During
an ALIS panel on leadership and empowerment, experts discussed balancing
results and when employees should have guardrails.
LOS ANGELES — When discussing
empowering hospitality leaders, Gilda Perez-Alvarado said having standard
operating procedures (SOPs) is important, but she said the most important
guardrail you can give employees is helping them understand the “why” behind
what they are doing.
“People need to know why they’re
doing something. Any situation can come in front of you. If you know exactly
why you’re doing it, then you will know how to act. That’s the best guardrail
we have,” said Perez-Alvarado, CEO of Orient Express and group chief strategy
officer for Accor.
Perez-Alvarado said companies
should continue to change and evolve the way they look at structures and
corporations.
“From a corporate structure
point of view, we need to hire for skill. We need to ensure we can continue to
upskill our employees. We cannot hire for a specific function. It’s a skill
set. The environment is very uncertain. We need to evolve,” she said.
From a corporate structure point of view, we need to hire for skill. We need to ensure we can continue to upskill our employees. We cannot hire for a specific function. It’s a skill set. The environment is very uncertain. We need to evolve.
Gilda Perez-Alvarado
Perez-Alvarado said COVID gave
companies an opportunity to rethink their operating structure and business
model.
“We’ll have more and more
disruptors coming in. There are better ways of doing things,” she said.
Perez-Alvarado was a panelist on
the “Boardroom XXV: Leadership & Empowerment” panel on the second day of
the ALIS by Northstar conference at the JW Marriott/Ritz-Carlton L.A. Live in
Los Angeles. Other panelists included: Greg Juceam, president & CEO of
Charlotte-based Extended Stay America; Jimmy Merkel, CEO & co-founder of
Columbus, Ohio-based Rockbridge; Anthony Rutledge, CEO and managing partner of
Norwalk, Connecticut-based HEI Hotels + Resorts and Rob Smith, CEO &
president of Denver-based Stonebridge. The author of this story and Ryan Mann,
partner at McKinsey & Co., moderated the panel.
Balancing
empowerment with results
Rutledge said, when asked about
the balance of empowerment and results, that the most important word is
balance.
“We always talk about, at HEI,
for decades now, that the jacket has to fit. What we mean by that is in a
really complicated operating world, we’re the best of our collective
experiences… It’s thousands of years of experience across our 40-year
existence,” he said. “When we’re interviewing and screening somebody, we’re
saying this person has the aptitude to embrace our systems and tools that we’ve
developed… but against the live environment and the challenges that we’re
facing, we want that empowerment… We want to overlay that into the existing
systems that are proven to work across investments, revenue and expense
management, and make them better.
When you build a
platform and structure that survives on the redundancy side, Rutledge said the biggest thing
is you don’t want to just say it, you want to live it.
When you don’t have layers of management, and you’re the only person on property, if the SOPs aren’t clear, if the expectations aren’t clear, if the guest doesn’t know what he or she is going to get, that’s where things can break down.
Greg Juceam
“You want to measure it. That’s
the only way that you’ll ever truly enact change,” he said. “So simple things
like surveys that have detailed, tailored questions to make sure that we’re
listening, we’re learning, we’re understanding, we’re empowering, but not at
the expense of being entrepreneurial. All these sexy words can be very harmful
against the challenges on the redundancy side… It goes to not relying on any
one person and having supervisory gates at every critical touch point.”
Juceam said empowerment can look
very different depending on the hotel’s chain scale.
"I started in upper upscale
hotels... and when you have layers of management, when you have guests
who are worldly and when you have employees that are largely college educated,
you can really empower quite a bit,” he said. “You can tell somebody at the
front desk, this is the end state of what we’re trying to get to and give them
some guardrails, and they’ll figure it out. If they make a mistake, there are
layers of management, and they can course correct. Nothing we’re doing in
hotels is brain surgery. There’s no permanent damage. In the bigger hotels, you
can do that, but the chain scale really matters.”
Juceam said he then moved to
upscale and, ultimately, economy and midscale hotels and the empowerment rules
can become quite different.
“When you don’t have layers of
management, and you’re the only person on property, if the SOPs aren’t clear,
if the expectations aren’t clear, if the guest doesn’t know what he or she is
going to get, that’s where things can break down, because then you have general
managers and front desk folks doing whatever they’d like and then you lose that
consistency,” he said. “The chain scale really matters. We have to be much more
prescriptive than some of my colleagues on stage about brands that offer more
empowerment opportunities. It doesn’t mean we don’t empower. It just means that
the bandwidth that we can provide is narrower and that the SOPs need to be
clearer for everybody.”
Smith said he personally doesn’t
think there should be guardrails on empowerment.
“I personally don’t think that
there should be guardrails on empowerment. If there are, then it’s not really
empowerment,” he said. “I’ve been in situations where GMs have said, ‘You’re
empowered, and these are the things you should offer the guest.’ That’s not
empowerment, in my opinion.”
Smith spelled out what he thinks
a good manager should do regarding empowerment and feedback.
“A true manager fully empowers
the associate and then has a Monday morning quarterback [session] where they
come back and say, ‘Did you have to comp the whole banquet, because there was a
piece of moldy bread at the buffet?’” he said. “So it’s a learning environment
and as long as you’re able to keep your staff stable, and there’s not a
tremendous amount of turnover, a culture of empowerment eventually evolves.”
That can be a different
situation, Smith said, when there is a lot of turnover or in a country with different
cultural norms.
“My whole career, I’ve tried my
best not to have guardrails,” he said. “But it was funny, when I was in the
Caribbean as a GM, and we rolled out empowerment, the managers were very upset.
They’re like, ‘Oh, we don’t want empowerment.’ Well, why? ‘Well, pretty soon
the employees are going to be acting like managers.’ Well, that’s what we want.
Empowerment really, really turns hierarchy upside down, but that’s the ultimate
goal.”
‘Owning it’
When asked what signals indicate
whether a team is genuinely empowered and capable of creating long-term value,
Merkel said it often comes down to having a strong leader.
We had a GM that came to a property and, in three years, absolutely transformed the property without a dollar of capex. He doubled income and added a third to revenues [because] … he got everybody on the same page.
Jimmy Merkel
“We had a GM that came to a
property and, in three years, absolutely transformed the property without a
dollar of capex. He doubled income and added a third to revenues [because] … he
got everybody on the same page. He was part of the team, and you just see that
when people own it, they truly own it.”
In the best
situations, Merkel said a sense of responsibility is infectious.
“That is when you just know you
have a great team, when that leader is owning it, and then that’s infectious to
the other leaders, because they are hiring and building their team. So it’s
really about ownership, really owning the outcomes and what you have to do to
create that,” he said.
“When you see it, you let it
run… and the best part is then you’re of service to them, because you’re giving
them advice. You’re not telling them what to do or how they have to adjust.”
Merkel said “owning it” means
employees feel empowered.
“I believe that you’re not given
empowerment. You earn it. You have to take it. It’s a way of thinking, and that’s
making decisions and preparing and taking ownership,” he said.