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

New Technologies to Balance “Speed-Accuracy Trade-Offs” in Hiring

A Growing “Need for Speed”

(First publication rights with HotelExecutive)

We predict 2021 will be “the year of two extremes.” These first quarters are likely to involve continued pressure on operations and financial distress, but the last quarters could well bring a significant upswing in various bookings. A surge in business ― fuelled by the global vaccination programs — should efficiently usher a recovery and rebound period. This view is not unrealistic optimism. People have ruminated on missed experiences over the past 12-months, and several consumer surveys indicate significant pent-up demand for entertainment and escapism due to the extended COVID lockdowns. Also, as social and travel restrictions are lifted and consumers’ fears and anxieties are alleviated, people will be more apt to make needed or desired purchases.

It is not surprising therefore that industry commentators have openly talked about a return of the “roaring 20s” and some even touted the notion of “revenge tourism,” which refers to burgeoning travel and leisure activities that will come post-pandemic. This latter parallels the “revenge spending” of Chinese consumers in the 1980s after the country’s economy was reopened. We expect therefore that it is not a question of “if” but rather “when” the rebound reaches critical mass. Of course, a company’s ability to act swiftly and decisively impacts whether it will be “ahead of the curve” relative to its competitors. This applies especially to many organizations that reduced their front-line staff and now face the challenge of ensuring that enough of the right people are in the right positions to meet brand promises. Reassessing and possibly beefing up talent bench-strength is certainly important but also potentially urgent.

“Speed—Accuracy” Trade-Offs are Looming

Faced with a need to recruit and build-up teams relatively quickly and with shorter notice, service-hospitality organizations are confronted with a classic psychological conundrum known as the “speed-accuracy trade-off.” This principle states that decision-speed tends to be inversely correlated with decision-accuracy. In other words, decisions can either be “fast” or “accurate” but typically not both simultaneously. Herein lies the problem: best practice companies know that wrong hires cost significant money, so they value due-diligence during candidate screening and selection. Yet, this process usually takes time to do well and therefore any lags can result in losing out on top talent if competitors are willing or able to make quicker decisions.

Tactical operations is another area where productivity is affected by the speed-accuracy trade-off. Here it concerns the time needed for a new hire to ramp-up successfully by learning new systems or SOPs and start adding value to the business. A new hire’s learning curve, efficiency, and effectiveness are certainly influenced by their intelligence and motivation levels. Companies thus need people who are “hardwired” to think and thrive in service-driven cultures — team members with what we call the “Hospitality X-Factor” who consistently deliver on brand promises. These individuals are competitive, self-directed, and intrinsically driven to exceed performance expectations.

Strategic Merger of Two Technologies

The preceding clarifies the dual-tier challenge for businesses poising for their rebound and recovery, namely “the need to efficiently and accurately boost internal bench-strength with “X-Factor” team members, who themselves are hard-wired to efficiently and accurately execute on brand promises.” There are new technologies that significantly facilitate this goal, but most operational and HR leaders have probably not heard of them. These innovations relate to new knowledge of key attributes to be assessed with psychometric testing, as well as new knowledge about how to measure these key attributes inconspicuously and precisely. These two technologies are the product of modern computer processing capacities that bring the “speed” and the machine learning algorithms (i.e., Artificial Intelligence: AI) that deliver the “accuracy.”

Research and application of such systems has been a specialty of the Laboratory for Statistics and Computation at ISLA-Vila Nova de Gaia in Portugal, headed by psychometrician and data scientist Dr. Rense Lange. Lange says that, “Recent developments in machine learning allow assessment systems to be implemented online in cloud-based systems in extremely cost effective ways.” This combination of improved hardware and software has proved to quickly and accurately profile people with the Hospitality X-Factor, or what many people might call “service superstars.”

To clarify, standardized testing of high- and low-performers in “guest-facing” and “non-guest-facing” roles has been quietly conducted over the last four years in cooperation with Dr. Lange and researchers in the School of Hotel Administration at Cornell University. This hospitality field research used AI modelling to refine a concept in organizational psychology known as “contextual performance.” Although many companies have traditionally hired candidates based on their specific “task performance,” this approach actually misses what matters most in actual practice. Rather than focus on a fixed set of performance skills, it is much more productive to screen and select for what organizational psychology refers to as “contextual performance.” This term denotes a broad set of knowledge, skills, and abilities that are relevant and transferable across a wide array of jobs and settings. For example, the ability to effectively use a point-of-sale system represents “task-specific performance,” as it may be essential for restaurant servers, but unnecessary for cooks. However, teamwork and related behaviours are important to effective job performance for servers and cooks, and many other jobs, regardless of the function-specific tasks.

Answering Two Critical Questions

Recent AI-based modelling of data collected from the field research has helped to answer two practical and critical questions: “How do you define contextual performance?” and “How can it be measured quickly and accurately?” To explain, a few qualitative and quantitative findings must be unpacked.

First, the field research noted above correlated several psychometric variables with performance evaluations. Global companies that participated in the studies created four groups using their incumbents (i.e., “Very Poor, Poor, Good, Very Good”), who were categorized by consensus using a standardized set of criteria that addressed contextual performance (or the X-Factor). Analysis revealed that thirteen specific attitudes and behaviours defined a robust psychometric scale of the Hospitality X-Factor (see Figure 1). These characteristics can be further subsumed by four general categories described by the acronym “CHAT.” That is, high-performers in service-driven cultures are collectively “Conscientious, Hospitable, Adaptable and Trainable.” Furthermore, scores on this new model of the Hospitality X-Factor showed a strong, positive, and statistically significant correlation with the overall performance rankings of “Very Poor, Poor, Good, and Very Good.”

Figure I: Psychometric Profile of Contextual Performance (aka, the “Hospitality X-Factor”)

Second, while we now have a modern profile of contextual performance, it is not necessarily a straightforward task to measure its underlying traits and tendencies quickly and accurately. Indeed, pre-screening hiring tools are often criticized for being easily manipulated by applicants. Self-report measures based on personality traits or personal characteristics are notoriously susceptible to “social desirability” biases. This means the tendency for individuals to answer questions in a manner that will be viewed favourably by others. It can take the form of over-reporting “good behaviour” or under-reporting “bad,” or undesirable behaviour. This natural behaviour can pose serious problems when conducting research with self-report assessments.

However, AI-based modelling helped to create a new way to measure the CHAT Model that mitigated social desirability biases. It is well-known to testing experts that there tend to be “hidden” patterns in people’s responses to tests and questionnaires. In fact, this knowledge is routinely used in psychology and education alike to improve test questions, equate different versions of test questions, and even to catch “cheaters.” These covert patterns are known to specialists as “differential item functioning,” and they can be used in ways that summed or averaged scores cannot. To begin with, test takers are unaware of their existence, but such knowledge would do little to help them anyway. Particularly, it takes sophisticated analyses to identify these patterns as they are not obvious in their “direction” (i.e., positive or negative) or “focus” (e.g., men versus women). Nevertheless, they are a special type of “fingerprint” that can reliably categorize people apart from simple raw scores.

It is no surprise that people high in the Hospitality X-Factor indeed showed a covert fingerprint that special analytics can detect. This fingerprint detector was validated in research using a “test” that was not based in “words” or “statements” which are especially vulnerable to social desirability biases. Rather, the detector consisted of a gamified, visual exercise that requited only four minutes to complete. And this process could even be done easily on a mobile device. This Hospitality X-Factor exercise delivered a “quick” evaluation decision, but how “accurate” were these evaluations? Analysis of the field data showed high accuracy rates when test-takers are categorized in terms of three levels of contextual performance: “low, medium, and high” (see Table 1). Overall, the study found an average accuracy rate of “83%” for the simple four-minute task. Thus, there is compelling evidence that new technologies consisting of more precise psychometric models and more precise measurement of these models can mitigate the “speed-accuracy trade-off” that typically plagues rapid decision-making in screening and selection.

Thinking Ahead

Academics know that good science equals good measurement, and business leaders likewise know that good decision-making depends on good measurement. The hospitality industry has been, at times, at the forefront of such data-driven business strategies and decisions. For example, we referenced earlier the 1980s, a period in which “revenge spending” was coined. However, it was also the decade in which the airline sector began introducing dynamic pricing to optimize its financial results. This later evolved into revenue management, which nowadays is best practice amongst all hospitality verticals. Similarly, although not able to claim the prize for having invented it, the hospitality industry is fairly advanced when it comes to its customer loyalty programs —a tool that provides organizations with invaluable data to better, and more efficiently, target and upsell to customer bases.

Other examples stem from different technology verticals, from the proliferation of e-distribution in the hospitality sector to data-driven digital marketing campaigns and service automation via AI and the Internet-of-Things (IoT) that make ordinary devices “smart.” On a larger scale, there also are virtual and augmented reality capabilities that have helped the event segment during the pandemic, as well as smart property management systems that collect, measure, and advise on energy consumption, waste reduction and other measures helping to improve sustainability credentials. In other words, the hospitality industry has shown that it can become “smart.” It is now time for this to translate into “smart(er)” hiring decisions. Our case study of screening and selection to prepare organizational bench-strength for the eventual rebound is therefore only one way that new technologies can confront “speed-accuracy trade-offs.” In fact, AI-based models can facilitate tailor-made predictions that are context dependent. So yes, thanks to AI and machine learning we can now simultaneously improve decision speed and accuracy in business – or, as we might put it, hospitality can have its cake and eat it too.

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

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

Mind the ‘COVID’ Gap
 

There was a collective sigh of relief in early November when Pfizer/BioNTech, Moderna and the Oxford-AstraZeneca team announced in rapid succession their news of vaccines with 90%-plus efficacy rates. However, business leaders in the hospitality industry understand that these positive developments are not a ‘silver bullet’ to solving pressing problems in the here and now. Neither will be the breaking news of the now UK-approved Pfizer/BioNTech vaccine. The World Health Organisation (WHO) estimates that coronavirus vaccines might be deployed, at scale, early to mid-2021. Challenges remain, mostly centred around production, the roll-out and the logistics involved, as well as the training of medical staff administering the vaccines. And, with many travel restrictions still in place, and likely to continue to be upheld in some shape or form throughout Q1 of 2021, the pressure on operational performance, as highlighted by STR’s regular data updates, remains high. All these signs suggest a slow recovery.

Hospitality executives are consequently ‘living to fight another day’ – and they must be at the top of their game to ensure that they and their teams are coping with the ongoing ripple effects of this crisis. Still, rarely are the economies such that it is all ‘gloom and doom’. Even in markets with considerable downward pressure, there are leaders who proactively identify and capitalise on arising opportunities. Consequently, ‘self-awareness’ and ‘self-reflection’ should these days be highly valued leadership traits. Recent research by AETHOS underscores that it all boils down to staying nimble and adaptable to new market conditions and business dynamics.

The COVID Gap Performance Analysis

Throughout 2020, AETHOS witnessed first-hand how industry leaders and teams have deliberately, or inadvertently, shifted their performance dynamics in response to COVID. These shifts can be considered ‘gaps’ because they often have negative or unintended effects on the business and people practices of organisations. Intriguingly, these performance gaps are easily detected in the psychometric patterns of senior executives. AETHOS thus decided to gather empirical data and find out what new patterns might have emerged.

AETHOS’ proprietary assessment – 20|20 Skills® – measures an individual’s status across ten core competencies that predict job performance in service-driven cultures. It gauges attitudes, knowledge areas, and skill sets in real-time and thereby can serve as a ‘barometer’ for monitoring situational factors, motivation, and mental well-being. To identify and illustrate the above referenced performance gaps, we have concentrated on the psychometric profiles of two key business functions in the global hospitality business – those of the Chief Operating Officer and the Chief Human Resources Officer (covering ‘business practices’ and ‘people practices’, respectively). Profiles taken in 2020 were contrasted to those completed throughout 2019 – and sure enough, the analysis revealed a significant divergence.

Table 1 suggests that Chief Operating Officers have become — at least for now — less strategic, less entrepreneurial, less team-focused, and less leadership-oriented. At the same time, they depict greater tendency to be more dutiful and reactive in their actions, more transactional and tactical in their behaviour, and more flexible in their thinking, basing their decisions to a greater extent on analysis rather than set SOPs. These trends arguably speak to ongoing ‘navigation’ issues stemming from 2020’s unprecedented circumstances.

Accordingly, the current COO psychometric profile is perhaps best characterised as a ‘Trouble-shooter’. This profile might be expected, and even required, during a crisis such as the ongoing pandemic – it helps to keep things moving, but it also comes at a cost. Particularly, troubleshooting entails being heads-down, fighting demotivation or burnout, and likely doing the tactical work of at least one level down.

Table 2 indicates that Chief Human Resources Officers have likewise become less strategic, less entrepreneurial, and less leadership-oriented, while simultaneously becoming more transactional, tactical, reactive, and analytical. However, CHROs show curious differences to the COOs — i.e., CHROs seemingly exhibit stronger team-building orientation and dutiful mindset, as well as a strikingly greater sense of process orientation (or being rule-conscious). It is perhaps impossible to know for sure, but this general profile with its differential patterns might speak to the ongoing ‘control’ issues that HR professionals face when striving to manage threats or challenges to an organisational culture and related perceptions involving parity and fairness.

As a result, the current CHRO psychometric profile might be characterised as an ’Arbitrator’. This profile might make sense under the circumstances to ensure that as ‘things are moving along’ they are also being done in the right ways to protect the organisational culture as much as possible. In other words, higher ‘Emotional Intelligence’ (EQ) and team orientation that are needed to successfully navigate the rough social waters of businesses that are dealing with crisis.

Yet, there also potential costs to an approach strongly rooted in arbitration. Here, the higher EQ of ‘arbitrators’, who are concerned with employee sentiment and motivation, can clash with the higher IQ of ‘trouble-shooters’, who are focused on quick, resourceful, and financially responsible decisions and actions. The result can be bottlenecks to decision-making and lack of cross-leader alignment on goal- and priority-setting. On the other hand, organisations that ‘mind their gap’ – i.e., proactively recognising the presence and role of rival profiles — would be in the best position to work towards making these individual leaders ‘complementary forces’ to collectively sustain or improve company performance. Simply put, senior leadership teams might need both ‘trouble-shooters’ and ‘arbitrators’ to survive, or thrive, in today’s turbulent and uncertain market conditions.

Mind the Gap – Decoding the Psychometric SWOT

Any business or human resources leader will know that data is key to identifying either potential problems early on, or swiftly occurring trends which might impact company performance. However, data are useless without proper interpretation and sensible implementation. So, despite all the pressing tactical priorities that have been born of this current pandemic, organisations are well advised to spend time taking a ‘temperature check’ of their executive leaders and leadership teams. Staying in-tune is ‘mission critical’ in good times, and even more so in chaotic and challenging times.

Engaging in a thought-exercise as above – one that includes reviewing and assessing a leader’s drivers, motivations, and mentality – supports executives and organisations by identifying internal, external, and situational factors that routinely influence individual and team performance. It can also help to normalise a situation and promote a ‘clear head’, thereby avoiding being bogged down in fighting mode without the clarity of mind to recognise, and act on, opportunities. Such an exercise can also identify steps needed to enhance output or collaboration by showing a team how to play-off of each other’s strengths. These types of individual and collective insights are akin to ‘market intelligence’ that gives evidence-based guidance to better align an organisation’s people practices with its business strategies.

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

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

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

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

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

Human Capital And The Current State Within the Hotel Asset Management Community

Regardless of where we are in the hotel cycle, the importance of high-performing asset management is critical to the success of any hotel owner. Over the last 20 years I have had the pleasure to work closely with this community assisting clients, such as public REITS and private equity groups, recruit high-performing executives, allowing owners to maximize value for their hotel property and/or portfolio. My thoughts regarding some important human capital misconceptions in the world of asset management will hopefully help shape the future for 1) hotel owners to attract and retain top talent and 2) for asset management executives thinking about charting their future career path.

Misconception #1: “I am underpaid”

For better or for worse there is a “herd mentality” when it comes to setting compensation within the asset management community—a tendency for owners to follow and/or copy what the competitive set is doing. Due to the incestuous nature of the business, organizations can draw competitive compensation information as easily as an asset manager can obtain data from a STR report. I have reviewed many asset management compensation programs and can confidently say that more than 90% of asset managers are competitively paid. Where most people seeking market compensation data go wrong is when they compare only one or two components of a total rewards program. To gain accurate data, it is necessary to consider the entire compensation mix—base salary, annual cash bonus, long-term incentive/equity, and benefits.

Misconception #2: “There is plenty of talent out in the market”

As mentioned in my introduction, I have worked with great leaders in the industry recruiting the highest performers for their organizations. When it comes to the current state of asset manager “supply,” I have to report the hotel industry is in trouble with a woefully low number of qualified executives. Even worse, there is a very lean group of next-generation talent to fill roles as current executives advance. As an example, let me point to a recent search I conducted—a hotel ownership group seeking a Vice President Asset Management with 7 to 10 years of experience, desired track record of managing 7 to 10 full-service hotels with “traditional” asset management experience (i.e., strong financial, analytical, and strategic background with previous experience working for a private equity group, REIT, and/or consulting firm). My recruitment candidate pool consisted of only 135 individuals. Hotel owners who are truly committed to this industry need to recognize the current asset management “supply” challenge and proactively execute on critical initiatives, including partnering with universities to better train students entering the workforce, designing more strategic internal succession planning programs, and very seriously considering executives currently doing extraordinary work in other parts of the hospitality industry with transferable skill sets.

Misconception #3: “A limited service portfolio is not for me”

Recent trends indicate that many sophisticated investment groups are taking a much closer look at the limited service and extended stay segments of the hotel business (i.e., acquisitions by Brookfield, Blackstone, and Starwood Capital). Currently, a majority of the talent within the asset management community view managing limited-serve/extend stay properties as a “step-down” and avoid these opportunities, where I believe it is a great strategy to diversify experience. The current thinking is, “If I have a proven track record managing more complex assets (i.e., full-service and luxury), my skill set is seamlessly transferable.” This is flawed thinking. Asset managers who diversify, experiencing as many segments as possible, will be the preferred talent for organizations of the future.

Clara Stilwell_AETHOS Consulting Group_New York_web

VUCA – Its Meaning and Implications for Hospitality

As published in HotelExecutive, Summer 2019

The US Army War College introduced the term VUCA during the Cold War ― a time when the world was facing especially high levels of volatility, uncertainty, complexity and ambiguity. Since being introduced, this framework has become a trendy acronym that strategic business leaders regularly use to assess the suitability of their environment or market for launching new products, entering new markets, and embarking on other key initiatives. It allows them to pinpoint where the four challenges in their respective business are situated or skewed, as well as how to create appropriate responses.

Many today would assert that, given the current geopolitical climate, the world’s VUCA level has again spiked to higher than normal levels. People and corporations must increasingly adjust to unpredictable events. In fact, the one thing we can almost certainly predict these days is that something unpredictable is just around the corner. The hospitality sector is no exception and has in the very recent past witnessed numerous events that have exacerbated the VUCA state in which its players operate.

VUCA in hospitality manifests on many different levels and can affect individual hotel properties, tourism demand within certain areas, an entire company, or even impact the industry on a global basis. Examples of symptoms of VUCA in the hotel world include impending Brexit in the UK, US-China trade war, les gilets jaunes in Paris, and Hong Kong’s weekly protests. On a broader scale, the launch of the disruptor Airbnb in 2008 shocked the industry at large. Companies and their business models that had been unchallenged over centuries suddenly faced fierce competition. More recently we learned about the massive data breach at Marriott, exposing private and sensitive information of some 500 million guests.

Katharine Le Quesne, Managing Director at HoCoSo attests, “Disruptors so often come from outside the traditional confines of the hospitality industry – look at Airbnb (students renting out beds to pay rent), OYO, ACE (Alex Calderwood went from party promoter, to vintage clothing, to reinventing barber shops before hotels), even Ian Schrager … they all possessed the ability to look at the industry with fresh eyes. The sector is not very good at being self-critical. The story of the emperor’s new clothes may seem to some as an outdated parable, but we ignore it at our peril. Anticipating and expecting the rules of engagement to change is the new normal.”

Businesses therefore must possess an awareness of the unstable environment in which they operate and be prepared to react and respond quickly. As Bruce Harkness, author of “Performance Matters: The Ultimate Career Survival Guide,” put it, “To survive and excel in today’s global economy companies must be highly adaptable, light in structure and fast in terms of decision-making. Technology and the application of supporting processes is mission critical but above all is the need to be adaptable.”

All the above scenarios are part of fast-changing technological, social, and business environments. Looking back, flux and dynamism have always been present; however, it should be emphasized that the pace of change, the immediacy, and the impact and complexity of problems have increased substantially.

No longer is “change” the exception but instead the rule. And, it requires a certain skill set to think and act in adaptive, nimble, and flexible ways when confronting VUCA conditions. This is particularly true in terms of business strategy and goal setting. Harkness states, “Bureaucracy and hierarchy have no place in high performing companies. Leaders need to be highly adaptable and have the ability to embrace change. This is in addition to being innovative, visionary, people focused, resilient and authentic in terms of how they lead their business. Slow and steady will not make the grade! Those organizations that adapt will survive and those that don’t will quite simply become extinct.”

Fortunately, social scientists have long studied productive attitudes and behaviours for VUCA scenarios. To date, there seem to be four variables that work individually and collectively to define the psychological profile of individuals and teams who are best equipped to succeed in this context:

  • Ambiguity Tolerance: a state and trait variable that is a well-known, established psychological construct. First described in the late 1940s, intolerance of ambiguity can be described simplistically as “black-and-white” thinking and solutions characterized by premature closure, often at the neglect of reality. Basically, intolerance of ambiguity results in rapid and overconfident judgment of ambiguous information or events. It is also a motivating factor for individuals in social situations — intolerance of ambiguity results is the tendency to perceive ambiguous situations as threatening, whereas tolerance of ambiguity is the tendency to perceive ambiguous situations as desirable. It can be learned or improved to a good extent.
  • Self-Efficacy: a state and trait variable that represents self-awareness, drive, motivation, focus, and accountability. These factors translate to what HR and business leaders recognize as “steadiness, resilience, and grit.” This variable speaks to an individual’s ability to take initiative, push for action, and manage stress and maintain perspective in the face of adversity. It can be learned or improved to a good extent and is frequently a standard component in leadership coaching.
  • Servant Leadership: a state variable that represents one’s capacity to embrace a vision, formulate actions and goals to further it, and an ability to communicate this vision so that others are inspired to follow. Business leaders and team members alike know this simply as adopting the working mentality of “the first priority is to make others successful.” While uncertainty controls the environment, a “leader’s aptitude to break the pattern by taking a thoughtful position and articulating an agile strategy is crucial.” It is almost entirely a learned skill — whether via unstructured or structured formats. Thus, leadership development programs must groom this mentality from the start so that next-gen leaders develop the “muscle memory” of servant leadership.
  • Strategic Thinking: a state and trait variable that is often misunderstood and discussed in cliché ways. It boils down to brain function, i.e., the capacity for big-picture and forward (proactive and solution-focused) thinking. It is not about trying to foretell the future, but rather that nuanced balance between drawing on empirical data and business intuition to “see around corners” and act accordingly. Although DNA-wired, raw intelligence plays a major role; this is an ability that can be learned or improved to a good extent.

In the current environment, hospitality businesses are being exposed to VUCA on a more frequent basis. No matter how much planning and preparation is put in place, the reality is that something unexpected can arise at any time and organizations need to be able to flex and adapt quickly to cope and survive. When it comes to the people leading those companies, as Harkness attests, “we (need to) recruit and develop leadership that is solutions-focused, that has the desire to keep learning and evolving, being open to change, and having the courage to explore new opportunities, take risks and maintain an open mind.”

When recruiting or developing talent into their business, hospitality organizations need to measure “Execution Skills” to assess ambiguity tolerance and self-efficacy, “People Skills” for servant leadership, and “Cognitive Skills” for strategic thinking capability. To help screen for ‘VUCA-resistant’ candidates, hiring managers may wish to consider using interview questions that probe stress management, creativity and adaptability, such as the following:

  • What has been the most stressful situation you have ever found yourself in at work? How did you handle it?
  • What have you done in the past to prevent a situation from becoming too stressful for you or your colleagues to handle?
  • Tell me about a situation in which you have had to adjust to changes over which you had no control. How did you handle it?
  • How was your transition from high school to university? Did you face any particular problems? How did you handle them?
  • Tell me about a problem that you’ve solved in a unique or unusual way. What was the outcome? Were you happy or satisfied with it?
  • Give me an example of when someone brought you a new idea that was odd or unusual. What did you do?
  • Give me an example of a time when you had to be quick in coming to a decision. What obstacles did you face?
  • Describe a situation in which you recognized a potential problem as an opportunity. What did you do? What was the result? What, if anything, do you wish you had done differently?

This VUCA-response recipe needs to be baked in a corporate culture in which speed and agility are hard-wired into the firm’s DNA. Those hospitality groups that manage to weather VUCA situations the best will be those whose leaders demonstrate the above skills and possess an acute awareness of the state of volatility, uncertainty, complexity, and ambiguity in which they operate.

Clara Stilwell_AETHOS Consulting Group_New York_web

Seatrade Europe and Thomas Mielke In Conversation: Sustainability, Recruitment And Leadership Development In The Cruise Industry

As published by Seatrade Europe in Summer 2019

Seatrade Europe recently spoke to Thomas Mielke, London-based Managing Director of AETHOS Consulting Group. Mielke will be moderating a panel discussion at the upcoming cruise conference to be held at the Hamburg Messe Hallen September 11-13, 2019. Here is what he had to say on some of the topics which will be picked up during the session entitled “Sustainability with a Twist – How to Future-Proof the Cruise Sector from a Recruitment, Talent Pipeline and Business Leadership Perspective”.

What progress do you think the industry has made on sustainability in terms of recruitment and leadership development over the last 5 years?

“People are the product of the hospitality industry” – this most certainly holds true for the cruise sector. Without the continuity of the talent bench-strength cruise companies would be unable to execute on their ambitious growth plans. As the fight for talent has continued and intensified throughout the last few years, cruise companies have started to embrace an approach which can be coined as “future-casting” – in other words, rather than focusing on proven track record and/or domain knowledge, they have moved away from assessing task competencies. This shift in their recruitment efforts has enabled them to identify people with potential who are adaptable, inquisitive and knowledge-thirsty and who perform well in high-pressure work environments such as the cruise industry.

Yet, adapting one’s recruitment profile is only part of the equation. Cruise companies have equally focused on improving their in-house talent management and succession planning efforts – in other words, instead of relying too heavily on fresh recruits, they have gotten better at identifying whom they already have on their payroll and what their specific development capabilities are. However, there is still a long-way to go for cruise companies to fully deploy the full potential of their in-house talent – too many organizations are unaware of who is ready for the next step up and/or who could be cross-promoted into a different division. To some extent, the problem in leadership development is intensified as international mobility, somewhat counterintuitively, remains relatively low within the industry. At the same time, career movements from ship-based positions to land-side continue to be the exception to the rule. Partially, this is because they attract different characters and personalities based on the very nature of the different jobs and functions. However, it also ties back to a more ‘systemic’ issue that speaks to business and human resources strategies which are not fully aligned with one another. This is by no means deliberate – often times, it is merely the result of leadership being pulled into different directions, forced to take quick ad-hoc decisions and/or an overstretched human resources department which has put in place the right strategies and tactics, but which is ultimately forced to ‘put out fires’ elsewhere or divert its attention. Leadership development is thus much more opportunistic and organic as opposed to structured and planned.

In summary, awareness has risen for the ‘problem areas’ and actions have been taken to rectify those. The shift to assessing contextual performance as opposed to domain knowledge has been the first step. Improving and investing in internal talent management and succession programs – targeted and fine-tuned for three rather distinct cultures (ship-side, land-side [non-corporate] and land-side [corporate]) – the second. Future obstacles to overcome continue to be topics centred around international mobility, cross-promotions and the fostering of a company culture which better aligns business strategies with a firm’s HR programs.

What is the biggest challenge for businesses in the cruise industry when it comes to sourcing and recruiting? How do you feel this will impact the future of the industry?

The Cruise Lines International Association (CLIA) predicts, based on its membership data, that as of this summer there will be almost 275 cruise ships in operation – providing more than 1.1 million staff with employment opportunities across the globe. And the order books of the shipyards are full for years to come… In other word, the pressure keeps on rising for corporate human resources departments to develop, sustain and safeguard a steady talent pool of future industry leaders. The challenge that industry leaders are faces with is thus both an internal and self-imposed one as well as an external and enforced upon ‘issue’ by the various industry stakeholders.

Companies have set themselves high growth targets to capture untapped business opportunities, new target markets and customer segments as well as underdeveloped destinations. Shareholders consequently seek ever hired returns. All this means that leadership teams are putting themselves under enormous pressure to deliver on those targets – and this necessitates securing a very large number of staff to be able to deliver on those business strategies. Whilst for many corporate land-side positions cruise companies are quite open and happy to recruit from other industry sectors – in particular in branding, marketing, sales and, for example, finance – securing ship-side talent is arguable the much more difficult task. Virgin Voyages, for example, recently announced that is launching a six months recruitment road show across 18 countries to find crew members. In which other industry do business executives have to greenlight such initiatives just to secure their employee base? In line with that, it is worthwhile to reflect that, in consequence, many of the new recruits are coming from culturally very diverse backgrounds. Ensuring that such a multi-cultural workforce is aligned, and is buying into a common vision, is not an easy task. Some might argue that it also brings on board challenges as it relates to managing one of the most important topics the industry is facing – that of ‘sustainability’. In a lot of the regions from which the cruise industry is recruiting from, sustainability has not necessarily risen to the top of the agenda when it comes to discussing the workplace and/or the business environment. A lot of the times, other more basic needs and requirements have to be met first. The cruise industry is thus in a unique position to promote and educate staff from all over the world on sustainability – but conveying the importance of the message whilst monetary, health or other more ‘basic’ concerns are front-of-mind is not an easy feat. Ultimately, for many employees, however much they care about sustainability, pragmatism will trump principles when faced with actual career decisions.

Arguably, there are also external forces which the industry is grappling with – one of them is tied to said topic of sustainability. Increasingly, customers, the general public and employees alike are putting more emphasis and the issue and there are studies, for example, on the positive correlation between a firm’s Corporate Social Performance (CSP) and its reputation and attractiveness as an employer. General companies need to deliver on those high expectations. A lot of progress has been made – from fuel efficiencies to waste reduction and sustainable food sourcing to more inclusive excursions which positively impact host communities. However, the sector is – partially based on the aggressive growth targets – impatient and best practices can easily, however unintentional, fall to the wayside. It is thus a mammoth task for leaders and the HR teams to instil and engrain the importance of those sustainable best practices in its workforce. This might mean aligning reward and bonus programs to specific targets and/or a general performance program which is properly aligned with an organization’s sustainability strategy and tactics. This might also mean that promoting sustainable credential whilst offering shore-excursions which include, for example, heli-skiing, might not be sending a consistent message.

Any further comments?

When talking about leadership challenges it is also worthwhile to reflect upon the general state of the industry and the ‘hot topics’. Experts currently talk, for example, a lot about the concept of VUCA; in other words those situations and/or business environments where (1) volatility, (2) uncertainty, (3) complexity and/or (4) ambiguity might complicate management and/or the decision making process.

The hospitality, travel and tourism sector can certainly be described as a fast-paced business environment and one where decisions taken might have immediate and/or significant impacts. It is no doubt a high-risk environment – consequently, one of the biggest challenges cruise companies are faced with is securing employees and leaders with the right skill set, character traits and grit to survive in such an environment. Going forward, cruise executives and the human resources department alike are thus likely to apply the VUCA framework to probe their teams, staff members and employees on those scenarios with a view to assess, or foster, behaviours and skills which help to efficiently and effectively operate within such a business context.

Clara Stilwell_AETHOS Consulting Group_New York_web

Sustainability – A Multi-Layered Human Interest Story
 

As published by Hotel News Now in Summer 2019

At present, business podcasts, industry articles and news bulletins are all about ‘sustainability’. The fact that the topic has established itself as a regular head-line feature across different media outlets is very commendable; yet, conversations appear to be somewhat one-sided. We read about initiatives to ensure economic benefits trickle down to communities which are otherwise left behind, to reduce pollution levels and/or to safeguard the environment. In short, most news coverage is about ‘pre-packaged solutions’ – but jumping to solutions will never get rid of the underlying cause of a problem. Should the conversation therefore be more multi-faceted and deeper?

Hospitality, Sustainability and A Role For HR

To put things into context – the hospitality industry is widely regarded as one of the most taxing industries on the environment and local communities. The various components of the tourism supply chain, ranging from transportation (aviation, cruise, ground services et al), to lodging, food and beverage and organised events, tours and other types of explorations all have a considerable, often negative, socio-economic and environmental impact. A great many of the ‘big players’ in the sector have developed and implemented worthy codes of conduct, as well as programs and initiatives to tackle the topic of sustainability. At times, though, it feels that the very thing upon which these initiatives hinge – the people – has been forgotten.

It is thus fair to conclude that a lot more ‘airtime’ should be given to the Human Resources department. It is the HR and Talent Management departments which are attracting, retaining and (helping in) grooming the future leaders of the industry. Thus, it is them who have, or should have, tremendous ‘clout’ over where an organisation is heading and how sustainably it operates. It is also the HR executives who spearhead alignment between business goals and an organisation’s people strategy and who support leaders and managers alike in implementing change management processes geared towards driving sustainability.

Rather than the ‘what’, one should thus accept that it is the ‘how’ and ‘who’ as it relates to implementing these suggested strategies and tactics that is behind the success or failure of any such endeavour. Some key initiatives therefore consist of:

  • Overcoming the ‘dark side’ of tourism employment so that front line staff’s basic needs are met and so that they can shift their attention to sustainability matters. In other words, only once the basic requirements as per Maslow’s hierarchy of needs are met can one reasonably expect employees to be able to commit wholeheartedly to driving sustainable change. HR departments around the globe are thus busy allowing front and back-of-house staff to move up the ranks, creating equal career opportunities for everyone and strengthening vocational and academic education so that they are able to move out of a low pay environment characterised by long working hours and at times high levels of stress (being the ‘first line of defence’ to tackle customer issues head-on).
  • Spearheading an organisational and cultural mind shift so that sustainability becomes front of mind across all levels of the organisation. In other words, one cannot deny that any successful sustainability campaign is based, and depends on, (1) awareness, (2) knowledge, (3) training and (4) skill – the role of the HR function is thus pivotal in improving one’s overall sustainability track record. The HR and talent function within an organisation is thus tasked with fostering continued learning as well as a work environment in which innovative thinking is encouraged that is geared towards improving one’s socio, economic and environmental footprint. Putting sustainability front and centre of personal development plans, and individual performance reviews should, for example, not be questioned but be expected.
  • Fostering empowerment whilst embracing a check-and-balance approach, in as much as it lies within human nature to operate on a ‘reward-basis’ – in other words, accepting that the great majority of people are driven by incentives tied to specific actions provides a compelling argument for HR departments to link personal performance to sustainability targets. This move recognises that sustainability does not work best if and when it is instructed top-down but if and when it is actually also driven bottom-up, by the individuals. By empowering staff, and making them accountable, HR executives provide a crucial link between hypothetical sustainability targets and actual outcomes as otherwise a company’s employees, managers and senior leadership will be drawn into making purely profit-driven decisions.

The point can easily be made that the success or failure of sustainability initiatives is purely incumbent upon people – in the business world, those stakeholders include the customers and the supply chain but also a company’s leadership team and a company’s workforce. A discussion around sustainability can thus not be decoupled from the human element of the story. Going forward, it would thus be encouraging to read and hear more about the interconnectedness of the workforce and sustainability. HR’s role in championing sustainability should be undisputed – but it cannot and should not only be limited to an administrative function. Instead, HR should move beyond the strategic business partner it has already become within most organisations to assume a more holistic ‘catalyst of change’ function, tasked to break bad habits and changing behaviour at an individual and company level.

Clara Stilwell_AETHOS Consulting Group_New York_web

Confronting ‘Trickster’ Figures In Market Metrics

As published by Hospitality Upgrade Magazine in its Summer 2019 issue

Numbers are tricky business… Data have arguably become the most valuable currency in business today. It is the food that nourishes companies and gives them the sustenance to act and react. It underpins the sky-high valuations of firms like Facebook; without it, AI would be just two letters of the alphabet. Data have become the accepted crutch that supports nearly all decision-making. “What do the data say?” For business leaders, when it comes to issues like profitability, market share or brand equity, the more facts, figures and information they have, the better they feel.

Huge faith is placed in data, often blindly. People want to believe the black and white figures in front of them; it feels safe and reassuring. In the hospitality sector alone, data have spawned a whole industry of firms that specialize in collecting, housing, distributing, compiling and helping users to understand data – data related to bookings, food cost, productivity, guest reviews, water usage, market demand, average spend, CRM, etc.
Are data always our friends, however? Consumer group Which?, for example, recently investigated customer ratings on Amazon and found that the site was inundated with fake five-star reviews. Can data always be trusted? Lying in wait to confuse or sabotage the conclusions that business leaders draw from data is the ‘Trickster’ ― one of several universal forces or patterns within the human mind that psychiatrist Carl Jung termed archetypes, with this one specifically representing the irrational, chaotic and unpredictable side of thought and behaviour.

These manifestations of chaos exist on balance sheets. Marketers are “betwixt and between” reality and fantasy in their interpretation and actioning of market metrics, and are quite likely completely unaware. Best practice market intelligence in sales and marketing often derives from consumer reviews, like formal satisfaction surveys, TripAdvisor ratings, Michelin star series or the ‘Net Promoter Scores’ (NPS), which is often held up as a best practice metric. This latter index gauges the loyalty of a company’s customer relationships, and some research indicates that it is correlated to revenue growth. NPS scores range from −100 (every respondent is a “detractor”) to +100 (every respondent is a “promoter”). NPS scores vary by industry, but a positive NPS (i.e., higher than zero) is generally deemed good, an NPS of +50 is generally deemed excellent, and scores over +70 are exceptional.

Such scores look straightforward, but leading-edge research in psychometrics, tests and measurements increasingly suggests that market-driven metrics like these are often and quite literally Trickster ‘figures.’

What You See is Rarely What You Get

Lurking under NPS scores can be critical consumer-based nuances or market-based idiosyncrasies that can distort responses, skew trends and promote misleading conclusions. Specifically, traditional consumer ratings, like NPS, have at least four inherent limitations:

  • The usual approach of summing scores of a test or rating does not provide linear (i.e., interval-level) measures of the underlying variable, and group differences and treatment effects are distorted.
  • Traditional scaling approaches treat all questionnaire items as equivalent, thereby making it difficult to select those questions that are most appropriate for a specific population of respondents.
  • The standard ‘raw score’ approach does not recognize that some items may be biased such that respondents with identical trait levels receive systematically different scores, e.g., younger respondents) endorse some questions more (less) often then older respondents with equal trait levels.
  • Traditional scaling approaches offer no indicators of the internal validity of respondents’ scores. Aberrant response records cannot be identified; it cannot be determined whether low scores are due to low trait levels or to respondents’ misunderstanding or incomplete processing of the questions.

Moreover, there’s a sinister fifth limitation related to rater-severity. Put simply, not everyone uses ratings or scoring systems in the same way — some people are harder or easier to please than others. Think back to your school report card and you will recall that, although working off the same grading system, certain teachers were lenient in their scoring while others were strict.

This type of respondent bias unfortunately also applies to consumer ratings like TripAdvisor reviews and NPS scores. Many marketers know this intuitively. For example, British consumers seem more difficult to please, so they give systematically lower (i.e., stricter) ratings on products or services. In contrast, American consumers are relatively easier to please, so they give systematically higher (i.e., more lenient) ratings on the same products or services. The net effect is that both consumer sets are using the same NPS scheme but in significantly different ways, thereby not producing a true apples-to-apples comparison.

This problem is extremely pervasive, according to Rense Lange, a Ph.D. statistician with the Polytechnic Institute of Management and Technology in Portugal and a published expert in psychometrics and quality control models. “Over 20 years of scientific research demonstrates that raters consistently differ in severity, even when using the same scale or review system.” So, how can organizations that rely on consumer ratings manage these severity biases so that their data-mining accurately guides business decisions?

Dr. Lange spoke to AETHOS about two solutions. First, it is possible to change rater-severity with two to three days of structured training, but this is very difficult, time-consuming and totally infeasible for online reviews or NPS scores that depend on consumer interaction. Plus, there is the added complexity that when raters or reviews are trained to be meticulous and contemplative, they subsequently tend to start using the “safe” middle-rating categories. In other words, if you tell people they are “too easy” or “too hard” in their grading or reviewing, they will start avoiding their respective extremes by starting to use more “middle” categories. Consistent “middle-of-the-road” scores or ratings essentially dilute or hide the very positive or negative feedback that organizations need to know. So, it seems the Trickster strikes again.

There is a second and more technologically grounded solution, however, that levels or equates rating across different reviewers with different severity biases. And, as Dr. Lange noted, it has been proven effective in courtroom settings with judges’ attitudes toward leniency in rulings, with HR and manager performance appraisal reviews, and even consumer product reviews on Amazon.com. It is an advanced statistical analysis known as the “multi-facet Rasch scaling” (MFRS) methods, which can be performed by qualified operators using the FACETS computer software by Michael Linacre.

The mathematics are too technically complex to explain here, but companies that care about accurate insights from data-mining–especially using information derived from customer ratings and reviews–are strongly encouraged to confront the Trickster in market metrics by never taking raw numbers like NPS scores at face value. The best practice is to leverage the power and accessibility of leading-edge software and statistical analyses to understand this type of data with nuance and intelligence. Most organizations do not even know the problem exists, and those that do likely will not take the time to actually fix it with MFRS. Those that do, however, will find they have a far greater handle on their data and, by avoiding the Trickster, are ultimately able to make better decisions. For those companies, the value of data will go up even further.

Clara Stilwell_AETHOS Consulting Group_New York_web

Leveraging Transformational Technology – Miles Ahead In HR With Artificial Intelligence

As published by Hospitality Upgrade Magazine in its Summer 2019 issue

Assisted by our increasing willingness to share information about ourselves, and facilitated by an exponentially rising computing power, the existence of data is omnipresent. Its proliferation and general availability are hereby not dwarfed by our, as of late, heightened awareness as it relates to privacy and data security. More interestingly, and despite tighter rules and regulations that address those concerns, experts predict that we all will willingly provide, and will benefit from, analytics based on more data, not less. Here is where “Artificial Intelligence” (AI) comes into play, because through its superior performance and ability to look at data and data patterns, it allows for much improved processing power and insights.

Broadly speaking, artificial intelligence is defined by the English Oxford Dictionary as “computer systems able to perform tasks normally requiring human intelligence.” It can be put to good use and can be applied in a plethora of different industries and functions. Logistics, supply chain management, sales, marketing, research and development as well as consumer insights have all already benefitted, in some shape or form, from AI. Cutting edge industries are typically those associated with “big money,” such as banking, insurance, manufacturing and retail as well as the travel and tourism sector, to a much smaller extent. The latter is of particular focus here because we are aiming for guidance and recommendations for hospitality owners and operators on (1) whether or not they should invest into AI and, if so, (2) which areas AI can add the most value.

A Case Study In The Value Of AI

A recent McKinsey study identified that, across 19 key industry segments, AI has the potential of creating an additional USD $3.5 trillion to USD $5.8 trillion in annual value for the global economy. Specifically, for the travel and tourism sector, this figure is estimated to be potentially USD$400 billion to USD$500 billion. With that in mind, it is not surprising to learn that, according to an earlier McKinsey study, leaders in the travel and tourism are anticipating an 11% increase in AI spending over the next three years. Therefore, it appears that the question should not be if, but what pitfalls to avoid and in which specific area hospitality organisations should invest in and adopt AI platforms.

One of the biggest pitfalls for organisations is to spend money and set up an AI infrastructure but not be able to use the outputs or insights gained – based on either incorrect avenues pursued that yield in irrelevant or difficult-to-use data points or based on a lack of in-house skills to “make sense” of the AI outputs. Understanding how “digitally mature” an organisation is and how ready its employees and executives are to implement “data science” should, consequently, be one of the first assessments one undertakes when looking at applying AI within an organisation. So, before taking out the cheque book, it is important to ensure alignment between the AI strategy and overall business strategy, as well as alignment between the AI strategy and the in-house capabilities. The high-level SWOT analysis shown below can further assist in assessing risks before officially “greenlighting” AI investment.

AI – Breaking It Down

In those instances in which a company has opted, in principal, to “up its game” from a technology perspective, the priority should shift to identifying which areas might offer the biggest upside potential and/or competitive advantage. Broadly speaking, the application of AI can be grouped into three subsegments:

  1. Descriptive AI: i.e., systems that aim to analyse what has happened in the past;
  2. Predictive AI: i.e., programs that have been designed to forecast future events; and
  3. Prescriptive AI: i.e., software that is meant to provide specific recommendations and/or a course of action.

Looking at data points that cluster past behaviours and preferences of customers, for example, will be helpful to the sales and marketing departments of an organisation – in fact, this practice is already being used quite successfully within the hospitality industry. The same holds true for systems that help predict future performance and the price sensitivity of an organisation’s key target markets and customers (think yield or revenue management). To push the boundaries and gain a competitive advantage, the travel and tourism sector should instead consider investing in Prescriptive AI. And, given the fact that the industry is a people-driven and labour-intensive business, organisations might want to consider applying Prescriptive AI for the benefit of its Human Resources and Talent Management department. In most instances, it would probably be the first time that this specific department would have received so much attention from the C-suite.

Looking ahead – A new Best Practice to Leverage AI in HR and Talent Management?

According to one of the earlier mentioned McKinsey studies, the potential value creation of AI platforms within HR is estimated to reach approximately USD $100 billion. Mostly, experts predict the value creation to come from increased productivity and efficiencies. However, imagine a scenario in which organisations are bolder than that, going beyond work flow automation and labour planning. Based on numerous conversations that AETHOS has had with hotel and restaurant operators and cruise ship companies, for example, there is a clear lack of successful, innovative and fully integrated talent management and succession planning programs. Using just this small component of the HR tool box as an example highlights how much room for improvement there is. To date, a lot of travel and tourism companies complain that they have no detailed overview of their global talent pool, for example – this is to say, who and where are the employees who have been earmarked as “top talent.” In fact, most companies even struggle to come up with a clear, cohesive and common set of competencies that qualify employees to be identified as “top talent” in the first place. Additionally, given the sheer size of most hospitality organisations, their global nature and (typically) decentralised HR functions, companies are struggling to define, recommend and put in motion truly ground-breaking career paths for their employees or to coach executives on the areas that will help them to become better leaders.

AI could change all of that. Ideally, using data that identify and map past and present “peak performers,” identify and track their career paths and combining it with data gathered from the literally hundreds and thousands of interviews that are conducted on an annual basis within these organisations, could help set benchmarks for success. Alongside the previously stated, AI could integrate insights from psychometric assessments, performance reviews, individual development plans and 360-reviews, for example, to paint a much clearer picture of an organisation’s “talent health.” The output from the AI system could range from detailed training programs based on the successful methods identified elsewhere in the organisation to specific recommendations in terms of career paths to take to equip a particular executive with the skill sets needed to excel at a particular, however nuanced, challenge.

An AI platform as such would create a truly unique competitive advantage for an organisation, because, although the technology platform itself might somehow be replicated by competing firms, the inherent value of the system itself would lie in its highly tailored HR and talent management recommendations based on something distinct to the organisation itself, its employees and the organisation’s institutional knowledge. Hospitality companies committed to implementing such an AI platform, and curious enough to find application in the HR and talent management department, would be wise to keep in mind this last piece of advice. Focus on the first mile (i.e., identify and organise the right data) as well as the “last stretch” of the journey (i.e., define how to use the output and how to integrate it from a management point of view).

Clara Stilwell_AETHOS Consulting Group_New York_web

Hotel Food & Beverage – Where to Invest in Talent?
 

It feels as though hotel food and beverage has received a lot of renewed attention in the industry as of late. Twenty years ago, around the turn of the millennium, we experienced a reinvention of the hotel fine dining model with the introduction of big name ‘celebrity’ chefs into hotels through outsourced, leased and/or licensing deals. One of the most prominent of such deals was that made between Blackstone and Gordon Ramsay at Claridge’s in London, which spawned a decade of followers as hotel ownership succumbed to the old adage that “hotels can’t do F&B” and instead opted to give the space over to someone who supposedly could.

In more recent times, we have seen this creativity of thought respond to changing consumer tastes and habits at all price points and to spreading beyond the luxury-end of the market to embrace every hotel segment. Whether it be in the limited service segment with grab-and-go concepts or in the lifestyle sector with hipster coffee bars and rooftop terraces, the attention given to hotel F&B has risen sharply. This renewed focus on what is the second largest revenue generator in a hotel, after rooms, has been heavily driven, in part, by hotel asset managers seeking to maximise the income potential and profitability of every square inch of the property. Furthermore, players such as Hoxton, Soho House, 25Hours and Lime Wood have demonstrated the role that a buzzing F&B operation can contribute to a hotel’s overall brand proposition and performance.

The success of these and other groups in dispelling the myth that F&B is merely a support act to the rooms upstairs has been such that we at AETHOS have seen a push by both ownership groups and hotel management companies to upgrade their F&B (also known as Food and Drink) competencies and talent in the past two years. In many cases this has seen the introduction of a centralised F&B function with leadership that has an increasingly prominent seat at the table for the first time. In their desire to compete not just with other hotels but also with other food and drink venues in their respective markets, hotel groups have looked at hiring professionals from stand-alone restaurant and bar groups to bring some of their destination magic into the hotel environment.

Running a profitable food and drink operation, however, is a challenging business. One only has to see the financial struggles being faced by high street restaurant groups around the UK at present to see how hard it is to balance how much they can justifiably charge the consumer against the rising costs in labour, business rates and produce. Salaries and related payroll costs are the largest expense line on an F&B department’s P&L (a ratio of 44% to revenue according to a CBRE study from 2017), and staff turnover is the highest of all areas of the hotel.

Hotels, faced with the need or desire to upgrade their F&B offering, therefore, do not have much room to manoeuvre in terms of throwing money at the problem. When it comes to the talent component, the chef craze of the early 2000s certainly produced an upswing in the stock of creative culinary talent and their corresponding pay packets within the fine dining market. The more recent shift of attention to making the broader F&B offering more competitive has seen heightened value being placed on specialised skills. In reviewing hotel salary levels at London hotels over the last five years, pay for F&B professionals, both front-of-house and back-of-house, has remained largely static, generally rising with inflation each year. The exceptions to this are to be found in the areas of pastry, tea, wine and spirits.

Afternoon tea may be a particularly London trend but it is one being milked by top London hotels that now start serving earl grey and scones as early as 12pm noon. Accordingly, Head Pastry Chef salaries have grown by an average of 5% per year as have those of the Lobby Lounge Manager, who is typically overseeing this operation. For those wanting something stronger, wine is where it’s at. Between 2014 and today, pay packets of Head Sommeliers in London have gone up by 26%, more than for any other position in F&B. In the bar too specialised skills trump general ability with the pace of growth in mixologist salaries outstripping those of their counterparts.

Owners and operators are today treating hotel F&B as a true, core component of their brand and experience offering rather than as a necessary evil. They are bringing much more creativity and careful thought as to how to execute a competitive strategy that often times both integrates holistically with the hotel as well as standing on its own two feet in its local market. This includes deploying the right resources and brainpower, and we expect to see continued demand for innovative, profit-minded, strategic F&B leadership at ownership and corporate levels as well as for highly specialised practitioners in the field.

Clara Stilwell_AETHOS Consulting Group_New York_web

Hospitality Leadership Solutions Series: The ‘Hospitality X-Factor‘, Foundation Of Long-Term Success

Foundations of Long-Term Success (as published in Hotel Management, March ’19) 

Noted hospitality thought leaders and corporate governance/ performance management experts Kefgen and “Dr. Jim” share common management challenges while providing time-tested, field-tested or just simple “quick-fix” ideas to keep professionals inspired, effective and successful.

“People are the product in the hospitality industry.” This simple principle implies that talent pipeline and continuity of bench strength are critical drivers of business success. If your company’s goal is to identify those who will deliver the strongest return on investment, the sad fact is that you likely are screening applicants or appraising incumbents based on incomplete or misguided performance characteristics. Simply put, most organizations manage talent up and down the organizational chart using metrics tied to short-term or tactical views of performance versus a strategic one.

Academic research and real-world HR practices alike traditionally emphasize task performance, which reflects the technical core of specific jobs, such as software expertise, menu knowledge or compliance with safety and sanitation standards. Domain knowledge is important, but it has limited utility, primarily because the focus is on a narrow (i.e., job-specific) set of tasks and responsibilities. Evaluations based on task competencies alone are tactically oriented and good when “hiring people for today.” However, this approach is ineffective for identifying highly adaptable employees who are best at learning new information, growing with increased role demands and succeeding across different departments, geographies or platforms. “Future-casting” is how we describe this more strategic philosophy of “hiring people for tomorrow.”

AETHOS Consulting Group recently collaborated with Cornell University researchers to investigate characteristics that define individuals who are ripe for future-casting in hospitality settings. Instead of task performance, this study validated the modern concept of contextual performance, which refers to a set of knowledge, skills and attitudes that are relevant across a wide array of roles and settings. For example, the ability to effectively use a point-of-sale system is an example of a task-specific performance dimension because it may be essential for restaurant servers but unnecessary for restaurant cooks. However, teamwork and related behaviours arguably are important to effective job performance for servers and cooks, and many other jobs up and down the org chart, regardless of function-specific tasks. The AETHOS–Cornell study found that there was only one factor (i.e., a single characteristic) that encompassed what previously was thought to be three distinct facets of contextual performance:

  • Conscientiousness initiative, such as persistence and taking on responsibilities that go beyond expectations.
  • Interpersonal support, such as helping and cooperating with others, also known as organizational citizenship behaviour.
  • Organizational support, such as favourably representing the organization and following procedures and rules.

In other words, the three “mini behaviours” above are merely different expressions of just one overarching behaviour that we call the “Hospitality X-Factor.” The study further discovered that this concept is defined by a highly stable (reliability = 0.89, p < 0.001) set of 13 performance attitudes and behaviours, which also are statistically robust regardless of employees’ age and sex. These 13 characteristics can easily be grasped and appreciated when presented as a “word cloud,” which shows the relative importance of each characteristic depicted by text size: the larger the text, the more important the attitude or behaviour.

These research results are not some hypothetical mumbo jumbo—they have rather dramatic and real-world implications, as presented at the 2017 Cornell Hospitality Research Summit. Particularly, the study established that individuals who scored higher on the newly discovered scale for the Hospitality X-Factor also received statistically higher ratings by their supervisors on their overall job performance (r = 0.81, p < 0.001). There also were some tantalizing implications for millennial workers, who have a reputation in pop culture for having a passive work ethic. Contrary to such beliefs, the AETHOS–Cornell study found that, even for younger employees, higher scores on the “Hospitality X-Factor” scale predicted solution-driven behaviours, including “accepting feedback with an open mind, taking on additional responsibilities and persisting in overcoming obstacles to complete their tasks.”

Adaptability and a solution mindset both are inherent to high levels of the X-Factor and allow these employees to be leveraged in many constructive ways by companies over time because these individuals tend to slide more readily and effectively into different roles and geographies, as well as functional settings that are becoming more fluid or dynamic, such as increased telecommuting, temporary office spaces or reliance on mobile technologies.

In short, high X-Factor employees legitimately possess a widely transferrable skill set. Retaining such talent is akin to an “HR annuity” and it pays dividends in promoting productivity and ongoing bench strength in succession plans. The lesson is simple and straightforward—strive to hire and promote people who have a strong capacity for contextual performance, not just domain knowledge. Your service standards, guest satisfaction ratings and net promoter scores should increase in accordance with X Factor levels in your employees … up and down the organizational chart.

 

 

 

 

Clara Stilwell_AETHOS Consulting Group_New York_web

Cross-Industry Hiring Decisions: Recruiting Leaders from the (System Chain) Restaurant Industry – Opportunities and Threats for Lodging Operators to Consider

Hoteliers have historically considered the Food & Beverage (F&B) department as a loss leader, a ‘must-have’ to appease paying hotel guests. To put it bluntly, money was to be made on the rooms side of the business. Yet, times and attitudes have changed. Clients have become more discerning and thirstier for authentic and local experiences to tease their taste buds whilst hoteliers have recognised that their in-house F&B offering can be a point of differentiation.

With a hotel’s restaurant and bar proposition suddenly in the limelight more than ever, the industry is increasingly focusing on how to turn things around and be more profitable in the F&B department. Having already worked on tweaking concepts, luring in guests with celebrity chefs, altering layouts and rolling out open-lobby concepts, the attention has often turned to swapping out senior leadership.

The amount of times AETHOS’ clients from the accommodation sector have sought assistance to poach and retain senior executives specifically from the (system chain) restaurant, contract catering or retail space to “bring on board and instil ‘high street’ thinking” has probably quadrupled in the last 24 months. However, is this really the ‘silver bullet’…?

The High Street Is Dead – Long Live The High Street (Thinking)

It is slightly ironic that the accommodation sector would be looking to find a solution within the retail and high-street space when the very sector is experiencing, at this moment in time, a considerable downturn. Retailers and high-street restaurant chains alike have been sending out profit warnings left, right and centre, and are apparently struggling to keep up with the changes in consumer behaviour.

However, this should not reflect upon the leadership capabilities of executives within this space. And, to be frank, many of the companies are struggling not because they are operationally unsound or because the concept is out-of-date, but because the firms have been overleveraged and/or been pushed too hard by ownership to expand too quickly.

Be that as it may, hoteliers have identified certain skill sets and character traits that such ‘industry outsiders’ could bring to the table that could be very useful within the accommodation sector. When it comes to recruitment and leadership aspects, however, there are many nuances to be considered – the following SWOT illustrates some of them:

It is considered a fact that players in the (system chain) restaurant and retail industry have to fight off tougher competition to stay in business; the churn rate of innovative concepts to stay ahead of the game is a lot higher. Consequently, hoteliers often are of the opinion that leaders in those industry subsegments have developed much stronger commercial acumen than their lodging counterparts. Undoubtedly, the accommodation sector could benefit from such ‘new talent,’ and there is certainly something to be said to promote greater industry ‘cross-pollination’ and a more diversified leadership talent pool within both the lodging and restaurants industry. At times, this indeed can be the ‘silver bullet’ that organisations are looking for to turn around operations and/or departmental profitability.

Yet, AETHOS has observed that not all players in the hotel and lodging industry are as open as they might think to take on board senior leaders from other sectors, nor do they appreciate what it takes financially speaking to secure some of this talent. At face value, they are eager to instil this often-quoted restaurant ‘high-street’ thinking – but they are seemingly easily ‘blinded’ by the upside of recruiting from outside the sector whilst ignoring some of the potential pitfalls. Yet, the accommodation sector would be fooled if it based its hiring decision purely on those perceived strengths of restauranteurs and retailers. Things are more nuanced than that. For example, to innovate and ‘be different,’ many hotel and lodging organisations are specifically looking for restaurant lifestyle experience – yet, often, they forget that such lifestyle restaurant operators are often very small in scale and not as multifaceted as the accommodation business. Therefore, if executives from such ‘disruptors’ are not properly ‘partnered’ with senior leaders who understand the scale and complexity of a globally operating hotel business, things unravel very quickly. The lodging sector should be encouraged to take such ‘leaps of faith’ and pursue new avenues, but it needs to be fully aware of some of the potential ‘limitations’ of restaurant leaders versus the experienced hotel F&B managers – and, above all, proactively manage those.

Clara Stilwell_AETHOS Consulting Group_New York_web

Hospitality Leadership Solutions Series: The ‘Organizational Spinal Cord’

The ‘Organizational Spinal Cord’ – Energizing Brand Winners in Today’s Service-Hospitality Landscape

Going beyond core values and company culture (as published in Hotel Management, January ’19) 

Noted hospitality thought leaders and corporate governance/ performance management experts Kefgen and “Dr. Jim” share common management challenges while providing time-tested, field-tested or just simple “quick-fix” ideas to keep professionals inspired, effective and successful.

Beyond Core Values & Company Culture

Core values reflect beliefs, and company culture reflects attitudes and behaviours – together they define the “heart” and perhaps even the “conscience or soul” of an organization. But, beyond these traditional HR and leadership tenets is the more fundamental concept of what we call the organizational spinal cord.

In medical terms, the spinal cord is a bundle of nerves that go to and from the brain. Its main function is to transmit neural inputs between the brain and the periphery of the body. In business terms, the organizational spinal cord is the nervous system responsible for stimulating and directing critical actions across the entire “body” of an organization. Beliefs and attitudes define why a company is in business and what it stands for, but the spinal cord is about how the company actually implements its strategic and tactical initiatives.

Dissecting the ‘Nervous Systems’ of Brand & Market Leaders

To understand what defines the organizational spinal cord of today’s trend-setting hospitality businesses, AETHOS Consulting Group studied the mission statements, website information, and Glassdoor.com reports of 17 top hospitality companies. The target companies – chosen for their demonstrable branding power, leadership, and market performance – included the following:

What did our review and analysis show? Despite differences among their geographic locations, product and service offerings, market segmentation, and corporate governance structures, there seemed to emerge a set of shared tenets driving their operational practices. Simply stated, we identified six variables that defined a common “organizational spinal cord” across these top companies.

Revealing the ‘Organizational Spinal Cord’ of Top Hospitality Brands

Below is the “spinal cord” we conclude is stimulating today’s top hospitality brands – inside and outside the hotel world. It might appear deceptively simple or intuitive, but notice it consists of six meta-variables (ordered alphabetically), with each defined by two primary variables. This spinal cord forms a “nerve pathway” of key performance indicators (KPIs) that integrates Execution, People, and Cognitive practices.

We might summarize the function or ideal outcome of this spinal cord as “To take control of individual actions (reactive or proactive) to steer solutions that promote coordinated success across the collective of the organization.”

Some Key Takeaways

Using our model as a template for organizational success, hotel companies (and any service-driven companies) can apply several of its insights and learnings to their HR and Leadership practices:

  • Passion to the point of proactivity. Team members up and down the organizational chart are not passive subordinates, but rather their engagement with the business and industry motivate energy and actions that are mainly proactive versus reactive.
  • Solution-driven actions. Team member actions are neither aimless nor superficial, but rather reflect a concern for the individual and collective success of others within and across functions.
  • Sense of control drives accountability. Team members are legitimately empowered to think and act as business owners.
  • Enterprise mindset. Team members empathically understand and respect one another’s perspectives and needs and how these are all interrelated and contribute to the company’s financial and branding success.

Fundamentally, our model suggests that “organizational effectiveness is, in part, directly dependent on assimilating the inputs among separate functions to create and sustain a holistic enterprise mindset” versus promoting an attitude of “silos.”

The traditional hierarchy of yesteryear simply does not work in today’s flatter, dynamic economy. Coupled with how younger workers prefer to work and collaborate, hospitality leaders need to rethink how they connect their operating models to their values and culture. This evidenced-based “organizational spinal cord” is intended to stimulate that very process.

Clara Stilwell_AETHOS Consulting Group_New York_web

The Broken Record Discussion – Boardroom Diversity Within The Restaurant Industry

Participating in countless client board meetings, I can say with confidence that gender diversity within the boardroom leads to first-rate ideation and collaboration. In addition, credible studies conducted by the likes of Boston Consulting Group and McKinsey & Company prove out a strong correlation between a board comprised of a larger female presence and superior results in the boardroom.

While top governance experts have been promoting greater gender diversity for more than a decade, not much has changed within the restaurant industry. These glum statistics say it all.

  • In 2015, of the 392 board seats available among the 45 U.S. public restaurant chains, only 69 were occupied by women (18%).
  • In 2019, of the 414 board seats available among the 51 U.S. public restaurant chains, only 80 were occupied by women (19%).

A 1% increase – seriously? In its simplest form, 80% of all consumer spending is driven by women. Logic dictates a board with more female representation encourages deliberative thinking in critical areas such as strategy culture, governance, risk, diversity and shareholder engagement, especially in the restaurant business.

When a concept is broken, influencers step in; powerful groups such as hedge funds and mutual funds and governmental bodies are pushing for non-negotiable change.

  • In 2018, California mandated that companies incorporated in the state and listed on a major U.S. stock exchange have at least one female director by the end of 2019 and at least three female directors by the end of 2021.
  • Starting in 2020, Institutional Shareholder Services (ISS – the leading proxy advisory firm) will vote “no” on re-election of a Nominating and Governance Chairman if their company does not have at least one woman on their board.

This is not a new concept. In 2008, Norway set quotas of 40% female representation, and other western European countries have set 30% targets for female board representation. A vast majority of our global clients agree that executing on this mandate was not easy, but it has paid off incredibly well.

Although these accountability measures will apply predominantly to public restaurant companies, I implore the thousands of private restaurant organizations to take this initiative very seriously. While the current restaurant C-Suite and succession planning pipeline is male-dominated, I have personally worked with many extraordinary female executives throughout the industry who can deliver incredible value within the boardroom. Private companies’ “keepers of the castle,” such as nominating/governance committees, private equity owners, founders, family offices and executive recruiters, need to hold each other accountable and change their thinking around boardroom diversity initiatives.

Clara Stilwell_AETHOS Consulting Group_New York_web

Understanding The Leadership Challenges Of A Cross-Generational Workforce

In Conversation with Natasha Larkin, VP International Human Resources, Viceroy Hotels

For the first time in history, five generations will soon be working side by side. Executives of the older generation are working longer while the “young guns” are quickly rising through the ranks and gaining a foothold in the professional world as a force to be reckoned with.

At face value, this is a complex, yet rewarding challenge for any leader in the hospitality industry. The level of experience and the, at times, distinct attitudes and character traits which are often attributed to an executive’s tenure within the industry, are often pointed out as the differentiating factors between the generations. Yet, it would be unfair to pigeonhole executives by these factors. In fact, AETHOS has often found that those differentiating character traits are innate and disassociated to the level of experience. Yet, the cross-generational divide does exist – it is driven, though, by different personal drivers and motivations, by different world views and by different communication styles and ways to manage relationships.

AETHOS sat down with Natasha Larkin, Vice President International Human Resources at Viceroy Hotels, to further discuss this topic. Natasha brings a wealth of experience in spearheading HR and talent management initiatives in numerous hospitality organisations, especially in emerging markets in which the cross-generational workforce has been leaving a mark for some time now.

Natasha, there are workshops and courses to help leaders manage a cross-generational workforce. What is your personal advice to leaders in the industry when it comes to better managing such diverse teams?

There is tremendous value in such diversified teams, and the industry should certainly try and leverage this to its advantage. The key to unlocking it lies in understanding the differing motivations of executives of the different generations. In fact, when it comes to inspiring, motivating and incentivising employees who come with their varying degrees of experience and tenure in the industry, it helps to think like an anthropologist. Considering where one’s employees are in their lives and what their needs are is a big part of leading with empathy. It is not necessarily about generations but more about the individual’s personal life ambitions and career goals. Yes, there are some typical generalizations being made about age-related “obligations,” such as needs that come with having children and/or mortgages, for example. Ultimately, though, different generations generally have different priorities. So, understanding the characteristics around those will help industry leaders figure out the best way to delegate work assignments and deadlines. In my experience, considering the personal needs of my employees has certainly greatly increased motivation and loyalty.

Natasha, we commented on the fact that different generations have their own worldviews, formed by their social-culture experience and expectations. At the same time, their environments have taught them certain ways of effectively communicating with one another. How can a leader be effective and embrace and manage those generational differences?

A dynamic leader will acknowledge generational diversity and learn how to communicate effectively with each of those different generations. This can eliminate major conflicts and confusion amongst the workforce. The generations often have their preferred methods of communication but, again, we all learn from one another. Some prefer one-on-one, telephone or written communication, whereas others tend to opt for emails and texts. Generation Z, for example, is generally said to prefer the collaborative interaction of social media. But it is also important to acknowledge that generations differ in the degree of formality they use when communicating. Some are more formal, whereas others will more likely use colloquialisms, abbreviations and even emojis!

Using ‘WhatsApp’, for example, has enabled me to strengthen and foster a better professional relationship with the international teams because we can instantly and more directly, and informally, interact and engage with one another. In general, though, sticking rigidly to one’s own favoured means and style of communication can certainly alienate others. So, although it might not feel natural for a leader, it is good to tailor his or her communication to suit the recipient whenever it is appropriate. For example, I still recall the first time someone picked up a phone during a meeting back in 2008. I was horrified and thought it was rude, but now, in an age of constant connectivity, it is almost an expectation that phones go everywhere and that they can be answered in almost any setting. And, where I used to use exclamation marks in the past, my emails now feature the (occasional!) emoji.

Natasha, it seems adapting to the “cross-generational divide” is key. What is your recipe for success?

Colleagues learn more from one another every single day, and typically, they take away much more from those experiences than from what they might learn through formal training programs, for example. In my view, it is therefore essential to disseminate the collective knowledge of an organisation’s executives and staff members — let’s call it the “institutional knowledge” – to gain a competitive advantage and to strengthen the ties between a company’s different layers of hierarchies and functions. In my experience, reverse mentoring programs work extremely well for this. In essence, it refers to the practice of pairing younger workers with seasoned executives to solve specific business cases/objectives.

For example, in a previous role, an intern assisted my leadership team during a particular busy time period. The intern was someone who had very little experience or “system knowledge” to speak of. However, this individual proved to be extremely valuable in teaching “the old guard” at the corporate executive level a thing or two about social media, technology and employer branding. In fact, I myself spent quite a fair bit of time with Liane, our intern, and was thereby able to significantly improve the way the company spoke and engaged with staff and executives it was looking to hire. She taught me “the lingo” and terminology that might give a better picture of what it was like to work for our organisation and the social media channels on which we might better attract the attention of the type of employees we were after. In fact, we developed a whole program together – but the process was an interdependent one. We needed one another.

In conclusion, I would argue that – should such recipe for success exist – I would put it down to proactively fostering a culture of inclusion, to building bridges between the different generations and to appreciating each and everyone’s contributions and viewpoints. Think of what Accor, for example, is doing with its shadow executive committee, which consists of 13 men and women from different disciplines all under the age of 35. With their ability to question the board and its strategies, tremendous value is being added to the organisation. By inviting all generations to the same table, leaders are empowering their employees and inviting them to form part of the conversation, rather than being bystanders. Being part of the decision-making process hereby allows for “joint successes” – and this creates powerful bonds.

Clara Stilwell_AETHOS Consulting Group_New York_web

Business Cases Strengthen Performance Management: Q&A with Dr. Michelle Crosby

Effectively predicting the future success of job candidates, both internal and external, is challenging at best. Traditionally, this process has relied heavily on interviewing – documented as one of the poorest predictors of on-the-job performance – and, occasionally, the use of psychological testing or biographical information. Yet, there are approaches available that are more effective than using such tactics alone.

In particular, simulations or work samples measure job skills by requiring an individual to demonstrate competency in situations that parallel actual work settings under realistic and standardized conditions. Their primary purpose is to evaluate what a candidate can do rather than what s/he merely knows. One prime example of this type of assessment, which is commonly used with leaders, is a business case.

AETHOS has worked with respected talent consultant Michelle Crosby in delivering business case simulations to organisations in the hospitality sector as a means to assess their internal executive bench strength. We asked Michelle to elaborate further on the benefit of this approach for screening and selection.

AETHOS: “Michelle, what does a business case look like?”

Crosby: “A business case presents candidates with information about a particular business situation or problem and asks them to analyse and prepare a set of recommendations. Rather than create a large number of scenarios to cover a wide array of situations, employers may design a single exercise to measure the general competencies in question (e.g., an interactive role play between the applicant and a trained assessor that measures an applicant’s problem solving, communication and interpersonal skills). Candidate’s scores on these types of assessments are generated by trained assessors who observe the candidate’s behaviour and/or by measuring key outcomes (e.g., ability to accurately diagnosis a business situation or deliver a presentation).”

AETHOS: “How can business cases fit within the overall applicant/candidate due diligence process?”

Crosby: “Business cases can be used effectively as part of the candidate assessment process. Given the level of effort required, it is recommended that the business case be reserved for finalists for the position — the final 3 to 5 candidates who have successfully completed other steps in the process, such as testing and interviewing, but prior to reference checks and other final steps.”

AETHOS: “What type or level of role is most appropriate for the implementation of a business case?

Crosby: “Work samples can be effective for most any level or type of position because, regardless of role, having someone demonstrate they can effectively perform the same types of tasks they will encounter on the job is valuable. Business cases are used most often with more senior leadership positions, although some entry-level management training programs also use them.”

AETHOS: “What are the key steps to be mindful of when conducting/administering business cases?”

Crosby: “Simulations, such as business cases, require careful development to ensure fidelity to the role requirements. Most often this type of case development is done by trained and experienced industrial/organizational psychologists. In addition to creating the materials for the case, developers will also create the assessor guidelines to evaluate performance and provide training for the assessors to ensure a valid and reliable process. These steps are critical to ensure job-relatedness, fairness and consistency in the process. Development of an effective business case can be difficult to do ‘on your own’ and typically requires additional expertise.”

AETHOS: “What is the outcomes research or evidence that business cases work, and what information do they reveal that hiring managers often cannot obtain in other ways?”

Crosby: “Extensive research in the psychological community supports that work samples, such as simulations and business cases, are among the best predictors of future on-the-job performance because they ask candidates to demonstrate their competencies in activities drawn directly from the job itself. In addition, business cases offer high “face validity” to candidates – they look and feel like the job and candidates readily accept them as a result. Often times, candidates may “look good on paper” or “interview well,” but when it comes time to perform, they are found lacking. Simulations help hiring managers get a preview of how the candidate will actually perform in a job-like setting, something that is very hard to do in an interview.”

AETHOS: “How do companies get started in developing or commissioning a business case study?”

Crosby: “As previously explained, development of an assessment requires expertise. If you are interested in exploring how a business case could be used to enhance your current hiring or development process, reach out to an expert to discuss your situation and hiring objectives to learn more about the power of a business case to enhance your selection process.”

Through our experience in running assessment centres on behalf of hospitality groups to either help qualify external candidates or to review incumbent talent for development or succession planning, we have witnessed the clear benefits that business cases can deliver. The exercise of placing individuals into a simulated real-life scenario and monitoring how they evaluate, respond and plan to execute provides valuable metrics and insights that are unobtainable with structured interviews, psychometric assessments and reference-checking alone. We would strongly recommend including a business case in your assessment toolkit ready for deployment when next attempting to predict an executive’s potential for future high performance.

Clara Stilwell_AETHOS Consulting Group_New York_web

Hospitality Leadership Solutions Series: Embrace Charisma, Not Stoicism

On the topic of embracing charisma, not stoicism (as published in Hotel Management, October ’18) 

Noted hospitality thought leaders and corporate governance/ performance management experts Kefgen and “Dr. Jim” share common management challenges while providing time-tested, field-tested or just simple “quick-fix” ideas to keep professionals inspired, effective and successful.

Some of the most memorable and effective mid-managers and senior executives utilize leadership charisma to bolster their personal brands, build alliances, gain buy-in from team members and maximize their influence internally and externally to their organizations. But some of the most charismatic leaders have used these skills to wreak havoc. Think of Charles Manson, Adolf Hitler and David Koresh, to name a few. Today, many leadership pundits promote a style of “servant leadership” and empathy that better serves leaders in a modern world. In “Good to Great,” author James Collins calls it Level 5 Leadership. But all too often the “command-and-control” management style still dominates in many workplaces.

This more transactional and authoritative approach is both outdated and counterproductive in today’s organizational environments. Aspiring leaders are encouraged to reject such management styles that undermine collaboration, flexibility, inspiration and humility. Rather, we encourage others to seize the myriad benefits linked to genuine leadership charisma. Learning, practicing and embodying three specific attitudes or behavioural principles will help to get you there because they provide a tactical definition of what leadership charisma means in practice. They seem simple in principle but can be difficult to exhibit consistently without some conscious effort.

Be mindful of and practice three core attitudes in your interactions up and down the organizational chart and with external stakeholders:

  • Attitude 1: Be engaged with those in front of you. The term “engagement” has somewhat staled, but here it means showing genuine interest in the success of the organization and individual team members. To clarify, interested and engaged people do not multitask, fidget with their smartphones or otherwise dilute their attention and participation during interactions and meetings. Instead, engaged leaders actively listen, proactively comment on others’ contributions and offer constructive feedback or insights to others’ questions.
  • Attitude 2: Be solution-focused with those relying on you. Naysaying is easy to do—but undoing its often ugly and lingering effects is not. Using language and framing your contributions and feedback in constructive and supportive terms typically has a “charismatic effect” on others. People like, respect and gravitate toward those who help to build momentum for success versus slowing it down.
  • Attitude 3: Be relatable with those around you. People want to be heard and understood, but active listening itself is not always enough. Leaders must communicate and interact in ways that best match the target audience. Showing humility, spontaneity and openness equates to being relatable. And constituents bestow credibility and trust to those with whom they can relate.

Leadership charisma does not mean being “larger than life,” a “dynamic speaker,” or having a strong “executive presence.” Rather, leaders fundamentally stand out in their ability to focus on others and not on themselves. This “service to others” is at the core of genuine charisma—it is inspirational in its message and its ability to bring people together to realize a common goal and share in that success. Charisma coupled with substance and empathy is a very powerful tool.

Clara Stilwell_AETHOS Consulting Group_New York_web

Hospitality Leadership Solutions Series: Is Self-Confidence Friend Or Foe?

Is self-confidence friend or foe (as published in Hotel Management, August ’18) 

Noted hospitality thought leaders and corporate governance/ performance management experts Kefgen and “Dr. Jim” share common management challenges while providing time-tested, field-tested or just simple “quick-fix” ideas to keep professionals inspired, effective and successful.

Self-confidence can be a friend and foe to emerging leaders and seasoned executives alike. In many cases, leaders must think and act against popular wisdom, and thus must exhibit confidence and grit in the face of severe—and even very public—opposition. Of course, self-confidence can also lead one down a very dark path of narcissism, nepotism and grandiosity if untampered, much less uncontrolled. As Herbert Joly, CEO of Best Buy told us, arrogance is the foe of self-confidence, not its equal. A healthy ego comprised of a sense of self-competence and self-esteem is important, but it is invariably dangerous if it lacks a corresponding sense of introspection.

Ego is a natural, necessary and constructive part of leadership, but it must be balanced with humility and realism to be focused on bringing positive impacts. In our world of workplace psychology, we call this collective and balanced concept of ego “self-efficacy.” This is a term for a combination of interrelated constructs that include drive, motivation, emotional intelligence, personal control and accountability. Fortunately, it can be fostered via three simple tactics:

  • Reflection before action: The human brain is hardwired with a bias to act impulsively and reactively in favor of self-interests in a given moment. But leadership requires challenging personal assumptions and thinking beyond oneself and the moment to enact decisions that align to a defined strategic outcome—or greater good. One of the easiest and most effective ways to combat internal biases for self-gain is to ask oneself this simple question before taking important business actions: “How will this decision affect my team and the broader business?”
  • Outside wisdom compensates blind-spots:  Successful leaders know the benefits of a “personal board of advisors” when facing challenging issues. These are informal groups that are carefully selected to be (a) small in nature (three to seven members); (b) composed of individuals with markedly diverse skill sets; and (c) independent from a leader’s organization to guard against group-think and internal politics. This impartiality enables leaders to gain completely candid, honest and balanced feedback that transcends the inherent biases, limited life experience and specific skill sets of individual leaders.
  • Give daily gratitude: Leadership is a process of symbiotic success, i.e., leaders focus on making others successful in their roles and careers, and in turn, motivated teams work diligently to bring a shared strategic vision to life and make their leaders look good. Acknowledging this symbiosis via genuine recognition (public and private “thank-you’s” to individuals and teams) reinforced with occasional celebrations of successful teamwork and meeting tangible targets go a long way in gaining others’ currency in the form of their engagement, loyalty and accountability.

Contrary to the stereotypical image of the big-ego CEO portrayed in the media, the best leaders simultaneously exhibit a marked degree of achievement-orientation on one hand, and empathy and humility on the other. Self-confidence is a foe when it serves only you; it is a friend when it fuels service to others.

Clara Stilwell_AETHOS Consulting Group_New York_web

A Leadership Exercise For Diagnosing And Easing Organizational Pain Point

Published as part of the

All companies have pain points during growth or stabilization phases, so leaders face two critical questions: Where are they, and how can we ease them? There is now an evidence-based model to help business leaders confront these issues more efficiently and effectively. It starts with understanding the “joints” in a company’s anatomy — joints being areas where strategic and tactical components in an organization intersect and are thereby particularly vulnerable to friction or bottlenecks.

Anatomy Of Organizational Alignment

To understand these pain points, I led a research group that conducted a three-year study of leadership and organizational dynamics, culminating in The Loneliness of Leadership (purchase required). Our research found that high-performing companies routinely — almost religiously — focused on defining and aligning four crucial joints, or components, of company performance. Called the Performance Matrix, this model identifies Purpose and Values as the drivers of Strategy and Goals, which in turn lead to an organization’s Structure and Tactics, which finally delineate Metrics and Outcomes.

This Performance Matrix can also serve as a useful diagnostic tool to isolate specific pain points within departmental teams across an organization. The trick is to assess candidly the current “look and feel” of an organizational team, and subsequently plot the results against the easy-to-read diagnostic template given below. Indeed, the way a company appears and acts often reveals important insights about its likely pain points, or what organizational psychologists refer to as the sources of misalignment.

Diagnosing And Easing Misalignment

Misalignment can mean many different things within or across teams, and it may vary by the size or growth of a company. All teams and organizations face misalignment at some point — it’s an inevitable part of maturation. Efficiently diagnosing and correcting misalignment is critical to maintaining optimal performance.

The recommended steps to data-gathering inform the eventual diagnosis, and this the most fundamentally important stage in successfully remedying misalignment:

Step 1: Launch an anonymous organizational opinion or climate survey (called a “pulse survey”) at least annually, if not more aggressively on a quarterly basis. Most climate surveys stem from licensed software that over-emphasizes rating scales, very similar to the use of Net Promoter Scores, which is an index ranging from -100 to 100 that measures the willingness of customers to recommend a company’s products or services to others. However, ratings often hide nuanced and insightful information that comes from requesting team members to think and act like owners by sharing their candid, open-ended feedback. Therefore, associate or management surveys should include optional questions that ask about what a team or organization should keep doing, stop doing and start doing.

Step 2: Pair this internal data with external customer experience — or brand promise and experience — data. Again, Net Promoter Scores are important, but they don’t necessarily tell the whole story of customer experiences. Mystery shopping initiatives, systematic analysis of the themes expressed in online or social media reviews, and focus groups can be useful ways to supplement ratings to capture deeper or more nuanced understandings of consumer perceptions. The idea is to gain specific insights into how customers or clients view a department’s (or entire company’s) attitudes or behaviours (i.e., the efficiency or effectiveness of its working dynamics and service quality, combined with the mood or climate of the working environment).

Step 3: Lastly, invite the executive team together to identify the main themes from the uncensored internal and external data, and then plot them against the simple Diagnostic Graph (below). This exercise will help to clarify where, most likely, a specific team or the broader organization is experiencing misalignment across the four joints of its Performance Matrix.

In particular, the Diagnostic Graph summarizes the overall climate or working dynamics (i.e., the “symptoms” of proverbial joint pain) that tend to occur (shown on the Y-axis) when a team or organization lacks specific components of the performance model (shown on the X-axis). The “fix” for the misalignment is straightforward in concept: Fill the gap that corresponds to the organizational joint that is missing, ill-defined or poorly implemented.

The heuristics in the graph obviously can be extrapolated to diagnose more than one point of misalignment. The exact solution selected will naturally depend on a company’s precise gap(s) and the available resources, but it is recommended that leaders leverage the domain knowledge and practical expertise of human resources professionals or external consultants in performance management. These experts are best positioned, in collaboration with executive leadership, to facilitate exercises or working sessions that best “define, refine or align” an organization’s Purpose and Values, Strategy and Goals, Structure and Tactics, and Metrics and Outcomes.

Only once leaders reliably gauge the source of misalignment can meaningful, tangible and measurable actions be taken to course-correct. Maintaining alignment is a continual challenge, but the most profitable companies routinely examine and fine-tune their Performance Matrix. It is simple in principle, yet often complex and difficult in practice. The Diagnostic Graph is one way to simplify the process by guiding proper assessment, sober discussion and realistic action-planning. Many people only see what they want to see, but data-driven leaders who are intent on positive influence will look at the heuristics in the graph with candour and humility and learn at a big-picture level where to profitably “up the game.”

Clara Stilwell_AETHOS Consulting Group_New York_web

Hospitality Leadership Solutions Series: Reducing Unnecessary Workplace Stress

Reducing Unnecessary Workplace Stress (as published in Hotel Management, July ’18) 

Noted hospitality thought leaders and corporate governance/ performance management experts Kefgen and “Dr. Jim” share common management challenges while providing time-tested, field-tested or just simple “quick-fix” ideas to keep professionals inspired, effective and successful.

This era of disruption, innovation and increased global competition means that businesses arguably endure more demands on their time, budget and human resources than ever. Some of the stress in organizations is inherent to today’s market conditions and customer expectations; however, leaders must constantly be wary of self-inflicted wounds. Here, we mean the kind of sustained but avoidable workplace stress that demotivates teams, causes unwanted turnover, reduces productivity and decreases profitability. Here are six strategies that can help guard against self-inflicted stress in a team or entire organization.

These tactics may seem overly simple in principle, but they indeed work when used consistently:

Focus on Clear and Concise Goals

When everyone is on board and heading in the right direction, unnecessary stress is eliminated. This concept is brought to pixelated life in “Finding Nemo.” With only two words, “swim down,” Nemo focused the attentions and efforts of hundreds of frantic fish on a clear, unequivocal goal: escaping a one-way trip to the seafood section of the grocery store. The unified force of Nemo and his brethren broke the line, released the net and saved them all a fate braised in butter and garnished with lemon. It is a wonderfully animated example of the motivating power of clear and concise goals, and their ability to turn chaos into results.

Use Time-Blocking Strategies

Multitasking kills productivity. Though developed as a means of combating the ever-increasing complexity of life, multitasking often results in perpetual oscillations between starting and stopping without ever completing a single task. Time-blocking, on the other hand, allows employees to start, focus and finish. Time-blocking involves grouping daily tasks into a handful of categories and assigning each category a time to be worked on. Time-blocking restores an employee’s control over their working hours, and promotes efficiency and proper prioritization.

Show Appreciation

Showing your appreciation is the easiest and least costly way to reduce employee stress. Unfortunately, it is also one of the easiest things to forget during hectic times. If showing appreciation isn’t a natural strength, schedule a reminder in your calendar.

Be Spontaneous, and Have Fun Periodically 

Periodic random activities like a “make your own ice cream” party, impromptu lunch at a restaurant, themed gift cards, office Olympics, etc. are great ways to create fun energy and break the tension in an environment that is normally stressful. When planning events, be sure to consider the demographics and gastrointestinal sensitivities of your team.

Implement the “Forced 40”

When your team is consistently working more than 50 hours a week, forcing them to only work 40 for one week will rejuvenate their spirits and bring motivation back to the team. When elite athletes train for maximum performance, periods of rest play as important a role as periods of pushing one’s limits. When a muscle is broken down and stretched to its limits, it is through rest that the fibres are able to adapt and grow stronger for the next challenge. Consider the forced 40 as a recharge week. Now that we are entering the new era of personal digital assistants and constant availability, our responsibility to make sure our employees take the necessary down time is becoming more important.

Build Awareness and Solutions Around Major Time Wasters

Educate employees on solutions to time-wasters by offering training or fun seminars on the following top 20 topics. These topics also foster productive conversations for team meetings or retreats:

  • External time-wasters: Telephone interruptions, meetings, visitors, socializing, lack of information, excessive paperwork, communication breakdown, lack of policies and procedures, lack of competent personnel and red tape.
  • Internal time-wasters: Procrastination, failure to delegate, unclear objectives, failure to set priorities, crisis management, failure to plan, poor scheduling, lack of self discipline, attempting to do too much at once and lack of relevant skills.
Clara Stilwell_AETHOS Consulting Group_New York_web

The Strong L&D Impact of Employee Bilingualism: A Case Study with Erin Janklow, CEO Entrada

“Learning and Development (L&D)” is HR speak for “ongoing education” – i.e., building or refining one’s skill set to enhance personal job security and broader marketability. These initiatives take many forms, such as traditional classroom or seminar presentations; personal coaching or mentoring; structured job-shadowing and cross-training; and “on demand” technology-driven methods like the eCornell platform, LinkedIn learning tutorials or Khan Academy videos. Naturally, companies should select the specific solutions or platforms that are best for them based on the competencies or domain knowledge to be cultivated, the learning styles of the intended audience, and the available financial or time resources to invest in solutions.

The ROI of L&D

The right L&D offerings benefit both employees and employers. First, it’s long been recognized that employees regard L&D opportunities as positive incentives and retention drivers. However, it’s perhaps less known that companies investing in L&D resources have seen a 24% increase in productivity and performance due to learning, according to reports from the research and advisory organization TowardsMaturity. Further statistics drive home the business case:

  • Companies that offer comprehensive training programs have 218% higher income per employee than companies without formalized training;
  • Research shows that a full 40% of employees who don’t receive the necessary job training to become effective will leave their positions within the first year;
  • Top companies are three times more likely than the average to report achieving benefits related to growth in competitive climates. They are almost 3x as likely to report that learning innovation has resulted in an impact on business innovation (39% vs 14% average) and 2x as likely to report improvement with staff motivation (55% vs 23%).

Wherever situated on the organizational chart, arguably the highest-impact way individuals can increase their current and future marketability is by gaining the ability to speak and understand two languages (“bilingualism”), or even more (“multilingualism”). This is particularly pertinent for line-level workers in the service-hospitality industry, where customer interactions can make or break brand promises and hence affect business profitability. One company – Entrada – has recently made a strong entrance to the industry with the mission to make learning and development “real time”, applied, and directly related to more positive guest outcomes. AETHOS has been aware of Entrada for some time – their CEO Erin Janklow is a familiar face at key HR, research and technology conferences. Her passion for their product and service is apparent, and it offers a strong business case for companies to promote learning other languages. To learn more about Entrada’s integrated learning platform, click here.

Erin Janklow, Founder & CEO – Entrada

Q: What “pain point” does the Entrada system address?

Entrada improves retention, drives recruitment, and improves the guest experience through our unique on-the-job ESL training program. Hiring and retaining hourly back of house roles is time consuming and expensive, and once hired, managing a multinational staff provides operational challenges that take conversant employees and supervisors away from their outlined responsibilities.

Our unique TalkBack® Method effectively shifts time, making it possible for your staff to learn English at the same time that they are working. This employee benefit tool improves both the personal and professional lives of your teams.

The war for talent and retention of line level staff are challenges that Entrada is built to solve. Empowering staff with language skills instils morale, boosts your brand image, and creates a cohesive company culture while simultaneously improving the service provided to guests. Adding an empowering language tool like Entrada brings your core values to life in a meaningful way.

Q: How does the system work, and how is it different than other commercially available software like ‘Rosetta Stone’?

Entrada is a tech-enabled company that teaches service industry workers English in 100 days, while they work, using our scientifically-designed TalkBack® Method and wearable hardware.

Many service roles are physically repetitive, which allows staff to work and learn simultaneously. As a housekeeper makes a bed, for example, she also wears, listens, and talks back to our program – without impacting productivity. Instruction is delivered in the native language (currently, Spanish) before teaching learners how to TalkBack® the words and phrases in English.

In addition to audio lessons, we provide learners with engagement tools and critical thinking lessons so that your guest experience improves. Our blended approach remains accessible for a tech averse learner group and provides valuable employee insight to management.

Our delivery method flips the current model: Instead of bilingual supervisors, we create a bilingual workforce. Current language programs require active engagement from learners (think: sitting in front of a screen/requiring dedicated time to learning). Our on the job, on the job training, is uniquely effective.

Patti Pegoraro, Director of People Services at Two Roads Hospitality, reported, “Entrada is an excellent program for the team that has significantly increased our morale! It’s great to see employees’ confidence grow as they develop English skills. Staff that previously shirked away from English conversations now engage with me in the mornings.  I recommend Entrada – not only for English, but for building culture as well!”

Q: Who can benefit from this system?

Entrada is designed to benefit everyone in the hotel ecosystem. Yep: We mean it, and we deliver.

  • GM: Provide a superior guest experience by having a more consistent and more engaged staff, evangelize brand values, and be recognized for providing outstanding service in the region. Provide 5-star service by creating confident staff to engage in authentic guest interactions.
  • HR: Spend less time and resources on recruitment, creating time to focus on benefits and processes that entice all staff to stay. The cost savings resulting from increased retention allows time to explore future initiatives.
  • Directors of Housekeeping, Operations: Spend less time solving operational challenges and/or translating for ad-hoc guest needs. Increase appreciation of managers through use of Entrada, which results in a highly engaged back of house crew.
  • Front of House and Millennials: Including a mission-driven initiative instills pride in the work place, improved service instills pride in the service that all staff can provide.
  • Back of House: Build confidence and skills to succeed both in and out of the workplace.
  • Customers: Engage in authentic connections and interactions with all employees!

Learners report an improved ability to interact with guests. Entrada graduate Maria noted, “I’m most surprised that I’m interacting with guests more! Before, if they asked for directions I would either point, or shrug and walk away. Now, I have the words to say, “it’s down the hall, to the right, etc”.

Q: What success metrics have you documented with your system?

Entrada’s tools have been designed specifically for service industry employees. We see an average engagement and completion rate of 70% from our learners – meaning that at least 70% of your staff will continue using the program in its 100-day entirety. The industry average completion rate for ESL courses is merely 15%.

We see a 107% average increase in conversational skills, with the largest advances coming from pronunciation, comprehension, the ability to ask and respond to questions, and confidence.

Ana, a housekeeper at the Embassy Suites Chicago North Shore/Deerfield, reported,

“The delivery man brought a shipment of soap to the hotel. He almost left the heavy package outside, which would have been very difficult for me to move to its proper location. As the man turned to walk away I found myself saying, ‘Can you put the box inside, please?”” Surprised at how easily the delivery man understood her, she walked away with increased confidence in her English ability and reduced the required workload for herself and her colleagues.

Q: How do you anticipate that Entrada will innovate the hospitality industry?  

The service industry is ripe for innovation: we have grown to accept “band aid solutions” to language instead of addressing the core root of the challenges their staff faces. There is a latent assumption that bilingual supervisors will manage, that learning a language as an adult is “just too hard”, and that poor customer service stemming from miscommunication simply “comes with the job”. Simply, that could not be further from the truth.

A confident and communicative workforce improves operations and increases retention, and simultaneously enables staff to enter their communities equipped and empowered to succeed.

When implemented successfully, Corporate Social Responsibility initiatives can lead to a 20% potential increase in future sales revenue. Within three months of program use, a guest reported in the post-stay survey, “Great job at this hotel with the housekeeping staff and their English skills.”

We would love to see the day when all staff members can serve guests efficiently and confidently. People travel for cultural exchange and for business, and enhanced communication only adds to this experience. With time, we will expand into additional languages and provide training for supervisors and managers to provide lifelong learning opportunities to everyone.

Final Take-Aways

We emphasize that promoting bilingualism aligns to the values of wellness and social-consciousness that are increasingly extolled by the hospitality industry, wherein people and service quality are critical differentiators. In short, bilingualism builds better human beings.

For instance, two-thirds of global company executives reported in a large-scale survey in The Economist that the multicultural nature of their teams increases organizational innovation. Further statistics underscore this:

  • Exports in the UK comprise approximately 30% of UK GDP. It is estimated that the UK was losing around £50 billion per annum because of language or cultural ignorance;
  • 39.5% of the UK’s international businesses lost business due to lack of cultural understanding among employees;
  • In the US, one in six businesses (where 33% of mid- and large-size companies had global operations or serve multilingual/multicultural clientele) had lost business due to a lack of personnel with language skills and multicultural experience.

You can now understand AETHOS’ enthusiasm and respect for the Entrada system. Simply put, it stands out as a rare example of a single techno-initiative or program that successfully meshes profitable business practices and people practices for the greater good and ROI of all.

Clara Stilwell_AETHOS Consulting Group_New York_web

Hospitality Leadership Solutions Series: Goal and Priority Setting

Goal and Priority Setting (as published in Hotel Management, June ’18) 

Noted hospitality thought leaders and corporate governance/ performance management experts Kefgen and “Dr. Jim” share common management challenges while providing time-tested, field-tested or just simple “quick-fix” ideas to keep professionals inspired, effective and successful.

The Flaw

New leaders eager to prove themselves by taking a plethora of visible and impactful decisions and actions – aka “Caesar on a march” – can fall into a trap of doing much but accomplishing little. With respect to setting priorities and achieving goals, the problem is that even seasoned leaders can confuse important and urgent, as well as fail to realize they cannot do everything.

Important means a task needs to be done, whereas urgent means it must be done immediately. Knowing the difference between the two simplifies priorities. Leaders can forget in the moment that tasks and projects have a domino effect. If you do one task, yet fail to do another, you may have wasted effort on the first task. There are seven tactics that make goal- and priority-setting easier for you and others. Read about these below.

 

The Fix

  • Begin with the end in mind. Organizations often fail to achieve goals and strategic planning targets that are set top down and by executives who lack crucial information and are out of touch with staff challenges. Such goals are unrealistic and fail to consider organization resources and capabilities. In this situation, employees do not believe that the rewards they will receive for goal accomplishment will equal the energy they invest to achieve them.
  • Concentrate on doing the right thing, then do it right. Noted management expert Peter Drucker says, “doing the right thing is more important than doing things right.” Doing the right thing is effectiveness; doing things right is efficiency. Focus first on effectiveness (identifying what the right thing to do is), then concentrate on efficiency (doing it right). All other things being equal: Focus on opportunities and breakthroughs; the future, not the past; priorities that support your values and are of the biggest human impact; the long-term and system-wide solutions; problem-preventing; and finally, on feeding your elephants (big important stuff) and starving the ants (trivia).
  • Consider reducing the number of face-to-face meetings. Ask yourself if a meeting is absolutely necessary or will a phone call do just as well? If a face-to-face meeting is a must, try a “standup meeting” in which participants stand rather than sit; this will help to guarantee that important issues are addressed and idle time is avoided. Take care not to make the mistake of not inviting all the correct people to the meeting or becoming resistant to appropriate meetings. Meetings are not the exclusive domain of upper management. Bring in everyone who has a stake first and then reunite periodically thereafter. Once the goals, parameters, considerations and hazards are identified, smaller teams can meet as frequently as needed. The time, money and quality lost to communication breakdowns when key players have not been included and which usually requires with numerous, random, redundant secondary meetings is so much harder to earn back than any money spent in appropriately planned and staffed meetings.
  • Too many goals make nothing a priority. When an employee wears too many hats at work, s/he can become overwhelmed with the sheer number of goals s/he is expected to meet. People with too many goals experience these issues: 1) they never feel as if they accomplish a complete task; 2) it is difficult to tie their goal accomplishment to a reward and recognition system that recognizes their accomplishments; 3) they do not know what is most important to accomplish next; 4) they fall prey to the “check it off the list” syndrome in which they check tasks off their list before the actions have been integrated by the organization. Work with the employee to ensure they know their specific work priorities. Each team member works together to bring about a larger, unified outcome. Focus all of your energies on your part of that larger outcome.
  • Avoid posturing or “show goals.” It is not uncommon for some organizations to create goals based on the desire to impress or mislead outside groups or to avoid serious analysis of the company and the marketplace. In the end, these “show goals” can then be used by senior management to pass the buck and the blame for the failure to meet the goals. Their effect on employees is substantial. They produce serious morale and competency-questioning issues.
  • Maximize people’s natural rhythms. Help your employee to identify their energy flows to best manage their time and tasks. Work with the employee to modify their work schedule to maximize their most energetic and focused periods of their day.
  • Consider the environmental and organizational factors impacting the employee’s work. Go to the person’s work area with them and identify ways to make their work environment more conducive to focusing and getting tasks done. The employee may need help managing their filing or perhaps there is too little work space around their workstation (this often happens if the computer monitor is on the same side of the desk as the employee’s dominate hand; i.e., if a right-hander has their monitor on the right side of the desk, that leaves no work room in the area of the employee’s most efficient hand). Set an action plan for making changes to their work environment and follow up with the employee.

Finally, share this simple set of heuristics with your team. It can guide them to look for the most effective solutions. All other things being equal:

  • Focus on opportunity
  • Focus on the future, not the past
  • Focus on priorities that support your values
  • Focus on long-term fixes rather than the “quick fix”
  • Focus on problem-preventing rather than problem-solving
  • Focus on system-wide solutions rather than a local solution
  • Focus on high-impact priorities that matter to a lot of people
  • Focus on breakthroughs rather than perfecting the status quo
  • Focus on feeding your elephants (big important stuff) and starving the ants (trivia)
Clara Stilwell_AETHOS Consulting Group_New York_web

A Welcomed Metamorphosis of the Chief Human Resources Officer Function

In the late 19th and early 20th century, the French-American duo of mathematicians Henri Poincaré and Norbert Wiener investigated how minor changes can trigger an unpredictable chain of events that lead to significant consequences on a grander scale. This phenomenon is known today as the “Butterfly Effect” – a term coined in the mid-1970s by another American mathematician, Edward Norton. Norton was also a pioneer in “Chaos Theory”, studying the behaviour of dynamical systems that are sensitive to fluctuations in their internal and external conditions. And, what are today’s businesses and organisations around the world if not just that? They are dynamical entities adapting to the flux of markets and economies, as well as the shifting priorities or interests of customers and stakeholders. They also depend on their management teams and leaders to take the right actions to ensure success in the future. Small calibrations today can thus lead to big impacts tomorrow …

Profiling the Chief Human Resources Officer: A New Type Of ‘Experience Engineer’

Following a breakfast meeting with a senior executive from the UK restaurant industry, my attention was drawn to the fact that a small number of Food & Beverage businesses has started to hire marketers for their most senior human resource roles. Although this is not yet an overwhelming trend in hospitality, I wondered whether this approach made sense from a competency perspective. And, if so, would others follow suit? Could this be such a “butterfly moment” – one that defines roles to come as well as HR and talent management best practices for the greater hospitality industry?

To address these questions, a gap analysis was needed which looks at the core competencies of senior hospitality executives holding leadership functions in marketing and compares those to the success profiles of human resources executives. Some intriguing insights emerged. Instead of looking at personality traits, AETHOS’ proprietary psychometric assessment – 20|20 Skills™ – provides an overview of and benchmarks an individual’s ten core competencies that predict job performance specifically in service-driven cultures:

  • Execution skills – measuring Self-effectiveness, Loyalty to Company, Process Orientation and Service Orientation;
  • People skills – measuring Team Building, Sense of Humour, Leadership, and Sensitivity to Diversity;
  • Cognitive skills – measuring Creativity and Problem Solving.

The aggregate 20|20 Skills profiles for HR versus marketing show both function leaders are well matched on Leadership, Creativity, Self-Efficacy, Sensitivity to Diversity, Humour and Service Orientation. Both the HR and marketing executives profile here as ‘achievers’, i.e. A-players – and strong generalists – compared to the hospitality industry’s general success profile.

Seemingly, then, there are many transferable skills between the two roles. Yet, there are also a few nuances worth exploring. Firstly, marketers are scoring higher on process orientation and problem solving and therefore depict stronger analytical acumen as well as a more metric driven mentality. In comparison, HR is slightly less rigid in its thinking and includes more often gut-reactions into its decision-making process. Secondly, marketers are scoring lower on company loyalty and thus more entrepreneurial and opportunistic. Their attitude is to fail as quickly as possible, learn from mistakes and move on and innovate. HR, on the other hand, is more concerned about long-term loyalty and engagement.

At face value, some of these results may surprise – for example, one might have assumed that marketers should be less process-driven and depict a stronger creative streak with HR executives being the ones concerned about policies and procedures. The fact of the matter is, however, that in today’s world marketing leaders are more aligned to quantitative problem solving and strategy (e.g. digital marketing, demand generation) and less about creative endeavours per se. Also, with the split of the traditional HR function, now being much more fragmented into administration and payroll, recruitment and training as well as retention and engagement, human resources executives have become more nimble and adaptable.

 

Analytical and Metric Driven – New CHROs Focusing on Aligning Business Strategies to People Practices

Having compared the success profiles of marketers with HR pros, one might suspect that – given the overlap of core competencies – companies that have started to recruit marketers into HR roles are on to something. At least it makes conceptual sense, because both marketers and human resources professionals are arguably ‘experience engineers’, i.e. executives who are concerned about driving and sustaining loyalty and engagement (the difference is that the marketing leader does so externally and the HR professional with a focus on the internal stakeholders).

Assuming that the recruitment of commercial marketers for CHRO positions is one of those “butterfly moments,” I thought about the possible consequences for the dynamic system, i.e. the organisations themselves. As the psychometrics suggest, one possible implication of this approach might be that HR departments will become more data-driven or even formulaic – with the new type of leadership increasingly or exclusively motivated by outcome metrics and business cases, possibly at the expense of relationships or people-first culture-building. Organisations might therefore run the risk of ‘commoditising’ the HR function, unless there is a conscious effort to maintain and foster a service-driven mentality. Given the analytical background of marketers, and their tendency to think in business metrics, one might also expect such new CHRO profiles asking for bigger budgets to be spend on testing, analysis and other initiatives to optimise people metrics for business outcomes.

Commercial CHROs will therefore add the most value to organisations that strive to make better business sense of employee engagement, guest satisfaction, loyalty programs etc… A word of caution goes to those companies whose HR-departments are solely expected to (re-)define and/or hone brand loyalty and employee retention, and whose HR executives are supposed to look after the status quo and not ‘rattle the cage’. Yet, in light of the general market conditions and the hospitality industry’s competitiveness, company leaders would be unwise to pursue such talent management and HR strategies which are centred around the unwavering believe in predictability and business certainty. The truth is that today’s business world is one of rapid, and chaotic, change. Commercial CHROs should be best suited to weather the proverbial storms.

Clara Stilwell_AETHOS Consulting Group_New York_web

Inside The Wild Brains Of Trailblazing Leaders

Published as part of the

Over the years spent collaborating on in-depth studies of hospitality leadership — including over 100 analytical interviews and assessment tests — my interest and co-research in the “anatomy” of leadership and the interplay of nature versus nurture has led to several studies published in the North American Journal of Psychology and the Cornell Hospitality Quarterly. Our work in this area has consistently found that leadership is more a mental state than a professional role or pursuit. The human brain has evolved over tens of thousands of years into an approximately-three-pound organic computer whose sole task is to make things more certain.

Gaining mastery and a sense of control over our environment is, therefore, an inherent motivation. But beyond the brain’s complex sophistication and capabilities, our research suggests that something remarkable happens in the minds of trailblazing leaders, which parallels near “superhuman” flexibility and proficiency in their cognitive abilities. The social and medical sciences refer to this phenomenon as mental fluidity or enhanced neuroplasticity, and it implies a special hardwiring in the circuitry of the brain.

Whereas normal brains filter information to maintain a functional segregation among perceptions, thoughts and feelings, the brains of superior leaders with frequent so-called flashes of genius or entrepreneurial intuition instead seem to show more unfiltered cross-talk among different brain regions. The result is a “wild brain” with the raw capacity to perceive and process external and internal information beyond the capabilities of average people.

This mental state has competitive advantages, because one of the major consequences are keen abilities both to think in the moment and anticipate future circumstances or outcomes. This competency is seen across many dimensions of professional performance. Outstanding predictive abilities, for instance among elite athletes, are based on the highly efficient unconscious processing of sensory cues and exceptionally accurate mental algorithms. This also explains aspects of superior performance in highly competitive, creative and fast-changing roles or fields.

Wild Brains: The Good, Bad And The Ugly 
Of course, wild brains also come with challenges. A critical but often unrecognized aspect of leadership development is learning to harness and focus the brain. This is easier said than done, but self-awareness and adopting certain habits go a long way in leveraging the strengths and mitigating the weaknesses.

  1. If you are a trailblazer, you tend to promote abstract, creative, intuitive and innovative modes of thinking. In practice, this means that most people up and down the organizational chart will have difficulty following your train of thought or keeping pace with your cognitive gymnastics. The best defence here is to routinely show patience with others by encouraging questions and taking time to fully explain the rationale behind your decisions and actions.
  2. It also helps if you set realistic performance expectations with others. Remember that very few people will share your work ethic, brainstorms or the need for mental stimulations. The key is to set expectations based on what they can do, not what you can do.
  3. The 24/7 nature of a trailblazer brain means that you are more susceptible to myriad chronic stressors, including depression, impulsivity, distractibility, moodiness and psychological tensions that manifest as physical symptoms. Moreover, many famous leaders have had infamous private lives characterized by extremism, hedonism, impulsivity or the blatant disregard for social norms. Recognizing these symptoms and characteristics is key to finding productive outlets to relieve the pressure.
  4. Our research has found that trailblazers benefit greatly from having a personal coach, mentor or a “personal board of advisors.” If you exhibit these aspects of leadership, don’t be afraid to seek the assistance of others. Remember that asking for help is a sign of maturity, not weakness. There are many paradoxes inherent to successful leadership, and in the end, the things that make you technically brilliant are often the same things that can derail your career. Self-awareness is knowledge, and knowledge is power.
Clara Stilwell_AETHOS Consulting Group_New York_web

Hospitality Leadership Solutions Series: Effective Teamwork

Fostering Effective Teamwork (as published in Hotel Management, May ’18) 

Noted hospitality thought leaders and corporate governance/ performance management experts Kefgen and “Dr. Jim” share common management challenges while providing time-tested, field-tested or just simple “quick-fix” ideas to keep professionals inspired, effective and successful.

The Flaw

Many leaders (especially new ones) are not aware of the following four characteristics of successful teams, much less how they work together to promote successful team dynamics:

  • Objectives – the team must understand and accept common objectives.
  • Roles – each team member must know how he/she fits into the overall picture.
  • Guidelines – team members must understand the systems and methods to be used to accomplish goals.
  • Relationships – team members must develop trust and respect for one another before they can come together for a common cause.

Individuals will only think and act as “managers when focusing on the tactical aspects of business, or the first three characteristics. These speak more to the “cognitive engagement” of team members. However, managers evolve into “leaders” when they focus on maximizing the most weighted characteristic, i.e., relationships. Indeed, research shows that “emotional engagement” with a brand promise or mission drives the greatest loyalty and performance. This lesson is typically not taught in business programs, but rather is learned the hard way during one’s climb up the corporate ladder. Save some time by using the cheat sheet below to foster more effective teamwork.

The Fix

As a leader, it is your responsibility to build and maintain layers of positive relationships throughout the organization.
Individual team members – Show that you care and will lend support if needed.

  • Team as a whole – Provide direction, guidance and inspiration.
  • Relationships among members of the team – Promote positive, productive relationships.
  • Relationships between your team and the entirety of the company – Team goals should go hand-in-hand with company objectives.

Now that you’ve developed positive relationships with your employees, you should have no problem getting high productivity from your team. Here are a few tactics to increase productivity through effective teamwork:

  • Make the work environment enjoyable.
  • Have fun together.
  • Provide training so individuals feel they are being invested in, as well as staying current and marketable in their competency set.
  • Give the team a common cause.
  • Cultivate interdependence among team members.
  • Team members should know each other and understand each other’s strengths, so they can trust and leverage each other as needed.
  • Use challenges to strengthen bonds. It is a well-known psychological principle that rivals often become allies when working on solutions to common problems.
  • Use a buddy system to begin working together, especially when helping to orient and on-board new hires.
  • Develop a team slogan, symbol, etc., if appropriate.
  • Recognize both team and individual accomplishments in public ways, as appropriate.

Promoting teamwork can be very fulfilling for everyone involved… it strengthens employee bonds and enhances your leadership abilities.

Clara Stilwell_AETHOS Consulting Group_New York_web

In tackling GDPR Do Not Overlook Your Employer Responsibilities

GDPR. Four letters of the alphabet that are proving to represent one of the biggest challenges facing businesses in 2018. The General Data Protection Regulation (GDPR) comes into effect on 25th May across the European Union (including the UK) and impacts any organisation that operates within the EU and/or that processes data of EU citizens wherever they may be in the world. How organisations hold, store and process personal data will now be subject to higher, and more consistent, scrutiny with the potential penalty for non-compliance being significant. Much attention is already being given to how customer data is handled under GDPR especially in the hospitality sector where hotels in particular process a high volume of personal information and payment data. GDPR does not only however impact how a business interacts with its external customers but also how it manages data internally with regards to its employees. In an industry such as hospitality where the labour force is so often highly diverse and comprised of multiple nationalities very few organisations will be unaffected by GDPR. To explore the burden being placed on employers we spoke to Adele Martins, Partner and head of the Employment Department at law firm Magrath Sheldrick LLP.

Adele, how far does GDPR go beyond existing data protection regulations when it comes to how employees’ details are handled?

The GDPR is considerably stricter in its requirements than the UK’s Data Protection Act (DPA). Whilst there are some similarities in relation to the categories of data, the obligations placed on controllers / processors of personal data are stricter, and the penalties very considerably higher. The publicity around the GDPR is a good thing as it will encourage businesses to take their actions in relation to data much more seriously.

Personal Data is enormously valuable and I think people are playing catch up. Individuals do not realise how / why / where their data is processed and transferred and with technology ever evolving I think creating awareness and enabling people to make informed choices about their data is vital. As such, the requirement for Privacy Notices to be issued to data subjects before data is captured and processed is a great leap forward.

What qualifies as ‘sensitive data’?

Sensitive data is just that – information about you that is more sensitive and consequentially you are likely to want to keep more confidential. For example most people will not regard their name as particularly sensitive data – many will be on employer’s websites as mine is on ours. However people will regard information about their health or their sexual orientation as more confidential.

Technically Sensitive Personal Data or Special Categories of Data include information about a person’s race or ethnic origin, their health or sex life, their sexual orientation, political opinions, religious / philosophical beliefs, trade union membership and genetic and biometric data.

How is employee consent defined and best obtained?

The GDPR makes it clear that consent must be freely given, specific, informed and unambiguous. It can no longer be implied from silence, pre-ticked boxes or inactivity. The difficulty with the employment relationship is the inequality of bargaining power between employee and employer, suggesting that the old mechanism of including an agreement to “consent” to the processing of personal data in an employment contract is no longer likely to be enforceable. Can it really be said to be freely given if execution of the contract is conditional upon it?

My recommendation is a separate, clearly draft Privacy Notice, which sets out all of the information that the employee is required to be given but is distinct and separate from their contract of employment. The contract can, of course, refer to the employer’s privacy policy or data protection policy, but it is sensible for the issue of “consent” to be separate. Ideally the Privacy Notice will require the employee to acknowledge that they have read and understood it, and separately request consent for processing.

Ultimately an employer wants to be able to rely on an alternative justification for the processing, such as processing the data to perform obligations under a contract of employment; in accordance with the employer’s legitimate interests or to comply with the employer’s legal obligations. Consent should not be regarded as the goal, but rather the icing on the cake. That said, explicit consent is required for the processing of sensitive / special categories of data, cross border transfers or decisions based on automated processing. I am advising a “consent plus X” approach.

A lot of businesses have external suppliers who are exposed to personal employee information, for example payroll providers. With which party does responsibility for GDPR compliance lie?

That’s a great question and one causing some consternation. However the simple answer is …. Both! One will be the controller (normally the party that collects the data and makes decisions as to what to do with it) and the other will be the processor (the party that is passed the data by the controller and essentially told what to do with it). Both controllers and processors have extensive obligations under the GDPR. The advice to controllers must be to ensure that they have appropriate agreements in place with their providers to ensure that those providers (processors) are contractually obliged to ensure that they are processing data appropriately.

What are your guidelines around how ex-employee data is best handled? For how long should data be stored before being destroyed?

Again, something that is causing concern. Many HR professionals have a habit of retaining all data for as long as possible. However, under the GDPR that is just not appropriate any more. Anyone responsible for processing personal data needs to ask themselves how long they actually need the information for and what purpose it could realistically have.

In relation to employment records, there is an argument for holding a substantial amount of information for some time after employment ends – on the grounds that a breach of contract claim could be brought up to 6 years after employment ends and a claim for personal injury for up to 3 years from the date of injury. However, as the time limit for Employment Tribunal claims for unfair dismissal, discrimination etc. is considerably less one should question the purpose of holding information for longer. For example, clearly there is a rationale for retaining the contract of employment and other contractual information for over 6 years (maybe 6.5 years) in order to defend a claim for breach. However, whilst there may be a justification for holding records of sick days and sick pay for that period, i.e. to defend a breach of contract claim, would you really need the information as to the reasons for those sick days? Would you need information on someone’s sexual orientation, or race?

Employers need to undertake proper data audits and consider what information they need to hold on to and why. After 6.5 years I can see no justification for holding any information other than dates of employment and position held for reference purposes.

If you are, say, a hotel in New York and you employ a French national in the kitchen are you subject to GDPR? What rights does the employee have in that situation?

The GDPR is interesting (I accept not to everyone but bear with me) in that it stems from the EU, and is designed to protect EU nationals BUT has implications worldwide. The GDPR applies to data controllers / processors outside of the EU if they are offering goods / services to individuals within the EU or are profiling the behaviour of individuals within the EU. There must be an intention to offer goods / services to those individuals, as opposed those goods / services simply being accessible (perhaps evidenced by a local language / currency etc.) and monitoring includes tracking and profiling (online behavioural analysis – i.e. collecting info about websites visited) but if those scenarios apply then the GDPR applies. It applies even if processing happens outside of the EU and whether or not there is an establishment within the EU!

So, a hotel in NY employing a French national is processing the personal data of an EU national but that EU national is not within the EU. Does that mean they are off the hook? No. The EU national is still likely to be protected by the GDPR – not least because they are bound to return to the EU at some point and the processing will not stop when they do.

Unless a business does not employ EU nationals, does not offer goods or services to individuals within the EU (and who can truly say that), does not monitor website activity from the EU then they are likely to be caught by the GDPR and given the levels of possible fine, should start getting processes in place to ensure compliance.

What are the sanctions for failing to comply?

The maximum sanction under the GDPR is a whopping EUR €20,000,000 or in the case of a corporate undertaking 4% of global annual turnover – so potentially much higher than the maximum EUR  €20 million figure. Whilst fines of such magnitude will only apply to the most serious breaches, authorities can issue fines of up to EUR €10 million or 2% of worldwide annual turnover for lesser infringements – so still a very serious incentive to comply.

That said, the adverse publicity is likely to be a very serious deterrent for most businesses. People are becoming much more aware of their data rights, and no business wants to be seen to be exploiting those or failing to keep data safe, let alone selling it or misusing it for example by processing that data for reasons other than those for which it was collected. 

What 3 things should every employer be making sure they have in place before 25th May?

  1. Appropriate data protection personnel internally and at a senior level tasked with understanding the requirements of the GDPR, who can undertake a comprehensive data audit, understand and implement the processes and procedures needed to ensure compliance, and ensure that data is properly managed to minimise risk to data subjects, and to the business.
  2. Appropriate security measures to ensure that personal data is properly stored, securely processed, retained only for as long as necessary and then appropriately destroyed.
  3. Appropriate Privacy Notices (both with employees and other data subjects) to ensure that the individuals in question understand what data they are providing, how and why it will be processed and how it will be protected.

And that’s before you start thinking about website notifications, terms of business with customers / clients and business partners, hardware and software security etc. Many business are daunted by the task and some are sticking their heads in the sand as a result. It is however a task that needs to be tackled, and with luck a data audit will identify many areas in which businesses are already compliant. The rest is doable and not as onerous as it seems but it does require commitment in terms of time and resources to ensure that it is done properly.

A sledgehammer to crack a nut? Or a necessary evil to ensure that personal data is protected and not exploited. I’ll admit that even with a background in the DPA I started the GDPR journey thinking that it could well be the former – but in all honesty I don’t think it is. I think in a world where personal data has so much value, and the potential to be used in so many ways, it is vital that it is properly protected. The law is only just getting started!

Clara Stilwell_AETHOS Consulting Group_New York_web

Hospitality Leadership Solutions Series: Personal Motivators

Linking Organizational Success to Employees’ Personal Motivators (as published in Hotel Management, April ’18)

Noted hospitality thought leaders and corporate governance/ performance management experts Kefgen and “Dr. Jim” share common management challenges while providing time-tested, field-tested or just simple “quick-fix” ideas to keep professionals inspired, effective and successful.

The Flaw

If you want to improve employee performance, think about your daily (or “rolling”) conversations with employees. No better opportunity exists to reinforce and help refine excellent employee performance. You have the chance to discuss new projects, talk about overdue assignments, give updates about completed tasks, and more. Unfortunately, many managers miss these opportunities and instead try to influence or control teams with the counterproductive “FUD” method, i.e., using explicit or implicit threats of Fear, Uncertainty or Doubt. Leaders instead should use rolling conversations to reinforce the importance of meeting or exceeding goals by linking an employee’s performance to a specific workplace result. How? Read below for some in-depth guidance.

The Fix

A results-based approach to rolling conversations works, because it allows you to explain the value of positive performance from different perspectives. The idea is to align results that are important to the organization to outcomes that are important to employees.

If employees react negatively or passively to one perspective, you can use a different result to illustrate your performance conversation. In the end, it means you do not have to say, “Do it because I say so” or “because it’s your job.”

Examples of Linking Employee Performance to Results Requested

  • “When you submit your reports on time (improvement you want employee to make), we are able to meet our deadlines for submitting the monthly reports to the field office (result of improvement).”
  • “Entering customer feedback into the database by 5:00 PM every day (improvement you want employee to make) helps us achieve our strategic goal of quickly responding to guest issues (result of improvement).
  • “When you order the janitorial supplies on time (improvement you want employee to make), that allows the maintenance employees to do their job in a timely manner (result of improvement).”
  • “If you attend the community meetings (action you want employee to take), you will have an opportunity to interact with all of the senior managers in the company (result of action).”
  • “By participating in the project (action you want employee to take), you will have an opportunity to learn more about the organization’s strategic plan (result of action).”

At the individual level, you can link employee performance to desirable outcomes such as greater autonomy, less stress, reduced workloads or increased visibility. These results emphasize personal and professional interests.

On a broader level, employee performance can be linked to organization mission, office goals, customer service or team performance. These require employees to look at the larger impact of their performance results. Just make sure you include results that reflect personal interests of your employees as well as results that are important to your organization. Following are some specific examples:

  • Link Performance to Job Enrichment. Employees want to feel that what they do is important. Doing more challenging work or working with different employees are just two examples. Investigate the things employees like about where they work. Determine what makes them excited. Use this information to explain how effective employee performance can lead to greater job enrichment.
  • Link Employee Performance to Learning and Development. Consider your employees’ strengths and weaknesses. Would new knowledge, skills or abilities be helpful? Or, maybe the employees can obtain certification in a job-related area. Use this information to show how positive employee performance can result in enhanced capabilities.
  • Link Employee Performance to Career Advancement. Think about how certain actions give employees greater opportunities for advancement on the job. Perhaps you can consider possibilities for a job rotation or a high-profile assignment. Use this information to connect employee interests to performance, highlighting the impact on upward mobility or desired lateral moves.
  • Link employee Performance to Money and Rewards. Identify the monetary perks that exist for employees. Go beyond the regular pay check. Include anything from cash payments to tickets to the theatre. Use this information to link employee performance to financial rewards or other types of benefits.
  • Link Employee Performance to Other Employees’ Performance. Identify who employee performance impacts? Consider managerial staff, technical staff, support staff and others. Use this information to emphasize how one employee’s performance can positively or negatively impact another employee’s performance and results.
  • Link Employee Performance to Office Achievements and Results. Look at an organizational chart of your company, agency or association. Examine workflow processes and the products or services you provide to other offices or departments. Do they depend on materials or information from your employees? If so, consider what happens when they get what they need or when they don’t get what they need. Use this information to explain why effective performance is important.
  • Link Employee Performance to Organization Success and Results Measures. Think about how your organization measures success. Some organizations use sales quotas as a guide. Others track the acquisition of new customers. Look at strategic plans and operational goals for direct or indirect links. Use this information to explain the broad-level impact of doing or not doing certain activities.
  • Link Employee Performance to Guiding Principles. Look at your organization’s vision, mission and values statements. This information tells you the kind of fundamental practices that are important. Examine instructions on “how” employees should do things as well as “what” they should do. Also consider rules, regulations and policies. Use this information to support the importance of certain types of employee performance.
Clara Stilwell_AETHOS Consulting Group_New York_web

Cruise Ships and Their Ports of Registration: Should Human Resources be Worried About Perception?

The hospitality industry is one of the world’s largest employers; the cruise sector is arguably one of the sub-segments which records one of the strongest growth rates (note: The Cruise Line Industry Association, CLIA, predicts 27 million passengers by the end of 2018). With that in mind, it is no surprise that everyone wants a piece of the pie. Although the market is dominated by just a few big players, new competition is muscling in.

AETHOS recently assessed what it takes for one of those new competitors, the traditional lodging operator, to move into the cruise sector – looking predominantly, at human resources and talent management. One key decision that we have not yet discussed is the relevance of the country where a cruise ship is registered – does or does it not impact the ability to attract and retain talent? Could it have an adverse impact on employer branding?

The Flag of Convenience

During times in which a new generation of employees is increasingly conscious of ‘doing the right thing,’ as it pertains to sustainability and corporate social responsibility (CSR), could the common best practice of flying a flag of convenience be considered ‘bad form?’ The flag of a cruise ship governs the rules, regulations and safety norms of a vessel; unlike common belief, an Italian cruise ship does not always fly the Italian flag nor does an American ship brandish the Stars and Stripes. What originated in the Americas of the 1920s, with companies wanting to circumvent the ban of alcohol by registering their vessels elsewhere, has continued to this day. Nowadays, organisations are predominantly seeking cost savings via lower fees and/or taxes. The term ‘flag of convenience’ was hence coined and these days the great majority of cruise ships are flying flags which are different to those of the brand’s headquarters (92%).

Naturally, any savvy business leader will strive to maximize returns for its shareholders; it is their fiduciary responsibility and flying a flag of convenience holds financial appeal. Voices raised by third parties about operators who chose such a strategy in order to drive profitability are thus not of concern here, nor a point of discussion – at least not from a commercial business perspective.

Does Flying a Flag of Convenience Have Ramification When it Comes to Attracting Talent?

Flying a flag of convenience can be viewed by some as responding purely to the needs of investors – but does it have an impact, positive or negative, on some of the other stakeholders of a firm, e.g. the employees? The fact is that often, by outsourcing the flag, an operator is also subject to more lenient labour laws in the form of less stringent minimum wage and benefits requirements, inferior employment protection and limited ability for employees to form unions. Frequently, the environmental gold standards also differ from the home country. Moreover, flying a foreign flag can make it difficult for employees to bring cases of criminal activity on-board back to their home jurisdictions for legal action…seemingly, not the best of outlooks then for employees. But, do they care? Research shows that individuals today are clearly concerned about socially responsible behaviour and good business ethics (i.e. CSR). For example:

  • A study researching a potential correlation between a firm’s Corporate Social Performance (CSP) and its reputation and attractiveness as an employer concluded that indeed the relationship is a positive one; i.e. results indicated that “a firm’s CSP may provide a competitive advantage in attracting applicants” (Turban, D.B. & Greening, D.W. [2017]. Corporate Social Performance And Organizational Attractiveness To Prospective Employees. Academy of Management Journal, Vol 40, Iss 3.)
  • A research paper investigating a job seeker’s perception of importance of CSP and its potential impact on an organisation’s attractiveness as an employer found that, whilst some sub-segments within CSP were considered more important than others, what a firm does overall in the area of CSP does have a re-affirming effect on its employer brand / attractiveness (Backhaus, K.B., Stone, B.A. & Heiner, K. [2002]. Exploring the Relationship Between Corporate Social Performance and Employer Attractiveness. Business & Society, Vol. 41, Iss. 3.)
  • An AETHOS study investigating the career priorities of Gen X versus Gen Y concluded that Gen Y concerns itself with career choices and a sense of purpose and, interestingly enough, also about social consciousness (Houran, J., Kefgen, K. & Gold, N [2017]. What Millennials Want: The Real Career priorities of Gen X vs Gen Y. Hotel Yearbook).

However, as pointed out by the AETHOS study, attitudes are at times poor predictors of actual behaviour. In fact, the research paper found that, according to Maslow’s hierarchy of needs, “pragmatism trumps principle when faced with actual career decisions.” In other words, at a high level, it seems that employees care about CSR. Yet, they do not always follow through and consider CSR when making key decisions as it relates to their career options. This bodes well for organisations who have opted to fly a flag of convenience – which, on paper, is at times at odds with what most would consider CSR best practice.

At a time in which large companies such as Google, Facebook or Starbucks are scrutinised for where they pay taxes, and how much, will flying a flag of convenience become a potential HR liability? Could the very loud voices criticising (and accusing) the (merchant) shipping industry for flying flags of convenience negatively affect the reputation of the cruise companies who are doing the same?

The clear answer to this should be a resolute “no.” A cruise company’s reputation as an employer of choice should remain intact as, although many of them do fly flags of convenience, they do a much better job than the shipping industry / merchant vessels in avoiding the HR pitfalls – precisely because they understand that ‘(brand) image’ is key to their very own success. Reviewing the various corporate websites of the cruise operators reveals links and references to their HR best practices and the ‘code of conduct and business ethics’ as well as the ‘modern slavery act’ and the organisation’s initiatives that address ‘sustainability’. Yet, cruise companies and those organisations looking to move into the sector may be well advised to learn from other companies’ mistakes. For example:

  • A study looking into the top 150 hotel companies in the world found “a large number of organisations reporting commitment to CSR goals, but a much smaller number of them providing details of specific initiatives undertaken to contribute to these goals and even less of them report actual performance achieved” (De Grosbois, D. [2011]. Corporate social responsibility reporting by the global hotel industry: Commitment, initiatives and performance. International Journal of Hospitality Management. Vol. 31, Iss. 3.).
  • A research paper investigating the transparency of hotel companies as it relates to their CSR best practices and testing the gap between CSR claims and actual practice concluded that official statements do not necessarily reflect actual operations. Larger hotel groups, for example, have comprehensive policies in place but are being let down by poor implementation (Font, X., Walmsley, A., Cogotti, S., McCombes, L & Haeusler, N. [2012]. Corporate Social Responsibility: The Disclosure-Performance Gap. Tourism Management, Vol. 33, Iss. 6.)

Cruise operators should thus engage in a more open dialogue, rectifying any potential misperceptions or grey-areas. Ultimately, potential employees will know that just because ‘loop holes’ exist (curtesy to some ‘flags of convenience’), it does not mean that those are always being exploited. But not being able to compare ‘CSR performance’ might become a deterrent for some employees and senior industry leaders – particular in an age where even consumers have started to become much more conscious of CSR best practices, with a reported 2:1 cruise travellers preferring cruise operators with good CSR policies and best practices in place (Adams, S.A., Font, X. & Stanford, D. [2017]. All aboard the corporate socially and environmentally responsible cruise ship: A conjoint analysis of consumer choices. Worldwide Hospitality and Tourism Themes, Vol. 9, Iss.1).

Clara Stilwell_AETHOS Consulting Group_New York_web

Anxiety When Sitting in a CEO Role: Servant Leadership Making Kindness a Daily Routine

Leaders in any industry admit to having anxieties associated with making tough choices, especially choices that affect their employees’ lives. The level of accountability and responsibility implicit in serving in a CEO role isn’t for everyone. Mythology refers to the Titan Atlas who carried something very heavy, possibly the weight of the world, on his shoulders. It is typically assumed that this was a punishment that came down from Zeus, king of the gods, after Atlas sided against Zeus in the war of the Titans vs. the Olympians. But the famous Roman author Vitruvius claimed this “burden” was actually a reward, for “through his vigorous intelligence and ingenuity, he was the first to cause men to be taught about the courses of the sun and moon, and the laws governing the revolutions of all the constellations.” Indeed, we have likewise consistently found that modern leaders view their power, influence and responsibility as a great privilege.

In a Harvard Business Review article, author Michael Mannor found that anxious leaders took fewer strategic risks, finding big bets less appealing despite the potential for big gains. His study of 84 CEOs demonstrates that anxiety plays a sizeable role in strategic decision-making, both good and bad. The best leaders have a “short memory” and a willingness to fight for their beliefs in the face of strong opposition. In fact, aspiring leaders find situations of crisis or change or situations in need of innovation when seeking leadership roles – is where the opportunities are for greatness.

Such dynamic and tenuous scenarios can also be fraught with pitfalls, so it is a constant balancing act between walking the high-wire and falling. Then again, it is important and comforting to remember that walking is simply the process of controlled falling. Leaders also state that most great ideas never get realized due to a lack of proper execution. Once you are convinced of your idea (strategy), it becomes a daily focus on the details and execution. This is where the great leaders distinguish themselves. Think of Brady and Belichick of the New England Patriots; talent only takes you so far. Organizations’ commitment, adaptability and an unrelenting focus on excellence is the only way to win over the long haul. And keeping your eye on the proverbial ball leaves little time for focusing on anxieties.

Course corrections and calibrations are inherent parts of leadership, as opposed to fretting over every consequence – foreseen or not.  It is a privilege to sit on the throne, and any worry that comes a leader’s way should be used constructively as energy and impetus to challenge assumptions, improve ideas and motivate unrelenting commitment to your team, who ultimately carries out the execution of a vision.

Viewed through the prism of leadership maturity, there’s a difference among the terms: accessible, approachable, and relatable. Accessible is merely being responsive or reactive to others; approachable advances this idea and entails being welcoming to others; and relatable is being proactively supportive to others.

It’s not about having close proximity to your team, but rather exhibiting a sincere attitude of support and kindness to the team. Building rapport with your teams is the goal of leadership. Rapport is the foundation for the building of trust, respect, and inspiration, all of which culminates in having influence with others.

Leadership is a difficult role that involves conflict, chaos, tensions and sometimes very awkward, heartbreaking and mind-numbing situations. This means that leaders must be willing and able to be bold, challenging, authoritative, and even forceful at times. Indeed, our psychometric research reveals that instances of political incorrectness and candid, direct language are hallmarks of effective leaders. But the “tough love” and “bold words and deeds” shown by leaders are motivated by a passionate drive for alignment, development, and excellence.

Passionate is the key word here. The leaders we studied as part of the research for our book did not exhibit kindness only when it suited their interests. Rather, kindness was and is the currency of choice for interpersonal exchanges, because true leaders understand that servant leadership is judged by one’s effectiveness in serving others and bringing them up personally and professionally. And really when you think about it, this sentiment of daily service and kindness is the essence of hospitality itself.

The physical tangible “product” elements of hotels, casinos, restaurants, cruise ships and entertainment venues can be physically beautiful, emotionally comfortable and intellectually captivating, but in the hospitality industry people are ultimately the product. Kindness, relatability, and hospitality will only be given to guests, if leaders first hold it as a core value and show it on a daily basis to the service providers themselves.

Clara Stilwell_AETHOS Consulting Group_New York_web

The “Trick” to Navigating the Turbulent Seas of Transition

Traditional Lodging Makes Waves on the High Seas, Part II

Approximately a month ago, following Ritz Carlton’s previous announcement about moving into the cruise line sector, I contemplated the issues that must have been discussed in the board room prior to committing to such an endeavour (click here for the original article). It stirred my thinking about a company’s transition into a new business area that requires new skill sets and a firm’s transformation from a company culture perspective to accommodate and welcome a new talent pool into its realms. 

Employers are acutely aware of the challenges they face nowadays, so they are pre-emptively having strategic discussions and preparing detailed action plans to cope with these kinds of business and organizational changes – whether it is a Ritz Carlton moving into the cruise line sector, for example, or Accor moving into a new hybrid segment with Jo&Joe, a brand described as “a vibrant living space, a home that is open to the external world […] which provides a made-to-measure solution for the Millennial-minded Townsters and Tripsters.”

Sticking to the topic of traditional lodging leaving the shores, I wanted to hear and learn first-hand from an executive who has witnessed similar change. I sat down with Marco Ciraulo for a brainstorming session. Marco is a former Cunard and SAGA Cruises employee who subsequently gained experience within the hotel industry, including with Four Seasons Hotels & Resorts, before returning to the cruise line sector. He is founder and owner of Culina Consulting as well as a senior teaching fellow at the University of Surrey where he lectures on organizational change management, business strategy and hospitality operations, and where he holds senior executive education seminars.

The “TRICK” to Success in Brand Repositioning

Capitalizing on the knowledge obtained in the luxury hotel industry, Marco is currently involved in advising an established European cruise operator to move into a more high-end market segment. He is helping this operator develop a new hotel room product and Food & Beverage (F&B) concepts, as well as getting involved in defining the client’s service and product proposition for its new fleet of luxury cruise liners. Both the soft- and hardware will be quite different from what the client’s organization already has. The key question Marco and I were discussing was, how do you ensure that an established, well-accepted and functioning corporate culture and DNA can be carried over successfully into a new business venture and/or adjusted to accommodate the changing needs of the business?

Marco’s current assignment is very much a question of maintaining a more disciplined, i.e., process-driven, company culture within one part of the organization whilst aiming to foster and develop a more intuition-based and emotive culture elsewhere. The client company’s goal is to encourage internal company transfers but it will also need to attract a new talent pool. Ideally, the two value systems will need to be compatible. It seemingly is a similar challenge as that faced by the Ritz-Carlton team: With already well-oiled and much appreciated corporate cultures and belief systems in place, the firms will have to make sure to attract a new type of employee profile without alienating “the base” to set up the new business ventures for success. To manage this, Marco and I suggest the following TRICK:

  • Train and mentor – to ensure existing staff feel valued and understand that there are opportunities to grow and develop across the organization whilst new staff learn to value the legacy of the firm.
  • Raise awareness – for what is different and the reason why it has to be different, making staff understand the new direction that is being pursued.
  • Identify commonalities – to help bridge the gap between the “old guard” and the “newcomers,” ensuring greater collaboration between one division and the next.
  • Communicate, communicate, communicate – not only to ensure that the message comes across but also to anticipate and proactively manage potential resistance to change.
  • Kick-start and foster innovation – to keep the firm agile and strengthen staff’s openness towards new ways of going about things.

Following the TRICK philosophy, and removing all potential ‘speed bumps’, is key to success. Marco elaborates on this, highlighting that “to get rid of those speed bumps, it is important to avoid any and all unnecessary politics that prevent a team from exceling due to, at times, lengthy decision-making processes at the head office level and/or senior management’s occasional, unnecessary involvement and micromanagement of processes that really should be left to the team hired to do the job in the first place.” Not wanting to dismiss the importance of trust and control, Marco and I agreed on the helpfulness of guidance and empowerment as conduits to success. Providing a platform and infrastructure to have the team work as entrepreneurs is key.

Launching a Landside Brand Offshore

Given Marco’s hotelier’s background, we were also comparing the hotel industry to the cruise line sector. Would a traditional lodging operator face particular challenges when moving offshore?

In his view, so-called key differentiating factors in the hospitality industry are, in fact, often easily copied. “Having bigger rooms? Providing the better selection of F&B outlets or in-room amenities? It may be costly to replicate, but it can be done without a lot of innovation or time of effort needed, whether this is on- or offshore,” he says. Success thus depends much more on the intangibles, the subtleties. In hospitality, it is often the people who make the difference as well as the brand affiliation and the customers’ emotional attachment to it that make it hard for competitors to keep up. Ritz-Carlton, therefore, is in a good position – there is no question that it does ‘the people side of things’ extremely well.

One of the main challenges a traditional hotel operator faces, though, when moving its operations to the seas is the increasing complexity of its staffing. Cruise ships employ an extremely diverse crew across the different trades. More often than not, a lot of them do not have a lodging or hotel background and may lack prior experience within the high-end hospitality industry. Adding to this is the fact that there is already tough competition out there for new recruits, with the cruise line industry being the fastest growing hospitality sector. Further complexity is added by the challenging work environment of long working days, limited pay scales and time spent away from home – all this reduces the pool of handpicked, highly skilled employees. When wanting to charge premium rates, this becomes a unique challenge. Moreover, time itself often becomes a challenge since one has to process a very large number of applicants, going through behavioural-based interviews before then organizing and carrying out behaviour training and skill-based development programs. Nowadays, one hears it everywhere, but hiring for attitude and training for skill really is crucial in the cruise line sector.

Re-concepting the Aesthetic and Service Experience

Although people make the difference, traditional hotel operators should not forget that in the cruise sector the product is so much more than just the look, feel and location of the physical asset. Marco and I were discussing that cruise customers are obviously a captive audience. There are limited opportunities for them to ‘pop out’ and experience the destination on their own, and they willingly ‘succumb’ to the predefined agenda of the cruise operator. This means, though, that customers are also setting extremely high expectations.

So, besides nailing the service levels and the customer engagement, cruise operators need to think of all the different components of their product – ranging from the physical look and feel of the ship and its venues and outlets to the social interaction on board, the destinations and ports of call that form part of the itinerary, the tour operators that carry out the excursions in the different destinations, the transportation companies that bring customers from A to B…. Getting the mix right and knowing what counts where is an art form. On land, customers typically do that for you, so when they opt for a cruise, they put a lot of trust in operators to get it just right and to their personal likings. To do this right for 300 or 5,500 passengers, that’s what we call a challenge!

But, in a way, this level of challenge can serve as an object lesson for all brands. After all, most luxury, boutique or lifestyle brands (be they hotel or F&B, etc.) all strive to become destinations in themselves – to build a sustainable community or, what offshore operators would call, captive audiences. So, perhaps the lessons to be learned go both ways… and the next tide of landside innovations in product or service standards will come like a message in a bottle from the seas.

Clara Stilwell_AETHOS Consulting Group_New York_web

Why ‘Heart And Soul’ Is Also A Strength In Leadership

One of the most difficult and humbling things for us human beings is to admit we don’t know something. Our brain has evolved over thousands and thousands of years into a three-pound, organic computer with the sole task of “making things more certain.” Gaining mastery and a sense of control over our physical and psychological environments is a natural, inherent human drive.

Many people assume that admitting ignorance about and asking for help in understanding specific things is somehow a sign of weakness and a public declaration that one is uninformed, incompetent or outright dim-witted. The exact opposite is actually truer to reality. The most mature leaders admit what they don’t know and go get the answer from so-called “subject matter experts,” who may or may not be part of their inner circle or immediate team. This entails asking for help, information and insight from others, or what we call being vulnerable to the talents of others.

This is not mere opinion or isolated anecdote. Hospitality Industry leaders have commented that “asking for help” was one of the most important lessons they learned as they matured; seeking the advice of others is the hallmark of a seasoned leader. In many ways, it was the secret of their leadership success. People who are too braggadocios and are the preverbal “know it all’s” rarely have credibility and long-term success. Leaders have also stated that asking for help also was a prelude to reciprocating, the basis of any sound relationship. To be sure, when we psychometrically profiled leaders, we found that they were strong generalists in their competency set and knowledge areas. And, they subsequently surrounded themselves with a team with specific expertise that filled the gaps in their own aptitude.

Moreover, these leaders also took the initiative to go one step further and formed a “Personal Board of Advisors (PDA),” which was composed of people from other walks of life and disciplines who would candidly challenge the leader’s assumptions and round out thinking and decision-making. This need not be a large group – our research has validated that a group of 6 to 8 people is all it takes to make a significant and positive impact on one’s decision-making. So, anecdotal and statistical evidence agree that “asking for help” and being vulnerable to the talents, expertise and insights of others is a show of strength and intelligence versus weakness and ineptitude.

Relating to others, reading and responding to social cues and adapting presentation and messaging style are the advantages that come with a high EQ. It also takes keen self-awareness to recognize one’s limitations and be receptive to the value that others bring to the table. It also takes high EQ and self-awareness to know both when and how to address conflict.

Who hasn’t heard of the “absent-minded professor”? These individuals illustrate the reality that intelligence in principle doesn’t always equate to intelligence in practice. Smart actions are mostly proactive versus reactive in nature. Smart business and interpersonal decisions stem from measured and strategic thought… and this means thinking beyond both the moment and oneself. Of course, this is much easier said than done, as research on brain functioning shows that humans are fundamentally hardwired to think and act in more reactive ways. Yet many studies also validate the critical importance of Emotional Intelligence (EQ) and Self- Awareness in thinking beyond oneself to function effectively as a leader.

Sadly, we have observed poor EQ, self-awareness and social skills as one of the most pressing blind-spots in the C-suite. In particular, having worked with global hospitality companies for more than two decades on various workplace psychology issues large and small, there’s one problem that consistently persists at the C-level (even including Board of Directors) – the failure of execs to confront bad habits or underdeveloped skills in direct reports, and especially when it concerns an organization’s rising stars. The sign of great leadership is one’s effectiveness at identifying and grooming new, impactful leaders.

All too often, however, bosses allow bad habits and counter effective attitudes and behaviours to slide. Why? Most people strive to avoid any conflict, or they choose the path of least resistance because typically there is a difference between doing the right thing versus the easy thing. It takes courage and grit to have difficult conversations with those we have rapport and rely on to help achieve our goals; it’s more expeditious and painless to put one’s head in the sand and rationalize that the pros in our team members and direct reports outweigh the cons. But that mentality actually shows a paucity of heart and soul to those team members and customers that we serve.

Organizations have two primary systems – Business Practices and People Practices. Smart leaders know that these two issues are interrelated and co-dependent, which is why the issue of how a leader brings about results is just as important as getting the results in the first place. Therefore, smart thinking – rooted in the values of empathy, accountability, and self- motivation – is absolutely required to know what is the right thing to do and having the tenacity to do it. Team members follow the examples set by leaders, so it was never more apropos to remember that “people watch what you do, more than listen to what you say.”

Having “heart and soul” goes beyond treating others well; it entails a leader caring about brand and culture to such a high level that smart actions are the norm, deviations from standards are always taken seriously, and in the process, every team member is proactively supported, as much as possible, for peak performance and ongoing success.

Clara Stilwell_AETHOS Consulting Group_New York_web

Recap of the 2017 Cornell Hospitality Research Summit (CHRS)

This year marked the fourth annual meeting between academics and industry practitioners at Cornell University in beautiful upstate New York (CHRS). Like past years the October conference was well-attended, and the speaker slate was varied albeit markedly skewed toward hotel and lodging. Despite this, there was enough general content that was applicable for businesses across the spectrum of hospitality.

Conferences are usually dominated by topical subjects, such as Leadership. Millennials, Social Media or Technology. This time the overarching theme was “Disruption” and the inevitable opportunities for innovation, brand differentiation and competitive advantages that can accompany it. However, this year’s agenda felt skewed in other ways, too. Most notably, many speakers represented outside vendors or consultants eager to pitch their perspectives, skills or tools.

This is neither an inappropriate nor bad thing per se, but the presentations I attended often talked more about purported effects and outcomes versus the methods and analyses used to justify the claims. This is understandable to an extent when you consider that presentations were timed to function more like TED Talks. Yet, presenters at academic forums should balance this with attention to critical details on approach and methodologies.

The Cornell faculty and support staff did well in keeping the proceedings lively and the momentum going. There was also ample social and business networking time, which is always the highlight of events like this. CHRS is a highly recommended event for all. In case you missed it, below are the key learnings that stayed with me.

Key Takeaways

(A) HR’s evolving role: The vernacular for human resources (HR) functions always seems to change, and in most respects, is being upgraded. There seems to be a realization that HR drives enterprise value by aligning people practices to business practices across the organization to support all employees and functions in delivering on brand promises. This process of creating and maintaining awareness and alignment to branding was consistently positioned at CHRS in terms of “Talent & Culture” versus the traditional “Human Resources.” Therefore, common HR issues of retention, engagement and diversity are being imagined in business and operational lingo of market differentiation and ROI. This means that HR pros will likewise need to become increasingly informed and savvy about all the internal business and outside market forces that impact financial and value creation key performance indicators (KPIs) that most capture and hold the attention of senior leadership and owners. In short, HR leaders must think and act as business leaders, and not simply functional heads.

(B) Leveraging “big data”: In our worldwide executive search practice, we have seen in recent years a marked uptick in organizations wanting to find superstar asset and revenue managers. This makes sense, given that these individuals offer some of the greatest short-term and long-term opportunity for value creation. But, whether for asset management or marketing and branding, several presentations touched on the tremendous potential of so-called “big data” in driving the most valid and profitable business decisions. Indeed, the amount of data available to businesses is immense – everything from consumer value sets, attitudes and behaviours to market trends and financial metrics across the globe. 

However, obtaining data is not really the problem anymore. The new challenge all functions have – from asset management to HR – is mining it. This means properly understanding and actioning big data, which is easier said than done. To this end, several presentations addressed analytical techniques or new applications to mine business data. This is a promising start, but the potential and promise of big data must successfully assuage Meehl’s caution and criticism that “everything correlates to some extent with everything else” (p. 204). In other words, with enough data one can find an endless supply of “meaningful-looking” patterns – some real (i.e., “signals”) and some that artificially capitalize on chance (i.e., “noise”). Separating the signal from the noise is the new name of the game.

This is why presenters at conferences like CHRS must take time to explain their methods and not emphasize their proposed results. It is difficult for attendees to know the trustworthiness of specific claims without appreciating how the claims were derived.

This latter point is perhaps the most important lesson for readers to take away from my recap. All people have thoughts, so opinions and views are not inherently insightful or otherwise meaningful. Practitioners and leaders, similar to academics and researchers, should be more curious at first about how others think and what process or logic drives subsequent conclusions. With the wealth of media attention and business books devoted to popular topics such as talent, curiosity, emotional intelligence (EQ), personal branding and social networking, it would seem that less emphasis is being placed on the fundamental skill of “critical or logical reasoning.” In my view, this is the core ability that will drive success in both HR’s and big data’s growing roles in the business world.

Clara Stilwell_AETHOS Consulting Group_New York_web

Strategies for Assessing Exaggeration and Deception by Job Candidates

“It takes more work to tell a lie than it does to tell the truth. You have to not only make up something, but also watch me to make sure I’m believing you.” – Maureen O’Sullivan, Ph.D., Professor of Psychology, University of San Francisco

Job candidates predictably distort the way they present their competencies and credentials out of concern for making a favourable impression and wanting to be liked by hiring professionals. These distortions, called social desirability biases, can be unconscious behaviours or they can reflect deliberate deceit. Behavioural clues to assess lying are too generalized to be effectively applied by most people. Rather, we outline a three-part strategy for due diligence on candidates that reduces bad hires resulting from erroneous information. Each component of the three-part strategy can be useful separately, but the components are especially powerful when used in tandem as a system of checks and balances.

Love or hate his more controversial ideas, but the illustrious psychoanalyst Sigmund Freud had a keen understanding of people and their motivations. One of his heuristics is hard to improve upon even today – the principle that people gravitate towards what makes them feel good and move away from what makes them feel bad. Experienced behavioural interviewers tend to know this principle well. Candidates typically, though often unwittingly, tell interviewers what is thought those interviewers want to hear. In the process, candidates can hype up characteristics that are thought to make a favourable impression and ignore or outright lie about characteristics that seemingly make an unfavourable one. Actually, we all do this to some degree; a classic principle in social psychology is that people behave in ways that they believe are socially acceptable and desirable when they know others are watching. This is generally known as “social desirability biases.”

According to Paulhus, individuals modify their behaviour in two primary ways. First, people can give honest but inflated self-descriptions reflecting a lack of insight and an unconscious bias toward favourable self-portrayal (self-deception). This is a variation of social desirability bias. While it is important to have an accurate assessment of candidates’ traits and abilities, professionals need to understand that virtually everyone exhibits social desirability biases to some extent. Candidates are simply acting naturally out of a healthy self-image and are expressing a need to be liked and accepted. The second and more serious form of social desirability is what Paulhus refers to as impression management. This term applies when people consciously use inflated self- descriptions, faking, or lying due to a hypersensitivity to situational self-presentation demands.

Self-deception and impression management behaviours lead to tainted candidate evaluations. This makes it crucial for hiring professionals to be prepared to address these confounds. This article aims to arm you with such knowledge.

To continue reading and download the full whitepaper, click here.

Clara Stilwell_AETHOS Consulting Group_New York_web

Is There a Paradox Between “Getting Everyone Aligned” and Having “Diversity and Avoiding Groupthink”?

It’s the Super Bowl, and you are the quarterback for one of the teams facing off. Wearing your football jersey, helmet, shoulder pads and cleats, you look at your teammates coming onto the field for the kick-off. Now, imagine the confusion and looming sense of defeat you would feel being the team captain when you realize that each of your teammates was instead dressed and ready to play something other than football — say, soccer, baseball, basketball, hockey, tennis… and yes, a few even came prepared for 18 holes of golf, and one person had expected bocce ball. It’s an absurd scenario that dramatically illustrates the state and consequence of “misalignment” within a team. It is no different in the corporate world — misalignment is the proverbial kiss of death.

Getting a team “aligned” is obviously critical to achieve its goals. AETHOS’ research on high-performance organizations and service-driven cultures reveals that there are four, interrelated elements of alignment underlying organizational effectiveness and efficiency. We call this the Performance Matrix, and it is simple to understand:

If sports is not your thing, then think of this Performance Matrix akin to driving a car on a long road trip and understanding the rules of the road. First, an organization’s ultimate goals, or where it’s heading, must be defined (the “destination”); second, the strategies that are necessary to reach that destination (the “roadmap”) must be formulated; third, the resources required to follow the roadmap must be determined and allocated (the “fuel”); and fourth, the organization must constantly monitor both the fuel and course to ensure it remains headed on the correct path (the “dashboard” measuring outcomes).

Getting aligned in these four ways is not synonymous with “groupthink,” i.e., where a set of individuals all adopts a near-identical ideological pattern of thinking and acting. Wikipedia.org defined it more formally as, “a psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome. Group members try to minimize conflict and reach a consensus decision without critical evaluation of alternative viewpoints by actively suppressing dissenting viewpoints, and by isolating themselves from outside influences.”

Groupthink is another proverbial kiss of death when seeking innovation and well-vetted ideas and actions. Constructively debating the details in the Performance Matrix is necessary for the best plan and collective sense of ownership to emerge. And, the Performance Matrix is never fully finished; there are always course corrections made for one reason or another. Therefore, a strong team has members who speak up, challenge assumptions and bring their unique expertise and value proposition to the equation. Strong leaders foster that debate and a platform for an exchange of new or better ideas.

A sports team is a collection of specialists working together on a common goal while simultaneously knowing the game rules. Likewise, organizations do not need team members who are clones, but rather need a team with “intellectual diversity” to help produce the best, well-rounded plan that everyone understands and supports.

It may sound funny or paradoxical, but ultimately that team diversity helps to facilitate the best alignment.

Clara Stilwell_AETHOS Consulting Group_New York_web

HR Strategies for Growth for Aspiring Restaurant Entrepreneurs

The hospitality industry remains one of the backbones of the economy in the Middle East, and the food and beverage (F&B) sector is certainly contributing its fair share. In the past, many regional businesses opted for an internationally recognised concept, but, nowadays, the market has matured and witnessed diversification. The UAE, in particular, has become a foodie destination in its own right and there is a notable appetite – from investors, developers and the consumers – for home-grown concepts. Not surprisingly, new outlets have sprung up (from ‘Cougley,’ to ‘Cocoville,’ to other home-grown start-ups such as Folly, Hikina, Matto Italian Restaurant, Publique or Ruya). The list is endless.

The sector is thriving – yet, so is the competition within it. Competing against established players, let alone successfully establishing a business from scratch, is not an easy thing to do for entrepreneurs in the best of times. More often than not, the roadmap to success hinges on the people behind the business, i.e., the ‘talent.’ Here, then, are some thoughts on the HR strategies for growth (as published by Catering News Middle East, 17th May 2017).

Transforming a start-up into a thriving business
Many of AETHOS’ restaurant client entrepreneurs have not necessarily set out to create a recognised ‘brand’ from the get-go – instead, given solid performance and having found the right market niche, they might have been approached by opportunistic investors to operate a second or third outlet. Over time, what was never meant to be a branded F&B business suddenly becomes a brand and complex operation. Others grow organically over time or have bigger plans from the get-go, striving for nationwide and/or international expansion. Whatever the circumstances, restaurant entrepreneurs, when faced with the opportunity to expand, should ask themselves:

  • WHY do I want to grow in the first place? Growth for growth sake is never the right strategy. Before committing resources to expand the business, entrepreneurs should re-evaluate their plans to grow and understand what specifically the desired outcome would be, then define a business and HR strategy that suits their goals and develop a timeline as to when which type of skill set and action is needed to execute on the expansion plan.
  • WHAT is needed to set up a brand and WHO is the best person to drive the business going forward? At times, business founders can be clouded in their leadership directives by their own ideas. Whilst their initial involvement is often crucial to the success of the firm – providing a clear vision and pushing employees in the right direction ¬– it can subsequently, given lack of experience and/or focus on tactics rather than strategies, become an obstacle to success. Entrepreneurs should thus investigate where their own and their team’s current shortcomings are. Recognising such limitations and getting people and business leaders on board with a complimentary skill set is crucial. At times, thinking outside the box and securing a Non-Executive Director during the early stages of the business, instead of a full-blown (and costly) Chief Executive Officer can help gain access to know-how and expertise whilst keeping costs down.
  • HOW do I best structure the organisation? Getting it right from the get-go is a lot easier than having to ‘re-wire’ an entire organisation. Crucially, this is where start-ups have the edge over well-established players – entrepreneurs would be wise in focusing on the ‘trifactor’ of (1) culture, (2) rewards and (3) development. The culture of the firm should guide and direct the firm’s talent strategy. Increasingly focusing in the recruitment and selection process on character traits and emotional intelligence, and promoting engagement as well as flatter organisational structures that foster empowerment, are hereby ‘safe bets’ to attract and retain talent. The culture should then trigger down to the way entrepreneurs reward individuals. Here, it will be important to think of both monetary and non-monetary rewards and to keep in mind the different stakeholders at both entry-level and mid-management as well as company leadership. Often, for example, start-ups cannot afford “the big hitters” coming from the corporate world, who are used to healthy, short-term and long-term incentive schemes. To overcome this, start-ups may want to consider shadow equity schemes/phantom share options, for example, tied to value creation and the execution of a specific long-term strategy. Having defined the culture, and put in place a reward system to attract and retain individuals, entrepreneurs should then focus their attention to talent development and critical succession planning. Providing internal development opportunities, fostering cross-exposure, will help keep turnover low and retain staff whilst succession planning can lower replacement costs.

AETHOS’ engagement with restaurant start-ups often evolves around helping them attract and retain talent and business leaders, defining and building corporate cultures and/or devising sustainable strategies to scale businesses by ensuring alignment between business and people practices. Yes, it is true that when it comes to attracting and retaining talent, one might think that the bigger, more established restaurant chains have it easier; they have tried and tested systems and benefit schemes as well as talent management programs in place that can help gain access to and keep talent. However, start-ups and/or smaller brands are often ‘sexier’ and more appealing to the next generation of leaders, the millennials. They want to avoid being a small cog in a big machine – restaurant entrepreneurs should not forget that and, on the base of this, turn one of their perceived weaknesses, their size, into a strength. In a highly competitive market environment such as the Middle East, and a people-driven industry, it is the above steps that can help pave the way to success.

Clara Stilwell_AETHOS Consulting Group_New York_web

Senior Leadership Succession Planning Within the Restaurant Industry

Let’s start by revisiting an excerpt from a piece I wrote:

“Some would excuse the malaise (in the casual dining industry) because of the soft economy, demographic changes, and even the weather. However, that doesn’t explain the remarkably few success stories who must compete for similar customers and are at the mercy of identical forces as the failing brands. In my view, the casual-dining segment is mired in a management carousel that, for over a decade, has bounced senior management from one company to the next on the basis of little more than their title. Hiring existing casual-dining executives may be the safe choice, but it doesn’t automatically make it the best option, as recent financial outcomes certainly bear out. Sadly, casual dining is backward looking, while society and culture is ever-changing and moving forward. A worn-out formula that doesn’t work at one chain is unlikely to succeed by shifting it to another.”

My comments above are certainly not profound, and many readers agreed that I was stating the obvious; if restaurant companies are serious about the long-term health of their organization and the restaurant industry at large, we must pivot and make succession planning and leadership development a priority. Here is the problem – the excerpt above was written in August of 2012; over the past five years the keepers of the castle (board members, private equity groups, company Founders and executive recruiters) have not heeded this simple piece of advice. Even worse, this disease has spread to other categories such as fast casual and polished casual. As a senior-level executive recruiter specializing within the hospitality industry I can state with certainty that the quality and quantity of executive talent within the chain restaurant industry is running on empty, and outside of very few outliers, restaurant companies are ill-equipped in an industry that is going through unprecedented change.

Moving forward, succession planning and leadership development program initiatives are an absolute necessity rather than a “nice to have;” board members, private equity groups, company founders and executive recruiters need to stop pretending and do their jobs; talent management initiatives must take precedence over predictable “band aid” strategies such as menu reimaging, refranchising and financial engineering. Even if decision makers continue to accept the idea of bouncing senior management from one company to another or to put it more bluntly, hire industry retreads, that window is closing because most of this pool of candidates are in the twilight of their career.

Creative destruction, the process that something new brings about the demise of whatever existed before, is happening in every aspect of our lives. Think about it… Netflix started out more than 17 years ago as predominately a DVD subscription service at the time Blockbuster Video was their competition – some younger people reading this may not even know what Blockbuster Video is. Netflix recognized it desperately needed to pivot and take advantage of the rapidly evolving mobile technology market and ever-improving internet speeds to become one of the largest video distribution networks on the planet, with a current market cap of more than $55 billion. There are too many other similar business success stories to intuitively conclude that the restaurant industry must import fresh thinking into the industry and through that inertia create succession planning and leadership development programs that keep our industry relevant, exciting and engaging.

Clara Stilwell_AETHOS Consulting Group_New York_web

The 2017 HR in Hospitality Conference in Review

Published in Hotel Management April 24, 2017

There are five enduring core issues (and potential pain points) in HR – Compliance, Compensation and Benefits, Organizational Dynamics, Selection and Retention, and Learning and Development. Of course, each can be impacted by real or perceived changes in market conditions and advances in HR theory and practice. Thus, we have the rise of specific buzzwords and increased attention to particular hot-button topics.

There’s been a steady stream of such “issues Du jour” over the years, such as leadership and brand authenticity, e-learning platforms, Obamacare (ACA), HRIS systems, emotional intelligence (EQ), social media, women in leadership and millennials in the workforce. This year’s focus was a confluence of “Innovation and Technology.” Maybe “confabulation” is more fitting than “confluence,” since the two topics unfortunately seemed to be promoted knowingly or unwittingly as synonyms. And, that can be counterproductive thinking, as we discuss later.

AETHOS always has a strong presence at the HR in Hospitality Conference, and we give props to the Cornell University team that acts as the planning committee and session facilitators. Dr. J. Bruce Tracey was especially effective at fostering debate and discussion with panelists who bridge academic models from the classroom with practices and lessons from the field – in essence, attendees see and learn from his ability to mesh qualitative and quantitative research in real time to produce practical and evidence-based “take-aways” for practitioners. For our part, we gleaned both overt and subtle lessons that fall in one of three buckets. Here’s our review.

HR’s Evolving Role

“HR is in the people business” was a common mantra in various forms at the conference. Frankly, we don’t strictly agree. HR traditionally was in the “process” business of personnel, entailing the transactional tasks of hiring, payroll, insurance and compliance. Then came the “people” business where professional development and culture-building were highlighted with new employee on-boarding, engagement initiatives, and learning and development programs. Today, it seems that HR deserves a new job description that emphasizes the strategic aspects of value creation that HR brings to organizations.

In this sense, HR is no longer seen as an administrative cost center, but as a strategic profit center that is a critical component of senior leadership. Therefore, the role that HR plays within the interactions among the senior leaders is the real business of HR. CEOs are actually “Chief Value Creation Officers;” COOs are akin to “Chief Application Officers;” CFOs function as “Chief Resource Officers;” and CHROs or Chief People/Culture Officers, and the like, are closer to “Chief Alignment Officers” in today’s organizations.

AETHOS’ research on high-performance and service-driven organizations has shown that successful companies have strong, ongoing alignment among four domains that define a broad “Performance Matrix” – Purpose and Values, Strategies and Goals, Structure and Tactics and Resources, and Metrics and Outcomes. Think of the Performance Matrix in terms of driving a car on a long road trip and understanding the rules of the road. First, an organization’s ultimate goals, or where it’s heading, must be defined (the “destination”). Second, the strategies must be formulated that are necessary to reach that destination (the “roadmap”). Third, the resources required to follow the roadmap must be determined and allocated (the “fuel”). And, fourth, the organization must constantly monitor both the fuel and course heading to ensure it remains headed on the correct path (the “dashboard” measuring outcomes).

HR leadership is concerned with connecting people practices to business practices, and frankly this means thinking beyond people. It’s now about organizational culture and the meshing of external and internal brand promises and experience. HR must be able to help refine strategies and goals, establish and implement systems of accountability and gather and interpret outcome metrics with the mindset of a business owner. Alignment among the domains of the Performance Matrix is the new reality of HR.

Defining Innovation in HR and the Broader Organization

“HR and the hospitality industry in general need to be more innovative” was perhaps the loudest mantra at the conference. It’s difficult to disagree with the premise that businesses require evolution to stay competitive. On the other hand, two issues are being confused – innovation versus technology. Oxford Dictionaries defines “innovation” simply as “the application of scientific knowledge for practical purposes, especially in industry.” Nowhere does that definition stipulate the adoption and use of “mechanical or electronic devices or platforms.” And yet, conference presenters routinely emphasized ways to “repurpose or reimagine” HR tasks in terms of gadgets and platforms that make connection, collaboration and learning more efficient and expedient for team members.

Scientific knowledge comes in many forms. Consider three innovations that changed the world – the social invention of “language,” the materials science creation of “plastic” and the discovery of “penicillin.” Each represents a landmark advancement that had nothing to do with mechanical devices. Likewise, it is tempting, but arguably counterproductive, to follow the current trend of thinking always as a “technologist” (device-oriented) versus thinking as a general “problem solver” (manual or automated approaches are both leveraged). Looking ahead is fine, but let’s first educate ourselves on the wealth of relevant scientific knowledge that already exists, which can be applied.

We encourage all HR pros and organizational leaders to routinely examine the core values, beliefs and theoretical orientations driving their business. Those operating principles could be outdated, or sadly, outright false. Case in point, we heard a few dangerous myths promoted during the conference. One was the “innovation equals technological applications” discussed above. Another was that “assessments are basically fuzzy science.” We sympathize with organizations that have had bad experiences with assessments, because most are neither measure competencies most important to the hospitality industry (Lange & Houran, 2009) nor are validated properly and legally defensible (Lange & Houran, 2015). However, there are psychometrically-sound assessments for screening and selection that have proven effective when used with behavioral interviewing and reference checking. Done well, assessments transcend fuzzy science.

Finally, we heard from a major HR practitioner that “attitudes drive a person’s behavior.” Actually, social science, and marketers, have known this is false since 1975! In particular, one of psychology’s most successful, well-validated models of decision-making in volitional actions is the Theory of Reasoned Action (THORA: Fishbein & Ajzen, 1975) and its later extension into the Theory of Planned Behavior (Ajzen, 1991). This theory has been the subject of theoretical and empirical study of more than 30 years in diverse areas, and its major tenets, predictions and implications have survived unscathed.

According to THORA, a person’s behavior is determined mainly by an “intention” to perform the behavior, and this intention, in turn, is a function of an “attitude” toward the behavior and the “subjective norm.” Intention is the cognitive representation of a person’s readiness to perform a given behavior, and it is the sole and immediate determinant of behavior. People’s intentions to perform a particular behavior are, in turn, determined by three factors: (a) people’s attitude toward this specific behavior, (b) their subjective norms concerning this behavior, and (c) their perceived behavioral control over performing this behavior. It seems complicated, but it’s actually quite simple and you don’t get more old-school than a behavioral model from the days of disco. So, how is it that a seasoned HR pro has come to believe and act on a mistaken premise, as well as not be familiar with an enduring and well-validated view of what really drives behavior?

No need to browse the internet for the latest and greatest “breakthroughs” in motivational psychology… here again is an example of existing, readily available technology (i.e., scientific knowledge) that works better than any other model and should be applied in today’s workplaces. The point is that we should be focused on mentoring team members, and especially leaders, on how to think, reason and problem solve in resourceful ways. This is different than providing and promoting technological resources as the solutions. Solutions come from applying grey matter, not gadgets.

For example, we met two providers at the conference that especially exemplified innovation in our view – one was technology-based and the other was not. First, there was a non-profit organization called “CORE” that provides financial support to children of food and beverage service employees navigating life-changing circumstances. This is a wonderful resource that can augment any company’s Employee Assistance Program (EAP). Second, there was an intriguing start-up called “Entrada”, which is all about leveraging the latest advancements in mobile technology to help employees learn new languages on the job and in real time. It is an extremely clever concept and application, both in terms of enhancing employee development with learning new skills and enhancing guest relations by overcoming language barriers that frustrate team members and customers alike.

Anticipating the Talent of Tomorrow

“HR needs to anticipate the employee skills needed to sustain tomorrow’s bench-strength and the guest experience” was an unspoken theme across many presentations and during casual conversations with attendees. One thing about which everyone seemed to agree was the need for team members who could adapt and thrive in an era of disruption – new technologies, expanding markets, consolidation of brands and businesses and changes in people’s values and lifestyles. How do we recognize and recruit talent that will drive innovation, and what will effective communication skills, leadership, team building and problem-solving look like 5, 10 or 20 years from now?

Even futurists have difficulty getting granular on questions like these. But one general skill that seems crucial up and down the organization chart and across all job types is “resilience.” Indeed, it has always been beneficial in business; it’s not a new idea or the latest success factor. Some call it grit, adaptability, flexibility or nimbleness. Social scientists refer to it variously as “tolerance of ambiguity” or “left-brained” individuals. It all reflects the basic propensity to “go with the flow” and not become overwhelmed by onsets of change, disorganization, reinvention or even downright chaos. This is not purely an innate personality trait; resilience can be learned and honed. For instance, in our own coaching and performance management work at AETHOS, we emphasize seven tactics:

  • Stay neutral and suspend judgment. Delay as long as possible the formation of conclusions. Resist emotional or gut reactions.
  • Stay curious. Seek to understand the things that would otherwise induce a judgment. Avoid assumptions and use Socratic questioning to explore what’s happening around you. Ask “why” and say things like, “Tell me more about that.”
  • Stay connected to multiple information. Acquire concentric knowledge as it is related to Personal Life, Workplace, Product/Service, Customer, Market/Industry and Global Perspectives.
  • Enjoy messes. Put yourself in unfamiliar places and situations to reduce anxiety associated with ambiguities.
  • Advisors. Choose seven diverse, smart individuals to help you stay grounded, measured and aware by challenging your assumptions and rounding out your thinking.
  • Embrace the stranger and all forms of diversity.
  • Calibrate/change strategy and structure, not values.

At the End of the Day

This year’s conference was full of optimism and enthusiasm as to the state of HR and the hospitality industry in its entirety. It is evident that our industry and its HR leaders are thinking and acting strategically and positioning HR to be at the forefront of meaningful innovation, not merely innovation for its own sake.

We encourage anyone interested in HR trends, tactics and tools to attend the HR in Hospitality Conference; attendees will likely feel value for the knowledge and awareness gained, as well as the social and business networking with colleagues, academics and vendors.

The conference has grown tremendously over the years and has graduated to be a “must attend event” for any professional looking to understand the myriad of facets defining “current” and “futurist” perspectives on the “People and Cultural” side of the hospitality business – and in this business, people are ultimately the product.

Note: Please contact the authors for a list of references and suggested further reading material.

Clara Stilwell_AETHOS Consulting Group_New York_web

The Uberisation of Employment
 

My father worked for the Midland Bank (better known today as HSBC) for 33 years. His brother, too, had been employed by the same bank. In addition, their father had similarly spent the majority of his professional life at Midland. Their respective generations were of a time when you picked a profession and, if you were lucky enough to be offered a job, you then dedicated your working life to one company until you reached retirement age. Such relationships between employer and employee engendered feelings of pride, security, familiarity and loyalty. It was not a model however that necessarily lead to high performance, and the latter quarter of the 20th century saw a swing towards greater acceptance of people moving from company to company as firms competed for talent. This shift in people’s notion of what employment means to them has been going through further radicalisation in recent years as the concept of working for oneself has gained traction and credibility.

Arguably, no company has done more for legitimising self-employment as a career choice than Uber. The car-hailing app has tapped into the zeitgeist of working people who want more flexibility – flexibility in terms of how they spend their time and flexibility over how and when they make money. As the freelance economy booms, not only do workers satisfy their wants but employers are able to get access to skills with less commitment and at lower cost. In the UK, there are now 4.7 million self-employed workers, a number that is soon due to overtake the numbers working in the public sector. If any proof were needed that the ranks of the self-employed are expanding, it was given by the UK Chancellor’s recent ill-fated attempt to increase National Insurance contributions for the self-employed.

In Europe, where onerous employment laws add extra complexity and cost to hiring and firing, freelancers are the “fastest growing group in the EU labour market;” in the United States it is estimated that more than 50 million people are doing freelance work. Feedback from these freelancers highlights the attraction of earning potential and schedule flexibility as well as the promotion of work/life balance. Furthermore, freelancing is not limited to one particular stratum of the workforce but appeals to a wide range of ages, income levels and educational backgrounds. “Freelancing is now seen as a highly attractive and lucrative career option by 87% of students with first- or second-class degrees.” Many have expressed concern over what this means for employee benefits, and the various attempts around the globe to regulate this sector for the workforce are well-documented. Freelancers are responsible for their own insurances, benefits and retirement plans – that safety net of the 33-year career with a bank has been taken away.

One of the biggest deterrents however against working for yourself is being rapidly eradicated and that is the fear of not finding enough, or regular, work. Technology has significantly shrunken the gap between hiring companies and job seekers. Complex algorithms today can rapidly and cheaply create a match between a professional and a firm in need of that individual’s capabilities. Hiring companies can now quickly view pre-screened candidates and enter a relationship with a freelancer that may only need last a few hours or that may last several months. One example in the hospitality world is the recently launched “jitjatjo” app, which helps restaurants meet their flexing staffing needs. A restaurant business, finding itself down one server for the evening shift, can find a replacement with a few clicks, and then, on shift completion, has the option to rate the individual so that he or she comes up as a priority the next time around.

Freelancing is not limited however to line-level-type roles. An increasing number of professionals, such as consultants, attorneys, marketers and technology executives are opting to work independently, and the former stigma of being ‘freelance’ or an ‘independent consultant’ has vanished. As the worry over how to find the next piece of work has diminished, project work and interim assignments now hold great appeal for top-flight executives who are no longer attracted to the classical corporate world. While many only see the upsides of taking control of their working lives, some of these independent professionals do worry that their opportunity for professional development and learning may decline, but, again, technology and social media are plugging the gap through online groups and ecosystems that support these communities.

There is no question that the way in which we think about our careers – what we want from them, how and where we want work, and who we want to spend time with – is going through a radical change. In the hospitality sector, it is not outlandish to picture a day where a receptionist is behind the front desk of a Hilton one day, and the next morning is greeting guests at an independent boutique hotel down the street; or where the CFO of a restaurant company is hired for a 9-month interim assignment to complete a refinancing; or where a casino uses an app to hire a data analyst for a special project. What is less easy to imagine these days is an individual joining one of these companies and staying there for the next 30 years.

Clara Stilwell_AETHOS Consulting Group_New York_web

Introducing the “Psychometric SWOT” Exercise for Effective Team Development

Growth. Expansion. Development. Progression. These words translate in a business sense to an increase in size, footprint, market share, revenue and profit or shareholder value. They are common aspirations of most companies eager to accelerate along an upward trajectory, as opposed to crisis managing a downward spiral. In the current climate, most hospitality operating businesses are in aggressive growth mode and faced with “positive problems,” such as how to acquire new contracts, how to staff new openings, or how to satisfy growing customer numbers. For small- to medium-sized businesses in particular, the consequences of rapid growth and its transformative affects can be acute.

Many businesses are projected to double, even triple, in size over a short time frame, and the pressure this puts on all aspects of the current operation is extreme. One area of particularly potent stress can be the company’s leadership. For example, is the management team that has been running 10 hotels equipped to suddenly manage 20 hotels in the next 12 months? Does the management team have the necessary capabilities to manage new layers of organization, to integrate new accountabilities and to adjust to new lines of authority? How does an existing, core team bring in new talent and quickly build the necessary rapport, credibility and alignment? How does the CEO ensure a growing organization maintains alignment with the fundamental values, culture and purpose of the company?

As management ponders these strategic questions, takes stock of the impending growth coming down the track and prepares to equip itself for success, they may want to consider implementing what we at AETHOS call the “Psychometric SWOT” exercise. It is a cost-effective, efficient and simple solution that requires only about two hours to conduct and scales across all types and sizes of occupational teams.

Three Steps for a Successful Exercise…
SWOT stands for Strengths, Weaknesses, Opportunities and Threats and is a time-tested method for breaking down key performance and market variables into clear, manageable themes, which leaders subsequently use to define goals, set strategies and track outcomes. This analysis is often reserved for shaping business practices, but regrettably it has been underappreciated as an effective exercise for shaping people practices within specific teams, e.g., boards of directors, corporate leadership, etc. Time for this to change.

The exercise consists of three straightforward steps:

  • Step 1: Profile. Administer a psychometric assessment to all team members to gain an aggregate team performance profile. Be mindful to use a tool that goes beyond personality traits. Independent research has shown personality to be an inconsistent predictor of workplace performance. Instead, augment personality tests with a competency assessment that measures execution skills, people skills (including emotional intelligence) and cognitive skills (arguably the strongest predictor of workplace performance).This approach will allow you to evaluate your team’s mind-set and behaviours. As a result, you will see how the team functions as a “single entity” or system; thus, it becomes instantly clear which characteristics, attitudes and knowledge areas are low versus high within the group. This set of strengths and weaknesses reflects your current “team dynamics.” Most online assessments can be completed easily within one hour, and often times much quicker. Therefore, this step should not be a drain on anyone’s time, and everyone should easily fulfil their part the week prior to the team meeting where the team results would be shared and discussed. One note – facilitators should not share reports on individual team members before Step 2. That only introduces an unnecessary distraction to the process before and during the exercise.
  • Step 2: Evaluate. This entails a candid SWOT discussion of the ramifications of the newly revealed “team dynamics.” Maybe the aggregate profile reinforces what you expected, or perhaps you will uncover new information that brings additional context to the team’s performance concerns or aspirations. The discussion, facilitated by an internal or external expert, should soberly address those dynamics that should be maximized or corrected to yield optimal performance. Optimal performance, in turn, is defined as strong alignment across the four dimensions of the Performance Matrix – an organization’s Purpose & Values, Strategies & Goals, Structure & Tactics and Metrics & Outcomes.The entire SWOT discussion often can be completed in about two hours, though many teams may want to extend the process for a host of reasons. Moreover, an external facilitator offers many advantages over using one’s incumbent HR or some other internal professional. An organizational psychologist or seasoned executive coach, for instance, is arguably best positioned to identify patterns in the SWOT analysis and lead the discussion in an unbiased manner. An impartial expert is not constrained by team politics, potential cliques or brewing power struggles. Therefore, we recommend leveraging the expertise of credible, impartial advisors whenever possible. It is usually a wise investment of time and money.
  • Step 3: Calibrate. It is not enough merely to focus on adjusting one’s team dynamics. The exercise should also pay attention to the role of each individual team member in contributing to the team’s success metrics. Consequently, it is imperative for the exercise facilitator to have 1:1 follow-up sessions with all team members about their individual psychometric results, and how they can personally improve to maximize the team’s or function’s performance. In this sense, the Psychometric SWOT exercise happens at both the team and individual team member level.This part should happen after the full team meeting so that participants are not distracted by their own personal results and become disengaged from the bigger picture of the full team’s Psychometric SWOT. Thirty to 60 minutes is a reasonable standard amount of time to allot for a private debrief, either via the phone or in-person.

Taking action…
There it is. We have worked closely with the senior management teams of a number of hospitality businesses that, though of differing sizes and facing individual challenges, found themselves at a crossroads in their organization’s evolution. The Psychometric SWOT exercise proved to be a valuable tool in helping to bring fresh perspective, to reaffirm and realign goals and purpose, and to clearly map the way forward. We urge you to use the Psychometric SWOT as part of your next leadership retreat, annual meeting or strategic planning session. For guidance on planning or conducting your own Psychometric SWOT exercise, contact AETHOS Consulting Group.

Clara Stilwell_AETHOS Consulting Group_New York_web

Hasn’t the “Great Man or Woman” Leader Profile Been Debunked as a Myth?

Speaking to executive teams, conference attendees and individual leaders throughout 2016, we received many questions about the ideas in our book, Loneliness of Leadership. Therefore, we thought it would be worthwhile to present a series of articles that share with the wider public a sampling of the most interesting or instructive of these exchanges and past debates.

The first story we will share was presented by a graduate student in industrial psychology and organizational dynamics, who adamantly claimed that the idea of “servant leadership” was hogwash at worse and an urban legend at best. In particular, the student had not seen the term “servant leader” adopted or otherwise taken seriously by any of the classic and authoritative textbooks in organizational psychology.

There are at least two conflated issues here that need to be detangled to make sense of this apparent controversy. First, whereas the concept of servant leadership has long been rooted in philosophy and religion, the grad student correctly noted that older, formal leadership theories did not explicitly support or address the concept. However, the same can be said of many currently held scientific theories, including continental drift or human evolution. At one time, these too were controversial stances. However, servant leadership has been in the academic literature in recent decades, especially as it relates to the hospitality industry, given that this industry is grounded in the philosophy of serving others. For instance, a quick literature review of new-generation research would have revealed to the grad student a study AETHOS and colleagues published almost a decade ago: Lange, R., & Houran, J. (2009). Perceived importance of employees’ traits in the service industry. Psychological Reports, 104(2), 567-578

Textbooks tend to be outdated, but this recent research showed indeed that HR professionals and hiring managers collectively identified attitudes, knowledge areas and skills tied to servant leadership as most pertinent, compared with basic personality traits. Further, the study cited above, combined with other research by Cornell University and AETHOS, produced a profile of servant leadership that is the cornerstone of AETHOS’ proprietary pre-hiring assessment called 20|20 Skills

The second issue to detangle relates to how people reason and evaluate ideas. Simply put, we caution anyone who bases a conclusion on a limited scope of information or what equates to the logical fallacy of “appealing to authority.” Such approaches would seem to have more to do with the old command-and-control leadership style versus the contemporary attitude of servant leadership. Is one leadership approach really more effective than the other? Well, famed CEO Jack Welch of GE fame says “yes” whenever he recounts his leadership career, which involved him changing from the former leadership style to the latter. And our formal research tends to agree.

In the end, what we now have is a working, general profile for successful “servant leadership,” but one that can be flexible in its expression. As a result, we argue that there is a profile that quantitatively and qualitatively defines a “great man or woman” leader, and it looks like this:

EXECUTION SKILLS

  • Self-efficacy: emotional intelligence, confidence, self-direction and reaction to stress
  • Ethical awareness: process-orientation, equity and behavioural integrity
  • Loyalty to company: sense of ownership, dedication and adherence to a company’s vision and mission
  • Service orientation: customer-centric mind-set

PEOPLE SKILLS

  • Leadership: big picture orientation, vision and goal-setting
  • Team building: collaboration, affiliation and teamwork
  • Sensitivity to diversity: appreciation for individual, cultural and ethnic differences
  • Sense of humour: optimistic mind-set and appreciation of humour as a social and stress management skill

COGNITIVE SKILLS

  • Creativity: curiosity, innovation and big picture orientation
  • Problem-solving: ability to think critically and analytically

We are not alone in our views, because the link between the philosophy of servant leadership and modern leadership theory has strengthened in the 21st century. Simply review Wikipedia’s fascinating summary on servant leadership to see that the concept’s omission from traditional academia has “changed with the emergence of integrated psychological leadership theory – as represented by James Scouller’s (2011) three levels of leadership model.” This model integrates older theories while addressing their limitations by focusing on the leader’s psychology.

Most importantly, integrated psychological leadership theory emphasizes that leaders should care as much about their followers’ needs as their own, and view leadership as an act of service. We certainly hope that this attitude is not an urban legend in contemporary organizations and board rooms.

Clara Stilwell_AETHOS Consulting Group_New York_web

“What Millennials Want” – The Real Career Priorities of Gen X vs Gen Y

Millennials (aka “Generation Y” or “Echo Boomers”) are the talk about town. A day rarely passes without a new report explaining what this generation wants out of life and how their value set are economic and cultural disruptors. As consumers and employees, GenY is therefore fast becoming the focal point of marketers, as well as cultural, religious and political leaders. Everyone is talking about how to “win over” this precocious generation. Of course, this is really an old question, which arguably gained prominence from a seminal study conducted back in 2009 by Boston College’s Sloan Center on Aging & Work. Their investigators examined the career priorities of GenY compared to GenX. The study, still available online today, found that Gen Y employees valued access to flexibility for work and family responsibility, whereas GenX employees looked for training and development opportunities and having supervisory roles. Most pundits today likewise continue this nearly 10-year narrative that GenY is all about career choices that emphasize work-life balance, sense of purpose and social consciousness, and that these attitudes differ markedly from previous generations.

However, several complications undermine a clear understanding of what millennials actually want. Careful review of the literature shows that although many studies suggest important generational variances, other research has found little to no meaningful differences. At least two issues likely contribute to this mixed picture on GenY. First, work-life balance, technology and social consciousness are simply a subset of a larger group of variables and priorities job seekers contemplate in their employment deliberations. The most accurate investigations of generational differences are therefore those that consider a wide range of potential factors. Secondly, studies often confuse attitudes with intentions – and it’s important to understand that the two are not synonymous, as an individual’s general attitude towards an issue turns out to be a poor predictor of actual behaviour.

Marketers have known about the distinction between attitudes and intentions for decades thanks to the pioneering work in the 1970s by social psychologist Martin Fishbein. He developed a well-validated model of behaviour called the “Theory of Reasoned Action (or Planned Behaviour).” According to this model, a person’s behaviour is determined mainly by an intention to perform the behaviour. Intention is the cognitive representation of a person’s readiness to perform a given behaviour and is the sole immediate antecedent of behaviour. Thus, it is a hallmark of the theory that only specific attitudes toward a behaviour or the issues in question predict that behaviour.

Conversely, it is unrealistic to expect other general attitudes to consistently predict specific behaviours. For instance, to predict attending church at location X, it is not very useful to use “religiosity” as a predictor. Instead, it is far more productive to assess a person’s attitude toward the behaviour of attending this church at a particular day and time. In other words, qualifying survey and research questions by providing a specific context bolsters the predictive validity. As a result, what we have been told about millennials as consumers and employees might be significantly tainted by studies that focused on asking about their general attitudes, as opposed to their behavioural intentions.

Asking the “Millennial Question” in a New Way
Our survey focused only on GenX and GenY for the sake of simplicity, and given that these two generations form the majority of the global workforce. Following the logic regarding attitude versus intention, we asked carefully-screened, survey respondents across industry sectors from GenX (n = 256, 70% women) and GenY (n = 254, 67% women) to rate a diverse set of career priorities. The sample skewed towards North America (75%), while the other quarter represented Europe and Asia-Pacific. Priority ratings did not significantly correlate with either gender or geography, so only generational differences were considered in our analyses. Finally, the age parameters that defined GenY and GenX matched those used in the 2009 study by the Sloan Center on Aging & Work – Gen Y (b. after 1980) and Gen X (b. 1965-1980).

Participants were not forced to rank-order the list of priorities, as this method (or “ipsative” approach) often imposes artificial “structure” on data and consequently can produce statistically false results. Instead, we worked with a paid research panel to ensure our respondents were matched on group size and behavioural intentions, (all participants were those who either were recently hired for new jobs or were actively considering job offers). In other words, ratings of career priorities correlated to actual deliberations of job and career choices, as opposed to ratings derived from respondents’ general attitudes.

Participants were instructed to, “Keep in mind your most recent job/role change (or specific job offers you are actively considering now) as you consider and rate the importance of these variables in your decision-making process. Please rate every variable in the list.” Each respondent then rated a list of twenty (20) job or career priorities using a 1 to 4 scale: (1) No importance at all, (2) Very little importance, (3) Some importance, and (4) Strong importance. The list of 20 job/career priorities was created in an iterative, consultative manner using an academic literature review combined with discussions with actual job-seekers and seasoned executive search professionals.

Two Significant Findings
Table 1 compares the hierarchies of weighted averages for GenY and GenX across the set of 20 career/job priorities.

    • GenX and GenY generally have similar priorities. The two generations showed a moderately-strong correlation (r = .70, p < .05) between their ratings of specific career priorities. In this sense, GenY and GenX are more alike than different. Interesting, the results modify the common wisdom about Millennials, in particular, while “work-life balance, direct cash compensation, standard benefits and sense of purpose” were rated highest, other factors like “global exposure, opportunities to make a difference, social responsibility, use of technology and company values and reputation” were rated much lower, both in terms of actual ratings and positions in the hierarchies of priorities. Remarkably, GenX showed these same trends. Therefore, both generations conform to Maslow’s classic Hierarchy of Needs, where pragmatism trumps principle when faced with actual career decisions.
    • GenX and GenY generally differ in their rigidity on priorities. Many sources characterize GenY as the “me generation” – implying they want it all and right now. Our results contradict this view. Instead, GenX appears more uncompromising in what they are looking for, whereas Millennials seem more flexible in achieving the same outcomes. This is borne out when looking at the variability in GenY’s ratings compared to GenX. Indeed, those in the GenX group rated “work-life balance, direct cash compensation and workplace autonomy/flexibility” all at the highest level of importance, followed closely by standard benefits, sense of purpose, and fair-supportive system of leadership. In fact, 35% of the career priorities were tied for second-place status for GenX. This effect was absent for GenY.It seems that the way many sources speak about Millennials is actually more descriptive of GenX – which makes sense considering this generation perhaps sees itself as having “paid its dues” and eager to reap the rewards in terms of increased autonomy, flexibility and sense of purpose. As recruiters and HR advisory experts, we interpret GenX’s strong expectations as representing a need for constant advancement or boost in career status and workplace control. So, while the two generations agree on general priorities, they hold different degrees of conviction toward them as well as specific nuances that reflect their professional maturity. The findings suggest to us that GenY is looking for “Balance, Bucks and Benefits,” while GenX is looking for “Balance, Bucks and Boost.”

AETHOS Consulting Group_Top 5 Career Priorities for Gen X versus Gen Y_Dr Jim Houran_Nina Gold

Advice for Leaders when Gaining and Retaining Talent
Knowing that the vast majority of new hires and internal promotions will likely come from GenX and GenY, it is incumbent upon hiring authorities to understand the practical uses of our findings. First the nearly decade-old assumptions of GenY versus GenX seem to require critical revisions. Individuals are consistent and predictable in their priorities when making actual decisions to accept new roles or jobs. Simply put, Millennials are not different than their GenX counterparts.

Rather than being unique to a specific generation or psychographic segment, today’s workspaces and careers are progressively “boundaryless” and unfold outside traditional organizational structures. This has allowed personal values to evolve such that people – and especially GenX – increasingly change work settings for greater autonomy, life balance and meaning in work. GenX shows rigidity in their priorities, whereas GenY seems more flexible when seeking the same priorities. This flexibility can allow employers to be more nimble and creative in the terms of job offers and the conditions of a given workplace. This flexibility is the new dimension in employment.

From previous research for our book, Loneliness of Leadership, we found that the most effective modern leaders are ones who tolerate ambiguity, show flexibility in thought and action, and anticipate rather than fight changing business conditions. It is understandable why companies are striving to hire Millennials, as they have these traits in spades. However, both GenY and GenX hold very similar priorities when it comes to employment. Employers should consider this when hiring knowing that the challenge will likely come when negotiating terms and conditions for employment. Expect GenX to be the “divas,” and GenY often less so.

Finally, keep in mind that subtle variations in these ratings occurred both within and across GenY and GenX. Perhaps this is the most telling trend of all. It suggests that there are risks when generalizing about the characteristics of any group or segment of individuals. Categorizing and treating individuals in a homogenous fashion like GenX versus GenY ignores the fact that we are dealing with unique individuals. In particular, we know that the rise of the lifestyle concept shows that hotel businesses recognize and attempt to deliver on a personalized guest experiences. Yet, it is odd that this identical philosophy is not uniformly applied to a company’s own employees, who are in effect its internal customers.

The best talent, regardless of generation, strives for the same general outcomes in a role, although the strength of expectations varies by professional maturity. The disrupting force of GenY is perhaps best regarded as an urgent wake-up call for organizations again to start thinking and treating team members as highly-valued individuals, with a focus on understanding their idiosyncratic motivators and then devising new and innovative platforms that best leverage their aspirations to keep them personally and professionally engaged.

Note: For references and a recommended reading list please contact the authors.

Clara Stilwell_AETHOS Consulting Group_New York_web

Brexit’s Repercussions on the Hospitality Sector

Article co-authored by Chris Mumford, AETHOS Consulting Group, and Ben Sheldrick, Magrath LLP

The referendum result in the U.K. this past summer has plunged the U.K. into a period of uncertainty as the country waits to find out what the decision to leave the European Union will mean exactly. A plummeting in the value of the pound was the most apparent immediate impact of the vote in June, along with a whirlwind of successive resignations among the country’s political leadership. As the U.K. waits for Article 50 to be triggered and for the terms of exit from the EU to become apparent, we take a look at what immediate impact there has been on the U.K. hospitality sector and what the future may look like.

Hotel, restaurant, entertainment and leisure businesses in the U.K. employ some 400,000+ EU migrant workers. The average five-star hotel in London, for example, has a workforce with more than 50 nationalities represented. Under EU treaty provisions, workers are free to enter the U.K. without any form of work permit or visa, and employers simply have to undertake a “Legal Right to Work” (LRTW) check before they can begin work. This flexible labour market has proven to be hugely beneficial to employers in the hospitality arena. The sector has become dependent on immigrant labour and is now in danger of no longer being the attractive destination for foreign job seekers that it has been traditionally.

As Keith Edwards, Chief People & Development Officer at Soho House, which operates restaurants, clubs and hotels, notes, “At Soho House, in the weeks and months since the Brexit referendum, we have noticed it becoming harder and more expensive to recruit and we expect that trend to continue. The drop in the value of sterling means that many of those from abroad who are working here have less money to send home, and the influx of those moving to the U.K. to seek work is slowing given the general uncertainty.”

This experience is shared in the hotel sector by Jumeirah Group, which has three properties in London. Ann Whelan, VP Human Resources Europe, states, “We are seeing a decline in casual workers, for example, housekeepers. The agencies we work with are seeing a drop in footfall. In terms of resourcing into our properties we not yet seeing any impact — it is too early — but the uncertainty and ambiguity over what’s going to happen does mean some Europeans are expressing reluctance over coming to the U.K.”

In the restaurant sector, outlets are predominantly staffed by young EU workers here in the U.K. for a temporary period to improve their English language skills and/or to study. Many businesses are dependent on being able to employ young people whose primary reason for coming to the U.K. is to learn English before returning to their home country to pursue their professional careers. Many restaurant businesses are now seeing that those who have been in the U.K. for a while are now moving back to their home country as a result of the currency dip.

Whelan notes that those Europeans already here are taking stock of their long-term futures in the U.K. “We are encouraging those EU citizens already here to apply for permanent residency. We are also starting to hear concern from those with children who will be due to start primary or secondary school this summer. As they are not sure how long they will be able to remain in the U.K. and therefore how long their child will remain in school here before having to relocate, they are now bringing forward decisions about their futures in the U.K.”

Not only is a fall in the number of job applicants making it more expensive to recruit, but employers are also facing increased costs through the National Living Wage, currently at £7.20 an hour and due to increase to £7.50 next April. Most hotel employees are on salaries above the National Living Wage, but in the restaurant sector the impact is certainly being felt. The restaurant sector wrote to Prime Minister Theresa May in December (The Evening Standard) to express concern over new business rates and the ability to retain EU workers. The reality is that, while restaurants would like to be able to increase salaries, it is simply not possible. Since the referendum, costs have really come under heavy pressure – on top of business rates going up and the living wage going up, the cost of supplies has also risen dramatically due to the currency fluctuation.

There is no doubt that public concern around immigration was one of the key motivating factors behind the vote to leave the EU in the referendum of June 2016. Consequently, it is very difficult to see how the government can negotiate a new relationship with Europe that continues to permit free movement of workers.

Furthermore, the government remains committed to reducing net migration to the tens of thousands annually. Currently, the figure is running at more than 330,000 per year — workers from the EU make up about half of this annual figure. There is, therefore, a long way to go before the target can be reached. Leaving the EU, with the consequent curb on free movement rights, will go a long way toward enabling the government to reach its long-awaited target.

Given the political narrative around immigration concerns, it seems inevitable that some form of “hard Brexit” will follow the two-year negotiation period after Article 50 has been invoked. This is likely to mean the re-imposition of immigration controls for EU citizens — although, it is very unclear at this stage what the structure of this new regime will look like.

Theresa May has already indicated that the government is unlikely to rely on a Points Based System (“PBS”) for EU workers. Indeed, there is already reference under Tier 3 of PBS (as yet undefined in detail) that in theory will allow for “lower skilled” workers to be recruited by employers who have specific needs. Originally, this was conceived primarily for the agriculture and manufacturing sectors that may require significant additional resources on a seasonal or contractual basis. Tier 3 has never been opened, however conceivably it could be used for EU workers within hospitality and services sectors following Brexit.

Alternatively, the government may introduce a new work permit scheme for these sectors. This would require employers to request permission from a central government authority to employ foreign national workers. If such a scheme is introduced, EU citizens would be unable to take jobs in restaurants, hotels and food outlets, etc., without first obtaining a work authorisation document.

It is possible that the work permit scheme could be introduced on a sector-specific basis (providing for a specific quota of work permits to be made available to the hospitality sector on an annual basis). Alternatively, a regional scheme could be introduced. This could mean that London, a region that relies very heavily on EU migrants in the hospitality sector, could receive a greater quota of work permit allocations than other areas of the country. London’s mayor, Sadiq Khan, has already indicated to government that he would like London’s position as a powerhouse of the economy to be recognised in the new arrangements.

The British Hospitality Association has indicated that at least 100,000 work permits will be needed by employers per annum following Brexit. The government appears to be between a rock and hard place. If they fail to meet their net migration target, they will be deemed to have ignored public concerns around immigration numbers and population growth. Equally, if they fail to provide the requisite number of work permits for sectors in need, the government will be accused by industry of impairing a very significant economic driver.

Whatever the new regulatory regime will look like following Brexit, as Keith Edwards rightly predicts, it is inevitable that business will suffer from additional administrative burdens of immigration compliance. Looking ahead, once Brexit is finalised, business costs are predicted to continue growing. “We will see what kind of Brexit the U.K. ultimately gets, but my expectation is that we will continue to be able to hire EU citizens but with a more burdensome administrative component, which will ultimately mean an increase in the overall cost of hiring.” These financial and administrative burdens risk becoming a significant drain on employers who have until now operated within a very liberal and flexible labour market across the EU.

It seems inevitable that Article 50 will be invoked by the end of March 2017. Consequently, it is entirely possible that the new immigration regimes for EU workers could come into force as early as spring 2019. In the interim, the hospitality sector will be lobbying hard to minimise the negative impact on its constituents.

Ben Sheldrick - NewBen Sheldrick: Ben is a Managing Partner and Head of Business Immigration at Magrath LLP Solicitors, one of the UK’s leading commercial immigration practices. Ben is also Director of Magrath Global, Singapore. He is recognised as a leading UK immigration expert by the legal community and is noted by all of the major legal directories for his expertise in immigration law.

Ben is immigration counsel to many household-name multinational companies and he has extensive experience in strategic planning of global mobility programmes for large organisations. His team also advises individuals of all nationalities seeking entry to the UK as workers, investors, entrepreneurs, artists, performers or for family reunion.

Ben works with the International Bar Association (IBA), the Immigration Law Practitioner’s Association (ILPA), the American Immigration Lawyers Association (AILA), British American Business (BAB) and many other groups in disseminating information in respect of global immigration policy and legal developments.

Clara Stilwell_AETHOS Consulting Group_New York_web

Communication – Key To Avoiding The HR Domino Effect

At the beginning of the year, AETHOS conducted an industry-wide survey, intending to shed light on the alignment between the HR function and senior leadership (click here to review the findings). Sixty-eight (68) senior corporate HR professionals, working predominantly in the hotel and restaurant industry in Europe, Asia and North America, participated. Sharing their views on performance-level expectations set by their respective company’s senior leadership teams, they rated the adequateness of resources and support provided. The survey concluded that there was a substantial misalignment between departmental success metrics and allocated resources required to achieve such metrics. The findings indicated that poor support in any one specific HR function could potentially start a negative ‘domino effect,’ threatening the HR department’s strategic value-add to any organization.

To understand how to potentially avoid this dreaded ‘domino effect,’ and to obtain a more balanced picture, AETHOS invited senior leadership teams to share their own views on this subject. A total of 88 executives responded (88.6% men, 11.4% women, working with major hotel [87.5%], restaurant [6.8%], casino-gaming [3.4%], and travel-tourism companies [2.4%]) from the Americas (29.9%), EMEA (51.7%) and Asia-Pacific (18.4%). Participants were asked the same questions as the surveyed HR executives and they provided candid feedback on alignment, resource allocation and performance expectations. Here are the observations:

Talking ‘priorities’ and adequateness of ‘resources’
Company leadership agrees with the findings of the previous study in that administrative aspects of the job should not take up the majority of the HR agenda. In fact, on average, senior executives believe that only a third (32%) of HR’s time should be spent handling administrative aspects, fixing problems and/or maintaining the status quo. Strategic aspects, on the other hand, such as succession planning, proactive and solution-orientated thinking and ‘innovation’, should take up, on average, approximately 49% of HR’s time.

However, opinions are divided when it comes to how well HR is resourced to deliver on its targets. For example, leadership believes staffing and funding are much less of an issue than they actually are:

  • In terms of staffing, 80.9% of leadership believes HR is appropriately staffed, a stark contrast to what HR executives felt (only 70.9% of HR executives agreed).
  • In terms of funding, 82.5% of leadership believed HR has enough monetary resources (only 72.7% of HR executives agreed).

In contrast, leadership is worried about HR not receiving enough peer support or that unrealistic deadlines are pressuring HR when, in fact, HR is not too concerned about those aspects:

  • In terms of peer support, 82.5% of leadership thought that HR is ‘backed-up’ by their counterparts in other departments (versus 89.1% of HR executives).
  • In terms of time pressure, 71.4% of leadership believed that HR has sufficient time to achieve their key performance indicators (KPIs) (versus 98.2% of HR executives).

Identifying the disconnects
The leadership survey reveals that senior management is not aware of the true pressure points HR is facing in its daily struggle to achieve set targets. The above-mentioned contrasting views on the adequateness of resources are just one example. Analysing the results of both the HR and the leadership questionnaires exposes further misalignment between senior management and HR.

For example, the earlier HR survey revealed that leadership seemingly sets goals that cannot be fulfilled given HR’s lack of resources. Consequently, the daily realities of the HR department mean that other tasks require more urgent attention (causing the ‘domino effect’). Yet, juxtaposing the responses from senior management and HR professionals paints an even more complex picture – ultimately telling us that one hand might not necessarily know what the other hand is doing. The table below highlights those contrasting views and opinions. It shows that there is a clear disconnect between what HR executives think they are expected to do and what they are actually capable of doing with the resources available. It also indicates that there is misalignment regarding what HR executives think they are expected to do and what leadership actually asks HR executives to do. Lastly, it highlights that there is a discrepancy between what HR executives actually manage to do and what leadership thinks HR manages to get done.

Communication Key To Avoiding The HR Domino Effect_MIELKE, FSADNI, HAZELTON

Recognising the true culprit: Communication, or lack thereof
The HR survey hinted at the fact that ‘communication’ might be at the heart of the problem. The leadership survey now seems to have confirmed this, and there has been no better way to corroborate this than by asking a set of straightforward questions:

  • ‘Is HR well equipped and resourced to achieve its KPIs?’ 53.9% of senior management believes (despite stating that it is aware of the lack of resources) that HR does not have to ‘fight’ internal battles to secure necessary resources, but 67% of HR executives actually feel that they do.
  • ‘Is the HR function vital to your firm’s success?’ 98.7% of leadership agrees or strongly agrees that the HR department indeed plays a key role in ensuring success; yet, HR executives thought this number to be lower (93%).
  • ‘Is HR’s voice being heard at the board table?’ 87.7% of senior management agrees or strongly agrees when asked if they sufficiently hear about HR’s opinions and views on business matters. Remarkably, when HR executives were asked, this number was significantly higher (94%).

The findings are telling. They indicate that leadership actually would be happy to provide more resources but that HR is not sufficiently speaking up and making its case (or perhaps, leadership is just not hearing HR’s cry for help). The results also pinpoint an age-old problem: leadership needs to make sure to not only commit to and communicate its support of the HR function but also to act upon it. After all, actions speak louder than words. The findings are also telling us that HR could do a better job in communicating and expressing its own thoughts and concerns. Leadership is certainly open to hearing more from HR professionals and valuing its opinion, but it also believes that HR needs to be more point blank in articulating its needs.

The way forward
The greatest return on investment lies in bridging the gap between performance expectations and the daily realities of the job. The very best way to ensure this is happening is by aligning leadership and the HR department. The plan of attack? Back to the basics. Candid and open communication is the best way forward. If leadership is truly welcoming HR to have a seat at the board table, HR executives must step up and secure their place. Leadership must proactively encourage HR to speak up and seek input, and HR must clearly communicate what is needed to be successful (‘if you don’t ask, you don’t get’).

Clara Stilwell_AETHOS Consulting Group_New York_web

AETHOS Talks Talent – The Human Factor

AETHOS frequently advises clients on the considerable nuances involved in finding and developing talent. Recently, much has been published about today’s sourcing and hiring processes, which seem to have become dramatically “technologized” for efficiency. However, speedy and transactional processes do not automatically equal quality outcomes. Until AI (artificial intelligence) can accurately and consistently mimic or perfect what human interaction can discern, technology can only assist in the match-making. The ultimate decision takes a bit more finesse. Let’s revisit the basic challenges hiring managers continually face, and then consider our thoughts on how to best tackle each.

Challenge 1: When looking to fill a specific role, how can you ensure a candidate is the right fit for your organization?

“The recipe for fit is simple in principle but tough for pressured hiring managers to put into practice – 50% technical skills and 50% cultural compatibility.” An organization must fully understand the context of the specific role and what will drive the role’s success. Although they may have an idea of who the perfect candidate is, the culture of the organization or the leadership style of the senior report may necessitate a different type of candidate. For example, the job description for a VP of Sales and Marketing for a small hotel management company with a new brand may describe an individual who can work in an autonomous environment, make quick decisions and not require hand-holding. The CEO or COO may think that s/he wants that type of individual but, in reality, s/he is more of a micromanager and wants an individual who will be able to balance this work style.

Taking the time to understand all the positions with which the role will interact up and down the organizational chart, what types of people are holding those existing positions, what were the successes and failures of the predecessor, and what measures will define the success of the role is paramount for finding the right “fit.”

It is best to be as prepared as possible—examine all aspects of the role so that you are targeting the appropriate talent pool. Regardless of the role, it is important to understand 1) the culture of your organization, 2) the leadership style of the senior reports, 3) the strength and weaknesses of the bench, 4) the technical requirements of the role and 5) the success measures for the role.

Challenge 2: How much thought should go into a candidate’s potential rather than existing skills?

“The best performing organizations always hire for tomorrow and not just today.” We advise our clients to consider potential, in addition to the present skill set; however, it is a trait that should be assessed carefully. An example of this would be in the case of hiring a VP of Operations for a brand company on a strong growth path. There may be excellent, however potentially pricey, candidates who have done this exact role for other companies. They may be able to jump in and be effective immediately. They may also be less nimble and flexible to adapt to the culture of the new organization if they are coming from a very structured background. Talent could also be approached from the regional or cluster general management bucket – plucking candidates from this pool could be quite rewarding. Finding someone who demonstrates strong potential with a balance of the right competencies – knowledge of how to run multiple properties, exposure to standard operating procedures, nimble and flexible, motivational yet hands-on, tactical yet strategic – can produce a candidate who can truly make their mark and take the organization to the next level.

Hiring for potential can happen at all levels of regional management and the C-Suite. Can a VP of Asset Management move into a development role or an operations role? Can someone with no hospitality experience step into a hospitality role? This happens quite a bit now, particularly in branding and digital marketing positions. We also see this at the CEO level – a great number of CEOs in our industry are from other industries – never worked a day in a hotel. The Boards are clearly hiring them based on their functional skill – ability to trail blaze, manage disruption, and move the organization in a different direction.

Challenge 3: Once a new employee is in place, how can you help that person develop her career and contribute in a meaningful way?

“Communicating clear expectations for the role and encouraging the new hire to think and act like a business owner is a permission slip for high performance.” We encourage companies to take very seriously the onboarding and professional development of their new employees. Often new hires leave due to a lack of alignment from the induction phase, resulting in a huge cost to the employer. It is important that communication from the get-go is clear – that the job description is as finely tuned as necessary, the performance metrics are agreed upon, the appropriate tools and authority are provided, and a schedule for performance reviews is created. On an on-going basis, particularly in that first year, regular meetings on performance development should be held. This can be accompanied with standardized testing to ensure appropriate competencies and action plans are discussed. Moreover, employee engagement or opinion surveys are an underutilized tool to understand spoken and unspoken cultural factors of an organization that affect both compatibility with candidates and the needs of the onboarding process.

Challenge 4: How do you build and keep a team that drives innovation?

“Actively building a team with both high curiosity and intellectual diversity, and allowing them the fun and freedom to fail, will drive both innovation and engagement.” The theme of “innovation” is one that is becoming a focus in our industry. With 115 brands offered by the top ten hospitality chains, how does the hotel industry differentiate one brand from the other? Is the brand unique in the physical structure, design, technology, clever marketing, bespoke food and beverage options, unique amenities or service? Wherever you chose to differentiate, the ideas start with your people.

Creating innovation within your organization requires humility and self-awareness at the leadership level. Whether it is at the C-Suite level or at the property level, how do you balance and incorporate for the skills that you or executive team may not have? If everyone is a creative visionary and no one has a financial pragmatic side, the results may not be so kind.

To encourage innovation, you must create an environment that supports creative thinking – allow team members to think out of the box, have fun, test ideas – without detrimental recourse. Performance metrics must be aligned, as well, to continue to have engagement from your team. Give them the wiggle room and ability to flex their minds, and reward them accordingly.

When hiring new team members, you must assess for curiosity and intellectual diversity. You can also hire based on previous creative accomplishments – for example, a VP Food and Beverage who has a track record of developing interesting culinary concepts. However, by asking the right questions through behavioral interviewing and standardized testing, you can uncover creative tendencies where it might not be plainly visible.

Challenge 5: What advice do you have for hoteliers looking to build an innovative team?

“Invest in the people and tools necessary to assess for talent and then properly resource that talent.” As discussed, it all starts at the top – with the ability to fully understand capability. The first step is to take a step back. Conduct a critical review of your bench as it relates to your strategic plan. What have your successes been? Where are your challenges? Where do you want to see innovation?

Look at the people you have in both the successful and unsuccessful parts of your organization. Get an in-depth understanding of their weaknesses, capabilities and potential. Then you can determine if the innovation capability is present, but potentially misaligned. Depending on where these gaps in innovative performance are, take very measured steps to get organizational alignment – restructure, train, redefine performance metrics and fill the gaps as necessary with new talent.

Let us know on Twitter if these perspectives resonate with you and what other approaches or solutions have worked successfully in your organization. What the industry needs more than ever is the sharing of best practices and the encouragement to hire talent that is intellectually curious and willing to change the status quo.

Clara Stilwell_AETHOS Consulting Group_New York_web

AETHOS Talks Talent – The Human Factor

AETHOS frequently advises clients on the considerable nuances involved in finding and developing talent. Recently, much has been published about today’s sourcing and hiring processes, which seem to have become dramatically “technologized” for efficiency. However, speedy and transactional processes do not automatically equal quality outcomes. Until AI (artificial intelligence) can accurately and consistently mimic or perfect what human interaction can discern, technology can only assist in the match-making. The ultimate decision takes a bit more finesse. Let’s revisit the basic challenges hiring managers continually face, and then consider our thoughts on how to best tackle each.

Challenge 1: When looking to fill a specific role, how can you ensure a candidate is the right fit for your organization?

“The recipe for fit is simple in principle but tough for pressured hiring managers to put into practice – 50% technical skills and 50% cultural compatibility.” An organization must fully understand the context of the specific role and what will drive the role’s success. Although they may have an idea of who the perfect candidate is, the culture of the organization or the leadership style of the senior report may necessitate a different type of candidate. For example, the job description for a VP of Sales and Marketing for a small hotel management company with a new brand may describe an individual who can work in an autonomous environment, make quick decisions and not require hand-holding. The CEO or COO may think that s/he wants that type of individual but, in reality, s/he is more of a micromanager and wants an individual who will be able to balance this work style.

Taking the time to understand all the positions with which the role will interact up and down the organizational chart, what types of people are holding those existing positions, what were the successes and failures of the predecessor, and what measures will define the success of the role is paramount for finding the right “fit.”

It is best to be as prepared as possible—examine all aspects of the role so that you are targeting the appropriate talent pool. Regardless of the role, it is important to understand 1) the culture of your organization, 2) the leadership style of the senior reports, 3) the strength and weaknesses of the bench, 4) the technical requirements of the role and 5) the success measures for the role.

Challenge 2: How much thought should go into a candidate’s potential rather than existing skills?

“The best performing organizations always hire for tomorrow and not just today.” We advise our clients to consider potential, in addition to the present skill set; however, it is a trait that should be assessed carefully. An example of this would be in the case of hiring a VP of Operations for a brand company on a strong growth path. There may be excellent, however potentially pricey, candidates who have done this exact role for other companies. They may be able to jump in and be effective immediately. They may also be less nimble and flexible to adapt to the culture of the new organization if they are coming from a very structured background. Talent could also be approached from the regional or cluster general management bucket – plucking candidates from this pool could be quite rewarding. Finding someone who demonstrates strong potential with a balance of the right competencies – knowledge of how to run multiple properties, exposure to standard operating procedures, nimble and flexible, motivational yet hands-on, tactical yet strategic – can produce a candidate who can truly make their mark and take the organization to the next level.

Hiring for potential can happen at all levels of regional management and the C-Suite. Can a VP of Asset Management move into a development role or an operations role? Can someone with no hospitality experience step into a hospitality role? This happens quite a bit now, particularly in branding and digital marketing positions. We also see this at the CEO level – a great number of CEOs in our industry are from other industries – never worked a day in a hotel. The Boards are clearly hiring them based on their functional skill – ability to trail blaze, manage disruption, and move the organization in a different direction.

Challenge 3: Once a new employee is in place, how can you help that person develop her career and contribute in a meaningful way?

“Communicating clear expectations for the role and encouraging the new hire to think and act like a business owner is a permission slip for high performance.” We encourage companies to take very seriously the onboarding and professional development of their new employees. Often new hires leave due to a lack of alignment from the induction phase, resulting in a huge cost to the employer. It is important that communication from the get-go is clear – that the job description is as finely tuned as necessary, the performance metrics are agreed upon, the appropriate tools and authority are provided, and a schedule for performance reviews is created. On an on-going basis, particularly in that first year, regular meetings on performance development should be held. This can be accompanied with standardized testing to ensure appropriate competencies and action plans are discussed. Moreover, employee engagement or opinion surveys are an underutilized tool to understand spoken and unspoken cultural factors of an organization that affect both compatibility with candidates and the needs of the onboarding process.

Challenge 4: How do you build and keep a team that drives innovation?

“Actively building a team with both high curiosity and intellectual diversity, and allowing them the fun and freedom to fail, will drive both innovation and engagement.” The theme of “innovation” is one that is becoming a focus in our industry. With 115 brands offered by the top ten hospitality chains, how does the hotel industry differentiate one brand from the other? Is the brand unique in the physical structure, design, technology, clever marketing, bespoke food and beverage options, unique amenities or service? Wherever you chose to differentiate, the ideas start with your people.

Creating innovation within your organization requires humility and self-awareness at the leadership level. Whether it is at the C-Suite level or at the property level, how do you balance and incorporate for the skills that you or executive team may not have? If everyone is a creative visionary and no one has a financial pragmatic side, the results may not be so kind.

To encourage innovation, you must create an environment that supports creative thinking – allow team members to think out of the box, have fun, test ideas – without detrimental recourse. Performance metrics must be aligned, as well, to continue to have engagement from your team. Give them the wiggle room and ability to flex their minds, and reward them accordingly.

When hiring new team members, you must assess for curiosity and intellectual diversity. You can also hire based on previous creative accomplishments – for example, a VP Food and Beverage who has a track record of developing interesting culinary concepts. However, by asking the right questions through behavioral interviewing and standardized testing, you can uncover creative tendencies where it might not be plainly visible.

Challenge 5: What advice do you have for hoteliers looking to build an innovative team?

“Invest in the people and tools necessary to assess for talent and then properly resource that talent.” As discussed, it all starts at the top – with the ability to fully understand capability. The first step is to take a step back. Conduct a critical review of your bench as it relates to your strategic plan. What have your successes been? Where are your challenges? Where do you want to see innovation?

Look at the people you have in both the successful and unsuccessful parts of your organization. Get an in-depth understanding of their weaknesses, capabilities and potential. Then you can determine if the innovation capability is present, but potentially misaligned. Depending on where these gaps in innovative performance are, take very measured steps to get organizational alignment – restructure, train, redefine performance metrics and fill the gaps as necessary with new talent.

Let us know on Twitter if these perspectives resonate with you and what other approaches or solutions have worked successfully in your organization. What the industry needs more than ever is the sharing of best practices and the encouragement to hire talent that is intellectually curious and willing to change the status quo.

Clara Stilwell_AETHOS Consulting Group_New York_web

Avoiding Tribe-dom Warfare When Merging Corporate Cultures

Successfully merging corporate cultures in today’s environment of consolidation takes more of a social science degree than a business degree. Fields like cultural anthology, social psychology, and sociology have long studied and described the way groups – and members within them – think and behave. Insights from traditional and well-validated social models are invaluable tools for navigating both the expected and unanticipated consequences of bringing new teams, cultures and brands together.

Fundamentally, teams and companies are complex and political “mini-societies” versus mere collections of employees working together. Knowing this is 80% of the battle. And all societies have rules and norms, although the nature of norms changes according to the type of society in question. Rules and norms follow from a collectively-understood tenet or “purpose or values” of the society, and, as such, they regulate societal behaviour. But all societies are not created equal, and nuances in social complexity introduces subtle and not so subtle challenges for leaders.

Merging Cultures is Merging “Tribe-doms”
Bands, tribes, chiefdoms and states… these are social typologies coined by anthropologist Elman Service. A band is usually a very small, often times nomadic, egalitarian group with little to no formal leadership. A collection of multiple bands is called a tribe, which function quite unlike old cowboy movies depicting warriors surrounding a chief. Most tribes have no formal leadership, as they, too, are egalitarian societies. A chiefdom is a political unit headed by a chief, who holds power over more than one community group. As the name chief implies, chiefdoms are not egalitarian but instead involve social rank, with the chief and his family holding power. Finally, international law and relations define a state (or country) as a geographic political entity possessing political sovereignty, i.e., the society is not subject to a higher political authority.

Companies are inherently fragmented or compartmentalized by function, although separate functions strive to operate as an integrated whole given shared or collective interests. In anthropological speak, companies are arguably akin to “chiefdoms,” with its various corporate, regional and asset level functions and teams functioning as highly vocal “tribes.” In practice, this means that merging company cultures is really an exercise in dealing with “tribe-doms,” and the trick is to avoid the predictable and dangerous tribe-dom warfare that ensues when different and competing societies, err companies, clash for status, power and survival.

The Best Defense is a Good Offense
Sun Tsu’s classic treatise, Art of War, noted that, “The supreme art of war is to subdue the enemy without fighting.” In other words, preparing for confrontation by knowing your opponent well can bring victory without a painful battle. In this context, your “opponent” is not the other company being acquired; rather it is the clear and present obstacles to integration. Loyalty, cooperation and rapport are strongest within a group than between groups. This is a critical truism of social interaction at any scale, as well as the opponent leaders must battle in corporate mergers. On a global scale, states often maintain diplomacy and accommodation among each other due to shared business or economic partnerships or interests, even though their value and belief systems may significantly contrast. Business is indeed a great peace-maker and -keeper. But corporate mergers must go beyond shared economic interests in order to be successful, since organizations need to integrate internal systems and cultures. This is drastically different and perhaps more complex and risk-prone than states working together.

Joint goal-setting and goal-realization are among the most effective strategies for building bonds between adversaries, or rival groups. With this mind, four steps grounded in organizational-psychological theory can help avoid the inevitable chaos and “tribe-dom” warfare that results from unprepared corporate mergers left unchecked. Cautious work must be done before, during and after a business and cultural merger:

  • Only square pegs in square holes: Mergers and acquisitions are substantially comprised when motivated purely by financial metrics. For example, companies will not align and perform effectively as a collective if they are metaphorically going different directions, at different speeds, using different modes of transportation and obeying different rules of the road. Instead, the smoothest mergers occur when tribe-doms have in advance of a merger a good deal of collectively-shared business and people practices. Therefore, leaders should look beyond P&Ls to proactively and comprehensively vet acquisition targets in terms of overlapping or complementary missions, visions and core values.
  • Remove the apprehension that ambiguity brings: Managing expectations alleviates much of the anxiety and uncertainty that is inherent to marked change. Groups splinter, factions erupt and people invent counterproductive stories and explanations in the absence of timely and credible information that speaks to the well-being and self-interests of a tribe-dom. Therefore, once a merger is planned, leaders must inform members of the tribe-doms of the purposes of the merger and any plans of action that follow from the intent. This includes articulating how the merger will build on collective values, strengthen or protect the survival of the tribe-dom, as well as how it benefits individual members of each tribe-dom.
  • Have tribe-dom members change perspective: Social science has long known that closer bonds form among individuals who share similarities based on their identity – such as the department (or tribe) in which they work, and the company (or chiefdom) that employs them. Therefore, diversity for its own sake complicates cultural mergers. Therefore, leaders need to know that research shows the secret to unlocking the positive effects of diversity is to promote perspective-taking. When diverse competing teams or functions take each other’s perspective, they performed more creatively and effectively than teams whose members were similar. Perspective-taking is critical when introducing previously rival tribe-doms together, since it helps to reduce individuals’ tendencies to think primarily in their own self-interests, and instead, to think about the well-being of the respective tribe-doms. The idea is to frame messaging consistently in terms of collaboration, exploration and expansion, versus messaging that is oppositional, competitive and argumentative.
  • Introduce a common “enemy”: Lastly, aspirational and motivational lingo and approaches are commonly espoused in business books, but the reality is that the most effective and quickest way to foment and sustain a collective and positive company (chiefdom) spirit among a group of self-interested tribes is by introducing a new, rival group or entity. Maybe it’s a specific competitor or a new market – leaders can be flexible and creative when choosing an enemy be it real or symbolic. But, fighting an enemy forces alignment and cooperation among previously disconnected tribe-doms to a common cause. This is the epitome of joint goal-setting and realization.

Ultimately, the chiefdoms that we call companies need servant leaders to successfully plan and execute corporate mergers. These are the chiefs who put self-interest aside to give members of each tribe-dom support, collective mission and a voice. Tactically it looks like the management of the economics underlying a P&L, but strategically it is about thinking and acting consistently and proactively as a cultural steward of a mini-society. What a tremendous responsibility that is.

Clara Stilwell_AETHOS Consulting Group_New York_web

Avoiding Tribe-dom Warfare When Merging Corporate Cultures

Successfully merging corporate cultures in today’s environment of consolidation takes more of a social science degree than a business degree. Fields like cultural anthology, social psychology, and sociology have long studied and described the way groups – and members within them – think and behave. Insights from traditional and well-validated social models are invaluable tools for navigating both the expected and unanticipated consequences of bringing new teams, cultures and brands together.

Fundamentally, teams and companies are complex and political “mini-societies” versus mere collections of employees working together. Knowing this is 80% of the battle. And all societies have rules and norms, although the nature of norms changes according to the type of society in question. Rules and norms follow from a collectively-understood tenet or “purpose or values” of the society, and, as such, they regulate societal behaviour. But all societies are not created equal, and nuances in social complexity introduces subtle and not so subtle challenges for leaders.

Merging Cultures is Merging “Tribe-doms”
Bands, tribes, chiefdoms and states… these are social typologies coined by anthropologist Elman Service. A band is usually a very small, often times nomadic, egalitarian group with little to no formal leadership. A collection of multiple bands is called a tribe, which function quite unlike old cowboy movies depicting warriors surrounding a chief. Most tribes have no formal leadership, as they, too, are egalitarian societies. A chiefdom is a political unit headed by a chief, who holds power over more than one community group. As the name chief implies, chiefdoms are not egalitarian but instead involve social rank, with the chief and his family holding power. Finally, international law and relations define a state (or country) as a geographic political entity possessing political sovereignty, i.e., the society is not subject to a higher political authority.

Companies are inherently fragmented or compartmentalized by function, although separate functions strive to operate as an integrated whole given shared or collective interests. In anthropological speak, companies are arguably akin to “chiefdoms,” with its various corporate, regional and asset level functions and teams functioning as highly vocal “tribes.” In practice, this means that merging company cultures is really an exercise in dealing with “tribe-doms,” and the trick is to avoid the predictable and dangerous tribe-dom warfare that ensues when different and competing societies, err companies, clash for status, power and survival.

The Best Defense is a Good Offense
Sun Tsu’s classic treatise, Art of War, noted that, “The supreme art of war is to subdue the enemy without fighting.” In other words, preparing for confrontation by knowing your opponent well can bring victory without a painful battle. In this context, your “opponent” is not the other company being acquired; rather it is the clear and present obstacles to integration. Loyalty, cooperation and rapport are strongest within a group than between groups. This is a critical truism of social interaction at any scale, as well as the opponent leaders must battle in corporate mergers. On a global scale, states often maintain diplomacy and accommodation among each other due to shared business or economic partnerships or interests, even though their value and belief systems may significantly contrast. Business is indeed a great peace-maker and -keeper. But corporate mergers must go beyond shared economic interests in order to be successful, since organizations need to integrate internal systems and cultures. This is drastically different and perhaps more complex and risk-prone than states working together.

Joint goal-setting and goal-realization are among the most effective strategies for building bonds between adversaries, or rival groups. With this mind, four steps grounded in organizational-psychological theory can help avoid the inevitable chaos and “tribe-dom” warfare that results from unprepared corporate mergers left unchecked. Cautious work must be done before, during and after a business and cultural merger:

  • Only square pegs in square holes: Mergers and acquisitions are substantially comprised when motivated purely by financial metrics. For example, companies will not align and perform effectively as a collective if they are metaphorically going different directions, at different speeds, using different modes of transportation and obeying different rules of the road. Instead, the smoothest mergers occur when tribe-doms have in advance of a merger a good deal of collectively-shared business and people practices. Therefore, leaders should look beyond P&Ls to proactively and comprehensively vet acquisition targets in terms of overlapping or complementary missions, visions and core values.
  • Remove the apprehension that ambiguity brings: Managing expectations alleviates much of the anxiety and uncertainty that is inherent to marked change. Groups splinter, factions erupt and people invent counterproductive stories and explanations in the absence of timely and credible information that speaks to the well-being and self-interests of a tribe-dom. Therefore, once a merger is planned, leaders must inform members of the tribe-doms of the purposes of the merger and any plans of action that follow from the intent. This includes articulating how the merger will build on collective values, strengthen or protect the survival of the tribe-dom, as well as how it benefits individual members of each tribe-dom.
  • Have tribe-dom members change perspective: Social science has long known that closer bonds form among individuals who share similarities based on their identity – such as the department (or tribe) in which they work, and the company (or chiefdom) that employs them. Therefore, diversity for its own sake complicates cultural mergers. Therefore, leaders need to know that research shows the secret to unlocking the positive effects of diversity is to promote perspective-taking. When diverse competing teams or functions take each other’s perspective, they performed more creatively and effectively than teams whose members were similar. Perspective-taking is critical when introducing previously rival tribe-doms together, since it helps to reduce individuals’ tendencies to think primarily in their own self-interests, and instead, to think about the well-being of the respective tribe-doms. The idea is to frame messaging consistently in terms of collaboration, exploration and expansion, versus messaging that is oppositional, competitive and argumentative.
  • Introduce a common “enemy”: Lastly, aspirational and motivational lingo and approaches are commonly espoused in business books, but the reality is that the most effective and quickest way to foment and sustain a collective and positive company (chiefdom) spirit among a group of self-interested tribes is by introducing a new, rival group or entity. Maybe it’s a specific competitor or a new market – leaders can be flexible and creative when choosing an enemy be it real or symbolic. But, fighting an enemy forces alignment and cooperation among previously disconnected tribe-doms to a common cause. This is the epitome of joint goal-setting and realization.

Ultimately, the chiefdoms that we call companies need servant leaders to successfully plan and execute corporate mergers. These are the chiefs who put self-interest aside to give members of each tribe-dom support, collective mission and a voice. Tactically it looks like the management of the economics underlying a P&L, but strategically it is about thinking and acting consistently and proactively as a cultural steward of a mini-society. What a tremendous responsibility that is.

Clara Stilwell_AETHOS Consulting Group_New York_web

Avoiding Tribe-dom Warfare When Merging Corporate Cultures

Successfully merging corporate cultures in today’s environment of consolidation takes more of a social science degree than a business degree. Fields like cultural anthology, social psychology, and sociology have long studied and described the way groups – and members within them – think and behave. Insights from traditional and well-validated social models are invaluable tools for navigating both the expected and unanticipated consequences of bringing new teams, cultures and brands together.

Fundamentally, teams and companies are complex and political “mini-societies” versus mere collections of employees working together. Knowing this is 80% of the battle. And all societies have rules and norms, although the nature of norms changes according to the type of society in question. Rules and norms follow from a collectively-understood tenet or “purpose or values” of the society, and, as such, they regulate societal behaviour. But all societies are not created equal, and nuances in social complexity introduces subtle and not so subtle challenges for leaders.

Merging Cultures is Merging “Tribe-doms”
Bands, tribes, chiefdoms and states… these are social typologies coined by anthropologist Elman Service. A band is usually a very small, often times nomadic, egalitarian group with little to no formal leadership. A collection of multiple bands is called a tribe, which function quite unlike old cowboy movies depicting warriors surrounding a chief. Most tribes have no formal leadership, as they, too, are egalitarian societies. A chiefdom is a political unit headed by a chief, who holds power over more than one community group. As the name chief implies, chiefdoms are not egalitarian but instead involve social rank, with the chief and his family holding power. Finally, international law and relations define a state (or country) as a geographic political entity possessing political sovereignty, i.e., the society is not subject to a higher political authority.

Companies are inherently fragmented or compartmentalized by function, although separate functions strive to operate as an integrated whole given shared or collective interests. In anthropological speak, companies are arguably akin to “chiefdoms,” with its various corporate, regional and asset level functions and teams functioning as highly vocal “tribes.” In practice, this means that merging company cultures is really an exercise in dealing with “tribe-doms,” and the trick is to avoid the predictable and dangerous tribe-dom warfare that ensues when different and competing societies, err companies, clash for status, power and survival.

The Best Defense is a Good Offense
Sun Tsu’s classic treatise, Art of War, noted that, “The supreme art of war is to subdue the enemy without fighting.” In other words, preparing for confrontation by knowing your opponent well can bring victory without a painful battle. In this context, your “opponent” is not the other company being acquired; rather it is the clear and present obstacles to integration. Loyalty, cooperation and rapport are strongest within a group than between groups. This is a critical truism of social interaction at any scale, as well as the opponent leaders must battle in corporate mergers. On a global scale, states often maintain diplomacy and accommodation among each other due to shared business or economic partnerships or interests, even though their value and belief systems may significantly contrast. Business is indeed a great peace-maker and -keeper. But corporate mergers must go beyond shared economic interests in order to be successful, since organizations need to integrate internal systems and cultures. This is drastically different and perhaps more complex and risk-prone than states working together.

Joint goal-setting and goal-realization are among the most effective strategies for building bonds between adversaries, or rival groups. With this mind, four steps grounded in organizational-psychological theory can help avoid the inevitable chaos and “tribe-dom” warfare that results from unprepared corporate mergers left unchecked. Cautious work must be done before, during and after a business and cultural merger:

  • Only square pegs in square holes: Mergers and acquisitions are substantially comprised when motivated purely by financial metrics. For example, companies will not align and perform effectively as a collective if they are metaphorically going different directions, at different speeds, using different modes of transportation and obeying different rules of the road. Instead, the smoothest mergers occur when tribe-doms have in advance of a merger a good deal of collectively-shared business and people practices. Therefore, leaders should look beyond P&Ls to proactively and comprehensively vet acquisition targets in terms of overlapping or complementary missions, visions and core values.
  • Remove the apprehension that ambiguity brings: Managing expectations alleviates much of the anxiety and uncertainty that is inherent to marked change. Groups splinter, factions erupt and people invent counterproductive stories and explanations in the absence of timely and credible information that speaks to the well-being and self-interests of a tribe-dom. Therefore, once a merger is planned, leaders must inform members of the tribe-doms of the purposes of the merger and any plans of action that follow from the intent. This includes articulating how the merger will build on collective values, strengthen or protect the survival of the tribe-dom, as well as how it benefits individual members of each tribe-dom.
  • Have tribe-dom members change perspective: Social science has long known that closer bonds form among individuals who share similarities based on their identity – such as the department (or tribe) in which they work, and the company (or chiefdom) that employs them. Therefore, diversity for its own sake complicates cultural mergers. Therefore, leaders need to know that research shows the secret to unlocking the positive effects of diversity is to promote perspective-taking. When diverse competing teams or functions take each other’s perspective, they performed more creatively and effectively than teams whose members were similar. Perspective-taking is critical when introducing previously rival tribe-doms together, since it helps to reduce individuals’ tendencies to think primarily in their own self-interests, and instead, to think about the well-being of the respective tribe-doms. The idea is to frame messaging consistently in terms of collaboration, exploration and expansion, versus messaging that is oppositional, competitive and argumentative.
  • Introduce a common “enemy”: Lastly, aspirational and motivational lingo and approaches are commonly espoused in business books, but the reality is that the most effective and quickest way to foment and sustain a collective and positive company (chiefdom) spirit among a group of self-interested tribes is by introducing a new, rival group or entity. Maybe it’s a specific competitor or a new market – leaders can be flexible and creative when choosing an enemy be it real or symbolic. But, fighting an enemy forces alignment and cooperation among previously disconnected tribe-doms to a common cause. This is the epitome of joint goal-setting and realization.

Ultimately, the chiefdoms that we call companies need servant leaders to successfully plan and execute corporate mergers. These are the chiefs who put self-interest aside to give members of each tribe-dom support, collective mission and a voice. Tactically it looks like the management of the economics underlying a P&L, but strategically it is about thinking and acting consistently and proactively as a cultural steward of a mini-society. What a tremendous responsibility that is.

Clara Stilwell_AETHOS Consulting Group_New York_web

The New Norm in Global HR Competencies

PAST…

The competency profile of professionals in Human Resources (HR) roles has always been a moving target. Consider the various names the function has taken over the decades – staffing, personnel, human resources, and more recently, more creative monikers like ‘people and culture’ to ‘human capital managers’ and ‘talent resources’. These changing names typically reflect the changing market or business conditions impacting organizations.

For example, unions formed in the mid-19th century in response to social and economic effects of the industrial revolution, which subsequently motivated businesses to think and act beyond simply hiring and firing in order to consider the broader and more complex issues of managing both labour pipeline and relations. As the “war for talent” blossomed in the 1980s and became fierce from the 1990s onward, companies often faced a job-seekers’ market and found themselves needing to “sell” themselves and the opportunities they offered to the marketplace of workers. As a result, many forward-thinking organizations invested in specialists to help build engagement via learning and development programs, as well as working with organizational leadership to maximize effectiveness.

PRESENT…

Despite the occasional advances, HR has been traditionally perceived and treated as an administrative cost centre versus a strategic profit centre – sadly a trend that has continued in recent times. Indeed, even Wikipedia defines a human resources department in this day and age as, “overseeing various aspects of employment, such as compliance with labour law and employment standards, administration of employee benefits, and some aspects of recruitment and dismissal.” Up to about five years ago that characterization, at least in the hospitality industry, was perhaps justified by independent psychometric profiling of HR pros across their Execution, People, and Cognitive skills. In particular, AETHOS’ prior global testing of HR leaders (conducted 2011, n = 1,000) using the 20|20 Skills™ assessment showed that most profiled as “Motivators” – those especially effective in general people skills and motivating team work with a focus on producing tangible outcomes. Of course, missing from that equation was the Cognitive skills element, given that often HR often did not exhibit or rely on its own decision-making but rather conformed to the directives, rules, and regulations set by senior management or government requirements.

Of course, that prior equation is changing too. Organizations are facing increased consolidation and culture merges, competency issues, as well as evolving employee expectations. HR pros are increasingly becoming to be seen as subject matter experts in the care and feeding of organizational culture and as a result their job descriptions have graduated from administrative levels to strategic ones to include responsibilities such as:

  • Competency modelling, bench-strength, organizational structure and retention
  • Proactive talent pipeline and succession planning for leadership roles
  • Team member engagement and culture branding to external audiences
  • Learning, development, mentorship, coaching programs within and across functions
  • Facilitation of IT and other technology to streamline all of the above

Current psychometric studies support the idea that today’s HR leaders need to function less as “Motivators” and more as “Achievers” – those endowed with strong Cognitive ability along with Execution and People skills. Cognitive ability is more than being “book smart” and involves the ability to reason, plan, solve problems, think abstractly, comprehend complex ideas and learn quickly). It is a competency that all modern leaders (notably C-suite) exhibit, and its especially pertinent in today’s market which is dominated by dynamically changing variables and substantial ambiguity.

AETHOS has recently profiled more than a 1,200 HR leaders from around the world. Figure I gives their scores (scaled 0-100, mean of 75) across ten core competencies that independent studies validate as significant predictors of performance in the service-hospitality industry. The graph surprisingly indicates that modern HR pros look increasingly like CEOs and decreasingly like their peer set from five years ago. In particular, 20|20 Skills psychometric testing reveals that today’s HR industry leaders are adept generalists across Execution, People and Cognitive skills, with particular strengths in Cognitive ability and process-orientation. Indeed, HR leaders have become – or perhaps finally have freedom to act as – balanced and independent thinkers and problem-solvers. Rather than administrative tacticians, this is the profile of organized, measured, confident leaders with the mental acumen to contribute meaningfully to strategic business discussions.

FUTURE…

As long as business conditions remain in constant flux, involve lingering ambiguities and present new complexities that require right- and left- brain thinking from HR, it seems unlikely the new competency profile for HR pros presented here will change dramatically. If anything, we predict that both the Problem-Solving and Creativity aspects of Cognitive skills will only increase in order to meet the challenges and opportunities yet to hit the industry. Therefore, we strongly recommend that organizations screen and select candidates for HR leadership roles, in part, with tools or processes that test for balanced and effective competencies in critical-analytical thinking and strategic-big-picture orientation. The idea is to identify individuals who are effective general problem-solvers, as opposed to merely subject matter experts.

This all ties to the foremost topic that seems to dominate conversations and presentations at industry conferences, i.e., the idea of trying to identify the most likely industry disruptors coming to the industry and how businesses should best prepare to navigate them from business and leadership perspectives. Since it is impossible to predict confidently specific changes or challenges, it is more important to identify and add to an organization’s talent base those individuals who can effectively and efficiently deal with dynamic and uncertain variables and forces, regardless of origin. This translates to high levels of tolerance of ambiguity, grit-resilience, emotional intelligence, behavioural integrity, and as shown in the graph, both balanced and high levels of general cognitive ability.

Perhaps this new norm in global HR competencies is not so surprisingly after all. Ultimately, organizations need HR leaders who think and act like business owners and apply their subject matter expertise systemically or cross-functionally, as the behind-the-scenes dynamics and corporate cultures are more open, transparent, and indeed public in a social media sense than ever before (think Glassdoor, LinkedIn, Facebook, etc.). HR expertise offers significant value to inform other functions from sales and marketing/PR to Boards of Directors and the senior-most leadership who set strategic direction for the company. The new competency norm understandably follows from new business norms. Who knows what new names for HR will be introduced in the decades ahead, but given the changes we have seen, HR leaders in our view fundamentally add enterprise value by serving individuals and teams within organizations as “cultural strategists”.

Clara Stilwell_AETHOS Consulting Group_New York_web

“Specific Curiosity” – The Trick for Building Innovation Bench-Strength for Organizations

A New Reality for Businesses

There has been much discussion lately about disruptors – present and future – to the hospitality industry and what this means for leaders and strategic planning. What measures should an organization take to position itself to compete in this “continuously disruptive” environment? A quick answer that comes to many is “better use of technology” – to digitally transform the business. However this begs a more fundamental question – does your organization have the appropriate talent to drive this transformation?

Today’s definition of “talent” must expand beyond salient and traditionally-valued characteristics such as “emotional intelligence,” “behavioural integrity,” “resilience/grit,” “humility,” and “service orientation” to include “innovative thinking.” How can we find talent who are actively engaged with, continuously exploring, and adapting to their surroundings? What is this characteristic called and most, importantly, how can we identify it? Experts in the area of work psychology have indicated that this specific ability is increasingly critical for individual and organizational success.

There are examples of innovation we can point to in the hospitality industry – and there will be more to come. Some of these innovative practices revolve around the use of technology (mobile check-in), others around food and beverage concepts (ethnic pop-ups), and even others around sources of finance (crowdfunding). Some companies will outsource their “innovation” to one of many groups out there who specialize in thinking out of the box and reaching the millennial demographic For example, Farenheit 212, engaged by Marriott to breathe new life into its food and beverage offerings. YOTEL, an already innovative hotel concept, brought innovation into the development phase for its San Francisco property with its strategic partner, Synapse, using crowdfunding for a portion of its equity raise. This was an innovative way to engage the community in which the property will be built – giving them an opportunity to invest in the hotel they will be socializing in.

With the millennials exhibiting traits that are quite different from the rest of the traveling population – digital natives and not necessarily brand loyal, how do leisure (hospitality, travel and restaurant) companies capture this market? If you take a deep hard look at brand proliferation in this industry – it’s a first blush answer to grab more market share within the same market. However, that is not necessarily innovation. Some, controversially may even see that as desperation. So how do these companies manifest a culture of profitable innovation?

If the goal is to leverage in-house resources to generate product, service and brand innovation in the face of ever-changing market conditions, then arguably the new reality for businesses is to build bench-strength by recruiting and training specifically for what we call “curiosity.”

The Science

According to the latest studies, not just any type of curiosity drives innovative thinking and creative solutions. Social scientists often talk about “trait epistemic curiosity” but this broad trait actually involves two basic and separate forms. One is called diversive curiosity, which is less goal-directed and interest-motivated, whereas the other is specific curiosity, which is more targeted and competence-motivated. Trait epistemic curiosity predicts creative performance, but this effect is due primarily to the influence of specific curiosity. This is an important detail, as diversive curiosity is often aimless and hedonistic in nature, and hence tends to be unproductive, or in some cases, a counter-productive byproduct of our natural curious tendencies. Specific curiosity is goal-oriented and problem-focused. Look at it this way, and consider which type of employee you would want on your team: the equivalent of a bored teenager flipping among television channels, or someone who thinks and acts like a scientist searching for solutions to problems? Specific curiosity is akin to the scientist, and this is the trait that drives innovation bench-strength.

Assessing Specific Curiosity

My partners, Keith Kefgen and Jim Houran, Ph.D., reported on a three-year study in the 2016 book, Loneliness of Leadership. They psychometrically profiled 156 leaders in the global hospitality industry (primarily CEOs and COOs) with the 20|20 Skills™ assessment that measures Execution, People and Cognitive Skills using ten core competencies predictive of workplace success. They found leaders to be strong generalists, but with notable peaks in the areas of Humour and Creativity. In other words, this study found that leaders need not be top in class across the board. Rather they exhibit exceptional balance and proficiency across a range of competencies, yet their peaks in Creativity and Humour provide them marked vision and perspective.

Furthermore, the validation research on the 20|20 Skills™ assessment corroborates the role of “trait epistemic curiosity,” and more importantly, “specific curiosity” in identifying the best creative thinkers and innovative problem-solvers. For example, the mathematical and hierarchical scale that defines the Creativity dimension of the assessment reveals that high scorers (> 85 on a 100-point scale) show marked proficiency in three critical areas inherent to “specific curiosity”: (a) they initiate new perspectives, (b) they strive for innovation, and (c) they routinely use independent, innovative problem solving (i.e., they do not rely on old solutions when facing new challenges). These attitudes go beyond and effectively complement being “smart” and having a high IQ in a traditional sense. It is the difference between right-brain and left-brain thinking.

Whose Responsibility is Innovation?

Whose responsibility is it to drive innovation within an organization to not just brace for what the future may hold, but to be one or many a step ahead of the curve? Does it come down to one person? Or, as in a team sport, is it the talent of the whole bench that is important? We would venture to say that of course, your leaders must exhibit specific curiosity, but why not your middle management and line employees as well? The culture of innovation manifests from within every part of the organization.

Every part of the organization must embrace the spirit of innovation. Do you have the right talent to effect positive change?

The Trick

Organizations who use standardized psychometric testing in order to help identify those with the foundation to be forward thinking and seeing patterns and connections where others do not, will be one step ahead of the curve. Not every assessment is designed and validated to do this, but it is a valuable competitive advantage for those who incorporate one into their due diligence and training programs. There has been a tendency for hiring managers to rely on gut instincts and subjective feelings as opposed to more reliable data gathering. AETHOS believes that effective and accurate evaluations for candidates must take into account both technical and culture fit, and this is best done using a combination of Standardized Testing, Behavioural Interviewing and proper Reference Checking.

When it comes to spotting candidates with strong “specific curiosity,” the trick is to ask questions about and seek real-world evidence for characteristics and attitudes such as whether the person:

  • Likes solving problems
  • Handles ambiguity and chaos constructively
  • Loves trying new things
  • Enjoys philosophizing and challenging assumptions
  • Has a passion for learning in general

Findings from the Loneliness of Leadership study implied that creativity – and particularly “specific curiosity” – is neither exclusive to artists nor leaders and can be found in virtually every profession and level of position. The good news is that this ability is part innate and part developed, so recruiting can focus on both aspects when building bench-strength. Regardless of where companies precisely look for these individuals, identifying and hiring them is arguably among the most pressing priorities of today’s organizations. Specific curiosity is the one evidence-based trait that speaks to successful organization evolution and innovation in this new reality of chaos and dynamism.

Clara Stilwell_AETHOS Consulting Group_New York_web

Knock, Knock… Who’s There? Understanding the Merits of Candidate Background Checks with Databases Expert Edward Robusto

This era of big data, global connectedness, and instant access to a wealth of social media information makes it tempting for organizations sourcing or vetting executive talent to assume that it is easy to “see what you are getting” with potential candidates. After all, the logic goes, most everything about people’s professional and even social backgrounds would seem to be codified and quantified online or otherwise documented and accessible somewhere.

But the issue is more perilous than it appears, as revealed by an AETHOS survey presented at the 2014 Cornell Hospitality Research Summit. For example, this industry study found that 67% of respondents use LinkedIn to establish contact with potential candidates and gather background information on these candidates. Moreover, and quite telling, 61% of respondents invite candidates to interviews for key leadership roles based primarily on favourable impressions of candidates’ LinkedIn profiles. Obviously, what hiring managers and HR pros read and assume about candidates online holds substantial sway during their sourcing and screening process. But, how complete or trustworthy is the information that people provide about themselves? The AETHOS survey found wide variability in the level of accuracy in candidate data from online profiles, but that research simply scratched the surface. Read more about the study here.

Ed Robusto headshotThe topic of candidate screening is inherent to AETHOS’s executive search services, so we welcomed the opportunity to get further perspective about the effectiveness and best practices related to background checks at the 10th Annual HR in Hospitality Conference & Expo. There we talked at length with Edward Robusto, President of Predictive Leadership Solutions – a sponsor at the conference and expert on public databases and personnel records. Edward first elaborated on what research indicates about the degree of deception in people’s online profiles like Facebook or LinkedIn. Considering that we live in a digital age of apparent easy access and transparency of information, it would seem too risky for people to lie or mislead about their professional and educational backgrounds…

ER: You would think that the speed and availability of information would lead to everyone making sure that their resumes were consistent with LinkedIn, Twitter, Facebook and beyond. But that just is not the case. We continue to see the inconsistencies, slight exaggerations and outright fabrications at a better than 50% rate. The person who says they graduated from a program, when they spent two weeks on the campus and received a certification. The applicant who suggested they were a manager or director when in fact they were a shift supervisor. It happens with regularity.

Falsification of previous experience is still very prevalent with nearly 50% of the background checks we process having some sort of discrepancy in this respect. Whether it is expanding the dates worked or elaborating on position held, candidates often feel compelled to present a better but fraudulent profile of themselves. We coach candidates all the time to be truthful on their resumes. Employers will often disregard a gap in employment but they won’t dismiss a falsification of the application.

What types of background checks are there… e.g., credit checks, employment records, drug screening, etc.?

ER: As the only background screening company that focuses solely on the hospitality industry we have a mastery of what our clients require when it comes to their background screening process. We build all of our processes and packages to meet the needs of our clients. We never pre-package and force feed something on a client because it is easier for us. What this means is through building an intimate relationship between our operations/implementation team and their own team they build it, they own it, and they get exactly what they require from their background screening process. We can do a simple/basic criminal search or we can do a deep dive extensive background check that includes social media, OFAC, terror watch lists, civil filings and more.

We can create a drug testing program for our clients, as well as, do credit checks, and employment verifications. There is no true correlation between the use of credit checks and the hiring of a good employee. Further, their use in the hiring of applicants is becoming highly regulated.
Unfortunately, we still see many employers, even in the hospitality industry not doing a background check on new hires. Additionally, there are many sub-par background checks which consist of mostly online databases searches that can give an employer a false sense of security. These databases are incomplete, often outdated and as a standalone background check are not compliant with Federal regulations on use of data when making a hiring decision. The only compliant and comprehensive background check is a search of the court records directly which is what we do for our clients.

What percentage of people have distortions of some sort in their resumes, profiles, or professional bios?

ER: Falsification of previous experience is still very prevalent with nearly 50% of the background checks we process having some sort of discrepancy on it. Whether it is expanding the dates worked or elaborating on position held, candidates often feel compelled to present a better but fraudulent profile of themselves. We coach candidates all the time to be truthful on their resumes. Employers will often disregard a gap in employment but they won’t dismiss a falsification of the application.

When it comes to professional profiles, what areas are candidates most likely to fudge or take liberties in presenting themselves?

ER: It’s a competitive job market right now. Candidates are often “fudging” on their title, their level of education, the time frame for employment (to close gaps) and their salary or hourly rate.

When and how should hiring managers or HR pros best use background checks and what are the liabilities involved?

ER: First I would suggest, at least in the hospitality industry that HR Directors and Hiring Managers should do a comprehensive background check on every level of employee in an effort to get the best and the brightest to serve their customer base, but also to protect their business. That said, I know that there are cost limiting factors that prohibit companies from taking this approach. Background checks are a powerful tool in mitigating risk for the property by not putting undesirable individuals in a situation to do harm to an employer. I’m a firm believer that there is a job for every person but not every person is right for every job. Unfortunately, we do see dishonest candidates gravitate towards positions and employers where they can take advantage of a situation. Whether it is a thief applying to be a cash handler or worse, background checks help weed out those individuals most likely to cause harm. The reputational injury a hotel could experience as a result of a bad hire could be catastrophic to a hotel, restaurant or casino.

Background screening should not be taken lightly as there are numerous Federal and state specific regulations associated with screening. For example, there are requirements around the proper disclosure and authorization forms to collect prior to screening, what types of crimes and the age of the crime that can be used in a hiring decision and a legally mandated process to follow should an employer decide not to hire a person as a result of the background check. Understanding the legal obligations of an employer can be challenging. We spend a great deal of time with our clients to develop a compliant and comprehensive program as well as ongoing education as the legal continues to evolve.

Generalizing the statistics from Predictive Leadership Solutions means that half of the people reading this article should go back and carefully review their resumes, CVs, professional bios and especially any online professional profiles for any inadvertent errors or omissions. Of course, social scientists would neither be surprised by these statistics nor puzzled by people’s motivations for posturing or grandstanding in these ways.

A classic tenet in psychology is that the perceptions we hold about ourselves – especially how we come across to others – are powerful influencers of our public attitudes and behaviours. In fact, social scientists strive to control for self-image biases in questionnaires and surveys. It’s called “social desirability” bias, referring to the fact that people tend to overestimate their strengths and underreport their weaknesses when making public statements, as well as give responses that they think are the most politically or socially appropriate at the time.

You might assume that distortions like this affect only a certain employment level or classification of worker. Well, think again. Readwrite.com posted an eye-opening 2012 article by Jon Mitchell about ten executives who lied on their resumes – and two who got away with it. These case studies did not occur at small, irrelevant organizations, but rather at established, prestigious institutions like the University of Notre Dame, Veritas software, InterContinental Hotels Group, and there was even an instance of extremely bold resume fabrication involving a former Dean of Admissions at the Massachusetts Institute of Technology – allow the irony of that to sink in.

Listed below are a set of best practices that can be leveraged in the case of any senior level hire to ensure a stronger referencing process has been be conducted. It’s important for the potential hire to fit with the values and company culture the candidate would be representing at the new employer. Like most things in life there is no silver bullet, but there are specific measures that can be taken to further solidify your organization is doing the right thing when finalizing executive hires:

  • Conduct an extensive criminal and financial check; this is a no brainer;
  • Do a 360-degree professional reference check. Ask for two former individuals to whom the candidate directly reported, two former peers and two former individuals whom reported to the candidate. The goal is to get a sense of how the candidate interacts, communications and collaborates with individuals throughout the org chart;
  • If a lack of references are provided from recent former employers, consider an “off the record” reference check. The goal is to identify individuals with whom the candidate has worked in the past and reach out to them simply for “candidate recommendations” to see if your candidates name comes up in a positive or negative light. Through the initial reference checking process the names of colleagues may have surfaced that the candidate worked closely with in the past that s/he may not have listed, these would also be good “off the record” sources.

The bottom line is that good due diligence involves a system of checks and balances that leverage Standardized Assessment, Behavioural Interviewing, and proper Reference-Background Checking – which should include both formal and informal referencing rather than merely accepting the references provided by candidates.

Services like Predictive Leadership Solutions exist to support organizations with the latter aspect of due diligence. Each part is important, but these three tactics should be consistently used together to ensure organizations gain the most accurate and comprehensive understanding of candidates. Indeed Edward Robusto reminds us that organizations often do not know what they are getting until professionals are used to start peeling back the proverbial layers of the onion.

Clara Stilwell_AETHOS Consulting Group_New York_web

“Best Practices” Refresher for HR and Leadership Assessments

If you’re reading this, chances are that you or your organization has used assessments at some point for employee selection or development. That said, chances are also that the assessment was used incorrectly in some way at a critical juncture. And, too often it seems that assessments are either OVER-emphasized or UNDER-emphasized by hiring managers, which further undermines SOPs and the efficacy of assessments.

HR pros can attest; however, that the winning formula for evaluating role fit is equal parts of a candidate’s technical competency (necessary skill set) and cultural compatibility (necessary alignment to the company’s core values). Assessments can provide uniquely objective insights about an individual’s role fit, but only when tools are used in a targeted way and balanced with other information that is collected as part of a comprehensive due diligence process.

This simple view has been born out in our Executive Search practice boasting a 98% successful placement rate and our decades of academic work designing and validating psychometric assessments(A). Therefore, this article combines our research and expertise with the rigorous criteria(B) set by the Standards for Educational and Psychological Testing and the Uniform Guidelines for Employee Selection Procedures to offer a quick refresher of the three basic issues defining best practice for assessments (1) What tool to choose, (2) When to administer it, and (3) How to use the results.

First, choose the right tool…

  • Measure cognitive ability, not just personality: “Hire for attitude, train for skill” is a common mantra, but it’s a misguided perspective on hiring. Many so-called attitudes, motivational or temperament factors are in fact learnable skills themselves. Further, studies show that “General Mental Ability (GMA)” is most predictive of job success. Think about it, cognitive and emotional intelligence underpin ability and speed to new learn things, as well as capacity to adapt to new circumstances and handle stress. Personality, on the other hand, has been shown by independent research to be an inconsistent predictor of professional performance. It seems counterintuitive, but personality factors per se do not drive behaviours in the workplace.
  • Industry relevance: It doesn’t makes sense to use a hammer when the task calls for a screwdriver. Likewise, it’s important to ensure that your assessment was designed to match the competencies suitable to the industry for which you are hiring. Often assessments are overly general versus being specific to an industry or even role. Some general, transferable skill sets across industries or employment levels do exist, but it’s best practice to consider specific competencies. The O*net database is an invaluable resource for HR practitioners and hiring managers who want readily defined competency models for various roles across various industries. These can help you understand whether a given tool covers the right skills sets and attitudes needed to assess applicants or incumbents.
  • Normative benchmarks: Which approach gives the most honest information about your strengths and weaknesses – looking into a proverbial mirror or asking someone who has observed your performance over time for a candid appraisal? Many assessments are self-referential, i.e., they provide scores or feedback based solely on how a person perceives him or herself. This is not as meaningful as a normative assessment, whereby a person’s attitudes, knowledge and skill set are compared to independent benchmarks or a peer group. After all, people may believe themselves to be the smartest or most capable individuals in the room, but this belief can be quickly tested when the person’s actual performance is compared to known, bias-free standards. This is what proper normative tools do – they show where someone ranks on a scientific, objective scale.

    Continue reading ““Best Practices” Refresher for HR and Leadership Assessments”

Clara Stilwell_AETHOS Consulting Group_New York_web

The Hospitality Industry’s Intense Eye on Human Capital: A Hot Topic in Strategic Circles

At the recent Global Restaurant Investment Forum in Dubai, Marc Blazer, Chairman & CEO of Overture Investments and co-owner of Noma, was heard saying, “I am not in the investment management business, I am in the talent management business”. This comment nicely sets the scene and actually summarises the key takeaways from a number of different industry events AETHOS attended across the globe as of late. Whether it was the HR in Hospitality Conference in Scottsdale/Arizona, the International Hotel Investment Forum in Berlin/Germany or the Global Restaurant Investment Forum in Dubai/UAE, one thing was clear: Human Capital is back on top of everyone’s agenda.

Operators and owners both agree that the way organisations handle Human Capital has a tremendous impact on their profitability and often comes to define them. So it should be no surprise that the best practices for recruiting, training, mentoring and supporting people have been amongst the prevailing themes at the conferences.

Of course, it should not be ‘big news’ to anyone working in the hospitality industry that there has always been an intense struggle for sourcing the right talent. So, why has Human Capital crept back up on the agenda of most hospitality company boards? Arguably, three major factors help to explain the current interest:

  • Firstly, investors have increasingly come to realise that their role is not purely that of a ‘bank’, providing the monetary funds to continue expansion. Equally, business leaders have awoken to the fact that their role is not purely that of strategists steering the company in the right direction. In fact, the role of investors and business executives has become that of creators and guardians of a company culture that creates a sense of shared purpose and branding that drive people towards a common goal and ultimately towards success.
  • Secondly, the hospitality industry – once again – is undergoing a major transformation and consolidation. Big hotel operators are looking to merge with competitors that have complementary brands (as reflected, for example, by the Accor-FRHI deal) or to acquire smaller start-ups in order to rapidly gain access to new market segments (as portrayed by Carlson-Rezidor’s acquisition of German Prizeotels) whilst restaurant start-ups and smaller F&B concepts are quickly being acquired by ‘bigger fish’ to create and capitalise on synergies (see Casual Dining Group’s recent shopping tour of Las Iguanas and La Tasca). Such heightened M&A activity comes with its operational challenges, so business leaders must better have quick and useful solutions to HR-related issues such as: How do you successfully integrate two companies with rather distinct (and often dissimilar) corporate cultures? Whom to keep and which talent is dispensable?
  • Thirdly, and in line with the increased M&A activity, the hospitality industry is continuing to attract cross-border investment interest. Specifically, Asian capital is backing much of the recent transaction activity: Whether this is Chinese Anbang Insurance bidding for Starwood Hotels & Resorts, Fosun’s acquisition of ClubMed or Hong Kong’s CTS Metropark Hotels Co. Ltd. successful take-over of Kew Green Hotels – Asian money is (currently) everywhere. However, leadership and communication is vastly different in these Chinese, American, French and British companies – so, for a ‘successful marriage’ to last, both parties involved in such M&A activity will want to make sure that adaptation is at the heart of their every doing.

It is encouraging to see that industry players are again paying closer attention to Talent Management and recognising the strategic value it brings to the table. However, discussions should not be purely centred around hiring, training and retaining the best possible candidates – we have had those discussions in the past and whilst those have been productive it would be important for other Talent Management issues to be broached in board rooms and at conferences around the world. For example, it would be beneficial to hear more about the value proposition of diversity in attracting top talent and informing better decision-making by guarding against ‘group think’.

Think about it: If you were to map out the people you know at work, how likely will it be that you will come up with a highly diverse list of individuals of different ages, gender, socio-economic, ethnical or cultural backgrounds? Is your organisation providing equal opportunities to abled and disabled employees? How about any prevalence of ivy-league school graduates? Sure enough, the hospitality industry provides employment to individuals from a plethora of backgrounds and its workforce is an extremely international one. However, does it give enough opportunities for individuals to move up the ranks? Are there glass-ceilings not only for women but also for other groups? And, does the industry do enough to capitalise on an aging workforce whilst keeping the Millennials engaged?

Keeping in mind the heightened M&A activity and the international buy-out or take-over activity that the hospitality industry is currently witnessing: How well do you think your organisation would fair if it were made up of likeminded individuals not used to be challenged or questioned by a different perspective? By individuals who predominantly come from the Western world and, although having gained international work experience, who have first and foremost made their careers in European or American institutions with belief systems quite distinct from their Asian counterparts?

What companies and industry leaders should really talk about and address is how modernisation (in emerging markets) does not necessarily mean Westernisation; how growth does not necessarily need to be managed in the same old ways by the same old people; how leadership values in one country may differ to another and how talent management programs may (and should) be vastly different from one region to another. In short: Copy-pasting tried and tested processes (or ‘plug-and playing’ successful business leaders) may not always work. Embracing diversity is key and finding and retaining those individuals who are adaptable and open to change with an ability to constantly re-invent themselves. The conversation should hereby steer away from the typical gender-focused diversification. Instead, it should be focused on incorporating as many diverse perspectives as possible.

Clara Stilwell_AETHOS Consulting Group_New York_web

Facing and Correcting the HR Domino Effect

AETHOS finds that poor support in one specific HR duty may start a negative domino effect

Alignment has been a commonly spoken “business mantra” for years, although Human Resources professionals would agree that misalignment is a common issue that is neither comprehensively discussed nor addressed in today’s workplaces. That performance gaps and lapses in resources exist is not debated. What’s now needed to advance the conversation is evidence-based guidance on identifying and rectifying the catalysts of misalignment.

AETHOS Consulting Group recently surveyed a highly targeted group of sixty-eight (68) senior HR professionals (60% women, 40% men) from major hotel (54%), restaurant (34%), casino-gaming (7%), travel-tourism (3%), and other types (2 %) of hospitality companies. These respondents, all of whom currently holding senior-level regional roles in all four corners of the world, answered candid questions about the degree of alignment between performance expectations and the resources allocated to their HR departments.
We discovered both good news and concerning trends that HR and senior leadership should understand when tackling the goals for 2016. At the heart is a major risk factor – poor support in one specific HR duty may start a negative domino effect that undermines the strategic efficiency, effectiveness and ROI of the HR function.

Common acknowledgement of HR’s evolving role
Traditionally, HR tends to be perceived as a tactical department at best, and at worst, as an administrative, “necessary evil.” Yet, these survey results suggest this perception is changing in ways important for their entire organization. On a monthly basis, respondents reported that 60% of their time is devoted to administrative aspects, including fixing problems or maintaining the status quo, although 40% of their time is spent addressing strategic aspects, such as proactively creating solutions to organizational challenges or driving innovation. This ratio may not be ideal, but it does hint at the increasingly strategic role HR is playing in today’s corporate cultures.

Most importantly, this potential for business impact is apparently acknowledged by senior leadership. In particular, in our sample the findings indicate that…

  • 93% agreed that senior corporate leadership views human capital as a key success factor to achieve business goals
  • 94% agreed that management considers HR a true business partner
  • 94% agreed that HR’s perspectives are voiced at the board table

This seems to be good news, but where acknowledgment of HR’s value add is strong, it seems the actual degree that HR is supported and thereby properly leveraged remains an area for opportunity. For example, 67% agreed that HR constantly fights internal battles for the necessary resources to achieve its mandates.

This is not to say that HR is reported to be under-resourced in all aspects. To be sure, the findings clarify where the lapse seems to begin. The concerning news is that lesser support or resources for certain KPIs may well be the catalyst for an unanticipated but serious domino effect of misalignment between corporate mandates for HR and the daily realities HR faces and must address.

Identifying misalignment in resources
Our findings suggest that HR is well supported in ways where generosity and flexibility are more easily permitted, namely peer support and the deadlines placed on the execution of initiatives. On the other hand and perhaps not surprisingly, Figure 1 shows that Staffing and Budget are less well supported. In other words, there is arguably a mixed or double message from senior leadership heard by HR professionals, “You’re recognized as a strategic business partner, but do more with less.”

Of course, a predictable complaint of probably any department or function is a lack of staff or budget. The 2007-2008 global crash undoubtedly hit a reset button on the way companies organize and function – lean and mean is often the new and enduring SOP. However, new research published in the Harvard Business Review notes some negative trends that come from the philosophy of “do more with less.” For instance, the study in question speaks about a phenomenal explosion in collaborative intensity over the last ten years. Part of that explosion is attributable to technological innovations like email and social media, which make it easier to connect with co-workers across the globe in real time. But a less obvious factor is the way organizations are evolving on a structural level to more matrix-based management and dual-reporting systems, which means that employees might be responsible to and receive assignments from at least two managers. HR serving both administrative and strategic roles would seem to be a prime candidate for this set of challenging circumstances.

Aside from this theoretical pitfall, a dilution of both HR’s focus and energy that comes from attempting to “do more with less” seems to contribute to a very real and impactful “domino effect” that distorts the expected versus realized priorities of HR.

The hidden “domino effect” – and battling it
Following from the above, it’s revealing to see how the survey respondents ranked-ordered six key HR tasks – indicating how HR spends its time on these tasks compared to the priority of these tasks set by perceived corporate mandate. The good news is that the daily reality of HR starts off well-aligned to corporate mandates. Building the talent pipeline and building engagement and culture (two interrelated activities and goals) are of prime importance. The bad news is that as this stage, derailment seems to occur in that handling issues associated with Employee Relations takes priority over Training/Development/Performance Feedback responsibilities.

When Employee Relations assumes greater attention and energy, the higher priority corporate mandates of Training and Development and then Developing and Implementing Succession Planning fall like dominoes in terms of their daily importance to HR. Unfortunately for both the strategic and tactical aspects of HR, these two KPIs (Training/development and Succession planning) should naturally coincide with and reinforce talent pipeline and engagement initiatives.

AETHOS_HR Domino Effect_Hazelton_Mielke

Precisely where this domino effect starts makes sense considering that HR is responsible for both corporate and field-based operations. Therefore, employee relations is an ongoing challenge up and down the org chart and across a portfolio of assets. Senior HR leaders who should be focused on strategic initiatives may find themselves constantly pulled into tactical issues and field-based minutia.

There are at least two key take-aways from this survey. First, assuming these results generalize to your organization, it appears that the biggest ROI in adding staff or budget to HR is hiring or training field-based, regional or director level professionals who are competent and earmarked, in part, specifically to handle Employee Relations issues. This one tactic will allow senior HR leadership to focus on big-picture, strategic initiatives or tactical programs that reinforce the building of the talent pipeline, training/development of incumbents, and succession planning to ensure ongoing bench-strength.

Second, we understand that the issue of Employee Relations may not be a catalyst for negative domino effects in all hospitality companies. That said, this research does underscore the issue of general misalignment between success metrics and allocated resources to achieve targets. Addressing potential or actual misalignment in strategic planning or candid 1:1 discussions seems a prudent way to kick off the New Year. Gaining and maintaining alignment is the responsibility of all senior leaders, but it is up to HR leaders to conduct their own assessments of the congruency between mandates and resources and to make targeted recommendations to senior leadership so that HR is positioned for strategic and tactical success.

Clara Stilwell_AETHOS Consulting Group_New York_web

Hospitality Leaders Ride the Waves of Change

The hospitality industry has been under repeated and marked changes of late, and like many other industries, the trend is consolidation. The implications extend well beyond market share and positioning; at the heart of these transactions lies the difficult task of meshing brands, segments, and management teams. Indeed, the winners in the M&A game will be the ones that can pull off the “Brady Bunch” plan better than the others.

Naturally, the media and Wall Street will be focused on the financial impact of these deals, as well as distribution and market penetration. But the really interesting stories will come from understanding how these companies are handling the internal blending of operations, cultures and people. In fact, most mergers fail because of cultural, not financial issues.

Anthropologists refer to circumstances like these as potential “culture clash”. Therefore leaders must be as mindful as ever in monitoring and managing what may likely seem like chaotic internal dynamics in positive and influential ways. This can be challenging enough when times are good and operations are in status quo; but this era of consolidation has upped the ante.

According to new research outlined in our book Loneliness of Leadership (Amazon, January 2016), such organizational and business trials and tribulations are useful in separating old school managers from modern servant leaders. In particular, the authors’ psychometric profiling of industry leaders revealed a competency set grounded in strong generalist knowledge versus single-minded, subject matter expertise. This competency set acts as a social network and focuses on intellectual bridge building. The goal is to assemble a personal board of (as-needed) advisors who round out a leader’s perspective and knowledge and subsequently challenge the leader’s thinking and working assumptions. The idea is to break away from surrounding oneself with “yes people” and thereby think and act outside of one’s own immediate interests. The hallmark of servant leadership is that ideas and actions are filtered through the lens of investing in other people’s success and fulfilment – team members as well as customers.

This approach is a competitive advantage, because it inherently encompasses an attitude of being a forward-thinker and what psychologists call “tolerant of ambiguity”. Old school managers detest unanticipated change and ambiguity, since it threatens the status quo and one’s sense of control. Of course, rigidity of thought and an inflexibility of actions and responses limit the evolution and innovation that comes from adapting to change of all kinds. In short, managers are focused with controlling circumstances, whereas leaders are more concerned with profiting from “riding the waves”.

Undoubtedly all of this consolidation in the industry will yield both expected and unforeseen change that will either help or hinder organizational evolution and product innovation – depending on the outlook and priorities of an organization’s senior leadership. Alignment and Engagement used to be the primary HR buzz words, but new mantras are needed now in order to effectively create and nurture these blended families.

The biggest winners will be the leaders – not managers – who recognize and leverage the power of adaptability, flexibility, and a mind-set grounded in the principles of servant leadership. It’s not about trying to force a square peg into a round hold, but rather about building new, novel, and profitable configurations altogether.

Clara Stilwell_AETHOS Consulting Group_New York_web

The Coachability Quotient (CQ): A New HR & Leadership Tool

They are critical business questions every leader faces sooner or later – “Can this employee be saved?” or “Would coaching be a wise investment for this person?”. Not surprisingly, we are asked if there is a reliable means to identify people who will most benefit from formal or informal development programs. In fact, AETHOS recently introduced the innovative “CHIC coachability model” to guide leaders in answering these important talent questions. This model profiles the best coaching candidates as having Curiosity, Humility, Internal Locus of Control and Competitiveness. Preliminary research suggests that these four inherent drivers work together to form a foundation that has a much greater cumulative and positive impact.

Testing & Refining the CHIC Coaching Model
Thanks to the confidential cooperation of many clients, 200 worldwide hospitality professionals completed standardized questionnaires measuring the four CHIC variables through 149 items. This allowed us to compare two groups – one consisting of people with track records of responding successfully to coaching versus a second group of controls, or those with poor records of responding to coaching.

Independent statistical analyses on the dataset confirmed the overall CHIC model. Table 1 (below) shows that 19 of the original set of 149 items were valid in distinguishing the two groups. Further, these 19 items spanned all four CHIC variables, and they defined a single Rasch scale or factor. Rach scaling is a statistical technique used to construct and score many well-known achievement tests like the GRE, MCAT and LSAT. This means that aspects of Curiosity, Humility, Internal Locus of Control and Competitiveness are not independent traits, but rather they form a statistical hierarchy with different aspects building on one another to create coaching success. Thus, determining whether an employee “can be saved” or “coached to greater success” are not simple “yes or no” questions. The answers are grounded in the CHIC variables that define a continuum of likely coaching success.

It Begins with Personal Control and Ends with Restlessness
The Rasch analysis summarized in Table 1 (please click here) revealed a CHIC model more nuanced than we originally thought. For example, we proposed that coaching success began with a foundation of inherent Curiosity. However, we learned instead that coaching success starts with Internal Locus of Control – meaning the individual must believe in personal control over his/her destiny versus being at the mercy of external forces. Also, we expected that Competitiveness was a strong motivating factor in coaching success, yet we discovered that the end point is a form of Curiosity driven by stress-relieving motives as opposed to sensation-seeking motives. That is, the most successful coachees are driven by a restlessness focused on achieving a particular goal.

Note that this is not an aspirational, pleasant state for the person; rather, the drive is to remove stress and anxiety over worrying about achieving certain outcomes. This is generally consistent with the motivations and drivers by top leaders in the hospitality industry recounted in the book, The Loneliness of Leadership. Apparently, coaching success feeds as much off of negative-oriented aspects of Curiosity as it does positive-oriented aspects. To our knowledge, this insight has never before been noted or discussed.

CQ: the Psychometrics of Coachability
As implied in Table 1 (please click here), processing the answers to the 19 questionnaire items is complicated by the fact that four items are reverse-scored. Table 2 below indicates that the answers “Completely disagree”, “Disagree somewhat”, “Agree somewhat”, and “Agree completely” are normally scored as 0, 1, 2, and 3, but when reverse-scored these four answers receive 3, 2, 1, and 0 points.

AETHOS Consulting Group_The Coachability Quotient_Table2_James Houran_Thomas Mielke

We noted earlier that in the case of “Yes/No” decision-making Computer Adaptive Testing (CAT) informs us that using questions whose difficulty levels resembles that of the cut-point between “Yes” and “No” will yield the best results (Lange, 2007). Independent analysis exploited this fact by identifying a subset of just six (6) questions that work nearly as well as the entire set of (19) items in this respect – that is, the decisions based on these 6 items alone are (almost) as reliable as those using all available items. In fact, in many cases it might not even be necessary to use all 6, as 5 or fewer might suffice, thus reducing the effort involved in evaluating an employee.

Table 3 describes this CAT procedure (please click here), which has a statistical likelihood of making a correct decision in at least 90% of all cases, and typically this percentage is far higher. An optimally-reliable decision is reached by first asking Questions 1 and 2 (i.e., “I don’t care if other people are better …” and “I would rather not compete”) and having the employee express his/her answers using the four category “Completely disagree” to “Completely agree” scale categories. Table 3 indicates that both questions are reverse scored, and thus “Completely disagree” receives 3 points while “Completely agrees” receives 0 points. Note that questions 3 through 6 are scored normally.

The points associated with both answers should be added, and the last two columns of Table 3 should be consulted. If the employee received a total 0 points we can safely conclude that s/he is not coachable. If s/he received a total of 6 points across the two questions, then we should conclude that the person is coachable. If the total is 1, 2, 3, 4, or 5, then more questions are needed and the process proceeds with Question 3 (“I enjoy setting and beating goals …”), and the process continues until a “No” or “Yes” decision can be made. In Table 3 it is assumed that the interviewer does not want to administer more than 6 questions, i.e., a decision is always made at this point, even if the statistical decision criteria have not been met.

For example, consider an employee who rates “I don’t care if other people are better …” as “Disagree completely” and “I would rather not compete” as “Disagree somewhat.” This gives a total of 3 + 2 = 5 points, and because this total is neither 0 nor 6, Table 3 indicates that more questions need to be asked. If the employee then answered “Agree completely” to the third question (“I enjoy setting and beating goals …”) the total sum rises to 5 + 3 = 8 points. Table 3 indicates that a total of 8 or 9 is sufficient to reach a decision, and in fact this sum indicates that the employee is “coachable” with a reliability exceeding 90%.

Everyday CQ Applications
Whenever possible, we recommend that the process in Table 3 (please click here) be used with candidates during the pre-hiring stages. This way, leaders or HR pros can have confidence they are gaining bench-strength with people who can learn and adapt as needed. However, there are times when leaders and HR pros must evaluate incumbents, and here a conversation might seem to be a more appropriate or natural method to gauge CQ than using a questionnaire. While Curiosity driven by stress-relieving motives defined the highest part of the hierarchy for coaching success, the questions about Competitiveness most efficiently distinguish those on cusp between being coachable or not. Therefore, these questionnaire items can be transformed into open-ended interviewing questions that can elicit similar insight into someone’s CQ – for example, imagine you are interviewing a seasoned, Regional VP Account Management & Sales:

  • “I don’t care if other people are better at things than I am”: Imagine you are the lead on a project but your boss asks for your colleague to handle the negotiations as s/he has a better track record in closing deals. How would you handle this situation? Have you been in a similar situation before – what was the outcome?
  • “I would rather not compete”: It is year-end and your boss is setting new targets for your department. S/he is suggesting to ‘spice things up’ by letting you and your peer compete for the company’s biggest account. Do you think his/her strategy is the right one to pursue? In your professional life, has there been a comparable situation – how did you deal with it and did it yield positive results?
  • “I enjoy setting and beating goals through competition”: Imagine a scenario in which you are managing accounts worth USD$20 million. Your peer is managing accounts worth USD$30 million. Your boss now has to decide whom to groom as his/her successor within the next 18 months. S/he sets you a challenge, giving you a year to ramp up your numbers which in turn should position you as a strong contender for the more senior role. How would you react to this challenge? Have you been through something comparable in your current position?
  • “I love the thrill of competition”: Talk me through a time where you had to prepare a pitch to win a potential business – in such a scenario, would you say you are generally speaking in a state of excitement with emotions running high or in a ‘lock-down’ mode, buried in data and analysing all facets, fearing to have missed an important bit of information that the other party might use against you? Please elaborate.
  • “No matter what, I try to be better than others at things”: Talk me through a scenario where you had to deliver / hand-in a project that you were not 100% content with? What were the aspects you were dissatisfied with?
  • “I brood for a long time in an attempt to solve some fundamental problem”: Imagine you have to decide between keeping two loyal customer accounts worth USD $20 million each or drop them to secure a new account with a competing firm potentially worth USD $40 million – talk me through your decision making process. Can you translate this into a real life scenario?

These are simply sample questions as food for thought. The exact questions can and should be modified according to individual circumstances of a role or company culture. The main point is that leaders and HR pros should listen for clear indications in responses to questions like these that the person is restless or anxious and adopts and incorporates a strong sense of competitiveness into his/her professional approach and focus on success metrics. These themes signify that the person is likely to be coachable, i.e., receptive to feedback and new learnings that can help to correct or calibrate counterproductive behaviours, as well as to build on existing strengths that will prepare a person for the next career step.

Determining whether an employee “can be saved” or “coached to greater success” isn’t a simple “yes or no” question. It’s an educated risk or assessment. The best guess answer is arguably grounded in the CHIC variables, which define a continuum of likely coaching success – and now you know the fundamental principle behind the empirical coaching quotient (CQ).

Understanding the Conundrum of HR’s Responsibilities, Resources, & ROI

Is HR Suffering from Multiple Personality Disorder?

During a recent mini TED-talk AETHOS held in Las Vegas with senior leaders in casino and gaming, one speaker noted the difference between aspiration and aspirational. This distinction strongly resonated with attendees who lamented that while the hospitality industry does well innovating on the product and service side (business practices), the industry has yet to advance its people practices and simply relies on familiar but outdated modus operandi.

The attendees agreed that one area needing a revamp or even reinvention was the HR side of the business. Many executives we speak with across the globe are looking for innovation programs to help their organisations become more competitive and better serviced by their HR departments. This is what we call aspiration — an intent, priority, goal or wish. Aspirational people, on the other hand, take ideas to the next level and commit resources to make tangible changes.

Many industry insiders will recognize; however, that there can be mixed messages or outright misalignment among the responsibilities, resources, and ultimate ROI tasked to HR. In a way, even minor misalignments can introduce a defeating sense of “multiple personality disorder” in HR departments. At best, organizations only leverage the traditional, administrative side of HR, and at the worst, executives yearn for strategic contributions from an HR department that is not properly resourced to deliver on those expectations.

AETHOS wants to understand the current state of HR functions in the industry and what specific innovations in people practices will yield the strongest ROI for organisations. A new AETHOS thought-leadership study will launch soon to help HR practitioners and senior executives alike answer these critical questions. Our aspiration is to help promote HR being viewed and leveraged as a true trusted advisor – the key facilitator aligning an organisation’s people practices to its business practices. After all, “When was the last time you saw a business thrive and generate above-average profits without strong leaders, a corporate culture that is not embraced by all employees and a compensation scheme that fails to incentivize peak performance? When was the last time you observed a company thrive over decades without a properly managed talent pipeline or well-developed succession plans to ensure company stability over the long term?”

The results of this new research will fuel those who are aspirational – willing and committed to action – to establish in their organisations a well-defined, constructive identity for HR where its responsibilities, resources and ROI are aligned and those in HR can actually deliver on both the administrative and strategic fronts. To learn more about this upcoming study, please contact the authors.

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Introducing the Concept of “Coachability”

Coachability, noun, “an individual’s receptiveness and capacity to capitalize on guided learning and development.”

Any HR professional and business leader has a number of options at his or her disposal to try and fix an employee’s performance or help him or her get to the next level. Ultimately, though, it comes down to a choice between (A) structured learning or (B) guided learning. The former essentially refers to systematic learning programs that typically evolve around specific skills or subject matters of expertise. The latter refers to highly personalized coaching sessions during which the participant is learning nuanced skills.

So, since we all know that anything personalized and time-intensive is – more often than not – rather costly, the question to answer is the following: When does coaching offer the highest ROI?

Generally speaking, there are three scenarios in which coaching best lends itself as the most impactful and (cost) effective tool to be used – those being:

  • Change: In organizational advisory, “change” has always been a buzz word – here, we are talking about organizational change that comes about as a result of two companies merging, for example. It could be a change in business strategy that is triggered by senior management pursuing an alternative strategic avenue or it could be a deliberate cultural change enforced by executives of a firm to foster innovation or collaboration. Other times, change may be more personal in nature – it could be triggered by personal difficulties, health and/or marital problems.
  • Performance/Leadership: Often, performance-related problems can easily be fixed by providing training to executives in a particular area. Here, however, we are referring to performance-related issues that come to light and that are more often than not linked to “leadership”.  For example, there might be performance issues that are based on difficulties in making a department work together as a team or it could be problems that arise and that are based on communication and/or cultural differences.
  • Advancement: Progressing in one’s career is based on a number of different variables. Certainly training is an important component – but when you are stepping out of your comfort zone and considering to take the next position further up the corporate organizational chart how are you supposed to know what you need to excel in this new job? Have you ever heard a well-meaning superior say to you “tell me what you need to advance your career and I will give it to you?” – well, how are you supposed to know what you don’t know?

It is in those three circumstances where an HR professional should consider coaching as a tool to “fix the problem”. Yet, aside from those situational circumstances there is another component that is equally important to be considered before actually kick-starting any elaborate coaching programs. For the argument of this article let’s just say that based on resources available and the situation on hand coaching is the best way forward – but who should be eligible for such a program? And does everyone respond equally well to coaching? How does one as an HR professional know that you are not wasting the firm’s money?

A Million Dollar Business Question: Who Best Responds to Coaching

As performance management consultants, one of the most popular and pressing questions we hear from leaders concerns the concept of “coachability”. The question appears in many forms, including:

  • Can you tell if an employee wants to be saved?
  • Is coaching a wise investment for a specific employee?
  • Will this employee likely turn around their negative attitudes and behaviors?
  • Is this person a rising star and can be actively nurtured for hospitality leadership?

Answering questions like these accurately and efficiently is a valuable business tool. For example, research reveals that even for low-level positions a failed hire costs a company double the person’s salary. At higher levels, the cost can be six times the salary. Hiring people is arguably the most important thing any organization does — the cost of failure is significant. And so is the cost of maintaining mediocre performers and the less-than-optimal “fits” with a company’s culture.

Coachability goes beyond the simple notion of training or trainability, which often involves teaching a specific set of skills in a highly structured manner.  Coaching, for lack of a better term, is a more intuitive process whereby an individual “absorbs” knowledge, attitudes, and skills via guided (versus highly structured) learning and development. It’s more nuanced since it partly involves an employee’s self-directedness in identifying and seizing learnings opportunistically, as well as an employee being positively motivated to devote time to attend structured learnings too. In other words, the most effective coaching clients have the insight, awareness, and self-directedness to recognize and seize learnings wherever they reside.

Five Critical Coaching Characteristics

Analyzing nearly ten years of psychometric testing and session notes from coaching clients has revealed a basic profile of who will likely be coached successfully versus not.  AETHOS Consulting Group is actively researching the most effective way to measure this set of characteristics, but for now the profile is offered as a general heuristic in the way to assess the degree to which an employee is coachable.

It’s important to note that these characteristics seem to build on one another in a prescribed way. Here’s the outline of the AETHOS Coachability Model which is captured by the acronym “CHIC.” This model assumes that the employee has at least an average level of Cognitive Ability – the ability to reason, plan, solve problems, think abstractly, comprehend complex ideas, and learn quickly. Research in workplace psychology consistently identifies cognitive ability as the strongest predictor of job performance, even more powerful than traditional personality testing. Cognitive ability is therefore the precursor of AETHOS’ CHIC coaching model.

But to be sure, cognitive ability alone doesn’t ensure coaching success. Here’s where the four CHIC characteristics work together in a process with cumulative and positive impact:

  • Curiosity: First, an individual must have the curiosity to explore his/her knowledge and skill gaps and the available resources and opportunities to improve personal and professional performance.  It just so happens that highly intelligent people also tend to be naturally curious, so it’s an extension of Cognitive Ability.
  • Humility: Curiosity motivates exploration, but a sense of humility determines an individual’s capacity to perceive and accept performance feedback, new information, and overt or subtle learnings in a constructive way. Humility is a grounding force that is critical to maintaining a measured perspective of one’s performance and potential.
  • Internal Locus of Control: Humility motivates awareness, but locus of control (LOC) determines an individual’s sense of control over learning and mastering new knowledge, attitudes, or skills. People tend to have one of two general outlooks on the world – they believe either life events are due to their own behavior and attributes, or they believe that life events happen because of uncontrollable circumstances like chance or the actions of others. Social scientists refer to these mindsets as an “internal locus of control” versus an “external locus of control,” respectively. Individuals with internal LOC take responsibility and know they have power to affect their circumstances and address skill or knowledge gaps. Those with strong external LOC make excuses and feel like victims of circumstance.
  • Competitiveness: Internal LOC motivates accountability, but competitiveness determines an individual’s sense of urgency and achievement-orientation. This is a core part of service orientation, which is a driver across all aspects of the hospitality industry.  The drive to constantly improve and succeed kills complacency by keeping an individual engaged with ongoing learning and education in all its forms. Competitiveness motivates action.

Putting the CHIC Coaching Model to Work

Stay tuned for the results of AETHOS’ quantitative research on a psychometric measurement that clients can use to screen candidates and incumbents against the CHIC model. In the meantime our qualitative research that inspired this model offers some immediate takeaways for HR practitioners and leaders.

First, determining whether an employee “can be saved” or “coached to greater success” are not simple “yes or no” questions.  The answers appear to be grounded in several variables that define a continuum of likely coaching success. Careful and critical contemplation and discussion of the CHIC characteristics in relation to the employee is a more accurate and fair approach for all involved than making a decision based on emotion and whether the leader “personally likes or dislikes” the employee or not.

Second, even for those employees who would likely be receptive to coaching all practitioners and leaders must balance the cost and time involved in a coaching program against the anticipated ROI of that program. Some businesses don’t have the luxury of time to give to an individual’s development, or an ample budget or other resources to invest in coaching. Therefore, the CHIC model speaks to the employee-side of the equation, whereas budget and time realities speak to the employer-side of the equation.  Both perspectives should be weighed when evaluating the feasibility of a coaching scenario.

Finally, there are probably many significant subtleties and nuances to the CHIC variables. This means that leaders should not assume that they are best qualified to evaluate employees against the CHIC model. Seasoned HR practitioners, industrial psychologists or other performance and talent management experts might need to be consulted in the process – at least until an efficient and effective tool is available that streamlines and partly automates the evaluation process. Until then, the CHIC model is a qualitative heuristic that focuses attention on the right issues to contemplate when looking at a specific employee with a million dollar business question in mind.

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Three Steps for Using Leadership Assessments to Pinpoint Personal Strengths and Weaknesses

“If you compare yourself with others, you may become vain and bitter; for always there will be greater and lesser persons than yourself.”
Max Ehrmann (1927) from the classic prose poem, Desiderata

The sobering truth is that personal and professional development hinges on the ability to be self-critical. Some might use softer language like “contemplative, introspective, and reflective,” but that undermines the rather raw and unforgiving nature of the task itself. Frankly put, when you’re not self-critical — when you do not honestly examine yourself — you’ll never be aware of performance blind-spots, much less improve your efficiency and effectiveness over time. Those two elements are the heart of competency.

For leaders in hospitality or in any industry for that matter, performance feedback – if given at all – typically consists of summarized or edited comments in a traditional 360-degree appraisal. This can be a valuable approach to gain insight, but it’s incomplete as the perspectives of raters are limited and highly subjective. A standardized assessment is a best practice supplement for a critical reason – it provides objective feedback on your skills, attitudes, and knowledge areas compared to rigorous benchmarks of high performers.

Drawing on a collective expertise in psychometrics, workplace psychology, and the hospitality industry, this article presents candid, insider information that walks you through three fundamental issues on how to use the right type of assessments to yield a personal SWOT analysis (strengths-weaknesses-opportunities-threats):

First, Choose a Performance, Not Personality, Based Assessment

For decades personality tests have been popular for employee screening and development, although personality traits have serious limitations when applied to workplace psychology. Research shows that personality tests are poor predictors of workplace performance, whereas measures of General Mental Ability (reasoning, planning, abstract thinking, comprehending complex ideas and learning quickly) and role-specific skills are stronger and more consistent predictors of performance. In fact, the popular O*net database of job classifications and corresponding requirements (http://online.onetcenter.org/) describes positions in terms of trainable and malleable skills and competencies rather than broad and rigid personality traits.

Simply stated, personality tests do not provide sufficient measurements or insights to give you an accurate understanding of your current capabilities and future potential. Moreover, it is questionable whether most of them yield valid and legally-defensible information. Measuring “how” people prefer to express themselves in general circumstances is good information, but it is markedly inadequate. Relying on a personality test to guide your development is much like relying on a road map to guide your vacation choices – it is interesting but terribly incomplete information. As one reasonable critic of personality testing put it, “Without weather forecasts, resort reviews, activity guides and price data, a long-planned, restful excursion could end up at a wilderness boot camp.”

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A well-designed and validated skills assessment, on the other hand, is a specialized tool that reveals constructive and adverse nuances in your competencies, attitudes, and knowledge areas. A comprehensive assessment or mixture of assessments is strongly recommended that will gauge three critical performance areas: Execution skills (how effective you are setting and accomplishing tasks and goals), People skills (how effective you are in your interpersonal actions up and down the organizational chart), and Cognitive skills (creative strategic orientation balanced with analytical, critical thinking).

Next, Ensure the Competency Assessment Gives Valid Measurements

Different assessments may share similar psychological theories, but products vary greatly in their reliability and validity due to their methodological and mathematical approaches. There are two common approaches – self-referential versus inter-individual. Some of the and most popular and traditional assessments like the Myers-Briggs Type Indicator and the DISC assessment are actually the least sophisticated, because such instruments describe individuals only in a self-referential way, i.e., against themselves. Avoid these approaches, as the feedback from these assessments is limited to what the test-taker wants that measure to say. Normative instruments (or norm-referenced testing), by comparison, are inter-individual. This means they describe test-takers against a reference group. Normative assessments are crucial development tools.

But meaningful “norms” are not enough to ensure reliability and validity of an assessment; instruments must also have a mathematical basis in modern test theory, such as Item Response Theory (IRT) or one of its variants like Rasch scaling. Wikipedia even offers interested readers clear overviews of these statistics, which are the gold standard foundations used in well-known assessments like the GRE, MCAT and LSAT. Unlike outdated methods many assessment vendors rely on, true scaling approaches generate proper normative instruments that take into account hidden response biases related to age, gender, cultural background and employment level of the test-taker. Without this level of validity, scores can be substantially distorted and misleading. Besides greater technical precision and the protection of meeting legal requirements against unwitting discrimination, modern testing theory also elicits richer information about test takers. Stated simply, high-quality feedback means unbiased, accurate, and detailed information on how your abilities compare to professionals within the global hospitality industry.

Finally, Ask a Specialist to Help You Understand the Assessment Results in the Context of Your Professional Goals

Would you trust an individual to make key business decisions based on a P&L statement if that person lacks the knowledge to interpret a P&L? Of course not. Likewise, trained professionals are indeed required to interpret statistical findings accurately and in a relatable way, but not all HR professionals, consultants, leadership coaches, assessment vendors, or social scientists have adequate training in statistics – much less tests and measurements, i.e., psychometrics. Furthermore, individuals repeatedly report that they find the most useful employee assessment reports to be ones that avoid psychological and statistical jargon and instead explain results in terms of applied contexts and business related goals.

The psychometric quality of an assessment – its reliability and validity – may be excellent, but this does not guarantee that the feedback generated by that assessment is also high in quality. In the service-hospitality industry and beyond we frequently hear criticisms that the feedback from surveys and assessments is often too general or “cookie cutter” to be useful and actionable. That is a reasonable objection to some products. What makes matters worse is that illegitimate or useless feedback can appear specific, meaningful, and legitimate. This is explained by what social scientists call ”Barnum and Forer Effects.” Unfortunately, professionals sometimes do not realize that the assessment on which they depend for recruitment, employee training, and professional development suffers from these limitations.

The Barnum Effect is the name given to a type of subjective validation in which a person finds personal meaning in statements that could actually apply to many people. Psychologist Paul Meehl is credited with coining the expression, which apparently is in deference to circus man P. T. Barnum’s reputation as a master psychological manipulator who often claimed that “we have something for everybody” and “there’s a sucker born every minute.” It is not difficult to see why assessments with illegitimate or useless feedback might be perceived as valid instruments. Specifically, if Barnum statements appear on a feedback report that a person believes has been specially prepared for him or her based on a realistic looking assessment, recipients often agree with such statements thereby giving validity to the assessment itself.

Related to the Barnum effect is the Forer Effect. Psychologist Bertram R. Forer found that people tend to accept vague or overly general personality descriptions as uniquely applicable to them, without realizing that the same description could be applicable to nearly everyone. Thus, the Forer Effect refers to the tendency for people to rate sets of statements as highly accurate for them personally even though the statements could apply to many people. The difference between the Barnum and Forer Effects is that the former describes a vague statement, whereas the latter describes how people react psychologically to Barnum (or vague) statements.

In his now classic 1940s study, Dr. Forer administered a “personality test” to his students, ignored their answers, and gave each student the same profile that was borrowed from a newsstand astrology column. He then asked these students to assess the accuracy of “their” profile on a scale from 0 to 5, with “5” meaning “excellent”, “4” meaning “good,” and so on. The class average evaluation was a striking 4.26! Forer’s classic experiment has been replicated hundreds of time with psychology students and the average is still around 4.2 out of 5, or 84% accurate.

Type: Strong Perceiver/Deep Feeler

Profile: You have a strong need for other people to like you and for them to admire you. You have a tendency to be critical of yourself. You have a great deal of unused capacity which you have not turned to your advantage. While you have some personality weaknesses, you are generally able to compensate for them. Disciplined and controlled on the outside, you tend to be worrisome and insecure inside. At times you have serious doubts as to whether you have made the right decision or done the right thing. You prefer a certain amount of change and variety and become dissatisfied when hemmed in by restrictions and limitations. You pride yourself as being an independent thinker and do not accept others’ opinions without satisfactory proof. You have found it unwise to be too frank in revealing yourself to others. At times you are extroverted, affable, sociable while at other times you are introverted, wary and reserved. Some of your aspirations tend to be pretty unrealistic. 

Personnel managers are also known to be susceptible to Barnum and Forer effects, even though these professionals should recognize these effects by training. This explains why organizational assessments may be seen as highly accurate and contributing to a company’s bottom line when in reality that feedback might be illegitimate, useless, or even completely misleading.

For all of these reasons, the use of assessments for personal and professional development should never be done in a vacuum. Rather, enlist the support of an expert who understands psychometrics, is familiar with the assessment you are using to gauge your competency set, can relate the results to your current role and future goals, and help you formulate an Action or Individual Development Plan (IDP). The most effective support for your development will come from an expert who can help you to maintain authenticity and behavioral integrity as you learn to integrate the good and the bad.

The hospitality industry is a unique mixture of complexities, ambiguities, and pressures and market forces in constant flux. Therefore, executives often have difficulty matching their good intentions for self-development with the limited time available to them. With this in mind, building and capitalizing on personal strengths arguably offers the biggest ROI with the path of least resistance. For those individuals who are highly motivated and disciplined with time management; however, a great specialist can use the unique insights from a performance-based assessment to help guide a person beyond the poetic thought in the Desiderata prose. Given enough courage, humility, and dedication… individuals paired with seasoned specialists can indeed learn also to overcome ineffective habits, poorly developed skills, and outright shortcomings.

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The Assessment Lesson Google Just Learned the Hard Way

In The War for Talent, McKinsey and Company3 declared that “talent is the most under-managed corporate asset of the past two decades.”  It’s astonishing this shortcoming persists since these authors further found that “talent driven companies of the Fortune 500 experienced nearly 82% greater profit than their competitor.”  Fortunately for organizations that wisely invest in organizational development, modern advancements in online assessment and evidence-based action plans can facilitate talent management in a way not possible in recent decades2.

There’s a right and wrong way to mine for talent. It’s tempting to follow the latest crazes in testing, assessment, and interviewing – striving for some elusive silver bullet. Even iconic, trend-setting organizations fall prey to innovative-sounding approaches that ultimately fail.  For instance, BusinessInsider.com famously reported that Google recently abandoned its legendary interviewing tactic of asking brainteaser questions in favor of interviewing against a set of competencies that were relevant to the role in question. Competency-based assessments have long been best practice in HR and workplace psychology. Google learned that lesson the hard way, and lessons like that cost money. Studies have shown that even for low-level positions a failed hire costs a company double the person’s annual salary. At higher levels, the cost can be six times the salary. On the other hand, research demonstrate that solid role and cultural fit produces an ROI.

Some modern assessments provide detail in data that hasn’t been possible with traditional assessments like the Myers-Briggs or DiSC, and this allows HR professionals to extract better and clearer insights from benchmark data that can be profitably leveraged in structural behavioral interviews. Benchmarking can be done beneficially without implementing large and costly projects.  And the results have wide-reaching HR applications that impact work performance and ultimately the organization’s bottom line.  To that end, below we give helpful guidelines to maximize the effectiveness of your benchmarking:

Science and specialization matter

Select an assessment that has been validated within the hospitality industry and only choose instruments that conform to the Standards for Educational and Psychological Testing1 and the Uniform Guidelines on Employee Selection Procedures (UniformGuidelines.com). In this way organizations can trust that the results are relevant to the unique conditions that define service-based cultures and work environments, as well as are unbiased with respect to the demographics of test takers. This helps to guard against issues of bias and adverse impact as required by the Equal Employment Opportunity Commission (EEOC).

Measure the correct things

Benchmark employees on attitudes, knowledge areas, and skills, not personality traits. Skills are applied constructs, while personality traits are often abstract. Examples of such skills for most job categories are available for free at the US Department of Labor’s “O*Net Online” at: http://online.onetcenter.org/. This resource exemplifies that personality traits are not synonymous with skills or competencies. Further, members of the Society for Industrial and Organizational Psychology recently published a new study4 showing that personality measures are generally poor predictors of work performance. As such, organizations that use such tools are arguably at legal risk, e.g., non-compliance with EEOC Title VII discrimination standards. More to the point, the old adage of “hire for attitude, train for skill” is a false choice. Attitudes aren’t inherent to personality traits – they’re akin to learned skills. Effective employees need both the right attitudes and skill sets.

Benchmark sooner rather than later

Large sample sizes aren’t always necessary to conduct valid benchmarking exercises. For example, assessments that were designed and validated using gold-standard item response theory (IRT) statistics are the most reliable and accurate in measurement and can detect significant differences based on relatively few test cases, since test items were previously calibrated against large, unbiased samples of professionals. Accordingly, the feedback and “Action Plans” generated from this foundation are meaningful at the individual and group levels.

Seek support to maximize the results

Consult with professionals – actual practitioners – in Organizational Psychology when interpreting and applying benchmark data. And always include a professional with strong expertise in the use and interpretation of the assessment used for benchmarking.

Successful organizations are tirelessly proactive in the war for talent.  A standardized skills assessment with industry-specific content and unbiased scores is one of the most efficient, reliable and effective weapons at your disposal. Combine this with proper reference checking and a structured behavioral interview and the ROI gets even stronger.  As an example, our research indicates that the anticipated first-year, average ROI for organizations using a proper assessment is about $74,500 for each new management hire. This assumes that the value of “high performance” is $100,000, with a 2:1 selection ratio and tenure of five years. Impressive ROIs are also documented for line and middle management hires.

Also, we have repeatedly found that even a modest follow-up or benchmarking study is well worth the effort and relatively small costs involved. Such studies often reveal the particular strengths and weaknesses of your current HR practices, while pointing to new areas of human behavior and performance that will be valuable when hiring new personnel and managing your current talent. Google learned the expensive way about the value of competency interviewing. Assessment and benchmarking drive successful competency interviewing. Together, they are investments that provide a strong competitive by finding and reinforcing your most valuable asset – human capital.

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Three Insider Tactics to Effectively Hire Hospitality Leadership from Outside the Sector

As an executive search professional who is specialized in the hotel and restaurant sectors, clients often encourage me to recruit leaders from outside their respective segments of the industry. This approach is certainly not new, but there has been a marked increase in such requests over the past two years. The practice makes sense and can be extremely effective when it is done thoughtfully and with a strategic purpose. All too often, however, that purpose is neither well-defined nor maintained throughout the search process. Therefore, three insider tactics are shared here to help ensure success in your recruitment initiatives.

There is always inherent risk when hiring any new executive — such as learning curve and acclimation to a new culture – so it’s imperative to understand why you’re venturing “outside” a sector to acquire talent. Remembering the “why” throughout the entire recruitment process allows everyone to maintain focus on the core objective. For example, a forward-thinking restaurant company looking to develop an international growth strategy may consider talent from one of the many hotel companies that have a successful track record with global expansion. Likewise, a luxury hotel company that wants to tackle a major branding initiative could consider hiring an innovative Chief Marketing Officer from a fine-dining restaurant group to infuse new ideas into their organization.

Regardless of the specific objective, there are three principles or strategies that are needed for a successful search outside a sector or industry. Having this in mind throughout the process will help to ensure focus, efficiency, and ultimate technical and cultural fit. Access the full report here or continue reading:

Know where to look when identifying talent

Expand your vision beyond your direct business segment, but keep it within the umbrella of hospitality-related industries. There are clear differences among executives who have worked specific verticals of hospitality, but the trademarks for success are reasonably consistent — delivering a high quality service and product in a highly customer-focused environment. Taking it a step further, recruitment efforts can also include industries parallel to the hospitality business. For example, there’s no reason not to consider candidates within the retail segment as these individuals typically have similar focus and passion towards customer service and the drive for quality.  In fact, some brands like Apple and Mercedes Benz often set the standard for service quality.

What competencies are transferable

My hospitality search assignments over the years have taught me that many critical skill sets are transferable across segments, most notably in the functions of marketing, sales, finance, IT, supply chain and human resources.  For instance, regardless of industry, a Chief Financial Officer needs to exhibit solid problem-solving skills and high ethical awareness. In contrast, an SVP of Human Resources needs to have creativity, service orientation, and leadership in order to be a strategic business partner at the enterprise level.  Once the critical skill sets are established, you are prepared to ask yourself the next vital question — “what skill sets are not transferable?”  A Chief Executive Officer coming from a non-service industry would likely have a difficult time transferring into the hospitality segment.  Additionally, many segments of the hospitality industry tend to function around the clock with multiple service lines, which could prove to be a difficult adjustment for an Operations Executive coming from a more narrow business model.

On-Boarding

Many industry professionals don’t fully realize that the recruitment process doesn’t end when an offer letter is accepted. An organization’s on-boarding program is critical in helping any new hires succeed in their roles. Lack of technical competency usually isn’t the reason why new hires at executive levels drop out – it’s a lack of cultural fit. Therefore, on-boarding supports new hires with the necessary knowledge and expectations to assimilate into the new culture. To be most effective, the on-boarding period should include setting very clear short- and long-term expectations and providing consistent feedback to your new executive on a regular basis.  It’s also essential that full transparency at all times is the core of all disclosures and interactions with the new leader. Knowledge of all company-wide issues helps builds the road map to navigate their new company. Organizations take a considerable time thoughtfully recruiting new leaders, and on-boarding those leaders should take a similar approach, especially when they are an outsider to the sector or industry.

The bottom line is that any new addition to your executive team is an important decision that aims to drive the business forward with a strong ROI. At a certain level it can affect the entire company and can potentially alter the voice or tone of the company culture. Bringing in someone from the outside can lend new perspectives and experiences and produce extremely positive outcomes.  The key is to know where to look, identify the needed skill-set, and then be sure to have a systematic on-boarding process in place to set up your new leader for ultimate success.  And don’t think of these as independent approaches. These are three, proven strategies that work best in tandem… much like three legs of a tripod that give a stable and enduring foundation.

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A Profile of Hospitality Leadership in Africa

Africa is traditionally called The Dark Continent – neither due the complexion of the original inhabitants nor the absence of lights – primarily because most people know very little about it.  It is last of the continents to feel the full influence of Western civilization.  Africa is actually a landscape flushing with sunshine, vivid light, and burgeoning development that is catching up to its vast potential.

Arthur Gillis, former CEO Protea Hospitality and current Non-Executive Chairman for Africa Development, Marriott International, recently described Africa as the “new haven for the hospitality industry” in an Op-Ed for BDLive.  Gillis enthusiastically summed up the business case for this new haven. In particular, “a McKinsey Global Institute report on the Progress and Potential of African Economies sets an eight-year prediction of Africa’s collective GDP at $2.6-trillion. If you consider that, along with predictions of African consumer spending rising to about $1.4-trillion by 2020 and 128-million households with discretionary income, it demonstrates a reduced reliance on mineral and energy exports and a greater emerging middle class in countries with healthier, well-rounded economies.” Gillis cautioned that international travellers and tourists do not yet constitute a firm foundation, but rather Africa’s growing middle class will travel more and more – producing a healthy domestic and also regional market.

Given all this burgeoning potential, the critical question arises “What types of hoteliers will be there to greet this market?”. Access the full report here or continue reading:

An unprecedented GM Gap analysis

Research by Cornell University professors shows that ten “core competencies” underlie successful hospitality professionals – a profile repeatedly validated in case studies across the world including Africa. Ultimately, these competencies reflect an individual’s People Skills, Execution Skills, and Cognitive Skills. One standardized and psychometrically-valid method to measure these characteristics is the 20|20 Skills™ assessment.

AETHOS Consulting Group has administered this assessment to GM candidates and incumbents across the world for over 15 years, as well as collected similar data from many license-users of the tool. This cumulative dataset reveals some notable differences between GMs in Africa compared to global industry benchmarks on core hospitality competencies.

FIGURE I 300dpi

This gap analysis in Figure 1 (above) highlights the strengths and potential development areas of GMs in this market. To be sure, as the African hospitality market matures and grows, so too must these critical middle managers.

Some trends are dramatic – African GMs score lower on (i) Leadership, (ii) Self-Effectiveness, (iii) Ethical Awareness/Rule Consciousness, and (iv) Loyalty to Company. In HR and organizational psychology speak, this translates to lower levels of service-minded leadership, energy, and self-directedness, as well as possibly reduced engagement with teams or brands. It is a mystery to what extent these trends follow from a lack of active skill and career development offered to emerging leaders, or whether this profile more reflects a response to current workplace cultures or the psychographic make-up of guests. Maybe we are dealing with a mixture of issues and causes.

Regardless, there is also good news about the GM profile… compared to industry benchmarks, the African GMs exhibit greater awareness of diversity issues in the workplace and exhibit stronger “general mental ability.” Higher scores are evident for both Creativity (strategic, big picture thinking) and Problem-Solving (critical reasoning, decision-making). Out of the ten core competencies, these two factors are arguably most important, since studies pinpoint general mental ability as the best single predictor of overall performance. It is a great indicator of one’s ability to learn and accept training, adapt to new circumstances and market demands, and cope with stress and ambiguity.

The C-Suite Level

development and career advancement remains a global HR issue for new and emerging leaders. The above gap analysis begs the question of “who is ready, willing and able to develop middle management?”  An obvious resource are regional or even corporate executives, assuming there is enough meaningful interaction between the employment levels. But CEO/COOs in the African market currently have their own set of strengths and challenges ahead of them.

FIGURE II 300dpi

Figure 2 (above) reveals several notable skills compared to global industry benchmarks. Overall, African corporate leaders tend to be grounded in a healthy ego and show a clear concern for group identity, cohesion, and collaboration – a series of issues related to Team Building. An attention to employee engagement is further underscored by their pronounced Loyalty to Company.

On the other hand, there are some areas where competency lags relative to industry norms. The trend for stronger “general mental ability” (Creativity and Problem Solving) seen with GMs in the African market is not consistently paralleled when it comes to those in “corner offices”. This profile suggests such executives can be emotional over analytical, prefer to deal with components and pieces versus tackling the big picture holistically, and appreciating tangibles more than visionary ideas. If this characterization is valid, then structure and standardization might be expected to rule the day. Yet, Brendan Gillespie, CEO of Lonrho Hotels, sees these profile trends as reflecting sobering realities in the market. In particular, lower scores on Ethical Awareness (rule consciousness) may indicate that CEOs/COOs in the African market are struggling with organization and consistency amidst poor infrastructure, shifting availability of goods and services, and tacit governmental challenges.

Moreover, the softer skills one might expect in a group that emphasizes employee engagement are clearly minimized in the African market CEOs/COOs. Lower Sensitivity to Diversity, Humor Orientation, and Service Orientation all pinpoint this group as likely more transactional than peers in the global benchmark, who in turn, exhibit a good foundation for service-minded leadership.

In conclusion, there may be no surprises here for those in the know. Marcel Kobilski, Divisional Director Human Resources at City Lodge Hotels Limited in South Africa, noted that he also finds that emerging leaders work at operational levels and do not have the potential to work at higher levels unless much time effort and money are spent on development. To Kobilski, the greatest challenge is identifying a style of leadership that both resonates with Africans and that is not totally alien to Western Corporate culture, as well as can be shown to be effective in driving results. And, once done, ensuring that leaders are chosen and groomed to take a more long term and strategic view of their businesses, including the development of a leadership pipeline that then enables consistent and sustainable delivery at the top levels in African organizations. In other words, current leaders need to proactively ask themselves, “Who will replace me, and how can I ensure that they will be more effective than I was?

The psychometric GM and CEO/COO profiles revealed here gives a data-driven response to the critical question posed as to what types of leaders will meet the guests defining the new haven of hospitality. And arguably that answer is leaders who are “technical capable but perhaps not fully prepared in their service mindset.”

Today’s GMs in African markets hold a decidedly clear competitive advantage in terms of the brain trust they can bring to their roles – an extremely valuable commodity since middle managers are the ones in the fray planning, adapting, and forging ahead through the ambiguity and complexities that define burgeoning markets. But savviness itself goes only so far. CEOs/COOs appear to think short-term and act transactional, even though they care and probably strive to promote workplace engagement.

A clear pathway for developmental growth emerges from the profiles. The most effective and efficient GMs will be those who are empowered, rewarded for service-minded leadership, informed and trained on the latest SOPs and best practices in hospitality, and who gain a sense of ownership in the organization and therefore develop a meaningful and lasting attachment to the brand and ownership. CEOs/COOs need to hone soft skills, exhibit service-minded leadership, seize opportunities to bring organization and professionalization to workplace cultures, and think more long-term and strategically.

This all sounds simple in theory, but expect much difficulty in practice. Building hospitality leaders is a collaborative effort among emerging leaders, seasoned leaders, HR professionals, and hotel ownership. There are also non-trivial time and cost factors at play here. But, top talent is needed to successfully meet the new opportunities in Africa so eloquently articulated by Arthur Gillis.

My sense is that experts like Gillis, Gillespie, and Kobilski would agree that developing talent actively and now to match these opportunities is not some “feel-good,” resource-wasting exercise.  Writing in the popular tome War for Talent, McKinsey & Company indeed reported a sobering analysis and conclusion, i.e., “talent driven companies of the Fortune 500 experienced nearly 82% greater profit than their competitor.”  That analysis is more than a case study or object lesson. In a burgeoning market and continent, perhaps it should be taken as marching orders.

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CEO Turnover Study 2013: A Profile of Hotel Industry Leadership – A 10 Year Review

A recent study surveying 2,500 of the world’s largest public companies, covering all industry sectors,  reported 14.4% CEO turnover (the 5-year average stands at 13.9%) – in comparison, our 2013 study of the hotel sector revealed turnover of 10.0% and a 5-year average of 10.8%.

Notably, changes in leadership within the hospitality industry have predominantly been planned as opposed to being forced or as a result of death or illness. Over the last 10 years just shy of 60% of CEO movement was the result of considered forward-thinking planning by the board. Yet, we have seen a slight increase in the numbers of forced CEO exits – it appears, especially in Europe, public companies’ shareholders have been quick to demand change in the face of adversity. It will be interesting to see whether this is just a reflection of the relatively uncertain economic environment of the past three to four years or it there is a change of mentality.

The following paragraphs look at the past 10 years and the changes that the hospitality industry has seen at CEO-level – where do they come from, what sets them apart and what are their qualifications….? Step-by-step, the following pages will paint a picture of our industry CEOs and profile the individuals who are leading the hotel sector around the world.

Click here to access the full article.

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Three things to know before conducting your own surveys

For many organizations, questionnaires in their various forms are effective and efficient tools for gauging internal and external performance – particularly with the current ease and access to data like never before thanks to new forums such as social media.

It is understandable that organizations aim to save money on survey initiatives, but collecting employee and market data with poorly designed tools wastes money in the short- and long- terms. In the short-term, poor questionnaires are a waste of development time and money. In the long-term, organizations risk making incorrect and costly business decisions based on corrupted data from poorly designed questionnaires. It is unfortunate that many organizations create, conduct and analyse questionnaires on their own – without any guidance from specialists. This can be a costly business mistake.

Readers here are being privileged to a rare insider conversation with one of the world’s most prominent experts in psychological testing, measurement and questionnaire research, who also happens to be an exclusive consultant to the AETHOS team. Meet Dr. Rense Lange, a pioneer and highly sought-after expert in applying modern testing and statistical methods to business analytics. In addition to serving on the faculty of the University of Illinois, the Southern Illinois University School of Medicine, and Central Michigan University, Dr. Lange worked for 15 plus years as the lead psychometrician at the Illinois State Board of Education. Now he heads the Psychometrics and Statistics Laboratory at the Lusofona University of Humanities and Technologies, In addition to consulting with governmental clients world-wide.

Being an exclusive part of the 20|20 Assess℠ survey and assessment team (www.2020assess.com), Dr. Lange recently fielded some pointed questions from AETHOS Consulting Group about the pitfalls of questionnaire studies of which organizations should be aware in order to ensure optimal outcomes.

Click here to access the full article.

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Breaking the Mould: Talent Management in an Ever Evolving Industry

The hospitality sector has increasingly become fragmented – throughout the past decades, the industry has been shaped by the changes in ownership and by the heightened degree of specialisation, innovation and the emergence of new business models and market players. At the same time, society at large is undergoing a major shift as Baby Boomers exit the work force, handing over the reins to Generation X and the Millennials. Many studies highlight that this new workforce has a completely different set of values – work-life balance is high on the list of priorities and being “fulfilled” and “engaged” is critical.

Arguably, traditional ‘linear’ career models have become almost obsolete as a consequence of both the changes in the industry and society. It is therefore disheartening that many organisations cling to dated talent management SOPs. Above all, the focus still appears to be on retention and retention only. Yet, given the fragmented nature of the industry and the thirst of today’s workforce for mental stimulation and continuous career progression, it appears that a new way of thinking is required to develop a sustainable talent pool. Going forward, human capital strategies may need to be re-engineered and firms may have to adopt a more inclusive and collaborative talent management program – resulting, for example, in “open source” talent pools or employee exchange programs.

The article is merely intended as food-for-thought and perhaps a wake-up call for the industry – the hospitality sector prides itself on streamlining processes, coming up with new culinary experiences or creating the most memorable overnight stays; yet, it easily forgets to also follow through on the promise of innovation in the area of human resources and talent management.

Click here to access the full article.

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New HR Study: Candid Recruitment Experiences with LinkedIn

Studies reveal that even for low-level positions a failed hire costs a company double the person’s annual salary. At higher levels, the cost can be six times annual salary.  Corporate leaders and HR pros tend to agree that hiring is the most important thing any organization does, yet the best method for recruitment remains debatable.

Recruitment strategies have historically followed certain trends – school recruitment drives, employee referral programs, job boards, and career sites like Monster or CareerBuilder. Today’s social media culture has driven a hybrid approach termed social recruiting.  As exemplified by the current marker leader LinkedIn, social recruiting allows users to create profiles that showcase their competencies and hint at career aspirations by outlining past work history and current interests and activities. Users also can join groups, contribute to discussions, send out online mailers, receive endorsements, see which other users have viewed their profiles, and contact individual users directly. Plus, the user database can be searched to quickly canvass a field or industry.

If you’re reading this article then chances are you have a LinkedIn profile… and you can be sure that decision-makers in the industry are studying it for various reasons.

DON’T JUDGE A BOOK BY ITS COVER…

The prevalence, efficiency, and user friendliness of sites like LinkedIn may cause you to question whether Executive Search firms are running scared. The answer is no. On the contrary, many firms embrace and leverage social recruiting themselves as another tactic to find suitable candidates. That said, anyone using LinkedIn, or social recruiting in general, has the challenge of appraising profiles, which an increasing number of HR pros have anecdotally characterized as a tricky task. In fact, some of the whisperings this author has heard firsthand strongly parallel the psychological phenomenon of “profile inflation” that online dating sites have battled for years. The basic platform and functionality online dating sites pioneered in the early 1990s are arguably the precursor to social recruiting. Think about it, the same transactions occur – candidates for relationships create profiles (complete with photos) to showcase their backgrounds, interests, and activities in an attempt to standout to others who are searching for suitable candidates within a competitive online community.  Profile inflation exists when a person attempts to artificially enhance a profile through little white lies (e.g., “I’m 6 foot” vs. the reality of 5’7”) or deceptively positive terms to describe oneself, past accomplishments, or current status.

Social scientists have long known that accurately evaluating people with online information is not as easy as it may seem. For example, the only information a hiring manager sees on LinkedIn is what a candidate chooses to reveal in the profile, and that information, as well as any other information the candidate chooses to disclose may either be truthful or intentionally deceiving. As a result, cyber-citizens are trapped within a world of “hyperpersonal communication,” that is, they must rely on broad assumptions in order to make interpretations about others, as well as inflate their perceptions of others based on the restricted cues that are available1.  Indeed, research indicates that people often form quite inaccurate perceptions of people’s personalities when communicating over the Web2 and that Internet socialization even motivates some individuals to develop “fantasy identities.”

In other words, it is tricky to know exactly whom to trust, even when you feel pretty good about a connection. To be sure, other research cautions us that people tend to let their proverbial guards down online and develop trust too quickly3. One study, for example, found that individuals meeting for the first time online are more likely to reveal their “true selves” (who they really think they are) rather than their “actual selves” (how they think they should be seen) 4.  Cyberspace can certainly be a quagmire of deliberate or unwitting errors and omissions. As such, profile inflation should not be surprising. One only needs to read the entry on “job fraud” in Wikipedia to be reminded how prevalent minor and major discrepancies alike often are even on traditional resumes, and to a large extent LinkedIn profiles are glorified resumes. Taken all together, it makes sense to investigate to what extent LinkedIn profiles accurately represent candidates.

To this end, sixty (60) HR professionals (68% women, 32% men: M age = 40.6 yrs, SD = 8.8, range = 18-59 yrs.) participated anonymously in a preliminary survey by AETHOS Consulting Group and candidly evaluated the correspondence between how candidates come across online versus their actual offline personas and abilities. The respondents were a convenience sample with an average of 14.4 years (SD = 7.8) of candidate interviewing experience, and a good level of formal education: No College/University degree (7%), Associates degree (5%), Bachelors degree (58%), Masters degree (33%), and Ph.D. or equivalent (2%). Their geographic distribution was North America (63%), EMEA (23%), Asia Pacific (8%), and South America (5%). The respondents hailed predominantly from the Hotel/Lodging sector (66%), although other hospitality sectors were also represented: Restaurant/Food Service (22%), Consulting /Service Firm (5%), Travel/Tourism/Consortia/Cruise (3%), REIT (3%), and Other (1%).

SURVEY RESULTS…

Big Picture – How Hospitality HR Leverages LinkedIn:

  • LinkedIn is overwhelmingly used in the recruitment of candidates for key management positions at Senior (87%) and Mid-Management levels (80%), whereas very rarely for Entry roles (8%).
  • Respondents indicated that LinkedIn has been useful for various aspects of recruitment (check references, establish contact, gather background information, map the talent pool in a specific market, obtain referrals/leads for additional candidates, and validate work experience), but it is most specifically used to establish contact with potential candidates (67%) and gather background information (10%).
  • Respondents gave LinkedIn a generally strong overall satisfaction rate of 86% (17% Very Satisfied, 69% Satisfied) as a recruitment tool for key management roles, although 14% (6% Very Unsatisfied, 8% Unsatisfied) were unfavorable towards the platform.
  • Ratings on perceived relevance and satisfaction with LinkedIn (on a 0-4 scale), however, varied markedly by particular recruitment tasks. Satisfaction ratings were favorable for (a) Establishing contact with potential candidates (2.94), (b) Gathering background information (2.63), and (c) Obtaining referrals/ leads for additional candidates (2.35).  LinkedIn was rated lower on relevance and satisfaction for (d) Checking references (1.22), (e) Mapping the talent pool in a specific market (2), and (f) Validating work experience (2.02).
  • Based on respondents’ overall experience with LinkedIn, there was a clear and favorable consensus of 97% (51% Definitely Yes, 46% Somewhat Yes) to recommend it as a tool in recruiting for key management roles. Only 3% responded “Somewhat No” to recommending LinkedIn for recruitment.

Important Details – Accuracy of LinkedIn Profiles:

  • A majority of respondents (61% total: 38% Sometimes, 23% Frequently) indicated they invite candidates for interviews for key management roles based primarily on a favorable impression of an individual’s LinkedIn profile. On the other hand, more than a one-third of respondents (39%) indicated that they Rarely (27%) or Never (12%) invited individuals for interviews based primarily on positive impressions of profiles.
  • A majority of respondents perceived good levels of overall accuracy of candidates’ PROFESSIONAL BACKGROUND/ CV/ RESUME as depicted in their LinkedIn profiles after meeting individuals in person (see Fig 1 [below]).

Perceived Accuracy of Profession Background

  • More variable levels were found for perceived accuracy of candidates’ DEMEANOR/ ATTITUDE as depicted in their LinkedIn profiles compared to meeting individuals in person (see Fig 2 [below]).

Perceived Accuracy of Demeanour

  • Arguably the highest variability was found for perceived accuracy of candidates’ BEHAVIOR/ COMPETENCY as depicted in their LinkedIn profiles compared to meeting individuals in person (see Fig 3 [below]).

Perceived Accuracy of Behaviour

TAKEAWAYS…

For HR & hiring managers

  • LinkedIn is predominantly used for recruiting roles at the mid-management and higher levels.
  • LinkedIn, and arguably social recruiting broadly speaking, appears most effective for making contact with potential candidates, gathering background information, and obtaining referrals or leads for additional candidates. This suggests the platform is useful in sourcing and screening candidates, as opposed to selection per se. Sourcing and screening candidates tend to be more early and superficial aspects of recruitment, whereas selection entails choosing finalists based on technical and cultural fit.
  • While candidates’ backgrounds and activities are factual aspects easily verifiable via reference checking and offline interviewing, there appears to be more opportunity for discrepancy between online impressions of a candidate’s demeanor, attitudes, behavior, and competency and how the candidate’s executive presence presents offline. This corroborates the trends summarized above and indicates that LinkedIn is helpful in screening candidates for basic job requirements, but less reliable for assessing cultural fit that is critical for a new hire’s long-term success.
  • Hiring managers, HR pros, and organizations who have LinkedIn profiles should be aware that savvy candidates research you and the firm prior to interviews – and this includes reviewing your online profile as well.  With high-level hires, candidates typically are interviewing and assessing organizations as much as they themselves are being evaluated. Review your profile on a routine basis to ensure accuracy in facts, purpose, and values.

For candidates

  • Ensure your online resume is recent, accurate, and does not contain any overly positive or misleading terms or wordings that make your background and skill set seem more impressive. Be factual in your background and speak to verifiable outcomes and accomplishments.
  • A summary or track record of past accomplishments is important, but it fails to inform hiring managers about your executive presence and other factors that contribute to cultural fit with an organization. The LinkedIn profiles of emerging and established leaders might profitably include a personalized note or very brief essay that speaks to your personality, professional approach and management style.  Use a conversational style when writing; not professional jargon that sounds impersonal or transactional. Whenever possible, include a link to video clips or other resources that others can use to get a sense of these traits and characteristics.
  • At interviews, take the initiative to ask whether the interviewer(s) browsed your LinkedIn profile and what impressions they had.  This will help you get a sense of what others assume or expect about you at this stage, as well as offers an opportunity for you to build on positive impressions and remedy inaccurate ones. Do not stop there, however…  ask for constructive feedback on how to improve it, accept the feedback gracefully, and use it.

NOTE

For exclusive publication by 4hoteliers.com. No re-prints available.

REFERENCES

1 Walther, J. B. (1996). Computer-mediated communication: Impersonal, interpersonal, and hyperpersonal interaction. Communication Research, 23, 3-43.

2 Rouse, S. V., & Haas, H. A. (2003). Exploring the accuracies and inaccuracies of personality perception following Internet-mediated communication. Journal of Research in Personality, 37, 446-467.

3 Whitty, M. & Gavin, J. (2001). Age/sex/location: Uncovering the social cues in the development of online relationships. CyberPsychology & Behavior, 4, 623 – 630.

4 McKenna, K. Y. A., Green, A. S., & Gleason, M. E. J. (2002). Relationship formation on the Internet: What’s the big attraction?  Journal of Social Issues, 58, 9-32.

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Threats to Executive Creativity and Problem-Solving

The article takes an in-depth look at how leaders must possess both creativity and problem-solving skills to excel on the job. Although some may views these skills as opposites, we disagree. We also believe that these skills can be taught and are not necessarily innate. We provide tools and exercises that can be used by individuals and groups to improve their cognitive abilities and idea flow. We finally draw attention to the threats that exist to the modern leader looking to advance in an ever changing world.

When most people talk about creativity they usually refer to artists, musicians and actors. In contrast, when talking about problem-solving abilities, they speak of mathematicians and strategists. The whole left brain, right brain argument usually ensues. This view often traps people with two misconceptions – first, that these two skills are mutually exclusive, and second, that the skills represent wholly innate traits rather than learned abilities.  Executives and developing leaders alike need to know that creativity and problem-solving are actually part of the same bucket of skills and quite complementary. Social scientists characterize creativity and problem-solving collectively as general mental ability or more simply, “cognitive ability.” Traditional IQ tests tap this broad competency by assessing both fluid intelligence (internally-based information processing) and crystallized intelligence (externally-learned knowledge areas).  These two types of intelligence work together to allow individuals to make decisions that require us either to create or construct new configurations of information and components, or to make sense of or deconstruct present configurations of information and components. Construction is creative thinking and deconstruction is analytical or critical thinking.  As Columbia Business School Professor Bill Duggan writes in his management book “Strategic Intuition”, cognitive ability is the capacity to combine creative solutions to existing problems, which leads to innovation. Honing these skills are critical if you want to become a great leader.

Cognitive ability can be impacted for better or worse by lifestyle habits and one’s motivation and success in absorbing and learning new information. Indeed, you can teach an old dog new tricks, if the old dog is willing.  Perhaps the first step is stop habits that undermine cognitive ability. Some common threats to modern executives include:

Group-Think

Social science research has long established that individuals tend to like other people that are most similar to themselves – familiarity breeds comfort.  However, this behavior reduces diversity of thought and perspectives that promote healthy debate and innovative thinking. To combat this threat, consciously surround yourself with people who have different backgrounds and perspective than you to avoid “group think.”

Educational narrow-mindedness

As people gain expertise in a specific discipline or subject, their field of view often tends to become very restricted – specialists, by definition, are not generalists. For example, finance specialists read financial literature and consult with kindred professionals. The net effect parallels the group-think effect noted above, and potentially valuable opportunities for “cross-pollination” can easily be missed. To combat this threat, read and consult various resource materials that are outside your immediate skill sets, knowledge areas and comfort areas. In other words, expose yourself to diversified material of both a general nature and specific focus

Complacency and low risk-taking

Humans tend to go for the path of least resistance, or the easy fix, all things being equal.  But this behavior can promote laziness, complacency and a lack of conscientiousness and healthy risk taking. To combat this threat, strive to flex your curiosity in social networking situations. Many individuals dread making small talk and meeting new people, so instead of asking people about the weather or “how’s business?” use these occasions as mini-brainstorming opportunities. Ask “What’s the most useful book you’ve read this past year and why?”, “Where do you draw inspiration for your best business ideas or breakthroughs?”, or “What trends in technology or business do see as the most impactful over the next couple years?”

The next step is to replace bad habits that threaten cognitive ability with constructive habits. Most notably, make sure your mind and body are in shape. Four key areas to concentrate on include:

Nutrition

Humans require energy for concentration on conceptual tasks, especially those demanding problem-solving and creativity. Breakfast especially provides those nutritional necessities and prevents symptoms such as headache, fatigue, restlessness and sleepiness from competing with outcomes. Maintaining proper nutrition provides key benefits to brain chemistry as well.

Sleep

Without an adequate amount of quality sleep, people do not function properly. Creativity requires efficient and effective storage of information. Two stages of sleep are crucial for memory consolidation, Slow-Wave and REM sleep. Sleep allows us to transform short-term memory to long-term memory, and by so doing, synthesizes new information with old. Quality sleep also seems to coincide with a healthy job outlook. In a study published in the Journal of Management, researchers found that employees reported higher levels of job satisfaction if they had slept soundly the night before, and lower levels if they had experienced insomnia. Furthermore, they found that women were more sensitive to insomnia’s effects on job satisfaction and emotions. The researchers recommended improving sleep quality by exercising regularly, limiting consumption of caffeine and alcohol, and improving general sleep habits.

Positive Thinking

It’s admittedly cliché, but the power of positive thinking to improve well-being has been endorsed for years. Optimism is important; the general principle to remember is that negative thoughts lead to negative results and positive thoughts lead to positive results. To that end, use only positive forms of thoughts and statements. For example, say, “I want to win,” instead of, “I do not want to lose” or “I have to win, as an alternative to, I cannot afford to lose.” Avoid words such as no, never, do not, cannot and impossible. Eliminate these words from your vocabulary, as they may have worked for Mark Twain but it won’t work in today’s business environment.

Education

We believe that it is never too late to learn, and as such, going back to school is always an option. Classes in math, statistics and economics can be matched with artistic pursuits such as painting, drawing and media arts. The “Father of Creativity” E. Paul Torrance identified a total of 384 studies which examined the effectiveness of creativity training. The majority of these studies have concluded that creativity can be enhanced through formal training. One of the most extensive studies on the effects of creativity training was conducted by psychologists Parnes and Noller. They discovered that students enrolled in a four semester sequence of college courses which focused on awareness-development, creative problem-solving and creative analysis processes scored significantly higher than a control group on measures of mental ability, creative application of academic subject matter, non-academic achievement in areas calling for creative performance, and certain personality characteristics associated with creativity. In fact, the overwhelming results of this experimental program eventually led to establishment of a permanent program at the State University College at Buffalo called the International Center for Studies in Creativity (ICSC). If you are not prepared to go back to school, become a veracious reader as ideas always germinate from great works of philosophy, religion, history and current events.

Having prepared the mind and body, you can use creative exercises to expand your ideas. The key is the act of combination. Creative ideas without the ability to execute are just dreams, while execution without thought can lead to some very ugly outcomes (the recent financial crisis comes to mind). People become creative when they let their minds wander and mix ideas freely. Innovation often comes from unexpected juxtapositions. Below are some simple exercises to jump-start the creative process:

  • Look at license plates while traveling to and from work. Consider what the plate numbers or letters might mean if the vehicle was owned by famous people such as the Dali Lama or Jennifer Lawrence.
  • Notice and choose people randomly and create a story in your mind based on the clothes they are wearing.
  • Choose objects you see in rooms, spaces, and places you travel through and create stories about them and their owners.
  • Today, in four different rooms in which you spend time, randomly choose objects. These can range from small items on tables or shelves to pieces of furniture or objects attached to walls. Next, create stories based on someone in the very distant future discovering these “outdated” objects. To make the process more challenging, alter the type of story being told – for example, comedy, drama, romance, etc.
  • Imaginatively try to turn noises you hear into musical rhythms, turn colors you see into specific sounds, and turn sounds you hear into particular odors. The idea is to experience perceptions in more than just one of your five senses at a time.

Below are some exercises to promote group problem solving:

  • Alphabetizing can be used to help teams generate a long list of ideas when their brainstorming has become stalled. Write out the alphabet, list 26 famous people names starting with the letters of the alphabet. Then, virtually ask each of the famous people how they might solve the problem you are working on. Generally this will lead to unique ideas that neither brainstorming nor logic alone can produce.
  • Assimilation is another effective technique for group problem solving. Begin by putting together a miscellaneous collection of photos, photo clippings from magazines, post cards or books of photos. Compile a mix of subjects from natural to manmade images, paintings, sculpture, ceramics, textiles, etc. Have group members randomly select 6 to 12 separate photos that simply “speak” to each individual or attract their attention unconsciously. Deliberately allow their minds to wander so they are not tempted to rationally select photos. They might even use “soft eyes” to choose images by letting their vision blur slightly. After all of the images are chosen, have members describe the emotions that sparked the photos they selected, discuss how the individual photos describe a problem the group is experiencing now, and then look for solutions for the problem in the photos…perhaps how nature has solved a similar problem or how an artist has solved it in their piece of work.
  • Executive retreats and management workshops you can schedule to promote creativity in organizational strategies. Using the Socratic Method group leaders can ask provocative questions and encouraging insightful responses. By asking questions based on the “known” but, with a focus on evaluation, synthesis, and the power of inductive/deductive reasoning that the ultimate production of new ideas will engender creative thought.

We believe that organizational creativity can be purposefully and systematically developed because the process depends upon the learnable skills of thinking, communication, and problem-solving. Moreover, the process is further reliant on such human aspects as intuition, emotional intelligence and right-brain thinking. As stated before, the key is to get prepared, show up and be open to new and interesting ideas and combinations. With a dearth of material on creativity, innovation and problem-solving you can become the expert you want to be.

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Who’s Managing Your Talent?

In the year 2000 McKinsey & Company published ‘The War for Talent’, a survey of people management practices at major US-based corporations, and found that “talent has been the most under-managed corporate asset over the past two decades.

‘Talent’ has a specific definition at every company but in broad terms it refers to leaders and managers are key to helping a company achieve its goals and attain a superior level of performance. They do this through their enhanced communications skills, strategic thinking, entrepreneurial instincts, leadership abilities, and functional skills.

So how can companies better manage this valuable asset? To begin with they have to embrace a ‘talent mindset’. A talent mindset is the fundamental understanding and appreciation that having better talent is what elevates a company above its competitors. Adopting this mindset means throwing out some old previously held beliefs about people management.

One popular misconception is that people management is solely the responsibility of the Human Resources department. The fact is that every leader within an organisation should be responsible, and be held accountable, for talent management. It is imperative that the CEO takes ownership and then communicates the talent mindset to the rest of the leadership in the company.

It is plain to see where talent management currently fits into the typical hotel company CEO’s priority list. At the recent International Hotel Conference in Monaco, a panel session on ‘Staff Attraction and Retention’ was held concurrently to sessions on finance and development opportunities. No prizes for guessing which sessions had the higher attendance. I am not suggesting that talent management is more important than finance but, as McKinsey found in their study, it should certainly have a seat at the same table.

Every leader should be continually assessing their team and looking at how to strengthen it. To do this, leaders need to set the example for talent within their organisation. They should ensure they only hire top quality employees, encourage people to raise their game, mentor certain employees, let go low performers, and create a benchmark for evaluation and promotion.

Leaders should play an active role in the people management decisions within their organisations. A CEO, for example, should be deeply involved in the development, assessment, hiring, deployment and retention of the company’s top echelon of performers. Talent must also be reviewed on a regular basis and talent management should be subjected to the same scrutiny as the annual budget. Review sessions should result in plans as to how best to strengthen the talent pool and how best to deploy it according to the business’s critical priorities.

And of course there is a financial commitment. Most managers view salaries, bonuses, and benefits as an immediate negative hit to their P&L instead of viewing it as an investment. Having a talent mindset means being able to take a long-term view and to recognise the benefit of investing in new hires, competitive salaries, attractive benefit schemes, stock options, signing bonuses etc. Importantly it also enables a leader to take smart decisions regarding compensation and to know which employees are worth retaining and are most worthy of this investment.

Finally, managers should be held accountable for the strength of their talent pool. In a similar way that financial performance, quality, and guest satisfaction are measured, so should a manager’s talent management. This can be done simply by setting a number of objectives at the start of the year for the strengthening of the talent pool. A fair amount of judgement will be involved when assessing the attainment of these objectives but, without accountability, a talent mindset will never be successfully integrated into an organisation.

Talent management is not something that can be delegated to Human Resources and forgotten about. A talent mindset has to be taken on 100% by all leaders within an organisation. After all, effective talent management ultimately yields increased company performance. As McKinsey & Company found, “companies scoring in the top quintile of their talent management index, on average, earned 22 percentage points higher return to shareholders than their industry peers.” Something worth thinking about.

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The Mental Shift to “Y”

Recent reports analysed the development of the tourism industry in the Middle East and highlighted the staggering growth this region is experiencing in both supply and demand. However, the publication also revealed that regional hoteliers, nowadays and even more so in the near future, will find themselves struggling to attract the right personnel.

Yet, this labour shortage is by no means a problem exclusive to the Middle Eastern tourism markets. It is a global trend, which has already been addressed by numerous industry experts and organisations (e.g. IH&RA, ISHC, PATA). In addition, it appears that qualified personnel are increasingly inclined to leave the industry after a couple of years employment in the hotel sector, which further fosters the so-called “war for talent”. The issue, therefore, lies not only in the attraction, but also in the retention of the right personnel.

Finding and attracting staff is generally influenced by the labour market and the level of competition in the respective hotel markets. Clearly, management is also a decisive factor and hotel guests have their final saying by setting the minimum expected service levels. Retention is a slightly more complex topic and could cover several areas, such as remuneration and benefits, succession planning or talent management. This article, however, looks at the labour shortage problem from the perspective of today’s labour force – Generation Y. We will concentrate on the changing work environment and the misunderstood Generation Y, as well as non-hospitality employers’ increasing appreciation of hotel school graduates´ skill sets.

Changing Work Environment and the Misunderstood Generation Y
Undoubtedly, the workforce of today is changing. Generations X and Y are gradually replacing the retiring Baby Boomers and thereby automatically altering the conditions in the work environment.

Generation Y in particular is living a different lifestyle: family structures no longer mirror traditional patterns and conventional gender roles are no longer valid. A recent study by Deloitte has examined the peculiarities of this generation (“Generation Y – Moving With The Times”, August 2007) and states that it is primarily the values that have changed; work-life balance and communication have become particularly important and personal fulfilment has evolved into a main driver of motivation. Furthermore, Generation Y is characterised by its determination and ambition and consequently wants to advance as quickly as possible in professional life, seeking to become more skilled and knowledgeable. Accordingly, job security is not as important as it used to be to other generations.

A lack of understanding of these values, clearly different from the attitudes of previous generations, has created an erroneous image of the Generation Y as that of being arrogant, impatient and disloyal. The study “Generation Y: Unlocking the Talent of Young Managers” (Chartered Management Institute, June 2008) has proven those prejudices to be wrong. It revealed that Generation Y primarily chooses an employer based upon long-term career development opportunities and only about 20% of the interviewees stated that salary levels were “very important” to them. Additionally, for the great majority of respondents, company values played a major role in their decision to join a company or not. The study also pinpointed the fact that more than one third worked extra hours on evenings or weekends and hence showed commitment by being flexible. The previously mentioned study by Deloitte adds to this and highlights the ethical and environmental awareness of Generation Y, concluding that job satisfaction is a key retention factor.

In consideration of all of the above, it becomes apparent that employers have to adapt to the changes in the work environment and adjust to the needs and expectations of today’s workforce – those of Generation Y. Bruce Harkness, Vice President Learning & Development at Moevenpick Hotels & Resorts, stated in an interview with me that the primary problem of the hotel industry is that it constantly underestimates its employees. The industry is stuck in its rather conventional approach towards career development, in which employees have to work their way up the career ladder through various levels of hierarchy. However, by doing so, hotels might lose employees with great – but unrealised – potential. Harkness points out the necessity to educate current management and decision makers (most likely being part of the Baby Boomer generation) on the needs and expectations of Generation Y.

For the hospitality industry this means that offering trainee-programmes as entry-level positions may not always help to retain or even attract hotel school graduates. Mostly, they do not see great potential to enhance and develop their professional skills in such programmes. After all, what is a trainee-programme, if not a mere extension of what was already learned during the studies and internships? Of course, there is nothing wrong with acquainting a new joiner with the procedures and standards of the company, but wouldn’t a junior management position in Marketing & Sales, Revenue Management or the Finance department, for example, better capitalise on the knowledge and capabilities of the hotel school graduates? Unfortunately, it is still the minority of graduates that enjoys such encouraging and motivating positions. Therefore, hoteliers might want to reconsider their trainee-programmes and tailor entry-level positions to the qualifications of the graduates, in order to increase attraction.

As we have also seen, communication and personal development is a vital part of the value-system of Generation Y; employers should therefore create a work environment which reflects this. Next to providing regular feedback, coaching sessions and on-the-job development opportunities, it is the empowerment of the workforce that should be the buzz word in today’s HR-departments. Harkness points out that often tangible project tasks provide the development opportunity graduates are looking for, by allowing them to apply theoretical and practical knowledge, take on responsibilities and to work independently. By identifying the personal objectives of each employee, hoteliers should also establish a tailored career development programme and determine whether, and by when, personal goals can be reached. In the opinion of Harkness, it is therefore important to adapt a mentoring approach instead of an overly formalised and training-orientated methodology. Additionally, keeping the organisational structure as flat as possible would allow for more contact with senior management and areas of greater responsibility. Ultimately then, this could help to reduce turnover rates and increase employee retention, which should positively influence the cost structure of the HR department.

Non-Hospitality Employers’ Increased Appreciation of Hotel School Graduates´ Skill Sets
After observing the changing work environment and considering that employers still fail to respond to the values and expectations of Generation Y, one might wonder whether this could be linked to the fact that an increasing number of recent hotel school graduates work in industries other than the hotel sector.

Surely, some of the graduates are driven by these circumstances into other industry areas. However, one should also bear in mind that, in light of the increasing number of educational programmes available, hotel schools include more and more managerial, strategic and financial courses in the otherwise specialised curriculum. By doing so, they provide their students with skills that are valuable in a multitude of industries. Some may also say that apart from such generic courses, it is the service-orientated attitude and well-developed communication and presentation skills of hotel school graduates which is appreciated by employers from the consulting or banking industry, for example. Both sectors are traditionally very reliant on strong customer relationships and personalised services. Others highlight the fact that an increasing number of institutions outside of the hospitality sector invest in hotel properties, given the attractive returns. Such investors (including investment banks, institutional and/ or private investors), often do not have the knowledge to evaluate if a hotel runs smoothly and provides the returns that can be expected. Hence, hotel school graduates who know the business are increasingly hired by such companies to provide their input in acquisitions and asset management of hotel properties.

In the end, however, it does not matter who is poaching the hotel graduates. What needs to be understood is that the new generation of hotel school graduates is determined and eager to advance quickly in their career. If they do not feel challenged or motivated, and are not offered the possibility to take on responsibilities matching their qualifications, frustration settles in rather quickly and they start looking for new opportunities which they often find in other industry sectors.

Many hotels are able to initially attract hotel school graduates, but lose them along the way to a more rapid path of career development. Part of this may be attributed to the fact that job requirements in the consulting or financial industry are similar to those in the hospitality sector (e.g. being flexible, willing to work long hours and travel frequently or change workplace), but working conditions and development opportunities are much better. Whilst the development opportunities have already been addressed earlier in this article, Bruce Harkness points out that hotels also need to work on improving the working conditions. For employees working in corporate offices, this may entail something as simple as being able to work part of the time from home. For staff employed at property level, hoteliers should aim to offset the lack of work-life balance by creating a work environment with a strong social aspect.

Keeping in mind all of the above, hoteliers should ask themselves two questions: “What is it that is most vital to our business?” and “How can we control or influence our key assets?”. The answer to both of these questions is that employees are the most valuable asset of a hotel and it is the HR directors or general management who influence the career path of each employee by setting the basis and framework for personal and professional development. Therefore, hoteliers should adapt to the mindset of today’s workforce and see this as a great chance: with the shift from the Baby Boomers to the Generation Y, the opportunity arises to make changes and be more innovative.

Clara Stilwell_AETHOS Consulting Group_New York_web

Questions To Ask When Recruiting Online

Employers looking to advertise on a recruitment website in today’s market can face a daunting task. With so many sites available and new ones popping up every week, how can one know which site to use? Do you select one that is generalist or industry-specific? On how many boards should you be posting open positions? Are you getting the best results for the money you are spending? There are several key questions you can ask the service provider to determine if that job board is right for your company’s needs.

In order to ask the job board provider the right questions, you first need to determine your recruitment needs. This can differ greatly based upon company, segment and region. An HR person for a luxury property in Vail, Colorado will have different needs from a corporate recruiter for a limited service chain with 120 properties in the Southeast US. So ask yourself the following: How many positions do I have open during any given month? Do I usually recruit for line level or middle management positions? What position (or region) historically has been the most difficult to fill? Narrowing your focus with help you ask better questions as different sites have different strengths. One site you can utilize if it is strong in a particular region; another you can go to if it offers more food & beverage candidates (a restaurant specific board for example). You also need to determine if you will just be posting jobs or searching a resume database as well.

To get the best information, you need to ask a series of questions and then continually qualify the answers. The first question you should ask is: How many candidates/resumes do you currently have in your database? A reputable recruitment site will give you the hard numbers and directly answer your questions. Keep in mind that a site like monster.com will have a far greater number than an industry-specific website like hospitalitycareernet.com. With a generalist board it is more important to know the number of hospitality-specific candidates, not the total number on the site. This is an important distinction if you have a need for a front office manager, which is a position unique to the hotel industry. However, there may be times that you would want to pull someone from outside the industry (i.e. for a marketing position), and a generalist or other site may be a fit. What you really want to know is: How many people do you have in the database who are qualified for the position, who live or will relocate to the area where they are needed. If your greatest need is usually in sales, you should then ask: What percentage of those candidates are in sales positions? as a site geared more toward the culinary segment would not be as good a fit. Lastly, you will want to find out: Which geographic markets have most candidates? If most of your company’s properties are located on the East coast, you would want to know where most of the candidates in the database reside. You may want to take a looking at region-specific sites (most local newspapers have their own recruitment site now) and use it in a conjunction with a hospitality industry-specific site.

If you are using the site for a one-time posting, the questions above will get you enough information to make a decision. However, if you are entering into a monthly or yearly contract, continue to press on. You don’t want to seek the same job seekers in November that you viewed in February. Ask: What are you doing to attract new candidates to your website and, on average, how many new resumes are posted each month? Strategies may differ somewhat (most sites rely heavily on search engine rankings), but you will want to see new and qualified candidates as you continue to have openings for your properties.

Now that we have examined questions that will elicit the information we need to make educated decisions, let us look at a question that is always asked (or a fact a job board may tout) that really isn’t that significant: What are the number of website hits? Website hits used to be the data point that carried the most weight in the dotcom world. After the bubble burst, people realized that just because a website had a lot of traffic, it didn’t mean the people viewing them were buying anything. Similarly, the number of hits a job board gets could be a result of a pool of lower quality, out of work job seekers on the site every day searching for and applying to multiple positions. The “A” candidate typically is passively seeking another opportunity and will visit the site less frequently (the better boards will offer matching systems that will email candidates when a new job is posted that fits criteria that they pre-selected). A better measure is looking at “unique visitors” because that will indicate how many different people are coming to the site. Also, it doesn’t matter how “old” a resume is (remember, the “A” players are doing their jobs, not updating their resumes), it is important that the site ensure that the candidate’s contact information is valid.

Depending on your needs other questions can include: Can the website sync with my corporate job board or other boards? (This will allow you to save time by posting in one place.) How long has your site been live? Are there any other services your site offers (i.e. assessments or background checks)?

In the final analysis, the results after the first use will be very telling. The focus should be on quality not quantity. Try to get a free posting or trial period if you are a first-time user. Check out what other companies post jobs on the site because it can be a good indication of the types of candidates it attracts. Asking the right questions in the beginning will yield you the best results from when recruiting online.

Clara Stilwell_AETHOS Consulting Group_New York_web

Making HR a Strategy and Profit Center in 2009

Accessible Solutions to Current Challenges

Like most businesses, the current priority in your organization is probably contingency planning. Fortunately there are simple, overlooked solutions when it comes to adding immediate and lasting value to your organization – “low hanging fruit” comes from streamlined HR, training and leadership practices. Human Resources and related departments are traditional cost centers, yet forward-thinking leaders understand that strategic initiatives can develop and transform these departments into strategy and profit centers.

20|20 Skills™ partners with some of the most successful and respected brands in the service industry – for example, Regent Hospitality Services, Mandarin Oriental, Orient-Express Hotels, Trains & Cruises, Heartland Brewery, Paragon Gaming, Royal Caribbean Cruises, Marriott Courtyard, Taj Hotels, Finish Line, Emaar, Banyan Tree, Occidental Hotels and Qdoba. Below we present ten simple but cost-effective strategies based on 20|20’s work with such clients coupled with its leading-edge research and decades of expertise in the industry. The strategies were also vetted for practicality and effectiveness by a leading industry insider. These are more than just ideas for contingency planning; these are best practices that can help make your organization stronger and more productive in any economic environment.

The Specifics

Tip #1: “Do” diligence, not due diligence. Rather than just documenting a “nice to have” selection process on paper, make it a business priority to consistently use a three-pronged, due diligence program for recruitment consisting of a Skills Assessment, Structured Behavioral Interviewing and Reference Checking. This approach seems time and resource intensive – and it might be to some extent – but the resources invested on the front end will pay substantial dividends down the road. A bad hiring decision can be immensely expensive: the cost of the recruitment, training costs, severance pay, loss of productivity, impact on morale and the cost of re-hiring. Studies have shown that even for low-level positions a failed hire costs a company double the person’s salary. At higher levels, the cost can be six times the salary.

Tip #2: Harness internal talent to streamline human capital management and organizational development. There are two aspects to this principle. First, use an employee referral system to help identify and attract top talent. Your employees can be a highly effective means of sourcing candidates using either a monetary or non-monetary incentive program. Second, organizations can leverage their existing talent in new ways. For example, every employee has “hidden” strengths and resources that can greatly benefit a company and reduce its dependency on third-party providers. By taking the time to conduct an inventory of employees’ skills and interests, an organization can produce a resource catalog from which all departments or assets can draw upon for cost-effective and efficient help as needed. This also benefits employees by offering them new opportunities to hone skills and enhance their employability and visibility in the company.

Tip #3: Telecommuting. Companies can save time and money by expanding their notion of the traditional workplace to a “workspace.” This is where telecommuting comes into play. For example, a given employee may be a “morning person” yet that energy and enthusiasm may be wasted on a commute into the office. Instead, the periodic telecommute for either part or all of a day can actually increase productivity and hence profitability. Of course, an employee must have discipline in order to be an effective telecommuter. An internal 20|20 Assessment™ study of telecommuters revealed that those most likely to be disciplined and effective showed high scores across ethical awareness, team building and service orientation.

Tip #4: Employees have market intelligence. Employees are strategically placed to notice business issues and customer issues that managers with a higher level focus can miss. Organizations should tap into the knowledge gleaned by its teams. Two effective practices are a quarterly or bi-annual Employee Opinion Survey (one that focuses on both employee engagement and business practices) and a structured method of knowledge transfer for exiting employees. Exiting employees should be courted before their departure date, because often they have streamlined or outright improved processes related to their jobs. Remember that knowledge lives in individuals, as well as in work communities. Capturing individual knowledge and information benefits the entire organization, not just that employee’s replacement.

Tip #5: Employee retention equals money retention. Employee training and professional development doesn’t cost, it pays. Customer satisfaction actually follows from employee satisfaction and engagement. Now more than ever, employee loyalty and performance hinge on perceived job security and future employability. Training and coaching initiatives drive retention by feeding these crucial variables. Training and coaching can be done in-house, such as with mentoring programs, and be used as a form of compensation. A recent survey found that 87% of responding workers viewed special training as a positive incentive, and it appeared most meaningful to employees with postgraduate education.

Tip #6: Promote and reinforce a culture of “doing the right thing.” Noted management expert Peter Drucker says that “doing the right thing is more important than doing things right.” Doing the right thing is effectiveness; doing things right is efficiency. Focus first on effectiveness (identifying what is the right thing to do), then concentrate on efficiency (doing it right). All other things being equal:

  • Focus on opportunity
  • Focus on the future, not the past
  • Focus on priorities that support your values
  • Focus on long-term fixes rather than the “quick fix.”
  • Focus on problem preventing rather than problem solving
  • Focus on system-wide solutions rather than a local solution
  • Focus on high-impact priorities that matter to many people
  • Focus on breakthroughs rather than perfecting the status quo
  • Focus on feeding your elephants (big important stuff) and starving the ants (trivia)

Tip #7: Learn and live the 80/20 rule. 19th-century Italian economist Vilfredo Pareto’s rules states that 80% of all that happens at work is really the result of 20% effort. For example, 80% of the dollar value of an inventory is often found in 20% of the items. 80% of all telephone calls come from 20% of the callers, or 80% percent of meals ordered in a restaurant come from 20% of the items on the menu. With your goals, you can be 80% effective by achieving 20% of your goals. If you have a daily to-do list of ten items, you generally can expect to be 80% effective by successfully completing only the two most important items on your list.

Tip #8: Multi-tasking kills productivity. Though developed as a means of combating the ever increasing complexity of life, multi-tasking often results in perpetual oscillations between starting and stopping without ever completing a single task. Time-blocking on the other hand, allows employees to start, focus and finish. Time-blocking involves grouping daily tasks into a handful of categories and assigning each category a time to be worked on. Time blocking restores an employee’s control over their working hours and promotes efficiency and proper prioritization.

Tip #9: Reconsider and restructure internal touch points. Following from the above, consider reducing the number of face-to-face meetings. Ask yourself if a meeting is absolutely necessary or will a phone call do just as well? VOIP technologies like Skype and Voipbuster (“google” these names to find out more) allow conference calls to be conducted at little to no cost – even among team members in worldwide offices or who are telecommuting. However, if a face-to-face meeting is a must, try a “standup meeting” in which participants stand rather than sit. This will help to ensure that important issues are addressed and idle time is avoided.

Tip #10: Feed the elephants and starve the ants. Revisit and streamline your internal practices to reduce obvious and innocuous time wasters that hinder productivity and profitability. Look out for these common roadblocks:

External Time Wasters Telephone interruptions

  • Unscheduled visitors
  • Socializing
  • Lack of information
  • Excessive paperwork
  • Communication breakdown
  • Lack of policies and procedures
  • Lack of competent personnel
  • Red tape

Internal Time Wasters

  • Procrastination
  • Failure to delegate
  • Unclear objectives
  • Failure to plan and set priorities
  • Crisis management
  • Poor scheduling
  • Lack of self-discipline
  • Attempting to do too much at once
  • Lack of relevant skills

Customizing the Specifics

Of course, many other specific strategies can be added to this arsenal, depending upon your needs and your segment of the service industry (e.g., lodging, gaming-casino, travel-tourism, healthcare, retail and food-beverage). Case in point – Regent Hospitality Services takes advantage of four other tactics that serve as an excellent model for hospitality-oriented companies:

Tip #11: Promote emotional intelligence coupled with situational leadership. Hire and retain leaders who are able to maintain perspective in talent management. For example, upcoming and established managers often misunderstand the level of line associates’ lifestyles and do not provide adequate experiences. For example, a $69.00 associate rate for travel seems like a benefit “on paper” yet most line associates cannot afford the travel. Regent therefore makes a hotel stay part of the orientation program, so all associates plus one guest may experience an overnight stay with dinner a movie and breakfast, and then, when the actual training focuses on guest service, there is relevance there.

Tip #12: Research and retrieve hidden resources. In certain parts of the country there are ETP Programs available whereby the State actually reimburses the hotel organization for training your associates. The second author’s [J.G.] properties have collected as much as $100,000 per annum for this initiative.

Tip #13: Bring the classroom to the employees. Every hotel must have a dedicated training room or learning center for all associates to use, complete with a PC and internet access for online courses. In the evening hours, the organization can team up with a community college and offer classes for neighboring hotel associates.

Tip #14: “Engaged” employees will “engage” customers. For example, as standard practice, Regent invites line associates to go on sales calls. Nothing is more powerful to have a housekeeper state the cleanliness of the room and the cook asking for the traveler’s favorite meal and the bartender for their favorite drink. This approach is so powerful that for one professional there has neither been a rate negotiation nor a lost contract. Imagine in a quarterly all associate meeting applauding those line associates who contributed to a sales contract with more than 1000 room nights. The impact on retention and motivation to increase productivity is unbelievable.

Moving Ahead

These tips go beyond best practice tactics for enhancing short-term productivity; it is about establishing and reinforcing a culture of thinking and working smarter and strategically. In The War for Talent, McKinsey and Company noted that “talent is the most under-managed corporate asset of the past two decades.” It is astonishing this shortcoming persists since these authors found that “talent driven companies of the Fortune 500 experienced nearly 82% greater profit than their competitor.” Down markets remind us that talent management is not a business luxury, it is a business lifeline.

Clara Stilwell_AETHOS Consulting Group_New York_web

Creating Effective Survey Projects

Understanding the important aspects of surveys can make the difference between success and failure of your survey project – and even of your overall organization. In this article, you will learn the fundamentals of creating or identifying good survey projects.

Questionnaires are popular tools for gauging internal and external performance and predicting future purchase behavior of customers for many organizations. There are many inexpensive do-it-yourself survey tools available to organizations wanting to save money on survey initiatives. While it is understandable that organizations may consider creating and administering surveys in-house, there are several good reasons to reconsider. Getting help from an experienced and objective (impartial) survey team can help organizations turn their survey projects into powerful business tools.

Why You Should Care about Creating Good Survey Projects

Bad Surveys:

  • Can be long and difficult to complete and can alienate respondents.
  • Waste your valuable time and money.
  • Can fail to identify the most important issues, which then continue to plague the organization.
  • Can misidentify unimportant issues as important, leading to resources wasted on ineffective changes.
  • Can fail to identify opportunities, leading to difficulty or failure to thrive.
  • Can lead organizations can make incorrect and costly business decisions.
  • Provide a false sense of objectivity and security that may not be valid, defensible or scientific.

Good Surveys:

  • Can be designed to eliminate irrelevant questions, be more valid with fewer questions, and be easier and faster for respondents to complete.
  • Ensure your time and money are spent on valid tools that gain expected results.
  • Can identify opportunities that make a real difference in the success of your organization.
  • Can identify and address your most important issues, allowing you to hire great staff, perform effective employee assessments, gain customer feedback, gain market information and/or accurately predict future behavior.
  • Can support your organization in making correct business decisions and allocating time and money where they will make the most difference.
  • Give you peace of mind because they are valid, defensible, based on proven scientific theories.

Four Key Elements of a Good Survey Project

1. Conduct a pilot study: Do not assume you already know what people think and why they think so. If you really did, then conducting a survey would be unnecessary, correct? So, instead, try to really listen and keep an open mind. What the question writer thinks is important should be completely secondary to what the intended respondents think. You should always do a pilot study before doing the main study. No matter how well you think you know people or a particular marker, you will be surprised!

2. Design your survey based on modern scientific survey theory: Do-it-yourself survey questions are often selected based on how interesting or appealing they sound – or they are based on the insights of a particular manager in an organization. Amateur survey creators tend to rely on anecdotal evidence or mistaken media reports. A survey constructed based on “instincts” or experience is rarely able to accurately predict employee or customer behavior.

Survey and questionnaire design is a science. Modern scientific statistical analysis allows behaviors to be predicted quite reliably from the right indicators. Years of research have shown that a systematic, explicit and correct theory about people’s behaviors, including factors like respondents’ beliefs, attitudes and intentions, is a necessary foundation to create a good survey that actually predicts behavior. Even the simplest and shortest questionnaire needs to take into account all these issues so the right questions can be included or omitted.

For example, you might think that using more answer categories is always better. In reality, most people cannot handle more than six pieces of information at a time. For the best results, do not provide more than six response categories. In fact, to be on the safe side, four categories are probably fine (e.g., “Strongly Disagree, Disagree, Agree, Strongly Agree”). Do-it-yourself and casual business surveys created by non-statisticians frequently impose an unnecessary burden on respondents and provide invalid answers as a result.

In another example, you may assume that some “neutral” category (e.g., “I don’t know”) is needed to allow people to be non-committal. Studies have shown that neutral categories are usually counterproductive and rarely give you the information you want. The selection of a neutral category often does not reflect uncertainty or indecision, but instead it is used to hide socially undesirable answers. The answer “I do not want to say” or “does not apply” may have a completely different – and possibly very important – meaning than “I agree somewhat.”

There are many types of approaches to survey design, and some are better for business use than others. The 20|20™ team often follows Fishbein and Ajzen’s Theory of Reasoned Action, because it is flexible enough to be useful for a variety of business and HR applications, while still accurately predicting behavior. Contact us to learn more.

3. Use a valid data analysis method: You might be tempted to analyze questionnaire and survey data with traditional approaches like raw-score sums, percentile rankings or percentages. In fact, many “professional” survey vendors make this mistake, too! Why not use these standard approaches? Standard analysis and reporting are often incomplete, severely limited and results can even be misleading.

A good example is again neutral categories and the challenges they present at analysis time. Our method of analysis should be able to tell us whether middle categories are used inconsistently and whether someone is giving valid data in the first place. Using the right methodology, middle categories can often be analyzed to provide just such information – information that would be unavailable or misleading when analyzed using standard statistical procedures.

For these reasons, the 20|20™ team relies almost exclusively on the use of Rasch scaling (a form of Item Response Theory), a complex but extremely flexible approach to statistical analysis. This approach is unique because:

  • Missing data are not a problem; indeed, they are inherently acceptable and provide additional insight into behaviors.
  • We can clearly judge the quality of the data and the questionnaire from the responses.
  • We obtain truly accurate measurements of the strength of the traits, opinions or other customer variables we wish to study and understand.
  • We can determine the extent to which the data are biased by factors such as age, gender or other demographics of survey respondents.

Surprisingly, professional survey companies almost never use Rasch scaling, or other Item Response Theory approaches, due to its complexity and the expertise needed to provide accurate analysis. This means that the business advantage is substantial for organizations who apply these methods in their analytics. Such information allows you to make more targeted and valid business decisions, confident that the survey, the data and the analysis are accurate, predictive and are as relevant as possible to your audience or market.

4. Be ready and willing to take action based on the survey results: Even the best survey is worthless if you do not plan to use it to take action. Although you should keep an open mind about survey results, you should also plan to allocate resources to address the business opportunities identified by a well-designed and executed survey.

For example, the 20|20™ team creates “Action Plans” based on an organization’s data. We build a mathematical model of the data that allows us to identify statistical outliers. We then feed this into our software to generate an interpretation for the observed misfit. For personnel assessment, the result is a person-specific and tailor-made diagnostic profile that can be used in a variety of ways.

Action Plans form the basis for the highly successful 20|20 Skills™ selection and training assessment. We have also applied it to educational testing where experts now tout it as a form of “curriculum sensitive” testing. Our team has recently completed the theoretical work to apply this approach to whole groups, too. We can now segment markets and organizations and provide mathematically correct profiles for entire groups and subgroups. The potential for market intelligence and targeted advertising applications is tremendous and wide open. For more information, see our article entitled “Reading Consumers’ Minds…‘.

Your Professional Survey Team

How should you evaluate a survey vendor to help with your survey projects? An Internet search results in thousands of hits – everything from “do-it-yourself” survey software to huge multinational companies. How can you be sure the survey team you choose will help you reach your goals and be more successful? Here are some important considerations:

  • A trained psychometrician should be an integral part of the survey team.
  • The survey team should recommend the survey project should begin with a pilot study and end with implementation of a targeted action plan.
  • The survey team has years of real-world experience creating surveys, analyzing results and advising organizations to take action.
  • The team uses a valid method to analyze results, preferably Rasch scaling (Item Response Theory).
  • The team is small enough to provide customized consulting to identify your unique business challenges and opportunities.

The Bottom Line

Keep these points in mind to help ensure the success of your survey initiatives. Doing so will transform your questionnaires from uncertain exercises to highly effective business tools.

  1. Do not assume you already know what your intended audience thinks – maintain an open mind and have the patience to make evidence-based, not belief-based, business decisions.
  2. Writing good surveys requires special expertise to provide valid questions and data. If you do not have this expertise, consider investing in professional assistance.
  3. Proper questionnaire analysis is as important as good questionnaire design. The most specific and valid findings derive from modern test theory methods, like Rasch scaling. Raw-score sums, percentages and percentile rankings are severely limited and can motivate wrong business decisions.
  4. If you are not going to take action, do not bother doing a survey.
  5. Choose an experienced survey team as your partner to be sure you get the best value for your time and money.

Million-dollar decisions affecting the long-term success of your organization should be based on solid questionnaire design, a valid and flexible analysis process and a targeted action plan. Doing so can save time and money, but most importantly, allow you to identify critical issues and important opportunities for your organization – and act on them! Finally, you can rest assured that you have made the right decisions for your organization – in the near term for the survey project- and in the long term for the future success of your organization.

Clara Stilwell_AETHOS Consulting Group_New York_web

MBA and Nowhere to Go?

While it may be one of the best times to enroll in a full time MBA, it maybe one of the worst times to graduate with one. AETHOS led a discussion with the Ecole Hôtelière de Lausanne (EHL) Masters students graduating in August 2009 about the current economic environment. We highlighted the threats and opportunities as well as best practices in finding a job in an increasingly more competitive employment market.

Several months ago the hospitality industry was in a state of composure, as most companies seemed to survive well during the economic crisis. This fall, however, the domino effect of the global credit crunch finally reached the industry and the picture seems to be getting darker by the day. The sharp fluctuation in oil prices, the collapse of major financial corporations and the ensuing credit shortage, as well as the overall anxiety prompting people to spend less on tourism and leisure have all had their effects on the industry. In such circumstances, one can naturally expect that budgets will be trimmed and jobs cut. To make things worse, this is the time of the year when hotel companies are completing their budgets for 2009. Most Executives are, thus, forced to replace the previously optimistic growth forecasts with more modest figures or even a decline in profits. As we get close to the end of the year, an increasing number of job cuts are being announced especially by public companies that have greater shareholder pressure to reduce costs in order to survive what they forecast to be a very tough 2009. It therefore seems as if 2008 won’t be the merriest of Christmases as companies try to tackle as well they can the current uncertainty and prepare for next year.

In 2009, job seekers such as EHL MBA graduates will face an employment market where demand > supply. Companies are cutting positions to consolidate their operations and in the process are letting go of talent which is now looking for work. In addition, now that some major players in the financial sector have fallen apart like card castles, and many more companies feel like they are skating on thin ice, more and more highly qualified people will migrate to other industries including hospitality. Considering the large talent pool searching for jobs and the shrinking job board, students due to graduate in the near future cannot expect employers to fight over them. However, this is not a cause for despair, but rather a reason to start working on a better job hunting strategy.

The first part of the strategy is acknowledging that the old job search strategy no longer works. Today’s economic situation is unique and the search strategy needs to be more bullet proof than ever. Below are some New Year resolutions for MBA graduates to maximize the chances to land the right job in 2009:

Market Knowledge
Read industry news and stay informed about what is going on in the industry – market knowledge is even more important during an economic downturn. Some companies will go bankrupt as others grow rich, some hotel concepts will succeed as they better meet today’s demands while others will fail, and some countries will survive the turmoil better than others. Only with this market knowledge will MBA graduates know which companies and regions they should be targeting in their search.

Flexibility & Long-Term Thinking
Some who initially started their MBA may have been looking for a total change in industry, geography and function. Today it will be difficult to change all three. However, in the same way that students decide to invest in an MBA with a long-term view, the same approach needs to be taken when applying for a job. Graduates should be flexible, but still apply for functions and sectors they are interested in.

Master students question if they should be looking outside the hospitality industry to increase their chances of finding a job but this in part defeats the purpose of their Masters in Hospitality. Graduates should not give up on their long-term career goals because of an economic downturn. Instead, if they can’t land their ideal job right after graduation, they should apply for another position in order to build the foundations on which they can apply for their dream job in the future.

At the same time, graduates should apply for functions they are passionate about but if needed consider jobs at a lower level than they had initially intended. Employers are a lot more likely to hire someone showing an earnest passion for the position they are applying for than someone desperately scavenging for any leftover vacancy an interviewer may mention. Therefore, although accepting a lower position for the same field of activity may be a necessary compromise and a judicious investment in future progress; stay focused on your area of interest. Expressing interest for a human resources job when you’d initially applied for a finance vacancy may be a dangerous move.

Additionally, MBA graduates also need to realize that employers are most often looking to hire people with experience, and that there is a large talent pool of experienced people in the market place. When marketing themselves to potential employers, graduates need to find ways to better position themselves next to the more experienced job seekers. MBA graduates often don’t come with a price tag and can market themselves as a “cheaper option” and a unique opportunity for companies to hire talent while keeping costs low. If graduates can afford to do so, they may want to consider going for an internship or part-time job to demonstrate their capabilities and earn the trust for when times get better and a vacancy opens up. This is a more effective and proactive way to bank on your experience when applying for jobs rather than merely waiting for an opening to pop up.

Creativity
Graduates should not only look into the big corporate companies for opportunities, but be creative and make sure to look into all hospitality related industries where their skills can be applied. For example, they should also look into smaller entrepreneurial companies such as hotel funds that will be set up to buy distressed assets or look into select service hotels since these will excel during the turmoil. An interesting idea given by one of the Master students in response to this issue is that EHL students might want to consider alternatives to traditional hospitality. Christina Norton, the Director of the Master of Hospitality Administration program at EHL, mentioned that some of the school’s graduates have successfully applied their knowledge and attitude of service excellence acquired through a hospitality education to the health care sectors, which today remains a growing industry. According to Mrs. Norton, some EHL alumni currently hold key positions in a number of private health clinics.

Networking
Above all, students should take advantage of any chance to meet professionals in the field. On-campus recruitment sessions and guest speakers are the most abundant resources available to many university students. Making use of the alumni network and professors’ connections are equally good ideas. EHL in particular provides an eloquent example of a strong and influential alumni network. An even better way of establishing a relationship conducive to employment is to interview relevant experts for surveys and studies. This way, students not only gain access to key decision makers whose say usually bears more weight in the recruitment process than the HR department, but they also get a chance to demonstrate their understanding of relevant issues and express their ideas. As a matter of fact, some ingenious students come up with new research ideas or projects specifically in order to use them as an “excuse” to get in touch with the people they are interested in.

Curiosity
Make sure to ask as many questions as possible to industry leaders about their business. When you are aware of the latest developments in the industry, you are always equipped with some ideas for a discussion with a professional in the field, be it during a cocktail party, an official reception, or an interview. Not only will you have a guaranteed topic for discussion, but also some interesting business ideas articulated to a company official are more likely to get you a job offer or at least elicit more interest toward you as a potential applicant than a kill-time discussion about the weather. Besides, some executives are so enthusiastic and proud of their business that, once you push their button, they are capable of going on and on for hours, and will sometimes give you more valuable information than a semester-long university course.

Diligence
Enough has been said and written about motivation letters and CV’s. Graduates should simply put themselves in the shoes of employers and think what would catch their attention. Especially at the graduate level, employers buy into a student’s attitude. How the graduate goes about their job application will say a lot about how they will perform in the job.

From an employer’s perspective, EHL Master students will be graduating in August 2009 when industry experts hope the hospitality industry will start recovering from the economic turmoil. MBA graduates in general are more open than ever to thinking out of the box and looking into other companies other than the traditional corporate recruiters who came to universities to fish for MBA talent. In the hospitality industry, this is the opportunity for budget hotels, smaller entrepreneurial companies, healthcare sector or other industries that are benefiting from the turmoil to snap up talent. Master graduates can also be a cheaper option than the experienced candidate to meet targets while keeping costs low. Our discussions with the EHL Master graduates this month shows that they have realistic expectations and are flexible in terms of position and salary as long as they can see the long-term return on their investment.

Clara Stilwell_AETHOS Consulting Group_New York_web

Upgrading in the Downturn

We are a society of consumers who have become accustomed to using something, throwing it away and buying a newer and better version when the whim takes us. We no longer have long-term relationships with our phones, TVs, music systems, cameras, cars, or clothes. Instead we are seduced by extra memory space, extra megapixels, extra wattage, extra horsepower and any opportunity to upgrade. An ever demanding client base forces hotel companies to keep up and to upgrade their product and offerings on a regular basis: HD TVs, iPod dock, in-room Nespresso machine, to name but three. In one area however there is rarely any mention of upgrading and that is in the area of talent. For the most part a company’s employees come and go of their own volition or in a small number of cases due to underperformance or nefarious act. Seldom does a company look at the bulk of its employee population and think “Hmm, have we really got the right person in that role?”

The current economic environment however is providing hotel companies with an opportunity to do exactly that and to upgrade its talent. Organisations which are able to see beyond the next month and ahead to the eventual recovery, whenever that may come, recognise the importance of having the strongest team in place to take them not only through that up cycle but to get them through the down cycle first in one piece.

The majority of hotel companies, whatever their size, have been forced into implementing significant cost cutting measures these past several months. This has naturally led to redesigned organisational structures and job cuts as corporations seek to streamline and introduce operating efficiencies. Reducing headcount is a compelling incentive to making sure that existing resources are used to the optimum. Many hotel organisations have been breaking down silos and increasing the span of responsibilities for the executives who are left. In some cases for example the number of geographic territories has been reduced with the result that a team of regional executives may now be looking after their existing region plus one other. At the large chains, some roles which were previously brand specific are now being made redundant and the responsibilities transitioning to a multi-brand function. As current jobs are redesigned and given greater responsibility and remit, so the need to have the best people possible as occupiers of those jobs becomes paramount.

Redundancies should be less about finally having an excuse to get rid of the expensive baby boomers and be more about retaining the cream of the talent and getting rid of dead wood. Depressed market conditions help to expose underperformers within an organisation as the level of scrutiny ratchets up. Sales, Finance and Operations are three areas where failure to steal market share from competitors, identify and eliminate costs and streamline processes, does not take too long to reveal itself.

In companies’ favour as they assess their internal talent strength is the fact that the pool of available replacement candidates has rarely been richer. More than in past recent downturns where it was typically the ‘B’ and ‘C’ players who were the first to be let go, this time there are a lot of ‘A’ players who have also found themselves victim to the severity of this recession. The job market has been turned on its head in the past 12 months and companies are today faced with an abundance of displaced talent. This results in an enhancement in the quality of recruitment as companies, faced with difficult choices to make between a number of highly qualified candidates, become more demanding in their expectations and requirements. As Paul Devereux, of University College Dublin – Department of Economics, notes in his study ‘Occupational Upgrading and the Business Cycle’ based on empirical evidence from the USA, “Consistent with a job competition model, the education levels of new hires within occupations are higher when the unemployment rate is high . . . The results are consistent with employers responding to a greater supply of educated workers by increasing hiring standards.” Competition for jobs is fierce at present and the impact of this should be a rise in the overall quality level of those who remain in employment.

The level of choice a company now has when hiring makes it incumbent on the hiring organisation to be very clear and exact on what the requirements of the job are, now and in the future, so that they end up only hiring ‘A’s. Sorting the wheat from the chaff when looking at candidates does take more time now but the cost of getting it wrong could be huge. Of course companies may not need to look outside their ranks but to do this they need to be able to accurately assess their in-house talent pool and identify their internal ‘A’ players. In my experience, very few hotel companies have taken the GE approach of sorting their management into A-, B-, and C-players. Now is the time to do so in order to make sure that where possible the As are held onto and that A-players are occupying key roles in the new look organisation.

As companies therefore reengineer their organisations for the current downturn and for the future they should take extra care to ensure they have the right people in the right roles and, where necessary, upgrade. Redundancies, headcount reductions, reorganisations, are never pleasant or painless affairs but if they are necessary then companies should make sure that they use the situation to their advantage and take the opportunity to upgrade their bench strength and invest in their future potential.

Clara Stilwell_AETHOS Consulting Group_New York_web

Web-Based Employment Branding for Employers

The best practice companies of the hospitality industry have long recognized the importance of building a solid employment brand. Not only is it good for the overall image of the company, it is the surest way of attracting and retaining top talent. Those companies who are heralded as the best to work for are progressive in areas of employee training and mentoring, they recognize the importance of the work/life balance, and offer creative compensation programs.

Today, the Internet often becomes the first point of contact for employers and job seekers. It is important for companies to recognize that their online recruitment strategies are a critical component of their employment branding practices. When communicating via the Internet a level of human interaction is lost. Employers need to take greater lengths to connect with that potential employee. Having run an online job board for several years, I have seen certain trends emerge. Job seekers are consistently saying the same things about what has appealed to them, and what has turned them off. There are several areas where employers need to focus.

Make your corporate website an effective recruitment tool. These days, you’ll need more than just a one page listing of your open positions and a fax number on where candidates can send their resume. The “career opportunities” section of your website is your sales pitch to attract top performing candidates. Have your company’s mission statement clearly displayed. Give as much information about your corporate culture as possible. Offer testimonials from current employees on what it’s like to work for you. Have all your properties posting their available positions on the site, and make sure it is updated regularly. Allow candidates to submit their resume directly through the website, not only for open positions but for future consideration. This will allow you to store resumes and build your own candidate database. The best practice companies, like The Mandarin Oriental Hotel Group have even tied an online skills assessment to their application process.

When posting a job on an online recruitment site (like hotjobs.com or hospitalitycareernet.com) make sure you have clear and comprehensive job descriptions. This is not an area in which you want to take shortcuts. I’ve seen postings for a Director of Sales position where the description read “Needs previous hotels sales experience,” and that was it. The high performing job seeker will typically not respond to this type of posting. Firstly, it looks as if the employer can’t articulate what the individual needs to do, a scary proposition for a person coming into a new job. Secondly, there isn’t enough information for the “A” candidate to decide if he or she is a fit. A detailed listing of the responsibilities of the position, the organizational structure, and both personal and professional requirements are the minimum required for an effective job posting. This will also limit the influx of unqualified job seekers applying to the position. The posting should also include whether the employer is willing to relocate, or sponsor an international candidate.

The biggest turnoff for a job seeker is the lack of response to an application. It leaves the job seeker wondering if the employer was even reached; this is especially true with the Internet. Employers are often getting a deluge of resumes, and it can get tough to manage. At a minimum, employers should indicate that only job seekers under consideration will be contacted, or to have an automatic reply system set up for applications.

Remember to get your marketing team involved in the employment branding campaign. Cisco for example, created an entire advertising promotion around the fact that the company was a great place to work and it valued smart people. After all, it is just as important for employees to be passionate about the company as it is for customers.

Clara Stilwell_AETHOS Consulting Group_New York_web

Emerging Core Competencies

Since the turn of the 21st century, hospitality has seen the emergence of new core competencies as consumer demand, legislation, and public policy have placed greater pressure on the industry, especially for public companies or those seeking to emulate public companies. Of particular interest are the specialized competencies within the areas of accounting and finance, asset management and ecological/green initiatives, all of which will continue to play a more critical role in the future.

Accounting and Finance

In the U.S., Sarbanes-Oxley emerged in 2002 requiring that the executives of publicly traded companies certify the accuracy of corporate financial statements. If these statements were found to be fraudulent in any way, the executives would be held legally liable. Enactment of this law required companies to examine corporate competencies in the areas of finance and accounting, and focus on recruiting top executives with in-depth knowledge and experience in the preparation of accounting and financial statements. Some common titles for this role include Chief Accounting Officer, Corporate Controller or Vice President of Internal Audit. Executives in these types of roles have had a greater focus on the accounting side of finance versus the transactional side. Over the last several years, the industry has seen and will continue to see an increase in the number of CPA’s headed for the Executive Office.

Asset Management

Similarly to accounting and finance, the discipline of asset management has become more professionalized in the last decade. A leading example of this is the formation of the Hotel Asset Managers Association (HAMA). As private equity groups have increasingly sought out hotels and hotel companies as acquisition targets, demand for industry experts to oversee operations and protect asset value has increased. Further, with current market trends where owners are defaulting or coming close to default, many receivers are recruiting professional asset managers to provide expert opinions and guidance. In the best practice companies, the asset manager has become the critical touch point between ownership and operations. The optimal background for individuals in this role combines a deep understanding of hotel operations with very strong financial skills and strategic thinking expertise; in an ideal world, this person has experience working both as a hotel General Manager and with a private equity group. A rare combination? Yes.  However, companies willing to put together a formal training program for up-and-coming talent will become market leaders for this competency.

Sustainability

Sustainability or the “greening” of the hotel industry has become a hot topic in relatively recent history, and companies are trying to figure out how to be both green and profitable simultaneously. In the past, environmental roles, where they existed, were focused solely around compliance. Today, the industry is seeing new titles beyond Director or VP of Environmental Affairs including Director or VP of Sustainability, Responsible Business, and others. These newer, “green” roles are focused around many aspects of sustainability, including guest education, sustainable building design, transportation systems, energy (conservation, renewable, alternative), water, waste, purchasing, menu development and climate change. While industry professionals agree that a leadership position focused on sustainability is important, there is some debate about how to quantify the results that such a person brings to the company in terms of profitability. Some of the less quantifiable impacts of focusing on sustainability are: Improving employee morale (employees like to work for a company that is perceived as “caring” and “doing good”), improving the company’s external image and visibility, and reducing energy and other natural resource consumption. We predict that demand for talent in the field of sustainability will continue to rise going forward. New hires must have an educational background in the field. Many top-tier MBA programs are offering specialization in this area. Most importantly, in order to be successful, companies must be committed to promoting sustainability, which means these experts must have support from the highest level of the organization, and must have the power to effect change within the company.

What’s Next?

As the industry evolves, new competencies will continue to emerge. As a global hospitality consultancy, we continue to keep a pulse on the industry through ongoing dialogue with our clients and we maintain a commitment to help make sense of these trends.

Clara Stilwell_AETHOS Consulting Group_New York_web

Can New Technology Bolster HR Strategy?

The traditional blocking and tackling responsibilities of corporate human resource departments have evolved even further over the past decade with the advent of new technologies. The focus on employee training, mentoring and development has been aided by high definition video, mobile networks, social networking sites and ultra sophisticated Human Resource Information System (HRIS) tools that tie the litany of human resource responsibilities together. Aside from improving efficiencies within the HR department alone, these tools warm the hearts of CEOs and CFOs as they can directly and dramatically affect both top and bottom line. More than ever technology is enabling HR to become a strategic partner.

So what does a CEO expect strategically from the HR department? In two words: organizational readiness. The C-suite will typically respond to ideas that are innovative and cool, which are the cornerstones of cutting edge technology. Picture skiers zipping around mountains bringing tablet computers directly to employees so they can participate in engagement surveys. That’s exactly what is happening at now at mountain resort company Vail Resorts. A large percentage of the Vail Resorts employee base does not work within the finite space of a hotel. Without mobile technology employee engagement surveys would be either cumbersome or simply impossible. Mark Gasta, Sr. Vice President Human Resources for Vail shares, “We load up a skier with iPads and take the survey directly to our talent where the mobile application allows the information to be gathered instantly.” This flexibility is especially critical for hospitality companies where employees are spread over remote areas. Mobile technology is conquering location-based challenges as never before.

Employee engagement surveys are just one HR tool that has become internet-based. The current trend is to tie as much software together as possible on one platform. Marian Barbieri, Vice President Human Resources of privately owned New Castle Hotels combines online applications with behavioral assessments. This streamlined process provides a more robust review of the candidates and empowers managers to post and pull applicants off the site without needing to go through the human resources department.

Another tenet of technology is that it helps save time, a precious commodity for senior executives. An example of time savings can be readily seen from the promulgation of electronic pay as both company and employee benefit. The days of the paper check are long gone; but this goes well beyond direct deposit. Pay cards (debit cards) are becoming the compensation vehicle of choice, especially within the hospitality industry with its abundance of hourly workers. Once issued companies save on the administrative and shipping costs of paper checks, and can also make payroll adjustments easily by executing them online. These debit cards offer great flexibility as they are highly scalable. Employers can also promote other services and benefits through the cards.

Platforms are not just employer focused but employee facing as well. Just like online portals such as Yahoo and MSN look to capture consumers, companies are looking towards having dashboards that capture their employees’ attention and are visited on a daily basis if not more frequently. This integration is a “one stop shop” for employees to view their compensation, benefits, IDPs (individual development programs) but also enables companies to advertise internal positions and company news. This helps to foster employee engagement, retention and promotion. Dave Sibley, White Lodging’s President and CEO Hotel Management Services is passionate about developing A-players internally, attracting A-players externally, and always being prepared for growth. He says, “We own nothing as a management company, the only thing that makes us better or worse than our competitors is our people.

With these new technologies also come some risks. While these innovations offer operational efficiencies, they also drastically affect employees as their normal way of doing business changes. Routines they were once comfortable with are replaced with new ones. This adds stress as employees now need to learn new skills. Another risk is allowing technology to substitute human interaction, which would be exponentially damaging to a service industry. Mike Speck, Vice President Human Resources for Qdoba feels there needs to be a balance, especially with respect to training, “Not to be completely dependent on an online training source as the sole source of information. In our business people train people and the tools and systems are guides to success.” There is no question that companies need to implement technology, but in order to mitigate these undesirable side effects, they should do so carefully and with a heavy dose of education.

Clara Stilwell_AETHOS Consulting Group_New York_web

Best Practice Due Diligence – a 20|20 Skills™ Case Study

AETHOS Consulting Group’s forward-thinking approaches have established it as a premiere executive search and compensation consulting firm specializing in the hotel, chain restaurant and gaming industries. The company’s impressive placement rate of 96% stems from its business tenet of “Knowledge + Talent = Power.” The firm assesses knowledge and talent through a pioneering Matrix Method for comparing, contrasting and weighing a short list of candidates. In particular, the Matrix Method summarizes and puts in context a myriad of critical information derived from a candidate’s structured behavioral interview, resume, professional references and industry reputation.

We sought an assessment that would support its methods by furnishing objective data on a candidate’s competencies and approach to professional situations – thereby providing a crucial cross-check of information from more subjective sources. In this way the effectiveness of the Matrix Method would be bolstered, and the firm’s competitive edge would be sharpened. Several years have passed since AETHOS adopted the 20|20 Skills™ assessment for this purpose. The firm selected it over outdated, personality-oriented approaches like DiSC, Myers-Briggs or Predictive Index because its content is industry-specific and the analytics are grounded in the statistical gold standard of Item Response Theory (IRT) so as to extract more detailed and accurate information about candidates and to ensure that those results meet legal requirements1. In addition, 20|20 Skills™ measures actual skills, rather than personality traits – which a recent study by members of the Society for Industrial and Organizational Psychology demonstrated have little to no power for predicting workplace performance.

Read the complete study here.