“When Managers Are Going... Going...Gone!"
By Dennis Gemberling,  December 1998
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Expect the best and plan for the worst is the mantra of many CEOs for the long term. Often, hotel and restaurant senior managers stop short of thinking about, even considering, what to do in the short term, such as when a General Manager or Key Executive leaves. "Okay that's easy, said one resort company President. We'll just have the GM from property A look over property B for awhile. She has a good Assistant and that person could be the Acting GM. And, as soon as we locate a full-time GM, then the interim GM can go back to her property again." Or, “We have the Department Managers pick up the GM's duties and I visit the property once a week, instead of twice a month," said a small chain Director of Operations. Interesting . . . 

When the Cat's Away 

Mice do play! While your Assistant is watching B, who gets to watch A? Do they manage A as good as the regular GM? What really happens when you are not there? If you can operate without a GM that easily, why employ anyone in that position? Every hotel or restaurant needs one overall person-in-charge. Right? Besides, will you go along that smoothly without a GM for 30, 60 or 90 days? Can you promote the secondary Managers? Are they already that capable? “Probably not, well hardly, yet -- no way -- is usually the answer.” 
  
Turnover IS Inevitable 

According to several independent and chain-type operators surveyed for this article, most companies have a GM turnover at their properties or units once every two to three years. Considering a hotel company operating 5 to 10 properties over a period of five years, that’s about 1 to 3 GM vacancies every year. Restaurant chains, with a similar number of units, usually experience higher turnovers, sometimes double. With only 12 months a year, it’s inevitable that many operators have 2 to 6 months where there is no permanent General Manager on-site. Recruiting times, typically 45 to 60 days, add to the problem. 

What's It Really Cost 
Then, there are those hidden costs of operating without a seasoned GM. These might include loosing room sales by not running full, excessive staffing and overtime expenses or ignoring VIP guests and patrons that need special treatment. 

Have a 2-1-10 Plan 

No . . . this is not like a 401K. Think of it as Crisis Management! It’s just as important to have a “short term management” strategy, as it is to have a long term one. Too many issues arise when your hotels or restaurants don’t have a permanent manager in place. Therefore, it is critical for you to have someone - on-site and in-charge - during the initial transition.  

a) Appoint a special Interim Mgr. without other responsibilities to take-over within 2 weeks when GMs are about to leave. 

b) Get the operation running up to normal in week 1. Adopt an “Interim Strategy” that includes: 

  • Takeover/transition “To Do” punch list
  • Keep staff focused & motivated
  • High profile & communication
  • Manage by wandering around
While your Interim Mgr. is running the operation, have him or her look for better ways to improve customer service, supervise staff and increase sales and profits.  

c) Plan to have a permanent GM trained and on-site as soon as possible, but no later than week 10.  Two and half months is a long time without a permanent leader. Any longer, and employee morale starts to suffer due to uncertainty and change.  

Lastly, have an Interim Manager write reports for future improvement. A fresh look at cost savings and building income will more than off set any overhead you incur by having an interim management program in the first place! 

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Founded in 1985 by Dennis Gemberling - The Perry Group has managed, operated and consulted on over 200 projects across the United States, Mexico and Canada. We work to help You get and boost results! 
 
THE PERRY GROUP
DENNIS P. GEMBERLING
870 Market Street - Suite 882 - 
San Francsico, California 94102-2902
(415) 434-0135 (phone) - (415) 434-0134 (fax) info@perrygroup.com (e-mail) - 
www.perrygroup.com (web-site)
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