What future for L'Ortolan?

by Helen Adkins , Thursday 24th April 2003 14:41
Jeremy Newman is not the kind of person you usually find running a Michelin-starred restaurant such as L'Ortolan. He has a wealth of experience behind him all right, but it's in the IT industry. The former consultant knows pretty much all there is to know about software, but not so much about food. His vocabulary is the language of computers - and in most kitchens he would need an interpreter.

After 18 years in the IT sector, Newman found himself in the precarious world of fine-dining restaurants when he joined chef Alan Murchison as managing director at L'Ortolan last November. Recruited by his brother, Peter, who owns the restaurant and is an IT entrepreneur, Newman's task is to make the critically acclaimed restaurant financially viable.

Getting L'Ortolan into financial shape is a challenge in itself. Under previous owners Nico Ladenis and John Burton-Race, it was awarded numerous Michelin stars, but it's no secret that the restaurant had its ups and downs financially. L'Ortolan had been shut for 12 months following Burton-Race's departure for the Landmark hotel, and was due to be turned into a private residence when Peter Newman bought it for £1m as a way of avoiding capital gains tax.

He then persuaded Murchison, former sous chef at Le Manoir aux Quat'Saisons in Great Milton, Oxfordshire, and head of the restaurant's cookery school, to set up the business and come in as executive chef. The restaurant reopened in August 2001 following a seven-figure refurbishment. By the beginning of 2003 it was the holder of a Michelin star and three AA rosettes, was given seven out of 10 in the Good Food Guide and was named Best Newcomer by Hardens Guides.

Yet, as anyone in the business will tell you, accolades don't guarantee a successful business. Jeremy Newman denies L'Ortolan was turning into a money pit, but the fact is that having gone through several management changes and with staff turnover at a high, the restaurant needed focus and strategy to move forward.

"There wasn't a huge amount wrong with L'Ortolan, but it wasn't doing as well as it should have been," he says. "We were struggling to make a profit, covers were down to about 58 at weekends and were in single figures at lunchtimes and weekdays. Money was being spent that could have been saved and the whole business process wasn't as dovetailed as it should have been."

Despite being an industry layman, Jeremy Newman decided his IT consultancy skills could work as well as any to pull the business into shape and push it forward. "There are three parts to every business - customers, staff and shareholders," he says. "I have good knowledge of making a business efficient and I believe that any business can be measured and thus managed effectively. I like measurements in place for everything. I analysed the restaurant for a month from a management consultancy standpoint, and then drew up a three-phase plan."

So can an IT man transfer the disciplines of the computing industry to the artistry of a Michelin-starred restaurant? Newman thinks so. His master plan is based on three key stages, which he terms "stabilisation, accountability and responsibility, and business growth", and is already beginning to bear fruit.

Newman knocked the IT financial systems into shape, brought costs under control, reorganised staff systems and is now working hard on the final phase. He also enlisted Nigel Sutcliffe, former general manager at the Fat Duck in Bray, to bring in some industry expertise. The plan is still in the process of "bedding down", but so far the IT approach appears to work for a Michelin-starred restaurant in need of a customer boost.

Corporate events, one-to-one cookery sessions, wine tastings and business lunches are slowly bringing customers through the door from nearby Reading. A plan to fit out rooms for the destination diner may boost business further. Covers are up by 15-20%. On weekday nights, the restaurant is doing about 30 covers and 20 at lunchtimes. Newman concedes he still has a way to go, but thinks he can improve the business by a further 15%.

His plan might not make him millions, but it will at least get the restaurant running as he wants. "My aim was never to have a restaurant to earn shedloads of money, but a restaurant that wipes its nose," he says. "Under the current plan, this place will do that." 

The IT consultant - Jeremy Newman

"Originally, Alan [Murchison] was going to be part of the restaurant management, but when you are in a kitchen producing Michelin-star food, you need an efficient operation around you. With the best will in the world, he couldn't do both jobs.

We're now putting some new management ideas into practice and it is beginning to work, but I've also learnt a lot about the industry. I realise that IT is specific and finite, while this industry is about artistry. If you look at the fall-outs in the restaurant world, there's often a lack of communication between management and fantastically creative chefs, and that's a weakness I suffered from at first.

So while I have my processes and systems, I'm aware it's not up to me to put measurements on Alan's work and that's a fantastically interesting aspect of this business. I wouldn't do anything that Alan didn't agree to. Our relationship is like a rubber band where I'll stretch Alan with suggestions until he says no. That's healthy.

I also enrolled Nigel Sutcliffe, former general manager at the Fat Duck to consult for us. He is my friend in the industry, so while I've got my lists, he provides the missing link.

A lot more people are smiling now, both customers and staff. We've increased the quality of our customer experience and the few things that took the shine off that experience before are now gone.

There are all kinds of things to consider for the future. I enjoy this world. You are a lot closer to the front line than I was in IT. Here I'm walking around and laughing with the kitchen porters and the front-of-house staff. I've even put on my whites and joined Alan in the kitchen a few times. I can see I've made a useful contribution."

The Michelin-starred chef  - Alan Murchison

"Taking me on here was a great leap of faith from Peter Newman's point of view. It was a very steep learning curve. A business like this isn't like a mobile phone - no one tells you how to work it.

The food was never the problem but there were many others, like where are your customers coming from? Recruitment was also difficult. It was very tough getting good people, especially when you are taking people to a building site and the restaurant hasn't got a name.

I concentrated on the food. We took it slowly at the beginning, doing a maximum of 20 covers a night in the first three months and built it up gradually. My first 18 months was spent getting the food right and getting a Michelin star. As far as the financial side went, though, it got to a stage where we needed someone to look after the business.

I wasn't sceptical about bringing in an IT man to run the business. It's a big boom industry that has obviously got the right people in it and Jeremy didn't come in with any preconceived ideas. He came in softly and worked in every area from the bottom up.

Maximising our downtime is our master plan. Anyone can fill a restaurant on a Saturday, but filling it on a Tuesday is what is hard. I've learnt from Jeremy that there are lots of ways of thinking about things, so we've got a lot of plans in the pipeline - business lunches, one-to-one cookery sessions, corporate events, and so on. Our core business is running the restaurant five days a week, but now we've got events planned for the slower times.

We have a fantastic restaurant management system now. Running a restaurant is all about getting square pegs for square holes. I'm a chef, I'm not a businessman. If someone can manage the business, it makes no difference if it's a restaurant or a bookshop."

Jeremy Newman's three-stage plan

1. Stabilisation
First, Newman improved the IT financial systems. "The restaurant used Sage, a common package in the restaurant world, but it had been plucked off the shelf and wasn't set up properly," he says. He redesigned the financial accounting systems, bringing costs and sales under control and looked at getting a better deal from suppliers.

2. Accountability/responsibility
Staff turnover and wage costs were high, so Newman took each area of the business - administration, back office, front of house - and looked at the levels of skill, structure and communication. He found the restaurant was over-skilled in some areas but under-skilled in others. He reduced front-of-house staffing from 14 to nine and also made some changes to the way staff worked.

For instance, he moved the booking system from back office to front of house. "It means accountability is with the front-of-house staff," he says. "They are responsible for taking the bookings, so if something goes wrong, they feel the pain."

3. Business growth
Newman's final step involved moving the business forward, bringing in custom from the surrounding area and further afield. "The problem with many stand-alone restaurants is that there is no real focus on long-term profitability," he says. "So you have to be very careful or it becomes a money pit."

Newman arranged a "brown paper" exercise - a brainstorming session in which members of staff got together to come up with new ideas. "We came up with a huge list of ideas, from organising wine tastings to business and ladies' lunches, team-building days, one-to-one cooking sessions," he says. "We then prioritised what we thought we could get a good return on and collated a future business plan for growing the business."

Factfile

L'Ortolan
Church Lane, Shinfield, Reading, Berkshire RG2 9BY
01189 888 500
www.lortolan.com

Owner: Peter Newman
Managing director: Jeremy Newman
Executive chef: Alan Murchison
Opened: August 2001
Seats: 58
Covers: weekday nights 30, lunchtime 19
Average spend: £55 to £60
Staff: 25

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