WHO SHOULD STAY AND WHO SHOULD GO?

June 10, 2020
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So here we are, and you have no choice but to cut your overhead to the bone. How are you going to do it? Sacrifice the young’ uns you have invested so much in and who are just about to give you a superb return on your investment? Just because they are at the bottom or only halfway up your seniority pole? And keep some loyal key players who, frankly, may be past their prime? I am not referring to age, but to the ability to think outside the box and look at your company with a fresh set of eyes. You know, those folks who, for instance, will be totally unaware of their competition’s key numbers and statistics. Because your company, in its pre-COVID arrogance, conveyed to them the thought that there is no such thing as competition. So, you have been trying to change the company from the top, and 50% of your General Managers (some of them subconsciously) have been systematically putting the brakes on because status quo is all they know. These fellas are VERY expensive, not only to you but to your hotel owners. Juicy pension plans, huge relocation packages, up to 40 years worth of annual salary increases and then some. The young’ uns, in terms of salary, are less than half your 30-year General Managers. Don’t you think you owe it to your hotel owners to save that money (their money, incidentally)? Is the 9 to 5 General Manager still seeing the forest from the trees? I guess the “normal” or traditional reaction, in COVID-19 times, is to let go of your Hotel Managers: after all, who needs a Number Two, when you have a Number One? Not so fast, I will take a Number-One-in-training anytime over a stale and expensive Number One.

Food for thought?

Remember what they taught us at Cornell or Lausanne about inventory systems: FILO (first in last out) is about as bad a way to manage an inventory as can be. Learn about LILA (last in, last out) and you will prosper.

How do you like them apples? Stale or fresh?

2 Comments

  1. Antoine Berberi June 11, 2020 10:06 am

    Great point Benoit. Totally agree with your comments. A few points to add:
    – Surrounding yourself with top performers is the only way to have long term success in any organization, regardless of the industry or state of the economy. Never compromise. It always pays!
    – Do not carry poor performers at any time, even when the labor market is very tight (Prior to COVID-19).
    – Do not base your decisions on who to keep and who to eliminate based on salary or package, but strictly on current and long term performance.
    – High performing executives want to work with other high performers, so you will have organic growth in your organization once you have hired the right people.
    – Do not wait for a downturn or recession to eliminate those executives who are underperforming. I recommend a great read from Jack Welch’s book “Winning” where he tackled this very subject: https://hbr.org/2020/03/jack-welchs-approach-to-leadership. To quote the article:”At a conference at which we both were speakers, he said something along these lines to an audience member who questioned his practices: “What would happen if for years and years you don’t tell someone that they are underperforming, not giving them the chance to try to improve, check whether they can do something else in the company, or alternatively look for somewhere else? And then a recession comes, and you need to fire the person, older and unprepared, in a much tougher market? Which is crueler?”

    Reply
    • Robert Cohn June 17, 2020 4:42 am

      Great comment, as I completely agree. Always think that the best is not good enough, and you ought to start every day by thinking what you should improve.
      It is something I have written about in my book, and on my blog at http://www.RobertRCohn.com. Take a look please.
      By being better than others you will be able to destroy your competition, and charge more, and that impacts your bottom-line!

      Reply

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