How Small, Local Wins Can Lead to Big, Global Successes in Hospitality by Teresa Amabile
How Small, Local Wins Can Lead to Big, Global Successes in Hospitality
by Teresa Amabile | Harvard Business School
The hospitality industry, always a challenging – if often rewarding – space in the economy, faces a particularly daunting set of challenges these days. As hospitality guru Danny Meyer says, it is imperative to deliver not only a high-quality product, but also “enlightened hospitality” – an outstanding customer experience with that product. But how can this dual goal be achieved in profitable ways that consistently meet the demands of a highly competitive industry? This was the challenge facing Host Hotels back in 2013. The solution was constant, sustainable innovation and, for help, the company sought out Bob Johnston and Doug Bate, coauthors of The Power of Strategy Innovation.
Starting from conversations with high-level leaders at Host Hotels, moving to commitments from those leaders to support company-wide innovation, and culminating in a series of intense, high-spirited workshops, Bob, Doug, and their colleagues enabled the company to achieve what might have seemed an impossible goal initially: $24 million in additional revenue in 2015, at a profit margin of 48%, with little additional up-front investment. ($37 million was forecasted for 2016.) When I initially heard about these results, I assumed that most of those ideas had originated at corporate headquarters and been implemented well at the company’s many properties – because that’s how most innovation happens in the hospitality industry: top down. But I was wrong.
In fact, these innovative gains flowed from grassroots ideas that had been generated in those high-energy workshops by small teams, each from one of the company’s properties, applying the Discovery Process that they’d learned from Bob and Doug. These small iTeams (for Innovation Teams) came up with ideas for new, low-investment revenue generation (sometimes inspired by other teams), culled those ideas to the most promising, and implemented the selected ideas in surprisingly fast timeframes. The most successful ideas were showcased at the 2016 General Managers Meeting by Dick Marriott, Minaz Abji and other top executives at Host Hotels and disseminated to the company’s hotels and resorts around the world.
So how does this magic happen?
I got a window into the details when Bob, Doug, and Gail Smith-Howard, General Manager of the Hyatt Regency Washington on Capitol Hill, allowed me to listen to a recording of iTeam co-captains, Philippe Cavatore, the Assistant Director of Rooms, and Stephan Siegfried, the Assistant Food and Beverage Director. Gail and her entire iTeam had very recently gone through a Discovery Process workshop and Philippe was describing his team’s experience in a conference call with Bob and all the other iTeams from the workshop. Within two weeks after the event, which Philippe said his team really enjoyed, they were already about to launch a trial run of one of their radically new ideas – partnering with UberEATS (and possibly GrubHub, too) to deliver the hotel kitchen’s food to anyone within a 15-minute radius of the hotel.
But this was only one of no less than 20 new revenue-generating concepts that the team was working on. As Philippe explained, the team had come up with this idea while trying to figure out how to offer the services of a high-quality food truck to the neighborhood without having to actually buy and operate the food truck themselves (which had been their original idea). So, using a technique they’d learned in the workshop, they combined two seemingly unrelated ideas aimed at what they called “space innovation”: using some of the hotel’s outdoor space for a food truck, and finding potential partners to use some of the less-used space inside the hotel.
Why not, they thought, offer to rent some less-used outdoor space – specifically, space in the front driveway – to already-established food trucks, during weekday lunch hours? The hotel’s location, just steps from the U.S. Capitol, made this brainstorm particularly exciting. After just a few conversations with potential partners, the team was gearing up to make it happen – quickly.
And even more quickly, in scarcely over a week after the workshop, the team had already run a successful pilot of another idea: the Overnight Concession Stand. Because the hotel’s Gift Shop, which sold various snacks and beverages, closed at 11pm and didn’t open until 7am, guests coming into the hotel late or leaving for an early-morning flight couldn’t easily grab a good snack. The Overnight Concession Stand, operated by Front Desk personnel, would fill that need. In just a few days, a simple prototype was built, the Stand opened, and it immediately proved its potential value. As Philippe said, it was a “quick and easy” implementation, and the early success had led them to begin developing SOPs for the front desk staff and working with Engineering to build the permanent Overnight Concession Stand.
These ideas might all sound like modest proposals, leading to small, local successes. And, in the grand scheme of a global hospitality company’s revenues, they are. But, as my research has shown, these modest steps forward – what my collaborators and I call “small wins” – can yield two outsize benefits. First, and most obviously, they keep the team moving toward the ultimate goal – which, in the case of Host Hotels, was continuous development of innovative ideas for profitable revenue generation that fits the company’s values. Second, small wins provide the fuel that fires employees’ passion for continuing to innovate; small wins boost positive emotions, foster positive views of the organization, and sustain motivation through the inevitable setbacks that mark any innovation journey.
If you have an interest in profitable growth through innovation, and cultivating and nurturing a culture that supports it, please download and read our Host Hotels 2-page case study - a powerful story of a program for sustainable “grassroots” innovation. If you’re curious about how this might be achieved within your organization, please contact us at email@example.com