Mr. Lund

Executive Leadership

Creating Financial Leadership in Your Hotel

By David Lund, Hospitality & Leadership Expert, The Hotel Financial Coach

That's right, your eyes and my fingers have not failed, I wrote the word on purpose "realtionshift" and I got this word from my coach, Steve Chandler. He wrote a book with Michael Bassoff called realtionshift and its about fundraising and fundamentally changing the relationship between fundraisers and donors. To sum it up in one sentence, the book is about fundraisers outgiving the donor and showing the donor that they make a difference, both the donor makes a difference and their money made a difference too.

Creating financial leadership in your hotel has the same fundamental realtionshift at its roots. The traditional relationship in the hotel with reports and deadlines to submit; forecasts, budgets and commentaries is to have the financial leader tell the non-financial department managers when reports, forecast, budgets and commentaries are due and to send out schedules and hound everyone every month several times about the pending deadlines. This system does not work. I know because that was my system for nearly 20 years and all it ever consistently produced was my frustration and a lack of usable content.

My frustration came from not being respected enough by the non-financial leaders or so I thought. The other leaders rarely provided their departmental numbers and reports to me on time, correct and of good quality. So, my assumption was they didn't respect me, they didn't respect my position and I was sick of it. It really was the worst part of my job. Especially when their lack of attention to their responsibilities got me in hot water. I can't sit in my office and dream up what is going to happen next month, next quarter, next year in the other department of the hotel. It does not work that way and without their financial contribution I'm playing Russian roulette. Sooner or later I am going to get it terribly wrong and the department managers will inevitably lead me to produce projections and actual results that are wrong.   Even in a small hotel the business needs to be managed departmentally with budgets and forecast that leaders can follow and adjust as business levels change. 

So where is the shift? The shift for me came from the act of serving. The schedules and reminders and memos' and follow ups that I was doing were not serving anyone but maybe me, selfishly. When I created, and delivered my first financial leadership workshop I had a profound and life changing experience. At the end of that day I had a lineup of leaders waiting to thank me and to share their experience with me. "no one ever explained the P&L to me before", "I had no idea what you did with my numbers", "everyone should have this training before they start" these comments and many more took me completely by surprise and I knew right away that I was onto something, something profound was going on.

At the time, I thought it was novel, however I didn't really understand the implications of what I had started. In a short period of time, less than 6 months later I did the same workshop in the same hotel again and I got the same result. Leaders wanting to thank me and share their experience with me. Fantastic, nice feeling but something else was going on. These same leaders were now regular getting their forecast, accruals, budgets and commentaries to me on time and with so much more accuracy and clarity. Leaders were now seeking me out to discuss their ideas on how to save money and generate more revenues. I had created a financially engaged leadership team by teaching them the business of hotels and treating them like adults. Investing my time and effort into their prosperity. 

All of this happened because of the shift that the workshop created. It shifted me from the dreary and negative task of pestering the other leaders to give me what I needed. It shifted me to a place where I was serving them first. Now that I have served they are more than willing to reciprocate. Why didn't I think of this before? Ego is the reason I didn't think to do this workshop and education idea before. Ego is  what holds us all back from really leading by serving. I'm the director of finance and they should get me their numbers because I need them and that's my job. I laugh now when I think about it because it only took 20 years to figure it out and it was someone else's idea to begin with. Oh well, now that I know the secret I'm telling others and writing this article to boot. 

The realtionshift in my hotel and the realtionshift I help my clients create in their hotels is anchored by four distinct elements. 

The non-financial leaders now see the impact that they have. Impact and making a difference are basic human needs. Maslow's hierarchy of needs identifies that people want to know they make a difference in life and with their work. This is a powerful principle to shine a light on. When you mix this with the other principles it results in a much greater desire to do this financial work. People see they make a difference and that this work will make a difference in their lives and create more, larger and desirable results. It will literally create and lead these managers to greater prosperity in their lives. Financial leadership skills are very valuable to have and once people get them it's like riding a bicycle, we don't ever forget.

They also quickly see that it's not so hard.  Financial leadership and knowing your numbers is not hard. It's especially refreshing when you get a group of leaders together and expose the truth about what happens in your department with payroll or expense and then the same thing happens in the sales department and maintenance. Suddenly, the charade cannot survive any longer and leaders see it's the same thing in another department as mine. What is all the fuss about let's get on with it and do this! Before financial leadership training non-financial leaders spend an inordinate amount of time making excuses and basically hiding out. With this training, it's no longer possible to hide out. 

Return on investment. What would it be like to have your hotel full of leaders that knew their numbers, and managed accordingly. Do we think it might lead to higher profits? The answer is a resounding yes! We all know there are a million ways to save money in our business and we all know the opposite is true, there are a million ways to waste it. All it comes down to what kind of a team do you want to create? A team that is financially engaged or one that is not. It's really that simple. What you tend to grows. Creating a financially engaged leadership team is essentially no different than creating a great guest service culture or a team with high colleague engagement. When we focus our time and resources on financial leadership we get results. We go from having  few leaders that know their numbers to having lots of leaders that know their numbers.   

Leadership is the fourth element. This part took me the longest to see and it has had the most profound impact. Creating a financially engaged team means your committed to the non-financial leader's success. You will be there when they have challenges and you will support them, and you will also be there when there is success.  The commitment you have to help them grow is the most powerful element. Remember what it was like when someone took you under their wing and helped you. This is what's possible with financial leadership. I teach my clients to make agreements on how they will support each other on the creating and ongoing maintenance of the numbers. Leaders will literally love you for helping them with this and it's not long before they get it and your world of frustration is all but gone. 

To wrap up the RelationShift its important to put things in clear perspective. The hotel business is about people, guests, colleagues and leaders. We're not perfect, any of us and we never ever will be. So just like service deficiencies were going to drop the ball with the numbers. Just like colleague engagement we can operate at a high level but were not machines and we will make mistakes. However, it is entirely possible to manage the numbers with great skill and it is possible to create a financially engaged leadership team in your hotel. No superstars, no exceptions, no excuses, no victims. Just team work, support and commitment to constant improvement. We approach guest service and colleague engagement this way, no one gets to ride the train with a free pass, were all in this together. Make financial leadership the same. RelationShift.         

David Lund is The Hotel Financial Coach, an international hospitality financial leadership expert. He has held positions as a Regional Financial Controller, Corporate Director and Hotel Manager with an international brand for over 30 years. Mr. Lund has reviewed thousands of budgets, forecasts, month-end reports and commentaries. He has managed hotels with combined incomes of hundreds of millions and assets of more than a billion dollars. He has combined his hotel business knowledge and communication skills to create strong financial teams and break with accounting stereotypes. Mr. Lund believes that all hospitality leaders have financial skills and talents and he works to see these talents come alive. Mr. Lund can be contacted at 949-791-2739 or david@hotelfinancialcoach.com Please visit http://hotelfinancialcoach.com/freecall/ for more information. Extended Bio...

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