If you’re a leader in hospitality who wants to wrap their arms around the numbers then I have some advice.
To maximize your effectiveness with your leadership around the money you would be well advised to accept the fact that it’s an endless exercise. We must see that the idea of mastering the numbers is elusive. This imperfect reality is comforting and seeing the challenge we have as just another endless mountain to climb is very healthy.
It’s critical to always remember when we do a budget or forecast for our hotel or our department that the only thing we know for certain is it’s wrong. Yes, wrong, it will never be right. Why then do we go through such an exercise if we know it’s wrong? The answer is obvious; we want a system that produces information about where our business is going so we can manage accordingly. We confuse this with the misguided idea that my numbers need to be right.
The fact that we will never master the numbers in our business is oddly enough in great company. Introducing the money’s two sisters; we have guest service and colleague engagement. These three pillars operate in the same fashion. We confuse money and its absolute qualities with the real task at hand, creating a business plan in which we can communicate and achieve a superior financial result. Having and executing the business plan in all departments is the key. Knowing that the various parts of the plan have been created by the leaders inside each department means we know the resources we have to execute our mission relative to our projected sales. With the plan in hand, they can take their shot. That’s exactly what we want them to do. Know the target, take the shot. Hit or miss, just take the shot.
Guest service is a constant, never-ending battle in our hotels. We accept the fact that it will never be mastered. There will always be challenges: training, standards, new colleagues, technology glitches, communication issues, guest expectations, business volumes, staffing challenges, value for money. I could fill the page with the endless demands that are part of creating and delivering guest service. The important aspect of these confronting circumstances is that we accept this reality. Knowing the job will never be mastered keeps us in the hunt, on our game. Hospitality and service are not an absolute, it’s not a science. There is an endless list of ingredients and conditions that produce a different result every time. That’s our business and we accept the challenge and meet it head on and perform. Knowing there will be new challenges tomorrow keeps us excited to see what shows up. It’s comparable to playing a team sport where we get a chance to win every day. Even if we win, our performance is full of areas we could have executed better. Somehow, we come back the next day and play again knowing we’re going to face yet another set of challenging circumstances with service. This captures the very essence of our business and it helps explain the addiction we all have to the hotel business and service.
Colleague engagement is the never-ending practice of building a team to take on the challenges of our business. Creating and maintaining an engaged team in your hotel is the building block that allows the service the highest probability of being consistently delivered. We know that the creation and maintenance of engagement will never be complete. We will be forever charged with the task of creating and maintaining engagement with our colleagues and leaders. The important thing to always remember and accept is the job will never be done. There will always be; turnover, lack of turnover, staffing level challenges, business volumes, resource issues, communication issues, last minute changes. I could once again fill this page and so could you with all the engagement challenges we have. What’s most important is we accept the fact that the engagement job is never done. We don’t give up and we fight every day to improve the landscape and win. That’s a tough pill to swallow, especially if you still have some rose color in your glasses. Knowing what our business is all about is knowing the game will never be mastered. For some of our leaders, this is the obstacle that stops their career. Who would want to work in an environment that resembles groundhog day? The same old served up day after day, the same challenges. Moving the needle in the right direction is the reward; building the team and their engagement is the reward.
So how do these two sisters relate to the money, how do they correspond to the financial leadership inside your hotel?
The money is “exactly” the same. The money piece will never be mastered in your hotel. As I stated earlier, the only thing we know about our forecasts and budgets is the fact that they’re wrong from the “get go.” Somehow, we have it all wrong in our thinking around the numbers. We naively believe we are entitled to get it right. Like it’s grade 10 math with an absolute answer for each problem. With grade 10 math it’s either right or wrong, we get a check mark or an x. That is where we confuse math with business planning. This confusion stops many of you in your tracks when it comes to playing; the money, the monthly forecast and annual budget game in your hotel. The whole idea behind creating financial leadership in your hotel is not to get the answer right. It’s to produce more operational questions, better financial communication with your leaders, higher engagement with their numbers and ultimately a strategy to more effectively manage your business. Like service and engagement, we are going to drop the ball from time to time. When we do, we need to realize it’s part of the deal and it’s an opportunity to learn what went wrong. The error leads to a better result next time. If we can see this, we now have the numbers working for us. They now give us clues about our business we could not see before. That’s the real purpose for the numbers, they point us in a direction. If we don’t write a plan and then execute we have no comparative. Without the comparison, we are lost. “Without a map, any road will take you where you want to go.” Far too often we use the result in our business to make someone wrong. Rather, we should be looking at the financial communication system and strengthening it. Michael Jordan
I am going to wrap this one up with a great quote from Henry Ford.
If you would like a copy of any of the following send me an email at email@example.com
- EFTE and Productivity Exercise
- Hotel Financial Policy Manual – Inventory of “Sections”
- Hotel Financial Coach “Services Sheet”
- How the Hotel Financial Coach Helped Me
- F&B Productivity Spreadsheet
- Rooms Productivity Spreadsheet
- Financial Leadership Recipe F TAR W
- Hotel Financial Coach – “Speaking Sheet”
- Flow Thru Cheat Sheet – Enhanced
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