Reference no: EM133961027

Question

Measurement before Management

Richard Sperry works for a major hotel management company. His corporate office has decided that his talents, honed as the head of strategy for the brand, need to be targeted toward the northeastern sector of the United States. This region has forty-five hotels and is presently the corporation's weakest performing region. Of particular concern to his boss is the ability of one of the competitors in the region to respond to market forces more readily, leaving the company at a major disadvantage. One competitor in particular always seems to have its finger on the pulse and adjusts its room rates perfectly to meet shifting demand seen in the region. Its package deals constantly meet with high approvals, and owners couldn't be happier.

Having been burned from the many "if you buy it, they will come," technology solutions offered by many vendors in the past, management is skeptical of purchasing new systems. Fortunately, Richard has a history of solving problems with little increased spending due to his ability to manage and use information effectively. Management is in clear agreement that the company is presently at a competitive disadvantage. Big data is little understood. Rather than react to every new offering a competing property may introduce to the marketplace, Richard and his boss concur that the best strategy to compete is to better use information to build a solid foundation of smart business practices blended with quality service offerings. The following five goals have been established and will be used as the basis of measuring Richard's performance over the next year:

Increase revenue by 5 percent

Increase occupancy percentage by 6 percent

Increase Guest Service Index (GSI) scores to 3.5 (on a scale of 1 to 5, with 5 being the most satisfied and 1 being the least satisfied)

Increase mobile reservations 10 percent

Reduce employee turnover by 15 percent

Current Systems

Luckily for Richard, each hotel recently upgraded its technology applications portfolio. Currently, each property shares a similar network infrastructure and common OS. High-speed Internet access is available at all properties on personal computers running Windows. Software, despite being upgraded, has not been standardized throughout the company. Among the forty-five hotels in Richard's region, there are three different PMSs, four different restaurant POS systems, and three different database architectures in use. Social media and digital marketing are mostly property specific. Additionally, word processing, spreadsheet, and other productivity software differ from property to property.

Current Procedures

Report compilation and dissemination requires each hotel's night auditor to scan weekly flash reports to the regional office where the numbers are entered manually into spreadsheet so that a consolidated report for the region can be prepared. Online guest surveys, the sole measurement for GSI scores, are emailed to the corporate office each week. The corporate office compiles the scores to create the GSI index and then emails a report to the regional office each month. The food and beverage director submits bi-weekly purchasing histories and nightly sales data to the on-site controller who compiles the data and emails a series of reports to the regional office. Each month, the regional office emails a series of summary financial and operating reports to the corporate office and each property in the region detailing actual performance versus budget and year-to-date statistics. These reports are then reviewed by the general manager and become the subject of discussion in executive committee meetings at each hotel.

Richard has some great ideas for a new strategy. He knows that he has to be able to measure what he is about to manage. Our learning activity is based on that theme.

Learning Activity

1. What are the key problems facing Richard Sperry and his organization as described in this scenario? If you were in Richard's shoes, how might you go about addressing these challenges? What would be your strategy and why? Be sure to provide appropriate justification and a specific (i.e., detailed and measurable) action plan.

2. Before any action is taken, what managerial measures must be implemented for the company's five goals, and how should these be implemented? What procedural changes are required at each property and at the regional and corporate offices? How should these changes be introduced, and who should lead the change effort?

3. Would any of data require access restriction? If so, who should have access, and to which data?

4. Evaluate the technology applications portfolio and infrastructure for Richard Sperry's company. What are its strengths and limitations? In what ways is technology being used effectively? Where is there room for improvement? What changes would you suggest and why?

5. If you were to design a balanced scorecard approach for measuring and monitoring performance and the overall health of the organization for Richard Sperry's company, how would you go about it? Where would you start? What issues might you face, and how can you overcome them? What would your proposed balanced scorecard look like?