In consulting for clients, in preparation for personalizing workshops and in evaluating topics for this regular column series, I regularly reflect on what the measures for success are. As an avid reader and an aficionado of history, I expand beyond my own career by examining the successes and failures of others to find knowledge.

Hospitality (and almost every business in this now global economy) has evolved to a blend of high tech and high touch. Technology greatly facilitates research, marketing, distribution and communication. The people-skills side of business, however remains the fundamental center of all basics that pulls everything together.

My MBA thesis¹ addressed some of the results of blending high tech and high touch. Contrary to many historical business patterns in the United States, the extraordinary consolidation of the most established hotel brands did not negatively affect the profitability of most individually owned hotels. In fact, the apparent consumer confidence in branded hotels not only maintained, but also actually improved profitability for most hotels in most segments during that time. This trend appears to be reinforced by the ongoing transition from independently operated and marketed properties to chain affiliation.

In my readings, I have come to respect many of the insights and business practices of former General Electric Chairman and CEO, Jack Welch. While he probably made some flawed decisions in his 20-year tenure of one of the world’s most diversified conglomerates, he recognized the need to focus his efforts on the high -touch side of succeeding in business. In a recent column, (Why do we really do what we do?) I outlined some of Welch’s focus on learning and on the merits of performing a SWOT analysis {Strengths, Weaknesses, Opportunities and Threats) of all business functions.

In his book STRAIGHT FROM THE GUT, Welch shared many examples of how critical it was to have the right people in the right positions if the company’s was to meet its long-term commitment to company values, to effective decision making and to ongoing profitability².

In one of his many speeches to groups outside of the GE organization³, Welch shared his views on trust of leadership and esteem for everyone in an entire organization. Welch shared his philosophy that an A-plus company needed top performers and explained his views of four types of managers:

1. Type I is everybody’s star: “These people deliver on commitments, financial or otherwise and share our values. Values like a love of speed, a hatred of bureaucracy. Values like relishing change, not being paralyzed by it, and respecting everyone and engaging everyone in the cause of winning.”
2. Type IIs are just the opposite: . Welch said, “ they do not meet commitments, nor share our values – nor last long at GE.”
3. Type IIIs are more complicated: “They try hard, but they miss some commitments, don’t always make the numbers but share all the values. They work well with people”, said Welch. “Sometimes, they swing and miss. We encourage big swings, and Type IIIs typically given another chance.”
4. Type IV is the real headache: “This is the person who makes the numbers, but forces them out of people rather than inspiring them to produce. This is your big shot, your tyrant, the person you’d love to be rid of but oh, those numbers….Type IVs deliver the goods without regard to values, and in fact often diminish them by grinding people down, by squeezing them, stifling gem. Some of these learned to change, but most couldn’t. The decision to begin removing Type IVs was a watershed – the ultimate test of our ability to ‘walk the talk’, but it had to be done if we wanted GE people to be open, to speak up, to share, and to act boldly outside ‘traditional lines of authority’ and functional boxes in this new learning, sharing environment.”

I certainly recognize that GE was and is a huge organization, with immense resources.

I also recognize it has huge obligations and liabilities. The failing of such business giants as Woolworth, Circuit City, General Motors, Chrysler, Pan Am Airlines and many hotel brands over the years cautions us all that size alone does not make long term success.

The purpose of this column is to get readers to think and analyze the leadership in their organization. In my career, I have worked in independent hotels, in branded properties from under 100 units to 1,500 rooms+, in family owned resorts and in corporate offices of differing sizes. I have seen each of the above Type Managers in action and I recall my level of engagement, satisfaction and sharing of values was directly influenced by which type of manager I had to deal with.

General Electric and Proctor & Gamble have each been called a ”CEO Factory”⁴ because of their commitments structured leadership development programs, which take their senior management through various experiences in different stages of their career. These leading companies provide an ideal training ground.

There are some excellent management companies and hospitality brands that have made commitments to excellence on a long-term basis. Two come to this author’s mind: Marriott who often appears on top 100 lists and Hyatt, a private company known for its entrepreneurship. I compliment them and would be pleased to share your stories about company leadership in future columns if verifiable information is sent to me.

What is your definition of leadership? Would you want to work at your hotel or management office?

1. The Surprising Effect on Profitability Resulting from the Tremendous Consolidation in the Lodging/Hospitality Industry in the United States 1990-2000 John J. Hogan, CHA MHS - A thesis submitted in partial fulfillment of the requirements for the degree of Master’s of Business Administration, Hospitality and Hotel Management April 2002
2. STRAIGHT FROM THE GUT, Jack Welch Warner Business Books, 2001, Chapter 12 Remaking Crotonville to Remake GE.
3. Welch speech at the 50th anniversary annual meeting of the North Carolina Citizens for Business and Industry, Raleigh NC 3/18/92
4. How admired companies find the best talent Anne Fisher, FORTUNE senior writer February 23, 2006; Leading from the front- Corporate Dossier-Features-The Economic Times 12 Sep 2008, economictimes.indiatimes.com

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Feel free to share an idea for a column at info@hoganhospitality.com anytime or contact me regarding consulting, customized workshops, speaking engagements … And remember – we all need a regular dose of common sense.

John Hogan is a successful hospitality executive, educator, author and consultant and is a frequent keynote speaker and seminar leader at many hospitality industry events. He is Co-Founder of a consortium (www.HospitalityEducators.com) of successful corporate and academic professionals delivering focused and affordable counsel in solving specific challenges facing hospitality today. www.HospitalityEducators.com is a membership site offering a wide range of information, forms, best practices and ideas that are designed to help individual hoteliers and hospitality businesses improve their market penetration, deliver service excellence and increase their profitability. Individuals wishing to contribute materials may send them Kathleen@HospitalityEducators.com. Special introductory pricing is in effect for a limited time that also includes a complimentary copy of LESSONS FROM THE FIELD- A COMMON SENSE APPROACH TO EFFECTIVE HOTEL SALES.

Consulting Expertise and Research Interest
1. Sales Management and training
2. Turn-around and revenue management
3. Professional Development for the Organization and the Individual
4. Customer Service
5. Making Cultural Diversity Real
6. Developing Academic Hospitality programs
7. Medical Lodging Consultants

If you need assistance in any of these areas or simply an independent review or opinion on a hospitality challenge, contact me directly for a prompt response and very personalized attention.

www.HoganHospitality.com
Your Hospitality Resource for Hotel Owners, Innkeepers, Managers and Associations