For the hotel team to succeed, asset managers and operators must work together to field the best players and maximize their potentials.
This third installment of the six-part series on asset management is focused on developing and maintaining a collaborative relationship between the asset manager and the operator.
There are two fundamental premises underlying the views expressed in this article:
- A collaborative relationship is more effective in optimizing results than an adversarial relationship; and
- there is nothing more important in developing a collaborative relationship than trust and mutual respect.
The opinion expressed in the first premise is based on successful application over many years, and in a variety of challenging situations. It seems, as well, to be commonsense because the asset manager and the operator should always be on the same team with respect to accomplishing what is in the owner’s best interests. If the individual members of a team are at odds with one another, performance will be suboptimal. This phenomenon is readily observable across many fields of endeavor, especially sports. If you, the reader, take an opposite view, it is probably not a good investment of time to read on; instead, I suggest reading “The Prince,” by Machiavelli or “The Art of War,” by Sun Tzu.
In establishing a collaborative relationship with the operator and the local management team, it is important for asset managers to acknowledge that the “asset” they are managing is not an inanimate object. The management companies, brands and property management teams on which they depend are made up of people. Thus, successful performance outcomes are derived, in large part, by effectively working with and managing people.
Think of it this way: Would any asset manager endorse—or even tolerate—a general manager who managed their staff through intimidation, threats, distrust, blunt force or dictatorial methods? Would they think it was a good idea for the GM to routinely go around their direct reports and give direction to supervisors and line-level employees? I seriously doubt that anyone with management experience would answer “yes.” So why would any asset manager think the best path to superior performance would occur when those same methods are applied to the operators, brands or local management teams they oversee?
Collaboration means working through and with the operator—not around or over them. Collaboration is the pathway to mutual respect. Competence is essential – but competence without trust is an engine without fuel. (Of course, collaboration is a two-way street. More on that in parts two and four of this series.)
The best analogy for this type of collaboration is the relationship between a player and a coach in any environment where winning matters more than just participating. (The reason for that distinction is that in business, you don’t get a trophy for showing up.)
Winning coaches want the best athletes on their team. In the context of a competitive business environment, hotel management is the big leagues. Accordingly, it is not the job of an asset manager to turn “B” players into “A” players. Even the very best asset manager cannot demand, coax, cajole or coach exceptional performance from a weak property management team, or from a management team with weak members in key positions. And no management company (brand or independent) can offset the adverse impact of a weak property management team through regional or corporate oversight.
Stated more succinctly, if you’re going to try to make a silk purse out of a sow’s ear, you’d better start off with a silk sow.
The property team’s quality starts with, and is highly dependent on, the GM. A mediocre or bad GM cannot recruit, retain or get the most out of a talented executive committee. The same is true on down the organization, from department heads through and including each person in a supervisory role. A truly good GM will not tolerate mediocre managers in any capacity.
Asset managers face multiple challenges when it comes to making sure their hotels recruit and retain the best management talent. Among those:
- Separating the wheat from the chaff. Hands-on operating experience is the best determinate of whether that happens and how quickly.
- The talent bell curve. There is simply not enough A-level talent to fill the needs of every hotel. And, the depth of the talent pool varies dramatically among brands and operators.
- Operator resistance to approval/oversight from owners and asset managers (generally more prevalent with brands).
- Turnover, whether initiated by the operator (for example, transfers or promotions) or due to external factors (poaching by another hotel/operator, spouse relocation or retirement). Although longer tenure is fairly common for GMs these days, the same is not true of other management positions and skill positions, such as sale managers, revenue managers and culinary team. These people – especially the really talented ones – are focused on career growth. Their best path is generally achieved through transfers to the same position at a larger, more-complex property or to a different position at a smaller, less-complex one.
You may ask, what does the selection and retention of top talent have to do with the topic of collaboration? First, this is one area where there can be no compromise and no time lag on correction. Most importantly, having the respect of the operator/brand, along with a positive collaborative relationship, will pay huge dividends in terms of the operator’s desire or willingness to deploy their best people at your hotels.
Richard Warnick is Managing Director and Co-Chairman of CHMWarnick (“CHMW”), the leading provider of hotel asset management and owner advisory services. The company asset manages over 60 hotels comprising approximately 25,000 rooms valued at roughly $15 billion. CHMW’s owner advisory services cover virtually every aspect of the hospitality industry, and all phases of a hotel’s lifecycle, including ground up development and repositioning. The company is currently providing development advisory services for client hotel and resort projects valued at over $3 billion. CHMW has offices in Boston, Phoenix, New York, Los Angeles, San Francisco, Fort Lauderdale, Minneapolis, and Honolulu. For more information, contact 978.522.7000, visit CHMW’s website at http://chmwarnick.com/or follow us on LinkedIn www.linkedin.com/company/CHMWarnick or on Twitter @CHMWarnick.
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