You probably read the title and said to yourself, “No way, that’s a load of BS. There is no way my managers want to do their financial forecasts. Heck, I can’t even get them to submit their accruals or commentaries. We ask them to do their forecasts but rarely do we get them on time or even halfway making any sense. How on earth can I get my department managers to want to do their forecasts?”
NB: This is an article by David Lund, founder of The Hotel Financial Coach
One of the most powerful distinctions in the world is the difference between wanting to do something and knowing how to do something. There is a saying that goes like this: If you can find the ‘want to’, the ‘how to’ is everywhere. The meaning is twofold.
One, it’s almost always counterproductive to tell someone to do something. People hate to be told what to do. Think for moment. Ask yourself when was the last time someone told you what you needed to do and you really appreciated it.
Two, as human beings we’re typically very good at getting what we want. If we’re clear about our desire and we’re willing to commit to go after it, we usually get what we want. When we want something, our motivation is high. When we see that it’s not difficult, our actions increase. When we are given support for our attempts, we’re much more willing to try again. When we see that it’s safe to try and we won’t be criticized if we fail, we’re willing to experiment. When we see the opportunity for greater prosperity, we tend to get excited. When we see the possibility of having a bigger impact in our world, we naturally want to move in that direction, if it’s safe.
Does any of this sound familiar? I mean, who would want to attempt something if getting it wrong or not quite right means personal judgement and embarrassment in front of one’s peers? No one. And because we don’t like feeling this way, we avoid the possibility all together.
If you want to create the kind of environment that has your leaders and managers wanting to do their monthly financial forecasts, commentaries or budgets, then you need to work on the following:
- Stop using the financials as a tool to embarrass and ridicule your managers and leaders. If your practice is to call people out on their financial results at your department head meeting (or any other occasion) stop this bad habit. Your managers will never step up financially unless it’s 100% safe to do so. You need to create the kind of environment where it’s ok to fail. What’s unacceptable in this environment is not trying. Failing to get your forecast right is a given. The only thing we know for sure about any financial projection, budget or forecast is that it’s wrong, it’s always wrong and it will never be right. What’s unacceptable is not doing your forecast. This simple distinction is the starting point for your journey to turn things around with the financial leadership in your hotel.
- Don’t think about sending your troops into battle without the necessary resources. We would not plan a mission without knowing what we need to make the mission a success. In any mission, we know we need supplies, training and planning. With your hotel financial planning you need to have a system that your leaders can follow and you need to train your managers on how to use that system. The great thing about hotels and the financials is that every month we get to start over again. Every month we get a chance to work the system, to practice, to improve and to get better. We can’t expect to do this once or twice and get it “right,” it’s a continuous process. Just like service and colleague engagement, the job is never done. Your mission with the financials is a never-ending process that you get to restart each month. This is great news!
- Show your managers and leaders the engine room. An old boss of mine was a bit of a character. I remember once he told me to stay after our executive committee meeting for a conference call that he had scheduled with corporate. The call was the monthly succession planning call with the company president and all the VP’s. In less than 30 minutes they talked about all the executive positions that were open in the company, who was ready to move into these positions and who wasn’t. In mere seconds careers were made and lost. He or she is ready for a big move, not quite there yet, or they are forever a B player. I was flabbergasted. After the call he said, “You’re in, you’re out, on top one moment and gone the next, all because of what someone says about another.” I was not surprised with what I learned from the call—this is how things were done. What I was blown away by was that he thought enough of me to share this with me. He could have given me a $20,000 raise and it would not have had anywhere near the same impact. Sharing the financials with your non-financial managers has the same impact. Especially when it’s done in the right way. Your leaders want to be on the inside. Show them the engine room and watch them become engaged. Watch them want more.
- Preparing the forecast for a department in the hotel is not terribly difficult. Showing your leaders how the financials work and how to pull together the information you need to prepare a financial forecast is like teaching your leaders how to fish. The proverb saying applies here, “Give a person a fish and he is fed for the day, teach him how to fish and he is fed for a lifetime.” Educate your managers and leaders on how the financials work. Once they see inside the P&L, explore how other departments work, and see how it all comes together, they will realize it’s not so difficult. Expenses can easily be estimated using a zero base. Payroll forecasting is just an extension of preparing a schedule. Revenues are an estimate based on trends and indicators. The trick it to start. The next trick is to repeat. Your leaders will see it’s not difficult. Each month equals practice. Each month it gets clearer. Each month we learn more about our business. It is the only way forward.
Your leaders secretly want to be ok with their numbers. To do this they need a system, training, support, and the right environment. I ask leaders all the time, “Why didn’t you do your forecast?” The reply I always get is “I really want to be comfortable with my numbers, I get the guest and colleague part, but to be a really effective leader I know that I need to get with my numbers?” Don’t believe me, ask them yourself. Your leaders want to do this they just need the right environment. The only way this environment gets created is if you make it happen.
My question for you is this, what’s holding you back from creating this kind of environment in your hotel? You know it’s what you want. You know it will make your hotel more profitable. You know your leaders will love you for giving them this financial gift. You know it will be a lot more fun. So, what’s holding you back?
Investing the time, energy, and resources in creating financial leadership in your hotel is not difficult to do. “How to” do it is not holding you back, “wanting to” do it is. You might want to ask yourself “Why?”. When you think you have the answer put it down and just try. Make the act of doing the forecast the goal, not getting it right. Practice and make progress by getting a little better each month. Before you know it, you will have a team that swings a big bat.
Author Bio
David Lund is The Hotel Financial Coach, an international hospitality financial leadership pioneer. He has held positions as a Regional Controller, Corporate Director and Hotel Manager with an international brand for over 30 years.
He authored an award-winning workshop on financial leadership and has delivered it to hundreds of hotel managers. David coach’s hospitality executives and delivers his Financial Leadership Training, helping hotels increase profits and build financially engaged management teams. David helps aspiring hotel leaders overcome their uncertainty with the financials in a safe and productive environment. The coach also consults on hotel financial statement and system design, financial policy and asset management.
He speaks at hospitality associations and company events and he has had many articles published in hotel trade magazines. David is the author of the book, Seven Secrets to Create a Financially Engaged Leadership Team in Your Hotel.
David is a CHAE through HFTP and a Certified Professional Coach
This is how you can contact David
Website: www.hotelfinancial.com
Email: david@hotelfinancialcoach.com
Phone: +1 415 696 9593
