Executive Talent in a Changing Environment - By: Michael S. Kogen - HVS International Executive Search
Hospitality executives face the daunting task of identifying business practices and organizational structures that will allow their companies to succeed in a swift global environment. The future success of lodging organizations will be driven by the ability of executives to identify, predict, interpret and capitalize on trends in a fast-changing competitive market, while keeping in mind the clear mission: satisfying the needs of the customer.
The industry is subject to change set in motion by the transformation of an economic system shaped in the industrial era, that is moving towards a knowledge-based era, driven by technological advances. This continuing global transition mandates that the hospitality executive examine key factors of marketing, product, organization, capital and technology, all of which will influence their ability to continue competing successfully. It is critical to consider the following:
- What future services will be essential in a technology-driven, global environment marked by rising customer expectations.
- What alternative approaches and skills must organizations develop to ensure market success?
- How will the industry's executives deal with the creation of shareholder wealth in a capital-constrained, highly competitive environment?
Business travelers will increasingly be more likely to prefer branded hospitality products. The business traveler demographic has become a more mobile workforce, bringing their offices with them as they travel. Hotels must therefore:
- Allocate more capital on technological improvements
- Reconfigure the traditional hotel layout
- Install more business-related equipment
- The need to increase market share
- The opportunities created by changing lifestyles and demographics
- Franchising in the future will require an understanding of the following dynamics:
- Domination by a few multibrand conglomerates
- Reliance on international growth in a globalizing economy
The Organizational Chart - Executives will be expected to continually reassess their organizational structures. They must evaluate the importance of focusing on the customer in the future. The value of the customer will be evident in all aspects of the hotel organization's marketing and product concerns.
The Six Sigma Management Philosophy, exploded onto the business scene in the 1990s when AlliedSignal and General Electric adopted this unique method of managing their businesses. Starwood Hotel and Resorts has followed suit. Historically, organizations have attempted to achieve strategic business objectives through a functional hierarchy. Functions are aligned vertically. The problem with a vertical hierarchy is that it often ignores the organization's customers. Hospitality executives are forced to redesign the organizational chart from a management of functions to a management of processes.
Capital Formation - As the competition for capital increases in the future, hospitality executives need to be knowledgeable about how they can enhance shareholder wealth and produce satisfactory returns. Investment opportunities will be strongly affected by economic conditions, anticipated financial performance, and the availability of capital. With a variety of interests involved in hotel companies, these interests will battle for available sources of capital seeking attractive returns.
Technology - Technology is having a significant impact on the ways in which hospitality companies organize and conduct their business. It is imperative that executives keep abreast of a continuing movement towards an era of the fully automated hotel, which will provide a network connecting the guest to other preferred vendors. The emphasis will center on the delivery of products and services electronically and physically beyond the hotel. In essence, the marketplace will become the marketspace. An executive also must be able to recognize that technology, which continues to provide improvement in the delivery of products and services, still does not replace the human element involved in delivering quality service.
Conclusion - Hospitality executive talent must have the ability to identify, predict, interpret and capitalize on trends in a fast-changing competitive market. In order to succeed, they must be required to adapt to elements affecting the distribution of hospitality products, the product itself, the organizational structure, the ability to attract capital, and the technological revolution. The future success of lodging organizations will be driven by the ability of these executives to implement these factors, while still keeping in mind the clear mission of our industry: to satisfy the needs of the customer.
Michael Kogen (pictured), is Vice President of HVS International Executive Search. Prior to joining the HVS Executive Search team, Kogen worked at Hospitality International Executive Search of New York City, where he was Vice President responsible for the Hotel Division. Prior to his time there, he served as General Manager of the Mansfield Hotel, also in New York, an award- winning property in the Boutique Hotel Group portfolio.
HVS Executive Search provides human resource expertise to the restaurant, lodging, and gaming industries. Core competencies of the firm include executive search, compensation management, corporate governance counseling, employee assessments, and on-line recruiting. For more information go to