Transformation and innovation are big buzzwords in today's corporate culture. According to a 2020 Garnter report, 60% of businesses mention that digital transformation is a topic of conversation in almost every board meeting. Where you focus your innovation efforts can be just as impactful as your methods of implementation. The end goal is the same: to implement changes that have a positive impact both within your company and in the industry as a whole. So, in this C-Suite viewpoint, we ask you to share your views on how specifically YOUR organization deals with transformation and innovation.
Have you documented your innovation goals along with a dedicated annual budget? Where and how does the process start... and what are the critical success factors that turn great "ideas" into actual implementation?
The history of innovation and technology progression has shown exponential growth through the generations, from Morse coding to facsimile, from telephones to emails, and now we are in the era of metaverse.
It's no secret that the hospitality industry has not been known to be the most forefront in innovation. Yet, not unlike other industries, COVID-19 has amplified the importance of innovation and accelerated the pace of transforming the way we operate.
At Pan Pacific Hotels Group, it is our vision to become a “trusted global hospitality company”. It starts here as this guides our strategies to take care of our guests, our associates and our partners.
This must inevitably entail providing them the thoughtful processes and efficient systems through the innovation roadmap, from the reactive to the long term for business growth and success.
When the pandemic hit and lockdowns happened, the company swiftly responded and pivoted businesses to digital e-commerce platforms. This arose from internal “War Room” discussions with the goal to preserve and generate revenue. Good ideas that were quickly adopted include new food and beverage online takeaway and delivery channels, EzyMeet – virtual and hybrid meeting packages with new ways of live-stream sales and virtual shows – as well as leveraging platforms such as WeChat powerhouse to target specific markets. These have shown high success over the past 18 months, driving critical revenue for our hotels. As one of the first hotel groups to embark on these measures, it has also allowed us to continue to nurture brand faith and loyalty through this challenging period.
As we move across the strategic spectrum in goals, boardroom discussions take place with the support from field experts as the Executive team brain-storms, debate and deliberate to put in place innovation plans, some of which are already underway.
Data reigns as king in today's world. This stands at the forefront for our technology advancement goals and resource needs. Data pertains to both serving our external customers and also insights which support our internal associates.
In laying out the blueprint, we learn from success stories from other more progressive industries, we seek out professional expert advice and engage the best talents and teams to support our own success.
Take for example: we work with the likes of Oracle, DerbySoft and are part of the Global Hotel Alliance with the goal to create more powerful customer relationship management systems and platforms to enable greater level of personalisation. These include B2B sales force automation as well as building our central customer database through our loyalty programme with Pan Pacific DISCOVERY. These efforts facilitate greater understanding of our guests and promote a seamless delivery of sincere service which is our hallmark.
On the internal front, we have already embarked on technology innovation in mining existing information and insights for supply chain control which his has resulted in better procurement forecast and inventory control, and also leveraging business intelligence and yield management for better business planning and stronger commercial viability.
These are but some examples of our innovation goals and successes. In concluding, I must emphasise the importance of having bold visionary leadership to move the needle with this colossal goal. This vision must be shared and embraced by a cohesive team who will put their hearts and souls in believing and be willing to make that change and difference.
At Les Roches, embedding a culture of innovation and transformation goes through a holistic approach. The students are not only told the importance of innovation, but are taught and shown, through a great number of ways, why innovation is fundamental for the wellbeing of the hospitality industry, so it becomes natural for them to think improvement. The key element of this approach is named Spark, our on-campus innovation center. With Spark, students, alumni and industry partners develop and test on our campuses new hospitality solutions in our living laboratories and create starp-up in its pre-incubation and incubation center. Spark is embedded across our entire academic curriculum, putting innovation and entrepreneurship at the heart of all our programs, through different projects and activities focused on the key areas that will dictate the future direction of hospitality innovation. They are: AI and face recognition, Robotics, WebApp/ecommerce, AV/VR/XR, Internet of things (IoT), Blockchain, Product technology and Big Data.
To ignite the student's passion for innovation and entrepreneurship, we give them opportunities to work on real-life business consultancy, provided by our industry partners. Among all the startups and industry partners, we are working with companies such as VIMA in the creation of a solution, supported by Artificial Intelligence, to better understand how hospitality employees are perceived by others, and how to ensure their well-being. Another example of project currently in development with Spark is Nevomo, which define and develop the future hospitality customer services & experiences for hyperloop and magrail transportation. In addition, students receive coaching and support on how to research, pitch and plan for a business launch. Les Roches regularly hosts entrepreneurs to share their experiences with students as guest speakers on campus. This proximity with the reality of innovation allows our students to familiarize with the challenges of giving life to innovative ideas.
Our students also took the innovation spirit installed at Les Roches to another level with the creation of Spark Society, a student club where participants organize activities to promote to their fellow students the innovative trends and novelties in the hospitality industry.
The global paralysis has brought forth the most impactful evolution of the hospitality landscape fast-track being engineered by agility, innovation and forward-thinking – all accelerated by the changing consumer behaviours in the new terra incognita, the quest for exploration of different experiences and the thirst for a healthier, greener, better and well-being focused alternatives. Such outcome-driven trends have outgrown the price tag discussion and have moved to what long-lasting impact they can deliver.
In the last 18 months, our industry has witnessed growth in sustainability initiatives, digitalisation of processes and convergence between the real and experiential world. One thing is certain – this change activates an even greater change and need for innovation. Embedding innovation and transformation means integration in every area, location, specification, KPIs, bonus systems, and everything else we are “used to” has to be re-looked at.
All of us have a responsibility to leave the world a better place, and the industry people want to be part of which means a lot more work on the soft side of our brands has to happen, and only with industry developments and innovation, believing in the new and younger brains, and being led by the true facts of where the world is currently going. We no longer have choice, but simply have to DO it.
Transforming company culture is something that must be done genuinely and with respect for the values on which your company was founded. We used the pandemic as an opportunity to assess our current set-up, operations and teams, utilising the time to embark on a journey of innovation and transformation that better caters to the needs of our customers.
We know that there are two things our (largely Millennial and Gen Z) community of students, co-workers, and travellers all seek: simplicity and community connection. We know that our audience wants to move seamlessly through F&B, the hotel, and co-working space. The aim is to use technology to remove or simplify non-value-adding transactional activities for both guests and team members, while ensuring we still have experiences and opportunities in place to foster genuine human connections, be it through events, staff-and-guest interactions, and our physical spaces.
Taking a customer-first approach to mapping a plan for innovation is critical to success. Create genuine and relevant value, and they'll stay loyal to your brand. After identifying our own customer needs and values, we could map all the interactions, transactions, and data sharing of TSH experience, highlighting the most impactful moments into user journeys, which become unique selling points of our brand. We then drafted the operational processes to deliver these journeys, and determined the parallel employee experience. Only then could we determine appropriate technologies that can facilitate these journeys and experiences for both staff and customers, without compromising emotional connection. From this technology architecture, we defined a multi-year budget to cater for our evolution.
Ultimately, we're building one team and focusing on one community. I know that this is what customers are looking for today and have no doubt that it will strengthen our underlying business model, while reducing complexity and allowing us to become a global brand.
To drive change, innovation, and growth throughout the company and to implement innovations in our hotels, we have a dedicated budget for strategy development. In this context, the area of transformation and growth in our company does not only include technical innovations and processes. Our staff at the headquarter and in the hotels are ambassadors for new solutions and services and therefore an important pillar in the creation and implementation.
Innovation is seen as an integral part of all our strategic projects. Our recent transformation process started with developing and building a commercial platform as the basis for the change of Deutsche Hospitality towards being a comprehensive international hotel-service provider to our business partners and stakeholders as well as to set up a client centric strategy. This includes the areas of franchise and management as well as consulting. The strategy was initiated right after Ulrich Johannwille (CFO) and I were appointed as the Board of Directors in November 2020.
Several aspects have a major impact when it comes to turning ideas into implementation: our successful strategy relies partly on ongoing communication, stakeholder management and participation, as well as a change process supported by our HR team. We established a Business Innovation department, which acts as a key component for creating new ideas and thinking outside the box. Furthermore, employees are encouraged to participate in special workshops driving change processes. Also, the ongoing communication across many professional areas on the management level works very well and, last but not least, the integration of innovation goals into the budget guidelines of the hotels and Corporate Office units is the breeding ground for our achievements. Together, the DHfamily is doing a great job in implementing changes that benefit our business clients and customers.
Like all consumer-facing businesses, at IHG Hotels & Resorts, the expectations of our stakeholders are constantly changing, and we're focused on evolving our digital ecosystem of products and platforms to improve our guest experience, create efficiencies for hotel teams and drive value for owners, without taking away the human factor that is so important in hospitality.
As a global organisation, one of our priorities is to create digital advantage. However, with a presence in more than 100 countries, nearly 80 of which are in our Europe, Middle East, Asia & Africa (EMEAA) region, we know that how we do this can come in different ways. We always aim to take advantage of our global scale without letting it slow us down, recognising that an idea that works in a particular location, or for one of our brands, may but not be suitable to expand further afield.
We typically work with partners and utilise products already in the market, rather than seeking to become a digital technology company ourselves. For example, we have worked with Amadeus to evolve our Guest Reservation System, which makes it easier for guests to book the rooms they want. And, as we look to the future, we will continue to enhance this experience across our digital channels.
This is critical not only for our guests, but for our hotels and owners too, as it ensures they're charging the best rates for each of their rooms – and it's just one of the ways we're supporting them through listening to their feedback. They've also told us how important it is to have a strong mobile presence, and we're working on the next generation of our IHG app, while automation and artificial intelligence (AI) – chat, search and booking – are other areas we're focused on as we look to reduce the burden on our hotel teams so they can spend more time providing memorable stays for our guests.
Another example of this is in the Middle East and Australia, where we're working with Winnow Solutions, whose innovative AI technology tracks, measures and reduces food waste. Through using real-time information, our chefs can adjust their menu planning accordingly – meaning it's benefiting our planet as well as our owners and guests.
In a company as diverse and large as IHG, there are a million innovative ideas that come up every day. As a leadership team, it's our job to ensure our colleagues understand what our priorities are while offering them the space to think, deliver and be creative. That means removing barriers where we can, ensuring our teams know who makes the big decisions, and supporting them every step of the way.
At IHG, we talk a lot about giving our colleagues the room to grow. I fundamentally believe that if we do that, they will keep coming up with the fantastic ideas that will allow us to deliver on our purpose of providing True Hospitality for Good as the world starts to open up again.
In 2017, Radisson Hotel Group completed a comprehensive diagnostic and developed a strong five-year plan with 25 concrete initiatives many of which focus on innovation. One of these initiatives includes the development of our global IT platform called EMMA, which covers CRS, PMS, S&C, and POS. EMMA is an integrated platform which is key to enhancing our forecasting tools, allowing us to be more dynamic with our pricing. We recognized that we needed an integrated platform to make quick decisions, reduce the time it takes to implement key pricing models, and cut back the time our Revenue Management Practice needed to incorporate RPA technology operationally at a corporate and hotel level. Because of this key decision, we can now quickly scale innovative operations such as online check-in / check-out, digital payments, chatbots powered experience solutions, and more. While digitalization solves some business issues, it is not a universal solution. We need to adapt the solution to the new issues that present themselves.
As part of the five-year plan, we also identified a need to accelerate our digital transformation and implement transversal innovation projects. In September 2021, we launched the Business Transformation Office (BTO) to dovetail cross-departmental coordination of complex projects and ensure that innovative ideas are developed and implemented quickly from inception through to delivery.
The innovation process at Radisson Hotel Group starts with identifying the issues we want to address and need to solve, and then to developing concrete solutions to ensure innovation is always focused and targeted. We do not have just one simple starting point but is a collective effort When our CEO, Federico J. González, joined Radisson Hotel Group, he was the key driving force behind the transformation and development plan which placed innovation at the heart of each initiative. He also made each individual leader responsible for driving innovation across their area of responsibility from the top to the bottom. Our integrated platform to which all employees have access, allows them to see all the creative ideas and proposals and to use this knowledge to develop action plans for their area. Any employee can easily propose a business idea directly from their mobile phone. A clear example and proof of success is that most core tools employed at our hotels were suggested and tested by the hotel teams.
Key steps to turn ideas into action successfully are:
- Ensure you have an open bi-directional channel where everyone can propose ideas
- Create a company culture where innovation is recognized and encouraged
- Have a horizontally structured organization wherever possible to stay close to the business and identify good ideas quickly
- Encourage participation by allowing the business units (hotels) the freedom to trial ideas by providing a working framework and transparent feedback
- Try to develop an agile mentality that extends beyond the purely digital: test, release MVP, improve, try and test again
Purpose, Creativity & Inclusion - At Remington Hotels, our culture of innovation is rooted in 3 key principles: purpose, creativity, & inclusion. It all starts with defining the purpose, goal, and strategic plan of the organization. This becomes the foundation of any innovation. You have to be intentional about driving innovation and process change. This is particularly important in any organization where their main source of business is not the creation of new products and services. Evolution is part of any organization, and those who do so to stay ahead, as opposed to keep up, will not just survive long term, but thrive among their competitors.
Second is creativity. It might be overstating the obvious, however, you have to look at meaningful problems that need to be resolved. You have to evaluate the needs of the organization from a structure and resource perspective and find unique ways to solve them. Most times, the organization needs to resolve an issue or improve a process, however, it might not have allotted resources to do so. Focus on what you are ultimately trying to accomplish, and do not be bogged down with the messy middle or how the organization has dealt with it in the past. Isolate the issue from the current process. This will free you from prior prejudice, and you might come up with a completely different way to solve the same issue.
Next is Inclusion. The largest hurdle to every innovation process is the human element, so involve associates early and ask them to be part of the solution. That is why when we identify an issue, we form focused teams with their goal being to tackle the most urgent matters of the organization. Open discussions are held on a regular basis among the smaller teams and who then share their findings and recommendations with the wider leadership team for final decisions and approval.
Finally, you have follow through & measuring results. Each initiative needs to have a clearly defined goal and expected measurable results. Assign project champions whose responsibility is to keep the team focused on the objective and report results on a regular basis.
An organization which does not evolve is destined to shrink and eventually fail. Our CEO continuously reminds us that our goal is progress, not perfection. This has allowed us the freedom to try, fail, learn, and evolve in a safe and inviting innovative culture.
It is true that innovation requires focus, resources and ultimately funding. At IDeaS we have a multi-pronged approach to innovation: 1) A constant dialog with our clients about their evolving needs and how IDeaS could provide more value to them 2) Continuous research and conversations about evolving end consumer expectations, technology transformation and their implications on hospitality at large and particularly the commercial function. This involves deep interaction with C-Level executives at hotel companies, consultants, startups, and the broader tech ecosystem. 3) Feeding information from the two areas above forms themes about potential innovation opportunities, which are then translated into growth opportunity business cases. 4) An annual innovation budget funds business cases which are selected to bring those to MVP 5) Regular investment reviews provide a feedback loop to evaluate progress and suggest course corrections where required.
The critical success factors are to always have your ears to the ground, you never know where innovation opportunities arise and then have a structured process to prioritize and move these opportunities to a positive outcome.
Innovation and digital transformation today go hand in hand in hospitality. We want and need to as an industry move forward and have a more digital “Mindset”. For me its more about the people than the technology. The technology exists to do this. Yes, it's hard to change the technology tools that are needed to enable digital transformation especially when you are running a hospitality business, normally a 24/7, 365 operation. For me we need more involvement with front line staff as well. I am convinced they have loads of small incremental innovative ideas that could make their jobs for efficient or allow them to provide a better customer service. We also need to create more positions that allow for innovation to happen. Data scientists should become a norm in hospitality just like revenue managers did. We need to move away from the word tradition to innovation. Ford is a traditional car manufacturer; Tesla is an innovative car manufacturer. End of story!