Investing in Financial Leadership in Your Hotel
CFO to CEO: “What happens if we invest in developing people and they leave?” CEO: “What happens if we don’t and they stay?”
NB: This is an article by David Lund, founder of The Hotel Financial Coach
I found this exchange in, of all places, the internet. Go figure. It’s an interesting back and forth that I know plays out in many organizations. Investing in anything training related in business is tricky. Not only when it comes to the money and resources it takes, but it’s also the matter of finding the appropriate training.
I also believe one of the biggest stumbling blocks to creating and investing in a culture where we train and develop our leaders continually, is the ability to have it result in a measurable change in behavior and performance. What I mean by measurable is a real return on investment (ROI). Without an ROI why would you sign the check? Just look at the training you did last year and ask yourself what’s changed?
In other words, to make this happen in the hotel business we need two things. A way to make the training stick and a way to find the resources necessary to do it. In this piece, I am going to lay out how hotels can do both.
I somewhat fondly remember my time inside several hotels as the Controller for 20+ years. I would always ask when presented with purchase orders for training, “When are we getting our money back?” The typical response was the immediate deer in the headlights look and then a bunch of mumbo jumbo about it being good for engagement and not much else of real substance to hang your hat on.
Back to today’s reality. More than ever in hospitality we face several serious challenges. One of the biggest demands we have is to find and keep leadership talent. Competition for these individuals is fierce. Time and time again what we hear they’re looking for is to align themselves with an organization that will develop their skills and abilities. Back to the title of this piece and the question at hand.
Brands are good at delivering the service and engagement skills that their leaders need but one big area remains vacant in the hotel industry. Brands don’t teach financial leadership. If you’re an aspiring hotel manager, you need to understand your hotels business strategy. The ability to manage your department’s numbers and gain a broader understanding of what underpins the hotel’s performance is what you need to get ahead in your hotel career. Without these talents, you’re just another pretty face.
How can brands deliver on this challenge? How can they provide their leadership with the training and development necessary around the finances? To answer that question, we must remind ourselves of the fundamental relationship that exists between brands and owners. Not that long ago we were “owner-operators.” However, today that species is all but extinct. Today hotel brands are management companies and what do brands sell owners? They sell expertise. Expertise in all areas of the hotel operation.
Wait a minute, who pays for the installation and development of this expertise? The answer is, drum roll…………………………………… the owner pays. That’s right–the owner pays. Brands mandate standards and the owners pay. That’s the deal.
Just look at your annual budget book from corporate, it’s chock-full of programs and trainings that the brand makes optional or mandates that the hotel include in the coming year’s budget. It’s called maintaining the standard. Whatever that is, it’s elusive and very useful. That’s the magic to answer the CFO’s question. The owner will pay for financial leadership training and development.
Owners usually balk at new programs and training that the brand mandates because the ROI is non-existent or at best a stretch. With financial leadership training, it’s anything but. Having your hotel lead by managers who can do their forecasts and track their results, adjusting to business levels, reviewing their monthly results and writing a commentary that continually points to improving, is exactly what brands can deliver to owners.
With financial leadership training, everyone is a winner.
- Leaders get what they so desperately want. Training and development around their financial skills. This shows them that they make a difference and have more impact in their world. They see that this is key to their personal prosperity. They all want this missing piece.
- Brands get to create an advantage over their competition. A brand with a strong bench of financially trained and competent leaders is a powerful distinguishing feature. Owners are looking for a brand that can best manage their asset, give them what they want.
- Owners benefit because their hotel has a leadership team that can punch above their weight. Give the owner what they want, a leadership team focused on getting the best result for their asset and they will gladly pay.
- The hotel business is about service. Providing your leaders with the necessary tools so they can reach their potential is the highest form of service. This is priceless. Just think about your own career and the people who helped develop you. I bet you would be willing to move mountains for them.
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