FM: Was your promotion to the CEO position in June a surprise?
Green: Actually, we have been talking about it for a couple of months now so it wasn’t actually a surprise. It’s a planned change, a natural progression given how big the company is getting. It’s really a natural result of growth.
FM: How would you characterize your overall views in contrast to those of Mike Bailey (the former CEO)?
Green: Mike Bailey and I have worked together since the day Compass arrived in Americaı—we both came across from Compass in the UK. Our views on how to take the business forward rarely differ.
FM: How would you describe those views in terms of strategy?
Green: The main areas are segmentation and the use of branded goods. We’ve taken the marketplace and divided it down. It’s a strategy we’ve carried out all over the world because we feel that what a correctional facility desires is absolutely different than what a healthcare or executive dining facility wants. You can’t be a jack of all trades.
FM: Are there any areas where synergies are possible?
Green: We’re trying to consolidate operations in the back of the house. On the whole, these functions are still divided as to supporting the operating companies. In purchasing for instance, we have a specialist for the corrections division, and another one for vending because the goods needed are different.
If we took just a short-term view, we could take out overhead, but we feel we’d lose more in our identity and our offering to the client than we would gain. We are going to have a record sales year this year and we view that as coming from being very genuine about segmentation in all lines of our business. We see potential for efficiency through technology and the way we do things rather than going away from our core segmentation policy.
FM: What are your priorities in terms of technology application?
Green: We are in the final stages of implementing the S.A.P. system [Ed. Note: Systems Application Products (S.A.P.) is a major vendor of business management software for large multi-national corporations] across our business, making us Y2K compliant and giving more information to our units.
One of the nice things we have going is ReMac’s, an in-unit system that allows unit managers to have control over inventory and ordering, as well as labor scheduling, sales information and automatic interface with our central system. ReMac’s was one of the major reasons we won the Microsoft bid last year, and that is the ultimate compliment to the system.
FM: How much discretion should your unit managers have in product procurement?
Green: Given the effort we put into negotiating deals with our suppliers, we would be disappointed if they don’t want to buy those products. After all, a breast of chicken is a breast of chicken and we negotiate a great price for it.
We make sure the suppliers we deal with provide the highest levels of sanitation to ensure a safe product. In the end, what our unit managers do with the product, rather than where they get it, is where unit level discretion should lie.
FM: What do you see as your biggest challenge?
Green: Our biggest challenge is keeping our people and keeping them motivated. We’ve developed a team with which we are very comfortable and we want to make sure we don’t lose them.
FM: How large a role will acquisitions play in your future growth?
Green: There are still segments where we’d like to increase our presence, and if acquisition opportunities come up and we need to augment our presence, we will look at it. I’m talking about healthcare, airports, maybe military feeding.
Compass feeds more military personnel across the world than any other contractor. That includes American personnel, because we feed the American military at bases everywhere in Europe, although not in the U.S.. We are also the leader outside of North America in airport feeding—that is a great market here in which we can leverage our European expertise. We landed our first major North American airport contract recently, in Toronto, and we’ll be developing a separate unit to operate airports in North America. Making the right acquisition to build that unit is a possibility.
FM: Any other lessons from overseas you could implement here?
Green: One thing we are doing is taking internal brands, particularly three cafe brands—Cafe Ritazza, Upper Crust and Not Just Donuts—and expanding them across the world. The world is getting smaller and the profile those brands have in our European airport and railway units will give us real equity.
FM: How much emphasis will there be on bundling services other than foodservice in the future?
Green: We will go into bundled services when we feel our clients are demanding that we do so. But at this time we don’t see a groundswell, apart from the healthcare sector, for our going in that direction.
FM: You are currently the third largest broad segment contractor in the U.S.. How important to you is getting to Number One?
Green: I would like to see numbers that reflect only North American foodservice operations, unaffected by overseas sales and facilities management revenues. Looked at that way, I think there’s less of a gap than it appears.
Our number one aim is to be the fastest growing company at end of the day, both organically and through acquisition. Organic growth is especially important because if you don’t have organic growth in this business, you don’t survive. Let’s just say we have big ambitions.