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Hotel Chain Answers a Wake-Up Call for Better Performance

By gaining a better understanding of employee behavior, a large hotel chain finds the answer to poor profitability in Smart Simplicity.

The managers of a large travel and tourism company faced a series of big problems. The company’s share price had been declining for years. Costs were unacceptably high, leading to low profitability. Occupancy rates and the average revenue per room were below internal targets. Customer surveys showed that satisfaction rates were far below acceptable levels.

As a result, managers responded with a set of restructuring initiatives intended to reduce costs, improve quality, boost productivity, and drive up occupancy rates. Unfortunately, after a year, none of these changes produced the desired improvements. In fact, each of the problems continued to get worse.

A Plan for Success

In response, the company applied the first of the six simple rules of Smart Simplicity—understand what your people do. The firm’s internal sales team observed and interviewed receptionists in multiple locations to better understand their problems, goals, resources, and constraints.

The analysis yielded several important insights about the organization’s receptionists and how they interacted with the back-office and maintenance staffs. Specifically, rooms were made up late or were held out of service due to maintenance problems, and the delays made guests angry. Housekeeping also noticed maintenance issues but didn’t call them in because they were incentivized to clean rooms as fast as they could, and repairs would slow them down. To solve these problems, receptionists gave customers rebates or transferred them to other rooms—the only resources at their disposal. As a result, rooms were kept in reserve, which decreased profits and occupancy rates.

Driving Higher Value

By applying Smart Simplicity, the company’s managers had, for the first time, an accurate understanding of the behaviors that generated poor performance at its hotels.

The management team took three steps to create a new work context for both the receptionists and the back-office housekeeping and maintenance staffs:

  1. Removed counterproductive “hard” and “soft” elements, such as ineffective training programs and financial incentives.
  2. Changed the context to product cooperation, by giving receptionists power over housekeeping and maintenance departments so that all could cooperate to solve customer problems—without giving rooms away.
  3. Adjusted career paths so that managerial promotion depended on working in multiple hotel functions to gain firsthand knowledge of the roles of others.
Smart Simplicity
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