With the many challenges we are facing at this time in North America with regards the events on Wall Street, real-estate foreclosures, natural disasters and job losses that may be pointing to a possible recession not experienced since the Great Depression, is it also possible, if not imperative, to ask ourselves, “What is the opportunity?” and never, “Who can we blame?”
The opportunity is to see what is possible IF we just choose to do things a little differently than we always have. There are only so many ways you can cut costs or downsize operations before you have completely changed what a brand has promised to deliver to its loyal customers and employees. As business leaders, we have a responsibility to look at the bigger picture—how it all fits together—determine what it is we can do to change the course of our actions. It is not enough to take care of the shareholders expectations, which may never be fully satisfied and possibly fuelled by greed or fear. What is necessary is to take care of every stakeholder by creating a sustainable business that delivers a sustainable return to the shareholder.
Sustainable means ongoing—not just next month or next quarter. We are facing the reality right now of what happens when we are fuelled by greed and not by sustainable longevity. Today, I read an article titled, “Washington and Wall Street complicit in financial crisis … Firms chased obscene, high-risk profit while the U.S. government turned a blind eye.” We are getting exactly what we created, and it is time for change.
The hotel industry is made up of leaders who are engaged in development, ownership, and the operation of properties that employ hundreds of thousands of people who can make a difference in the lives of their customers, their co-workers and their communities if given the opportunity and support by the people they work for. We also have the choice of doing what we have always done and knowing that we will likely get what we have always gotten, as the saying goes. One takes immense courage, the other takes no effort at all.
How might you create a sustainable business? By adopting business practices that focus on a broader and blended bottom line—the triple bottom line. What does that really mean, besides being the new and overused buzz word in the business sector? And what might it mean in the hotel industry?
The triple bottom line refers to a balanced focus on the company’s financial, environmental and social performance, and an expanded scorecard from the one dimensional focus of “net profit”. Both environmental and social responsibilities have become additional key metrics for many companies across a wide breadth of industries, with some being more advanced in this area than others. Let us not be mistaken that this evolution has occurred for the very reason that it has become the will of society, the consuming public, or more succinctly: the paying customer.
Encouragingly, the hotel industry has shown progress in the area of sustainability by adopting environmental practices such as recycling and increased energy efficiencies. There are leaders among us that are willingly courageous and moving in this direction.
The first to come to mind, having read a recent interview in Hotel News Now, is Mr. Horst Schulze, an industry icon who is currently the president and CEO of The West Paces Hotel Group. He founded the company after serving almost 20 years with The Ritz-Carlton Hotel Company. Mr. Schulze is such an innovator. Although, he may be going back to the hotel industry’s roots of being in the customer service business, first and foremost, he is clearly moving forward by honoring our history and by living his company’s Canon (a body of rules, principles, or standards accepted as axiomatic and universally binding) and Vision (“We are the Global Leader in the service business. Our accomplishments and meaningful contributions have a positive impact on society.”), which is truly values-driven. There is no doubt that Mr. Schulze knows that his ability to live by and lead by these values will create the level of success and leadership legacy he wishes to experience.
New brands such as “1” Hotel and Residences that focus on a green concept, described by Starwood Capital Group as “a luxury, eco-friendly global hotel brand”, has the ability to lead the way in best practices for the industry to adopt, where it is deemed possible and proven economically.
Both of these examples and many more, are examples of our collective ability to move forward and are encouraging. Mr. Schulze and his partnership with Auburn University in Auburn, Alabama, to assist with developing a new curriculum for the University’s bachelor’s and master’s programs in hotel and restaurant management is a clear example of living by the company’s vision and of accepting social responsibility. “1” Hotel and Residences is the example of adopting an environmental responsibility, and neither of these will be successful without balancing these endeavours with their financial responsibilities to owners and investors.
What if we could put it all together and create a balanced scorecard that focused on all three simultaneously? Because maybe, just maybe, this is where we are headed.
Judy E. Adams is president of EssentialStrategy.. EssentialStrategy partners with businesses within the hospitality and tourism Industry that want to experience increased and sustainable profit growth by creating foundationally strong, lean cultures that thrive on success, while adopting the "Triple Bottom Line" approach to business success. You can reach her at judy.adams@essentialstrategy.com.