Lessons From Hyatt: Simple Ways to Damage Your Brand

Sep 25, 09 | 1:55 am

By Paul Michelman

Looking for a sure-fire way to do a little damage to your brand? Follow these two simple steps:

1. Make the decision to fire a very important yet modestly paid sector of your workforce. Fire the entire lot of them.

2. Outsource their positions to a third-party vendor who will bring in contractors to do their jobs at a lower cost. But - and this is critical - before you fire them, trick your workers into training the people who will replace them. How to pull this neat trick off? Tell them they are training vacation replacements. (Best to leave out the fact that the vacation is permanent).

There you go. Simple as that. And don't thank me; thank your friends at Hyatt hotels who, according to an article in the Boston Globe, have apparently executed this very strategy at three Boston area properties.

Hyatt managers seemingly came to the conclusion that they could save money by firing the housekeeping staffs at three hotels and replacing them with vendor-managed contractors. These are the workers who ensure that your room is clean and pristine. It's often said that when travelers check into a fine hotel room, they should be met with the impression that no one has ever stayed there before. As for the reverse: any weary road warrior who has trudged into a room to find an unmade bed, a sink covered in toothpaste spittle, or even missing towels and soap will tell you the feeling is unpleasant - and the impression lasts. For a hotel, housekeeping is not trivial.

Even so, I'm not in a position to judge the business reasons for Hyatt's decision. The savings may be dramatic. Managers' confidence in the vendor it selected may be both high and well-justified. But some combination of the outsourcing itself and the way it was carried out has captured public attention.

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Source: Harvard Business Review