Here are the top 10 considerations to guide your business relationships.
by Larry Mogelonsky, MBA, P.Eng.
One of the greatest challenges that you face as an owner or asset manager is stepping back from the day-to-day and delegating unencumbered operating responsibility to your on-property team. Not doing so can have disastrous effects.
Countless times, I have witnessed general managers and other senior executives working in full spin mode to accommodate a direct and often-unexplained request from an owner, which ends up being counterproductive to the business’s goals.
There is no set definition as to what constitutes an appropriate demand by an owner for his or her team. After all, it’s your investment. Clearly, issues that would be considered material to the property from a monetary standpoint – such as major CAPEX or significant changes to financial position versus budget – are worthy of a timely discussion. Conversely, an urgent call from an owner to management addressing, for instance, a single one-star TripAdvisor review is not warranted.
It’s all about your leadership approach. Some owners are far more hands-on than others. In my own career, I have experienced an ownership group that phoned its advertising agency (in this case, your humble scribe) early on a Sunday to address copy points from an advertisement scheduled to run in that morning’s New York Times. I’ve also witnessed owners who personally select their restaurants’ wine lists, no doubt based upon personal preferences but without their chefs’ input or advice.
While these are obviously flagrant examples of overstepping that critical owner-operator boundary, it is nevertheless incumbent upon you, as the owner, to help establish the ground rules by defining your own leadership style. Everyone working at your property knows that you care and are keenly interested in the venture’s success. This is a matter of expectation management, as your team will work best when they already know exactly how you intend to oversee their management of the hotel.
Establishing Your Ownership-Leadership Style
Let’s set aside those laboriously long operational manuals and complex mission or vision statements. They’re useful if you feel the need to bulk up your corporate paperwork but can often only amount to more work for senior executives without any clarification.
As a start, numerous pundits offer their guidance on this topic. Just Google ‘leadership’ – or look through past issues of Today’s Hotelier – and you’ll discover differing approaches outlined in full. Moreover, there are many experts in the field including leadership coaches, and you can register for courses on the topic.
The framework that I am suggesting affords you, as the owner, both the opportunity to get involved and at the same time drive your own self-actualizing objectives. Here are the top 10 considerations to guide your business relationships, which, taken together, will help create your own leadership style.
Focus your requests. And, once you make a request, ensure it is completed to your satisfaction. Too often, owners fire numerous scattershot questions at their management team with no real sense of priority. This can result in significant staff time away from direct operational supervision and potentially guest service deficiencies. Best to target on a few succinct requests, in writing, if possible, and with a specific due date. Don’t forget to acknowledge the response, confirming that what you received met your needs. Lastly and of course, saying thank you is an easy way to build morale and close the loop.
Encourage initiation of projects by your team leaders. Empowerment of this nature is far better than having them wait for you to assign tasks. Your goal is to generate self-sufficiency among your property leadership team. If they are used to relying upon your direct involvement and, ultimately, your ‘helicopter’ leadership, you end up becoming the surrogate general manager. You need to step back and encourage them to set the agenda and act upon that agenda.
Take an active role in strategies and goal setting. But remain passive when it comes to the execution. Owners must be visionary, setting both short and long-term goals for the organization. Once goals are mutually agreed, however, your role should be distinctly hands-off. It’s hard to step back, but you need to let your team execute on your behalf. Measure the delivery, be there as a cheerleader, and offer encouragement but don’t meddle. You’ll be surprised when the goals are not only achieved but also exceeded in ways that you could not imagine.
Focus your activities on larger and more complex challenges. You aren’t needed to analyze daily reports, the social media position versus the competitive set, today’s restaurant menu, turndown service analysis or the manager-on-duty schedule. Leave these day-to-day duties to your team. Focus instead on meatier subjects that do not involve the operating team such as major financial or real estate issues. You’ll find that your time will be used far more productively.
Have confidence in your decisions. This gives you force and substance. The worst owner is one who makes no decisions, instead vacillating between one approach and another. Best to make that critical decision, explain your rationale and stick to it. Often owners seek counsel from a team member prior to decision-making. This is all well and good, but be prepared to listen and not just pay lip service to those who you involve.
Set a leadership example through delegation and respect. Just as you lead your on-property team, so too should the on-property leadership – most likely the general manager – approach his or her management team. The parallels are undeniable.
Set appropriate goals for your team to ensure a constant sense of purpose. We all live by the concept of meeting budget. How many times have you had to recalibrate after a first quarter of the year failed to meet target? I have personally delivered a first quarter record result 15 percent ahead of previous year, yet suffered the wrath of an owner because that number was still a few points shy of budget. I might also add here that the plan was set by the owner, with the team being told it was a ‘stretch budget’ – whatever that is. This demonstrates how you should be realistic in your objectives. Performance goals are not dictated by your financing needs, but on marketplace factors on which you rarely have any control.
Progress lies in accomplishing difficult work. Make an example of rewarding such activity as not all projects are equal. Some tasks will require more effort as well as an element of risk for a favorable outcome. Do not shy away from these challenges. True success comes from accepting these trials and delivering positive, profitable results. When a member of your team delivers in this fashion, single them out for praise and appropriate compensation. Others will follow!
Allow your team to think creatively and find new solutions. Think about the past five years and the changes that have been brought about to our industry through technology and the sharing economy. Now imagine what the next five years will bring. It will take great minds working together to deliver ever-improving results. How will you set the tone to have your team respond and thrive?
Don’t shy away from confrontation. It’s often necessary to achieve progress. You must keep your team focused on the overall goal even when the debate becomes unproductive. Remember to focus on principles and not personalities or emotional whims. There are times when you must use your prerogative as owner. But do so sparingly and only as a last result when all other avenues of consideration have been exhausted. You never want to end up in a situation where you have to say, “Do it this way because I am the owner.”
Testing Your Ownership-Leadership Style
Here are three real situations. For confidentiality reasons, the names and locations have been altered. What actions would you take in each of these scenarios, and what would you delegate to your management team?
Harish owns several limited service branded properties across the southern states. Their STR reports reveal the group is at the top of competitive set. The market is buoyant, so Harish is interested in selling one or more of the properties. A deal is imminent but not yet announced nor consummated. In confidence, he speaks to Sam, one of his best general managers. A few days later, Sam comes to Harish tendering his resignation as he plans to accept a position in another, potentially competitive property. Should Harish fight to keep Sam? And, if you believe so, how should you manage this situation?
Sara works as a front desk manager and is a solid performer. Sunny, her general manager, knows she is ready for promotion but is wavering on recommending an advancement since he feels threatened by a woman. This is substantiated after Sara apparently overhears a conversation whereby Sunny says, “He would never endorse a woman to his executive committee.” Quite rightly so, Sara is now considering her position and involving legal counsel. Hassan, the owner, is totally unaware of any of this until Sunny comes to him. If you were Hassan, what would you do? Do you support Sunny or Sara?
Chen is the regional sales manager for a well-run, profitable airport hotel. Without telling Jane, his director and supervisor, he approaches David, the owner, with a partnership idea to generate additional revenue. David is excited and goes to Jane with the idea that Chen presented. Jane claims the concept as hers and recommends dismissing Chen for insubordination. How do you sort this out?
Your immediate reaction may be to say that these are all human resource (HR) issues and that they should be dealt with by the corresponding personnel. While HR does play a critical role in any hotel’s operation, it is extremely hard for owners to resist involvement. As well, some smaller properties rely on outsourced support. Sometimes knowing when to get involved is of overarching importance.
These scenarios remind me of the saying, “When you’re up to your neck in alligators, it’s easy to forget that the initial objective was to drain the swamp.” The expression means, of course, something along the lines of, “I’m so busy with all the complications of work that I can’t make much real progress.” Indeed, sometimes leading your property when you’re not the hands-on operator feels this way.
Many of you are probably expecting me to provide the final outcomes to these three scenarios. All were resolved positively, but not before putting undue stress on their respective owners. No one said that owning a hotel is easy. Leadership means delegation. Setting the rules, hiring a competent team and giving them the responsibility to accomplish their tasks will afford you the best chance for true success. ■
Larry Mogelonsky is the owner of Hotel Mogel Consulting Limited. His experience encompasses hotel properties around the world, both branded and independent, ranging from luxury and boutique to select-service. He can be reached at firstname.lastname@example.org.