It used to be rare to encounter senior executives in the hotel industry who had “grown up” outside the business, but that’s no longer the case. Many of Spencer Stuart’s senior-level placements in hospitality and leisure companies over the past five years spent most of their careers in other industries.
We have explored this phenomenon based on our own work and in conversations with leaders across the industry who were once truly “outsiders” themselves. We examined what attracts leaders to the hotel industry, why hotel companies may benefit from hiring an outsider and the qualities to look for in these individuals.
The Allure of the Business
In our discussions with leaders, the opportunity to have impact was the most commonly cited reason for working in the hotel industry.
“This business is very different — and much more complex — than consumer packaged goods,” said one chief executive with a previous background in consumer goods companies. “It’s faster paced, and there’s more energy. You have the opportunity to have an impact in so many places, and the people aspects are much more challenging — from recruiting to execution. What’s going on in the world everyday has a huge impact on this business.”
Leaders seeking a truly multidimensional experience are attracted to the opportunity to touch every aspect of business, spanning marketing, sales, e-commerce, high finance, big long-term relationships, construction and customer service.
In addition to having an impact on the business and their own development, senior leaders are also drawn to an industry that provides experiences that bring joy to people and widen their perspectives. Outsiders who have joined the industry have told us they appreciate the chance to add value to consumers’ lives by providing experiences that will be remembered for a lifetime.
What’s Different About Hotels?
Those coming into hotels from outside the industry were quick to note the differences — as well as a few surprises, both good and bad.
One hotel president noted that it takes years to change the brand of a hotel. With the staff of some global hotel companies totaling in the hundreds of thousands, it can be challenging and time-consuming to roll out a new brand and deliver the brand experience consistently. Additionally, with thousands of hotels and a portfolio of brands operating in countries around the world, senior leaders must be prepared for daily unexpected events — and be able to both adapt and discern which issues should be prioritized.
The chief human resources officer of one global hotel company was struck by the tremendous loyalty and pride among people in the industry, particularly among front-line workers. He said he has always been impressed by the service ethic in hotels; in his previous role in financial services, he targeted hotel customer service talent for customer-facing roles.
On the downside, some noted a few areas where industry players are falling short. One senior executive highlighted the lack of sophistication in distribution channels and systems, often due to talent perceiving the business as a fun hobby vs. a challenging, multifaceted industry. Others have been surprised by the relative lack of standards and measures that would allow the hotel industry to be more cost effective and better able to focus on efforts that deliver value to customers.
Thoughts on Recruiting Outsiders
We have witnessed a trend in large hotel chains becoming more receptive to hiring outsiders. One hotel company president said while his company still firmly believes in promoting from within, the growth, changing requirements and insufficient supply of leadership talent for the demand in the industry are forcing the organization to recruit more from the outside.
Growth is not the only driver of this shift. Hotel companies are looking for broader skill-sets among their top executives, particularly strategic thinking and a wide range of functional capabilities. One CEO of a large hotel group observed that hotel company corporate roles need more sophistication and expertise than hotel general managers historically have offered. He has found that typical GMs lack strategic, analytical and functional skills such as talent development and marketing.
Global hotel leaders also consider an executive’s ability to think broadly and develop top-notch capabilities across multiple functions as key to evolving the way success has been defined traditionally in the industry. The challenge is to stay at the top of one’s game in all functions given the multifunctional nature of the industry, which is not known for being world-class in any one dimension.
The president and CEO of another global hotel company said he is open to recruiting at senior levels from adjacent sectors in functions such as marketing, HR and finance because lodging historically has been more operations-driven and has not developed the same functional strengths, e.g., marketing, as other industries. In HR, he is open to candidates from industries where the business model is decentralized and the brand is delivered through the front-line employees. In finance, he looks for talent with experience in real estate development and decentralized business models.
However, one area where hotel company leaders are hesitant to hire outsiders is operations. “Operations is probably the only area where it would be hard to walk into this industry from the outside, because that’s where the complexity really starts to play out — you’re dealing with assets and countries all over world and a wide variety of people,” said one leader. “You have to be able to deal with the consumer experience face to face: in our business, the customers are not buying a box and taking it home.”
Qualities to Look for in Outsider Candidates
When evaluating candidates from outside the industry, certain capabilities have proven to not only be transferable, but also valuable. Here are some key attributes that will help ensure the outsider will make a successful transition:
Willingness to invest time in learning the business. Many executives cited examples of people who have failed because they didn’t take the time or have the capacity to understand differences between this industry and others. Senior leaders should assess whether the candidate has an appreciation for the realities of the business and have empathy for those on the ground, such as the general managers.
Capable of managing complexity. Compared to other industries, the complexity of this business is unique and challenging. It calls for globally sensitive leaders who are agile and equally skilled at branding and design, large-scale people leadership, complex financial deals and partnerships. Leaders who have more generalist vs. specialist backgrounds tend to be better positioned to build new knowledge of the less familiar functions: law, finance, operations and real estate development.
Results orientation. The hotel industry is suited for those who like accountability and immediately noticeable results. Executives must be able to deliver in the short term while opening up opportunities for the long term. “You’re looking at the numbers day by day, and you’re immediately accountable,” said one industry leader. “You can’t recover revenues on empty rooms.”
Passionate about pleasing guests. A large part of this industry involves a love of customer service — as one global hotel president aptly put it, “We sell guest experiences, not bedrooms.” Hotel companies need to look for people who demonstrate a commitment to customer service and leaders who can balance performance with caring.
Focus on relationships. Excelling in the hotel industry requires strong relationship-building skills, particularly at the senior level. Since most things in the industry get accomplished through relationships rather than organizational or hierarchical authority, it is important to grow and nurture them, particularly on the owner side between brands and operations.
Clear and frequent communicators. Communication goes hand in hand with relationships. Effective, regular communication is essential for strategy formulation and execution in the industry. Be an active listener with front-line employees and managers, and initiate discussions with customers, franchisees, owners and field employees.
Conclusion
This new wave of outsiders in hotels has both increased the diversity of talent in the industry and opened up new opportunities for senior leaders from different sectors. Even though many “outsiders” are now succeeding in the industry, it is crucial for hotel company leaders to have a detailed profile of who can best adapt to the industry and for candidates to understand the industry’s nuances before making the switch. For many, the move is beneficial for both the leader and the organization. A former “outsider” summed it up well: “I just wish I got here sooner. I love the business and the impact the people have on the guest experience and the results.”
Originally published in Perspectives at Global Hotel Network.com.