“Companies will need to develop a clear purpose within value creation if they are going to be successful. That is the big change.”
For Edin Basic, creating value was always more than just building a financially successful venture. Arriving in the UK having escaped the conflict in Bosnia in 1993, he went on to found Firezza in 2001, and in doing so became one of the pioneers of the delivery wave that transformed the restaurant industry. Having sold Firezza to PizzaExpress in 2016, he stayed on to help manage the integration process, and is now keeping busy establishing a similar concept, Mano Pizza, in Norway, launching an experiential pub venture in west London, and working with the social enterprise Tern, which helps empower and upskill refugees looking to set up businesses in the UK.
Edin’s genuine passion and care for the industry was evident throughout our conversation, and at the heart of this was his recognition of the importance of developing happy teams.
“Every food business is about people,” he stressed. “How do you ensure you get great people? You need a fun atmosphere and to develop the team as if they’re part of the family. It is more difficult now – people want to work for good brands who make a difference. Access to information is greater, the route to another job is very easy. So you need to find, train, motivate and keep them.”
Edin is adamant that there are real opportunities for brands who are able to demonstrate clear differentiation: “I think we’ll now see the emergence of genuine brands with greater purpose, and we’re reaching a point where you’d be crazy to open without it, whether it be sustainability, the culture, your people and so on.
“It is the big societal change. Previously there were lots of brands where the purpose wasn’t clear, but we are at the tip of choosing our direction as humanity, how we treat the planet, each other and other nations. Everything is around how we connect with each other: businesses need to play a big role in this and recognise the need to offer more than just individual security and income to live, but the bigger point around creating value through having purpose that makes the world a better place.”
According to Edin, this is now transforming how customers emotionally engage with a brand: “The public is now more into feeling good about where they spend their money. It’s just the beginning – people want to know how much plastic is used in packaging, how the food is produced and how the people are treated. It is not a trend. Traditionally businesses were there to make money. Companies will now need to develop a purpose within value creation if they are going to be successful.”
Edin feels this fundamental change is forcing private equity firms and founders to ‘rethink’ how they approach scaling up: “The days of 12 openings a year are gone. It’s now about creating value through connecting to customers and having 20 sites run at profitable rates rather than having 100s less well run.”
How far along are companies and private equity investors in recognising this urgency? “They have a way to go but they will adapt very quickly because it is dictated by the consumer.”
Amidst this change, Edin feels that private equity firms’ advisory and operational skillset is as important as ever: “Founders need to be led and supported – you need people who talk founders’ language, make them feel understood. When private equity is able to provide that guidance, it’s invaluable in building trust.”
Additionally, investors still have a valuable role in providing leadership teams with the resource to scale up: “It’s about consistency. At Firezza we learned the hard way. When we sold to PizzaExpress it was a great experience to have insight into how to create and follow processes.”
Edin believes the big challenge for founders is scaling up beyond three sites. “You need to create the best possible experience, through people, product and balance of ingredients. You can control this across one to three sites – it’s run by personality. The biggest challenge is when you’re no longer able to manage by personality.”
For Edin, it all comes back to having the right people to execute the growth plan and to do this, businesses need to be able to demonstrate their clear purpose. This, he feels, is at the heart of value creation in 2019: “The concept of value is still the same but how you go about creating it is different. The reality and ambition of making profitable businesses hasn’t changed. What has changed is how to get there.”
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