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By: Keith Kefgen and Rosemary Mahoney-Browning  - Dec, 1997

The year that was 1997 spawned a number of trends that will continue and further develop in 1998. Here are some of the major changes to expect.

Development

It is obvious that 1997 was the year of consolidation. Although M&A activity will continue into 1998, we predict a dramatic slow down. As a result of all of these mergers, a clash of cultures has begun that will play out in 1998. With such unique talents and strong personalities coming together, there will most certainly be a large displacement of senior level executives. In turn, we predict that some of these talented executive will start their own companies by accessing capital from savvy investors.

Because of the buying frenzy in 1997, there will be little first-rate product left to purchase. Thus, companies will be forced to, dare we say, build hotels. Timeshare resorts comprise an asset class that will be actively developed in 1998. Also, Las vegas will continue to see the development of monster sized facilities through the year 2000.

We further predict that companies will begin to value intellectual capital, as opposed to just concrete and steel. Because of the increased dependence on technology, creativity an strategic thinking, intellectual capital will be the buzzword of 1998 and beyond. Companies will seek to nurture and capitalize on human energies such as perception, judgment, thinking, inventing and knowledge.

Compensation

Incentives will continue to play a major role in shaping compensation policy in the lodging industry. Gainsharing will become more popular as a vehicle for break through performance measurements. With gainsharing, a company offers its entire workforce an incentive to improve organizational performance. This type of program forces employees to think about overall company performance in addition ot managing their individual tasks.

Incentives will replace base salary as the largest component of total compensation. Stock option plans will continue to be a strong motivation for management, as they directly tie company performance and executive pay. With more liberal use of options executives will begin to see more premium priced or market indexed options in their pay packages. These options make it more difficult for an executive to make large sums of money without significant stock appreciation. More golden parachutes will be given in the aftermath of the M&A activity. A golden parachute is one of few employment provisions that offers a reasonable level of financial security in the event of a takeover.
 
 

Other Interesting Trends

If you want the latest in leadership and group dynamics training, skip Stephen Covey's "Seven Habits of Highly Successful People," and pick up ChinNing Chu's "Thick Face, Black Heart." Don't let the title scare you - this one's a winner.

If you want a cheap airfare, get to know a ticket consolidator, in addition, many of these consolidators are starting to offer hotel rooms at a bargain.

Do you want to be a director of a public company? It may be advantageous to be a woman or a minority. Most public companies are actively seeking to diversify their boards with female and minority members. Furthermore, the days when family members and friends populated the board are over. If you still have cronies on your board, get rid of them.

How about allowing casual dress at corporate headquarters? Many Fortune 500 companies are trending toward casual dress, creating what they say is a superior work environment.

Finally, it's time to junk the Pollyanna company mission statement in favor of real leadership. The great business leaders establish real goals and a business model to achieve real results. As far as we can tell, a mission statement has never managed a thing. Renounce the old, embrace the new, and prosper!

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