"How is this year looking?" I asked.
"Pretty much the same as 2011. And the year before that. And the previous," he said with a half-smile.
"Which means?" I followed up, pressing the point.
"Up and Down."

This was part of a conversation I had recently with a hotel owner that I know.
He can be a bit monosyllabic at the best of times, but no matter how blunt he is, he usually has something worthwhile to contribute.
And his 'up and down' comment hit the nail on the head.
Volatility is the new norm in business life.

Now, you don’t need me to tell you that there is probably nothing harder than trying to manage through volatile times. In any sector – and even more so in ours - it becomes increasingly difficult to predict demand and then reposition the business accordingly; even basic tasks like rostering become significantly more challenging when business levels are fluctuating dramatically.

Equally, I am well aware that nothing I can say here will make that challenge any easier in the year ahead, but a number of managers and owners I met over the holidays made important comments about managing through volatility, which I think are worth considering:

Don't think only of the short-term
It’s only natural when times are so uncertain that the focus should shift to the short-term. In many respects there is little alternative than to concentrate on getting through the immediate future. That said, thinking only of the here and now can actually be a self-defeating strategy, if taken to the extreme.
Let me highlight an example of what I mean.
One manager I spoke with over the Christmas period explained to me a lesson he had learned in this regard from 2011.
He outlined how early in the year, in order to reduce costs, his company had seriously considered taking out a full tier of management; when they did the numbers, it stacked up as an idea.
But when they considered the longer term implications of such a decision they saw many hidden costs, such as the loss of a significant amount of organisational knowledge and experience for starters.

What did they decide to do in the end?
Well, this leads me to a second consideration when managing through volatility.

Creativity and Innovation matter more than ever

When times are tough and resources scarce, finding creative solutions to problems becomes even more important. The tried and tested no longer suffices, or may appear best on the surface, but when properly considered can be less attractive.
The only way forward is a new way forward.
In the case of the business considering whether to take out a layer of management, they decided to hold off on the decision and try another approach - it wasn't anything spectacular, but it showed the importance of thinking longer-term and trying to be a little creative when making decisions in tough times.

In this case, they sat the relevant managers down, explained the situation - warts and all - including the possibility that they might all be made redundant; but they indicated that they were willing to listen to suggestions as to how alternative savings could be made.
After some time, the managers involved came back with a range of cost saving proposals, including reductions in their own salaries, but others such as how operational costs could be reduced through a change in suppliers without damaging quality etc., plus a proposition to strengthen their online presence to improve revenue from that source.
Now, the manager in question readily admitted to me that the total cost savings suggested were less than what would have happened had the whole management layer been taken out, plus those cost savings would take longer to materialise. Yet, the exercise had shown that these were people worth keeping, if only for their loyalty to the business.
They represented "added-value" that the examination of pure numbers didn't account for.

He also explained that, many months on from that decision, the hotel was still far from out-of-the-woods, but he was the first to admit that the "place felt rejuvenated" because everyone was pulling together much more than before.
December had been excellent and he was more confident, despite the naysayers, heading into this year than he was a year ago.

Focus on the customers you have

When times are tough the majority of companies tend to rush to attract new customers, which often requires spending heavily on advertising, or offering special promotions to attract new business. Clearly, there is nothing wrong with that approach in principle, but one manager recently made a point to me on this subject which is undoubtedly very basic, but worth noting all the same.

The guy in question, a very experienced manager, explained how in his hotel they were less focused on chasing new clients, but instead were targeting much of their effort on existing customers, or those who had lapsed, and seeking to increase the volumes generated from that source. It had proven more successful, he assured me, than the 'cold calling' approach or raising their ad spend significantly, simply because they already had an 'in' with these people.
One example he gave me is worth noting.
It was how they had contacted a particular company which had previously held many training seminars at the hotel, but for the past two years or so, volumes from that source had dropped significantly. It turned out that the company in question had significantly reduced their expenditure on training anyway, so there weren't as many seminars being held. There was no business to be had from them as regards training seminars.
Still, during the contacts with this company, it came to light that they were using a different hotel for overnight accommodation for their clients, because the rate there was lower; on hearing this, the hotel manager explained how his sales people were able to counter-offer an attractive rate which succeeded in "poaching" back that business.

Okay, this is minor in the greater scheme of things, but it does present a small example of effective management of the existing and historical customer database can be beneficial.
Sure, I fully understand that the ability to apply this approach depends on many factors, such as the type of hotel and the size of your existing client base, but the principle of trying to increase revenues from clients you already know and understand - as well as attempting to generate new business - makes sense in a tight market.

Think as well as do

In times of volatility there is always a need, to some extent at least, for ‘all-hands-on-deck’ and of course each and every one of us has to improve our individual productivity to help make it through to the other side. I see plenty of GMs taking on Duty Manager shifts these days in order to curtail costs.
On the other hand, one manager I spoke to in December made the somewhat obvious, but again no less important point, that it is vital to leave plenty of time aside to think as well as do – and from that to try to plan the way forward rather than simply responding to the rapid changes in the operating environment.
In other words, he emphasised, it is crucial during volatile times to avoid falling into the "busy fool" trap.

Up your game as leader

Perhaps the most common theme raised by the owners and managers I met in December was just how important strong leadership becomes during difficult times.
Many I spoke with highlighted how they had been personally challenged by the downturn, and how this had led them to "up their game" leaders.
The words of one manager stick in my mind here, when he readily admitted that he had "become a bit complacent during the good times" and that the past few years had been a "bit of a wake-up call" for him in terms of "getting out there and leading from the front".

I firmly believe that by raising your own performance, you can help to get the most out of others around you which in turn raises overall productivity and effectiveness.

That is a big help when battling volatility.
Achieving this, of course, is never easy and requires each of us to really think about our own leadership skills and, harder still, work to improve them, but the potential results are worth that effort.

Clearly, none of the above are intended as magic solutions for managing volatility, nor are they necessarily new ideas, but no matter where you are located, no matter how big or small your businesses, I think they are worthwhile considerations as you seek to navigate through these volatile times.

Happy New Year!

About the Author

Enda Larkin has over 25 years experience in the hotel industry having held a number of senior management positions in Ireland, UK and the US.
In 1994 he founded HTC Consulting, a Geneva based firm, which specialises in working with enterprises in hospitality and tourism. Since that time, he has led numerous consulting projects for public and private sector clients throughout Europe and the Middle East.
He is author of Ready to Lead? (Pearson/Prentice Hall 2007), How to Run a Great Hotel (How to Books 2009), ‘Quick Win’ Leadership (Oak Tree Press 2010) and Journeys – Short Stories and Tall Tales for Managers which is due to be published in March 2012. He may be contacted via or at [email protected]
Read his Blog at

Enda Larkin
Director, HTC Consulting
+41 (0) 22 700 8675
HTC Consulting