How To Run a Great Hotel
THEME 1 –DEFINE DIRECTION
Define a clear direction for your hotel
What are you trying to achieve?
'Efforts and courage are not enough without purpose and direction' - John F Kennedy
If you were driving somewhere you had never been before, you would probably use a map to guide you. Well, you would if you wanted a hassle-free trip. Without the map, you are more likely to get lost and even if you don’t, you are certainly leaving things to chance. The same applies to achieving excellence in your hotel which is also a journey and one with many twists and turns. Having a map to keep you on track is useful. In fact, it’s vital, because getting lost in your car is one thing, losing your way in business life is an altogether more serious prospect.
Some hotel owners and managers do lose their way, not because of any lack of ability or effort, but because they don’t fully think through what it is they are trying to achieve. They might talk about being the best but they fail to really define what that means in practice, or indeed plan how to get there. Sure, they have a vague idea of where they are going, but this can be as loosely defined as to ‘outperform our competitors’ or ‘maximise profit’.
Such operators lack focus and, as a consequence, end up trying things for a few weeks or months but when they don’t see immediate results, they quickly change track. They eventually fall into a damaging cycle of meaningless change driven by an endless search for the next big thing which is going to give them an edge. Next big things are few and far between in the hotel industry today.
Excellence is all about focus and direction. It means knowing the end result you want and planning back from that. In other words, it means having a strategic map. A strategic map requires you to direct all your efforts towards first identifying and then realising specific goals that are designed to make you the best. It is an essential component of your journey to excellence because it shifts you away from the short-termism which has inflicted many businesses today; it is well known that goal-orientated individuals tend to achieve more and the same principle applies to enterprises.
As a first step towards excellence you must therefore consider where it is you are going and what you are trying to achieve at the hotel. After all, how can you ever hope to get ‘there’, if you don’t actually know where ‘there’ is? Even when you do know, you can’t make it there overnight, so you must concentrate your energies on specific business areas to see the results you want. This is particularly true in our industry, where much depends on reputation, goodwill and customer loyalty, none of which can bemagically built up in the short run. So, now is a good time to consider: what are you trying to achieve?
Theme 1 helps you to define what excellence will mean in your business and to devise a strategic map to achieve it. The content in the following three chapters addresses these important questions:
- What is a strategic map and how can it help you to achieve excellence?
- How can you create a strategic map for your hotel?
- How can you measure the impact of your strategic map over time?
Theme 1 will guide you as you define your journey to excellence, providing down-to-earth advice and practical examples that you can quickly apply to your own circumstances.
What is a strategic map and how can it help you to achieve excellence?
Lack of direction in a business significantly increases the risk factor. The owner of a small family hotel recently explained why he had added a spa to his operation, ‘My main competitor opened one last year and they seem to be doing very well, so I didn’t want to be left behind.’ Think about that for a moment: a large chunk of family capital invested with little research on feasibility undertaken to support the move. The danger here should be pretty obvious. What you might not realise is that, although an extreme case, it is far from unusual in hotels both large and small.
When you don’t have a framework to guide decision-making, you are essentially making things up as you go along. Worse still, you can be tempted into following your competitors’ moves in the hope of getting to a better place – wherever that may be. In the case of this family hotel, it was not a simple change in the offering, or a minor addition to the service mix, but a move posing potential risks for the future survival of a well established business. The owner was a smart guy, yet he made this particular decision on a whim, with no apparent rationale other than to keep up with the Joneses.
Keeping an eye on your competitors is, of course, a must; doing what they do is not, unless it fits with your own goals. If it does, then you should question why you didn’t get there first. Do you want to lead, or follow? Operating your hotel solely on the basis of what others are doing, or taking uninformed decisions will get you nowhere in the end because what seems like a smart move today often turns sour tomorrow.
That said, not everything you do in business life can, or indeed should, be planned and analysed to the nth degree. Gut feeling is good and has inspired many great decisions but it shouldn’t be the sole driver of the choices you make. Without focused, goal-orientated decision-making, you are essentially drifting; potentially into trouble.
A strategic map will give you the framework you need to excel and achieve lasting business success. With a strategic map you become outcome-driven and, as a result, you reduce the risk of failure because you make informed decisions about the development and growth of your business. Of course, it will always be necessary to respond to changing circumstances; for example you will undoubtedly have to take some difficult decisions to get through the current recession. However, armed with a strategic map in future, any such short-term decisions will no longer be taken in isolation. Your strategic map will create a context for everything you do and will inform every decision you take.
What does having a strategic map actually involve?
Developing a strategic map can at times seem a very convoluted process; google the topic and you will be bamboozled by terms like vision, mission, strategic options, goals, strategy, programmes and plans. Phew, that’s enough right there to put you off. But it doesn’t need to be so daunting and we will keep it as straightforward as we can.
IT’S ALL IN THE MIND
The ability to create a realistic strategic map for your hotel begins with a particular mindset; everything else stems from that. It’s about how you view your business, and as a result, how you operate it. How you think determines how you act, so having a certain mindset supports the creation of your strategic map and indeed the quest for excellence.
Some operators view their business from the wrong perspective, believing that because they have a hotel they have stakeholders, such as customers and employees. Operators who truly believe in excellence take a different approach. They see their stakeholders as being an integral part of their hotel, not external to it, or a result of it. They recognise that without certain stakeholders they do not in fact have a viable business.
Creating your strategic map requires you to become totally stakeholder focused and any hotel has a variety of stakeholders.
How you differentiate between primary or secondary stakeholders is in the degree to which they exert influence over, or have an impact on how you run your hotel. Those who have significant influence and/or impact are seen as primary stakeholders and, as such, require most of your attention. Secondary stakeholders are not unimportant, it is just that they are unlikely to have the same degree of power over the choices you make. However, you do need to consider their needs and address them where appropriate.
For our purposes throughout this book, we will focus on three primary stakeholders as shown. Creating your strategic map involves placing these stakeholders at the forefront of your thinking in terms of the business decisions you make. It also means recognising that the path to excellence lies in satisfying their needs because, in doing so, you are ultimately satisfying your own.
Think of it this way: one of your employees’ needs is to feel valued and respected. If you don’t deliver on that need, this will affect their ability to offer excellent service to your customers, which in turn will sooner or later impact on profitability, which eventually directly affects you. It is this interconnectivity of stakeholder needs which provides the rationale for the creation of your strategic map and underpins the journey to excellence. Our four themes focus on how to meet the needs of your primary stakeholders to help you run a great hotel.
Elements of a strategic map
Not only can this process of strategic map-making seem confusing at times, but it is also riddled with concepts, models, frameworks and terminology. Worse still, everywhere you look you will find different interpretations of how best to develop your strategic map; it’s enough to drive you to distraction and make you want to bang your head against the wall. But when you strip away all the complexity and jargon, you are essentially trying to answer four vital questions in relation your hotel.
Things start to make a bit more sense when you look at it this way. You know it will be somewhat more challenging in practice, but if you can keep these basic questions in mind, you won’t go far wrong. You will notice that building your strategic map fits closely with the Think, Do, Review approach which we will follow for all themes covered throughout this book.
-You start by thinking about the current position of your hotel (Where are we now? ) and then you describe the big picture (Where do we want to be? ).
- Based on that, you move to the doing bit by defining goals and related strategies to achieve them with action taken every year to make it happen (How do we get there? ).
You will then review progress over time to see if you are moving in the right direction (How will we know we are getting there? ) and the lessons you learn here will be used to adjust elements of strategic focus where necessary.
It is important to re-emphasise at this stage that your strategic map will not be written in stone. Changing economic or competitive dynamics will naturally require you to revisit where you want to be or to adjust the how to get there part. That is not to say that your strategic map will constantly change from year to year, for that would mean you didn’t in fact have a strategic map. Nevertheless, it is a fluid process which you revisit continuously based on internal and external feedback. Even if you are forced to make adjustments, at least you will do so in light of your strategic map which is a far more logical approach than random, impulsive decision-making.
In Chapter 2 we will explore what you need to do to create your strategic map in practice. However, before we move on, many in our industry have misconceptions surrounding the whole area of strategy – let’s call them strategic myths – and it is worth tackling some of them now because you may have similar concerns.
Dispelling the strategic myths
Some hoteliers, particularly in smaller operations, believe that strategy and related matters are only relevant to very large enterprises which have power in the marketplace. One owner summed this view up well when she said, ‘What’s the point in having a strategic map when we have no control or influence anyway over what happens in the operating environment? We just need to be good at reacting, and reacting fast.’ An understandable concern perhaps, except that having a strategic map does not mean having control. Nobody has control over what happens out there in the general business environment, regardless of size.
However, you can have direction and because of that you will be in a stronger position to anticipate, or at least manage change. Having a strategic map is important in a hotel of any size, but if you run a smaller operation, the need for the map is even greater because where larger hotels or chains might survive costly mistakes, you won’t. Creating a strategic map for your hotel does not mean trying to be something you’re not; it does mean applying proven concepts for success in a manner appropriate to the size and ethos of your business.
THINKING ABOUT THE FUTURE
Another concern frequently raised is that focusing on the future is a luxury that you simply can’t afford when you run a hotel. ‘That might be great for you consultants, but I live in the real world and have more important things to do than navel gazing’, an operator once said to me when discussing the issue. Actually, it is because you live in the real world that you need to think about the future.
KNOWING THE INDUSTRY
The final myth we will touch on is quite prevalent in hotels. A positive feature of our industry is that it offers great scope for ambitious individuals to progress to managing and even owning their own hotel. Maybe you too have taken that route, for many do. The downside of this can be that those who follow this path often believe that it is their experience in the field which will be the major factor in helping them to achieve excellence. So convinced are they by this that they don’t bother with all this strategy nonsense. After all, they ‘know the industry’ so who needs a strategic map?
Unfortunately this sort of thinking often catches up with them in the end. Of course having a hotel background is a big plus, particularly operationally, but without your map, supported by accurate information, then your chances of success are diminished. No amount of industry knowledge or indeed hard work can compensate for lack of direction; effort and excellence are not the same thing.
Considering the realities
Having addressed some of the myths, here are some realities to consider. A strategic map
So, if your hotel is in its early stages of development, creating your strategic map should be your number one priority. Even if you are up and running for some time, when did you last sit down and really take stock of where you are now and where you are going? Are you leading, or merely competing? Don’t be fooled into thinking that being in a good financial position means that your hotel is heading in the right direction. It is of course a better sign than if you are not, but unless you have mapped out the direction you want to take, you might find that there are shocks hiding behind what currently seems to be a healthy bottom line.
Understanding what a strategic map is, why it’s important and how it can contribute to running a great hotel is a critical first step on your journey to excellence. If the bottom line is your only motive, or if you don’t really believe in the benefits of taking a longer-term view to the development of your hotel, then you are likely find the guidelines in the coming chapters more hassle than they are worth. Achieving excellence takes time, effort and, more importantly, direction: Rome wasn’t built in a day, as they say.
In the following chapter we will shift our attention to exploring how you can start to create or revise your strategic map. We will, however, end this chapter with a warning. While a strategic map can help a viable hotel to grow and prosper, unfortunately, nothing can turn a frog into a prince. If your operation is based on a bad idea, in the wrong location, at the wrong time then a strategic map will be about as useful as rearranging the deckchairs on the Titanic.