The Art of Profit Improvement Plans in Sluggish Companies
Over the years I have been fortunate to have worked for some interesting companies in the tourism and hospitality space, as well as venturing out into other industries, where the main objective and raison d’être was to improve the company or brand performance after a torrid time with previous management or leadership.
Invariably, the rite of passage for a new leader or senior leader coming into an existing company that is beset with performance issues or sluggish growth, is influenced by the culture and inertia of leadership that are likely stuck. Stuck in thinking, stuck in protecting their own ways and stuck in their fear of change!
The problem is not an inability to act but an inability to take appropriate action. There can be many reasons for the problem—ranging from skills shortages, managerial stubbornness, protecting selfish interests and jobs – to sheer incompetence—but one of the most common is active inertia. Stuck in the modes of thinking and working that brought success in the past, management teams simply are stuck to their tried-and-trusted activities. In trying to dig themselves out of a hole, they just deepen it, sadly.
In some cases, processes have hardened into routines – and innovative alternatives become difficult when needed. In others management develops blind spots or scotomas- where a strategic framework set from the top shapes the way managers see the world and provide standard or myopic thinking to real problems or opportunities. Then , even though relationships with employees, suppliers, clients, lenders, and investors are important, they can become shackles and limit growth thinking. Even Values, so crafted previously to inspire, become meaningless and wallpaper.
In situations where “a new broom tries to sweep clean”, and tries to meet a mandate to improve performance, I believe there are valuable lessons learnt in steering a ship into calmer waters and how to navigate the turbulence of stormy waters. Although not exhaustive, here are a few intuitive guidelines to improve performance in tourism and hospitality companies.
- Understand the impasses and reasons with data and facts, not innuendo and hand-me-down words of wisdom. Trend is your friend and numbers, if pulled correctly, don’t lie. Take some time to understand margins, big cost drivers, revenue buckets and 80/20 clients – and benchmarking versus your competitors. Info is always available.
- Put a plan up and be ready for criticism and debate. Don’t fall in love with your own work – often nuggets and pearls of wisdom will come from unlikely sources in the team you lead. It’s always advisable to provide a framework around no more than 7 points of focus, each with a champion of change or implementation, and with dates, incentives and resources.
- The team you meet or build to improve performance must have a healthy mix of trust and collaboration, mavericks and solid performers, innovators, and process people – and be encouraged to try new things with your support – and show resilience in times of trouble. Your People brand may turn out to be more important than your physical brand or service!
- If you are an outsider, consultant or leading a team tasked with profit or product improvement, take the team on the journey every step of the way. Often if you have researched and framed the problems and facts correctly, and request assistance, the team is more powerful than the individual and will rise to the occasion.
- Resist the impulse to rush forward. Most struggling companies have a good sense of what they need to do and require a little time and support to internalise, adapt and accept a new way forward – particularly in our society today.
- Evolution is better than revolution, and probably wiser for owners of assets and companies. Accept that these owners have spent considerable time and effort on their business and managing their acceptance of change management will make plans or projects sink or swim.
- You will always find saboteurs protecting old and selfish ways, trying to undermine efforts for improvement – give them one opportunity to get on board, and say goodbye if they don’t. Internal social relationships can be healthy or toxic, and disruptive behaviours upset guests, customers, employees and morale alike. Don’t ever stand for political players in your team.
- Get on the front foot and motivate the future when you can. Understand what’s coming next in the market, in hospitality, tourism , events – or any industry you are part of. Then make subtle adjustments in your company structure that you can take advantage of or encourage your early adopters and magic makers inside your company to own and run with these ideas, providing momentum and forward thinking.
Certainly, a technical profit improvement plan, focusing on the basics, is crucial, but then its success falls squarely on the shoulders of the team adopting and implementing the plan!
