Julian Metcalfe: A hunger for success
LONDON, England (CNN) -- CNN Financial Editor Todd Benjamin speaks to Julian Metcalfe, co-founder of UK sandwich and coffee chain Pret A Manger. The following is a transcript of the interview.
Q. Julian, what do you think makes a good entrepreneur?
A. Ah. That's an impossible question. I don't even understand what an entrepreneur is. I don't aspire to be an entrepreneur. And the few times in my life when somebody's introduced themselves to me as an entrepreneur I have to run out the room. An entrepreneur ... what is it? I'm sure it's quite easy to think of the things that makes a bad entrepreneur. Someone who succeeds or even partly succeeds in making their vision into a reality is probably someone who is very tenacious. Tenacious ... I'm sure tenacity has a lot to do with it. And you've got to be ... I guess you have to be quite open-minded. You've got to like working with people, you can't do it on your own. I really don't know, I have no idea. I don't think I ... if I am an entrepreneur, which I probably am not, I'm not a very good one.
Q. What do you think of yourself as then?
A. Well, if you were to ask the people who work with me they'd say I was trouble. I was trouble.
Because I'm not easily ... I'm never satisfied. Things could always be slightly better. I don't really like praising my work. I tend to see the faults in it rather than the joy. Yes, it's difficult working alongside a guy who is never happy. Who is never always, always obsessed about what it could be, rather than what it is.
Q. Why do you think you're so obsessive?
A. Well, I'm not obsessive about many things. I'm obsessive about all things to do with Pret for some reason. And I really...I don't know the answer to that, I don't know. Do you know I have people around at home...a great friend of mine called me the other morning and said, you know, when we come round to your home the food is really shocking. You've got to do something about it. In other words, when I'm at home surrounded by people I'm fond of -- friends and family, I'm not obsessive, I'm not obsessive about many, many things but about Pret I have a very strong vision of what it could be -- i.e., a place where the people who work there and make the food are really proud and that the food tastes great. And it's really good, fresh and proper, real.
Q. But where do you think this drive and passion comes from?
A. Well I think it's very -- in the case of Pret -- it's very concentrated. Don't forget it has been going now for, the first shop opened nearly 20 years ago. So my feeling for what it could be, and what it is, sometimes on a good day is very strong, it's very acute. And when it's not right, I'm obsessed about trying to put it back on the pedestal, back where it could and should be. I don't know where the obsession comes from, I really don't know. I don't know. I mean I of course don't see it as obsession at all, not at all. I just see it as the essentials of life in a Pret shop. What other people would see is barmy, I see as completely normal. Completely normal.
Q. And what do you see those essentials as?
A. Well, from the minute you cross the threshold of a Pret shop it should... there should be a harmony. A harmony. And that harmony is hard, is very hard to achieve actually sometimes. Not all the time, I think. But when it is achieved, it's great harmony. What is the harmony? How do I describe it? Is the harmony where the ... definitely the staff are proud of what they are doing. It's definitely a place where the staff know what is required of them. It's definitely a place where the customer is fulfilled. They feel they bought the right thing at the right price. It's a place...it's a whole host of things, it's a host ... it's a living breathing thing, you know, actually like most businesses, there is nothing unique about Pret.
Q. Now ... let's talk about Pret's management style, because Fortune magazine called it "one of the 10 best companies in Europe to work for" and you have well over 2,000 employees worldwide. Why do you think you've created such a great place to work for? What is the basic philosophy behind it?
A. Well, for a start you have to ask the people who work here if it's a great place to work, and I have no idea. I look with great fear, when we do our ... we involve everyone who works here a lot and there is no question when the surveys come back, and our employee surveys are well written, they're very user friendly stuff and we ask extremely honest and awkward questions for us, or for myself as a management rather than for them to answer. And I get very nervous when I look at these things. I care enormously, enormously about what it's like to work at Pret. Don't forget for the first four years my partner who started the business with me, Sinclair, we worked in the shop everyday for four years so we have a very good understanding of what it's like to do what we do. And we have an acute understanding, and I still do today, when it works well and when it works badly. The atmosphere, what it's like...
Q. But can you somehow try and pinpoint for me what you expect that atmosphere to be for the customer when they walk in?
A. That's an extremely ... look, I've been doing this for 20 years now and I still can't answer that question off pat. I have to think about this. What do I expect? I expect, when I walk... when I go into a Pret if I had nothing to do with Pret whatsoever, I would expect, do you know there are shops you go into... particularly in other countries, in Japan, sometimes in France and in Spain where there's such a pride in the way they handle their food and they make their food. It's a complete joy. It's a joy not only to buy it, but to eat it, more importantly perhaps, more importantly to eat it. And that was something that I felt was absent here in 1986 particularly in the UK. Working with food wasn't considered a very joyous experience, it wasn't something people aspired to generally - and serving food even less. Now is that something unique to our culture (in a culture quite common in America, I fear too)? It's certainly not the feeling you get when you travel in the far east and Italy, of course.
Q. Now let's go back to that, you founded Pret in 1986 with a college friend. Started out with a loan of just over £17,000. What was your idea? Why did you decide to start this business?
A. Frustration, I think. A number of things: I couldn't think of anything else to do. Secondly, I just felt, I mean I love food. I was brought up around food and respecting good food and enjoying good food and it just...it struck me, I mean overwhelmingly at that time in London to get, to buy food which was well served and well made was almost impossible. It was just impossible. And that seemed wrong to me. Now naively because I hadn't been in the food business and I wasn't a retailer, I guess probably stupidly, I thought it was easier than it was going to be. That's why it took four years for the first shop to work, took a lot of hard work, really, a lot of hard work actually thinking back on it. Not giving up too, I mean really if you look at Pret now it looks so simple, doesn't it? But it clearly isn't that simple because otherwise it wouldn't have taken four years to develop. And actually the fake Pret a manger shops all over the world, and they are not... there are fake Pret's in just about every big city in the world now. They are often pretty grim. And they usually close down actually. I think they must miss the vital ingredients.
Q. Why do you think you've succeeded where other shops have failed?
A. Good question. Other food shops? You mean other shops doing what we do? Well, I think a lot of shops have failed over the last 10 years because they've tried to copy what we do. And that's a sure-fire recipe for failure, I would have thought. And I'm sure if we succeed and we continue to do well and the shops are now, they are busier now than ever before in the history now. I think it's because... because I'm surrounded by like-minded people who we care a lot about what we do, we don't get it right all the time, but my goodness me, we care, and that's not something, you can't tell people to care it comes from their heart, it comes from deep within. It really does.
Q. But you can create an atmosphere where people enjoy working in that establishment -- you have that atmosphere.
A. Yeah. You can create an atmosphere with 10,000 little components. I always try and compare ... I compare Pret to the inside of a beautifully made Swiss watch, you know. If all 10,000 cogs are turning it works. And the result of that is the atmosphere is good. And the sandwich is good. But you know all ten thousand cogs have to work: the recruitment process has to work, the training process has to work, the property indeed has to work, the hot water system has to work, the bread must be delivered, the man who makes the ham must make that ham with pride. It all has to work and only when all ten thousand things click together, then maybe if you are lucky you get a good atmosphere. And that's the hideous truth. I'm not making this up, this is the truth and when I go, when we go into Pret shops and you don't have that atmosphere or the quality, it's because maybe just a couple of...you only need a few dozens of those cogs not to turn for the whole thing to start suffering. I'll tell you that.
Q. You've succeeded where others have failed, what do you think the biggest mistake most entrepreneurs or managers make?
A. Well, I should think many give up to quickly. I should think they either give up too quickly or it's not their vision, but someone else's vision -- that's very bad -- I mean a lust to create wealth is a sure-fire... I would have thought, not a good recipe for success the lust for wealth, um, it's one of many components, but that alone never seems to work, um...
Q. You have to have passion for what you're trying to do?
A. Yeah, I think you have to really love and believe in what you're doing, absolutely, yeah. Now, I don't...let's not get carried away here, how can you love and believe...? I do love and believe in a good sandwich versus a mediocre one or versus a bad one, I do, yeah. I really do and so do we all here actually.
Q. And also at Pret you have a much smaller staff turnover than let's say at similar establishments, why do you think that is?
A. Well, because I care...it seems madness...well, basic common sense actually to answer your question, listen, what is the point of spending hours, hours, hundreds of hours, training someone just to see them go? Or even more stupid is to develop...for..to allow member of staff to develop a relationship with your customers just to see them go? It's madness, um, this overwhelming not only a responsibility to develop a good relationship with your staff, but also obviously even better if they can develop a relationship with the customers who come to the shop.
Q. Is it because you pay more?
A. No! We pay more maybe, I suppose, I don't...yeah, a bit, yeah...it's not just that though, I think it's many things. It's about the quality of the products they work with, it's about the way we help and develop them, it's a way...the culture of the company is very much from 'promote from within', over half our managers of the stores are from 'promote from within', our directors are from...you know, no, it's very much a culture of hope here, 'can' hope, I mean I...I, you know, I haven't got an MBA, I'm not particularly well educated, um, it's a comb...it's a hope.
Q. Your human resources department is known as the "people department."
A. Oh, is it? Not by me, it's not.
Q. Alright, we'll skip over that
A. Actually it is probably, I don't know. No, I know we refer to recruitment as "treasure hunting," but, um, the "people department"? Yeah, probably is actually, HR, human resources, I mean, yeah.
Q. I read somewhere where you said the more obsessive you are the better it gets?
A. Well, that's not always true. Not "the better it gets" for other people who work with me, but I think the more obsessive I am it can definitely benefit the customer, yup. If I...when I find things...you know, when I...when people tell me that my soup isn't absolutely the best, I can assure you I do something about it. And the same goes for just about everything we do, yup. Of course.
Q. And what advice would you give to anyone who wants to be an entrepreneur? You said that it can't be about the pursuit of money.
A. I don't think it can. I mean I really don't think it can, I'm afraid that's the ugly truth. It has to be about much more than that. It's got to be about something you love doing, about something...it's about something which puts fire in your belly and it could be the oddest thing, I mean, people...you know, it's...you know, not enough people, very brilliantly educated, very well educated, intelligent people go into manufacturing anymore, don't know why it's considered...listen, not that many people go into the food business.
Q. In your own personality though, if you had to describe it, would you always say you were driven, obsessive?
A. No! I wasn't, I'm not at all. When I left college I didn't have a clue what I was going to do, I was 22 or something. I had not a clue, not a clue. Um, no, I really...I wasn't driven or obsessive at all, but just once I started, I realized, ok, we can do this well, we can do this very well or we can do it mediocre, um and I've suddenly realized in fact, sky's the limit with how well you can do it.
Q. Do you stay awake at night thinking about selling new bread or soggy tomatoes...
A. No I definitely walk a block before I go into one of my shops, I walk round the block just to calm down to make sure I'm not...no, no, little things can drive me berserk, little things, but you know we're very lucky here, on the whole the people who work for Pret are pretty incredible. They care so much too, you know.
Q. Let me ask you about... one of the tough questions for an entrepreneur for a lack of a better word, is how far to take the idea on your own? And then whether or not to bring in a major partner because in 2001 a lot of people thought you'd brought in the Antichrist when you made McDonald's your partner and nevertheless you made that decision, why?
A. Oh there were many factors which ended up in that decision. But from my point of view, I was part of a process and it seemed to make absolute sense at the time that McDonald's had such huge...amazing track record on developing their successful...their business successfully in foreign countries. Pret was about to start work in America, um, we were contemplating starting work at that time in other countries. I felt so green and so sort of scared, that a combination of...just the unlimited advice they could provide with regard to legal and building and food sourcing and just how to do it, just as a hand-holder, but only 33% so they'd never be in control to make decisions which could adversely affect what we did.
Q. But at the same time your international rollout at best has not been that successful
A. Well, it had a very...it started...we did too much too soon. So that was odd, I mean, partly you could argue the reasons I went...'we' teamed up with McDonald's, was for these lessons and even then and I think even then McDonald's had forgotten just how difficult it was in the early days, so to open - as we did - 16 stores immediately in Manhattan and I think 16 in Japan as well, all in the same year, or within 18 months, was too much for us. Um, Manhattan...our international business now is good, um, it's profitable and it's very, very exciting...
Q. But it's a tiny part of your...
A. It's tiny, but it's got such potential, it really has got great potential. I'm starting to spend a lot more time in the us as of September. It's got great potential, great potential.
Q. But the culture there is different...
A. No, it's not such much now. New York - people say going to a Pret shop in new York is just like coming here. And in Hong Kong, my goodness me, the stores, the quality of service and our staff in Hong Kong is breathtaking, actually. I mean it's just unbelievable the standards are so high in our Hong Kong shops. They are really are obsessive there, my goodness me.
Q. Let me go back to one thing because when I walk into a Pret shop, the thing I'm struck by is a) how international the staff is, of course, London is very international city so it does reflect that, but again it's the friendliness of it and the familiarity of the faces
A. Well, there are 3 things there. Number one: we've always... for years and years at Pret had a system whereby the staff hire each other. So I pay or the office will pay for somebody to spend a day in a Pret and at 4 o'clock they all vote on a napkin, 'yes' or 'no', so this is not a manager behind a locked door hiring someone, um, the staff are very involved. That's number one, that's one of hundreds of things we do. You know...I try...I can't bear...I like...we give as much control here as possible to the shops, to the managers and to the people. We do not control...we don't want to control them, we want to give them responsibility rather than the other way round and if people have responsibility they tend to enjoy their work more and that's the way we've always run the company, you've got to run the company on trust. You know, when you've got one little store it's hard, but when you have a vision, the fact is...yeah, of course mistakes are made, but we trust the staff, I trust the people who run our stores enormously. The other day, you know after that bomb, the other day here - the one bomb? Three bombs - I don't know how much food they gave away, I think half the Prets were made into sort of refuges. They make decisions themselves, they just do what they think is right. We give away, I mean just so much food, in fact, we've always given away all the food which doesn't sell to charities every night, but much more than that, they...we just give them responsibility. I mean any staff member at Pret can give away within reason what they want from the till. We have endless guidelines...just bizarre guidelines, if someone looks unhappy, give them a coffee, don't charge them. Why? Why, because it's basic...it's good business, they'll remember you.
Q. I agree with you.
A. Do you know? Business is just common sense really. And you've got to trust people, most people have common sense, why shouldn't they? And too many people, particularly I think in our business, aren't trusted by their employees. They're bossed around, or treated like little machines. They're not. They're just as emotive... They're as complex as emotions as all of us and they need to be trusted and that's why. You can't train someone to smile. That's a ludicrous idea. Do you know, we have no customer service training at Pret at all. Never. And we're not about to start it either. You can't train someone how to serve someone politely. It comes from deep inside. It's just basic, isn't it?
Q. So you do feel that a lot of business is just common sense?
A. I think nearly all business is common sense. You need checks and measures. You need to stay on top of your figures - make sure that ... it's common sense, of course it is. It's good common sense, yep. It's so easy to say that though, isn't it? For me sitting here... you know, to run your business with real common sense takes courage and openness. And it takes courage, actually!
Q. What do you mean? Why does it take courage?
A. Because you have to deal with the good, the bad and the ugly, equally. You have to deal with it every day. You have to deal with it. You make mistakes a lot. You have to be open about that. You have to give people huge levels of trust, it's frightening. Um, it's not easy running your business with good, old-fashioned common sense sometimes.
Q. When you started out, it took you four years before you actually turned a profit.
A. Oh God, I know. Yep, yep. It was tough, it was very, very tough. Because it was a question of just slowly the vision of what we wanted to do coming together with the reality. And that's not easy sometimes. I don't think we were very good, I think other people have proved that you can do it much quicker and easier than we did. But we got there in the end. We got there in the end.
Q. And the biggest single thing that you learned in those first four years?
A. Um... oh, I couldn't think of one. I couldn't think of one. I'm afraid there were hundreds, they changed from month to month. I'm still learning things now. We all are here, all the time. All the time.
Q. Have you got any advice for anyone who wants to be an entrepreneur?
A. Without any question, surely it's find...get involved in something you really love. You know, you know, if you love sailing, then build masts or find out what people with boats think of masts or sails or rudders, or any number of things. I loved the idea of being able to buy something good to eat quickly. But, um, you know...
Q. Where does this obsession about food and ingredients come from?
A. That's a good question. I've never really thought about it. I've never analyzed it. I don't know. I really don't know. I went to university, well a polytechnic in those days, in Westminster and there was no where to get... listen, I traveled! I was lucky. As a boy I traveled. We used to go on holiday abroad and it struck me from a very early age when you went to a cafeteria, a cafe, in France it was quite different from going to a cafe in London. It just seemed unnecessary, something had to be done that's all, something had to be done. And because I was so ignorant basically of the industry I presumed, wrongly, that it was easier to make a difference than it was. Once I'd started I had to finish, so thus the four years. But you know, that's... it did seem to take a long time, didn't it? I must say. Never mind.
Q. And now basically you have enough money that you don't need to continue to work but you continue to work. Why?
A. I work as hard today as I have ever done. That is odd, isn't it? I think all that does is show how much I love it, I guess. Or I'm mad, completely mad. No, no I think it just proves I love it. I love it. I love doing it. I love striving for it to be better. Definitely. Little things. I'm involved in all the minutiae today as I was then. It hasn't changed at all. The food meetings twice a week, I look forward to them. A lot. A lot.
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