. And that was what he talked about as well. The importance of succession was one of the things he talked about as you move the organization on. How do you actually find the energy? You just said? It's bloody hard? How do you find the energy to show up pro every day? Jonathan, it's you, you have as many crazy challenges as anyone else. But how do you get the energy? How do you get yourself pumped and ready to go in every day?Jonathan Reed::
Yeah, I'm not gonna sit here and lie and tell you that I wake up at 4 am and have a power shake every morning and then you know, run a marathon or anything like that. Because that would be that will be other bull, but what I do try and do is wake up at a decent hour. So I'm generally up before six. And I do try and achieve something before I put anything into my body, but I wave coffee or breakfast or whatever it may be. So for me, I try and get to the gym four or five times a week, and just make sure I've earned my breakfast before I put any fuel inside me, I think that's really important. The other thing I do is, walk really fast wherever I go. I don't know if you've ever seen a miserable person walking fast. doesn't happen too often unless they're in a rush because they're late. So I feel like walking fast raising your heartbeat is a good place to be. So that's something I do quite a lot. And I just made sure to drink loads of water from an energy point of view, you know, at least two or three liters a day. I do have to limit the coffee sadly. because sleep is also a huge, huge defining factor in someone's energy so I tend not to have coffee after three o'clock. I'm gonna have to admit that probably no, but it's all this.Michael Tingsager::
Yeah, I know how that is as well. But I always help I know you have small kids as well. So they also take a lot of energy so that makes you sleep very well. When you're you get the opportunity to sleep. What would be like? Top advice to leaders out there in our industry, we talked about culture, and we've talked about where the industry is going. We've talked about the staffing crisis of what is like your top three advice to people out there.Jonathan Reed::
So for me, the best thing that I've done in the past 18 months is gone much closer to our teams, and give our guys on the floor, bigger responsibilities, bigger roles, and bigger voices. So the program that I always used to love watching on television was undercover boss where people would go back to the floor, and they would try and get under the skin of their business once again, and try and find out what they needs to do in order to change things improve things through the eyes of their employees. And I think the concept is, is sound and it still works today. So I try and make sure that I spend time on the floor. I think it goes a long way. I think people enjoy sharing the pain and the joy with the senior folk in the business. So that's certainly one. Look outside hospitality, for advice, information, and the challenge, I think we can all get captured in this bubble of hospitality. And we all think, oh, woe is me. Isn't it tough right now? Well, probably is damn sure it's tougher elsewhere, if you look, and some people outside of society have probably had similar challenges. And I've probably overcome them with some different thinking. So, you know, that's, I think, really important. And, yeah, I mean, I was sort of challenged myself and say, What do I want? What I wanted to say on my tombstone, I appreciate this as simply positive language. But, you know, what do you want to leave behind? That's really important. So is what you're doing today, something you're really proud of? And if you get those, you know, that one sentence on your tombstone? What's it gonna say? What do you leave behind? And are you proud of the impact you've had? So yeah, that would be my advice.Michael Tingsager::
That is the super advice Jonathan and I guess there's a lot as you say, there's looking into the mirror instead of out of the window. If you want to improve yourself as a leader, but also as a business, go and find inspiration from the best of the best, both inside and outside hospitality love that. Where can people find you if they want to reach out to you if they want to know more about Paddy & Scott, whereas the great places to go?Jonathan Reed::
Yeah, come on. Come and see us at some Paddy & Scottâs Coffee Shops. We've got some really cool coffee shops around Suffolk. We'd love to welcome people over. And yeah, you know, there are some great videos on YouTube, that we're really proud of as well that tell our story passionately. and promote the impact we're trying to have around the world. So funnily enough, we've got I think, got some videos that are absolutely crazy in terms of viewer count, and the number of subscribers on my YouTube channel is absolutely nuts for a tiny little company. So in that respect, we must be doing something right.Michael Tingsager::
Great, great. Jonathan, thank you so much for taking time out. And actually, you know, I know you're out and about today in one of the stores and shared the story with us and with the rest of the audience and I will send you and the team at Paddy & Scottâs power and energy for the road ahead.Jonathan Reed::
Awesome. Thank you very much. Appreciate it. We're taking it, with open arms.