Clara Stilwell_AETHOS Consulting Group_New York_web

Hospitality’s Second Act: Capitalising on the Enchantment Economy

(Download pdf’ed article here)

The successful vaccine rollouts mean global economies are now generally rebounding from the sustained social and travel restrictions of the past year. Consequently, service-hospitality organisations are seeing consumer activity like so-called ‘revenge tourism’ further speed up the recovery. Although demand will undoubtedly be high, so too will customers’ expectations. Having longed for entertainment, enrichment, and escapism, guests will not want to be disappointed. Operators should therefore be hypervigilant ‘wooing, and wowing’ consumers.

At a recent expert forum, organised by Seatrade Cruise and AETHOS, panellists – including Agnelo Fernandes (Chief Strategy Officer at Terranea Resorts), Francesca Romana Gianesin (former SVP Experiences at Disneyland Paris), Jim Berra (Chief Marketing Officer at Royal Caribbean International) and James Houran, Ph.D. (Managing Director, AETHOS Consulting Group) – explored the notion of how companies can best meet these challenges for service-product differentiation and guest experience. The emerging consumer research and the panellists alike agreed that hospitality organisations must quickly and deftly answer these elevated guest attitudes by evolving their product and service offering. Gone are the days of the mere experience-led economy. Now, travel and tourism players need to welcome and structure their strategies around the enchantment economy.

Following-up on the panel, AETHOS spoke with Francesca Romana Gianesin about how the enchantment economy should be approached from a Human Resources perspective. Indeed, organisations should not only strive to enchant external consumers but also their internal customers – i.e., the employees. We thus talked about how fostering deeper connection with the workforce ― and enchanting internal teams — will allow organisations to drive higher engagement, greater productivity, and stronger retention, whilst also strengthening their route to economic recovery.

Enchantment Economy – The Broader Context

‘Lockdown fatigue’ has become a well-known and widespread phenomenon. Having patiently adhered to social and travel restrictions, individuals are now eager to start living again, to socialise and to seek out new experiences. Hospitality companies want to take advantage of this intense pent-up demand, hoping for it to help ‘balance the books’. This poses a key question: “How can organisations best capture the attention, and spending power, of these eager customers?”

The answers lie in a company’s ability to capitalise on the current emotive drivers of the travellers and holiday makers. “For almost 25 years,” says my AETHOS colleague and industrial workplace psychologist James Houran, Ph.D., “hospitality businesses have conformed to the classic concept of the ‘experience economy’ ― defined by a striving to woo customers by creating new, exciting, and memorable experiences.” But, as he points out, recent research suggests the level of emotional response sought by consumers has deepened and even evolved. “Gone are the days of the thrill-seekers looking merely to ‘escape’, or the socially-conscious looking for ‘authenticity’.” Instead, he says, “consumers seek to completely immerse themselves into settings that offer ‘awakenings’ – that is, disruptions to the mundane or difficult experience of their daily lives that specifically stoke a positive and transformative feeling of connection to a transcendent agency.” Simply put, he concludes, “we are talking about the need to be awed, delighted, and ultimately ‘enchanted’.”

“This quest for enchantment requires hospitality organisations to re-evaluate their brand promise, customer journey, and experience on offer,” says Francesca, who in the past has been VP EMEA for Disney Consumer Products, and who, in 2018, assumed responsibility for the end-to-end guest experience at Disneyland Paris. Continuing, she adds “we observe a marked trend towards ‘revenge buying’ and an increasing demand for unique experiences.” Organisations thus need to make sure to rethink their businesses and organisations, reassess investments and trying new things – in hospitality, we concluded, this will likely focus and centre around the people side of the business which forms such an integral component of the guest experience and brand promise. “A crisis is a terrible thing to waste,” says Francesca, so the roadmap to success needs to be a balancing act of preserving stability whilst breaking the mould and going for the unexpected by turbocharging the human element. We agreed bold moves would be needed.

Applying ‘Enchantment Theory’ to Human Resources

Companies that apply new learnings of the enchantment economy only to product offerings or curated experience packages will fail to fully capitalise on the economic rebound and recovery. This is because the most basic component of guest experiences must also be considered, i.e., the people delivering on brand promises. Sadly, many hospitality organisations across the globe continue to struggle with enticing employees back to work. It is reasonable to deduce that the economic recovery might be at risk if employees themselves are not ‘enchanted’. The obvious question becomes how businesses can effectively accomplish this.

Francesca talked about the foundation of Disney’s focus on aligning an employee’s body, mind, and soul with a company’s vision. Our very own ‘enchantment recipe’ boils down to three key steps:

  • Always be re-energising: In a post-pandemic environment, boosting employee morale is more important than ever. “It takes people to make the dream a reality,” says Francesca, reminding us of the words of Walt Disney“. “At Disney,” she noted, “employees are trained to be enablers of the enchantment.” To perform in their jobs, they need to become an active part of the story making – and this is true for most employees in the hospitality sector. No one can excel, though, if they are drained or exhausted. “The unprecedented impact of the pandemic has caused huge stress, anxiety, and uncertainty for staff members,“ we agreed. Even if employees are now starting to return from furlough or part-time work, chances are individual workload will have increased with companies under pressure to do more with less. This, in combination with continued instability in the market keeps stress levels and frustration high. “The need to constantly work in ‘crisis mode’, the novelty to work from home and/or the necessity to adjust to new technologies is causing a lot of exhaustion and frustration,” Francesca says. This, in turn, negatively impacts productivity and engagement.

Managing fatigue is thus mission critical. Reinforcing leaders so that they themselves can make better decisions is a key step in ‘re-energising’ an organisation and its leadership. As AETHOS’ workplace psychologist recently put it in an article published by the Boston Hospitality Review, leaders should “critically reflect on the impact they tend to have on their direct reports, peers, stakeholders […]. Does one’s efforts, relationships, and outcomes consistently ‘invigorate’ other people or ‘snap’ them? Ultimately, enchantment involves ‘inspiring vibes or energies’ from experiences or interactions – and that energy is just the jolt needed to propel us forward.”

  • Routinely be engaging: Leadership teams and employees alike are so intertwined with the product and service delivery in hospitality that it is impossible to succeed without an engaged workforce. “One tends to think of Disney as the theme parks, rides and attractions,” says Francesca. “In fact, though, the ‘Disney Magic’ happens with and through its employees (‘cast members’) – they are the brand experience.” We agreed the same principle applies to the broader hospitality industry – whether it is hotels or other type of operations. The interaction between employees and guests can make the difference between success or failure, a happy and loyal customer versus a disgruntled one. “After years of financial struggle [at Disneyland Paris], we got record-breaking revenues because employees loved what they did and where they were and that transcended to customers loving what we did.”

Driving employee engagement requires company leadership team to be aware of the pressure points. When was the last time a pulse survey was taken? If so, how do results stack up compared to expectations? What trends or broader topics are being brought up, and are actions taken to work on identified issues? Engagement often comes with strong personal bonds between staff members and buy-in into the overall company mission and vision. Communication is thus key. “Disneyland Paris launched WeCast,” says Francesca, referencing a social media platform for cast members to be inspired, entertained, and engaged through podcasts, blogs, videos, and tutorials. “During lockdown, it helped sustain a sense of pride, belonging, and optimism, and it boosted advocacy during a challenging time.” She also references the importance of providing leaders with a ‘playbook’ to get employees involved in tackling ‘daily life hassles’, evolving around business processes and/or digitalisation, for example. “Concrete actions, she says”, help employees to see their contribution to the overall success of the company.

  • Consistently be purposeful: Many individuals have re-evaluated their priorities and purpose in life during the pandemic. Employees are thus increasingly looking for organisations who reflect their views and principles. Companies who understand how to convey meaning to the work being done are better positioned to enchant their employees. Purpose and meaning can relate to society, the community, or other more holistic entities or beliefs – including sustainability. All too often, though, organisations are preoccupied with ‘control and processes’ – so much so that, as AETHOS’ practice leader for leadership and performance management recently put it, “excessively rational or transactional corporate cultures […] dehumanise an organisation.” Instead, says James Houran, Ph.D., leaders need to create enchanted workplaces that promote meaningful and empowering experiences.

“At Disney, over the past twelve months, teams have done an exceptional job of helping local and national associations, hospitals, and many partners with donations of all kinds – food, protective equipment, medical equipment, and derivatives,” highlights Francesca. The key, here, is to be genuine, and to engrain such initiatives into the company culture which is lived and breathed. “Not every company will be able to reference a longstanding track-record in supporting local authorities or communities but Disney’s VoluntEARS [a team Francesca has been a part of for almost two decades working behind the scenes to give back and support those in need] also started small – taking the first step is what is needed!”

Closing Thoughts

In the quest to enchant employees, there is an as-yet unmentioned skill which successful leaders will know how to deploy – it is the ability to be empathetic. Empathy allows for more meaningful, engaging, and genuine conversations and business relationships. It comes with emotional intelligence which further allows leaders and staff members alike to be more affective at ‘reading a room’ – identifying potential stress scenarios, exhaustion, or other pressure points. It therefore also helps to proactively combat ‘pandemic fatigue’ – and re-energising teams is not possible without being emotionally connected to them. “At Disney,” says Francesca, “we have always said that we [the leaders] serve our cast members […]. Only through empathy and best in class relationships can we lead the change and transformation needed to come out of a crisis.”

Clara Stilwell_AETHOS Consulting Group_New York_web

Loss and Perseverance
 

“At one point, I thought life was about acquiring things. Life is totally about losing.”

Former professional boxer, Mike Tyson

Mike Tyson might have a new career as a philosopher. Indeed, his point about life being comprised of a long series of losses is not only insightful but also motivational. Tyson contends that a person’s drive and stamina to rise above loss is the defining mark of a winner. Martin Luther King, Jr. echoed this sentiment when he argued that “The ultimate measure of a person is not where they stand in moments of comfort and convenience, but where they stand at times of challenge and controversy.” Our long-standing psychometric studies back up this view. Specifically, high performers scored significantly higher on measures of resilience, adaptability, self-directedness, and personal accountability than those with poorer performance appraisals. At no point in our lifetime have these traits been so important.

As the pandemic began to unfold, our consulting business was devastated as clients cancelled or delayed assignments. Hiring and organizational development were the last thing on people’s mind. It was about survival. It was a scary time for us and everyone we knew. Clients and friends kept asking, “what are you supposed to do?” We decided to start talking; to anyone willing to take our calls. We counselled others to do the same.

What we quickly found out is that other business leaders wanted to talk as well. No one had a “playbook’ for COVID and it seemed like everyone wanted to bounce around ideas. We became a conduit between leaders in all facets of our business (lodging, restaurant, gaming, club, cruise, and travel technology). We even began a sharing group to help disseminate these ideas to others. We also started a Podcast to share some of their poignant stories of loss and perseverance. The two words that continued to be a theme amongst our discussions were RESILENCE and ADAPTIBILITY. In the wake of losing so much our industry has been so resilient and has adapted at incredible pace.

Re·sil·ience Noun 1. the capacity to recover quickly from difficulties, toughness.

The lessons from our conversations focused on how quickly many of our clients reacted to the shutdown. Bill Walshe at Viceroy Hotels & Resorts described how their activated ideology and cultural roadmap gave him and his people the strength and purpose to carry on during the onset of the pandemic. The coordinated and random acts of kindness by his team were well-chronicled by the press. Arne Sorenson before his passing, told me that how quickly, compassionately, and openly Marriott dealt with difficult decisions would be his lasting legacy as the CEO of the company. He was so right.

Matt Maddox commented in an interview with Casino.org, that with Wynn’s operations in China, he knew that this was going to be a problem facing the US. He went on to say the company moved swiftly to hire medical experts and advisors to best ready the casino firm for life amid a pandemic. This allowed Wynn to develop the first plan in the industry. It was also a plan that he freely shared with others. Today, the company is in the process of creating “Wynn Lab” where employees and guests can get a COVID rapid test on site.

A·dapt·a·bil·i·ty Noun 1. The quality of being able to adjust to new conditions.

There are going to be hundreds of books written as post-mortems to the pandemic. Most will focus on how people and companies survived. The survivors will be the ones that showed how adaptable their people, processes and strategies were. Raul Leal at Virgin Hotels spoke to us about how their process improvement program allowed them to have a framework for making quick adjustments and adapting to the ever-changing events of the pandemic. It turns out that their discipline and rigor around processes was critical for building consensus quickly and effectively.

Danny Meyer, CEO of Union Square Hospitality Group quickly shut down his restaurants when the pandemic hit. He then quickly reopened when it was allowable and then sent a letter to customers and employees in November stating, “As of today, we have discontinued indoor and outdoor on-site dining at the small handful of our full-service restaurants that had been operating at 25% capacity (Union Square Cafe, Gramercy Tavern, and Blue Smoke, Battery Park City). Instead, we will focus exclusively on pickup, delivery, nationwide shipping, and virtual food and wine experiences—all of which you can find on our website. This will allow our teams to put 100% of their efforts into cooking amazing food that you can enjoy in the comfort and safety of your own home, whether picked up contact-free or delivered to you.”

Moving forward, perhaps the measure of strong leaders will be the choice to use their influence and power to turn episodes of significant loss into opportunities for themselves and the people around them. Think about what Tony Capuano needs to do as he takes over from Arne Sorenson at Marriott. How will he focus the world’s largest hotel company to become even greater? We doubt his plan is about just getting bigger, but rather about getting better. We suspect that the company will use its considerable influence to be more involved in government policy, social justice, and global travel strategy.

In some respects, the predictions of the death of New York City are no different. We believe that city leadership will need to quickly address the changing norms of city life post COVID. How will the exodus of talent and taxpayer dollars force the city to adapt and be a beacon of hope as it has been in the past? What will draw the next generation of leaders to the great cities of the world? It will be opportunity, advancement, and sustainability. The cities that get this right will be the big winners. Ultimately, we believe that post-pandemics leaders must ensure that their organizations stay intimately connected to a higher purpose and value system that reframes “loss, frustration, isolation, and adversity” as an opportunity to appreciate and model “gratitude, fortitude, humility, and service.”

Clara Stilwell_AETHOS Consulting Group_New York_web

A Conversation with Le Cordon Bleu about Talent, Trends, and Entrepreneurship

In Conversation with  Dr Thomas Kyritsis  

(Download pdf’ed article here)

Dr Thomas Kyritsis is the Programme Director of BBA Culinary Industry Management and MSc Culinary Innovation Management at Le Cordon Bleu. He has received a first class BA (Hons.) in International Hotel Management and a MA in Hospitality Management with distinction from the University of West London before pursuing a Ph.D. on the impact of shareholder activism on the corporate boards of international hotel chains.

Prior to his academic career, Thomas held a number of managerial positions in the hospitality industry in Greece and in the UK, in companies such as Hilton Worldwide, Doyle Collection, CCTvenues and Dorsett International.

Keeping Faith in Hospitality
Talent, Trends, and Entrepreneurship

As the world economies start to emerge from a year of lockdowns, some more quickly than others, the attention of hospitality business leaders has markedly shifted towards successfully preparing and managing reopenings. Many will now look to quickly rehire or attract new staff to their organisation. These businesses will be in competition with others, newly emerging start-ups and concepts which are looking to fill the gap left behind by distressed operators and to take advantage of extremely low occupancy rates on the local highstreets.

Putting the pessimists aside, one can therefore reasonably expect employment opportunities and prospects to significantly improve over the next few months and years. A welcomed message. With this in mind, I sought to exchange some views with someone who has his finger on the pulse at the ‘source’ for some of the talent in our industry here in the UK. Connecting with Dr Thomas Kyritsis, I was keen to understand whether the pandemic has diminished at all the appetite for individuals to join our sector in the first place. Thomas is Senior Lecturer at Le Cordon Bleu and Director for the Master and Bachelor programmes which the organisation runs together with Birkbeck College, University of London. Our conversation started on the impact of Brexit on education and the UK hospitality industry but quickly moved to other topics. Are industry executives still ‘taking the plunge’ to pursue their own entrepreneurial endeavours? If so, what trends or shifts in consumer behaviour should individuals keep in mind that might shape the industry …?

Since 2016, the UK hospitality industry has feared an exodus of talent due to the regulatory consequences of the BREXIT referendum. With the pandemic having shut many operations, industry veterans now worry about a further outflow of talent, causing a significant tightening of an already difficult recruitment market. Have you observed a drop in demand from individuals wanting to enter the sector?

TK: Last year, the industry has certainly faced significant difficulties. Yet, this has not deterred students nor experienced industry executives to invest into training and education, and we have not observed a ‘flight of talent’ from hospitality either. On the contrary, we experienced a year-on-year increase in demand for the higher education programmes offered by Le Cordon Bleu and Birkbeck. This demand has been driven by both international, non-EU students and the domestic market.

However, speaking with colleagues from other universities indicates – at least anecdotally – that Brexit has impacted their recruitment efforts from the EU. The Universities and Colleges Admissions Service (UCAS) puts things into perspective by reporting an overall decline of 40% in the number of EU applications for the upcoming intake (September 2021). Yet, this is contrasted by an uptick of 17% of non-EU applications. It seems these ‘global’ source markets might help to ‘soften any potential blows’. The UK’s new ‘Graduate Route’ (to be introduced in July of this year) will allow international students who meet certain set criteria to work for a maximum period of two years here in the UK – I expect this to further bolster demand.

From our perspective, and looking back at the last couple of years, it is noteworthy to mention, though, that we have seen a shift in and a diversification of the student profiles for our professional cookery courses. For example, we have noticed a marked uptick of interest from ‘career changers’. Now we have, besides the young career starters, numerous TV hosts, chemical engineers, doctors, and computer science engineers in the classroom and even a professional snooker player and international gold medal champion as well as an ex-Microsoft executive. I suspect this bodes well for the future hospitality talent pool.

Yet, it would be foolish to ignore the fact that – by and large – the industry as a whole still has an image problem here in the UK. Until this is fixed, and we become a more attractive employer of choice, scarcity of talent will remain an issue. Unfortunately, all too often the conversation from the press and hospitality scholars is centred around pay or working hours. However, despite the fact that we have a long way to go, there are operators that have taken steps to improve the industry’s image by focusing on the overall employee experience and staff/skills development. One way to tackle the ‘image problem’ is by highlighting that a career in hospitality can be very diverse and lead to different professional paths – some of our students become journalists, food critics or food photographers, others stay in ‘operations’ or become nutritionists, TV and radio presenters, wine agents or retailers! And some really leverage their hands-on know-how and experience, as well as the business skills learned to become entrepreneurs.

You reference the opportunities the sector provides for individuals to pursue entrepreneurial endeavours. From your conversation with the industry and students, are people still taking the risk of ‘setting up shop’?

TK: Le Cordon Bleu has always been known for having helped shape the careers of some of the best chefs, food enthusiasts, and hospitality professionals around the world – this has certainly not changed. Just a few months ago, we launched a new book ‘A Culinary Journey’, gathering 70 recipes from our alumni around the world. It very much showcases our students’ rich career paths and diverse experiences where talent and savoir-faire find success. Flipping through this book one is reminded that, in the last decades or so, we have observed more and more chefs developing their own brands, setting up their own businesses, and moving from restaurants into retail. This is part of the reason why our curriculum focuses strongly on nurturing critical thinking, business skills, and concept development. Market research and ‘sniffing out’ the latest trends is part of the journey to potentially, or eventually, become an entrepreneur.

Notable examples of Le Cordon Bleu alumni who set up successful businesses include Virgilio Martinez, chef patron and founder of Central (Lima, Peru) and Lima (London, UK) restaurants; Gary Yin, chef and owner of King’s Joy (Beijing, China), a three Michelin star vegetarian restaurant; as well as Nina de Bouyalski, chef and founder of Esperluette (Bali), pastry and coffee shop. Other alumni who have pursued different paths include Michael Swamy, chef, author and food stylist; Luisa Fernanda Gallego, co-founder of the international creative pastry and bakery salon of Colombia, and Luciana Berry, winner of Brazil’s Top Chef (2020) who is a private caterer and consultant.

Based on the feedback we are getting from our current student body, I suspect this entrepreneurial route has now become an even stronger motivating factor for them to pursue a career in hospitality. And rightly so – post Covid, the sector provides plenty of opportunities to ’leave a mark’. Consumers are hungry (quite literally!), to dine-out, to socialise in bars, restaurants, and other hospitality venues, and to experience a more elaborate taste palette than perhaps the traditional homecooked meals they have had for the past 12-months. At the same time, third party delivery companies and dark kitchens have thrown for many restaurant players a lifeline during the pandemic – they have shown the value they can bring to the table and how they can, to a certain extent, de-risk start-ups but also support established restaurants to diversify their target market and revenue streams. Perhaps this could be the start for a more successful collaboration (admittedly, though, pricing and commissions still remain hotly debated topics…). Either way, our students recognise the potential.

Delivery platforms are not foes of the industry and dark kitchens can be an excellent way to try out new concepts before formally committing to paying rent in a fixed location. With remote and flexible working likely to stay, in some shape or form, the delivery market is bound to go from strength-to-strength – no wonder then that Euromonitor estimates the ghost kitchen market to potentially be worth US $1 trillion by 2030…! We’d like to think that our future graduates at Le Cordon Bleu and Birkbeck, University of London will be driving some of that value creation with their own entrepreneurial adventures.

The pandemic has had people craving comfort food. Simultaneously, though, we observed a strengthening of the trends towards wellbeing and improved nutrition. Where do you see opportunities for food entrepreneurs?

TK: Covid-19 has certainly affected consumers’ tastes, preferences, attitudes, and behaviours as it relates to food and drink – time will tell how long-lasting those impacts are. Pre-pandemic, experts already talked about the fact that ‘free-from’ products, although targeting niche markets, have become mainstream. I thus suspect that, if they have not already, health and wellbeing will become much more of a priority for consumers in the foreseeable future. Many have had the time throughout the past 12-months to consciously evaluate their lifestyle choices – and decided to make marked changes to the way they live… For example, according to the Independent, although alcohol consumption from 1990 to 2017 has increased globally, in Europe and more specifically in the UK alcohol consumption has dropped. Having gotten used to supporting neighbourhood shops and restaurants, I also believe quite a few consumers will seek to continue supporting local communities, thus giving rise to more individual(listic) restaurant concepts, homegrown produce, and the like. Community-led food projects, such as Eataly or Mercato Metropolitano are a good example of that.

However, for every movement there is a countermovement. I do not doubt for a second that grab-and-go, fast-casual, and fast-food concepts will continue to thrive. Consumers are continuing, perhaps increasingly so, to look for value for money as well as convenience. The demand is therefore there – and let’s not forget that fast food and fast casual operations also have lower overheads and a higher turnover of covers, thus creating attractive margins in challenging economic times. This is why we have read in the past few months of so many fast casual and grab-and-go concepts making big announcements about their ambitious growth plans here in the UK (e.g., Wendy’s, Popeyes, Jollibee).

Looking more holistically at the industry, what are the trends that today’s aspiring food entrepreneurs should bear in mind? Are there major shifts in the business landscape or consumer behaviour?

TK: Broadly speaking, a few things spring to mind – mainly, the continued drive towards informality, the growing importance of sustainability and digitalising the customer journey and experience, as well as a further diversification of business models centred around membership models or home delivery.

  • Informality: In the past, we have already seen a notably shift towards ‘informality’. A formal service and atmosphere are no longer attractive to many consumers – or just for very select occasions. Instead, customers opt for dining experiences that offer a relaxed service in an inviting environment – this has already caused a redesign of the service experience and the customer journey. At the high-end, it has become a lot about pairing things back, about simplicity – less is definitely more, and there is an even stronger focus on quality. However, we have also observed a notably shift towards greater engagement between staff, guests, and the food. People show a genuine interest in the menu. Provenance has thus become quite important. Going forward, I believe more fine dining operators will try ‘breaking the mould’ by focusing on ‘informality’ and ‘accessibility’ – similar to what Daniel Boulud offered in September of 2020 with his casual pop-up dining experience at his flagship restaurant ‘Daniel’ in New York.
  • Sustainability: Of course, there is also the topic of sustainability – it has grown in importance over the past few years. Consumers are aware of the impact the industry causes to the environment, and their choices are more and more influenced by the extent that restaurants adopt sustainable and ethical practices. This is not just a fad – the Sustainable Restaurant Association was launched in 2010 with just 50 members, nowadays it has more than 7,000! Articles about some of the UK’s best sustainable restaurants are also frequently featured in online foodie and travel resources such as the Olive magazine, Foodism and Country & Town House, to name a few. Going forward, I believe there will have to be a lot more transparency about where restaurants are getting their food from, how they engage with or support the local producers, and how aspects such as food wastage are handled.
  • Digital Experience: I mentioned earlier the changes in the fine-dining segment. As it relates to fast food, fast casual, casual, and grab-and-go concepts, I believe we have to talk about the impact of technology. Here, the customer experience has definitely become more digital – and I suspect this to continue. It does not only impact the way we pay and order but also the way brands engage with their customers. Managing these digital relationships will not be easy as younger generations, such as Millennials and Generation Z, are savvy and know what they want. Operators will need to look at technology as a consumer-experience facilitator to compete successfully in the market. Mobile ordering and contactless payments are standard practices; so, what comes next? Several companies explore innovations that will allow them to transform digitally. For example, Chilango recently opened its first digital-only venue in Croydon, including a fully digital ordering system (digital kiosks or in advance through its website). McDonald’s has tested AI which scan license plates (with customers’ permission) to predict orders and it has also tested the idea of voice assistants to improve its drive-thru experience.
  • Membership Models: I believe the pandemic has also taught some of us a good lesson. Many restaurants have, out of necessity, toyed with the concept of membership or subscription services – the idea seems to have legs. In the UK, for example, M Restaurants offers its members exclusive access to their lounges and benefits such as complimentary breakfast, discounts on food and beverage and access to events (masterclasses, tastings and talks). In the US, Michelin-starred restaurant Quince in San Francisco has created a new membership based-model with its sister restaurants and its affiliate farm (Quince & Co). This model offers to its members a dining credit, quarterly boxes with seasonal produce and pantry products, and educational workshops such as beekeeping and olive oil pressing.
  • Home Delivery/Meal Kits: The online delivery market was increasing at a significant rate before Covid-19. During the pandemic it has become even bigger and very important for hospitality operators. The main aggregators, Just Eat, Deliveroo and Uber Eats, drive the market; however, the pandemic led to the growth of another segment – DIY meal kits. Changing consumer behaviour resulted in high demand for companies such as Hello Fresh and Gousto. According to the Financial Times, from July to September 2020, Hello Fresh reported sales of EUR €970million compared to the same period the year before… These meal kits have given the opportunity to many hospitality operators to diversify their revenue stream during the pandemic. Casual food from brands such as Pizza Pilgrims and Patty Bun, as well as fine-dining from the likes of Le Gavroche, Simon Rogan, and Lyle’s have both been embraced by consumers. Although many believe that the re-opening of the sector will slow down the DYI meal kit market, I believe that more operators will explore this avenue.

 

Clara Stilwell_AETHOS Consulting Group_New York_web

Hospitality’s ‘Hot Seat’ Leadership Series: COOs – A Tale Of Two Fortunes

Part II

(Download pdf’ed article here)

In our roles as organisational advisers to the hospitality industry on all HR-, talent- and recruitment-related aspects, we are frequently being asked: “What can we [or I] do differently to stay ahead of the curve?”, often followed by, “What profiles, backgrounds and leadership skills are currently most sought after by the market?”.

This natural curiosity about the ‘hot functions’ is keeping both organisational leadership teams as well as individual executives preoccupied. How can one best reshuffle or complement one’s existing leadership team? Are there specific experiences or skills which could further enhance one’s own executive profile – and thus one’s ‘marketability’?

In a series of articles, we want to shine a bit of light on some key functions sitting with ownership or management companies of small and large hospitality organisations. Have we observed a lot of turnover in a particular role? Have executives with a certain background been more ‘courted’ than others? Last month, we looked at Chief Financial Officers. Next up is the function of the Chief Operating Officer.

Chief Operating Officers: A Tale Of Two Fortunes

Senior operational leaders, those working for large organisations, often have the benefit of holding a role which more frequently than not has cross-border responsibilities. They oversee and manage platforms which encompass numerous jurisdictions and geographies, each with their own idiosyncrasies. Consequently, they – almost by default – bring on board strong cultural awareness and adaptability. Character traits which help their appeal for a diverse group of employers. One might say they are therefore ‘evergreens’ – executives who, due to their broad exposure, may find it easier than others to find their next career move. However, have we observed shifts caused by the pandemic? Do we anticipate certain individuals being more wooed than others once the uptick in business activity has commenced?

  • The recent past has been relatively steady for COOs. Changes did take place, but many of those were driven by one executive leaving for a competitor and thus leaving behind a crucial vacancy . Perhaps more than other C-suite leadership functions, we have witnessed internal hiring – showing a (much needed) strengthening of the internal talent bench-strength and the succession planning for operational leadership roles. We have, however, also witnessed external hires – for example, in those instances where divisional brand leadership roles were created, or geographies restructured. During the pandemic, the COO role was key to holding the organisation together from the top down. They were at the forefront of leading the charge against COVID, developing safety protocols and new standards to ensure guests safety as well as compliance with new laws and regulations. Operations leaders have also been, more than ever, ‘trouble-shooters’ doing their bit to not only keep crucial frontline workers safe but also ‘on target’ during what has been a dark time for our industry. Needless to say operations executives are not going anywhere but there has been a ‘re-calibration’ of the role during the pandemic.
  • Due to the pandemic, we have observed organisations re-assessing their success profiles for the function of the COO. Whereas in the past, a lot of emphasis was placed on growth and expansion, on building teams, developing new brands or entering new markets, the focus has now shifted to hone-in much more strongly on pure performance. Uncertain as to how long the economic pressure will prevail, organisations have started to evaluate whether a different person might be better suited to spearhead operations. Someone perhaps less known for their servant leadership but instead a doer and executer, someone pragmatic and extremely results-driven, bringing more of an ‘asset manager’ type mindset to the functions. With many organisations having shed significant management layers, there certainly is an expectation of doing more with less.
  • Looking at the next 18 to 24 months, assuming continued pressure on cost and performance, we expect organisations providing ‘up-and-coming’ profiles with a bit more opportunity to prove themselves and perhaps grow into a COO function. At the same time, with the relationship between operating and owning entities becoming ever more crucial, we believe that executives with experience with owner-operators, or PE-backed businesses, will have an edge over those whose background includes working purely for brands or management platforms. Comparable to the split which we have observed with CFOs, we also anticipate those senior leaders operating at the extreme ends of the market to be more sought after on the employment market – that is to say, those focusing on either the budget or luxury segments. Differentiation is key. On that basis, we also predict more players honing-in on the alternative segments such as serviced apartments, senior living, student accommodation or hybrid lodging models. In summary, we assume the function of the COO to evolve from that of the COVID-strategist to that of a nimbler and more adaptable, asset management minded operator who has adapted to do more with less as our industry continues its recovery over the next few year.
Clara Stilwell_AETHOS Consulting Group_New York_web

A Conversation About Investor Sentiment and the Role of Human Capital in Acquisition Due Diligence

In Conversation with Romain Semmel, Pygmalion Capital

(Download pdf’ed article here)

Romain Semmel is Investment Director at Pygmalion Capital. He built the foundation of his career with globally recognised property advisory firm Jones Lang LaSalle, where Romain has been involved in over EUR €2.5billion in hotel acquisition and financing deals across Europe. He joined Pygmalion in 2018, a dedicated European investment firm deploying institutional capital to acquire hospitality assets and operating platforms. The company has had its first foray into the hotel sector by acquiring a portfolio of Spanish upscale hotels and is now looking to continue its acquisitions despite the current environment.

Closing the Deal – A Conversation About Investor Sentiment and the Role of Human Capital in Acquisition Due Diligence

With local and regional lockdowns still in place, Romain and I caught up over a cup of coffee, using one of the now omnipresent video chat platforms which have, throughout the past 12 months, proven so helpful in maintaining ‘face-to-face’ contact and a sense of normality. They have, however, also been very useful in continuing a positive momentum as it relates to facilitating key business decisions – but often, to ‘close the deal’, the parties involved are still required to meet in person.

“AETHOS has had an influx of inquiries from newly launched investment platforms looking for help to beef-up their acquisition and asset management teams,” I commented, however, “social distancing requirements and travel restrictions have often delayed the recruitment process and hiring decisions – despite the options to conduct video calls and meetings”. Drawing similarities to his world, Romain concurred, citing that similar factors are currently holding back, or delaying, decision-making processes on property deals. We both agreed, though, that with plenty of firms having recently announced fresh capital raising initiatives and, with deal volumes having hit historic lows, market activity is bound to tick up – significantly. We thus started talking about sentiment amongst the hotel investment community, about the role of human capital and talent in the acquisition due diligence process and about prospects for 2021 and beyond.

Romain, albeit operational pressure remains high whilst lockdowns prevail, consumer confidence appears to be growing. Is this more positive sentiment echoed within the European investment community?

RS: Generally speaking, investment sentiment is positive, but I would argue that we might still be facing a quiet market for a few months yet. One might say life is a rollercoaster right now… At the end of March, it was the great depression. In June, we were all going on with our lives like nothing happened. Come November, the risk of the second wave became reality. And just before Christmas, with vaccine approvals, we thought we were on the right track but are now facing the realities of a new virus strain and further lockdowns.

Everything is changing very fast and it is difficult to make mid-term projections; however, some things remain constant:

  • Appetite for travelling remains fairly intact. As soon as travel ban eases there is a surge in bookings, and
  • Investor appetite remains strong and even growing for the hotel asset class

However, despite strong investor sentiment, we are really not just yet seeing a huge number of transactions in the market – this is mainly because everyone is trying to time the bottom of the market. We also need to remember that traditional lenders remain ‘out of the game’ as they are still focused on (predominantly) ‘troubleshooting’ the assets which are on their books rather than underwriting new deals. Another key factor for the lack of activity, at least for the moment, is that vendors’ expectations have not moved significantly enough to match the inherent risk estimated by investors.

The likes of Blackstone, KKR and KSL, to name just a few, have been quite bullish about hotel investment opportunities and some have recently raised fresh capital. At the same time, AETHOS has also been more frequently approached by family offices to build investment teams and operating platforms. With so much capital waiting to be deployed, will we see real distressed opportunities coming to the market or will investor demand outstrip supply?

RS: This crisis, unfortunately, will create an unprecedented level of opportunities for both traditional players and new entrants. The longer the pandemic lasts, the larger the opportunity will be. And yes, there is a significant amount of capital available in the market right now with a lot of funds having accumulated ‘dry powder’ over the last twelve months. We have ourselves announced last week the first close of our new fund dedicated to special situations in the hospitality sector in Europe. Compared to the last global financial crisis, where appetite for hospitality investments was particularly low up until the end of 2011, there is nowadays really no shortage of investors wanting to ‘get in’.

Does this mean the distressed will not be as pronounced as anticipated, or feared? There will certainly be pockets which will be much more affected than others (e.g., business vs leisure). But quality assets or prime locations will continue to, to some extent, hold their value. Also, one should not forget that there has been a significant spread as it relates to investor activity – and the sectors and segments sought by them. Investors have different investment horizons, cost of capital and appetite for risk. This will soften the distress.

Overall, the impact on pricing will depend on the type of asset (e.g., hotels having been much more affected than student accommodation or serviced apartments), location as well as the type of investors attracted to the investment opportunity. A 5-star hotel in Paris city centre, appealing to institutional investors, family offices or HNWI might only be impacted by 5-10% while a hotel in the suburb of Rome might see 30% discount, or more, compared to its pre-Covid valuation. We anticipate that a portion of the demand pre-Covid will forever disappear (i.e., some portion of business travel) but new forms of demand might arise in the meantime, like staycation or co-working. More than ever, hotels will need to find new ways to also cater to the local demand which will be a source of growth in the coming years.

AETHOS has increasingly worked with ‘hands-on’ investors. Pygmalion itself can be classified as such. Yet, you sit alongside many other big equity players all willing to seize this unprecedented opportunity to strengthen, or gain, a foothold in hospitality real estate . Is there enough room for ‘boutique investors’?

RS: Specialised investors – like Pygmalion – represent a very attractive proposal as they have the opportunity to invest alongside a manager with a track record and a proper institutionalised structure while also benefiting from a very specific ‘know how’ that larger generalists cannot provide. Therefore, with smaller but experienced managers like us they see an opportunity to diversify their portfolio in increasing their exposure to the hospitality market with very limited execution risks.

However, as we are looking at single assets and/or portfolios of hotels where we own also the going concern, we have more ‘skin in the game’ than institutional investors who might only look at hotel real estate with lease contracts attached to them. This means that we are going through a much more thorough analysis and due diligence process when investing our funds. In particular, we are interested in understanding the management and leadership capabilities of the executives who form part of the hotel business prior to executing the deal. Do we have the right people on board? Will there need to be some hiring or coaching taking place to be able to execute against our business plans? Knowing whether we must replace key personnel early in the process further helps us develop and execute our value-add strategy.

And, suffice to say, this closeness to the management team continues all throughout the investment lifecycle – and it is certainly also to the benefit of the operator. We bought our first portfolio back in 2018, and since then, we have helped our operator to reshape its business and to improve its financial success. This special relationship which we have had from day one, being approachable and open to dialogue, has proven useful in the last few months as we worked jointly to make the best out of the situation. In that respect, the crisis demonstrated that our approach was the right one. We want to work with operators and managers with whom we share the same objectives, values, and ambitions, where each parties’ strategy is clearly defined, and the relationship balanced and fair from the moment we sign the contract.

On the subject of human capital, what role do you believe HR-related question will play during board room discussions in the next 12-24 months?

RS: Human capital has a significant impact on the value of our investment. Of course, managing payroll is always a top priority for us – however, not having the right people on board is a considerably worse problem to have. I believe it will be easier to secure ‘top talent’ in a post pandemic environment as redundancies will ensure that the available talent pool is considerably larger than before. The hospitality industry has always had its ‘war for talent’ but I believe the situation to become less competitive in the coming months. However, as soon as the momentum picks up, savvy investors and business leaders will continue to want to make sure that they have the best of the best to either restructure, reposition or build their platforms and the situation might return to pre-pandemic level. With considerable distress and operational pressure likely to prevail for some time, I anticipate a larger than usual number of investors re-assessing and re-evaluating the capabilities of their leadership teams at the platform or property level.

I also believe that investors, as management companies, will continue to take a closer look at costs – and as mentioned, payroll is a significant factor in the hospitality industry. The pandemic may thus give the necessary push to the involved players to start re-evaluating more critically the compensation best practices in the industry. Compared to other sectors, it is still surprising how only a relatively small portion of an executive’s total compensation is driven by KPIs, and thus performance. And, let’s face it, turning around a distressed portfolio may require ‘big hitters’ who usually come with hefty financial expectations. A good way to secure those leaders would be to develop short and long-term incentive schemes which really tie their performance to that of the business. I thus expect HR-topics, and alignment of the business strategies with the people practices, to be frequently referenced during board meetings.

You seem to have an optimistic outlook on the sector. What will be your main objective in the next 12 to 24 months?

RS: I  see tremendous opportunity for the Continent as one of the most attractive hotel markets to invest into in the near future. This stems from the fact that here, many destinations do not just purely rely on international travellers, but actually also benefit from strong local demand – and Europe has a fairly wealthy population of 450 million inhabitants craving for travel, as we have seen during summer 2020. For us, the objective will be about securing the right deals in Europe and we anticipate a very busy 2021 in that respect.

Clara Stilwell_AETHOS Consulting Group_New York_web

Company Cultures and Residual Shockwaves from 2020

‘Shift Happens’

(Download pdf’ed article here)

Social and economic disruptions often shift people’s behaviours — sometimes in small ways, other times more seismic. On this point, AETHOS conducted a ‘COVID Gap’ analysis for the C-suite within hospitality organisations at the end of last year. The results were sobering. Particularly, we found several significant changes across these team’s Execution, People, and Cognitive skills:

“Overall, management teams were more tactical and short-term focused, but also much nimbler in their thinking. Strategy alongside established protocols and processes were thrown out the window. Aspects relating to team building, or professional development, were taking a backseat, replaced by a much stronger emphasis on efficiency and results. Little time was spent on building consensus; instead, decision-making was decentralised. The unifying voice ensuring that teams back one common vision was missing… We could observe in the data that the external pressure on the senior leaders had a negative effect on their motivation, drive and engagement. Being forced to constantly react to external pressures meant stress levels were through the roof – resulting in considerable risk as it relates to mental health and well-being.”

Given these outcomes, it is natural to ask how management teams, with limited time to address personal and team well-being, can effectively ignite the necessary spark, motivation, and inspiration to drive and shape the anticipated recovery. In a search for answers, pragmatic solutions were enacted that centred on specific HR, coaching, and leadership training initiatives which could help combat the negative effects of the crisis, normalise behaviour patterns, as well as lift the spirits to fight off mental fatigue.

AETHOS’ ongoing interactions with industry investors and operators, however, reveal that the pandemic has affected considerably more than an organisation’s senior leadership teams. Industry feedback consistently indicated that last year’s disruption clearly had a lasting impact throughout the organisational chart. We therefore examined empirical data to clarify the nature and extent of these apparent cultural shifts to organisations.

Mining Organisational Insights from Culture Surveys

Company cultures are not static, rigidly-fixed things — instead, they are malleable and often adaptive to business directions and market conditions. In other words, aspects of a business’ “Mission, Vision, and Values” can vary in importance depending on necessity or available resources. Companies routinely use employee opinion surveys to monitor their degree of enterprise alignment and engagement, and AETHOS likewise conducts annual surveys for many global clients. Reviewing anonymised data points, we have detected several noteworthy trends that reveal how the disruptive COVID-19 pandemic has altered the working dynamics of many service-driven businesses.

Specifically, the events of last year have consistently shifted company cultures in consequential ways. In certain respects, cultures were both strengthened and weakened. Understanding these insights can help leaders to capitalise on what is working well and to address those issues that are likely undermining performance across the organisation. Even though workers at all employment levels in 2020 tended to be significantly more tactical, reactive, and short-term thinkers than in 2019, we noticed that the percentage of people who responded with “strongly agree” and “agree” to employee survey questions actually trended higher last year. That is, the overall “favourability” ratings increased relative to fiscal years with greater market stability and less chaotic organisational environments. The specific strengths and weaknesses in company cultures during 2020 give insight into this surprising finding.

Strengths (in order of highest rated)

  • Respect: Respondents distinctly felt respected by their direct supervisors and company leaders. This means that individuals received a consistent sense of personal attention, support, and recognition from managers. That outreach apparently was a critical motivating factor for employees to cope with, if not rise above, any negative effects of the pandemic in the workplace.
  • Pride: Respondents reported a strong sense of pride in their companies, i.e., what their organisations stood for and accomplished last year. This implies a greater awareness of or connection to a company’s brand identity or personality. How an organisation responded to the challenges brought on by the pandemic apparently made a significant impact on employees’ sense of identification with that organisation – it either boosted team spirit or eroded it.
  • Empowerment: Respondents felt increasingly more latitude or accountability in their work, which was a positive development. Last year arguably revolved around ‘trouble-shooting’; on all levels, so employees appreciated the sense of trust and encouragement for them to think and act more like business owners. Essentially, employees felt and were treated as if they were “critically needed”. This is a clearly a motivating sentiment for those up and down the organisational chart.

Weaknesses (in order of lowest rated)

  • Compensation: Employee surveys nearly always show lower ratings on pay and compensation issues, but last year’s outcomes were even lower than normal. Many companies furloughed workers, and those that were lucky enough to remain tended to take considerable pay cuts. Moreover, these same employees were then tasked to do more with less in terms of their daily responsibilities. Most employees understand cost containment, but such measures still hurt and can undercut short-term productivity or long-term loyalty.
  • Cross-Departmental Alliances: While respondents certainly felt more individual empowerment, it seems they also perceived lower ‘alignment’ and ‘synergy’ across departments. Alignment means a common understanding of organisational goals and success metrics, whereas synergy refers to open communications and cooperative actions needed across departments to achieve organisational goals. Both these critical ingredients for sustained business success seemingly took a big hit in 2020.
  • Ongoing Training-Development: Given the heightened ‘tactical’ and ‘reactive’ activities of 2020, it is no surprise that employees reported poor company focus on their ongoing development. Job security and sense of marketability are known factors that influence employee engagement. In turn, ongoing training and development feed these crucial sentiments. Indeed, it is well-known in organisational psychology that development opportunities are regarded as a major incentive and effective retention tactic.

Where Do We Go from Here?

Service-hospitality businesses should reflect and potentially act on the key findings above. Keeping a finger on the organisational pulse — involving the COVID ‘performance gaps’ of individuals and company-wide cultural shifts — is not exclusively the responsibility of senior leaders or HR professionals. In fact, every employee must be mindful to take notice and speak up about the observed strengths and weaknesses that accompany change. Coming out of this pandemic crisis stronger and better is everyone’s goal and in everyone’s interest. Thus, identifying the potential positive culture shifts will allow organisations to proactively foster them with a view to actively support, in a tangible way, the recovery. On the flipside, detecting and pinpointing the potential detrimental culture shifts will enable organisations to course-correct, ensuring business strategies have business practices and people practices that are aligned and mutually reinforcing.

Clara Stilwell_AETHOS Consulting Group_New York_web

Governance in a Changing World
 

(Download pdf’ed article here)

The restaurant industry has been hit especially hard by COVID. Layoffs, closures, a shift to delivery and outdoor dining, as well as mergers and acquisitions have dominated the news this past year. Many executives and even board directors have taken pay cuts during this health crisis. We also have seen restaurant boards in the news over the last several months. For example, in March 2021, Mellody Hobson will become the first African American Chairwoman of the Board of a Fortune 500 company – Starbuck – which is long overdue.

We have been studying governance practices in the industry for nearly two decades and have seen huge strides in the quality of board practices. Our study of board practices is based on data in 2020 Proxy Statements and covers five critical areas of corporate governance:

  • Board size and makeup,
  • Committee structure,
  • Related party transactions,
  • Evaluation and shareholder communication,
  • Board and executive pay.

There was a tie this year for the best board between Red Robin and Starbucks, earning an impressive 42 out of 46 possible points. Finishing second was a tie between Fiesta Restaurant Group, Jack in the Box, and McDonalds. Also deserving kudos are Brinker International, Darden Restaurants, Dave & Busters, Domino’s Pizza, and Yum! Brands which all finished with 40 points.

SIZE AND MAKEUP

In determining the effectiveness of the size and makeup of a company’s board, we looked at six attributes: total number of board members, length of term, the Chairperson’s background, the presence of a lead director, ratio of insiders and outsiders on the board, and the board’s diversity policy.

Total Number of Board Members: A board should be comprised of an odd number of members between 5 and 11; a range that most experts consider to be optimal. Exactly half (23 of 46) of the companies we measured fell within this range.

Length of Term: Having staggered board terms is a governance no-no. Each board director should stand for re-election annually. The only reason to have staggered terms is to prevent proxy battles with investors. Not the best way to build a relationship with the owners of a company. Restaurant companies have made progress on this front over the last several years as only fifteen (15) companies have multi-year terms.

Chairman Characteristics: Most governance experts believe that the Chairperson and CEO roles should be separated. In today’s environment, the Chairperson should be independent of the company and a balance to a strong CEO. The separation of powers is a cornerstone of our democracy and it should be the same for public companies. The restaurant industry has made some improvement in this area as twenty-one (21) companies had an independent Chairman. Ten (10) companies continue to allow the CEO to serve as Chairman of the Board, a characteristic that is hopefully in the way out. Of the top 10 highest rated companies in our study eight (8) had an independent Chairperson while two (2) did not.

Lead Director: When a board allows an insider to be Chairperson, they should at least appoint a Lead Independent Director. Seventeen (17) corporations appointed a Lead Director while nine (9) boards had a CEO or Insider as Chairperson without an Independent Lead Director.

Ratio of Insiders and Outsiders: Boards should have a super-majority of independent board members – at least two-thirds. Twenty-seven (27) lodging boards had a super-majority, while only two (2) boards have a majority of insiders on their boards.

Diversity: Companies received points by having a formal policy around gender and racial diversity. Beyond being a social responsibility in today’s environment, it is just good business practice. A diversity of background and opinion can only help in board meetings. Thirty-three (33) companies had multiple diversity Board members while five (5) still had zero.

COMMITTEE STRUCTURE

The SEC requires public companies to have the following four committees: audit, compensation, governance, and nominating. The committees should have official charters, no Executive Committee, and be made up of solely independent directors. While Executive Committees are meant to act quickly when decisive action is needed, oftentimes they serve to circumvent larger Board input on key decisions. Just twenty-one (21) companies scored perfectly on all these metrics.

TRANSACTIONS WITH RELATED PARTIES

We continue to see Related Party Transactions taking place in the restaurant industry. Twenty-four (21) companies still had some form of a Related Party Transaction. Much like the presence of an Independent Chairperson, all the top 10 companies are without a Related Party Transaction while only two (2) of the bottom 10 companies we measured can make this claim. This seems like an easy fix, but most continue to do it. Appearances do matter and advisory services such as ISS are not turning a blind eye.

EVALUATION AND COMMUNICATION

Issues concerning the effectiveness of internal board operations, director evaluation, and accessibility to shareholders were measured in this section. Much like our next section, we like to see companies study the competition to make sure shareholders are happy, feel engaged, and are confident in board strategy. Only seven (7) companies scored perfectly in this category. Very few public restaurant companies conduct yearly independent evaluations of board performance, so members do not get too cosy in their roles – or too close to the Executives they are supposed to keep tabs on.

PAY-FOR-PERFORMANCE

The final area of our survey is a hot button topic, CEO and Board pay. So much has been made about the inequality of CEO and the average worker. Dodd-Frank regulations now require companies to delineate CEO pay ratios and Say-On-Pay votes. In our opinion the issue is not about how much CEOs get paid, it is about whether they earned their pay. Many of the companies in our survey did a much better job of articulating pay philosophy and being transparent with pay metrics and amounts. Most boards used outside parties to assist in analysing executive and board compensation and overall pay strategies.

Investors can argue about the amount executives get paid but they can no longer say they are in the dark when it comes to pay. Additionally, we like seeing larger percentages of Executive Compensation in the form of Long-Term Incentives to tie executive (and board) compensation to company and stock performance. Most boards seem to be heeding our recommendation. Sixteen (16) companies scored a full ten (10) points in both Board and Executive Compensation categories, while an additional eight (8) falling just one point short of full credit.

We commend the industry for the improvement in corporate governance and suspect that these issues will continue to be omnipresent for investors and regulators. It also signifies that the restaurant industry is getting interest from more sophisticated investors and activists. No doubt the pandemic will impact the valuation and viability of many companies and concepts. What we do know that the companies at the top of our performance list have the leadership and system in place to weather the storm.

Clara Stilwell_AETHOS Consulting Group_New York_web

Hospitality’s ‘Hot Seat’ Leadership Series: Trends in Key Functions

Part I

(Download pdf’ed article here)

We are frequently asked by leaders in our industry what roles are ‘hot’ and where are we seeing movement? That curiosity is reflective of our highly competitive sector, one where individuals are eager to further their professional development but also of an industry where scarcity of talent remains an issue – and the pandemic, perhaps counter-intuitively, will probably exaggerate this even further. Of course, one cannot deny that, at present, there is a larger than usual talent pool for employees to pick and choose from. However, the pandemic has also caused some considerable ‘talent haemorrhaging’, with executives having taken the decision to re-orient their career or to leave the sector for good. On top of that we have already witnessed well-capitalised industry players starting to ‘snap up’ talent so that they are ahead of the curve when it comes to driving and shaping the recovery.

Overall, however, considering the state of the industry and the (still) ongoing pandemic, recruitment activity in the US and EMEA has been – relatively speaking – more active than anticipated and across a relatively wide spectrum of functional areas of expertise.

  • As it relates to employers, we note that some operators and management platforms might have ceased their rapid expansion, but others have certainly been quick to step in, trying to take advantage of market gaps the more exposed industry players have left behind. They have thus not only started to take on operating contracts for portfolios or individual assets, but also talent which – in ‘normal times’ – may not have as easily considered a career change. Meanwhile, investors are (by-and-large) continuing to ‘hold their breath’, waiting for the moment where market pricing reflects their risk appetite – but rest assured, once that equilibrium has been reached, a renewed confidence will drive further recruitment activity.
  • As it relates to the talent, we note that executives have displayed – perhaps driven by larger life(style) choices following 12-months of reflection on career ambitions and motivations – a greater willingness to ‘take the plunge’ and join either start-ups, innovative hybrid concepts or new market entrants which may lack sector-expertise but more than make up for it in financial prowess. To some extent this is a healthy ‘migration’ of talent, allowing for individual executives to be exposed to new work environments and cultures, but to also to go through a somewhat steeper learning curve than perhaps at their old employer where they ‘felt comfortable’ in their roles.

In a series of articles, we shine the light on a number of key  leadership positions, assessing the demand  for particular functions and, more specifically, what exact version of that role might be most sought after by the market. First up, the role of the Chief Financial Officer.

The CFO – A ‘Hot’ Commodity

Looking back at the past 12-months there is no question that CFOs have been ‘mission critical’ for most organisations. This has meant that seasoned financial executives were amongst those who had a lot more on their plate than before, and as a consequence, most have felt relatively stable and confident in their function. Will this change going forward? This is what we observe:

  • The last 18- to 24-months have already seen a hive of activity as it relates to CFO appointments. Partly driven by heightened transaction during the preceding years, many investors were looking to fill both CFOs within their own organisations (with a focus on fund-raising and/or financial engineering) but also the equivalent roles within their operating platforms (with a stronger emphasis on building and managing systems which enable rapid growth targets). Pure management companies equally sought new financial leaders in those instances where the rapid expansion outpaced the growth capabilities of their in-house CFOs.
  • In the most recent past, CFOs have had the benefit of holding an almost ‘crisis-proof’ job. One could argue that no other role has been leaned on by the executive team as much as the CFO, having to partner with the entire C-Suite to assist in making tough financial decisions in these unprecedented times. However, this is not to say that there have not been any changes at the C-suite. In fact, with a shift from a growth-led strategic mentality to one more akin to a tactical ‘trouble-shooter’, organisations have already started to reassess whether or not they have the right individual in the CFO seat.
  • Looking at the near- to mid-term future, we thus suspect further CFO changes to take place – it will therefore continue to be a role in high demand. We gather that two CFO profiles will specifically be sought after: For a lot of management companies, it will likely still be all about the abovementioned tactical trouble-shooters, ready to streamline operations and drive performance in addition to fostering the integration of new businesses or assets into the existing platform. For a lot of investors, many of whom are sitting on a lot of ‘dry powder’ and anticipate a flurry of distressed-driven M&A activity, it will likely be about the entrepreneurial builders, experienced in executing an opportunistic investment spree. With a significant number of investors – be they family offices, institutional money, or private equity firms – seeing significant upside in getting more ‘hands-on’ in involved in operating platforms and assuming larger risks, CFOs who bring on board experience on both the owner and operator side will hold the trump card. And, given the marked uptick in interest in the ‘hotel alternative’ segment, by many perceived as a pandemic-resilient sub-sector, any CFOs with experience in student housing, micro- or co-living, hybrid lodging models and/or serviced apartments can expect to command a premium over their peers.
Clara Stilwell_AETHOS Consulting Group_New York_web

Performance Analysis of the ‘Covid Gap’ in the C-Suite

AHGZ: In Conversation with Thomas Mielke on Leadership in 2021

(Download pdf’ed article translated into English here)

Die Coronakrise bleibt nicht ohne Auswirkungen auf den Fuehrungsstil von Managern. Das hat kuerzlich nicht nur eine Xing-Umfrage ergeben, sondern das bestaetigt auch Thomas Mielke, Partner bei der international agierenden Personalberatung AETHOS Consulting Group. “Viele Manager haben sich in den vergangenen Monaten sehr veraendert, weil sie kurzfristig handeln mussten, viele am Rande des Burnouts stehen.” Stellt sich also die Frage, wie sich das Management nun veraendern muss, bevor im zweiten Halbjahr das Geschaeft wieder richtig anlaeuft? Im Gespraech mit ahgz-Autorin Susanne Stauss gibt Thomas Mielke dazu Tipps.

Herr Mielke, Manager aus Hotellerie und Gastronomie arbeiten auf Hochtouren an der Umsetzung ihrer Strategie fuer 2021. Wie koennen sie sich angesichts der weiterhin bestehenden Herausforderungen besser fuer die Zukunft wappnen?

Das vergangene Jahr 2020 hat vielen soliden Firmen den Boden unter den Fuessen weggerissen. Allerdings gibt es auch Unternehmen, die 2020 schwarze Zahlen geschrieben haben – teils aufgrund der Geschaeftmodelle, teils wegen der Agilitaet und Kreativitaet von Fuehrungspersoenlichkeiten und Managementteams. Diese Agilitaet beizubehalten bleibt daher sehr wichtig. Der Jahresbeginn ist ein guter Zeitpunkt, um das alte Jahr Revue passieren zu lassen und vom Erlebten zu lernen. Wir raten Unternehmen und Fuehrungskraeften immer dazu sich die folgenden drei Fragen zu stellen: 1. Was muessen wir weiterhin so machen wie gehabt? 2. Womit muessen wir anfangen, um ein positives Momentum zu gewinnen? 3. Womit sollten wir aufhoeren, um negative Konsequenzen zu vermeiden?

Und wie ist es um die Personalstrategie bestellt?

Die Art und Weise, wie 2020 zusammengearbeitet, kommuniziert und Innovation vorangetrieben wurde, hebt sich deutlich von den alten, buerogebundenen Vorgehensweisen ab. Gleichwohl ist in vielen Unternehmen rein vom Restrukturierungsbedarf die Rede – oftmals nur gleichgesetzt mit Kosteneinsparungen und einer Reduktion der Mitarbeiterzahl. Das ist zu eindimensional gedacht. Organisationen und deren Personalabteilungen muessen anerkennen, folgende Bereiche schnellstmoeglichst kritisch zu hinterfragt und eventuell neu zu definieren:

  • Kompetenz-Analyse: Wer haelt welche Verantwortlichkeiten und inwiefern sind sowohl die Personen als auch die identifizierten Kernkompetenzen weiterhin adequat bzw. von Relevanz? Gibt es Fachbereiche, die nicht abgedeckt werden oder institutionelles Wissen, welches aufgrund einer etwaigen Restrukturierung verlorengegangen ist/gehen wird?
  • System-Analyse: Ist die Organisation mit den richtigen Systemen und Ressourcen ausgestattet, um in einem drastisch veraenderten Umfeld weiterhin effektiv agieren zu koennen? Wenn es an Mitteln fehlt, an welchen: finanziellen Mitteln? Mehr Personal? …?
  • Prozess-Analyse: Was sind die bestehenden Arbeitsablaeufe/-vorgaenge, um gesetzte Ziele erreichen zu koennen? Sind diese in einer neuen Arbeitswelt oder in einer eventuell drastisch verkleinerten Firmenstruktur weiterhin relevant bzw. adequat?
  • Kultur-Analyse: Wie sieht es mit der Kommunikation aus, wird gelebt, was man lehrt? Sind die Werte im Einklang mit den Handlungen und dem deklarierten Ziel der Firma? Wird Innovation gefoerdert und wertgeschaetzt? Erlauben die Entscheidungswege ein effektives Handeln?

Wie kann die Personalleitung die Geschaeftsfuehrung dabei am besten unterstuetzen?

Ausser den bereits erwaehnten Punkten wird oftmals auch ueber die noetigen Investitionen in neue Kompetenzen und Systeme gesprochen. Es erfordert Mut, in Krisenzeiten zu investieren und haengt nicht zuletzt von den finanziellen Mitteln einer Firma ab. Allerdings hat die letzte Wirtschaftskriese gezeigt, dass Unternehmen vom Vorteil des First Mover profitieren konnten. Etliche unserer Mandanten haben im vergangenen Jahr trotz anfaenglicher Anstellungsstopps aktiv Teams aufgestockt, um kurzfristig verfuegbare Talente fuer sich zu gewinnen. Andere haben proaktiv in Kompetenzzentren investiert, die in einem neuen Arbeitsumfeld an Bedeutung gewonnen haben, etwa eCommerce, digitales Marketing und IT. Wer keine derartigen finanziellen Verpflichtungen eingehen kann, sollte zunaechst mit dem bestehenden Team arbeiten und dabei vor allem sicherstellen, dass kein Team-Mitglied ein Burnout erleidet. Vor allem aber auch, dass sich das Managementteam in der richtigen mentalen Verfassung befindet, um auch neue Moeglichkeiten erfassen bzw. auf diese reagieren zu koennen. Eine pyschometrische SWOT-Analyse, bei der Staerken, Schwaechen, Chancen und Bedrohungen analysiert werden, kann helfen, neue Verhaltensmuster und etwaige Warnsignale fruehzeitig zu identifizieren.

Wie kamen Sie zur Einschaetzung, dass Fuehrungskraefte gerade jetzt besonders Burnout gefaehrdet sind?

Wir haben im vergangenen Herbst eine Studie durchgefuehrt, die die psychometrischen Profile von Chief Operating Officers (COOs) und Chief Human Resources Officers (CHROs) in der Hotellerie analysiert und deutliche Veraenderungen in den Verhaltensmustern identifiziert hat. Ein Resultat daraus: Die operative Geschaeftsleitung hat 2020 als Troubleshooter agiert, die Personalfuehrung hat sich als Vermittler profilierte.

Was heisst das konkret?

Die COOs handelten weniger strategisch und waren mehr taktisch unterwegs. Daten und Fakten haben ihr Handeln definiert – nicht Protokolle, Vorgaben und der Teamzusammenhalt. Es galt, Listen abzuarbeiten und Entscheidungen zu dezentralisieren – aktive Teamfuehrung, und Foerderung lagen dabei weniger im Fokus. Es darf schon fast gesagt werden, dass in gewisser Weise Dinge weniger persoenlich wurden und die Sachlichkeit Vorrang hatte. Ein solches Troubleshooter-Profil birgt natuerlich das Risiko, dass COOs durch den Fokus auf die unmittelbare Zukunft das groessere Ganze aus dem Auge verlieren. Darueber hinaus ist die Konzentration auf das Hier und Jetzt aeusserst aufzehrend – de facto waren die Manager staendig im Krisenmodus und mussten oft  mehrere Braende gleichzeitig loeschen. Damit wiesen sie Ende des Jahres zugleich starke Tendenzen zu einem Burnout auf.

Und wie war es um die Chief Human Resources Manager bestellt?

Die CHROs agierten ebenfalls mehr taktisch als strategisch. Auch sie konnten primaer nur reagieren und nicht proaktiv handeln. Die Risikobereitschaft in Handlungen und Entscheidungen ist ebenfalls deutlich geschrumpft. Im Gegensatz zu den COOs haben sich die CHROs jedoch deutlich mehr auf den Teamzusammenhalt und das groessere Ganze fokussiert. Auch galt es, Protokolle und Vorgaben durchzusetzen – die Personalfuehrung legte somit mehr Wert auf Kontrolle, aber auch auf die Motivation und den Zusammenhalt der Teams. In gewisser Weise ziehen COOs somit in eine fast entgegengesetze Richtung zu der der Personalfuehrung. Das heisst, dass Entscheidungen eventuell auf Grund von Meinungsdiskrepanzen nicht stattfinden und dass sich zwei wichtige Mitglieder des Managementteams in fundamentalen Aspekten nicht einig sind. Das wiederum erschwert Zielsetzung und Prioritaetenlisten.

Sind auch bei anderen Mitgliedern der Geschaeftleitung Verhaltensveraenderungen anzunehmen? 

Ende Dezember haben wir nochmals eine aehnliche Analyse der gesamten Geschaeftsfuehrung bei Logis-, Gastronomie- und Tourismusunternehmen vorgenommen. Der Fokus hier lag auf Schluesselfunktionen wie Chief Executive Officers (CEOs), Chief Financial Officers (CFOs), Chief Operating Officers (COOs), Chief HR Officers (CHROs) und Chief Commercial/Marketing Officers (CCOs/CMOs). Die Resultate (siehe Grafik) weisen darauf hin, dass Managementteams in ihrer Gesamtheit aehnliche Leistungsspalten aufweisen wie die vorherig analysierten COOs und CHROs. 

Koennen Sie das etwas genauer ausfuehren? 

Die Herangehensweise von Mangementteams an die Herausforderungen im vergangenen Jahr aehnelt beispielsweise der der COOs. Geschaeftsfuehrungsteams agierten deutlich taktischer und flexibler als sonst. Langfristiges Denken, mitsamt der Einhaltung von etablierten Protokollen und Prozessen wurde ueber Bord geworfen. Der externe Handlungsdruck wirkte sich zugleich negativ auf die Motivation der Geschaeftsfuehrung aus. Managementteams haben weniger selbstbestimmt agiert, was wiederum zu Gefuehlen wie Angst, Stress und/oder innerer Entfremdung fuehren kann. Solche Risiken sind durch ein deutlich hoeheres Pflichtbewusttsein zusaetzlich erhoeht.

Und wie ist es dabei um das Zwischenmenschliche bestellt? 

Was das betrifft, so haben der Teamaufbau und die Teamfoerderung deutlich an Bedeutung verloren. Stattdessen fokussierten sich Managementteams auf Effizienz und Resultate. Dies ist aeusserst schaedlich, wenn es darum geht, Teams fuer den erwarteten Aufschwung zu motivieren. Doch Delegation und autarkes Handeln hatte im vergangenen Jahr Vorrang. Entgegen der Erwartungshaltung vieler wurde scheinbar weniger kooperiert und wenig Zeit damit verbracht, Konsens zu bilden. Es fehlte eine vereinigende Stimme, die sicherstellt, dass beim Wiederaufbau alle an einem Strang ziehen. Auch hatte diese Isolation scheinbar zur Folge, dass die Gemuetseinstellung der einzelnen Fuehrungspersoenlichkeiten deutlich pessimistischer wurde. Positiv hervorgehoben werden kann, dass trotz alledem Managementteams ihre Fuersorge fuer die Mitarbeiter nicht verloren haben.

Welche Konsequenzen sollten Personalabteilungen nun daraus ziehen? 

Die Aufgabe der Personalabteilung ist es nun, zu eruieren, inwieweit sie punktuell mit selektiven Fuehrungskraeften arbeiten sollte. Sie sollte diese dabei unterstuetzen oder coachen, sich psychisch und mental auf den baldigen Aufschwung vorzubereiten, um die noetige Energie aufbringen zu koennen, ihn mitzugestalten. Zudem erlauben die Ergebnisse unserer Analyse auch Hinweise darauf, dass Personalabteilungen jetzt zum Jahresanfang besser an Aspekten wie beispielsweise der Unternehmenskultur oder der Bereitstellung von besseren beziehnungsweise auch mehr Resourcen arbeiten sollten. Alle haben ihr Verhaltensmuster geaendert, deshalb sollte jetzt folgende Frage im Mittelpunkt stehen: Wie kann eine Geschaeftsfuehrung, die gezeichnet ist von der Krise und wenig Zeit hatte, sich um das Wohlsein der Mannschaft zu kuemmern, die noetige Motivation und Inspiration entfachen, um gemeinsam mit den Mitarbeitern den Aufschwung umzusetzen? Genau hier muss die Personalabteilung einsteigen und moeglichst rasch agieren, um die Fuehrungsgarde dazu zu bringen, die Verhaltensmuster anzupassen beziehungsweise zu normalisieren.

Clara Stilwell_AETHOS Consulting Group_New York_web

Why HR Practitioners Look Forward to Rolling-Up Their Sleeves as 2021 Provides Opportunities To ‘Build Back Better’

In Conversation with Susan Meinl

(Download pdf’ed article here)

Susan Meinl is an industry veteran, having spearheaded for well over two decades the HR function within one of the original associations set-up to support small boutique hotels across the globe. As global HR leader at Design Hotels (www.designhotels.com), she has witnessed and shaped the organisation’s journey from start-up all the way through to its (gradual) acquisition by Starwood Hotels & Resorts / Marriott International. After more than twenty years within the corporate world, Susan has now decided to set up her own practice, honing-in on leadership coaching, and HR facilitation as well as organisational and cultural development work. “I recognise,” Susan said, “one has to grasp opportunities when they present themselves.” The year 2021 is one such instance – “for HR professionals, it provides the chance to really leave a lasting positive impact on the way hospitality organisations are facing the uphill struggle, but also the opportunities that present themselves after a year of destruction to build back better”.

Having, throughout the past decade, maintained a dialogue about market insights, HR trends and the latest about organisational development, Susan and I most recently caught up just after the new year. Despite the still severe travel restrictions, we both commented on how the recent glimmers of hope have started to give the industry more confidence – with many an individual’s new year’s resolution including the unwavering desire to travel to explore new cultures and cuisines, and to once again be spending time with family, friends, and our communities, we were encouraged that pent-up demand would, in time, ensure a solid rebound for the industry. Yet, there are more reasons to be optimistic about 2021 – wearing our hats as organisational advisors and HR professionals, here are our Top 5 ‘lessons learned’:

  • Number I: 2020 has proven that, given commitment and willingness, organisations can be quick to adjust. The various, at times fundamental shifts and structural changes which companies have undergone to ensure the survival and to come out of this crisis not only stronger but better, are a testament to what else firm’s and their leadership teams can achieve if they put their mind to it. “A lot of organisations have broken down silos and flattened hierarchy levels, thus speeding up decision making processes and allowing ‘up and comers’ to have their voices heard,” I commented. Susan added that this would be “an incredibly exciting time from an HR perspective as many a firm has been set free of the ‘chains of bureaucracy’ which, in the past, have slowed down innovation, creativity and empowerment.” Commenting on the importance of learning from the past and maintaining this agile and flexible thinking, we highlighted the growing acceptance of, for example, remote and part-time work solutions, as an opportunity to drive engagement as well as diversity and inclusion. This, in turn, would further help bring in new perspectives and drive innovation. We pointed out, though, that a more mobile and flexible workforce would require a greater degree of trust in, and empowerment of, the employees – thus creating a company culture centred around competencies and skills, but also one where employee engagement would likely be heightened. In short, looking at the bright side, we believe that the necessary organisational structural changes many companies went through in the past 12 months are setting the foundation for a prosperous future.
  • Number II: With most organisations having just completed their end-of-year strategy planning, many will also have critically assessed, and redefined their mission and vision statements. “After a year of introspection, I anticipate companies having re-connected with their purpose, their core values and belief systems – or critically re-evaluated those with a view to stand on ‘firmer ground’ come 2021, ” I said. Susan similarly foresees such ‘organisational re-adjustment’, adding that any firms have been confronted with the harsh reality of what their true company culture really looks like – “and not everyone liked what they saw,“ she said. “This has triggered senior leadership teams to commit more seriously to aligning business strategies with the firm’s people practices,” I remarked, “and this can only be a good thing”. “Whereas in the past we often complained about the HR function not having its voice heard in the boardrooms, it has proven itself as all but indispensable throughout the past 12 months. It has been a year where senior management teams really appreciated how the people-function truly represents the backbone of any business,” Susan said. Both her and I anticipate organisations showing stronger commitment to strengthening, and further developing, their HR and talent management teams and function. Increased attention to, and engagement with company culture and aspects which related to it will only strengthen commitment, alignment and buy-in – critical success factors when re-building a firm’s operations.
  • Number III: Having had to shut down operations or put staff on furlough, many organisations – and individual employees for that matter – have wanted to make sure to use their time wisely. Often, this led to some valuable ‘soul-searching’ and the pursuit of training programs, courses and / or personal coaching. “Finding the time, and resources, for professional development, for upskilling or cross-training, always ranks high on the priority lists for both employers and employees – yet, more often than not, the day-to-day realities of tasks at hand, of budgetary cuts, time restrictions or other mitigating factors often mean that such initiatives are being postponed (indefinitely),” I observed. During 2020, however, “we have seen a huge wave of upskilling or proactive career planning,” Susan noted. “The emergence of online learning platforms and their vast and oftentimes free offerings encouraged people to take responsibility for their own development and learning. This will not only prove highly valuable for the individuals, boosting their confidence and bolstering their future career prospects, but it is also in the best interest of the organisations – they will have a more competitive workforce at their disposal and be able to drive efficiencies, productivity and, most likely, innovation”. Concurring, I added that “in a fast-paced, digitally enabled workplace, ‘continuous learning’ has become a key aspect of ensuring to stay competitive and ‘at the top of one’s game’ – for both individuals and entire organisations.” Susan further observed that peer coaching and learning will also be a new way of sharing knowledge and fostering team spirit and collaboration. Going forward, we agreed that the industry must thus ensure that it continues to carve out the time, and resources, to keep diversifying and developing the skills and capabilities required for our new reality. If it does, then organisations will not only be on track to become ‘best in class’, but – as history shows – they will also reap the rewards of a more engaged workforce.
  • Number IV: There already is a growing emphasis by the industry and investors on social responsibility and sustainability – and not a minute too late as employees have been critical and observant, for some time now, of the best practices, or the lack thereof, of many industry players. “2020 has probably heightened everyone’s awareness for the impact mankind has on the environment, and what the (possible) consequences are of those. At the same time, we have seen that change can happen, that behaviour can change, if there is the need or the will-power to steer this through. In a way, many have thus had their ‘Greta Thunberg’ moment,” I said. Susan agreed that the past 12-months will help set a much higher benchmark for organisations and individuals alike and observed that there is indeed the intent to build back better. “Organisations have redefined their purpose, practices and goals, and individuals are asking themselves what they can contribute to leave a more positive mark”. In the next few months, we both therefore expect value-driven, purposeful initiatives supporting social responsibility and sustainability to be propelled to the forefront, that there will be a major step-change in organisations looking to do ‘the right thing’ and make an impact.
  • Number V: In many ways, 2020 has shown a lot of us what we do not want. Yes, the greater flexibility of working from home – and the mere fact that collaboration actually worked rather well despite physical distances – has been welcomed, and individuals have embraced technology to stay connected in more than just one way. In fact, “many industry executives loved the digital conferences which had been set-up all throughout 2020, and I suspect some of the smaller events might switch to a digital (or hybrid) format going forward,” I said. However, many employees and executives have probably concluded that spending hours upon hours on zoom calls staring at a screen is not ideal either. “In a way,” said Susan, “people have been forced to accept some of the limitations technology provides – and personal interactions have gained in appreciation.” “The challenge,” I pointed out, “but also the huge upside for those successfully manoeuvring it, will be in intelligently applying technology to aid and facilitate communication and better collaborate in a physically distanced world without ‘killing off’ the chance encounters and the informal social interactions which are so vital for individuals to develop, network, bond, engage and form part of a community.” For the foreseeable future to want more meaningful exchanges whilst embracing tech-enabled communication can only be a good thing for companies and individuals alike.

There remain, of course, plenty of things on the ‘to do list’ of executives and HR professionals alike. For instance, both Susan and I wholeheartedly agreed that no matter the sentiment, mental health and wellbeing would of course continue to be a critical topic in this post-pandemic era. At the same time, some of the referenced structural changes and shifts require further ‘organisational adjustments’ – as it relates to, for example, increased workplace flexibility, the need to alter and overhaul a company’s compensation and benefit program springs to mind. Nor should we kid ourselves – moving increasingly away from a hierarchical structure towards a more meritocratic one, to alter the thinking and place greater emphasis on ‘purpose’, and to give up, to some extent, control in favour of empowerment, and to thus proactively foster or encourage ‘experimentation’, will not be an easy road to travel. By and large, though, it warrants to reflect and acknowledge that there is positive momentum, which in turn will spark confidence and drive welcomed change.

Clara Stilwell_AETHOS Consulting Group_New York_web

Saying Goodbye to 2020 with Gratitude

(Download pdf’ed article here)

This past year has been a tough one; a year which was, for many, filled with suffering and loss and I for one, alongside most others, could not wait for 2021 to commence. In reflecting on the last 12 months, I have consciously decided to adopt a different mentality for what lies ahead. I recently came across a quote from the theologian Paul Tillich which read “suffering introduces you to yourself and reminds you that you are not the person you thought you were.” It was followed by the comment, “suffering teaches us gratitude.” Wow.

So, in retrospective, I choose to reflect on 2020 with gratitude. I am grateful for my family and for their health. Not all of us can say that this year, and for that I am truly grateful. I am grateful for my relationships, both professional and personal. This past year has shown the strength of these relationships and the faults of others. Some date back only a few months, others date back to preschool. It is through times of challenge and hardship when you really find out, and are reminded, of who your true friends are and who has your back.

Below is an anecdote that I recently read that, unfortunately describes so much of our society today:

“One day a teacher wrote 10 math problems on the board, intentionally answering the first one incorrectly. Upon completing the task, the students began to snicker and laugh – pointed out how silly and “dumb” the teacher was for answering the first problem with the wrong answer. When the laughter subsided, the teacher sat on the edge of the desk and in a calm and quiet voice said, ““I wrote that first one wrong on purpose because I wanted you to learn something important. This was for you to know how the world out there will treat you. You can see that I wrote the RIGHT answer 9 times, but none of you congratulated me for it. But you all laughed and criticized me because of one wrong thing I did.”

The story can teach us all a valuable lesson: in this day and age, we do not tend to focus on the good or the uplifting; instead, the attention is often purely on what we or someone has done wrong. We are quick to criticize others, rather than embracing the positive outcomes, successes, and the overall achievements. As we have turned the page on 2020 and look to 2021, I look forward to embracing a more positive mindset, both personally and professionally, and to start celebrating the small things rather than dwelling on the negatives and failures.

Finally, I am grateful for my own health, both physically and mentally. Too often, it seems, we put undue pressure on ourselves and take on the burden of companies, organizations and even communities. This weight that we carry can be a financial burden, but it can also take on many other forms. I was hosting a management forum and was asked how, as leaders, can we manage everything that is thrown at us on a weekly, daily, or even hourly basis. After talking through a few ideas and tools, I reflected and made one more comment, “… and be kinder to yourself.”

Clara Stilwell_AETHOS Consulting Group_New York_web

Confronting the Global ‘New Normal’: A Conversation with Daniel Xiang, Hong Kong-based Junson Captial

The Only Constant is Change
Culture can be understood as ‘how we do things around here’. Right now, the how is changing daily – and in some cases, forever.

The above sentiments reflect what most business leaders and operators are currently thinking. COVID-19 has drastically altered worldwide market conditions, with many countries on the brink of recession. The International Monetary Fund (IMF) expects the global economy to shrink by 3% this year, which would be the worst decline since the Great Depression of the 1930s10. A Gallup survey acknowledged this harsh reality by noting that 7 in 10 Americans now believe the US economy is either in a recession (40%) or a depression (30%). Additionally, workers’ have increased worries concerning being laid off and reductions in work hours, wages, and benefits — for instance, 27% of U.S. workers worry about being laid off, which is up from 15% in 201912. Moreover, remote workdays have doubled during the pandemic, which can threaten ‘real life’ office cultures; isolated environments can lower productivity by 17% for those who prefer the ‘in-person’ working dynamic.

To make matters worse, it is no secret that the hospitality industry was among the hardest hit. A recent analysis of U.S. Bureau of Labour Statistics (BLS) data estimated that 34% of U.S. jobs lost between February and July 2020 occurred in this sector alone. Travel has declined in 65% to 80% of the nation.  Several hotels in New York City alone have shut down including the Hilton Times Square and the W New York Downtown. Hermann Elger, a seasoned hotel operator based in New York City, referred to this time as a “pivotal moment in the history of hospitality” emphasizing that “the future of travel and entertainment is dependent on creating a culture of accountability that fosters resilience through well-being and health security.”

Capturing customers’ preferences or new revenue streams is essential as consumers’ habits have changed throughout the pandemic. For instance, data from Technomic Ignite consumer brand metrics found that 46% of consumers want restaurants to provide online/mobile or kiosk/tabletop ordering capabilities, and 43% likewise prefer that method of payment. SevenRooms, a New York City-based data-driven guest experience platform, reported that 13% of Americans will only dine out at restaurants with contactless dining options. Such consumer-facing trends are only the tip of the proverbial iceberg, as COVID-19 has also impacted many business practices behind-the-scenes.

One Perspective from Global Real Estate Development

This is where Daniel Xiang, Senior Investment Manager with Hong Kong-based Junson Capital, steps in. While sharing observations and insights from his international dealings, he emphasized to us that the pandemic has “accelerated technology and digital transformation trends. As a result, it has motivated Junson to embrace new ways of working, communicating, and collaborating to remain efficient and relevant.” Xiang views COVID as a disruptor that brings particular opportunities, assuming that companies are willing to define, and adapt to, a ‘new normal’. Danny Meyer, arguably one of the foremost restaurateurs in America, described it well when saying “There is no playbook for this. And the only playbook any of us has is really the values of our company and your own values as a compass.” We wanted to know if Meyer’s guidance here was equally true for businesses outside the US, and here is what Xiang told us.

AETHOS: Many business gurus have talked about a ‘new normal’ with consumers and businesses post-COVID. How do you view the ‘new normal’, and how have you adapted to it?

Xiang: I view the ‘new normal’ as ‘evolving among uncertainty’. I feel the pandemic has not reshaped the fundamental of the world, rather it has accelerated technology and digital transformation trends. As a result, it has motivated Junson to embrace new ways of working, communicating, and collaborating to remain efficient and relevant. As a company, we felt it was necessary to adapt quickly resulting in remaining productive while remote working. For me personally, maintaining a clear goal during this time and a nimble, open mindset has been essential in pivoting and identifying a new strategy, as well as charting the best course for work. I’m glad that I have also found more time to read books, learn about history, and chat with wise people. Most importantly, I have found that staying objective by looking at things with positive reflection has helped me to adapt.

There is no doubt that people suffered after the pandemic’s initial shock – human nature inevitably leads to all kinds of fear. After also personally experiencing the 2008 Sichuan Great Earthquake and 2002 SARS Crisis in China, I view this pandemic as a cold, hard test. Looking at history, I realized that the nature of crises will always fade away; we will always be amazed by how resilient humans are. I feel if we look back after a few years we can expect that people will appreciate the opportunities this time has allowed, including rethinking the most important things in life, valuing nature and safety, as well as the importance of staying strong and united.

AETHOS: From your perspective, do you see the real estate business world changing as a result of COVID-19? And where is the greatest opportunity?

Xiang: While I do not see any fundamental changes, I believe the overall industry margin may erode due to the higher expenses and protection mechanisms implemented. I observe other trends accelerating similarly. For example, I predict hotels will employ more technology and safety measures. In the short term, people may favour suburb housing over urban centres. Also, offices must adapt to new operational standards which may include a re-design of building and furniture layouts. I do observe logistic and data centres benefiting from clear online trends.

On the deal level, each side will encounter short-term disruption and slower growth. My advice to both buyers and sellers is to be realistic in pricing expectations. Buyers shouldn’t expect a great deal of distress; the U.S. Real Estate market was strong and healthy before entering the pandemic so its fundamental is still solid. I feel sellers with sufficient liquidity are not likely to offer any discounts and would rather hold through the crisis. As result, people will have to underwrite value based on different scenarios of cashflow and the newest loan dynamics, which can affect returns for investors significantly. Any creative way to bridge the ‘gap’ will be considered such as revenue guarantee, payment escrow upon closing, as well as the sale and leaseback structure, etc.

I feel the greatest opportunity is the time we have to re-think our goals of real estate investment and establish long-term objectives. If we can build out a balanced and stabilized portfolio that can last at least a generation, we can become a long-term family office investor. Also, since we were able to quickly pass through the initial shock, we were able to do thorough research on the whole real estate industry. This has allowed us to generate our own view for each asset class and how they will perform in the long run. Furthermore, allowing us to strategize focusing on building up core asset classes (student housing, signal family rental, and traditional residential) when we see the right deals. We also have the opportunity now to utilize our competitive advantages to targets on value, add hotel investment as we’ve passed the bottom already, be flexible on real estate credit investment for opportunistic deals such as debt, secondary market investment, and other specialized funds.

AETHOS: Have you changed your investment strategy and what specific types of deals are showing the most interest and traction?

Xiang: Yes, we have evolved our investment strategy to be nimbler and more creative in such an uncertain environment. We have also taken a long-term view, aiming to build up a balanced and adjustable portfolio, but most importantly, to invest in more people and create a great culture in the long run.

Concerning student housing, I observe that logistics and data centres are showing resiliency. I see opportunities here if we aim to strategize and build this asset class. Hotel assets have bottomed up since April so I also see an increase in potential in future years with a higher return profile; that is only if entered at a really good discount with proper capital structure, business, and contingency plan as the recovery process is risker.

Distressed deals are gaining more traction, such as institutional assets. Unfortunately, with liquidity issues, oversold shares due to fear, and high discount debts, people who have a long-term capital holding horizon can gain favourable average yield.

In Closing: So, Is There Really “No Playbook”?

As Meyer stated, “There is no playbook for this. And the only playbook any of us has is really the values of our company and your own values as a compass.” Xiang seems to have further verified that Meyer’s guidance here is equally true for businesses outside the US. Indeed, this Q&A emphasizes the importance of nurturing safety and new trends, while staying strong and united as a company.

David Taylor, COO of Lore Group, embraced new ways of working when reopening Luxury Hotel Riggs, in Washington D.C. The Rooftop At Riggs has been split in half to provide a bar area, as well as an entertainment space for corporate meetings. The restaurant also has outdoor seating and curbside pickup. The Dallas Morning News noted that pop-up “side hustles” are becoming more common for restaurant operators as a recent survey from the Texas Restaurant Association noted 55% of Texas restaurant operators say their expenses are higher compared to this time last year. This is despite operating at half capacity or less. Joel Montaniel, CEO and co-founder of SevenRooms, stresses that it is still possible to deliver a high level of possibility during these times if done correctly. For example, at the MGM Grand in Las Vegas, guests receive a welcome video from the chef when they check-in.

Ultimately, Xiang’s view helps us to grasp the global impacts of COVID-19 on businesses and discrete practices so that organizations can take to maintain their grounding cultures and core values during these times. For companies like Junson Capital that have a foundation with enough flexibility to adapt to changes to ‘normal’ market conditions, the pandemic can be viewed as a disrupter that brings important opportunities rather than mere losses.

 

References

1 Ballor, C. (2020, September 10). Why pop-up “side hustles” are becoming the new normal for restaurant operators. Dallas News. https://www.dallasnews.com/food/restaurant-news/2020/09/10/why-pop-up-side-hustles-are-becoming-the-new-normal-for-restaurant-operators/

2 Business Insider. (2020, September 10). Sharecare teams up with Forbes Travel Guide to ensure health security and safety within hospitality industry | Markets Insider. Business Insider. https://markets.businessinsider.com/news/stocks/sharecare-teams-up-with-forbes-travel-guide-to-ensure-health-security-and-safety-within-hospitality-industry-1029579812

3 Cobe, P. (2020, September 22). Tech is enhancing the restaurant experience for consumers … or is it? Restaurant Business. https://www.restaurantbusinessonline.com/technology/tech-enhancing-restaurant-experience-consumers-or-it

4 Crabtree, S. (2020, September 29). Consumers’ Likelihood to Visit Businesses Stable in August. Gallup.com. https://news.gallup.com/poll/318803/consumers-likelihood-visit-businesses-stable-august.aspx

5 Forbes, S. (2020, September 11). Hospitality In The Age Of Covid: A Conversation With Danny Meyer. Forbes. https://www.forbes.com/sites/steveforbes/2020/09/11/hospitality-in-the-age-of-covid-a-conversation-with-danny-meyer/

6 Hanson, J. ‘New Normal’ Is Elusive For Hotels Amid Pandemic, Attys Say. Law360. https://www.law360.com/articles/1307181

7 Herway, J., & Hickman, A. (2020, August 28). Remote Work: Is It a Virtual Threat to Your Culture? Gallup.com. https://www.gallup.com/workplace/317753/remote-work-virtual-threat-culture.aspx

8 Jones, J. M. (2020, September 29). More in U.S. See Economy in Recession or Depression. Gallup.com. https://news.gallup.com/poll/307940/economy-recession-depression.aspx

9 Jones, J. M. (2020, October 5). U.S. Remote Workdays Have Doubled During Pandemic. Gallup.com. https://news.gallup.com/poll/318173/remote-workdays-doubled-during-pandemic.aspx

10 Jones, L., & Brown, D. P. & D. (2020, June 30). Coronavirus: A visual guide to the economic impact. BBC News. https://www.bbc.com/news/business-51706225

11 Reed, D. (2020, September 10). Hotels Beg Congress For Help To Avoid Foreclosure And The Loss Of Millions Of Hospitality Jobs. Forbes. https://www.forbes.com/sites/danielreed/2020/09/10/hotels-beg-congress-for-help-to-avoid-foreclosure-and-the-loss-of-millions-of-hospitality-jobs/

12 Reinhart, R. J. (2020, September 29). U.S. Workers’ Worries Spike Amid COVID’s Economic Impact. Gallup.com. https://news.gallup.com/poll/312503/workers-worries-spike-amid-covid-economic-impact.aspx

Clara Stilwell_AETHOS Consulting Group_New York_web

The Big Rethink Agenda: HR, Leadership and Crisis Management

As First Published By HNN

Throughout the summer months, AETHOS has been inviting human resources executives to participate in one-on-one conversations as well as online round table discussions. The purpose: to have an open and unbiased forum to be able to share concerns, ideas, or challenges with impartial industry executives as it relates to talent management and leadership aspects within one’s own organisation. Here is an overview of what they have shared with us is on their minds.

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Since the beginning of 2020, HR leaders have been expected to act fast and to have ready-made plans in place to be rolled-out. The fact, though, is that the sheer scale and impact of Covid has dwarfed whatever contingency plans might have been in place and it has made many of the ‘Plan Bs’ redundant. To ‘steady the waters’ and to protect employees and customers alike, as well as the business and its shareholders, senior human resources executives, together with company leadership teams, have drawn up new agendas – although not exhaustive, here are some of the top priorities:

  • Realigning HR and business strategies – In light of the current subdued business conditions, organisations are bracing themselves for a long road to recovery. Consequently, having already cut costs, restructured departments, and boosted efficiencies and productivity, they are now refocusing their attention on making further adjustments to their core business models. In other words, leadership operates on the assumption that travel and demand patterns, as well as behaviours, have shifted for good – so do the HR departments. With a view to stay ‘lock-step’, HR leaders are thus re-prioritising, placing a greater emphasis on effective and proactive crisis management, innovation and change management. However, they are also more focused on, for example, commercial functions as opposed to operational ones – the former being regarded as more vital for the new avenues being pursued by many organisations (as it relates to, for example, subscription models, or repositionings). For many, it is also a question of building stronger flexibility and adaptability into the HR system with a view to ‘future-proof’ against other crises – which begins with securing access to, or building up, a more fluid workforce.
  • Managing a more fluid workforce – many organisations were mandated by governments to put in place remote working or to limit the size of the work force (and its interactions with one another and the customers). At the same time, companies have had to deal with enforced quarantine measures and travel restrictions. All this, on top of the cost measures which significantly reduced the workforce, has resulted in significant strains on the system. It has forced companies to re-think traditional ways of collaborating and of ‘getting things done’. These, then, are really the questions at the heart of what is keeping many HR executives up at night: How does one guarantee continued access to know-how, or key business relationships, if a large portion of the workforce is on furlough or no longer with the company? How does one collaborate effectively without being in the same room, or in the same time zone? How does one make sure employees have all the tools at their disposal if they are having to work remotely? Perhaps more importantly, additional questions arise around quality of decision-making and performance management. Not wanting to set-up a ‘control state’ which micromanages its employees, HR executives are exploring how they can best assess quality of work or productivity – by default, this included a re-assessment of the available talent pool and the inhouse skills gap.
  • Plugging the skills gap – With many businesses no longer being able to afford the payroll and levels of staffing that they have been used to, restructurings have been abundant. Many organisations have been using technology and assessment tools to assess who within their workforce is ready for the next step or challenge, and who would bring the needed transferable skills and abilities to the table to drive and implement change and innovation. Plugging the skills gap will be one of the crucial responsibilities of HR departments – and doing so requires an excellent overview of the available inhouse talent, a laser-focus on what skills and management capabilities are needed to steer the company through such times of change, an ability to quickly put in place (cross-)training or coaching programs, and a knack for spotting up-and-coming ‘superstars’ who have yet to prove themselves. It is a challenge which depends on HR’s own capabilities, but also on its resources – and unfortunately, many departments have been deprived of the necessary funds and even lack, for example, a properly integrated talent management system. Technology-upgrades have thus ‘moved up the ranks’ in terms of priorities.
  • Upgrading systems and protocols – The significant rise and popularity of technologies such as Zoom has demonstrated how organisations are trying to find ways of staying connected, keeping business personal and collaborating more effectively. However, many companies have also looked at technology to continue, or fast track, their road towards a leaner operation, to improve their forecasting, or to better use customer data to tailor new products and services. And of course, business leaders and HR executives are looking at new systems to help protect their employees, guests, and business partners. Such ‘invasion’ of new technologies often also raises questions around data security – as we have seen across many international markets where ‘track and trace systems’ have been delayed because of concerns around exactly that aspect. Building more IT into an organisation’s structure and workflow thus brings with it many questions which the HR department, alongside some of its counterparts, needs to answer. It begins with data security but spans all the way to assessing how new systems might impact workflows, and thus potentially the way the business engages and interacts with its customers, as well as the mental wellbeing of employees.
  • Protecting mental wellbeing – It was reported in the past that a ‘technology-overload’ can have counterproductive and even negative impacts on employees. Having to adapt very quickly to new systems or protocols can be overwhelming – in particular in an environment in which an employee might already be working quite literally in isolation from its colleagues and in which informal exchanges can only happen ‘at a distance’ through an impersonal platform. However, organisations are of course also concerned about stress and the mental wellbeing of staff in general – that is those who are still part of the organisation (most of whom will likely have had to take on additional responsibilities) and those who have had to, or will have to, leave the organisation. Stress and anxiety levels are reportedly very high. HR executives have thus ramped up and improved the way organisations communicate with their employees – placing a particular focus on ongoing communication. That is, staying connected and engaged with staff, providing up-to-date information but also proactive support.

Developing and implementing an ‘HR strategy2’ is a significant challenge for many organisations. Most are rising to the occasion, with the above initiatives helping to fine-tune and improve on existing structures and processes. Many of the HR executives have, however, also stressed that part of this ‘big rethink agenda’ is a re-evaluation of governance. We have seen different strategies being pursued by countries across the globe – some have pursued a highly centralised strategy to fight this situation, others have decentralised decision-making power and let local governments/municipalities take the lead. The jury is still out as to whether or not there is one winning strategy, but HR executives are asking themselves: “Are there potential learnings for us from the different strategies being pursued by governments across the globe? During times of crisis or change, does a de-centralised structure trump a centralised one or vice-versa?”

Clara Stilwell_AETHOS Consulting Group_New York_web

Re-Shape, Re-Generate, Re-Invent: A Career Roundtable Discussion Focused on Confidence, Control and Opportunities

As First Published By Hospitality Insights

The Annual Hotel Conference was held October 8th – in line with the overarching theme of ‘re-shaping’, ‘re-generating, and ‘re-inventing’, delegates were able to participate in an interactive roundtable discussion focused on professional development opportunities. The conversation centred around identifying and securing one’s next career step.

The intimate setting provided a confidential platform for participants to share their difficulties in, and concerns centred around, continuing their career path within the hospitality industry, and securing the next step amidst a global pandemic. The group shared insights on common obstacles encountered during the job search but also discussed proactive and tangible ways to tackle those. Displaying a non-defeatist attitude, insights were shared on how best to ‘sniff out’ opportunities before they come to the market, which functions are ‘hot’ right now, and which sub-segments show activity and growth.

“Sometimes, we are the biggest obstacles to our own success” – on the importance of staying in the right frame of mind…

Recognising that the current labour market is defined by a significant lower number of firms actively expanding their teams, and a considerably higher number of executives ‘on the market’, the roundtable participants quickly focused on what lies within their area of control. Yes, these are challenging times, but the group was united in its view that staying optimistic and motivated throughout one’s job search is vital to successfully securing the next position. Top tips to boost one’s confidence, and to not lose the sense of control, were the following:

  • Firstly, ask yourself, “What are employers looking for right now?” and, in a vital next step, “How do my experiences, skill sets and personal abilities speak to what is being sought?” – the group acknowledged it is easy to get frustrated and to lose motivation if one is unsuccessful in one’s first attempts to secure the next role. To keep morale up, it helps to identify what employers are valuing the most and what competencies they need to help them be successful during, and in the aftermath of, this crisis. In a subsequent step, one should then try and link one’s own background to those traits and skills, with a view to then have very specific and highly relevant talking points when getting in front of potential employers.
  • Secondly, ask yourself, “What are the compromises that I am willing to accept?” and, as important, “What are my priorities right now and in the mid to long-term?” – the group agreed that re-evaluating, and re-affirming, one’s own priorities and risk appetite is crucial in keeping the sense of control throughout the job search. By consciously re-assuring oneself of the choices that one is willing to explore (e.g., accepting a pay cut or a lower position, moving into a different industry sub-segment, joining a start-up or enrolling in further education programs), one is able to speak with greater conviction and confidence when it comes to exploring career opportunities with potential employers that might ‘deviate’ from one’s original career path.

“The mindset of a champion”

Agreeing that a ‘stable inner core’ and a strong self-confidence can help oneself to ‘keep going’, the group equally acknowledged that ‘getting the foot into the door’ was yet another matter. Often, it is here where many executives receive the much-dreaded rejection – in particular in times where organisations looking to expand their teams are inundated with a very large number of applicants. Understanding the target audience and being mindful of one’s own competition is one thing; it is another to ensure to stand out from the crowd. Much of this is common sense, but the group boiled it down to two best practices:

  • Firstly, it was acknowledged that one absolutely has to make approaches customised and targeted. Sending out standardised applications is a complete waste of time and effort and only feeds one thing – the number of rejections. Having gone through the first exercise as outlined in the previous section helps in identifying the key areas which one should focus on to help make applications highly relevant. In fact, ‘relevance’ is hereby as much of a success factor as ‘succinctness’ – in other words, the ability to provide condensed yet pertinent information to the potential employer. Make sure to show them that you have done your research, that you have understood where they want to go, with a view to help them make a quick judgement call as to whether or not you should form part of the next round of interviews.
  • Secondly, it was agreed that a key success factor in securing the next job is often tied to having the ‘perfect timing’ – in other words, chances of getting that desired next position are higher if one gets in early. ‘Sniffing out’ opportunities before they come to the market is thus crucial and easier than one thinks – it is about leveraging one’s network, consisting not only of former colleagues, associates and friends but also of industry bodies and, for example, headhunters. The key point, though, when communicating with your network is not to ‘sell’ yourself – instead, the focus should be on asking the right questions. For example, use your network to inquire about their views on your own competencies and skills. Have they witnessed others with a comparable background successfully move into a different position or industry segment? Which firms have they heard are expanding their teams? ….

Reality check – “In the midst of every crisis, there lies opportunity”

Despite the optimistic tone of the roundtable discussion, one question was raised which displayed and articulated the concern of many – does one need to consider leaving the industry to be able to secure a stable position and income. What started off as a sobering conversation turned, however, into one where participants shared the opportunities which are still out there within the hospitality sector. The industry has lived through many crises, and yes, 2020 has thrown up one which has shaken it to its very core – yet, whilst the challenges are great, so are the opportunities. Specifically, the group saw growth in, for example, the hotel alternative space – in other words, companies focused on extended stay, co-living, student accommodation as well as senior living or, for example, hybrid models (all of which have proven to be more resilient than the traditional lodging space). However, the group also talked about the benefits of being focused on the extreme ends of the sector – in other words, it saw more activity with platforms focused on very clear and highly defined segments, mostly in the leisure space and either at the budget end of the spectrum or the high-end luxury resort market. Finance, or financing institutions were equally reported to have picked up recruitment activity – mostly in anticipation of heighted M&A activity towards the end of this year / beginning of next year. The group did, however, also highlight technology platforms which have shown strong interest in picking up talent from the sector for business development or product development functions. In fact, commercial roles such as eCommerce or digital marketing are in heightened demand, as are senior finance and technology functions.

Clara Stilwell_AETHOS Consulting Group_New York_web

Evolving To Normal – How Private Members Clubs Have Adapted

As we fall into Fall, hospitality companies need to continue to think different. There is no playbook for a pandemic and what we may do one week can get turned upside down the following week due to a colour scheme and algorithm that is supposed to tell us if we are “safe” to operate. Regardless of opinion and political views, one thing is certain – we need to continue to attract more customers and find new ways to activate revenue.

Over the last seven months, one hospitality segment that has seen a massive up-tick is Private Clubs. Yes, golf rounds may have hit an all-time high this past summer, and in the warmer climates that will continue to be the case through the end of the year and into 2021. The interesting piece of the puzzle is how clubs have adapted and innovated over this period. Most no longer able to serve indoors and host events, many pushed seating to outside locations and now offer curb-side pickup for those not comfortable eating among others but reliant on their club’s dinner service. Some clubs have even taking it a step further and offered their members groceries and sundries for pickup. Literally a one-stop-shop.

The point of this is not to look for a mass exodus to the private club space; however, there are some very interesting opportunities for those in hospitality to expand to other segments beyond hotels and resorts. That is another article for another day. The point is that our “new normal” is not going to be constant and the only guarantee is that it will continue to evolve for the foreseeable future until we finally land on what will become “normal”. Over these next months it is imperative that all businesses, no matter which hospitality vertical, continue to attract guests and activate new revenue streams.

From in-room dinning that is no longer “room service” but now “takeaway” from the restaurant to outdoor dining bubbles on the Upper West side, guests are still looking for an experience that anticipates and exceeds their expectations. Everyone’s expectation may be a little lower throughout the pandemic, but it does not mean that it still cannot be exceeded, and you still can be creating guests for life. Now, more than ever before is the time to not ask ‘why’ you should try something new, but ‘why not’. Who is to say that procurement and services that have always been for the back of house cannot be offered to the guests? We all know large meeting will not come back too quickly, so what better time to partner with schools and colleges to repurpose ballrooms and conference space to socially distanced learning centres. Now is the time to take a page out of the private club sector and offer up services that have never been done before.

Innovation is simply taking an idea of invention and applying it to a new vertical or within new context. In the immortal words of Steve Jobs, we must learn to “think different” and a great place to start is by looking outside of our own hospitality bubble and looking forward to our next normal.

Clara Stilwell_AETHOS Consulting Group_New York_web

An Insider View: What Keeps Hospitality Leaders Up At Night

The hospitality industry finds itself in a state of flux. Many organisations have had to restructure – thus not only forcing executives to re-evaluate their professional careers, but also forcing the organisations themselves to more critically assess internal workflows, staffing and productivity levels. ‘Change management’, ‘adaptability’ and ‘innovation’ are certainly the buzzwords which are front of mind. Having recently participated in several panel discussions, below is a quick summary of what – collectively – senior executives have identified as their ‘top three’  leadership/HR worries. Unfortunately, questions still outweigh the answers…

  • In the current operating environment, defined by extreme financial pressure and the need to cut costs and reduce payroll, many hospitality organisations are axing entry-level positions and reducing the temporary or part-time work force – yet, often times minority groups are representing a large proportion of these roles and functions. Hospitality firms are thus grappling with the consequences of these austerity measures, which – unwillingly – jeopardise undoing a lot of progress which has been made in that area as it relates to providing equal opportunities to a much broader workforce. This will remain top of mind for leaders as they continue to navigate what is both best for their perspective companies financially as well as organisationally.
  • Most organisations have tried their very best to avoid major rounds of redundancies. However, for many the financial realities have hit home and action needed to be taken. They recognise, though, that what matters is not only the way these redundancies take place, but – more importantly – how organisations are further supporting at risk staff members or those who have already been made redundant. What has been highlighted was the urgent need to provide ongoing support – to help employees and staff members with potential cross-training initiatives, mentorship and coaching, or the provision of access to a support network. Organisations have equally highlighted their initiatives to provide better mental support – this applies to remaining staff members on the payroll as much as those who have been let go. For the moment, though, no one seems to have the perfect program in place.
  • Talking about mental wellbeing, many executives and organisations have highlighted the need to be more conscious about one’s own state of mind. Staying positive and keeping the long-term in mind can be difficult during times in which short-term survival depends on cost cuttings and drastic efficiency measures. Seeing opportunity in an environment of chaos requires a calm and steady approach and the mental space to identify or develop strategies and tactics which can help pivot a business into a different direction. Leaders are hereby not only required to display this ‘inner calmness’ themselves, but they are also focused on working with HR executives to instil the same in the general workforce. Many executives have actually highlighted here that focusing on the chance for those who remain in the workforce to prove themselves in times of crisis represents something of not just a baptism by fire – but an opportunity to test their leadership skills during a time of crisis and help pivot their business in a positive direction.

In line with what organisations are doing, leaders, too, are required to re-evaluate and assess their own strategies and tactics. The various round table discussions have brought to light opportunities which present themselves to hospitality executives – in particular, the technology sector has been highlighted as one of the business segments which appears to be keen to capitalise on the current available talent pool. Companies are looking for business or sales and marketing professionals who, with their knowledge of and relationships within the hospitality industry, could assist in growing market share (or to further enhance software products, tailored to the needs of hospitality clients). In fact, with many organisations looking to reposition themselves, or keen to tap into new customer segments, commercial functions appear to be in demand across a broad variety of business sectors. The same holds true for technology and IT experts – perhaps not surprising given the new business environment characterised by remote working. Executives thus shared that they are spending more time nurturing their professional network and building a small ‘personal board of advisors’ which can help identify or assess such hidden opportunities.

Clara Stilwell_AETHOS Consulting Group_New York_web

AETHOS Hotel CEO Turnover Study 2020

Exclusively Published By HNN

The pandemic has been impacting businesses across geographic fault lines and industry segments. However, despite the fact that the hospitality sector has undoubtedly been one of the hardest hit, it is also important to recognise that the industry is experiencing a rather remarkable period of steady leadership – and with it comes the firm hand of a tried and tested leader, one who has seen and dealt with a variety of different crises and turbulences and who, one would hope, has gained the trust of ownership, the shareholders and the stakeholders.

The Status-Quo: “Nobody Moves!”

AETHOS has been tracking CEO turnover at the 50 largest public or privately-held hotel companies for well over fifteen years and there have been since only two years in which there was less ‘shuffling of seats’ for the top job than in the recent past. In 2014, coincidentally the year in which the United Nations declared Ebola an “international public health emergency” but which also saw a continued uptick in global terrorism, we saw only two hotel CEOs change their jobs (at Wyndham and Shanghai Jin Jiang) – everyone else seemed to be too busy dealing with the going concerns and preparing for the ‘super-mergers’ which followed in 2015 (e.g., Marriott/Starwood, Accor/FRHI). Going further back in time, 2009 also stands out as another year of remarkable stability – although the global economy was in shatters, or most likely exactly because of it, hotel companies around the world kept a firm grip on their C-suite to steady the waters and to avoid any unnecessary uncertainty or distractions that might come with a change in CEO.

Last year, we saw new appointments at Extended Stay, for example, Red Lion Hotel Corporation and Caesars Entertainment as well as Scandic Hotels. This year, we have (to date) witnessed four changes – at Minor International, MGM Resorts International, Disney and Millennium & Copthorne. All, with the exception of the departure at Millennium & Copthorne, occurred pre-Covid. For the moment, then, it would appear that this picture of the steady and calm leadership within the industry continues to hold true – but only just….

Yes, by and large, hotel companies have continued to stay loyal to those at the helm; however, average tenure of incumbent CEOs now sits almost at an all-time high of approximately 10 years. This, in combination with the incredible amount of pressure the organisations are experiencing on their operations globally (i.e., not only tumbling revenues and profits but also fundamental changes to demand patterns, buying behaviours etc.), increases the likelihood of investors (rightly or wrongly) wanting to call for radical changes to take place. Those may not happen imminently but happen they will.

Looking Ahead: “Ready – Get Set – Go!”

The years following the ‘calm oases’ of 2009 and 2014 were characterised by heightened activity as it relates to changes within the C-suite. Interestingly, though, after 2009 we saw a much more prolonged period of ‘instability’ within hotel companies across the globe. During the subsequent three years, CEO changes continued to increase, culminating in eight companies which were making leadership adjustments in 2012. In contrast, following the inactivity in 2014, the industry saw only one year of frantic shuffling of the CEO seats, with seven new leaders having been appointed in 2015 before activity then quieted down. Which pattern are we likely to follow this time around?

As the current pandemic is both a health crisis as well as an economic one, it is reasonable to expect that a scenario comparable to 2014/15, where there was a brief period of quick adjustments, is less likely. Instead, the hospitality industry is realistically having to prepare itself for a prolonged period of ‘corrections’ – one can assume that we will witness numerous acquisitions, or mergers, as well as considerable restructurings. All of these scenarios are likely to come with ‘build-in’ changes to the C-suite.

Moreover, the incumbent CEOs will be, more than ever, under the microscope; not only by their investors but also by their fellow executives and staff members. Have they taken the right decisions? Were they firm enough in their actions to protect the business, its employees and stakeholders from the worst of the crisis? Did they themselves take proportionate or substantial enough pay-cuts, for example, to show solidarity? Have they shown proactive leadership in futureproofing the business for the aftermath? Were smart actions taken to better manage costs, such as rent/lease payments, to try and spread the burden of the crisis more evenly amongst the stakeholders involved? The UK’s budget chain Travelodge, backed by significant hedge funds and an investment bank, is a good example of how divided the public opinion can be on whether the right actions were taken to protect the business (the ‘Travelodge Owners Action Group’, representing the majority of UK Travelodge landlords, has in the meanwhile started to evaluate whether it will execute a break option from Travelodge to create, under the umbrella of AGO Hotels, a new association with Accor). Again, such increased scrutiny is likely to trigger additional calls for someone new to come in and take the reign.

Additionally, considering the changing landscape and business environment, investors are, going forward, likely to be looking for different skill sets in their top man or woman – although the latter is, unfortunately, still very unlikely to be the case (just shy of 90% of the CEO seats continue to be held by men and essentially almost all of the incoming CEOs, since our first Hotel CEO Turnover report, are men – with very few notable exceptions as, for example, Jennifer Fox [2018], Alison Brittain [2016 ) or Trudy Rautio [2012]). After all, a CEO tasked to rapidly grow and expand the business is, more often than not, a different type of leader, coming with a different background of experiences, than one who is tasked to streamline operations, identify cost savings or to restructure the business.

Credit Where Credit Is Due

There is no doubt that Covid-19 has been devastating for the sector; however, it has also forced hospitality organisations and their CEOs to focus their attention, and to improve (amongst other areas) their ‘score cards’ as it relates to innovation and speed of action – traditionally areas which have not always been a forte for many of the internationally operating players. It seems results are starting to show, and this is to the credit of the incumbent CEOs. They have had to face unparalleled disruption and challenges which they have had to overcome, undoubtedly causing (just like for all employees across the organisational spectrum) large amount of mental and emotional stress, pain, and pressure. Maintaining a high alert level 24/7 over such a prolonged time-period is not easy.

Perhaps, then, besides some of the listed reasons for a likely uptick in CEO changes in the years to come, those might just occur for the plain and simple reason that someone with a new perspective, unburdened by previous fights and challenges, can also bring in renewed energy and drive and rally potentially divided share- or stakeholders to more readily back one common goal. It would seem that this is exactly what is happening in another subsegment of the hospitality industry as cruise line companies, renowned for their steady leadership, already saw earlier this year the ‘Heads of’ at Azamara Cruises, Holland America, Seabourn and Windstar depart (alongside the CEO of Norwegian [back in December of 2019]).

Clara Stilwell_AETHOS Consulting Group_New York_web

The New Work Environment
 

Co-authored by Gary Pearl / Seak International 

The world has changed, and there is an accelerated need for new working arrangements and greater workplace automation. We are in the era of the new normal, from telemedicine and streaming fitness classes to social distancing and “elbow bumps” and from online learning from Ivy League universities to remote workplace training and engagement.

COVID-19 emergency measures will define the new organizational life, which will be characterized by an increase in remote and flexible work arrangements. These arrangements are not new, and nor are the benefits and pitfalls. However, the size and scale of the remote workforce will increase dramatically. According to Buffer’s 2020 “State of Remote Work” report, 98% of workers who are currently working remotely would like to do so, at least part of the time, for the rest of their career. Some of the benefits of remote work include improved employee retention, reduced commuting, better work-life balance, a larger candidate pool, lower organizational costs, increased productivity, fewer sick and personal days, and a decrease in employee attrition.

Technology advancements have also made workers more accessible than ever before. As Notion Consulting senior partner Diana Vienne wrote for Fast Company, “The physical location in which we now work has merged with the places in which we eat, sleep, learn, exercise, and play.” In today’s work environment, it is technology, not a common workplace, that keeps people connected. According to KPMG’s Jane Gunn, after the pandemic is over, “work will be a thing you do, rather than a place you go.” These advancements will, likewise, replace face-to-face classroom training with distance learning.

The concept of remote learning has a long history, according to Florida National University, from 1840, when Isaac Pittman began teaching shorthand by mail; to the 1873 founding of The Society to Encourage Home Studies in Boston; to the first televised college courses in 1956 in Chicago; to 2011, when 89% of four-year public colleges and universities and 60% of four-year private institutions in the U.S. offered classes online.

The Financial Benefits of eLearning

As Dr. Ulrik Juul Christensen, chief executive officer of Area9 Group, wrote for TrainingIndustry.com, “Organizations worldwide spend more than $350 billion on corporate training and education each year, but much of it is ineffective.” Companies will continue to look for more effective and efficient ways of delivering training and particularly for methods that support the transfer of learning into behaviours that drive workplace performance. No longer will the key measures of training be the amount of money a company invests or the number of hours each employee spends in training. Training expenditures need to answer the same question as any other business investment: Is there a justifiable return?

There are obvious economic considerations that favour eLearning over traditional classroom instruction:

  • It reduces the impact of lost productivity due to time spent away from work and eliminates the cost of travel, hotels, training rooms and instructors. According to Panopto, Microsoft cut training costs from $320 to $17 using video, and Caterpillar reduced costs by between 40% and 80% using eLearning.
  • It provides greater flexibility than classroom instruction, which is bound by fixed schedules, fixed locations and a limited number of participants.
  • Traditional classroom instruction often attempts to convey too much content in a short period of time.
  • Learners participate at their own pace and can determine the time and location of their training.
  • Many eLearning platforms enable learners to log in from any location and at any device.
  • With classroom training, it is often more difficult to address the specific needs of individual learners.

But Does It Work?

Are economic reasons enough to invest in eLearning? The bigger question is whether this training modality is effective in developing skills that drive workplace performance. In a research report, Dr. Will Thalheimer, president of Work-Learning Research Inc., states:

“There is clear evidence to suggest that it is not the elearning modality that improves learning, but, instead, it is the learning methods typically used in elearning—and used more often than in classroom instruction—that create elearning’s benefits. These learning methods include such factors as providing learners with realistic practice, spaced repetitions, contextually-meaningful scenarios, and feedback.”

Some of the measurable impacts of eLearning include:

  • Greater consistency in delivery.
  • The ability to quickly deploy content across a geographically dispersed organization.
  • Accessibility for frontline employees, who typically make up a majority of a company’s workforce.
  • Participants’ ability to demonstrate skills mastery.
  • “Anytime, anywhere” access to learning materials.
  • Reduced time away from work.
  • The ability to use microlearning.
  • The ability to use blended learning.

Implementing eLearning effectively doesn’t mean transferring classroom content to an online format. Rather, it is about the quality of the content, visual design and training methods used. eLearning design should focus on providing engaging learning experiences, gamification, processes and tools that enable learner feedback to enhance skills mastery, and learning metrics.

Although distance learning is not the answer in every circumstance, it clearly has significant benefits. It is also our new collective reality. Getting ahead of the curve is imperative for companies looking to stay ahead of the competition. Remote learning also allows for social interaction in a time when people are begging to stay connected.

Clara Stilwell_AETHOS Consulting Group_New York_web

Covid Uncertainty Does Not Discourage European Hoteliers

Sentiment Remains Fragile, But Silver Linings Are In Sight

As the UK prepares for reopening the hospitality industry, AETHOS sought to get a clearer picture of the sentiment amongst branded as well as independent hotel operators. The idea – to contrast the mood of the British hospitality industry with that of a country where hoteliers have already had a little ‘head start’ due to the earlier lifting of restrictions.

Two Steps Forward, One Step Back

Unsurprisingly, with UK hospitality businesses still in lock down at the time of writing, operators felt little sense of control of the situation at hand. Unclear policies and regulations, and questions around the timing of the reopening of the industry, severely damped business leaders’ mood. In contrast, in Germany, where many hotels had already reopened during the month of May, the first few weeks of operations seem to have heightened executives’ sense of control – they have been able to test safety rules and measures, and staff and guests alike have slowly gotten familiar with the mitigating factors. The group was re-approached post June 23rd – the day on which the British government set a clear date for the industry to reopen and on which the mood in the UK significantly improved. Yet, the German hoteliers – who had learned a couple of days earlier from a resurgence of cases in a meat processing plant and renewed, although locally restricted, lockdowns – have gotten slightly more ‘jittery’. This is evidence that the situation remains rather fluid and fragile. In fact, commentaries from the survey group include numerous references to the many uncertainties that remain. For example, hoteliers from both countries lamented that business on the books remains very low – and with most large-scale events continuing to be postponed or cancelled, and many of the demand driving attractions being shut (such as most theatre and entertainment businesses), difficulty of preparing for the next few months ahead remains high.

Nonetheless, and although daunted by the huge task at hand to reopen businesses, UK hoteliers seemed relieved to be able to ‘get going’, with at least some sense of renewed optimism being observed amongst the survey group. Many commented on the expected high levels of pent-up demand and a summer defined by ‘staycations’. The easing of travel restrictions and the suggested ‘air bridges’ (or so-called ‘tourism bubbles’) between countries with comparatively low infection rates are expected to further bolster demand. The news that one of the well-known UK hotel brands (Travelodge) managed to secure temporary rent payment cuts through to December of 2021, and that the government would extend the moratorium on lease forfeitures, also plaid a role in British hoteliers’ sense of relief. In contrast, German hoteliers’ optimism appears to have slightly muted in the recent past – although business had picked up (with resort hotels in particular reporting solid demand), the excitement of re-opening seems to have given way to the stresses of managing operations in a difficult environment defined by profit-limiting ‘performance plateaus’ and unpredictable, and much shorted, booking patterns. However, participants commented positively, for example, on the support received through reductions in VAT on lodging, food and drink (something for which their UK counterparts are also hoping for) as well as the trial ‘air bridge’ between Germany and Mallorca / Spain.

Going forward, plenty of worries remain which keep hotel executives up at night. It is interesting to observe that as businesses (prepare to) reopen and are accustomed to the ‘new normal’, the tactical and more operational issues – although still a worry – are seemingly becoming less of a concern. Most companies, whether or not they are already up-and-running, appear to have a good, or at least better, handle on managing the mitigating factors, such as training staff on health and safety measures, implementing new procedures for front- and back-of-house staff and enforcing new behaviours of social distancing. The bigger worries, both in the UK and Germany, relate to the mid- to long-term strategies around building and stabilising the businesses – in other words, working on business plans to reposition operations or, for example, attracting a different (more local) clientele.

More positively, it is encouraging to observe that, although battered by the crisis and its consequences, hoteliers were able to see silver linings. Keen to rebuild stronger and better, they seem to identify the disruption as a potential vehicle for positive change. The following three themes were amongst the most common ones:

  • A chance to drive innovation, best practices and productivity by being required to reskill a large proportion of the workforce, to more closely collaborate, to decentralise decision-making to the ‘front line’ and to take bigger risks;
  • A chance to strengthen the company’s talent pool and fast track potential future leaders of the industry as, with a significantly reduced workforce, most organisations are forced to push those who remain within their employ to more quickly ‘step up’ and prove themselves;
  • A chance to reinvigorate the company culture but also to ‘level the playing field’ by having to (a) draw on a much wider and more diverse talent pool, (b) break down barriers between staff and senior management, and (c) accept greater workplace flexibility – all this is hoped to lead to greater empowerment, more evidenced-based decision making and more equality amongst staff.
Clara Stilwell_AETHOS Consulting Group_New York_web

Do Not Let Covid Infect Your Brand
 

The first thing that came to mind when Marriott International furloughed two-thirds of its corporate and property staff was – Is this going to severely impact the Marriott brand and the relationship with their most important asset: PEOPLE. Many blue-chip companies in hospitality, gaming and travel followed suit. These same companies have spent untold millions over the past decade building both a customer and an employment brand. Would their reputation be severely impacted in ninety days? I sought the expertise of my friend Anshuma Lal, founder of branding agency Human Made NY, to weigh in on the issue. Here is what she had to say:

“Maybe it’s best to start with what brand integrity is not. It is not muddling the truth. And it certainly is not communicating one thing and doing another. People do not expect companies to be perfect. In fact, you may be surprised to know that it is not your low pricing or superior product that keeps your customers coming back. Or the perks you provide as an employer that keep your staff from jumping ship. It’s your ability to maintain authenticity, transparency, and sincerity that elicits loyalty. During these unprecedented times, a company’s effectiveness in exercising these values will directly determine how well they weather the storm.”

Anshuma’s comments hit home as some hospitality leaders such as Arne Sorenson at Marriott, Danny Meyer at Union Square Hospitality, Chris Nasetta at Hilton and Matt Maddox at Wynn have done an admirable job of staying true to their brands in the face of the pandemic. Below are more specific examples of how they have been maintaining brand integrity and consequently customer and employee loyalty.

Be Informed

Marriott put CEO Arne Sorenson front and centre in a corporate video where he laid out the facts about the COVID-19 impact on his company and the industry. Furloughing two-thirds of Marriott’s workforce was a painful decision but he was honest and decisive. He also shared how he sought the advice of numerous experts and shared timely facts about the industry-wide shut down. It was difficult but heartfelt.

During a time of great uncertainty, employees and customers do not need opinions; they need accurate and up-to-date information. Hire or seek the advice of experts in the relevant areas of concern. In this case, infectious disease specialists, labour relations/law experts, communications professionals, virus disinfection & sanitation services. Like Arne, gather a well-rounded group of advisors.

Tell the Truth

When Danny Meyer at Union Square Hospitality laid off 2,000 associates, he said it was a tough but straightforward decision. In his interview on the Masters of Scale Podcast he laid out his thoughts in greater detail. He brought his team together via technology and told them the following hard truths about closing his restaurants:

  1. It could be dangerous for them to come to work.
  2. There was no work.
  3. The only way there would be work for them in the future was to keep the business alive and kicking.
  4. There were programs in place such as unemployment that his team could tap into and that he would help them access these programs.

It may not be easy, but telling the truth is always better than communicating a misinformed and unrealistic picture. This is what plagues President Trump as he is constantly backtracking on pandemic comments that prove to be erroneous.

Show Compassion

For example, Hilton donated rooms to help healthcare and essential workers have a comfortable place to stay. They also provided free vacations to workers after the pandemic subsides. Many other hotel companies followed suit. Las Vegas Sands has been at the forefront of keeping employees on staff and paid.

There is no better way to support your staff than to keep them paid and engaged. If you can’t, donate what you can. This will be over at some point and people will remember how leadership acted during the crisis. Remember that you are part of a community and both friends and foes are watching. The pandemic has inflicted a great deal of pain world-over with people losing livelihoods and loved-ones. Speak and act with acute sensitivity that empathizes and resonates. The key is to keep your humanity.

Deliver

Matt Maddox at Wynn Resorts put out a 36-page how-to strategy for re-opening a casino resort. He has shared that strategy with everyone to replicate and refine.

Take authentic action to help and execute. Everyone is better off when you deliver on your promises. This is a precarious time to be a leader and a business owner, so even small wins are better than loses. Collaboration is also critical. Support the AHLA, NRA and AGA and their efforts to help the entire industry recover.

Thoughtfully Innovate

Hilton created CleanStay in collaboration with the maker of Lysol and the Mayo Clinic. They are developing processes and training to make rooms cleaner and safer when the economy reopens. Numerous other companies and the AHLA has developed similar protocols.

Safety is too important to the entire world and these companies are sharing their programs for the betterment of all people. The world has changed, and we need to change with it. As always, innovations will be the key to progress. Let the past be a reference but not an impediment to advancement.

Brands are a fragile balance of many inputs and they need constant reinforcement. More so during difficult times. Use your brand pillars to guide your decision making and you stand a better chance of coming out on the other side with your brand integrity intact.

Clara Stilwell_AETHOS Consulting Group_New York_web

Key Questions on Employees’ Minds Right Now, Part II/II

Many hospitality students and professionals around the world recently participated in AETHOS’ series of development webinars. These sessions offered attendees the opportunity to complete the 20|20 Skills™ assessment to gain a personal SWOT analysis to help them navigate these challenging times of occupational crisis and change. Interestingly, the attendees consistently voiced certain concerns and follow-up questions.

We wanted, therefore, to address these issues publicly for the benefit of business owners, leaders, and HR professionals who are eager to understand the issues presently on the minds of the global workforce. First, we will consider some general topics (see part I here). In this follow-up piece, we will explore questions specific to two groups of team members: (a) those who have jobs and are likely telecommuting and (b) those who have been furloughed. Likewise, we urge leaders to contemplate these issues and questions and proactively address them in their own businesses.

For Those who are Telecommuting & Added Duties

Audience: Often my work is clearly appreciated by peers and customers but under-appreciated by my senior leaders. How can I fix this gap?

AETHOS: There is no escaping company politics, which happen everywhere to some extent. However, we suggest you “flip the script” whereby you worry less about getting credit and actually spend more time proactively looking for ways to make others successful. This is the principle of “servant leadership,” and done consistently, it will increase your (a) rapport and alliances across teams, (b) working knowledge of the business and its supporting systems and resources, and (c) your reputation and visibility as a supportive business partner.

This effort should include reaching out to your direct supervisor and other senior stakeholders to ask how you can support them better or differently. These informal touchpoints also serve as opportunities to provide updates on the progress or outcomes of your key initiatives and goals. If you use these accomplishments as a springboard to explain how your approach, skills, or acquired knowledge can help them or the broader business in other ways, then your updates will be perceived as natural and logical versus as political and showing off.

Audience: How do I stop other team members from taking credit for my work?

AETHOS: This is a tricky issue with no easy answer for every situation – how best to address it depends on the nuances of a person’s circumstances and the “rules of the road” set by the company culture. Nonetheless, we have handled several coaching assignments that involved this challenge. Certain worker type profiles are more amicable, agreeable and conflict avoidant than others. Being helpful and cooperative with others is a positive characteristic in the workplace, but not when it is taken to the extreme. Everyone should feel empowered and comfortable standing up for oneself – it’s a critical skill related to confronting conflict balanced with emotional intelligence.

Therefore, rather than see this as a frustration with a co-worker, we recommend you see this as a development opportunity. It might take a mentor or personal coach to learn and practice the social nuance of confronting others or standing up for yourself, but it is worth the effort to seek an appropriate resource to assist with this. One specific recommendation is Kim Scott’s excellent book, Radical Candor. Get a copy and really study it. It can be your introduction to the topic of having sensitive but important discussions with people.

For Those who are Furloughed

Audience: How can I be more visible and attractive to other hiring managers, owners, and investors who do not clearly understand my contributions prior to being furloughed?

AETHOS: What you describe involves a delicate balancing act.  On one hand, you want proper recognition for the value you deliver. But on the other hand, you must avoid coming off as someone who is merely showing off or jockeying for status.  Your company’s HR pros can be excellent resources for confidential guidance and advice on topics like these, but here are some options to consider.

One good approach is to align yourself with an coach or a mentor in the organization. Beyond providing advice, direction and really just being there as a career sounding-board, this person can help you hone your own social savviness and help you to navigate company culture. This person will keep you motivated and also serve as an internal cheerleader. They will also, and this is the key, be someone that will be able to taut your praises to others in the organization in ways that don’t look egotistical or narcissistic. It’s not you telling others how great you are, it is your mentor/coach who is sharing, even bragging about your abilities and accomplishments.

Another tactic is to approach a supervisor or leader and ask them for guidance on a specific issue. An issue that is outside of your day-to-day job scope, but something you have invested time in to go above and beyond. While asking them for their thoughts, you can also update them on what you have been doing, and how you have been trying to drive positive impact. This is a little bit of a “back-door” approach to telling people your contributions to the organization but it also plays off of your humility because you are asking them for feedback on ways you can up your game and contribute even more.

Audience: What do I need now to reach the executive level at a competitive company within the next ten years?

AETHOS: First and foremost, you must touch base with people in your network and plan to continue to expand those connections. Think of the old adage, “it’s not what you know, but who you know”.  This is not a bulletproof plan but knowing people within organizations is invaluable when looking for introductions, interviewing and or applying for new roles and promotions. Indeed, this is the entire premise behind Linkedin.

In any environment, but particularly now, it is imperative that you look to the big-picture. Now could be a great time to seek a professional certificate or advanced degree – a good time to round out your technical knowledge. Courses at community colleges or even online such as eCornell could help you to broaden your transferable skill sets. One thing that we hear all the time when companies are looking for executives is, “Find me a great leader; someone who is great at driving performance.” These skills come from what workplace psychologists call “contextual performance,” or the proverbial “X Factor.”

New research indicates that this concept boils down to a few target variables. An easy way to remember these skills is with the acronym, CHAT. This stands for four specific areas of focus: Conscientious – stronger to attention to detail; Hospitality – having social savviness that comes with emotional intelligence; Adaptability – staying calm and cool in stressful situations; and Trainability – identifying better ways of doing things. Working on these abilities, in addition to a strong foundation of servant leadership, should position you well for advancement within your company, or elsewhere.

Clara Stilwell_AETHOS Consulting Group_New York_web

The Myth Of ‘Crisis Leadership’
 

Google the phrase “crisis leadership,” and you get over half a billion (yes, with a “b”) entries. It is one of the hot topics on social media now, with new entries appearing daily. Everyone in the business world is talking about it, and they all seem to characterize it the same way: that crisis leadership reflects a highly specialized skill set or psychometric profile that is significantly different than “everyday” leadership.

The spirit or intent of these articles is certainly commendable. Indeed, leadership development remains as much an art as a science, and so data-driven guidance is critically important. However, the core premise of crisis leadership as it tends to be discussed is often misguided or blatantly incorrect.

Our psychometric studies of over 50,000 leaders from around the world clearly rewrites the idea of great crisis leadership in favor of one simple idea: great leadership in crisis. This small change in word order reflects a huge difference in theorizing the nature of leadership.

Anatomy Of Servant Leaders

The classic notion of leadership emphasizes the ability to define and embrace a vision, formulate actions and goals to further it, and subsequently communicate this vision so that others are inspired to follow. Within recent decades this view has been re-framed or reinterpreted as a simple philosophy that making other people successful is the top priority of servant leadership.

Servant leadership involves three dimensions of performance: execution skills, people skills and cognitive skills. Each of these three dimensions contains an array of distinct attitudes, skills and knowledge areas. However, we are not dealing with a random set of capabilities. Instead, there is a stable set of specific capabilities that relate to each other in structured ways. That is, certain attitudes, skills and domain knowledge can predictably demonstrate low, medium and high levels of servant leadership.

Solutions-focused leadership is key to success. Continuous learning and evolving, openness to change and opportunity, calculated risk-taking and receptiveness to other perspectives — strong servant leadership offers this, and in so doing, it also happens to be the framework that facilitates effective crisis management.

Below is an outline of nine traits or tendencies that define servant leadership in all contexts and circumstances, not just crisis situations. There are additional components to leadership, but this sample of characteristics illustrates the adaptability and versatility of a strong servant leadership profile. Planning and preparation aside, in reality, the unexpected can occur at any time. To withstand the unexpected, organizations must be flexible and adaptable.

Capabilities Of Strong Servant Leaders

Execution Skills

  • Tolerance of ambiguity: Ability to resist black-and-white thinking and thus better handle situations involving uncertainty.
  • Resilience: Ability to take initiative, push for action, manage stress and maintain perspective in the face of adversity.
  • Attention to detail: Conscientiousness to critical elements in strategy or execution.

People Skills

  • Behavioral integrity: One’s deeds reliably match their words.
  • Emotional intelligence: Ability to understand, use and manage one’s own emotions in positive ways to relieve stress, communicate effectively, empathize with others, overcome challenges and defuse conflict.
  • Proactive feedback: Ability to provide direct and constructive guidance or redirection on someone’s performance.

Cognitive Skills

  • Analytical reasoning: Ability to think logically and about information or issues and associated numerical calculations.
  • Measured collaborative-consultative approach: Decisive decision-making that draws on others’ input as needed.
  • Strategic thinking: Big-picture and proactive, solution-focused mentality. The nuanced balance between drawing on empirical data and business intuition to see around corners and act accordingly.

Great Leadership: It Is What It Is

This web of interconnected and mutually reinforced characteristics helps empower individuals to lead effectively through a diverse set of conditions and circumstances. Some conditions can be positive, like business startups and mergers or acquisitions that contribute to growth modes. Others can be negative, like business downsizing, hostile takeovers, natural disasters, political upheavals or technological disruptors.

The many forms of crisis management are, therefore, merely among these many scenarios. Of course, it is important to understand that episodes of conflict or chaos typically reveal and amplify an individual’s true leadership profile. In other words, you show yourself as a poor, average or strong leader when it matters most — when the stakes are the highest.

Psychometric profiling demonstrates that leadership is not one thing, attitude, skill or piece of generic knowledge. Rather, leadership is a multifaceted construct that comprises myriad success variables related to one’s hands, heart and head. That cumulative profile either enables or disables an individual’s ability to align, motivate and mobilize teams throughout times of change, uncertainty and crisis. If your business only knows stability, then chances are it only needs managers, not leaders.

Clara Stilwell_AETHOS Consulting Group_New York_web

Key Questions on Employees’ Minds Right Now, Part I/II

Many hospitality students and professionals around the world recently participated in AETHOS’ series of development webinars. These sessions offered attendees the opportunity to complete the 20|20 Skills™ assessment to gain a personal SWOT analysis to help them navigate these challenging times of occupational crisis and change. Interestingly, the attendees consistently voiced certain concerns and follow-up questions.

We wanted, therefore, to address these issues publicly for the benefit of business owners, leaders, and HR professionals who are eager to understand the issues presently on the minds of the global workforce. First, we will consider some general topics. In a follow-up piece, we will explore questions specific to two groups of team members: (a) those who have jobs and are likely telecommuting and (b) those who have been furloughed. Likewise, we urge leaders to contemplate these issues and questions and proactively address them in their own businesses.

For the Generally Curious

Audience: What is the value of professional development webinars if everyone learns and leverages the same information?

AETHOS: This is an insightful question. Indeed, there would be no inherent competitive advantage if everyone operated equally well from the same performance playbook. Of course, that is the point – not everyone seizes opportunity. First, most people do not attend development webinars for various reasons – but usually it boils down to a lack of humility, curiosity, or both. Second, a small percentage of attendees actually do something meaningful with newly acquired information and insights. Ideas must transform into actions, and only the most proactive, dedicated, and motivated people take those next steps. It is those who have the competitive advantage in their career advancement.

Audience: How many worker types are measured by the 20|20 Skills psychometric assessment?

AETHOS: The assessment acts like a “psychometric selfie” to gauge a person’s motivations, traits, and tendencies related to Execution, People, and Cognitive skills. Thus, a person’s profile can change over time, depending on their role, training, maturity, and situational factors.

However, the algorithms examine all the various nuances and broad patterns to characterize an individual at a point in time using ten general “worker type” profiles. Note that there is no “right/wrong,” “pass/fail,” or value judgment of any kind with a specific outcome – each profile has its own particular strengths and weaknesses. Thus, you can only interpret the result properly against the requirements needed for a particular role or company culture:

  • “Learner”– someone who shows marked humility and a strong focus on professional development and career advancement. This positive attitude and perseverance promote strong openness to new learnings and opportunities. For example, the person could be new to the job market, the hospitality industry, or a specialized role or entirely different company than the person’s work history.
  • “Thinker” – someone who is especially effective in general cognitive ability, such as handling tasks associated with analysis, planning and developing innovations and strategies.
  • “Facilitator” – someone who is especially effective in general people skills and facilitating teamwork.
  • “Producer” – someone who is especially effective in executing plans and producing tangible outcomes.
  • “Motivator” – someone who is especially effective in general people skills and motivating teamwork with a focus on tangible outcomes.
  • “Researcher” – someone who is especially effective in general cognitive ability and working diligently on tangible outcomes.
  • “Standard Bearer” – someone with competitive levels of cognitive ability, people skills and execution skills in the industry.
  • “Visionary” – someone who is especially effective in general cognitive ability and leveraging people skills to inspire teamwork and achieve goals.
  • “Achiever” – someone who is especially effective in general cognitive ability, people skills and being hands-on with implementing plans and achieving goals.
  • “Peak Performer” – someone with unusually high levels of general cognitive ability, people skills and capacity for execution compared to typical professionals in the industry.
Clara Stilwell_AETHOS Consulting Group_New York_web

What is Your Business 2.0

The government has effectively shut down the hospitality and travel industries. Yes, this will end, and no, it won’t go back to ‘normal’. What will the new normal look like? I have heard all kinds of predictions from a V-shaped recovery to social revolution; a wide spectrum to say the least. The fact is no one can see the future and the past is not always a great predictor of future results. We at AETHOS have been spending some of our new-found ‘down time’ to think about the new normal. Here are things we are considering:

  • Will our mission still be viable?
  • What business will we need to be in to serve our mission?
  • Will our strategy work in the post COVID economy?
  • Will our SOPs have to change?
  • Will our value proposition to clients have to be reevaluated?
  • How will we measure success moving forward?

These are the same questions every business owner needs to be asking themselves. These are also the building blocks of every successful company we have analysed over the past 25 years. We typically start this inquiry with:

  • A whiteboard, a quiet place and the right people ‘on the bus’.
  • Asking the Why, Who, How, Where, What, When questions.
  • Idea generation.
  • Verbalizing intuitions.
  • Determining a delivery system.
  • Prioritizing.
  • Understanding the capital structure.
  • Agreeing on outcomes.

Use this roadmap and you will be ahead of 90% of your competition. Don’t do it at your peril.

Clara Stilwell_AETHOS Consulting Group_New York_web

Rethinking the Nature and Relevance of ‘Legacy’

It would be an understatement to say that the service-hospitality industry is experiencing unprecedented times. The global ‘Black Swan” event has arrived, and the light at the end of the tunnel appears the size of a pin hole. However, our industry is critical to the ongoing wellness, social connection, and enchantment of consumers, so it will certainly persevere – hotels will re-open, cruise ships will set sail, restaurants will seat guests, galleries and studios will re-engage visitors, and the Vegas lights will again dazzle.

Everyone has a meaningful role to play in bringing the service-hospitality industry successfully into the post-COVID era. One priority that should not get lost among all the tactical manoeuvring that accompanies crisis and change management is how you want to be remembered, if not permanently branded, as a leader, colleague, and friend. ‘Legacy’ is more than the biographic story of accomplishments that defined one’s career. Instead, rethinking this concept has been a theme in my recent conversations with several industry thought leaders. Simply put, legacy is now, not later ― how you handle yourself during this time will leave a lasting impression for the years to come.

There are certain inalienable traits that we all must demonstrate during these chaotic circumstances to best advance as an industry and community. Leaders must be considerate of everyone’s current situation. Tough decisions are often required, but these need to be made, communicated, and executed via an empathetic lens. Open and honest communication is key. Regardless of how dire the situation is, we owe it to our team members to be timely and upfront every step of the way. Furthermore, colleagues and employees need to be amicable and adaptable to their new situations and roles; we all need to recognize that this scale and scope of economic constriction is new for everyone at all stages of their careers. We must embrace and exhibit a level of grit and resilience, take accountability for our actions, and continue to “show up” day in and day out for our fellow colleagues and friends. In essence, many businesses now have to think and act in ‘start-up’ mode.

When the crisis subsides and markets gradually return to normal, you will want to be remembered as the leader, colleague or friend who ‘listened, showed up, and pitched in’. More than ever, we all have the opportunity to be genuine servant leaders by supporting others and inspiring confidence through this historic low. And through this, effective leaders will be remembered for what they did and how they did it. The examples set now – be they positive or negative – also establish legacy. They implicitly groom the traits and tendencies of the future leaders who will help our industry to grow, innovate, and hopefully combat whatever challenges and crises lay ahead.

Clara Stilwell_AETHOS Consulting Group_New York_web

Mental Wellness and Today’s New Workplace Norms

‘Mental wellness’ is a broad topic that involves our emotional, psychological, and social functioning. In what is a reflection of the fast-paced and high-pressure environments that we nowadays live in, it has increasingly topped the management agenda of many boards and HR executives across the globe. In a high-touch and hugely interdependent business environment such as the hospitality industry, many executives had already voiced concerns about losing their ‘equilibrium’ before the current COVID-19 crisis. Burnouts amongst staff and senior corporate executives were certainly not unheard of. The pandemic is now, however, threatening to further destabilise an already delicate situation. To cope with the ‘storm’ caused by the corona virus, many hospitality businesses have had either to release, redeploy or furlough employees. Irrespective of the preventative measures taken, the result has raised overall anxiety levels for employees – thus providing a potentially fertile ground to disrupt mental wellness.

Everyone Is at Risk for Disequilibrium: A Pressing Leadership Challenge

It is tempting to think that people fortunate enough to retain their jobs are ‘the lucky ones’ who can concentrate squarely on doing their best work to help their companies survive the present turmoil. However, one might argue that these executives could also be experiencing among the lowest levels of mental wellness. For instance, workers who remain employed are of two minds – one is focused on satisfying their employer’s demands, which have likely increased, whereas the other is focused on agonizing about their ongoing job security. Additionally, they will have to grasp a new reality quickly – a situation defined by new workplace norms of amplified stress, consolidated teams, increased role demands, telecommuting, and workplace activity dictated by contingency planning and short-term goal setting. In other words, many employed workers will probably be suffering anxiety on a 24/7 basis.

As the first line of defence against anxiety is often knowledge, it is important for leaders to self-reflect and educate themselves. More than ever, leaders must therefore carefully monitor and promote wellness in themselves and their workforce. This can be tricky, as team members have different psychological profiles and will therefore handle the ‘new normal’ in their own unique ways. Ultimately, though, there are three dimensions of professional performance that should be observed and supported:

  • Execution skills (tactical work)
  • People skills (working relationships), and
  • Cognitive skills (problem-solving and decision-making)

Leaders will need to understand that strengths and weaknesses in their own performance and that of their teams will follow depending on their approaches related to these three dimensions. There is no absolute ‘right or wrong’ here as to where on the psychometric spectrum an individual or entire team ‘lands’ on these dimensions – instead, every spot along the performance continuum has the potential for positive and negative consequences. Leveraging AETHOS 20+ years of experience in psychometrics, the below sections outline some key pointers for leaders to better understand their own traits, tendencies, and performance drivers, as well as potential pitfalls to which they might be especially exposed as they cope with the current crisis. The guidelines are based on aggregated and anonymised individual profiles from AETHOS’ proprietary 20I20 Skills Assessment.

Potential and Pitfalls across the Spectrum of “Execution Skills”

This subject refers to how people approach their tactical work. It is defined by a spectrum that basically describes the degree of initiative and process-orientation.

Potential and Pitfalls across the Spectrum of “People Skills”

This subject refers to how people form and maintain working relationships with various stakeholders up and down the organization. It is defined by a spectrum that basically describes the degree of warmth and connectedness.

Potential and Pitfalls across the Spectrum of “Cognitive Skills”

This subject refers to how people think and act on information, that is, problem-solving and decision-making. It is defined by a spectrum that basically describes the degree of analytical ability and perspective.

Clara Stilwell_AETHOS Consulting Group_New York_web

The Future State of Hospitality after COVID-19: A New Psychology of ‘Enchantment’

These introductory quotes show that great minds in science and literature have historically recognized the fundamental need for enchantment in people’s lives. Just think back to your own remarkable encounters with art, music, nature, and even special people like ‘first loves’, childhood heroes, or favourite celebrities. Indeed, most everyone has experienced that ineffable feeling that is often described simplistically as a mixture of awe and delight. Its defining quality and benefit is lifting people out of their mundane existence ― albeit for a short time. Thus, it is difficult to imagine anything people will crave or need psychologically more than a healthy dose of enchantment following weeks of monotony, restlessness, and anxiety that accompany COVID-19 quarantines.

Ever-Evolving Consumer Expectations

But what exactly are the core elements of enchanting experiences? Many people have talked around this question, but few research studies have actually delved into the nature and relevance of enchantment as a psychological construct or consumer motivator. Perhaps the closest guiding principle used by the tourism-hospitality industry has been the notion of the ‘experience economy.’ This reflects the philosophy that businesses compete in today’s market by offering increasingly memorable experiences versus strictly focusing on the quality of products or services. Moreover, some research has modelled the ‘ideal’ features of such ‘memorable experiences.’ Namely, the trend over the past decade or so has been for consumers to seek experiences grounded in (i) aesthetics, (ii) authenticity, (iii) education, (iv) entertainment, (v) escapism, (vi) newness, and (vii) a sense of transformation.

Along these lines, many hospitality-entertainment businesses, at least pre-pandemic, seemed intent on developing so-called ‘immersive experiences’ to deliver on the promise of enchantment. In fact, this was the hot innovation trend at this time last year. An immersive experience is an illusory environment that completely surrounds you such that you feel that you are inside, and part of it. It is a way to sensorial experience the ‘impossible.’  But ‘augmented or virtual reality’ applications are becoming increasingly commonplace. In fact, it could be argued that COVID-19 has motivated greater attention to all things virtual, whether for personal or professional aims.

It is ironic that ‘virtual reality’ has apparently become simply ‘reality.’ The new norm, at least for the foreseeable future, is telecommuting, streaming entertainment, remote events, and a ‘mobile mentality.’ At some point a threshold will be reached, and even now there might be some indications that society has developed a new tolerance level for being enchanted by technological marvels. For example, this past February news reports highlighted GameStop’s stock price decline that stemmed from plunging sales and associated earnings, It was further noted that GameStop’s market cap has fallen to around $270 million with rumblings about potential bankruptcy. However, this might turn around, in part, after the upcoming release of next gen gaming consoles by Sony (PlayStation) and Microsoft (Xbox). Only time will tell.

New Opportunities for Innovation in Product Development

Mobile and immersive innovations will rightfully continue, but it seems that our impending familiarity with and dependence on virtual platforms could make technology-induced experiences more mundane and thus less enchanting. Our industry probably should not solely expect technology-related experiences to reinvent or reinvigorate the industry. Rather, we would recommend that forward-thinking businesses revisit what we learned from success stories in the experience economy, and particularly as this relates to experiences that deliver feelings of authenticity and transformation. At this stage, technology seems ill equipped to satisfy fully these consumer drives.

To make some sense of future directions and opportunities, AETHOS has launched a research program on the ‘new psychology of enchantment.’ The Cornell Hospitality Quarterly just published our first report, which explored the key variables that stoke experiences of enchantment via the niche of paranormal tourism (“Paranormal Tourism: Market Study of a Novel and Interactive Approach to Space Activation and Monetization,” see here). After all, what could be more transformative and enchanting for a consumer than the prospect of an encounter with ‘real magic’?  Technology, even at its best, will always be understood and experienced as a manufactured spectacle.

Follow-up studies are in the works, but we have already gained initial insights that could assist the broad hospitality industry develop new products and services that re-define current standards based on the dated assumptions from the experience economy. We will share our learnings once the research is done. The pandemic has disrupted our industry and arguably society’s prior allurement with technology. Perhaps the industry should, in turn, disrupt consumer expectations around experiences in the service, gaming, travel, tourism, and hospitality sectors. It was necessary anyway, but now it takes on greater urgency given the opportunity that awaits us once the pandemic subsides. People desire, even need, experiences of awe and delight. Now is the perfect time for experimentation and innovation, because in our estimation the experience economy is unquestionably evolving to an enchantment economy.

Clara Stilwell_AETHOS Consulting Group_New York_web

To Lead In Times Of Crisis, One Must Be Equal Parts Realist, Pragmatist and Optimist

As an evaluator of leadership capability, I have been asked what it takes to lead in a time of crisis, such as COVID-19. My answer has been simple, “you must be equal parts realist, pragmatist and optimist. This mixture of archetypes is essential in dealing with the fast moving and unknown outcomes of a crisis.

Realist. a person who accepts a situation as it is and is prepared to deal with it accordingly.

To face a situation that is as complex as COVID, fact finding is critical. Like a complex puzzle, getting started in the known areas is a good start (start in the corners). Ask for help in areas that are unknown and take too long to figure out on your own. Set realistic timelines and don’t lie to people. Everyone knows its going to be tough, acknowledge it.

Pragmatist. a person who is guided more by practical considerations than by ideals.

Emotional leaders tend to waiver and can get caught up in the drama. Don’t let that happen. Like Level 5 leaders, don’t get too high and don’t get too low. Focus on the goal and marshal resources accordingly. Focus on how prediction, problem-solving, and action will deliver results.

Optimist. a person who is hopeful and confident about the future.

The COVID pandemic will be awfully cruel to mankind and our collective circumstance. But it will not last. It is how we recover that will distinguish us. Leaders who can paint a picture of that future and rally teams around that vision will be survivors and winners. Leaders who can show this level of adaptability will be the heroes.

Clara Stilwell_AETHOS Consulting Group_New York_web

Is Your Business Hard-Wired for Panic or Innovation?

The COVID-19 pandemic has now become the most disruptive event in our lifetime. Understandably, virtually all organizations are bogged down in “immediate” decision-making. It is all tactical right now, because there is no place to run and no place to hide; there is no safe haven. But once the immediate circumstances settle, will your organization be hard-wired for panic or innovation?

This pandemic offers two critical lessons for leadership thinking. First, psychologists have often emphasized mindfulness to a purpose. Living in the present moment, and nonjudgmentally as an approach to living. But the current crisis also underscores the tremendous risks of thinking and acting in short-sighted and counterproductive ways when focused exclusively on the present.  Instead, leaders must strive to be mindful of the big picture.  This is not only smart; it is an approach that works with our natural hard-wiring for problem-solving and decision-making. Simply put, the human brain inherently acts as an “engine of prediction” that is naturally future-oriented.

Indeed, considerable neuroscientific research indicates that the brain continually generates hypotheses and simulates models of the world to anticipate action and events and to minimize prediction errors to promote cognitive, neural, and generally adaptive functioning in daily life. Thus, the coronavirus pandemic can be recognized as a valuable case study in the power and need for proactive, resourceful, and solution-oriented thinking in the face of volatility, uncertainty, complexity, and ambiguity. This is not the first time we have faced an occurrence of large-scale panic – e.g., recall other disruptive events such as the advent of the internet, Y2K, the terrorist attacks of 9-11, the great recession and other outbreaks like SARS, MERS and Ebola.

We anticipate that leaders who manage this crisis most effectively are those that can think and act organizationally and with an agility that maintains a futurist perspective. This view suggests that the best solutions address immediate challenges, while simultaneously identifying learning to apply to future challenges. Thus, the concept of simply “reacting” in the moment transforms to strategic “prospecting.” This view also follows the findings of a recent study by AETHOS Consulting Group and the Cornell Hotel School that identified the traits and tendencies of high performers in fast-paced and service-oriented environments. In the context of the pandemic, this success profile can also describe the most productive and resilient workers who have the flexibility to succeed in various environments, such as working from home with maximum accountability and minimum oversight.

The second lesson is the importance of rethinking or reinventing during times of great change. Leadership performance will be judged on the ability to morph crisis into opportunity. These leaders will exhibit the success profile called “CHAT” and is built on a long-standing principle in organizational psychology known as “contextual performance,” or what might be considered the ultimate transferrable skill set. Contextual performance reflects a broader set of knowledge, skills, and abilities that are relevant across a wide array of jobs and work settings. These relate to Conscientiousness to needs and tasks, Hospitable attitude internal and external to an organization, Adaptability to changes in business conditions, and Trainability to learn and apply new information.

We argue that this success profile likely applies at the enterprise-level and characterizes organizations with the strongest “agility” in the face of crisis ― that is, those businesses that do not merely react in the present moment but develop approaches to immediate challenges that leverage a strategic or futurist perspective. Disruptive events like the coronavirus pandemic offer entrepreneurs, leaders, and operators the opportunity to diagnose the state and strength of their organizational agility and future focus Not all will, but then again that can be a competitive advantage in the business jungle where it remains survival of the fittest, or should we say, agile in the present to remain resilient in the future.

Clara Stilwell_AETHOS Consulting Group_New York_web

Class Of 2020 – Forged In Crisis, The Servant Leader Of Tomorrow

It has already become clear that the uncertainty caused by Covid-19 has forced the industry to become much more creative and innovate. What will the sector’s executives take from the experiences gained during such unprecedented times of crisis?

  • First and foremost, as a matter of priority, many of the industry’s CEOs have already upped their game and displayed more publicly their ‘servant leadership’, well knowing that during times of crisis, communication and compassion are key to keeping morale high – thus ‘steadying the ship’ so that one is ready for when things improve. Although the sector’s current performance issues will certainly continue for a good while longer, executives know full well that demand will eventually come back – everyone is therefore trying to avoid major lay-offs as one needs to be ready for when that turnaround comes. The message across the board is thus ‘we are in it together’.
  • There has also been observed a lot more commitment from the industry’s leadership teams towards (finally) securing HR’s seat at the board table. Everyone is analysing one’s organisational structures, identifying inefficiencies and/or redeployment opportunities; and everyone recognised the important role that HR plays in all of that. Are there hiring freezes? Caps on any further salary increases? Is non-essential staff at risk? Are promotions being put on hold? Yes – but most notably there are also a lot of conversations with the Human Resources and Talent Management teams about securing employees’ (mental) wellbeing, about cross-training and mentorship support programs as well as about opportunities to attract talent (which might otherwise not have been open or interested to consider a career change).
  • ‘Agility’ has also become key with business leaders not only constantly reviewing cost structures but also regularly revisiting the accuracy of business cases and forecasts and developing new strategies and tactics to streamline operations. Product and service offerings are being reduced, facilities shut, and rigorous measures implemented to protect staff and guests alike. Some hotel companies are offering their empty hotel beds to doctors as well as support and emergency staff who have been deployed into affected areas. Others are trying to ‘outsource’ their services to residents and neighbourhood businesses. Overall, up and down the organisational chart, hospitality executives around the globe are working more closely together, across previous ‘enemy lines’, to arrive at the most optimal outcomes. Brands are closely coordinating with their franchise partners and owners, and asset managers are stepping in to help identify inefficiencies and/or assist with what many businesses are struggling with the most – cash flows.

Undoubtedly, the industry finds itself in unchartered territory and requires its stakeholders to think on their feet and to master ambiguity. Those that seemingly have risen to shine are the executives who have not only displayed business ingenuity but who have put people-driven strategies into practice and who have demonstrated humbleness as well as kindness and solidarity with those surrounding them… People say every generation has its defining moments; often shared experiences which forge a common mentality, attitudes and character traits. Perhaps 2020 represents that turning point for the future generation of business leaders as Covid-19, however awful it is, has helped all of us to remember that we should be putting the interests of the ‘greater good’ first.

Clara Stilwell_AETHOS Consulting Group_New York_web

Crisis Management – Market Reactions vs Steady Leadership

The Financial Times this weekend reported on the trillions of dollars that have been wiped out thus far due to the coronavirus disease 2019 (COVID-19) outbreak. According to the newspaper, stocks in hospitality companies have been particularly hit, having fallen by a reported 19% in Europe compared to last week – one of the strongest declines for the sector since the terror attacks of 9/11. The still-growing number of countries, and companies, enforcing travel bans is exasperating the situation. Reuters reported, for example, global giant Nestle suspending all international business travel. Other companies operating across the globe, such as Amazon, BP and Estee Lauder, have equally suspended or deferred travel to and from the affected countries. Large gatherings have been banned in many countries, and major business events and trade fairs, such as the Barcelona Mobile World Congress, the Geneva Motor Show as well as the IHIF, ITB and MIPIM, have all been cancelled.

For the laymen it is at times difficult to judge – are the markets right? It would seem it is a balancing act between panic and denial.

 

HOTEL COMPANIES SEE STOCKS PLUMMETING

There is no doubt the hospitality industry is going through rough times. It is already by default highly perceptive to changes in the socio-political environment as well as the world economy – Brexit, the US-China trade tensions and the recent Hong Kong unrests, coupled with terrorist threats and even volcanic eruptions, have certainly not made it any easier for hotel companies to predict performance. With the World Health Organisation (WHO) having declared that the outbreak has reached the highest level of risk, hotel stocks last Friday (Feb. 28) recorded some of their worst performances.

Since the initial outbreak approximately three months ago, the stock from publicly listed hotel companies such as Marriott, Hilton, Hyatt, Wyndham, Choice, IHG and Accor have fallen, on average, between a little more than 5% (Hyatt) and up to almost 16% (Accor) – see chart above. Many of the bigger losses, though, have been incurred within the last week of February – see chart below. Hilton ‘only’ lost a little more than 11%, whereas Hyatt and Accor both saw their share prices fall by more than 16%.

In early February, Hilton’s CEO Chris Nassetta commented on an earnings call on the company temporarily closing 150 of its hotels in China and its expectation to lose between USD $25 million and USD $50 million in its full-year adjusted EBITDA due to the impacts of COVID-19. Keith Barr, CEO at IHG, observing the trading performance said, “there will clearly be some impact on our business, which we started to see coming through in late January. […] We are currently seeing less travel in the region, which is leading to reduced occupancy, and around 160 of our 470 hotels are closed or partially closed.” Accor’s Deputy CEO and CFO Jean-Jacques Morin commented along the same lines, stating that 200 of its 370 Chinese hotels were (for the time being) no longer taking bookings and that RevPar was down 90% in the Greater China region. Wyndham decided to close 70% of its hotels in China and saw a drop in occupancy in those properties still operational of approximately 75%. Its CFO Michele Allen shared on an investor call that the company expected a decrease of between 200 and 400 basis points in RevPar, resulting in an up to USD $5 million decrease in the first quarter’s EBITDA and between USD $8 million and USD $12 million in adjusted EBITDA for the full year. Also, Marriott – having closed nearly 25% of its hotels in China – said it could lose considerable fee revenues if trading conditions were to persist. Skift referenced Leeny Oberg (EVP and CFO), who commented that the Asia-Pacific region’s gross fees represented approximately 12% of Marriott’s global gross fee revenue in 2019 (with Greater China generating approximately half of those fees). “Our base case model assumes Asia Pacific and fees in 2020 will total roughly USD $500 million to USD $510 million, with greater China fees, again, constituting about half of that amount. […] We estimate the region will earn roughly USD $25 million less in fees and EBITDA per month as compared to our 2020 base case.

HOTEL CEOS OFFER A STEADY HAND

The situation has long since impacted other regions, too, and it is no longer China where confirmed cases are being reported – hence, the recent negative performances at the stock markets. We have read about hotel properties being temporarily closed, staff being redeployed elsewhere or sent on training courses (or [unpaid] leave), compensation programs deferred, and supplier contracts being renegotiated. Depending on the operating agreement, leadership teams will no doubt have sit-downs with hotel owners to assess what can be done to alleviate the financial stresses and conversations will take place centred around payment reliefs, deposit protections and cancellations. Every stakeholder must do its bit to help.

From interviews and conversations with CEOs and regional leaders, AETHOS has observed time and again the importance of ‘leading from the front’ as it relates to ‘steadying the waters’. In other words, during times of crisis, it is vital not only to lead but to be seen publicly taking ownership of the situation. Company CEOs have hereby reliably pursued a predictable pattern:

  • Assume ownership and demonstrate responsibility for the areas that one can impact
  • Acknowledge limitations of own position and secure buy-in from other interrelated parties
  • Define goals and act with one common mission
  • Build flexibility and adaptability into the decision-making process
  • Collaborate effectively across parties to enable impactful decisions ‘on the ground’
  • Act decisively and deal with ambiguity, acknowledging the inevitability of imperfections
  • Constantly adapt strategies and tactics and align resources as required

The solace for investors is that hoteliers have had to deal with somewhat similar scenarios, albeit on a very different scale, in the past. They are thus able to balance expertise with intuition. In late 2002, early 2003, for example, the industry grappled with SARS. According to research by Daniel Morris, Senior Investment Strategist at BNP Paribas, hotel and leisure businesses were amongst the most affected during the SARS outbreak in which Hong Kong’s overall index fell by 8% from peak to trough. Yet, recovery followed within a few quarters and long-term profitability of the companies initially affected remained relatively unchanged.

Investors, and the world in general, are rightfully nervous. However, in this instance, and unlike in past (economic or political) crises, central banks are unlikely to be able to help businesses – this is a consumer confidence and demand issue. When looking at the C-suite of hotel companies, there should therefore be some comfort in the fact that these are experienced and tried-and-tested CEOs. AETHOS’ CEO study, which tracks CEO turnover since 2014, shows that the industry is currently enjoying a very stable period characterised by consistent and experienced leadership – approximately 40% of those currently in the C-suite previously have held a comparable position. More than 60% of the incumbent CEOs at publicly listed hotel companies can be considered ‘insiders’, having previously been with the firm in a different function (thus bringing on board valuable ‘institutional knowledge’ about the ‘inner workings of the organisation), and nearly 80% bring on board prior hospitality experience. The average tenure of the incumbent CEOs stands at more than seven years – with some, such as Chris Nassetta at Hilton and Mark Hoplamazian at Hyatt, easily beating that benchmark.

From the outside, at least, it would appear hotel CEOs have been successful in the recent past to satisfy their investors – to deliver on growth targets but also to manoeuvre through very tough crises that they certainly have had to face. It is understandable that investors are ‘jittery’, but they should find confidence in the fact that the CEOs have the steady hand to navigate the current situation. Most importantly is hereby communication – to build trust and confidence with internal and external stakeholders. As Marriott’s Arne Sorenson put it, “while this is still guesswork to some extent, we know one thing with confidence — this will pass […] and when it does, the impact to our business will quickly fade.” Share prices of hotel companies at some point will recover and return to their long-term intrinsic value.

Clara Stilwell_AETHOS Consulting Group_New York_web

Restaurant Finance Monitor – CFO Compensation Report

This report is designed to provide current and credible compensation trends covering compensation information for the Chief Financial Officers (CFOs) within the chain restaurant industry. With more than 150 data points collected through our confidential survey, and additional data gathered from publicly traded restaurant companies, we have collected information from a diverse group of organizations throughout all segments of the industry, including quick service, fast casual, casual dining, and fine dining.

All data submitted by participants are regarded as highly confidential and only aggregate results have been reported. AETHOS guarantees that individual data will not be disclosed under any circumstances.

Information included in this report includes base salary and annual cash bonus (actual payouts over the last 12 months). AETHOS presents the data analysis for each compensation category in standard percentile format. A percentile is a measure of location in a distribution of numbers that defines the value below which a given percentage of the data fall:

  • 25th percentile: The point below which 25% of the data fall. If actual pay is compared to this point, it indicates whether pay is higher or lower than 25% of the incumbents whose data have been matched to that position.
  • 50th percentile (median, or middle): The point below which 50% of the data fall. If actual pay is compared to this point, it indicates whether pay is higher or lower than 50% of the incumbents whose data have been matched to that position.
  • 75th percentile: The point below which 75% of the data fall. If actual pay is compared to this point, it indicates whether pay is higher or lower than 75% of the incumbents whose data have been matched to that position.

AETHOS prefers the percentile format because it is a better reflection of real compensation levels and is less susceptible to statistical outliers.

To download the full report, click here.

Clara Stilwell_AETHOS Consulting Group_New York_web

Three tips to be successful as an emerging hospitality industry leader.

Seasoned executive search professional and human capital advisor, Thomas Mielke, shares his thoughts on success for emerging hospitality industry leaders

In last month’s article, AETHOS raised the importance of assembling a small group of advisors or mentors – specifically during the early stage of one’s career. In today’s world, though, in which everyone is or can be an ‘influencer’, irrespective of their track record or what their credentials are, choosing such a personal board of advisors is probably more challenging than just a decade ago. Add to that a growing general scepticism amongst the younger generation – having grown up in a world where ‘fake news’ makes more headlines than real news – and one can see why the ‘up-and-comers’ do not know where to look for guidance.

However, Gen Z is characterised as being natural in absorbing a lot of information, having grown up in a technologically advanced world, and as being independent, self-confident, and autonomous. These are good, quite entrepreneurial traits to have when building a career. The suggestion here is to proactively leverage those character traits. Building a career does not purely rest on outside advice – instead, the ‘up-and-comers’ are advised not only to be independent thinkers but to be more mindful as well. ‘Mindful’ is being used here with the intent to be aware of one’s own bad habits – or to make sure not to develop them in the first place. The one bad habit to watch out for is not to isolate oneself, deliberately or not, and not to become – over time – disconnected.

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The latest generation to enter the workforce, which is bound to become the future leaders of the industry, has – as some might say – the benefit to move up the ranks quite quickly. This is partially because Gen Z is characterised by being ambitious, but also because of some significant changes in the work environment. Today’s businesses move at a much faster pace than just a decade ago. New skill sets are needed and ‘adaptability’ as well as ‘contextual performance’, as opposed to domain knowledge, have been established as reliable performance indicators in today’s professional world – character traits that Gen Z happens to bring to the table in heaps.

However, such rapid career movements and taking on greater responsibilities quite early on in one’s professional life can leave their marks. It leaves precious little time to assimilate and, with frequent promotions being the norm rather than an exception, (peer) pressure to perform and deliver can mount. It is thus easy for those future leaders of the industry to get caught in a vicious cycle. Without a strong, developed support network, it very quickly gets lonely at the top for those up-and-comers.

So, what should they be mindful of and what should they be watching out for when climbing the career ladder? First and foremost, it is all centred around communication:

  • Be an open book: Many executives, and leaders alike, struggle to engage with the teams that surround them. Connecting with those around you, and getting them to back one common vision, depends on trust – trust, though, can only be established over time. Being true to one’s word and not taking others for granted are two of the pillars. Many executives believe that this also requires a certain ‘toughness’. Yet, they forget that showing vulnerability plays a key role in earning respect and trust. Expressing oneself, and sharing personal stories, is fundamental in becoming more relatable and in securing buy-in – thus avoiding the old saying of “it gets lonely at the top”.

 

  • Actively listen, don’t tolerate silence: Often, executives talk at one another; they do not communicate. When an up-and-comer encounters obstacles, or personal problems, it is easy for a leader or mentor to keep things at a high level, to give a short pep talk and move on. Vice-versa, many up-and-comers believe it is important to show that they have what it takes to survive; therefore, they want to show that they have a thick skin. Yet, this often leads to a vicious circle of not facing the problems – instead, it only amplifies them over time. Up-and-comers should remember that it always pays to go that one level deeper in a conversation, to probe and question, and show personal interest in one’s counterpart. It is easy to ignore silence, but true leaders take a step back. They look out for what has not been said and they strive to have meaningful conversations.

 

  • We all have the right to disconnect, no matter what: Often, burnouts, depression, and/or anxiety all share one common root – they develop because executives get overwhelmed with workloads or responsibilities, but avoid confronting the truth until it is too late. They believe resilience is key and look to prove themselves by persevering. Sometimes, though, this leads to being overworked, to feeling disconnected, and to completely forget about one’s mental health in favour of delivering on set targets. However, with those around them believing that ‘s/he can take it’, it is easy to take on even more responsibilities; thus, the vicious cycle continues. It is important to remember, and practice, that asking for help is not shameful but actually a sign of strength.
Clara Stilwell_AETHOS Consulting Group_New York_web

Hospitality Leadership Series – Future Leaders: Seeking Advice and Applying the Right Filter

Seasoned executive search professional and human capital advisor, Thomas Mielke, shares thoughts on success for emerging hospitality industry leaders

A new year has arrived and with it comes different opportunities and challenges. Some things, though, never change – the great majority of us tend to ‘take stock’ at this time of the year and plan for what we want to achieve or do differently, both personally and professionally.

For most industry ‘novices’, the fresh hospitality graduates or apprentices out there, there does not tend to be a limit on their ambitions and aspirations. With a clear target in mind, the question is not what they want to accomplish but how best to go about doing it. Advice is plentiful – the trick lies in applying the right ‘filter’.

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Most industry leaders have established relationships with a mentor or a very select group of personal advisors for whom they can call upon for thoughts, advice, or direction as it relates to their career. AETHOS has often highlighted the importance of such ‘personal boards of advisors’. For new entrants to the industry, though, it is often difficult to know who to choose as a mentor or role model. It is no surprise, then, that during last year’s “Young Hoteliers Summit”, which annually gathers more than 200 students from hospitality universities in over 20 countries, this issue was raised the most in the one-on-one discussions.

It is easy to be blinded by someone else’s mastery and thus to try and mimic their career steps or rely upon them for career advice. However, those who do are potentially setting themselves up for failure. When seeking a mentor, or preferably a group of advisors, young professionals need to first do some ‘homework’ to avoid being misguided or trapped on the wrong track:

  • Be self-aware and know what you are passionate about.
  • Define your purpose. What gets you up in the morning?
  • Act deliberately and stay in line with your drivers.
  • Be open to options.

In other words, industry up-and-comers should not be too influenced by career choices others have taken. One should remember that doing something because others have done it is seldomly a winning strategy. What works for others does not automatically work for oneself, and it can be dangerous to blindly follow the advice of those who have already achieved success. Their ‘best practices’ or behaviours may have changed now that they have achieved their ambitions, so merely copying their current habits may lead to little else other than frustration. When putting together a ‘personal board of advisors’, it is wise for those looking for external guidance to:

  • Assemble a diverse group of individuals who can advise on different areas and provide support personally and/or professionally; getting the right mix is crucial to avoid group thinking and/or to pursue forgone conclusions;
  • Limit yourself to approximately ten ‘trusted advisors’; this ensures diversity of opinions but also allows selection of a smaller group of, for example, five experts for input at any given time on a particular challenge you are facing;
  • Choose mentors not purely based on their impressive accomplishments but on their ability to sort out the noise and focus on what matters to you; to help you question your assumptions and own objectivity; to be persistent (and not complacent); and to practice your skills as well as to evaluate potential associated ‘risks’ of a decision.

Most likely, listening to the chosen mentors will be challenging at first. Yet, to be open to (tough) feedback and be willing to course-correct is vital to a successful mentor-mentee relationship. The qualities industry newcomers should be watching out for in their ‘personal board of advisors’ are:

  • Natural curiosity, i.e., an ability to challenge but also to be a good listener.
  • Innate empathy, i.e., someone who will get to know you and who has your best interest at heart.
  • Inherent grit and candour, i.e., a pragmatist who will provide honest and direct feedback.
Clara Stilwell_AETHOS Consulting Group_New York_web

Boosting Your Career in 2020: Advice for Up-And-Coming Hospitality Players

Part of the European Emerging Leaders Network Roundtable Discussion 

Each individual has the responsibility to take charge of his or her own development and career. Those eager to do this should keep the following in mind:

  • Burst the bubble: It is easy to get comfortable with doing what you know works and looking for the commonplace solution. Operating inside the “bubble” of the known prevents you from driving innovation forward.
  • Investigate cross-department and cross-industry opportunities: Employers today are generally quite open to allowing employees to work for a time in different areas within the company, or even to leave the company for a time to gain particular skills and experience, to be rehired later. For example, individuals with front-of-house expertise may desire experience in back-of-house, or employees working in a property-level role may aspire to a corporate position.
  • Know exactly where you want to go and communicate it: Barriers to career growth are often self-inflicted, meaning you shouldn’t wait for your boss or the company to advance your career. It is incumbent upon you, as an up-and-comer, to be empowered to speak up and openly discuss your career ambitions with your superior. Specify what you want to do then assert you are ready for the next role and ask for help getting there.
  • Demonstrate your success to get noticed: Be ready to produce a measurable track record of your results in prior roles, in terms of sustainability credentials, financial performance and team-building and management. Incorporate metrics wherever possible.
  • Be relatable: The most successful career candidates have personal competencies headed by being charismatic and engaging as well as credible and confident.
  • Leverage your personal network: Talk about your career with two or three trusted advisors. Ask for their perspective on your strengths and weaknesses and how they may see this apply to different roles or industries. How does your profile compare with other applicants for the job you are after?
  • Make sure an advanced degree will have an ROI: Taking on additional education is an excellent way to strengthen your knowledge and perspective, but be very certain the time, effort and money required will represent added value for employers you may wish to join in the future.
  • Avoid being pigeonholed: Learn to say no to opportunities that keep you stuck in the same career track. Express gratitude for what you are learning in your present position, but make sure your superiors are aware of your aspirations and interest in exploring new avenues that could allow you to contribute more fully to the organisation.

What else defines a future leader? In a business environment growing more complex and ambiguous almost by the minute, leaders will need skills that allow them to navigate quickly and well across multiple information and decision-making streams. Being an expert in a particular field can be helpful, but at the very top of an organisation this can be a liability. It’s important to learn to delegate well, involving yourself in a deep dive to course-correct and redirect only when needed. Keep your eye on the big picture and avoid being drawn into one particular area or issue. Also, as a leader, you want to make sure people believe in you and trust you. At the same time, you need to have the gumption to go for things you believe are right. This is where taking on “servant leadership” as a philosophy can be particularly effective, shifting the role of leader from sole focus on the thriving of the company to prioritise supporting your people. This approach allows you to deal with difficult situations; you know you can trust your team, and your team can trust you. By taking charge of your own career, taking accountability and responsibility and staying focused on how you can best serve your company and your employees, you also serve yourself in the best possible way and will be recognised for doing so.

Moreover, it is important to seek out scenarios that challenge and even terrify you. There is less competition for these, and you will learn more and have a greater chance of making a difference and standing out when you succeed. One might say that aspiring future leaders should aim high and prepare well. Think logistically and consult with others, learn new skills and be willing to fail, as you will learn from the process.

In summary, here are some ‘top tips’:

  • Be nimble, flexible and adaptive; think outside the box.
  • Stay focused on the big picture; learn to delegate well but know when to make a deep dive.
  • Have the ability to be hands-on as needed and lead by example.
  • Espouse “servant leadership.”
  • Break the glass ceiling by looking out for team members ready to take the next step up.
  • Never lose sight of where you want to go.
  • Be professional, no matter what.
  • Avoid any sense of entitlement—remember that humbleness is an appealing characteristic in almost any circumstance.