Archive for September, 2015

Lists of Tens

Monday, September 28th, 2015

David Letterman is famous for the Late Show Top Ten, a humorous compilation of 10 items usually relating to some prominent topic of the day.

Hospitality managers can also use lists of ten to uncover issues and opportunities as part of a process of continual improvement in their operations.  It’s a simple matter of asking employees to list their top ten “whatevers.”  Recognizing that employees are often the people most familiar with an organization’s challenges due to their intensive laboring in the details of the operation, I have found that asking for anonymous submissions will yield the most truthful and helpful information about what needs fixing or improved.

Managers must make it clear that it’s not required to list 10 items.  The purpose is not quantity, it’s to get answers regarding what’s troubling staff or customers/guests/members.  Here are some lists of ten examples:

  • Ask food servers for a list of their top ten complaints from customers.
  • Ask front desk staff for the top ten complaints from guests.
  • Ask housekeeping and maintenance staff for their top ten obstacles to completing their tasks efficiently.
  • Ask the bag, range, and cart attendants for their top ten ideas to provide better or higher levels of service to golfers.
  • Ask all employees for their top ten frustrations about working at the establishment.
  • Ask employees for their top ten ideas to wow customers.
  • Ask turn house and beverage cart attendants for the top ten snack items requested by golfers that aren’t carried in inventory.
  • Ask the accounting and HR staffs for their top ten frustrations with employee work and departmental submissions.

As can be seen, the list of ten questions can be far-ranging and cover any aspect of employees’ jobs and the challenges of service and service delivery.  The real benefit in posing such periodic questions to employees is that they often reveal unspoken issues and obstacles that make their jobs more frustrating.  It’s a simple matter to take the submitted lists, collate the results, and review for any consensus of opinions.  Often some of the issues raised are easily solved by a change in policy and procedures or some minor purchase.

Managers must always thank employees for their input and get back to them about any proposed action to address issues raised or ideas given.  It’s also important to let employees know if any of the issues will not or cannot be resolved and give the reasons why.

The ultimate purpose of the list of tens is to discover issues and opportunities in the operation.  Using periodic lists of ten and acting on the responses sends a powerful message to employees that their ideas and concerns will be listened to and, if possible, addressed.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

A Roadmap to Successful Club Benchmarking

Monday, September 21st, 2015

In late June of of 2012 I participated in a panel discussion on benchmarking at the Hospitality Finance and Technology conference in Baltimore.  My fellow panelist was Russ Conde of Club Benchmarking.  Some weeks after the conference I received a sheet summarizing attendees’ reviews of the session.  While mostly positive, one of the attendees said that the discussion covered a lot of benchmarking concepts, but was short on the specifics of how to benchmark.

As I have written in Twelve Reasons I Benchmark, there are a number of reasons to benchmark your club’s operations.  One important reason is to compare your club’s performance to that of the wider industry – and Mr. Conde’s Club Benchmarking service does just that in a simple, automated way via the Internet while providing standardized benchmarks industry-wide.  The CB analysis tools and reports support strategic versus tactical thinking in the boardroom.  A study of data from more than 1,200 clubs currently in the CB system has revealed a number of Key Performance Indicators with direct impact to the bottom line and confirmed the existence of a common private club business model now known as the “Available Cash Model.”  I cannot commend Mr. Conde and his partner Ray Cronin enough for this invaluable service to the industry.

But just as there is value in benchmarking your operation externally, there are valid reasons to benchmark your performance internally – that is within each department and the club as a whole.  Having provided this context, let me now provide some of the key specifics on how to benchmark.

First, for those wishing to compare their performance to other clubs and graphically visualize how their operation relates to the industry’s common business model, it couldn’t be any easier – simply visit the Club Benchmarking website and sign up for their service.

Second, for those who want to set up an internal program of benchmarking, here’s a discussion of some of the challenges and pitfalls, as well as information on where to get the necessary benchmarking instructions and spreadsheets to do it:

  • Let me start by saying that every day there are literally hundreds of data points generated in club operations.  The real benefit of benchmarking, though, is in tracking data over time.  The number of meals served in the club dining room on a particular Friday night doesn’t signify very much; it is simply an occurrence.  But if that number is part of a declining trend in Friday night dining, it is certainly a cause for concern.  Without the effort to track trends and compare them to historical performance, there is no way to manage for either quality or performance.
  • It is essential that the club’s General Manager buys into the value of benchmarking and fully supports the effort.  Without his or her backing, it will be far more challenging to implement club-wide benchmarking.  That doesn’t mean that individual department heads cannot benchmark within their departments and be successful, but it does limit the overall value of benchmarking to the club.
  • It is helpful to have a point person for the project – and I suggest the club controller.  This does not mean that the burden of benchmarking falls on the controller’s shoulders – as each department’s benchmarks must be the responsibility of the department head.  But it is helpful to have a person knowledgeable about accounting and the use of MS-Excel to help guide and assist less knowledgeable department heads through the process.

Having said this I also want to stress that the controller’s office is the logical place for the preparations of several key reports (some sort of Weekly Revenue Report, see HRI Form 203 for an example, and a Pay Period Summary Report, HRI Form 229) that will facilitate data availability club-wide, as well as the consolidation of key benchmarks from all departments into the Executive Metrics Report which I have advocated as a useful enhancement to the monthly financial reporting package.

But even in the absence of such reports from the accounting office, a conscientious department head, recognizing that she is the person fully responsible for her department’s performance, can with a little effort get the necessary data to benchmark.  For example, revenue information can usually be accessed from point of sale reports and payroll data is available from the accounting office or payroll service – both merely take a little initiative to get the desired information.

  • Depending on the club’s pace of operations and individual department heads’ workloads, it may make more sense to start small with one or two departments whose managers are “numbers” people and who relish the idea of a deeper empirical understanding of their business operations.  The enthusiasm and resultant success from these early adopters or “pathfinders” will serve as an invaluable inspiration and guide for others.  An alternative would be to implement one significant form of benchmarking club-wide – say benchmarking payroll costs across all departments.  In time, the value of this will lead to a desire for more robust benchmarking of other areas of club operations.
  • While every club can set their priorities for data to benchmark, here are some suggested priorities and the reasoning behind them:
  • Profit and Loss Statement (as part of the Executive Metrics Report) – low hanging fruit, easy to access data from P&Ls, requires only monthly data entry.
  • Payroll Cost – largest cost in operations, potentially yielding greatest opportunity for improvement and savings; makes future budgeting far easier; most effective when employees are paid on a bi-weekly basis (read Why Our Workweek and Pay Cycle? to understand why).
  • Departmental Revenues – by day of week, week by week, monthly, and annually; easy to access data, historical record can improve staff scheduling, makes future budgeting far easier.
  • Food and Beverage – probably the most effort and time-intensive if done thoroughly (tracking sales of beer, wine, alcohol, appetizers, desserts, specialty drinks, etc.), but provides critical feedback on any efforts to improve the average check; data can also help with managing inventory levels of alcoholic beverages.
  • Inventory and Accounts Receivable – low hanging fruit, easy to access data in accounting office, helps monitor and correct inventory volatility, requires only monthly data entry.
  • Retail – can dramatically improve performance when coupled with other retail disciplines.
  • Utilities – low hanging fruit, data comes from monthly utility bills, once-monthly data entry for electricity, water & sewer, and gas; helpful in spotting and investigating usage and billing anomalies.
  • Individual Departments – prepared by department heads, makes them more knowledgeable about operations (enhancing their authority and influence), analysis of benchmarks leads to improved performance.
  • All the resources to begin internal benchmarking at your club can be found on the Club Resources International website.  Simply purchase the 153-page Club Benchmarking Resources for $99 at the Marketplace store.  It contains the background information, the basics of benchmarking, departmental benchmarking instructions, and samples of benchmarking spreadsheets.  Each departmental instruction gives a list of benchmarks to track and sources of data, as well as specific instructions on how to use the spreadsheets and a sample spreadsheet for both year-to-date and year-to-year tracking.

A number of benchmarking spreadsheets are available on the Club Resources International website and can be downloaded at no charge.  After downloading and reviewing the benchmarking material, managers can customize the spreadsheets* for their operations, and begin collecting and recording the necessary data.  If key data has never been tracked before, patterns will emerge pretty quickly as benchmarking progresses, though the longer the data is tracked, the more valuable the benchmarks will be as operating standards.

  • My experience with benchmarking over the years is that it usually takes several months of close focus and review to successfully set up; thereafter ongoing benchmarking becomes part of the club’s routine.
  • Some department heads may need training and handholding during implementation, particularly if they are not familiar with computers or spreadsheet software, but once up to speed, they fully appreciate the value of monitoring the underlying details of their operations.
  • An important discipline that fully exploits the benefits of benchmarking is to make a formal review of departmental benchmarks part of the ongoing monthly review of financial statements with each department head.  When combined with the Tools to Beat Budget program and an examination of progress toward the goals of the department head’s annual work plan, benchmarking becomes a particularly effective means of driving progress and performance club-wide.
  • All departmental benchmarks are then summarized on a monthly basis using the spreadsheets and a copy forwarded to the controller for the next and final step in the benchmarking program.
  • The club controller completes the Executive Metrics Report using selected benchmarks from the departmental spreadsheets and submits it to all stakeholders as part of the club’s financial reporting package.  One controller who presented the EMR to the club’s finance committee reported that a particularly influential member said he was “thrilled” to see such underlying performance data and looked forward to reviewing it on an ongoing basis.

Benchmarking is an essential business discipline that yields significant benefits to club operators.  As H. James Harrington author, engineer, entrepreneur, and consultant in performance improvement, said “If you can’t measure something, you can’t understand it.  If you can’t understand it, you can’t control it.  If you can’t control it, you can’t improve it.”

*Individual clubs will undoubtedly want to customize the Excel spreadsheets for their range of departments and scope of operations.  While spreadsheets are “protected” to prevent inadvertent write-over of cell formulas, the protection is not password-protected, allowing individual clubs to modify the spreadsheets as necessary.

If you have any questions or want more information about any aspect of benchmarking, contact us at info@clubresourcesinternational.com.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

How Fares The Genius with a Thousand Helpers?

Monday, September 14th, 2015

I return once again to the profound and proven wisdom of Jim Collins’ Good to Great.  In his study of immensely successful publicly-traded companies and what made them great, he contrasted their performance to comparison companies – those of the same approximate size and markets in the same industries that did not achieve or sustain greatness.  Collins’ findings are all the more compelling because they are based on empirical evidence, not management theory or untested hypotheses.

Among his many findings (see the article The Book Every Hospitality Manager Should Read on the HRI website) was the prevalence of Level 5 Leadership in the good to great companies.  Many of the comparison enterprises, in contrast, followed a “genius with a thousand helpers” model.  These companies attained success, in some cases spectacular, based on the unique gifts and will power of the organization’s leader, but in the end were not able to sustain that success when the leader moved on.

The same pattern is often seen in small organizations such as private clubs where a new general manager is hired to make dramatic improvements or to turn the club around.  Because of the ever-present time factors and impatience of the Board and members, the leader by force of will implements the necessary changes but without investing the time to strengthen the subordinate management team.  While progress is made, the foundation had not been laid for long-term success.

When the “turnaround specialist” is hired away to a more prestigious position based on his or her accomplishments or when boredom sets in after the major initiatives are accomplished, the organization is left with a weak management team that depended too much on the genius’ direction and forceful personality instead of developing their own management disciplines and leadership abilities.  The end result for the club is an inability to consolidate their gains and an inevitable slide back into mediocrity and inconsistency.

In some situations the Board and membership inadvertently create the limiting environment where only the genius with many helpers model can be used by mandating such low compensation and benefits packages for the club’s department heads that a strong team cannot be built and maintained.  In other instances there is a failure of the General Manager to establish clear expectations and hold subordinates accountable for their performance that gives rise to this fatally flawed management model.

So what is a club Board or General Manager to do?

First:  In selecting a new general manager the Board should focus on a candidate that can produce long-term gains by building a disciplined organization and developing his or her subordinates.  As a member of the search committee, I would focus on the specifics of how to go about doing this and dig for satisfactory answers.  Facile responses and evasions, no matter eloquent or smooth, would disqualify any candidate.

Second:  As a potential general manager I would develop an explicit game plan to develop the necessary organizational building blocks for success (see The Quest for Remarkable Service for an example).  In interviews with search committees or headhunters I would explain in detail what is necessary, how I would proceed with implementation, and provide sample timelines with explicit deliverables or measures to chart and monitor progress.  Finally, I would ensure the search committee understands the requisite and realistic time and resources necessary to implement the plan.

For an incumbent general manager intent upon organizational turn around or renewal, I would use the same criteria to “sell” my plan to the Board.

Third:  Once hired or the plan approved, I would interview each department head in depth to ascertain background, experience, skill set, leadership abilities, and management disciplines for their position.  Then I would lay out in some detail my expectations (see What I Expect from My Club Management Team) for these key managers and establish a written work plan (see Expectations, Work Planning & Performance Reviews) with measurable accountabilities, timelines, milestones, and deliverables.  Over time I would hold them ever more strictly accountable for their performance.

Fourth:  I would expend significant effort in training, coaching (see Coaching Your Way to Excellence), and mentoring my subordinate managers.  The overall purpose of this is to identify who has the necessary desire to learn, will to succeed, enthusiasm for change, and work ethic.  Those that don’t demonstrate this level of interest and commitment should be encouraged to move on.

At the same time, I’d stress the need for all department heads to develop their assistants who show promise for greater responsibility and contribution.  The time and effort spent in developing the organizational depth of talent will yield both immediate and long term results.  For those departments without promising assistants, I would question the hiring rationale and methods of the department head.

Fifth:  Begin implementing the necessary management disciplines to better organize the operation.  See 10 Disciplines that Will Transform Your Operation for an overview of these.  Implementation will take time and a particular club’s needs will impact the priority of effort, but with steady focus, turn by turn of the flywheel, the club will achieve the breakthrough that will fundamentally transform the operation and achieve levels of quality, service, and success that, in retrospect, might have seemed unattainable.

In Good to Great Collins tells the story of Henry Singleton who, with single minded determination, founded and built Teledyne Corporation into a Fortune 500 company in five years based on his undeniable genius and drive.  Yet when he stepped away from the day-to-day management of the company, it began to fall apart.  Within 10 years without his guiding hand, Teledyne’s stock value had collapsed.  As Collins said, “Singleton achieved his childhood dream of becoming a great businessman, but he failed utterly at the task of building a great company.”

So what type of leader would you prefer to be – a Level 5 Leader or the Genius with Many Helpers?  The choice is yours – and you also own the results!

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

Good to Great: Freedom and Responsibility within a Framework

Monday, September 7th, 2015

Throughout my career I have struggled to balance the competing needs for entrepreneurial thinking, innovation, and initiative and the necessities of organization, structure, consistency, and control.  How does one create and sustain a nimble organization that can quickly respond to new technologies, changing member wants and desires, and the competition of the marketplace while maintaining an efficient operation and conscientiously meeting regulatory requirements?

No thinking business person wants to saddle their operation with a bureaucratic mindset, yet efficient operations need systems to function properly and avoid risk, liability, and regulatory problems.  The very word “bureaucracy” carries the negative connotation of inefficiency and stultifying processes where crossing the t’s and dotting the i’s become an organization’s reason for being.

In examining this never ending challenge for businesses, Jim Collins and his research team at Stanford University found that the good to great companies they examined gave people the freedom to do whatever was necessary to succeed within a highly developed system or framework.  Then their people were held strictly accountable for their results.

The analogy that he gave was a commercial airline pilot who works within rigid air traffic control and safety systems on the ground and in the air, but who has the ultimate responsibility for success – that is, the safe delivery of plane and passengers from location to location.  That singular responsibility allows a pilot, at his or her discretion, to remove unruly passengers, abort landings, fly to alternate airports, and take any other action deemed necessary for the safety of the flight.

But essential to bestowing such freedom and responsibility is the necessity of defining the system and clearly identifying constraints.  In the airline industry the Federal Aviation Administration establishes all standards, policies, and procedures for both commercial and private pilots and ensures their ongoing understanding of the system through licensure, certifications, simulator and cockpit training, as well as continual flight and safety bulletins.  To quote from the book:

“The good to great companies build a consistent system with clear constraints, but they also gave people the freedom and responsibility within the framework of that system.  They hired self-disciplined people who didn’t need to be managed, and then managed the system, not the people.”

As a club manager at any level of the organization, you cannot do it all yourself.  Holding the reins tightly creates a bottleneck where all decisions have to come through you, thereby stifling the initiative and creativity of your subordinates.  It also puts a tremendous burden on you to perform, requires you to be on property at all hours, and leads to burnout.

The only way to be truly successful in any complex enterprise is to empower those under you and give them the freedom and responsibility to succeed in their portion of the operation.  But to do this successfully you need to fully develop the framework for their empowerment and a means to hold them accountable.  This means you have to have well-defined organizational values and written standards, policies, and procedures.  Lastly, you need measurable accountabilities for performance.

With these in place you have started on the path to greatness in your enterprise, but it’s only the start – Collins offers much more proven guidance for those willing to invest the time in this well-researched and written, as well as entertaining, book.

The book is Good to Great – Why Some Companies Make the Leap . . . and Others Don’t, Harper Business, New York, NY, 2001.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!