In the uncertainty of today’s economic environment, the old saying, “Plan your work and work your plan,” is not only as good of advice as ever, it takes on a new meaning.
We know the annual process of writing business plans produces our blueprint for achieving maximum performance. In this economy we know any number of economic variables could change from the predictions we made during the planning process.
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William Edmundson
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We have to use our annual plans as living documents—not as an exercise that produces a binder that sits on the shelf and gathers dust all year.
Gone are the days of automatic success in our industry. Your plan should have been written with as much knowledge about your property’s operations, market, accounts, guests and brand-driven costs as possible. It should have specific measurable goals and be reviewed on a regular basis. If you do not have a plan in place, you need to get one in place quickly.
Working, or reviewing your plan, requires you to measure financial and operating performance against your plan. Are you on track with both revenue and expense projections? Is everything on track by department, by accounts and by guest satisfaction scores? Do you have the right team in place? If you are achieving a particular goal, are you sure you know why?
If the answer is no to any of these questions, you need to ask, why are you not on plan? Is there anything that can help you get there, or do you need to reflect the situation moving forward? Every review of your plan should include revisions that adjust strategies and tactics to better meet goals based on the current situation.
Ask your key players what they can do better, and hold them to it. Each and every action in your plan should have a specific person responsible and accountable for its achievement along with a date for completion. Many operators ensure focus on success by tying key team members’ compensation to achievement of specific goals.
Cost reductions and revenue generation
A multiproperty owner recently conducted a review of his portfolio. He knew his properties were not going to meet the budgeted financial plan, so he rushed to cut expenses. While this owner’s team had been conducting regular reviews of their business plans at each of his properties, they did not “work” their plan focusing on specific reasons for shortcomings and how to adjust performance on both the cost and revenue sides of the equation.
As performance dropped, they continued to cut costs. At one point, vendors were asked for a cost reduction across the board. While some cost reductions were realized, some vendor relationships were put in jeopardy. At least one vendor provided feedback that the owner’s hotel teams were not fully using their products, including tools that could have helped drive top-line revenue. The vendor provided additional training and sales were reported to increase.
What was missing in this owner’s process was an investigation of any shortfalls in his business plans throughout the year. As an owner, you should always ask questions, such as:
Are all departments meeting their goals?
Are all planned actions being executed?
Is your team asking vendors and brand partners if they are using their products and services to their fullest? Did they have any recommendations?
Is your team following through?
Maximize your performance in 2010 by using your annual business plan as a living document. We must review business plans often and measure against specific goals. Hold specific members of your team responsible and accountable for meeting their goals. Adjust the plan as needed to meet or adjust your goals.
Remember—don’t leave the plan on the shelf. Plan your work and work your plan!
William Edmundson is a hospitality executive with more than 20 years experience in brand building, culture creation, innovative marketing and sales, operations, and franchise relations. He has worked on industry leading brands for Holiday, Promus, Hilton and Choice. William is currently consulting, speaking and writing for the hospitality/travel industry and can be reached at williamledmundson@yahoo.com or 301-653-0506.
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