The third pillar - Part 2

Pillar 3 – The Money

The money, the P&L, the owner, it all boils down to the same thing, providing a superior return for the stakeholder. How is this pillar different? Well, really it is not different. We just treat it differently. 

When we talk about the money and we ask ourselves what we do to create financial leadership inside of our hotels, the answer 19 times out of 20 is NOTHING. We do nothing to lead and educate our management teams on the matter of financial skills.

I am not talking about the accounting department and the financial function. I am talking about the education and the skills of the non-financial leaders in your hotels. What do we do inside our hotels to create management teams that have a solid financial foundation? The answer: NOTHING.

Why might you be asking is this the case? There are three reasons that I will point out:

1. We still live in an owner/operator mindset that still echoes the idea, “look after the guests and the money will look after itself.” But the reality today is that we manage hotels and as a management company we sell expertise to owners. Brands need to slow down long enough to realize they need to evolve.
2. The finances and talking about the money for many people is still “Taboo.” The idea that we share the P&L and the managers get to see the financial results is a sacred cow for many people. To this notion, I can only say, “Get over it.” If we want to have mature responsible leaders, we need to trust them and share the financial information.
3. We seemingly do not know how to lead and educate our managers financially. We hide behind the numbers and push it off as the responsibility of the finance department. This is really the opportunity in all of this. We have the ability to train and lead our managers financially and it is not difficult to accomplish. In fact, the owner will pay 100 percent of the cost to create the financial leadership in your hotel.Just as we discussed in the other two pillars the brand can mandate the training program and the owner will pay 100 percent of the cost.

Leaders want to be educated financially and they want to have financial responsibility. The idea that leaders do not want to do this work is nonsense. Today’s leaders literally are dying to get financial leadership skills. They know without these abilities their careers are limited.

There are some conditions to this

Leaders need to know you are there to support them, to provide the education and the training to facilitate the creation of financial leadership as part of your culture. Giving your leadership the responsibility for the numbers is not enough, you need to give them a system and be there when it counts. Be there when it is a mess and support their efforts. Be there when it is a win and celebrate their success. The brand and the general manager need to get behind this initiative. It is not a finance and accounting function, it is one of the three pillars and it is a front-line management function for every single leader. It is not someone else’s responsibility. 

Hiding out behind the numbers is not a viable strategy. Leaders need to know you have a system for them to follow, a predictable process with defined timelines and accountability for all. Leaders want to produce their own budgets and forecasts, not be given numbers that someone else has cooked up and then they are told, “Good luck—here are your numbers.” 

Leaders need to see that you are investing in them, in their career and in their success. Once they see you are committed to their success, it is a game changer. If they sense in any way that it is anything less you are offering, you will not succeed.

The benefits of financial leadership are everywhere

Leaders who know what is happening financially in their departments can plan and execute better.

Imagine a leader who knows their expenses and payroll and he or she tracks the sales and volumes in the month and adjusts spending and schedules accordingly. The flip side is flying by the seat of your pants. We have all been there. What will happen the next time you have financial headwinds in your hotel? If you have created a financially engaged team, you will have choices and buy-in when it comes to cost reduction. 

The brand also benefits from financial leadership training, building bench strength as leaders move throughout the organization. A brand with this kind of talent will quickly make a name for itself. The owner benefits big time. Having a financially engaged leadership team means the team is all in when it comes to maximizing resource and profits. We all know that in our industry we have a million ways to waste money— it is literally everywhere.

On the flip side, with a financially engaged team, we have a million ways to save money. It is all about the culture you create, and it is fun! 

Like building a great service culture or a colleague engagement machine, financial leadership teams are every bit as possible. 

How do you grow a garden? You plant seeds and you nurture and care for them. 

The financial leadership piece in your hotel is exactly the same.

David Lund – The hotel Financial Coach.

Contact David at (415) 696-9593
Email: david@hotelfinancialcoach.com

•  Share this page