Financial success: begin with the end in mind - Insights

Financial success: begin with the end in mind

Finance 600Creating a finically engaged leadership team in your hotel is no different than creating a strong guest service or a team that has colleague and leader engagement as their mission.

What you attend to grows – it’s that simple. What’s different with the finances is you and your focus. The picture you want to create needs to be clear, and you need to have a plan to follow resources and resources to employ to create financial leadership. It’s no different than guest service or colleague engagement. We would not expect these two disciples to grow and prosper in our hotel on their own, no, we recognise that these require constant attention and nurturing. The financial leadership in your hotel is exactly the same.

“Begin with the end in mind means to begin each day, task, or project with a clear vision of your desired direction and destination, and then continue by flexing your proactive muscles to make things happen” – Steven Covey.

First, it starts at the top. The brand, the owner, the general manager all need to have the concept of financial leadership as their mission. No, just saying but actually having the tools, the processes and the measurement to follow. I am not talking about financial audits and internal controls, I’m not talking about the accounting function. I have seen so many hotels and their executives hide behind the financial function and the financial leader. It’s like saying HR is handling the colleague engagement piece and the rest of us can sit on the sidelines and watch. The focus and attention to the financial leadership needs to be continuously delivered from the highest level in any hotel organization. What are we doing in our business to raise the level of financial leadership? How much have we invested to train and educate our leaders on the art of financial planning in our hotels? Is this investment and the attention I place on financial leadership equal or greater than the attention and investment we make in service and engagement. It’s that simple and that’s great news, because there are no super powers required to master the financial function, only attention, dedication and purpose.

In regards to financial leadership, it needs to be said that most of our executive and our hotel generals managers don’t come from a financial background, and that’s perfectly ok. It’s usually sales or operations that produce the GMs, so the financial piece with these individuals is almost always missing, or it’s not their strong suit. When I say the financial piece, I mean a solid understanding of the basic fundamental accounting equation, how it all ties together and the knowledge it takes to explain how the underbelly of the financial machine of a hotel works. This is something that needs to be compensated for. Why would we put someone in charge and not have them equipped with the financial leadership skills they needs to succeed? We have a long history of this and it’s driven by the ancient ideology that says “look after the guests and the money looks after itself”. That is the very crux of the problem. That myth comes from our owner operator lineage. This is the misguided myth that plagues our business, and we mix this myth with the fear of numbers and the idea the financial department will carry the day.

Today we’re management companies and we sell expertise. So, in short, the executive sticks his or her head in the ground and ignores the real mission, which is to ensure that every manager and leader who consumes resources is properly trained and supported to ensure they maximize their part of our business. It’s that simple. If you’re running a hotel and the leaders who prepare their schedules and order their supplies without the necessary P&L knowledge, then you’re running the Titanic. The iceberg is straight ahead and the collision is not a matter of if, it’s only ever a matter of when, and in this case, the when is now and it’s ongoing.

By David Lund

David Lund is an international expert who has been branded ÔThe Hotel Financial Coach’. Just as any great hotel is true to their brand, so is David. His client commitment is about exceptional service. And his #1 focus is to help his clients gain a fastÊReturnÊOnÊInvestment from his workshops and personalized coaching. David’s background includes over 30 years as a regional controller, corporate financial Director, hotel manager and controller throughout North America.


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