From my commencement address to the graduating classes of the hospitality colleges of University Center Cesar Ritz, in Brig, CH.
We (i.e., the hotel industry) are awash in data – monthly statements, daily operating ratios, even in the US, data on how one’s set of competitors did last night in rate, occupancy, and revpar (revenue per available room, a standard yardstick in the industry.) Arm an accountant with a computer and you will be up to your ass in data before you can get to your desk.
And what do we do with that data? We analyze it, we report it, bosses review it and the accountant projects it. In other words, we all stand on the observation platform at the rear of the train, looking back down the tracks and assume we know where we’re going.
Two things you must know about accountants' projections: first, they are always wrong; second, they are never right.
If you’re going to lead, get up in the engine and look ahead. Yes, it’s necessary to know where you are, but the question to ask of the data is “What does this suggest given what I know and don’t know about the future?” Forecast. Cast forward your thoughts and intentions.
Forecasts differ from projections. Projections are just extensions of the past. They don’t tell you when there is a block in the track or when a switch decision is coming. Forecasts are judgments and educated guesses of what is likely. And don’t just forecast a single future. Forecast a best, worst, foreseeable, likely, conceivable… and intentional futures. See what they suggest as a prudent leader you do.
The best CEO I ever worked for was Bill Marriott. He had coupled an amazing attention to detail with a keen gift of anticipating. One day in 1983 he called me to his office to discuss airline crew contracts which we had been beating the bushes to get during the recession with great success; we’d garnered the lion’s share of crews at every airport and metro market in which we operated. So, I gathered up my books and steeled myself to get examined about why we didn’t have Eastern in Salt Lake or Continental in Miami or whatever. I was thunderstruck when Bill said “start dumping the airlines. This economy is about to turn and business travelers will be heading out onto the road. We have to be ready for that high-rated demand, so get rid of the discounted crew contracts.” That was looking ahead -- and 1984 turned out to be a barn-burner for pent-up business travel demand.
Be curious. Don’t just solve the problem in front of you, but ask why is it that we’ve been short of banquet waiters three times this month? What does that mean about our waiter pool, or labor rates, or what’s changing in the local hiring market? Look up from the data and look around, as Bill Marriott did while I had my nose buried in the airline contract prospect books.
One more word on looking ahead: it’s amazing to me how few operators attend to demographics. Operators know a lot about their current customers (never enough, but a lot,) but don’t look at what's already known to foresee their future customers. For example, with women making up half or more of business school graduating classes in the mid '80’s, should it have been a surprise to encounter a rising tide of women business travelers ten to fifteen years later, when they were reaching middle management and taking more trips? It shouldn’t have been, but most of the industry was totally unprepared to cater to the needs and want of women diners and women guests. “How come all this damn demand for hair dryers” said housekeeping; “where are all these room service orders coming from” groused the food and beverage manager. They had all been standing at the back looking down the tracks, and nobody had been looking ahead.
Use data, of course, but be forward looking.
We (i.e., the hotel industry) are awash in data – monthly statements, daily operating ratios, even in the US, data on how one’s set of competitors did last night in rate, occupancy, and revpar (revenue per available room, a standard yardstick in the industry.) Arm an accountant with a computer and you will be up to your ass in data before you can get to your desk.
And what do we do with that data? We analyze it, we report it, bosses review it and the accountant projects it. In other words, we all stand on the observation platform at the rear of the train, looking back down the tracks and assume we know where we’re going.
Two things you must know about accountants' projections: first, they are always wrong; second, they are never right.
If you’re going to lead, get up in the engine and look ahead. Yes, it’s necessary to know where you are, but the question to ask of the data is “What does this suggest given what I know and don’t know about the future?” Forecast. Cast forward your thoughts and intentions.
Forecasts differ from projections. Projections are just extensions of the past. They don’t tell you when there is a block in the track or when a switch decision is coming. Forecasts are judgments and educated guesses of what is likely. And don’t just forecast a single future. Forecast a best, worst, foreseeable, likely, conceivable… and intentional futures. See what they suggest as a prudent leader you do.
The best CEO I ever worked for was Bill Marriott. He had coupled an amazing attention to detail with a keen gift of anticipating. One day in 1983 he called me to his office to discuss airline crew contracts which we had been beating the bushes to get during the recession with great success; we’d garnered the lion’s share of crews at every airport and metro market in which we operated. So, I gathered up my books and steeled myself to get examined about why we didn’t have Eastern in Salt Lake or Continental in Miami or whatever. I was thunderstruck when Bill said “start dumping the airlines. This economy is about to turn and business travelers will be heading out onto the road. We have to be ready for that high-rated demand, so get rid of the discounted crew contracts.” That was looking ahead -- and 1984 turned out to be a barn-burner for pent-up business travel demand.
Be curious. Don’t just solve the problem in front of you, but ask why is it that we’ve been short of banquet waiters three times this month? What does that mean about our waiter pool, or labor rates, or what’s changing in the local hiring market? Look up from the data and look around, as Bill Marriott did while I had my nose buried in the airline contract prospect books.
One more word on looking ahead: it’s amazing to me how few operators attend to demographics. Operators know a lot about their current customers (never enough, but a lot,) but don’t look at what's already known to foresee their future customers. For example, with women making up half or more of business school graduating classes in the mid '80’s, should it have been a surprise to encounter a rising tide of women business travelers ten to fifteen years later, when they were reaching middle management and taking more trips? It shouldn’t have been, but most of the industry was totally unprepared to cater to the needs and want of women diners and women guests. “How come all this damn demand for hair dryers” said housekeeping; “where are all these room service orders coming from” groused the food and beverage manager. They had all been standing at the back looking down the tracks, and nobody had been looking ahead.
Use data, of course, but be forward looking.
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