Hospitality Financial Leadership: Hotel Finances for Dummies
April 1, 2019 1:18pm
My primary responsibility as the head of the finance and accounting departments in the hotel was to ensure the books were clean and balanced. What I really got paid for was serving as the “chief financial information officer.” The reality was the financial information I had to work with stunk!
In every business, communication is important, but especially around the financial piece of the business. Communication is key. Great communication can make the business successful, help it grow, cause it to take on a life of its own. Poor communication can make the business die either a long, lingering death or a swift, unexpected death. But death is death. Death is painful, even in business. It means the death of that business owner’s and/or the investors’ hopes and dreams.
Good communication in business is, therefore, a matter of survival.
Hotels follow the same pattern, especially regarding communication about the money coming in and going out. No communication on the financial numbers translates into poor results without understanding why. For instance, incomplete financial statements with the telltale signs of missing invoices and bungled accruals, budgets and forecasts that totally miss the mark feed financial failure. Put all that on top of monthly financial commentaries that didn’t make any sense because supporting documents didn’t exist. This was what I was producing.
I knew what was needed in order to do my job properly, but I couldn’t get the 75-plus other non-financial leaders in the hotel to help me.
As the financial leader, I knew I couldn’t just sit in my office and dream up what was going to happen next month in the kitchen, the laundry, the dining room or any other area of the hotel with any accuracy. The hotel business does not work that way. To be successful, the financial information must come from the department heads because they are the experts in their departments. But also, each of these experts must take ownership of the information and goals set. And in turn, each one takes ownership of the desired results.
I tried everything I knew to get these managers to play ball with me. I wrote tons of memos, preached hundreds of sermons at department head meetings, and cornered countless managers for one-to-one discussions where I stopped short of dropping to my knees to beg. All of it was to no avail. What I wanted or needed didn’t matter to them. They had their own worries, wants and needs.
The reports I received in exchange for my heartache were either incomplete, not accurate, late or nothing at all. It felt awful to work so hard, with such passion and still fail, still produce lousy work. I was pretty sure this gig was not going to last too long because it was moving in this downward, unproductive direction. I ended every day feeling frustrated and alone.
The new general manager came to my office one day and asked what was going on in the financial area. I discussed the frustration I had with the other managers and their lack of follow-through in providing the financial information I needed to produce good results.
I wanted him to say something like: “Leave it to me. I’ll light a fire under them!” But he didn’t.
Instead he said something unimaginable, “Why don’t you create a workshop for the managers. Call it ‘Hotel Finances for Dummies’ or something like that.”
I paused for a split second, let my mouth and emotions overrun my brain, and blurted out, “I don’t have time. Look at my desk. I’m already here 10 or more hours a day trying to do this job. And I’m not a teacher.”
His calm reply was, “You can do this! And, David, it’s the right thing to do.”
As he stood to leave, the parting comment was, “As incentive to inspire you, this little workshop is now part of your annual bonus criteria. No workshop, no bonus, Mr. Lund.”
Somewhat reluctantly, but with this new carrot being held out in front of me, I set about putting this monster training together.
Where to start? What information to include? Where to get the information? How to ask for what I needed in a different way than what had already not worked?
Days and weeks passed as I worked to address the questions in my own mind about the who, what, where, when and how of this presentation. Given my previous lack of success and having tried all methods of persuasion I could think of already, I didn’t feel very confident about the workshop results. After all, it’s accounting!
The workshop day arrived. Human resources handpicked 35 of the hotel’s leaders to attend my first-ever financial workshop from 9:30 a.m. until 4:30 p.m. Six hours of teaching time. I was scared. Not comfortable with the idea of standing up in front of 35 hotel managers who ran or hid when they saw me headed toward them. And then there was the part of me who dreaded standing up front of and talking to these managers the whole day about nothing but accounting.
“Yea! Everybody loves accounting! Not!” I told myself.
Then a little voice whispered back, “That was the whole point of doing this workshop. Try to teach each of them the value in the numbers and the value they had in the process.”
“That was an impossible task,” I thought, standing at the front of the room at 9:15 a.m. watching as everyone dragged themselves to a seat.
As the day progressed, I gained more and more confidence. Ultimately, something magical resulted that day. From my perspective, some of my examples were hard for the attendees to follow. Some of the hands-on exercises were only semi-enthusiastically received. But overall the day went much better than expected. Turned out I was the harshest critic in the room.
It was what happened at the end of the afternoon that blew my mind and redirected my thinking.
I wrapped things up and got a small round of unexpected applause. I thanked everyone and gave them a short evaluation to fill out with 10 questions to rate the workshop from 1 to 5. Then I opened the workshop up for comments and feedback.
A couple of the department leaders stopped and took their time to thank me. Before I knew it, I had a line of managers waiting to thank me.
After only six hours of teaching time I got some amazing compliments that shook my core. I taught them to value their roles in the financial piece of the pie, to value each other and in that I felt valued, too.
I knew right then and there how wrong I’d been. This training was something BIG. What an amazing feeling to motivate, inspire and train these leaders in a profound way.
The words and surveys revealed some incredible comments. Here are a few:
“Finally, someone explained the P&L.”
“We should all have had this training from day one.”
“I had no idea what you did with my forecast.”
“I didn’t know my financial forecast input mattered.”
“The owners actually see my projections.”
“Owners actually care about my projections.”
“Sorry! I thought I was just doing your job for you. I didn’t understand until today that what you asked for really made my job easier.”
During the coming weeks, I was asked to host a second workshop. It filled up quickly as word spread about its success. We even started a waiting list.
Early the following year the hotel I worked for submitted the workshop concept and results to our headquarters for an annual contest. My accounting workshop won the international innovation award!
All of this now, and it started with a problem and what appeared to be a dumb idea. Go figure.
Tags: hospitality financial leadership,
David Lund is The Hotel Financial Coach, an international hospitality financial leadership pioneer. He has held positions as a Regional Financial Controller, Corporate Director and Hotel Manager with Fairmont Hotels for over 30 years.
He authored an award-winning workshop on Hospitality Financial Leadership and has delivered it to hundreds of hotel managers and leaders. David coach’s hospitality executives and delivers his Financial Leadership Workshops throughout the world, helping hotels, owners and brands increase profits and build financially engaged leadership teams.
David speaks at hospitality company meetings, associations and he has had several financial leadership articles published in hotel trade magazines and he is the author of two books on Hospitality Financial Leadership. David is a Certified Hotel Accounting Executive through HFTP and a Certified Professional Coach with CTI.
For a complimentary copy of my guidebook on creating a finically engaged team in your hotel head over to my website, www.hotelfinancialcoach.com and don’t forget to email me email@example.com for any of my free hospitality financial spreadsheets.
Hospitality Financial Leadership: What Do Indy Car Racing and the Hotel Business Have in Common?
Hospitality Financial Leadership: Engage Their Hearts and Minds First
Hospitality Financial Leadership: The Financial Forecast Disconnect and How to Correct It
Hospitality Financial Leadership: Investing in Financial Leadership in Your Hotel
Hospitality Financial Leadership: Negative Flow Thru
Hospitality Financial Leadership: Nobody Gets to Be Wrong, Everyone is Wrong, No One Gets to Be Right, Everyone is Right
Hospitality Financial Leadership: OH, BROTHER
Hospitality Financial Leadership: RevPAR vs. GOPPAR and Why We Need a New Champ
Hospitality Financial Leadership: Understanding the Concept of Owner Spend
Hospitality Financial Leadership: The Next Big Thing
Hospitality Financial Leadership: Contra or Barter Exchanges – How to Record Them and Some Tips
Hospitality Financial Leadership: She Said She Was Born Without the Financial Gene
Hospitality Financial Leadership: Roger Penske & The Hotel PMS
Hospitality Financial Leadership: City/Region Wide Supply and Demand Analysis
Hospitality Financial Leadership: The 5 Hidden Costs of Being Branded
Hospitality Financial Leadership: Earned and Unearned Revenues – Understanding the Difference
Hospitality Financial Leadership: Bring Multi-Tasking to an End for Hotel Leaders
Hospitality Financial Leadership: Understanding the Importance and Use of The Reserve for Capital Replacement
Hospitality Financial Leadership: The Matching Principle
Hospitality Financial Leadership: The Top 10 Interview Questions About The Hotel's Finances for a General Manager and the Best Answers
Please login or register to post a comment.