Hospitality Financial Leadership – Welcoming Imperfection
May 17, 2017 8:53am
By David Lund
To maximize your effectiveness with your leadership team 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 were 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 maintain 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 ground hog 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 getgo. 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 you 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.
“I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game-winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed. Talent wins games, but teamwork and intelligence win championships. I can accept failure, everyone fails at something. But I can’t accept not trying.” – Michael Jordan
This quote by basketball's greatest player ever sums it up quite well. In your hotel, you have a chance to take a shot with every leader every month. Buy “not trying” in your hotel means you have no monthly departmental business plans. Each department is on the sidelines and they are not taking a shot, their shot. They are not taking a shot at getting better. They are missing their opportunity to fail and learn. Get them to complete their forecast, track their results, adjust their spending, review their monthly financial results, write their commentary. F TAR W. Practice and learn, that’s what you do and above all else, you create an environment where it’s safe for your leaders to take their shot and ultimately miss it. And then you encourage them to take another shot, learn and know that failing is the way to win. The financial game in your hotel will never, ever, ever, ever…….repeat “ever”300 times, be done, won or mastered. Accepting this reality with the financials and working with all departmental leaders to create teamwork and intelligence with the numbers is the ultimate way to succeed. You have the ability to create a financially engaged leadership team in your hotel. Just get everyone on the court and take a shot. Learn and take another shot. Just don’t stop.
I am going to wrap this one up with a great quote from Henry Ford.
“Whether you think you can, or you think you can't—you're right.”
Financial leadership in your hotel is something that you can create and it’s also true that it won’t happen if you don’t think you can. The right mindset is a powerful thing.
Visit my website today for a copy of my guidebook
The Seven Secrets to Create a Financially Engaged Leadership Team in Your Hotel
Call or write today and arrange for a complimentary discussion on how you can create a financially engaged leadership team in your hotel.
Tags: david lund,
hotel financial coach
David Lund is The Hotel Financial Coach, an international hospitality financial leadership pioneer. He has held positions as a Regional Financial Controller, Corporate Director and Hotel Manager with Fairmont Hotels for over 30 years.
He authored an award-winning workshop on Hospitality Financial Leadership and has delivered it to hundreds of hotel managers and leaders. David coach’s hospitality executives and delivers his Financial Leadership Workshops throughout the world, helping hotels, owners and brands increase profits and build financially engaged leadership teams.
David speaks at hospitality company meetings, associations and he has had several financial leadership articles published in hotel trade magazines and he is the author of two books on Hospitality Financial Leadership. David is a Certified Hotel Accounting Executive through HFTP and a Certified Professional Coach with CTI.
Contact: David Lund
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