The International Network of Hospitality Consulting Professionals

Transformational Leadership in the Restaurant Industry

The restaurant business has always been challenging, competitive and hazardous, with a recent study by Dr. HG Parsa pointing to a 59% restaurant failure rate within the first 3 years of operation.  In looking at all the factors affecting the business, a strong case can be made that highly effective leadership is the primary determiner of restaurant success.  This article proposes a path of transformational leadership for restaurant entrepreneurs to adopt as a way to maximize their chance for success.

What is Transformational Leadership?

Transformational leadership can be described as consisting of two major responsibilities:

  1. providing an ongoing vision for the business and the execution of that vision while always working on healthy strategic growth
  2. creating a work culture that continuously promotes active employee engagement, high productivity and a genuine commitment to the well being of the staff

Both responsibilities are vital to a restaurant’s continued success and also require very different skill sets that very few entrepreneurs possess when they first get started.  However, they are skills that entrepreneurs can develop with a commitment to learning and willingness to experiment and adapt.  In addition, the delegation of some of the responsibility with active oversight is another means of managing to implement the benefits of the two roles. The following are specific areas that comprise each of these responsibilities:

The Visionary Growth Executor

To paraphrase Bob Dylan and a line from The Shawshank Redemption, “Restaurants that aren’t busy growing are slowly (or in some cases, rapidly) busy dying.”  Every year, new and old competition is looking to take away your customers.  Rent, cost of goods and labor expenses are on the rise.   If an operator is not proficiently implementing an ongoing strategic and detailed growth plan, they’re falling behind.  Being a visionary is to see a future that doesn’t exist and create a path to it.  That takes courage, knowledge, and commitment.  The following are five key areas of focus to develop visionary transformational leadership:

  1. Dynamic Flexible and Realistic Growth Plan: Growth can take place in a variety of ways. If you are a single operator who has no desire to go beyond the love of your neighborhood place, growth can be the development of a more active strategy to retain and increase a regular customer base.  Other avenues for single operator growth could be a robust catering and delivery program, training staff to increase check averages with creative menu additions and promoting profitable special events. Localized growth can also mean an abiding commitment to continually move towards excellence and efficiency in the way your business operates. In addition, single unit growth can be seen as further developing staff and their financial rewards or becoming a leading voice in local sustainability or healthy food issues. If your goals are to go beyond your four walls, then solid infrastructure and brand development are key.  Growth can take the form of multiple units, franchised or company-owned, or developing a mix of different concepts or connected businesses, or building your reach to include branded retail products like dressings, condiments and other grocery shelf items.  Finally, as a leader, you can incorporate any combination of the above directions in your pursuit of development.
  2. Develop Staff to Support Growth: Successful growth demands highly competent and committed people to take on greater responsibility.  As a transformational leader, you need to have in place a clear program for developing and mentoring staff to take on the necessary work involved.  As well as creating internal growth positions within the restaurant, this could also involve forming partnerships with qualified staff in opening new business ventures.
  3. Continual Learning and Adaption of Industry Trends: This involves initiatives such as promoting new menu items and dietary trends like plant-based foods and gluten-free options, adopting new technology and social media that can impact your business and always looking to incorporate different creative ways to enrich the customer experience.
  4. Development of Diverse Income Streams: One way to counter the inevitable flattening out of a business trajectory is to build multiple income streams.  As referenced above, this could take the form of a variety of in-store income streams like catering or special events or developing outside business opportunities that continue to grow your brand.
  5. Commitment to Goals and a Mission Beyond Restaurant Success: Transformational leadership sees the mission of a business as significantly impacting the community outside of its four walls.  A business has an extraordinary opportunity to be a leading voice in affecting positive community change.   It has also been demonstrated that consumers and staff have a stronger connection and loyalty to a business that incorporates a wider mission than simply their own success.

The Culture Creator

Many experts estimate that most workers in this economy operate at a performance level of 50% or lower with no real understanding or connection to the goals of the businesses they work for.  A culture that can significantly raise that performance level while actively getting productive contributions from the staff creates a major competitive edge for the restaurant. This also would also impact minimizing costly employee turnover which has been a significant issue in the hospitality industry.  Imagine creating a workspace where employees look forward to being involved and are motivated to contribute to the success of the business.  The following are five areas of focus for the transformational leader to develop in creating a highly engaged and productive work culture:

  1. Hire Smart: You can’t bake a delicious tasting cake with the wrong or poor ingredients.  The ability to assess the character, chemistry and strategic placement of potential staff is critical to any future growth and success.
  2. Train and Coach for Success: Transformational leaders understand that a positive work culture involves constant training and coaching while allowing for failure as a way to encourage learning and contribution.
  3. Provide Opportunity for Growth and Security: Depending on whether an employee is ambitious and seeks opportunity or a grinder who just does their daily job consistently and with a great attitude, you need to understand how to help define clear motivation and goals.  The ambitious employee needs to take on greater challenges with more responsibility.   The grinder may look for long-term security and increased financial reward.  You need to be responsive to both to build a sustained and vibrant work culture.
  4. Be Highly Approachable and Genuinely Respectful: Be a leader who cares and demonstrate that by having an open door and genuine commitment to listening with the realization that every staff member counts and makes a vital contribution to the success of the restaurant.
  5. Family and Fun: Loneliness is the number one factor in dysfunctional mental health. In this age of social media with everyone having a broad width of acquaintances and a shallow depth of strong close friendships, a transformational leader can create a culture that counters this trend by providing a healthy family experience which is primal to everyone’s needs.  The goal is to have a highly productive staff feel at home while at work.

Transformational leadership is a way of being, not simply a list of tasks to be completed.  An entrepreneur who is committed to transformational leadership reflects it by the way they go about their daily business.  The act of balancing the visionary and culture creating roles is challenging yet ultimately deeply rewarding if the purpose is to make a real difference on multiple levels.  Transformational leadership provides the entrepreneur with a creative and practical approach to their most critical role: leading a business to successful growth in the full and dynamic sense of its meaning.


About the Author:

Alan SomeckAlan is a 30-year operator of high volume restaurants, in which he has managed all facets of the business. His experience and expertise have led him to develop a well-regarded expert witness practice. In his consulting practice, he has worked with many clients to create and establish their concepts. In addition, Alan has worked on assignments to develop food products for market such as protein bars, cookies, and brownies. He has also directed 7 EPA grants to train operators in Green sustainable practices. He has created an extensive network of industry professional who he works with on a regular basis. Throughout his career, Alan has supported the success of entrepreneurs through executive coaching and training. For the past 10 years, Alan also has taught at the Institute for Culinary Education in NYC and at NYIT where he has taught all aspects of the restaurant business. His students have opened fast-casual restaurants, cafes, bakeries, and fine dining operations.

Is Your Hotel Sales Training a Train Wreck?

Is Your Hotel Sales Training a Train Wreck?

Hotel sales training is important, and as Ben Franklin quoted, “An investment in knowledge pays the best interest.”  I’m a lifelong veteran in the hotel industry, and over time, I’ve seen that not all hotel owners see training and development as an investment in their business. Some of the best hotel companies I’ve worked for invested in this training, but the inferior hotel groups did not. They saw this investment in training as an expense. Those hotel groups are what as I refer to as a train wreck.

There are many questions that we have to ask to try and determine why some hotel companies look at knowledge as an investment and others look at it as an expense. While it might be impossible to come up with the answers to all of these questions, I do have some ideas for why when dealing with hotel marketing, some companies look toward hotel sales training and others do not.

  • Why is it that many owners/executives in our industry do not invest in hotel front desk training and developing their team?
  • Is it that they have invested in training courses in the past, yet were unable to measure the ROI?
  • Could it be that they strictly rely on the property brand to train their staff? Do they think this training from the brand is automatic, sufficient, or thorough?
  • Do property owners think that their general manager will train the staff? Is their general manager an expert in all areas of the field?  Do they have the time and/or take the time to train?
  • Does an owner think that the hiring practices of his/her general manager is so streamlined and perfected that the staff being onboarded are already fully trained to sell?
  • Is the owner so Nano-focused on the NOI that he/she doesn’t want to invest in hotel front desk training programs?

In my experience, whenever I would join a new organization or when somebody new joined my organization, it was always refreshing to hear and implement new ideas. Many of us have our own life experiences and track records that influenced our success or failure rates.

Bringing in outside influences to train a staff can help you increase revenue. Even if you have had some training to help with hotel marketing, a third party company can bring knowledge that isn’t well known amongst hotel owners and employees. Nobody knows it all, and every hotel in existence have areas in which they could improve upon.  A consulting firm can also help because the staff will often be more receptive and open to learning when a topic is taught from an outside professional in the field.

Not only will the hotel staff learn specific new skills, but teaching them knowledge will motivate them and make them feel valued. When you invest in your employees, they can feel that. There simply are not enough of the great hotel companies out there that invest in their employees. Unfortunately, a lack of investment leaves revenue on the table that could be gathered from successful hotel marketing that goes beyond the status quo.

For example, let’s say your guest service agents are trained on a sales lead generation program.  This program has a proven track record of digging up new leads for your sales team and general manager to follow up on. In turn, this should convert more travelers to your property. You invest $3,500 into this training program, and your ADR is $100. Once you sell an incremental 35 guest rooms, you have your investment back.  Any additional room revenue generated from the program is your ROI. Keeping these goals and measuring the improvement is important, and it can really help fill your hotel.

If you are a hotel group that is thinking about investing in training, my advice is to go for it. Give it a try with an outside training program. Many are low cost, and you can see the results by measuring improvement and setting goals. Hold the consultant you have hired accountable of those results, and soon enough, your hotel’s revenue will increase from hotel sales training.


About the Author:

Jay Hartz, CHA is a former member of Cayuga Hospitality Consultants.

Ten Keys to Career Success

Recently I was asked to address a group of hospitality school students on the topic of career success. My career started as an assistant coffee shop manager in a hotel restaurant and ended as an Executive Vice President. My task was to explain how I made this happen.

Admittedly my success was a lot about timing; growth in the hotel sector during my career was off the charts. And, of course, a little bit of luck was involved. However, when forced to think about the proactive steps that will help advance a career I came up with the following:

1. Vision. It is important to have a sense of where you want to be in three to five years, and to have some goals you want to accomplish. I always had a vision of sorts and I will be the first to tell you things didn’t always work out the way I planned. A vision and goals will help guide your thoughts and actions – giving you direction.

2. Focus on the task at hand. Yes it is good to have a vision. Excelling in your current assignment is what will get you noticed and promoted. It isn’t a good idea to be telling anyone who will listen what you want to do next. In fact, unless asked a direct question by a supervisor I recommend keeping your vision to yourself.

3. Develop your strengths. Too often I have seen people spend too much time trying to turn a weakness into strength with limited success. Yes, you need to be aware of your weaknesses, make efforts to improve or surround yourself with people who balance you and your team. Your strengths are what helped to get you where you are today and will be a key to future success. Work to make them even better.

4. Communication. Being a good communicator is critical to everyone’s success and here are a few recommendations:

  • Listen first and talk second. Listen for understanding.
  • Over-communicate your direction. Don’t assume your subordinates and peers fully understand the why.
  • Tailor your communication to your audience. Your delivery and substance need to vary depending on who you are speaking to.
  • Don’t communicate anything on social media you don’t want in the public domain.

5. Don’t be a checklist manager. Try to understand the purpose of the task you have been assigned and how it fits in the whole. If you aren’t clear then ask for clarification. Complete the task with the purpose in mind and the end result will be superior.

6. No excuses. When something goes wrong, don’t make excuses or assign blame. The best course of action is to ask yourself: What could I have done differently? If you are candid with yourself, I can guarantee that you will be able to identify a personal action (assigned a different person, added resources and clarified direction) that that you could have taken to change the outcome.

7. Learn from your mistakes. We all make mistakes; just don’t make the same mistake twice! It is imperative that we take ownership of our own mistakes and adjust our behaviors appropriately. Seek out and accept constructive critique on your performance.

8. Relationships and mentors. Develop professional relationships with everyone around you – supervisors, peers, employees, other departments, owners, customers and competitors. Don’t expect things to get done just because they should. Relationships grease the wheels. Some relationships will naturally develop into mentors. You should seek and embrace mentor relationships. A mentor will tell you the truth regardless and push you in the right direction. I’ve had several mentors and they were invaluable.

9. Politics. Politics exist in every organization to some degree. You need to be aware of the office politics. However, the best advice I can offer is to distance yourself from them to the extent possible. I have seen a lot of smart guys play the politics game and eventually get burned. Yes, you will win a few rounds, but like any game you will also lose a few rounds and those are the ones that will hurt.

10. Take calculated risks. The key word here is calculated – know what the odds of success are before you leap. I like to use the 80% rule. You will almost never be 100% sure before you act, and if you go much past the 80% mark before you act you may miss the opportunity.

Here are two examples of career risk:

Third Shift: As the most junior manager on staff, I was assigned the midnight to 8am shifts at the coffee shop. I took the initiative to present a business plan to eliminate the third shift, eliminate a management position and improve profitability. It could have been my position that was eliminated, but I didn’t think they would fire the plans author.

Career Path: As a Director of Marketing with five years of F&B experience I was ready to move to Resident Manager and onto General Manager – a goal I had since I first started. Instead I was offered a Regional Director of Sales & Marketing assignment – a big job with some performance risk involved. I took the risk rather than the conservative path and it led to international assignments, a General Manager gig and eventually Executive Vice President.

There is probably very little on my list that you haven’t heard before, and you may have a few to add yourself. The key to success is to apply these principals or your principals consistently. The name of the game is to be the best you can and it isn’t all luck and timing; it does take a proactive effort.


About the Author

chuck-kelley

Chuck Kelley retired as Executive Vice President for Marriott’s Caribbean/Latin America Region in 2010. During his tenure the region grew to 53 operating hotels and a confirmed pipeline of over 20 new hotels. Chuck’s career spanned 32 years in the hotel business including a strong focus on the Caribbean and Latin American regions. Chuck is a 1977 graduate of the University of Hawaii Travel Industry and Management School with a Bachelor of Science Degree in Business. Contact Chuck at kelleychuck33@gmail.com”

Service Excellence From The Inside Out

How do you define service excellence in your company? Here’s how you can judge if you have the right corporate culture in place to facilitate greatness.

It seems like there has been a lot of chatter recently about the service priority and why service is the difference maker. Or maybe this is just my imagination and the chatter is always present. In any case, I have my own opinions and wanted to add to the chatter.

What is Service Excellence in the Hospitality Industry?

Service excellence is about delivering to the customer expectation, and then meeting and slightly exceeding that expectation. Notice I said “slightly exceeding” and I say that because if you go above and beyond, you begin to create a customer expectation you can’t achieve without negatively impacting other priorities.

Service excellence and customer expectations vary by brand and by hotel type – select service vs. full service, commercial vs. resort, luxury vs. economy, country and culture and so on. As the operator, it is your responsibility to understand the brand promise in regards to service and the related customer expectation. You need to find the right balance between meeting and exceeding the customer expectation while also being true to the integrity of the brand. This includes creating a positive work environment for your team as well as meeting and exceeding profit objectives.

Clearly a delicate balance, but for those who get it right, you ensure the long-term success of your property. You have happy customers who will return; the brand is happy; you will continue to be employed; the owner is pleased with their returns and they will continue to invest back into your property.

From The-Inside-Out Approach to Service Excellence

It all sounds very simple in theory. So how do you make it happen? Let’s assume that 50% (probably high) of your employees interact with your customers on a regular basis. That means that the other 50% of your employees only interact with other employees, and yet we frequently neglect or underestimate the significance of the employee interactions. Therefore my step philosophy of ‘from the inside out’:

  1. Hire based on attitude, not experience. Experience helps, but you can teach skills and gain experience. You can’t teach attitude.
  2. Attitude is just as important in the back of the house as it is in the front of the house. A positive attitude from the back to the front of the house will get you headed in the right direction.
  3. Begin your training in the back of the house with as much focus on customer/employee interactions as skills training – more focus on engagement and motivation. The customer of the back of the house employee is the front of the house employee.
  4. Train your customer contact employees to understand and respect the role of the back of the house and how their success depends on the back of the house.
  5. Provide customer interaction training for your management employees. Don’t assume that just because they have a title that they have the appropriate customer skills.
  6. Develop recognition and/or incentive programs that equally reward front-of-house and back-of-house employees. Don’t allow your programs to create a two-class society within your property.
  7. Ensure that your organizational structure is designed to facilitate internal communications between departments. Watch for ‘silos’ and break down the barriers.
  8. Mistakes – own them and accept responsibility at the highest level. Make sure this is the mantra at all levels within your organization. It starts at the top and by example.
  9. Empower your employees to solve problems and recognize or reward success. Don’t gauge success or failure based on the cost of the associated rebates. The value of keeping that customer far exceeds the cost of the rebates. Remember the last thing your customer wants to hear is ‘let me check with my manager’.
  10. Problem resolution – set a standard to exceed customer expectations. Studies show that when your problem resolution exceeds the customer’s expectation, the customer’s intent to return is the same as if they never had a problem. If an employee goes beyond a reasonable standard, treat it as a training opportunity, but say thanks first.

Start from the inside out and create a solid foundation. How often have you found that the root cause of a customer problem can be traced to a back-of-house failure? Make sure your hiring practices, training, recognition programs, compensation plans, empowerment philosophy and workplace environment efforts are equally balanced across all employees and the management team.

The key to success is in attitude and desire to achieve excellence. And for that, you need a solid foundation, so start from the inside out!

If you would like to talk to a professional about hospitality service excellence, please feel free to contact us!


About the Authors 

chuck-kelley

Chuck Kelley retired as Executive Vice President for Marriott’s Caribbean/Latin America Region in 2010. During his tenure the region grew to 53 operating hotels and a confirmed pipeline of over 20 new hotels. Chuck’s career spanned 32 years in the hotel business including a strong focus on the Caribbean and Latin American regions. Chuck is a 1977 graduate of the University of Hawaii Travel Industry and Management School with a Bachelor of Science Degree in Business. Contact Chuck at kelleychuck33@gmail.com

The Hospitality Talent Search – Outsourcing Your Most Important Investment

In a hotel’s perpetual quest to find creative ways to reduce expenses while not compromising quality, senior management tends to outsource a lot of services.  From bedding and restaurant linens to IT, security and transportation, for many of these properties, relying on external contracts has become the norm rather than the exception – so why not your key executive search needs?

Yet when it comes to a hotel’s most valuable asset – its people – searching for the right talent is often managed internally, even at the executive level. While I’m a strong proponent of outsourcing this responsibility, it’s important to first acknowledge some situations where it makes sense to keep this process in-house. For instance, large chains like to promote from within, not only because individuals already know the culture, standards, guests and colleagues, but also because it keeps hoteliers motivated to stay with the company. Knowing there is upward mobility and oftentimes a myriad of locations from which to choose to work are both strong employee incentives.

But even when considering this overt example, is the internal hire necessarily the best choice? How do you know there isn’t a more talented and more eager leader out there who can bring in fresh ideas as well as a wholly new perspective on your approach to hospitality management?

Having spent many years in the industry, I can assure you that I’ve seen some very good hires and some very, very bad ones. Just think of the cost of onboarding an individual, which can include a hefty relocation. In addition to the costs of a bad investment, the worst impact of a mismatched hire is that of the acrid taste left behind from guests and staff alike.

According to a study produced by Robert Half, 41% of surveyed hiring managers and HR professionals who have all made a bad hire estimate the costs to easily be thousands of dollars. (Note that from the infographic, this numerical figure pertains to what’s defined as small to mid-sized companies with revenues of up to $500 million per year).

Knowing that there is a monetary risk involved, your strategy for hiring at the executive level (director and up) should include three important considerations: Time, Talent and Treasure.

With all the other open recs an often low-staffed HR department has to fill, is the team really investing the time needed to find its next superstar? It can take a team of four search experts months to first find a slate of highly-capable, ‘passive’ candidates, then vet them, screen them, interview them and finally present them for hire. What HR individual can invest that amount of time to find the best possible candidate? Moreover, can you afford to make a hiring mistake? Think of the implications of bringing someone in who doesn’t work out.

HR professionals are really good at what they do. Oftentimes, their number of open recs is quite high, and range from the most entry-level positions to executive-level searches. The skill set to hunt for lower-level versus higher-level employees is vastly different, though.

It takes the right talent to hit the right buttons when attempting to recruit busy executives. You get one shot at that email or phone call, and it had better be the most compelling message that person receives in his or her overly-packed day. Outsourced search professionals are highly skilled at what to say, what gets a response to an email and how to manage the process from start to finish.

outsourcing

Furthermore, executive searches may be national or even global in nature. Experienced executive search leaders invest a lot of time on the front-end by prescreening candidates via a multi-step prequalification approach, ensuring that their hotelier selection is the right fit, both skill-wise and culturally.

The important questions to ask yourself here are whether or not your internal interviewers know what questions to ask and how they ask them in order to zone in on, say, the implications of a family move to a new state or country. HR leaders often have not had the personal experience and understanding of how to get the full story. Conversations around issues pertaining to relocation or the potential of a counteroffer are also managed quite effectively by external search experts.

Now let’s talk about cost, or as to better fit with our ‘T’ alliteration, the expending of treasure. Obviously, enlisting an executive search firm to fill a role is not free. It is, however, an investment in your most important asset. How many good decisions would a great executive need to make to cover the cost of this flat or commission-based fee? What’s more, if the position is vacant, the dollars that would have been paid to that executive can often cover the cost of this fee.

Call it a wash. Good executive search firms will be willing to negotiate the fee and remittance terms if they are serious about wanting your business.

These three considerations are, of course, best illustrated through two in-depth examples. Firstly, and without mentioning any names, a multi-use property was in need of a finance executive. The well-known resort destination knew it would have a difficult time finding local talent at the level it sought, and had an additional 30+ job orders to fill for the ramp up to its busy season.

They required a national executive search to find an individual with a very specific skill set, and one who would be willing to relocate to the resort area. By outsourcing this one search, which was very specific in nature, the HR Director was able to focus her attention on the other roles that needed to be filled. The search took the equivalent of weeks of man-hours – weeks that one individual could never have spared.

Secondly, another property presented a situation where a senior leader was going to be let go, but leadership wanted to hire the individual who would assume the role prior to the incumbent leaving. In other words, they needed to keep the search strictly confidential. When executive searches of this nature are outsourced, the risk lies with the search firm to ensure confidentiality. Several additional steps need to be taken with each candidate who is vetted, and if a hotel employee is not seasoned at doing this, there is a big risk for a breach of confidentiality and a lot more than just hurt feelings.

So next time you’re thinking of how best to find the right talent for one of your most important positions, think twice about your approach. Just as you would pull out all stops to take care of a VIP who is checking in at your property, likewise, consider your next executive to be a VIP and approach finding him or her in the same way.

(Article by Emily Neill, published in eHotelier on October 18, 2016)


About the Author

 

Emily Neill is a former member of Cayuga Hospitality Consultants.