In this article, Conor Kenny, Head of hospitality industry advisors, Conor Kenny & Associates, looks at how to manage your business through stormy waters.
Business people are resilient folk and they have seen it all before. Whilst the Celtic Tiger created lots of wealth it was counter balanced by reams of legislation that tested the creativity and survival of every pioneering hospitality professional.
2009 will be a very tough year. It will be tougher than 2008 and it will test who is fit and who is fat.
However, there is an optimistic bright horizon for those who keep their shoulder to the wheel. The hospitality industry more than anyone knows all about responding to a challenge and after all, what’s the alternative?
There is only one thing worse than facing into a perfect storm that is to deny it is coming.
Recently I listened to a distinguished Hotelier say “I think we are just talking ourselves into this”. First things first, we are not. Read any economic forecasts and truth will out very quickly. The thunder has already rolled and the wind and rain are fast following.
Meredith Gray gets it about right when he said; “Sometimes reality has a way of sneaking up and biting us in the ass. And when the dam bursts, all you can do is swim. The world of pretend is a cage, not a cocoon. We can only lie to ourselves for so long."
“First things First”
An economic storm is no different to a natural storm. If you knew it was coming the first thing you would do is make a survival plan. That plan is simply to weather the storm, batten down the hatches and make sure you survive. There is not much point in looking for a sun tan when the downpour comes, much better to stay dry than catch a nasty cough!
However, if you create a solid and robust plan you will plough through the waves as well as the inevitable challenges. Better to have a map than trust it all to The Gods.
“Follow the Leader”
Lots of people talk about leadership but few explore its potential impact. One thing is for sure, a recession is a great test of a leader and their leadership skills. It used to be called ‘Survival of the fittest’. Today, that should perhaps read ‘Survival of the smartest’. Many years ago, a good Boss (and great leader) said to me “Conor, good decisions come from experience and experience comes from bad decisions” - worth thinking about. But, in these stormy seas it is absolutely true that some will perish. What’s the difference between similar companies who survive and those who won’t? - Leadership.
Imagine an airplane in a turbulent sky. Now imagine the impact on the crew and passengers if a pilot was overheard on the loudspeaker - “Oh My God, I don’t know what to do. I’m lost. These turbulent bumps are really stressing me out. It’s all YOUR fault for getting me into this mess” Or, “Ladies and Gentlemen, it’s going to be a little bumpy and turbulent for the next while so why don’t you stay in your seats, sit back, relax and just as soon as we can we will begin our drinks service”
I know which flight I’d rather be on!
The last decade was kind to business; the last few years were not. Hopefully the good days created enough surpluses to save for a rainy day. That rainy day has arrived. How you use those funds will determine your future. Many argue that a recession will be a good time to invest, rebuild and take stock. All true but first you must be clear and real about the new landscape, market conditions and dynamics. Then you need a strategy and let’s call that strategy a plan. Your plan should consider 5 key components, (1) Where you can reduce expenditure but without penalising the quality or the customer – cost control; (2) A deep look at how your customers are responding to a new climate. How much do they have to spend today (not yesterday). What is important to them now? How has their use of your business and their behaviour changed? – The market (3) how will you drive your business forward to reflect the new conditions, needs and wants? – Your future plan. (4) How and where will you invest to cater for these new conditions? – Your investment plan. (5) How will you manage and invest in your people? – Your people, training and staff development plan.
“Back to Basics”
A good business functions efficiently. A great business is memorable. Memorable is all about people, atmosphere and mood, the efficiency is taken for granted. Therefore, you have to give me a reason to come in to you in the first place, more so in a storm. The first golden rule is simply ‘people’ This means three things (1) You and your leadership (2) Your team, how you empower them, motivate them and inspire them, as well as the culture and values you create (3) Your customers, how you treat them, receive them, mind them and say goodbye to them. In a perfect storm worth thinking about. Better still, worth planning for. As David Joseph Schwartz said; “Here is the basic rule for winning success. Let's mark it in the mind and remember it. The rule is: Success depends on the support of other people. The only hurdle between you and what you want to be in is the support of other people.”
If profit alone is the sole motivator and inspiration you will end up leading a bunch of mercenaries and no matter how profitable, one thing is for certain, they won’t be happy.If you don’t put people first, train them, empower them and inspire them, don’t be surprised if business could be better, much better. Successful businesses must be happy places. Happy environments are created by people. How happy are you? How happy are yours?
“Let’s be Honest”
Your competitors are in the same business, just like yours. Many target the same customer and have similar propositions; many are more of the same. So what is it that marks out those that are more successful than others? Why is it that they have a higher repeat business ratio? Why is it customers say simple things like “they are just very nice people”?
The answer? ‘Values’ it’s that slightly below the radar ethos, culture, and attitude that is interwoven in every organization. It’s not obvious, rarely taught but ever present.
Stephen Covey gets it about right when he says;
“Principles should not be confused with values. Principles describe how things are and how they work, whereas values state where we aim to go. If principles are the territory, then values are maps”
Values are what you stand for, what you believe in and are, in some ways, the moral compass of your business.
In a recession, many people will reveal their true exploitative nature. Many of us have already seen the true colours of once trusted allies. One thing is for sure; as the tide goes out we will see a multitude of unpleasant things that were hidden by the high happy waters. Thing is, when the tide comes back in - and it will - those who survived on superficial charm will quickly drown in the fast incoming flow.
“Best Foot Forward”
As the saying goes; “You get one chance to make a first impression” The secret for every business, especially in a testing climate, is to capture that rare moment and make a new customer a customer for life. There is no magic formula or one single thing. From your exterior to deep in the back of your interior, it is your unique DNA and how you create it. The answer lies in everything being one per cent better than your competitors, not one thing.
We make instinctive decisions very quickly. The first 30 seconds will be subject to heightened senses. Make sure those messages are the right messages.
Great infrastructure is secondary, not primary. Invest and focus in the sensory things up front. ‘Warmth’ is more than heat; it is all about atmosphere, attitude, mood and tone. It’s fabric and its people and if you weave them together you will create that special cosy feeling.
However, if you are going to do any of that the cheap or half way, don’t bother, in a market that will look even more for value you will be quickly found our – and remembered.
Now work twice as hard at greeting and smiling, it will forgive a multitude and bring the masses.
There is no magic article, formula or book that can guide you through stormy seas. Every business is unique and your solution needs to be unique too. The temptation in a big growling sea is to suddenly try ‘that new thing’ However, ‘that new thing’ might just capsize your vessel.
In business, just like life, we can make simple things complex. That too is a dreadful disease and takes you nowhere new, productive or even cheerful.
There is no alternative in a storm other than to survive. To survive you have to focus on getting fit and removing the fat. To get fit you have to work harder, accept less, inspire, lead and innovate. Above all else, you have to stay calm, in control and cheerful.
If you do all that you will get slim, fit and, you never know, but those new clothes that show off your new fit figure might even attract a whole new generation of adoring disciples and you will be their hero!