It’s not every day that a hospitality company is recognized for its culture and successfulness of managing its company and employees on the Business Magazine. But in 2009, the Oliver & Bonacini group was found ranked amongst one of top 50 employers in Canada. Their success screams culture.
Who is Oliver & Bonacini?
No, his name is not Oliver Bonacini—it is Peter Oliver and Michael Bonacini. The two founders are the leaders of the well-known culture O&B is recognized and commended for. Within ten years’ time, the company has grown its company to having two diverse profiles: fine dining and casual restaurants. On one hand, you can find their leading fine dining restaurants in Downtown, Toronto, including Canoe, Jump Café and Bar, Auberge du Pommier, and Biff’s Bistro. On the other hand, the Oliver & Bonacini Café and Grills are new concepts allowing the company to locate itself in the casual dining industry including locations in and out of Toronto (Bayview Village, Oakville, Waterloo, and Blue Mountain). These two concepts have put the company and its culture under spotlight.
What is the O&B Culture?
So, what is organizational culture? It is difficult to give organizational culture one specific definition. But one definition deemed by Dr. William DeMarco is: the sum of the history, folklore, and values that, taken together, make up the unique identify of a society at a given place and point in time (figure 1). The O&B culture is built up of many aspects that make it unique against its competitors that fit with DeMarco’s definition of culture.
[ Figure 1: DeMarco's Culture Model. ]
History within the O&B culture can be found with people, events, and institutions. The two founders, Oliver and Bonacini, are leaders who have impacted the direction and values of the O&B Group originally when they used to run the restaurants themselves. These two entrepreneurs are the primary source of O&B’s culture of attention to details, “dogged” expectations, etc. Through time and growth though, the O&B group changed from the two entrepreneurs leading the company to an executive team who is now in charge of every day corporate decisions.
The O&B culture is primarily driven by the leadership role Oliver and Bonacini holds. The growth of the company eventually crafted the approach of strategic leadership rather than entrepreneurial leadership when it comes to running the business. For instance, Johns and Saks describe strategic leaderships as having six components (2008, p. 319):
1. Determining the firm’s purpose or vision. This is prepared by Oliver who created a list of visions O&B strives to achieve to become ‘the best-managed restaurant company in the world.’
2. Exploiting and maintaining core competencies. O&B’s competitive advantage is in the way they treat their employees and services provided to customers for maximum satisfaction.
3. Developing human capital. Extensive training is given to managers and employees of O&B to show how valuable they are to the company.
4. Sustaining an effective organizational culture. Ability to do so it through the power the leaders have within the organization.
5. Emphasizing ethical practices. O&B Group operates its restaurants with ethical principles and practices.
6. Establishing balanced organizational controls. Manuals are introduced to employees, and statistics are given to managers as a way of guiding organizational activities.
The O&B Group has a strong folklore foundation for its culture. The culture uses symbols such as “bundles of sticks” to stress unity of staffs similar to that of Ackoff’s systems thinking, which is first introduced in the employee manual. Also, O&B uses myths to further strengthen its culture. Myth methods are “Moment of Truths” (MOT) that is used to motivate employees by establishing a competitive setting of wanting their MOTs posted on the restaurants’ memo boards. But the key folklore portion is its heroes—Peter Oliver and Michael Bonacini. Without them, the O&B Group would not exist. O&B has a lot of long-term employees, especially in its fine dining restaurants. These employees have seen how Oliver and Bonacini achieved their status of being a respectable figure in the company. The values and beliefs that Oliver and Bonacini established before they relinquished the reins to the company still hold true to this day in the company.
Through time, O&B’s culture has established a strong set of values for employees and executives to look up to. One, they stress heavily on values such as paying attention to details. This is a belief O&B employees have now accepted as true and ingrained in their minds. For example, every day, restaurant managers “string” tables and chairs to make sure they are meticulously aligned (McGinty, 2006). At one point, Oliver would reprimand female employees for not wearing make-up or look for inadequately shined shoes on males! Employees value attention to details through observation. These methods have exemplified the importance of attention to details for employees to follow when working at O&B restaurants.
Another feature of the O&B culture is the concept of “Emotional Service” that gives the company its competitive advantage. The reason Oliver executed emotional service was to provide not only good food and drinks, but service at higher level that customers would remember and appreciate. Emotional service is further enhanced with the use of MOTs.
Also, it is seen that O&B values their staff through the extensive and detailed training. O&B staffs are given opportunities to be exposed to all aspects of the company. For instance, a hostess at Canoe can transfer to Jump’s with little conflict and a culinary employee can be relocated to each restaurant exposing them to all sorts of cuisines such as North American, French, Italian, modern and classical (McGinty). Also, O&B offers the Wine and Spirits Education Trust (WSET) program to not only managers, but also employees! The amazing part is that the WSET program is equivalent to qualifications if they were to attend it at George Brown College (McGinty)! As well, employees and managers are taken to wineries from the Niagara region to all the way in Los Angeles to learn about wine hands-on style. With so many learning opportunities offered to an employee, who can resist not working for them?
Fine Dining vs. Café Grills
With two restaurant concepts within their company—fine dining and casual dining—O&B has found itself facing a cultural gap between the two types. Similar to gap analysis, having a cultural gap in the company can pose as a problem. Cultural gaps are usually applied to two companies merging together causing their individual cultures to clash. For instance, company A in Canada who merges with company B in China will most likely face a culture gap due to differences in values, behaviors, customs, and language. In the case with O&B, a cultural gap can be seen forming within the organization between the fine dining and casual dining divisions. Both restaurants share the same values and beliefs as those of Oliver and Bonacini because employees from both restaurants receive the standard O&B handbook when they are introduced to the group.
However, the difference between the two concepts is visible. For one, the fine dining restaurants are given nearly endless autonomy when operating. Personally, it seems the fine dining restaurants have a persona that see themselves better than everyone else. This confidence seems to be one reason why they are allowed more autonomy than the Café and Grills. Another reason they have more autonomy is because they are the pioneers giving them a first-mover advantage within the company. Rather than operating the fine dining restaurants like a corporation, each individual restaurant is like an entrepreneurial project. As with the Café and Grills, they are kept consistent with each location including menu items, staffing requirements, etc.
Another difference between the two restaurants is the hiring of personnel. Staff members in the fine dining restaurants are typically in their mid to late twenties while Café Grills’ staffs are in their earlier twenties. Also, the fine dining restaurants’ location in Toronto permits them with a wider range of applicants to choose from. While the Café Grills are located in smaller towns such as Oakville, Waterloo, and Blue Mountain limits their options when selecting employees (McGinty). Therefore, fine dining restaurants’ staffs are more likely to fit their description of the ‘ideal’ O&B employee while Café Grills have to make do with what they can.
Five Restaurants in 2 ½ years?
Since the O&B group started in 1993 with the opening the Jump Café and Bar, they have steadily expanded by opening restaurants 2 to 3 years’ time in between. This steady growth has allowed the company to fund its projects without the help of the bank. Also, both Oliver and Bonacini were able to personally acquaint themselves with their employees in each restaurant—Oliver even handwrote Christmas cards to each employee with comments on them!
It is projected that the O&B group will be opening 5 restaurants within 2 ½ years. This rapid growth puts them in a tight spot with financials and hiring the ideal employees. Just alone in the Café Grill that’s to be opened on Front and Yonge in May, the O&B Group have spent approximately $4.5 million on renovations (YongeStreet, 2010)! Now imagine that times 5… that is at least $22.5 million needed to be spent in 2 ½ years! To create the 5 new restaurants, O&B now has to look to the bank for assistance.
Since the company has been used to running their restaurants as long as the bottom-line was met, cost control is a concept totally new to them. Having to report their financials to the bank puts emphasis on controlling costs even more. But how is it possible for a fine dining restaurant to get used to cost control measures? Important factors when operating may be sacrificed in order to meet the set targets. For instance, in order to meet labor targets, service may be affected. What used to be one employee doing one job duty may result in that same employee doing now two jobs. This misallocation of duties can in turn damage service quality because of the extra responsibilities employees need to juggle with.
[ Figure 2: Comparison of Meeting Labor Targets between O&B Café Grills ]
In figure 2, the graph shows the results of Café Grills putting in their efforts in meeting the labor target set out by the CFO, Lee Chung. The Café Grill in Bayview Village needed 1 year’s time to meet the target while being able to earn a profit. Oakville’s Café Grill attempted for 4 months but in the end, needed help from upper management to bring labor costs down since they were operating at a loss. The worst case was their newest edition in Waterloo where after 3 months, nearly 100% of the management was turned over and operated at a loss! The quick and high turnover of management there creates a distorted perception of the true O&B values. These results demonstrate the organization’s resistance to change. Strong cultures are subjected to resist change which in turn damagers their ability to improve (Johns & Saks, p. 284).
With so many new restaurants opening up, a whole new population will be needed to operate and run these restaurants. Even if the hiring process is not long, training these personnel is time consuming. But time isn’t exactly O&B’s best friend at the moment. To train an individual to become an O&B employee takes at least 6 months for them to understand the culture. If Blue Mountain’s Café Grill required 80 employees to operate the restaurant, 80 times 5 equals to approximately 400 employees needed to be hired and trained by the end of the 2 ½ years (McGuinty)! By the end of 2 ½ years, O&B will be seeing themselves with over 1000 employees apart of their organization! Also, training is crucial for the O&B culture by looking at the results of the Café and Grill in Waterloo. External hires are not as successful within the organization because they do not have the concept of O&B’s core values engraved in their minds yet. Therefore, O&B will need to either promote internal employees or train new hires well enough to run the opening restaurants. In order for external hires to be successful, they must fit the mold of the O&B culture so that little controversy or uncomfortable situations will arise (Page, 2010).
Not only is time not on their side, qualified personnel may pose as a problem as well. Since O&B hires with an ideal employee type in mind, they aren’t the only ones. Other restaurants such as The Keg, Moxies, Earl’s, and Milestones look for similar individuals! In order to hire the needed 400 people, I guess O&B may need to look at their competition for people who meet their criterias.
‘There is nothing constant in this world but inconsistency’ – Jonathan Swift
O&B lacks consistency with its procedures in both types of restaurants which leaves room for errors and can cause confusion for those working in the company. Since the organization is growing so rapidly, certain procedures and systems need to be standardized. The fine dining restaurants working like entrepreneurs could pose as a problem. The hiring techniques in O&B are inconsistent because the hiring process is not standardized. Each restaurant is allowed to hire whichever way they want! Although standardized questions are given to managers to ask, they have not steadily followed the plan to this date—and I don’t think they ever will.
The Invincible O&B Culture
When talking about the culture of O&B, many would perceive that the organization’s culture is ultimately strong as a bullet. It was. But that’s not the case anymore. Things change over time—so does O&B’s strong culture. The culture mentioned above is of one that was primarily headed and influenced by Oliver and Bonacini, but that culture has slowlychanged due to reasons such as having a cultural gap between fine dining and casual dining restaurants, rapid growth and expansion of the company, and inconsistency within the organization.
The New O&B Culture
Oliver and Bonacini have been relinquishing their reins on the company gradually for years now and have allowed the executive team to replace them in decision making. But the infamous O&B culture founded by Oliver and Bonacini may end up leaving as they leave. However, Johns and Saks (2007, p. 280) explains that a strong culture can persevere regardless of organizational personnel turnover. Signs that show their strong culture are that values in the O&B culture still hold true. Concepts such as “bundles of sticks”, MOTs, emotional service are basic underlying assumptions still applied to this day by the executive team. Basic underlying assumptions are unconscious values and beliefs of the organization that Oliver and Bonacini have engraved in the employees’ minds (Schein, 2009). Many of the executive team members have been with O&B for years now so they understand how the culture should be operated based on Oliver and Bonacini’s vision. Now, the executive team is taking the O&B culture and flavoring it with their own spices.
A Cultural Shift Towards Success.
Since the heroes of the company will eventually leave the company completely one day, the O&B Group will end up being situated in an even newer culture. The existing culture to this day still has the influence from Oliver and Bonacini but those days won’t last forever. Although the core values are etched on stone now, the organization will need a plan to handle the upcoming situation of their rapid growth and development. What was once a company of 400 employees will now have grown to over 1000 employees by the time 2013 comes! Inevitably, the human resource department in the corporate head office will also need to grow in size to accommodate the supply of bodies.
[ Figure 3: O&B's Cultural Shift. ]
Figure 3 shows the direction O&B’s culture will need to be shifted in order to be successful. Originally, the culture of O&B was guided by the leaders, Oliver and Bonacini with all the rules, visions, values and beliefs set and managed by them. As the company grew and time went by, the Executive Team took over the management of the restaurants. Although the culture shifted because of the change in management techniques, the basic underlying assumptions remain within the culture. The future of O&B’s culture is the dotted circle that will be guided by the Executive Team and the Human Resources department. This upcoming culture is now a mix of the old, current, and future of O&B.
The Rise of Human Resources
In order to implement the newest culture, extra emphasis will be needed to grow the human resources department of the O&B Group.
The first thing the HR department should do is to conduct a reassessment of the current culture O&B is in. By doing so, they can compare the results with that of the one conducted in 2008 to develop strategies fitted to the new culture and have an understanding of what needs to be improved. A culture measuring technique O&B can use is the Organizational Culture Assessment Instrument (OCAI). OCAI evaluates and identifies the overall organizational culture and suggests what the future of the culture should be like (Cameron & Quinn, 1999).
Another issue HR should focus on next is putting forth a consistent system for the hiring process. Checklists and standardized questions should be used regardless of the restaurant type. The Café Grills should have a consistent hiring process because it is a growing chain restaurant. Unlike fine dining, the Café Grills’ concepts are equivalent to each other where consistency is key. But actually implementing this system may be difficult at first, especially for the fine dining concept who is used to autonomy and is more resistant to change. Todd Efird (2010), a consultant, explains how to breaking through the shield of resistance which will require multiple steps in order to be successful. First, the HR staff must prepare a plan to discuss resistant behavior and identify the goal of implementing a uniform hiring procedure with the restaurants. Next, involve managers in the making of this procedure while explaining the reasons for changes and what is expected of them. This step will prepare them for the changes to be made. Then, follow-up on their efforts and if change is needed, appreciate their contributions. If one manager or restaurant is still unwilling to change, discipline them.
As easy as 1, 2, 3. Let’s hear it for Q-RIPE!
The vision Oliver created is of great detail, but it’s just too hard to remember. O&B should have a memorable vision similar to that of McDonald’s QSCV (quality, service, consistency/customer and value). The seven visions O&B currently has should be reduced to five key criteria spelling out ‘Q-RIPE’. What Q-RIPE stands for is:
Q – Quality of Management, Services and Products
R – Solid Reputation
I – Innovativeness and Mental Energy
P – Ability to Attract, Develop and Keep Talented People
E – Efficiency and Operation Standards
To make the vision more compressed, quality of management, services and products are grouped together because the overall point was to maintain quality. However, ‘Financial soundness and profitability’ is not included in the acronym because it is a predictable measurement all companies use to measure success. What company doesn’t want to be profitable?
The reason behind the formation of Q-RIPE instead of other forms was because of the meaning behind the word ‘ripe’. There are many meanings ‘ripe’ can stand for but the meaning of the word ‘ripe’ used in this context acquired from Dictionary.com is:
Ripe - adjective – fully prepared or ready to do or undergo something (of people)
This meaning for ‘ripe’ is suitable because when O&B’s people are ripe enough, they will be ready and able to achieve anything to meet the O&B vision. ‘Ripe people’ stands for O&B’s ability to attract, develop and keep talented people which will then fulfill Oliver’s vision of becoming the best-managed restaurant company in the world. Ripe is chosen to describe people because the Service Profit Chain states that satisfied employees through internal quality ultimately lead to profitability which is one of Oliver’s visions (Heskett, Jones, Loveman, Sasser, & Schlesinger, 1994). Also, without talented people, the other 4 visions cannot be completed!
[ Figure 4: Service Profit Chain. ]
Conclusion
It is certain that the leaders, Peter Oliver and Michael Bonacini, have successfully established a strong culture for O&B to grow in. Although the O&B culture is no longer what it initially was when they managed the restaurants, O&B’s culture holds strong to the founders’ core values and beliefs. Regardless of change in management structure or rapid growth, some things just don’t change.
References
DeMarco, W. A narrative on culture as foregrounding context for locals of leadership.
Johns, G. & Saks, A. M. (2008). Organizational Behavior: Understanding and Managing Life at Work Seventh Edition. Toronto, On: Pearson Education Canada.
Efird, T. (2010). Overcoming CAVE dwellers to further a culture of change. Retrieved March 15, 2010, from http://www.cmts.com/company/conFeat_cave.asp?loc=news_events&subloc=consultantfeatures
Heskett, J. L., Jones, T. O., Loveman, G. W., Sasser, W. E, & Schlesinger, L. A. (1994). Putting the service-profit chain to work. Harvard Business Review. Retrieved from http://www.busi.mun.ca/semyrden/6230/Heskett_ServiceProfitChain.pdf
Kruger, R. (2009, September). 3 Benefits of Having a Procedure Manual. Retrieved March 15, 2010, from http://ezinearticles.com/?3-¬Benefits-¬of-¬Having-¬a-¬Procedure--Manual&id=2930637
McGinty, A. (2006, June). Why Oliver Bonacini Group is a master of staff culture. Retrieved March 14, 2010, from http://www.alanmcginty.com/O+BGroupF&HJune06.htm
Cameron, K. & Quinn, R. E. (1999). Diagnosing and changing organizational culture. Retrieved March 14, 2010, from http://webuser.bus.umich.edu/cameronk/CULTURE%20BOOK-CHAPTER%201.pdf
Page, K. A. (2010, February). Hiring Talent – Finding the best professionals is sometimes best done by professionals. Retrieved March 15, 2010, from http://ezinearticles.com/?Hiring-Talent---Finding-the-Best-Professionals-is-Sometimes-Best-Done-by-Professionals&id=3708204
Schein, E. (2009). Three levels of culture. Retrieved March 15, 2010, from http://www.valuebasedmanagement.net/methods_schein_three_levels_culture.html
YongeStreet. (2010, February). Oliver & Bonacini put finishing touches on $4.5-million rebuild of the old Shopsy’s. Retrieved March 14, 2010, from http://www.yongestreetmedia.ca/devnews/cafegrill0203.aspx
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