You’ve read previously in this space about the importance of being able to precisely execute a plan. Conceptually, measuring results against efforts does not seem like ‘rocket-science’ when addressing the question of how effective we’ve been in executing a particular strategy. We all want to show a successful outcome from any work that we put forth, but how could we possibly know if it was in fact successful if we cannot measure it? So many of us put hours, days, and weeks into the planning that goes along with what we call “strategy,” without an equal or greater focus on the execution that must accompany such planning. Simply stated, the difference between an outstanding plan and an outstanding result lies in execution. Execution creates an opportunity for measurement, which in turn tells us whether we have succeeded or not.
Despite the fundamental nature of this, it is astonishing how frequently our efforts in the hospitality world are not closely measured. Instead, we rely on “conventional wisdom” in much of our work. A few examples to consider:
Example 1)
Opportunity: Hotel wants to increase its rooms revenue
Solution: Hotel raises its room rates
Reality: Is raising our rate really the answer?
Example 2)
Opportunity: Hotel salespeople are not making enough sales calls to grow business
Solution: Increase the number of sales calls that salespeople are required to complete
Reality: Is ‘more’ really ‘better?’
Often in our industry, we believe that we are measuring performance when in reality we are measuring steps, tactics, or other pieces of the puzzle. The ability to demonstrate the fact that we have increased the number of sales calls that we complete, or that we have increased our room rates by “X” percent does not directly translate into the actual results that come from those actions.
Let’s go back to our first example, a hotel which wants to increase its rooms revenue. The concept is simple enough, but we would all agree that the process is far more complex. There are specific steps required in this process in order to ensure that the desired outcome, increased rooms revenue, is achieved. In this example, do we know and can we measure:
a. Who is directly responsible for the creation of our strategy
b. Who is directly responsible for the implementation/execution of our strategy
c. Who is monitoring the performance of our strategy on a daily or even hourly basis
d. Who is analyzing and interpreting results on a daily or even hourly basis so that we can adjust the strategy if necessary
e. What is the tangible goal at the end of the road; how will we specifically define success or failure
As you can see, each of the five steps above is completely measurable, with a clear definition of who is accountable for whatever action is required. Along the way, it is equally important to specify exactly what each person is doing and what metrics they are being measured against. For instance, in Example #1 above, do we understand which rooms segments are growing, which are not, and what the impact of these dynamics is on our bottom line? Clearly, there are many metrics to be applied in a case like this, but this is exactly the point; there must be metrics applied so that we can determine not only who is succeeding, but how they are succeeding. An outcome that often occurs such as “we did grow revenue by ‘X’ percent or “we did not grow revenue” is simply not enough information to know how to move forward. This is the bigger point relative to measuring our actions. Without clear accountability, without clear measurability, results are subject to interpretation, which is never as precise as outright “did we succeed or did we fail and by how much?” There must be accountability and measurability for all of our actions, otherwise we cannot possibly achieve the desired outcome, because we cannot identify the actual outcome in the first place.
Accountability and measurability enable us to define results, but as senior leadership, we must be certain to focus on the right results. Yes, we want to know that the sales team completed 150 sales calls this week, but if the result was anything less than the agreed-upon goal of booking $50,000 in new definite business during the week, we have not truly succeeded.
While the saying “What Gets Measured Gets Done” has been used time and time again, its accuracy and its value in driving how we do business have never been more important. Yes, accountability and measurability are very precise approaches to business, but until they become the drivers of your hotels’ business culture, you will run the risk of not achieving your true potential.