Why is financial leadership in hotels so un-evolved? We need to realize that the third pillar, the money, the owner, the profit-and-loss (P&L), the paperwork, whatever you want to call it – it needs a proper voice. The right voice – a voice that speaks to the leadership and the highest purpose that a cornerstone of our business warrants.
You’re probably thinking that the director of finance sure makes enough noise about the numbers and schedules for month’s end and the variances to forecast. He or she is very vocal at the department head meetings, always telling us what’s wrong, what’s late, what didn’t work. You’re also thinking that the owner’s presence with their asset manager is pretty obvious. They are always getting the hotel to cut back; we make seemingly endless changes to standards and payroll all to drive the bottom line. The financial voice in the hotel is loud and it’s almost always negative, never enough; always wanting more, an endless need to be fed. This is what happens to the voice for the money if we don’t address the way in which we craft, package and deliver the money message.
What if the voice of the money had the same respect and understanding that the voice of the guest has? Or the voice of the colleague? It’s possible to create the kind of environment where this is the case and it’s built on understanding.
It’s important to understand why the money needs a special voice and why it easily gets a bad rap if we don’t take care to give it the proper voice. Money, the P&L, the owner…it usually gets a bad reputation because of three reasons.
One, money is a powerful part of our society’s fabric. If you don’t have money or you think you need more, it is a powerful negative force. Not enough money and the next step is surely death, and so on. I think we all get the picture.
Two, money is usually used to shame people. There’s not enough of it; you’re missing something, and certainly, you’re not keeping up.
Third, the very subject of money and any open discussion about it are still largely taboo.
So, the net sum of all of this is; if we want to have a positive relationship with the money in our hotel we need to get the money out of the dark closet and get it front and center. We need to give the money a fair, friendly and equitable voice. After all, money is just a way to measure and exchange value in our world. To give the money that kind of a voice requires a strategy and practices we need to adopt.
The strategic foundation is open access to financial information. Budgets, forecasts, and actual results are all shared in your hotel. Managers and leaders at all levels are part of the creation of the budget; they forecast and share these updates regularly with their departments and colleagues. Success is celebrated and rewards for financial gains are shared.
The sharing part is critical, whatever that means in your business is uniquely yours. It could be profit-sharing, bonuses or celebrations. It really does not matter as long as your sharing the prosperity. In times of constraint when revenues decline, we now have a leg to stand on with our teams. Expenses and staffing need to be adjusted and no one likes to do this but an engaged team that knows what the score is will be much more willing to do their part id they know what’s going on financially and if they feel like they are part of the team.
This is the only way to break out of the cycle that would otherwise have the money being the instrument that victimizes the workforce when we need them on board more than ever. We can’t have our cake and eat it too. If we try too hard, our colleagues and leaders will see through our double standard.
In writing this chapter, it occurs to me that this is the very core of our being in hospitality. We’re here to help people and we often associate that with helping the guests. The same is equally, if not more important, when it comes to the colleagues. If we truly desire a team that actively looks after our guests, then the formula is surely one that has the executive, the leadership, the owner, the money looking after the colleagues.
A large part of that looking after can be built on the money culture, making its voice one of caring and fairness. All we need to believe is that looking after our colleagues and sharing resources results in one thing: colleagues who look after their guests and this, in turn, keeps them raving about your business and coming back. It’s like perpetual motion. Giving the money a voice in your hotel enables in you the embodiment of values that no other pillar can. It creates an incredibly engaged team in your business, a team that respects you because of your openness. This team lifts your business up with many hands. The voice of the money can be kind and just, it need not be feared and kept in the dark for only a few. Either way its voice will be heard, it’s up to you to decide what it will say.
By David Lund
David Lund is The Hotel Financial Coach, an international hospitality financial leadership pioneer. He has held positions as a Regional Financial Controller, Corporate Director and Hotel Manager with Fairmont Hotels for over 30 years. He authored an award-winning workshop on Hospitality Financial Leadership and has delivered it to hundreds of hotel managers and leaders. David coach’s hospitality executives and delivers his Financial Leadership workshops throughout the world, helping hotels, owners and brands increase profits and build financially engaged leadership teams. David speaks at hospitality company meetings, associations and he has had several financial leadership articles published in hotel trade magazines, and he is the author of two books on hospitality financial leadership. David is a certified hotel accounting executive through HFTP and a certified professional coach with CTI.
This article is an excerpt from David’s free guidebook ‘The Seven Secrets To Creating a Financially Engaged Leadership Team In Your Hotel’. You can have a copy by signing up at www.hotelfinancialcoach.com.