When it comes to speed, we’re obsessed.
We idolize athletes who can outpace their counterparts. We shell out for cars that can quickly get from 0-60 and bet on the horses we think will reach the finish line first. Hell, we’ve even flown faster than the speed of sound and are constructing tubes that will get us from L.A. to San Francisco in 36 minutes.
Our fascination with speed can be observed everywhere we look. Let me revise that- everywhere outside of hospitality.
Hoteliers for decades have fallen into a comfortable cadence of scheduled reports and weekly strategy meetings, which have historically served the industry well but are no longer enough to keep us on a path to profitability.
The current crisis has highlighted the shortcomings of our established business practices. Hoteliers are spending their days updating forecasts and compiling reports, only to find that they are obsolete 24 hours later.
Typically, the answer to this challenge is overwhelmingly, “more.” More reports, more ownership updates, more meetings, and more exhaustive game plans covering every possible scenario.
And yet, this focus on more has paradoxically led to “less.” Less decisions made, less strategic initiatives deployed, less of an ability to respond to changing circumstances as they present themselves.
Experts from around the industry are currently attempting to gaze into the crystal ball and determine what business segments will bounce back most quickly. Will it be drive-time leisure? Corporate executives attending high-priority meetings? SMERF groups, albeit smaller than previously contracted?
Yet, while they mean well, nobody really knows when the recovery will begin and the type of business that will allow us to bring our team members back to work. In developing contingency plans for every possible scenario, we’re missing out on a larger opportunity.
Instead, focus on speed.
Speed to analyze. Speed to formulate strategies. Speed to adapt and respond to changing events in real time. Stop making decisions weekly and start making decisions hourly. Doing so will require fundamental changes to the ways we engage with our team members, owners and customers.
A Tale of Two Industries
The best advice I’ve ever received is to think about decision making as if it were a factory floor. How do we efficiently shape raw materials (facts) into the finished product (strategy), allowing us to ship (deploy) it more quickly?
Let’s look at the automobile industry as an example. In the past 30 days, we’ve seen the likes of Ford, General Motors, and Tesla redesign their assembly lines in order to ramp up production of testing supplies and PPE. That is remarkable speed.
By comparison, the steps hospitality management organizations typically go through just to deploy a new marketing campaign are exhaustive. We’ll manually compile reports to determine need dates and provide static reports to the rest of the team during weekly meetings. Then department heads connect offline about the steps needed to deploy the campaign; then we deploy the offer and get the offer code working; then we begin tracking and realize no reservations are coming in. This all takes longer than a month before we realize it wasn’t a success and we need to launch a new campaign.
In the time it’s taken Ford to switch gears, re-equip their entire assembly line, acquire raw materials, manufacture them, and get them out the door, we’ve deployed a campaign netting us little and raising our “unsub” count.
When I was serving in on-property revenue management roles, what I often failed to realize was that I was part of the problem. As a green leader, I mistakenly believed I was adding value by providing data points and weighing in on every strategic decision made.
A more experienced, wiser (or at least older) me now realizes I would have created far more value by enabling real-time data access and developing a decision making framework with my team that would allow me to get out of their way so they could execute.
A New Model
It’s clear we need to adopt a new decision-making model to ensure we can keep pace with evolving dynamics as we prepare for and contribute to the recovery. When thinking through a new approach I’d encourage you to consider the following:
- Highest and best use. Borrowing a term from commercial real estate, consider whether you are currently spending your time and energy on the initiatives that will yield the greatest impact for your hotel.
- Democratize your data. The hospitality industry has talked ad nauseum about breaking down the silos between sales, marketing, and revenue management for nearly a decade. The single greatest factor in our inability to do so is a scattered data framework that requires sales, marketing, and revenue optimization executives to use different systems. By providing your hospitality management teams with a shared data resource that can be easily interpreted, you’ll improve their ability to execute more quickly.
- Empowerment isn’t just for the line level. As hoteliers we love to talk about how we “empower” our associates to make the right decisions while servicing our guests. Yet we fail to apply this same mentality to the strategic decision making process. Our need for consensus on everything from daily rates to marketing campaign names slows us down and prevents us from being able to test new strategies that may yield better results.
- Don’t deliberate over easily reversible decisions. Borrowing from Jeff Bezos: “Some decisions are consequential and irreversible or nearly irreversible – one way doors – and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. But most decisions aren’t like that – they are changeable, reversible – they’re two-way doors. These decisions can and should be made quickly by high judgement individuals or small groups.” Rather than over-analyzing the best course of action, it’s better to place a multitude of small bets and determine which strategies hold the most promise based on real-world results.
- Frameworks > Rules. In a dynamic environment the rules you’ve previously established may no longer be applicable. Rather than becoming overly prescriptive with rigid business rules (ex. group ceilings, free sell dates), consider developing a decision making framework that empowers your team while communicating the values most important to your stakeholders. Here’s an excellent example from startup icon Ben Horowitz, who ran several companies before becoming an early advisor for Facebook, Lyft, and Slack.
The current crisis hit us with dizzying speed, and speed will lead us out of it. Those hotels that use this as an opportunity to build speed into their processes will recover most quickly.
Those that continue with their weekly cadence? The cold hard truth is that their doors may remain closed longer than they should be.