The business of managing the hotel finances is not terribly technical or complicated. What makes it challenging is that it’s usually a very large job involving many people. In a 500-room hotel, you can easily have 20+ forecast contributors. The communication system in the hotel is the key to both smooth management and predictive financial results. This is the how to. If hotel finances are not a complicated matter, then why is it such a challenge in so many hotels? The answer lies in finding the Òwant to.Ó
It’s not a big surprise to learn that most leaders in the hotel don’t naturally want to be managing numbers. They typically didn’t get into the hotel business with the idea that they would be business people with forecasts and budgets to run. They’re Òpeople peopleÓ; artists and creators. We all know the stories of how so many of us found our way to hospitality and fell in love. Most of your non-financial leaders landed in hospitality for a short stay and decided to move in. Now a few years later they find themselves in roles with responsibilities to get the numbers done and they don’t like it. They don’t like it for a few reasons:
1) They are often responsible for numbers that are created by someone else; someone who expects that leader to own the numbers they’re given. This never works. If you’re cooking up the numbers in your hotel and giving them to your department managers and expecting them to own those, then stop! This is a complete waste of time, as they will not take any ownership with these targets. They’re yours, not theirs. Know that these leaders are quietly thumbing their nose at you when you do this. You’re placing a huge expectation on them and they don’t like it one little bit. Sure, you might get lip service, but they do not appreciate this one little bit. What they really want is to create and be responsible for their own numbers.
2) They don’t have a good financial communication system to use when dealing with the numbers. Non-financial leaders need a strong schedule and constant communication around the numbers. It needs to become part of the culture that the numbers are just as important as the guests and the colleagues. It’s not enough to publish daily reports and expect that the managers will read and use them. You need to have the numbers be an integral part of the daily communication system in the hotel. Not just arrivals and departures, VIPs, outlet hours and groups in-house at your daily meetings. You need to shine a light on yesterday’s revenues, month- to-date revenues, and the variance to forecast. Every day your leaders should know if we’re on track to make our top line and divisional revenues. If not, then how will they be able to react and adjust labor and spending to compensate and affect the flow? The finances need to become an integral part of your daily makeup. Exercise these muscles!
3) They don’t take the time necessary to properly manage the numbers. Your leaders will always treat the numbers as second place or worse unless you show them that the numbers are just as important as the guests and their colleagues. How do you do that? SimpleÑmake the numbers real and treat the leaders as adults who have financial power. Invite them into the captain’s lounge and show them the respect you have for their role. Be there and be supportive and helpful when things are not going well and be there to celebrate and encourage when times are good. We all know our business has ups and downs; it’s cyclical in nature. Be the kind of leader who walks the talk and knows it’s not always easy for your leaders and you have respect for their challenges. This translates into investing in financial leadership. Just like service and engagement, we are never done with our work. There will always be mountains to climb.
How can we create the Òwant toÓ with hospitality financial leadership? The want to do this in the three areas I identified is naturally low. Let’s be realistic for a moment and ask ourselves: ÒIf they really wanted to manage their expenses and know how much they spent they could figure it out.Ó So how do we increase the Òwant toÓ? We do this by showing our leaders what is possible with good financial communication by investing in financial leadership in our hotel. Leaders realize very quickly that it’s not so complicated, and mastering the numbers is 100 percent possible. Your leaders really want to be responsible for their numbers. I am going to tell you why they want to master their numbers, but first, a little story to reinforce the Òhow toÓ versus Òwant toÓ distinction.
A couple of years ago, our daughter moved in with Johanne and I while we were living in San Francisco. She had finished university and had come to start her career and was staying with us until she got on her feet. One thing developed that we were not anticipating. She was a messy housekeeper and her room was often a disaster. I asked her several times to clean it up and somehow this just wasn’t working. In this situation, it would never dawn on me to send her on a course to learn how to clean her room or buy her the latest book on how to clean your room! She knows how to clean her room! So, what’s missing? Answer: She doesn’t want to clean her room. Period. Full stop. Doesn’t want to. If I am going to have any impact on this situation I need to operate in the realm of increasing the Òwant to.Ó Once someone, anyone has an increase of the Òwant to,Ó the Òhow toÓ is everywhere.Ó
Increasing the Òwant toÓ is always the answer we want to be looking for. What’s in it for them? What will be better in their lives that will make them motivated to do the task at hand? With financial leadership in your hotel, there are lots of areas you can cultivate in the Òwant to.Ó
Financial leadership skills are extremely valuable tools for your nonfinancial leaders to have. In today’s competitive world it’s not enough just to be great with the guests and colleagues. Leaders need these financial skills to advance. All your leaders want to move ahead, they all want to be executives and to lead. When you present these as opportunities, your leaders will happily step up.Ê
We also must remember that the only place your leaders can get these skills is from you. They need you to create this environment that nurtures these skills. Your leaders see more dollars in their pockets and rightly so. With these skills, they are much more valuable.
Your leaders all want to have more impact. Once you show your team how their numbers directly affect the business, they will want to get on board.
Maslow’s hierarchy of needs shines a light on people wanting respect for their work and to have a meaningful purpose. Maslow theorizes that humans have basic needs, one of them is to make a difference in what we are doing. When framed properly, this is incredibly powerful. Self-esteem and self-actualization are direct by-products of having financial leadership skills and responsibilities. This comes with a warning label. Make the responsibilities a positive attribute and not one that is negative. Management by embarrassment will backfire big time, every time. The financial leadership in your hotel needs to always be packaged with love and never fear. If we put fear and money in the same boat, we literally sink.
By David Lund
David Lund is The Hotel Financial Coach, an international hospitality financial leadership pioneer. He has held positions as a Regional Financial Controller, Corporate Director and Hotel Manager with Fairmont Hotels for over 30 years. He authored an award-winning workshop on Hospitality Financial Leadership and has delivered it to hundreds of hotel managers and leaders. David coach’s hospitality executives and delivers his Financial Leadership workshops throughout the world, helping hotels, owners and brands increase profits and build financially engaged leadership teams. David speaks at hospitality company meetings, associations and he has had several financial leadership articles published in hotel trade magazines, and he is the author of two books on hospitality financial leadership. David is a certified hotel accounting executive through HFTP and a certified professional coach with CTI.
This article is an excerpt from David’s free guidebook ‘The Seven Secrets To Creating a Financially Engaged Leadership Team In Your Hotel’. You can haveÊa copyÊby signing up at www.hotelfinancialcoach.com.
