Examination of Witness (Questions 176-199)
MR DUNCAN ACKERY
6 DECEMBER 2010
Q176 Chair:
I notice you were born in Australia. We won't hold that against
you while the Ashes are going on. We're modest as always about
that.
Duncan Ackery:
That is magnanimous of you. I'm afraid I pass the Tebbit test.
Q177 Chair:
Would you care to say anything by way of introduction? We have
a little blurb about your background, experience and so on but
you are welcome to add to it.
Duncan Ackery:
As you rightly said, I was born in Sydney. I opened my first restaurant
when I was 23 or 24. It was a concession restaurant in a museum
in Sydney. I went on and did some other things and built up a
business but what was interesting was that the core of that business
was in the government or semigovernment sector. Of that
business, two of the leases had to be approved by the Government,
so they were in the equivalent of a royal park or museum, so I
understood from an early age the world of providing catering within
an environment where catering is not necessarily the key purpose
of the organisation or the location of that unit.
I moved to the UK when I was about 30. I then tried
to escape catering but couldn't quite; I'm afraid it runs deep
in my DNA. I found myself back in the world, did some stuff for
the Corporation of London and then for the first time in my life
took a job and took the position of director of Tate Enterprises
and ran the catering company but was also on the board of the
Enterprises company that covered publishing and retail at the
Tate. I came in before Tate Modern opened, rode that wave and
built them a really interesting catering business. I think it's
regarded as one of the best inhouse operations around the
UK. People have their own view and I'm happy to share people's
views on that but we can perhaps go on and talk about what made
that successful. Primarily, the key thing that made that successful
was that everybody knew what it was we were trying to achieve,
from Nick Serota to the board of trustees to my management team
and that's what helped make a success of that business. I've
then gone on and worked for some big hotel companies, run Searcys,
a very well-regarded, old, established London restaurant firm
and now I try my best to not do corporate jobs and to do as much
for myself as I possibly can. I've just done a joint venture
with the V&A museum and we've opened a small retail bookshop
and wine bar in South Kensington outside the museum. They are
on a mission to try and stretch their brand and, of course, earn
more money for themselves so I've partnered with them in that
business. What may be interesting for the Committee in terms
of my background is that I understand running catering in environments
where catering is not the key business of what you're doing.
I also understand about how you go about ensuring that the catering
is underpinning the purpose of the work that's going on in that
environment and hopefully enhancing the work that's going on,
so whether it's in a museum or an art gallery or whatever. Does
that give you a good enough snapshot?
Q178 Chair:
Yes, thank you. One of the difficulties we face here is the everincreasing
security consideration: as soon as we welcome the public, who
put us here, into our midst, that raises issues of security that
perhaps limit what we can do to take money off them, as it were,
through our banqueting facilities and so on. Have you experience
of that situation where you have to balance the security aspect
while at the same time wanting to increase revenue?
Duncan Ackery:
Yes, in two ways. One has been about the securing of the environment,
particularly in terms of providing entertainment in key galleries
with works of art on the wall that are worth extraordinary amounts
of money. It's not just about those works of art but about ensuring
the integrity of the building. Then of course just managing the
logistics of welcoming 2,000 people into a high-security building
for an event that is going to start at that time and strangely
enough is being televised, and you have to serve the main course
by the time that the live feed goes for the lottery draw or you
will have failed. So yes, I have done a bit of that.
Q179 Mr Jones:
In terms of branding, we have a small gift shop down the stairs.
Have you had a chance to look at it?
Duncan Ackery:
I haven't.
Mr Jones: Clearly the
V&A and the art galleries have got brands and they use the
V&A brand to sell various goods with. Firstly, how could
we expand that operation? Secondly, how do you do it by protecting
the brand and not becoming too tacky, if you know what I mean,
which is obviously a thing that the V&A and others want to
do? Thirdly, have you any experience of using the internet to
generate income from those types of brand of goods? What is your
experience of how successful that's been?
Duncan Ackery:
Can I answer those questions in reverse? I'm not going to comment
on the internet. I don't pretend to be an expert on that area
and I think it would be a mistake for me to comment on that.
Q180 Mr Jones: Do
the V&A use the internet?
Duncan Ackery:
Yes, absolutely. I have been involved in online businesses but
I'm not going to pretend that it's really my thing. In terms
of tackiness, it's down to integrity of product. That is all
it is. If the product has integrity and if you sell it in a well
thought-through and considered environment, I do not believe that
you in any way belittle or undermine the brand that you're seeking
to enhance. To me, it comes down to appropriate selection of
product, whatever that product is, whether it is books or memorabilia
or clothing or whatever. It is about integrity of product.
Q181 Mr Jones:
Could you explain for example the V&A? The trustees of the
V&A must have conservative views, I would think, a bit like
this place, in terms of what is appropriate. What is the process
that you would go through in terms of ensuring you protect that
integrity but you also get something that is commercially viable
in terms of what people want to buy?
Duncan Ackery:
The way that organisations like the Tate or the V&A organise
that is via an enterprises company, so that all commercial activity
is undertaken by an enterprises company that is basically an adjunct
to the core business. So you have the board of trustees in the
core business here and you have the enterprises company sitting
at the side. The enterprises company is then made responsible
for creation and selection of that product and empowered to do
it. Do they make mistakes along the way and perhaps put the wrong
product in front of customers? Yes of course, they would admit
that, but the thing is that you have to have the right people
running those businesses, people who feel passionately about the
brands they are engaged with. Whether it is rolling out a piece
of fabric that you're selling in a shop in Japan or the books
you are publishing around the activity that is going or whether
it's a t-shirt, to me it just comes back to that point about quality.
I haven't been to your gift shop here but—
Q182 Mr Jones:
It's tacky in parts.
Duncan Ackery:
There's certainly enough in the history of this fantastic environment
that you could create a set of products that would not be tacky
and that could really enhance the visitor experience and in turn
underpin that experience. I don't think I've answered the first
bit of your question.
Q183 Mr Jones:
In terms of commercialisation, how did the V&A for example
start in terms of organising?
Duncan Ackery:
That goes back to that thing about the enterprises company. It's
about empowerment and then about creating the appropriate, in
their case, board structure. For example, when I was at the Tate
sitting on our board, there were people like Helen Alexander,
who is the head of the CBI and—because we're involved in
retail—we had the exchief exec of John Lewis partnership.
We had some high-profile people on that board who felt passionately
about the products that we were creating and they were very, very
tough on us if they felt that we were doing anything that was
impinging on the brand.
Retail product is in a way a little simpler. It
is easier to apply good taste to that than perhaps it is for retail
catering, which is a more difficult thing. What we achieved there
took a long time; it was not quick—the debate about the
strategy of catering when I first came into that business was
constantly hijacked by the debate about quality. It's what I
call the carrot cake moment. You would be sitting somewhere where
you had done your work about how you wanted to plan what you wanted
to do with the business for the next one, two or however many
years and someone would stick up their hand and say, "I had
a poor piece of carrot cake in your cafe last week." There
is only one way to deal with those complaints and they are only
valid, from my point of view, if they are made immediately. Otherwise,
what can you do about it as an operator? You can't do anything
about it unless people immediately say that so you can address
the issue. It was about putting mechanisms in place where you
could review the product, you could certainly complain about the
product or say it was great, and there are appropriate ways to
do that, and you could review the business strategy. You would
do those things at particular times so that they had a chance
to breathe and take shape. It took time, but I believe it was
time well spent.
Q184 Sarah Newton:
Thank you for sharing your considerable expertise. I am sure I
speak on behalf of us all. We are very grateful. You could probably
charge thousands of pounds an hour for this advice so thank you
very much indeed.
Duncan Ackery:
Well, if you've got any clients you would like to share with me.
Q185 Sarah Newton: It
is very public spirited of you. I very much agree with you about
the enterprises company model and I can see how that would work
really well for us in terms of retailing and extending the brand
beyond the House. However, given that, unlike your previous experience
where you were setting up a catering offer within a museum environment
and that we have already got an inhouse operation, to what
extent do you feel that the same model of outsourcing the catering—so
having a strategy inviting different people to come in and it
being more arm's length from the organisation—would be an
appropriate model and what would the challenges be when you have
got an existing way of doing things to make that transition?
Duncan Ackery:
I will take that in a few chunks if I can. I've done all those
things along the way. I've been the outsource person, I've been
the inhouse person and I've done joint models. I'm a bit
of a champion of inhouse. Given my background, I suppose
that is not surprising. I've helped organisations like Sadler's
Wells and the National Theatre either go over to an inhouse
model or enhance an inhouse model, although I fully see
the benefit of outsourcing. There are a number of things that
will make inhouse work. Your business needs to be of a
certain size. You need to be generating a certain amount of income
and the reason why you do is because you have to take the same
management approach as a high street business would. You have
to pay people the same amount of money as they would receive in
the high street. It depends on the pension arrangements and all
the rest of it, I understand that, but broadly you have to take
that approach because ultimately your customers, or in this case
the Members of the House or the staff who are working here, know
what's going on in the high street and they expect that quality
to be delivered to them and rightly so in an environment like
this. So I am a fan of the inhouse model if the business
is large enough to sustain that.
How big is that business? Well, it depends. How
long is a piece of string? It might take a bit longer to get
a clear answer about that. I think it also works when you have
what I'd describe as vertical buyin. Everyone knows what
you're doing, so if you go to that venue and on a Tuesday afternoon
it is only selling scones and tea, that is all it is doing, then
when the complaint letter comes in and says, "Why couldn't
I get a lamb casserole?", it is very easy. You say, "Because
that is not what we do. We decided that we are going to do scones
and tea in this environment at that time." Everybody knows--the
management know, you know--who are responsible, the other people
here would know and then it comes down to quality. Was it good
enough? Inhouse is good when you can define it in that
way. The problem arises if you say, "Well, actually, we
can't quite define it well enough." For whatever reasons,
we find ourselves in a situation where it is quite hard to get
what I would describe as vertical buyin. Let me tell you
one thing: you can't outsource that problem because you go and
outsource it and then how does your poor outsource provider, who
isn't even integrated into your organisation as well as your inhouse
people, possibly survive? All that will happen is that people
will see it as an opportunity to perhaps beat them up more. They
will think it is their problem, that they are not doing a good
enough job. It all comes down to definition and that applies
equally to inhouse or an outsourced model. What I do think
could be of interest is how you could bring some things together.
Perhaps you could work with an outsource company to take advantage
of purchasing. Perhaps you could be using their supply chain
so that you are providing regional products that are more reflective
of what the high street is providing, because there is this huge
move towards providing local, sustainable food, which we should
be doing. Maybe that's around back-of-house support, so that
your financial reporting is up to scratch so that you can look
at any bits of your business and unpick it and then make a decision
about it.
Q186 Nigel Mills:
How would you say this place, as an attractive venue, would compete
with some of the others that you have been involved in? If we
are wandering into banqueting or weddings and trying to compete
with the Tate or wherever, do you think this should be more attractive
and a premium to them?
Duncan Ackery:
We had a rule at Tate, we didn't do private events. We certainly
didn't do weddings. I wouldn't do weddings, personally. Flippancy
aside, excuse me, it's a word-class venue. Everyone around the
world comes to London, where do they come? They stand on that
corner and they take a photograph of Big Ben and they take a photograph
of one of the most handsome buildings in the UK. Ultimately,
it is a fantastic venue. The issue there is how you sell it.
It is about how you set up a structure to effectively sell it.
The people who are doing that job have to be empowered to sell
it. Sure, you set the parameters around which they have to work.
They know when clients can and can't come in; they take control
of the diary. Yes, of course they have to do all that, but my
experience of running big event businesses in organisations is
that it has to be absolutely crystal clear who's selling it, what
the parameters are, what they can and can't sell. If that's all
nice and neat and if, at the end of that, you have the opportunity
for a viable business, I would say it is worth considering, for
sure. I can't imagine why clients wouldn't be interested in coming
to entertain here. I am absolutely confident they would. Once
again though, it may be best to work with a partner or a few partners
on that. Out there in London are some of the world's best events
companies. They are world class and they would be delighted to
work with you on bringing what they do to an environment like
this.
Q187 Dr Lee:
Is there any idea how much the V&A made? What sort of turnover
increase did we see with this V&A brand?
Duncan Ackery:
Sorry, are you talking about the V&A project?
Dr Lee: Yes.
Duncan Ackery:
It's only been going three weeks that one.
Q188 Dr Lee:
In which case, are there projections or expectations on the basis
of other similar organisations? I'm trying to get a handle on
how much we are talking about.
Duncan Ackery:
The catering business at the Tate, when I left, we were doing
£13 million. In our best year, we covenanted back £1.7 million.
In an average year, we were doing between £1.3 million
and £1.5 million back on about that turnover. We weren't
paying rent and other people who work in my sector would say,
"You could have made a lot more money than that." We
could have. We could have bought cheaper chicken. We could have
bought poorer quality vegetables. We made a decision about how
we were going to run that business and we were happy with the
returns we got from it. That was a sizeable operation. It was
also underpinning the ethos of the organisation by giving a great
customer experience, a great visitor experience.
Q189 Dr Lee:
And you did that by pricing against who?
Duncan Ackery:
Benchmarking? Against similar organisations on the high street.
I think when you're looking at benchmarking, there are a number
of things to bear in mind. Perhaps the Tate is not a bad organisation
or model to look at but there are certain elements of what you
do that are so unique that you can't really benchmark it. What
your benchmark for that sort of activity should be is around quality
and provision of service and meeting benchmarks within provision
of service. Where things are like for like—if you are doing
an espresso bar—you should be able to benchmark it just
like that. It's easy. You go out into the marketplace, you see
what they're doing and you look at the prices and the quality.
That is what we did. We had independent people who would come
in and benchmark us—mystery shopping. It is what people
in our industry do. Someone turns up. It's all on a mobile phone.
You don't know what they're doing; you're taking the order and
they're saying, "Person has got a dirty uniform." That
sort of stuff is very, very useful. Perhaps that is harder to
implement in this environment, although I am not absolutely sure
it would be that hard. It is preplanned; they are coming
in two months' time; we can do the security clearance; someone
can accompany them. Is it that hard? That sort of benchmarking
is critical, so it is price point, product, what is on offer,
how does that sit with what is out there on the high street?
Q190 Dr Lee:
And what about your judgment of the power of the brand—this
is a difficult one to answer, I guess. If the V&A has a powerful
brand, I would suggest that this has got a stronger brand than
the V&A, certainly globally.
Duncan Ackery:
Yes, you're right.
Q191 Dr Lee:
So presumably you would think that this would be a good business
idea, to put out branded, quality goods?
Duncan Ackery:
I do. It comes down to something we talked about earlier. It
is about quality of product. If we're talking about retail catering
to people who are visiting the House, about events provision or
about the provision of a gift shop or whatever name you want to
give that shop, you have to be proud about it. You have got to
be able to come back to this committee room and you have to sit
there and think, "You know what, it's great. What we're
doing is great. The product is great, tastes good, looks good.
People are buying it." That comes back to it being benchmarked
against people's retail experience elsewhere. You cannot divorce
the two. Audience take their experience with them wherever they
go.
Q192 Bob Russell:
I am very impressed with what you have said and also your CV.
However, this is a place of work. There may be 650 MPs but there
are probably about 10,000 people who are not MPs, many of them
low-paid. While we are looking at the grandiose plans to bring
in corporate hospitality, what about the low-paid staff who do
need to be fed and watered?
Duncan Ackery:
It is arguably the most important bit of what you do. What I
would say in respect to that, and I'm not sure exactly how you
manage that currently so I can't say, but you need to find ways
to provide food for them in a really cost-effective way. So whether
it is their own environment—for example, at the Tate we
ran the staff cafe and as an enterprises company, we knew it cost
us about £100,000 a year. It lost money but the trustees
understood that. We recorded it in our accounts as such. It
was a loss-making part of our business and we subsidised that
offer and rightly so, because the people who were going there
were people who were at the lower end of the pay spectrum. I
do not believe those things are mutually exclusive. It is about
good planning and understanding what it is you are providing,
where, for who and at what price point and then, particularly
with staff, having a way to engage them via a staff committee.
They will come back and tell you what they think of the service.
You work with them. Make them equally responsible in the provision
of that service in terms of its improvements and enhancements.
Q193 Bob Russell:
I am grateful for that response because I sense there is a danger
that we might go down the Premiership football road where the
prawn sandwich brigade were more important than the ordinary fans.
Here the ordinary fans are the low-paid staff.
Duncan Ackery:
I absolutely agree with you. You cannot disenfranchise people.
It is a place of work and you need to be mindful of that. I
will repeat what I said, I don't think it is mutually exclusive
and if it's done thoughtfully, they can underpin each other.
Q194 Mr Jones:
You said earlier about the Tate that you didn't pay rent, which
obviously we don't here. In your costings, did you include heating
and lighting?
Duncan Ackery:
The answer is yes, although not in every single area. We were
certainly independently metered on things like gas, which we were
a huge user of. What we did was, for example in Tate Modern,
was we had some pretty sophisticated building management systems
that could tell you who was using how much energy and the like.
The answer is broadly yes; some of it would have been done according
to percentage formulas, some of it very specifically.
Q195 Mr Jones:
But the important point: in those profits that you just told us
about, energy costs were actually part of—
Duncan Ackery:
Every single cost of running the business was part of it.
Mr Jones: Apart from rent?
Duncan Ackery:
Yes, other than security provision and rent.
Q196 Mr Jones:
Can I ask you a follow-up question in terms of cost effectiveness
of supplies? You talk about quality of food.
Duncan Ackery:
Purchasing.
Mr Jones: It's right to
get the quality right. How did you go around in terms of not
only ensuring you get the quality right but also you then get
it at a competitive price?
Duncan Ackery:
We had friends in the industry and we would talk to them. That
was one way and you certainly had a sense of who the decent suppliers
were. You would make the most of them. But we did beauty pageants
really. Every year, we would tender out bits of our business,
so for example, butchery, fruit and vegetable, fish, whatever
it was, we would review our purchasing once a year; we would bring
in other suppliers; we would benchmark and so on. We had other
friends out there in the industry and we would share our invoices
with them: "What were you paying for Scottish salmon today?".
We did that regularly and pretty closely.
Q197 Mr Jones:
Who took the ultimate decision in terms of suppliers? Was it
the chef or was it yourself in terms of running the organisation?
Duncan Ackery:
In terms of the individual product purchase was by the chef but
in terms of the supplier of that product, ultimately it was my
responsibility to say, "We will go with this one and not
with that one." There is an absolute difference between buying
a commodity product, of which that is one, and buying a bespoke
product, such as a nice piece of Scottish salmon. I go back to
the comment I made about the chicken. You can buy nice, frozen
Brazilian chicken and it's cheap or you can buy nice Norfolk free-range
chicken and it tastes a hell of a lot better. What we often did
was within our certain classifications, we may have two people
we would purchase from. One of whom where we were buying the
more commodity-driven product within that sector and one where
we are perhaps buying the smarter lines, so that when we are thinking
about our staff cafe, we know that we're buying a can of coke
as cheaply as we possibly can, and yet we are buying a nice bit
of halibut when we feel we should be.
Q198 Dr Lee:
You outlined that at the Tate there is a subsidy for the staff
canteen. Living in the world in which we're all having to live
at the moment with regards to how apparently we're all here on
subsidised champagne, according to the media, it strikes me that
this might be an opportunity for you to confirm that it's acceptable
within a public building, such as the Tate, that the total catering
can be presented--the total cost or any profits--but at the same
time it is indicating that there is subsidy going on in certain
parts of that service. At the moment, we feel somewhat under
pressure, and certainly the authorities seemingly are, to try
to reduce any subsidy. In fact what you're saying is, as part
of the whole entity, there has to be subsidy in some areas and
that we make our profits elsewhere. Do you think that it would
be acceptable to put that forward? For the House of Commons to
say, "The Members' Dining Room, the Pugin Room and the staff
canteens don't make any money, but we make money out of conferencing
and various other outlets. Is that an acceptable way to go?
Duncan Ackery:
Yes, absolutely, as long as that's underpinned by transparency.
As long as you know how much it's costing you to run those individual
services and you can take a decision annually or whenever it might
be. You can review it and take your position accordingly.
Q199 Chair:
Thank you very much indeed. We appreciate your coming to see
us. Look at the souvenir stall on the way out and if you have
any after-thoughts, let us know.
Duncan Ackery:
Christmas is coming. Cheers.
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