In your hotel, you either share the financials with your leaders, the department managers, or you don’t. If you already share the financial statements, you know the power it unleashes with your team and the result it helps to create.
If you don’t share you’re wondering what the management team will think about the money and how much goes to you and the owner. You naively think no one needs to know about the finances in your hotel. You think it’s none of their business. You’re also pretty sure the team will judge you and your results. You’re probably thinking the money is top secret and on a need to know basis. Or maybe you just tell yourself that so you have a good excuse not to reveal the results of your efforts. If you already share your numbers you know it’s not such a big deal, and it’s the way to go. In this article, I will explore the relationship we have with the money and how we can get the financials out of the closet and reap the benefits.
If you’re in the camp that says we don’t share, I ask you to think about what holds you back from sharing. Is there really a policy in your company that states the sharing of financial information is prohibited? I’m pretty sure those are few and far between. The way it usually goes down is something this. That’s just what we do, we have always done it this way or the last guy or gal didn’t either. I am willing to bet that most of you reading this could make the decision to share the financials with your department managers if you had a plan as to what would be accomplished if you did share. That’s an exciting prospect. It is changing the way you manage and introducing a new process to generate a different result.
The financial statements serve two purposes in your business. One, they are the vehicle we use to keep score. It’s that simple, a way to keep score for the game we call the hotel business. How is your business prospering or not is revealed by the numbers in your statements? A quick look by someone who knows how to read the statement will reveal your truth. I know many hoteliers don’t share because they are embarrassed by the lack of prosperity they are experiencing and the very thought of sharing this with their managers is too much to take. In our culture money has immense power. If we subscribe to this notion the power, we’re giving the money in our business is negative. It holds us down and keeps us from really wrapping our arms around our business and getting the results we know are possible. “But what will people think of me”, “surely, they will think I’m incompetent” – these are some of the fears we have. I often hear it’s the owner that does not want the financials distributed. I also here it’s policy not to share and the reason is we want the managers and department leaders to look after the guests and their colleagues. No matter what the excuse or reason I always say the same thing in response to my inquiry about sharing the results. I say, “do you think you could achieve a better financial result if your leaders and managers knew what was happening financially?” Inevitably I get a deer in the headlights response of yes, but…
The second purpose for the financial statements in your business is to help you to create plans and actions to improve the results moving forward. Really that’s the BIGGEST and HIGHEST purpose of the financial statements for your business. Tell me how I’m doing, what’s the score and drum roll here. What can I do to improve the results! Your financials point the way to possible improvements. If we don’t know what’s wrong with our patient, then prescribing a cure is beyond anyone’s ability. A close review of your financial statements will reveal exactly what is wrong with your business. When we look at ways to improve our business we naturally want the maximum buy-in from our managers and leaders to help pull it off.
Well, let’s think for a moment and ask yourself how could I get my managers to really own the action going forward. How can I get the team as engaged as possible financially? The biggest part of the answer is to share the financial results with your leaders and involve them in the formulation of the profit improvement plans. This really is not a new thought or a leading edge new age strategy. This idea to get your managers to buy into the ideas for improvement by involving them in creating the ideas by sharing the financials is as old as the hills. Here is the kicker. If you won’t share or believe you can’t share the financials the buy-in and accountability you desire will NEVER HAPPEN. That’s right, no matter what else you do if the managers and leaders of your hotel don’t have financial statement information they will not step up. Why may you be asking is this the case? It’s simple, you cannot expect someone to create a result that is better than the current result if he or she don’t know what that result is or what the new one should look like. They are in the dark without any way of navigating and they have no destination to navigate too.
Your leaders want to make a difference in what they do in the lives, at work, and at home. All of us have a basic human need to make a difference. Your managers what to have a greater impact on your business results. They also what to know the score, the scoop. They want their seat at the captain’s table. They want to be on the inside track. They also want you to treat them like adults. For you to share the financial results and ask for their participation is an incredibly powerful gesture. It also needs to be presented properly with just the right amount of humility and vulnerability. Yes, vulnerability. When you share your results your opening up a part of you that they know is sensitive and personal. Money in our society has such incredible power and by showing your financial results you create equity with your leaders. Manage this process carefully and you can turn your financial world around. Educate your leaders on the financials. Show them how it works and what it all means and watch them get excited. Financial leadership skills are incredibly valuable assets for your managers to create. With these skills, they are highly marketable in our industry. These skills cannot be picked up at school, or from a textbook. The only place you can learn how to manage the P&L and your department is on the job. The only person in your business that has the capacity and capability to create these financial leadership skills with your managers is you.
Do you remember what it was like when you were younger and someone took you under his or her wing, guided and mentored you? This is the same opportunity you have to create that priceless relationship with them. Do this for your leaders and they will move mountains for you and your business. And don’t worry about your managers taking these new skills and running to the competition. By the very fact that you have served them and created greater prosperity for your managers means their commitment to you is at its highest level.
Serve your leaders by sharing the financials. Serve your manager by training them on how the financials work. Serve your team by asking them to participate financially and ultimately to create their own forecasts and budgets. Serve by creating financial leadership in your business and watch your profits soar. Serve your team and watch their engagement grow.
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.
David has a 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.