You have the ability to increase the way you lead your team financially, to create an environment that has your managers working together on the “business” of running your hotel.
I invite you to read my Top 10 list for hotel financial leadership success and open up to the opportunity you have to improve the financial communication in your hotel and brand. If you do this, you will have a more engaged leadership team, your hotels will make more money, your leaders will love you, and everyone will have more fun.
1) Start With the End in Mind
The picture you want is that of a leadership team that knows what is happening financially; one that is plugged into the financial well-being of the hotel. The appropriate leaders all participate in the financial management, and forecasts and budgets are completed with detailed input from all areas of the hotel.
- When forecast and budget changes need to be made to achieve overriding goals, leaders on the ground make these changes on line items, and they know what items are included in their final budgets and forecasts and which ones are not. There are no executive level changes to forecast numbers at the 11th hour.
- Each leader knows and agrees to financially managing his or her piece of the operation and they happily take responsibility for what happens in their area. There are no expectations, only agreements.
- Schedules and timelines for forecasts, budgets and month-end close are adhered to.
- Regular communication on the numbers is thoughtful, complete and informative.
- Department managers and leaders all know their revenue, payroll and expense lines. They monitor the progress for their area daily throughout the month, and make adjustments to schedules and purchases to reflect the realized and adjusted business volumes.
- New leaders are selected, trained and properly supported to evolve financially, as well as providing service and colleague engagement.
- Leaders evolve financially in this environment because the hotel has created great bench strength.
- Leaders from this hotel get promotions because of their many capabilities, especially their ability to lead financially.
2) The Third Pillar
It’s the three pillars of our business—guests, colleagues and owner.
We manage guest interaction with an understanding and belief that we’re all invested in good guest service. Even the departments that don’t have direct guest contact help to support colleagues who do. We are all responsible.
With colleague engagement it’s the same: We’re all involved and implicated in managing departments and hotels that have high-colleague engagement. No department or individual is separated from the mission of service and engagement. So why is the owner different?
Well, not so long ago it was considered taboo to discuss the finances. So naturally, many leaders and managers didn’t know what was going on financially. Now we find ourselves in a different world—one in which we want managers and leaders to get in the game. We bounce around this third pillar and we don’t have the same level of expertise as we do with the other two pillars. The issue, as I see it: We have not evolved financially as quickly as we have with the other pillars.
Brands sell expertise to owners, the three pillars of expertise. Brands need to realize the key to mastering the third pillar starts with investing in financial leadership. We have a myriad of guest service checklists: audits, training, standards…you name it. With colleagues we have the same, and sophisticated surveys telling us everything under the sun about our people and how they are thinking. So what do we do financially to check ourselves out, to see how we’re doing, to check out our standards? Nothing substantial or effective.
Sure we have audits for the accounting function, but we have nothing for a standard or a way of measuring how we lead financially. I talked to a GM of a big brand not long ago, and he proudly told me, “I have only four people managing the numbers.” I asked him if he thought he would get better results if he had 40 people working on it. He is still thinking about that.
My point is that we have a long way to go to evolve financially.
The irony in this is that brands largely don’t own hotels anymore. Brands sell expertise. The brand with the best financial leadership model would be very attractive to owners. Brands mandate standards and owners pay to have these in place. In the case of financial leadership like service and colleagues, owners pay the way for the brands. What are brands waiting for?
3) The Paper Can’t Talk
Why is financial leadership in hotels so un-evolved?
The answer is somewhat hidden. When we look at what we charge our leaders in hotels with doing, it’s three things: Looking after 1) the guests, 2) the colleagues and 3) the owner.
The simple fact is this: The guests and the colleagues can talk. They can speak their mind, ask for help, and demand our attention in ever-increasing cultural and socially responsible ways. The paper, the reports, the forecast, the budget…all of these instruments don’t have a voice. We need to give them a voice that everyone can hear.
That’s financially evolved leadership: Make the financial piece as important as the other two pillars in how we communicate. We know it’s easy to ignore the financial piece, and we also know it’s a costly error.
Check in with HFTP Connect tomorrow morning to read part two of this series.
David Lund is an international hospitality financial leadership expert. He has held positions as a Regional Financial Controller, Corporate Director and Hotel Manager with Fairmont Hotels & Resorts. He authored an award winning workshop on hospitality financial leadership. David coaches hospitality executives, leads group facilitations with hospitality teams and delivers his Financial Leadership Training workshop throughout the world. He earned his CHAE from HFTP in 2006, and he is a Certified Professional Coach.