Archive for February, 2010

Effective Interviewing

Monday, February 22nd, 2010

Employers hire people to make their jobs easier and their companies more effective.

Interviewing is hard. First, you don’t do it very often. Second, you are talking to a company and people you know very little about.

The key to an effective interview is to concentrate your answers on the most important aspects of the job. If they have not identified those in their ad, or during phone calls, ask them early in the interview. It can be as simple as asking: ‘What are the three most important contributions you expect from this position in the next 6 months.?’

When you are asked you about your previous experience, be sure your answer highlights your accomplishments in the 3 areas they have indicated are most important.

When asked about difficult situations you have handled, give them examples in the three areas they have indicated are the most important to them.

When you are asked about your most significant accomplishments answer with examples that address their three key aspects of the job.

Should the person interviewing you get off track, bring them back on topic by addressing one of the areas.

Yes, you want to figure out if you are interested in the company. More important still is whether they are interested in you.

Even if you decide you are not interested in the job 5 minutes into the interview, you still want to get a job offer. Why? You may not want the job you are interviewing for, but you may still be interested in the company. If you are no longer interested in the company you still want them to be interested in you. Prospective employers talk to each other. You never know when they can refer you to a great job.

Let’s start a dialogue on recruiting. What’s the toughest interview question you have fielded? How did you answer it? Did you get the job offer?

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A Think Piece: How HR Caused Toyota to Crash

Monday, February 15th, 2010

Following is shortened version of Dr John Sullivan’s views on how HR contributed to Toyota’s billion dollar direct loss and $30 BB decline in stock evaluation. Full article was posted on ERE.net today. Link is included at end.

Excellent process points for Executives, including those in HR, to remember/consider.

To Find the Root Cause of Toyota’s Problems, Look Beyond the Gas Pedals.

“In any situation where employees fail to perform as expected, investigators must determine if the human error could have been caused by factors beyond the employee’s control. Such external factors might include actions by senior management, lack of adequate information or job training, faulty inputs to the process, or rewards that incent actions not in line with documented goals.

If you believe in accountability, you have to accept that human errors that lead to corporate catastrophes could be the result of faulty HR processes, most notably those related to acquiring, developing, motivating, and managing labor.”

“The Eight HR Processes That Contributed to Toyota’s Downfall”

“If the root cause of the problems Toyota is facing are failure by employees to make good decisions, confront negative news, and make a convincing business case for immediate action, then the HR processes that may have influenced those decisions must be examined. The HR processes that must at least be considered as suspect include rewards processes, training processes, performance management processes, and the hiring process.”

“Rewards and recognition — The purpose of any corporate reward process is to encourage and incent the right behaviors and to discourage the negative ones. Key questions — Were rapid growth (sales have nearly doubled recently) and “lean” cost-cutting recognized and rewarded so heavily that no one was willing to put the brakes on growth in order to focus on safety? Were the rewards for demonstrating error-free results so high that obvious errors were swept under the table?”
“Training — The purpose of training is to make sure that employees have the right skills and capabilities to identify and handle all situations they may encounter. Toyota is famous for its four-step cycle — plan/do/check/act — but clearly the training among managers now needs to focus more on the last two. Key question — If Toyota’s training was more effective, would the managers involved have been more successful in convincing executives to act on the negative information received?”
“Hiring — The purpose of great hiring is to bring on board top-performing individuals with the high level of skills and capabilities that are required to handle the most complex problems. Poorly designed recruiting and assessment elements can result in the hiring of individuals who sweep problems under the rug and who are not willing to stand up to management. Key questions — Did Toyota have a poorly designed hiring process that allowed it to hire individuals who were not experienced in the required constructive confrontation technique? Were their hires poor learners that did not change as a result of company training?”
“The performance management process — The purpose of a performance management process is to periodically monitor or appraise performance, in order to identify problem behaviors before they get out of hand. Key questions — Was the performance appraisal and performance monitoring process so poorly designed that they did not identify and report groupthink type errors? Did Toyota’s famous high level of trust of its employees go too far without reasonable metrics, checks, and balances? Did HR develop sophisticated metrics that produced alerts to warn senior managers before minor problems got out of control?”
“The corporate culture — The role of a corporate culture is to informally drive employee behaviors so that it closely adheres to the company’s core values. Key questions — Did HR’s failure to measure or monitor the corporate culture contribute to its misalignment? Was the corporate culture (the Toyota Way) so biased toward positive information that employees learned not to make waves, in spite of their professional responsibility to be heard on safety issues?”
“Leadership development and succession — The purpose of leadership development and succession planning processes are to ensure that a sufficient number of leaders with the right skills and decision-making ability are placed into key leadership positions. Key question — Was the leadership process at Toyota so outdated that it produced the wrong kind of leaders with outdated competencies, who could not successfully operate in the rapidly changing automotive industry?”
“Retention — The purpose of a retention program is to identify and keep top performers and individuals with mission-critical skills. Key question — Did the retention program ignore people that brought up problems and as a result, did these whistleblowers often leave out of frustration?”
“Risk assessment — Most HR departments don’t even have a risk assessment team whose purpose is to both identify and calculate risks caused by weak employee processes. Clearly HR should have worked with corporate risk management at Toyota in order to ensure that employees were capable of calculating the long-term actual costs of ignoring product failure information. Key question — Should HR work with risk-assessment experts and build the capability of identifying and quantifying the revenue impacts of major HR errors, including a high hiring failure rate, a high turnover rate among top performers, and the cost of keeping a bad manager or employee?”

“Final Thoughts”

“Toyota’s problems are not the result of a single individual making an isolated mistake, but rather due to a companywide series of mistakes that are all related to each other. So many corporate functions were involved, including customer service, government relations, vendor management and PR, that one cannot help but attribute the crash of Toyota to systemic management failure.

The key lesson that others should learn from Toyota’s mistakes is that HR needs to periodically test or audit each of the processes that could allow this type of billion-dollar error to occur.”

To view the complete article, or to post comments directly to John Sullivan:

http://www.ere.net/2010/02/15/a-think-piece-how-hr-caused-toyota-to-crash/#more-11718

Posted in Leadership | 1 Comment »

Tom’s Take: Best Places for Business Meetings

Monday, February 8th, 2010

Robert Half Management Resources recently ran on survey on “the best places to hold a business meeting” outside the company’s four walls.

Following are the results and few ideas on how hotels can drive revenues.

The recent survey by Robert Half Management Resources.

When asked, “Other than in the office, what was the location of your most successful business meeting ever?,” here’s what 1,400 finance execs replied:

restaurant (36%)
trade show or conference (25%)
sporting event (4%)
golf course (3%)
in a car (1%)
on a trip/plane (1%)
nowhere else (24%), and
other/don’t know/refused (4%).

To increase your revenues:

-Call local businesses and offer your restaurant for business meetings between meal periods. Let them know that 1400 financial executives surveyed indicated this is the number one source of business meetings outside of their own offices. If they need larger area, sell them meeting space. Long term benefit: Local businesses will become aware of services you offer and will tell vendors that visit them. As employees of these companies become aware of your hotel they can refer visiting friends or social business to you. Collect business cards to establish communication paths.

-Trade show or conference. When there is trade show for any industry in your town or city, do you attend? This is one of the best opportunities to discover all the vendors that come to your town/city. You have a captive audience. Ask them where they are staying. If not at your hotel, exchange business cards so you can cultivate them.

-Sporting Event. Check with local golf courses, country clubs, and casinos to see when they have events/tournaments scheduled. Visit them to collect business cards from people that can use your hotel and facilities the next time. A half day at these functions can generate 50 or more leads for future business. Tournaments attract vendors, spectators and participants. All can be your customers.

We all talk about people who “think outside the box.” Any of your employees who are doing the above are demonstrating these abilities. Take care of these employees. Need more employees like this? That requires you to think “outside the box.” We can help. There are inexpensive ways to recruit, call Securemploy at 800-935-5280. We’ll be glad to share what we hear from successful companies.

Posted in Finance, Industry News, Leadership, Sales & Marketing, Tom's Take | No Comments »

One-Question Interview to Measure Motivation

Saturday, February 6th, 2010

Feb 5th, Lou Adler had an article titled, Using the One-question Interview to Measure Motivation on ere.net. His knowledge of recruiting is exceptional.

I’ve always been interested in identifying how to write better recruiting advertising based on the criteria necessary to succeed in the job. (We try to avoid using the word “ads.” Using “advertising” instead of ads reminds us we are writing advertising copy. Advertising copy is designed to attract attention. Each of us who write employment advertising are trying to attract candidates in the Top 40%.)

Key points Lou Adler made:

Over time, the best predictors of on-the-job success have included:

-Technical competency
-Motivation to do the work
-Team skills
-Job-related problem-solving, and
-Trend of past performance over time.

After evaluating 1000 placements, “ it was evident that motivation or drive to do the work was the most important predictor of success.” Daniel Pink’s current hot-seller Drive reconfirms this and provides much of the science behind it.

“While a minimum threshold of technical competency and team skills were necessary, without personal motivation to deliver timely and consistent results, the person would never be a top performer.”

“Personal motivation was not universally transferrable across all jobs. Motivation depended on

the manager,
the type of work involved,
the resources available,
the degree of independence,
the compensation,
the growth opportunity, and
the company culture

“This is why I’ve (Lou Adler) always had a problem with traditional behavioral interviewing. While behavioral interviewing helps prevent emotional decisions due to its structural nature, it doesn’t pinpoint whether the candidate would be a top, average, or below-average performer since it doesn’t directly address these critical fit issues.”

How does the above impact how employment ads are written?

Good employment ads reduce the time recruiters spend.

Effective recruiting ads identify:

-Critical performance objectives. (That’s totally different than a position description.)
-The style of the management team the successful candidate will be working with. (Is it tough, no-nonsense , highly motivational, or somewhere in between? Describe it specifically. Don’t have enough information? Go back to the team to find out.
-The company environment. One of the Securemploy mottos: “There is a ‘right’ candidate for every employer. But not every candidate is ‘right’ for every employer.”

Then ask the candidate to include:
-Their management style when applying. (Cover letter is perfect for this. How they respond tells a lot about the candidates written communication skills.)

The above information in your employment advertising will help candidates identify whether they are qualified or not.

Now you are ready to use the One-question Interview. Base it on the critical performance objectives in your employment advertisement.

Ask the candidate to describe an accomplishment comparable to each of the required performance objectives. Their answers will lead to follow-up questions.

Candidate answers will identify whether they are highly motivated to succeed or not. Answers will also identify if they are motivated by the immediate job or the company. There are wonderful candidates who just want to be the best they can be. Some are very willing to stay in one a job for extended periods of time. Many people equate ‘motivation’ to upward mobility. That’s not necessarily true.

To read Lou Adler’s complete article: http://www.ere.net/2010/02/05/using-the-one-question-interview-to-measure-motivation/#more-11553

Willing to share? What have been your most successful interviewing techniques?

Posted in Leadership, Recruiting & Training | 1 Comment »

Tom’s Take: Hiring the Top 40%

Thursday, February 4th, 2010

Employers are telling us they will need ‘better’ employees in 2010.

Their definition of better? Employees who are:

Highly motivated,
Already cross-trained, or demonstrate the ability to be cross-trained
Have accomplishments they can quantify
Team players
In all probability, currently employed.

The above definition applies to 40% of employees at most. The rest may be good employees, but don’t have the same degree of promotability.

2010 employers all need to do more with fewer or the same number of employees. That means that all employers will be chasing the same 40% of the work-force.

How to Attract Candidates in the Top 40%.

Offer highly competitive compensation packages and don’t be afraid to quote real salaries. Especially when advertising sales positions.
Tell them about your standards of performance for their position.
Describe your management team and how they work together.
Indicate how they can make a positive impact on your company.
Tell them about people who have been promoted.

To hire candidates rated among the Top 40% you need to give people a reason to apply for your jobs. These candidates are currently working. They are willing to listen to new career opportunities. When you first reach out to them they are not highly motivated to change jobs. Your employment advertising needs to be create a reason for them to start thinking about changing jobs now.

Willing to share? What recruiting techniques are working best for you?

Posted in Leadership, Operations, Recruiting & Training, Sales & Marketing, Tom's Take | No Comments »

Tom’s Take: Profiting from Multi-Family Ind. Problems

Wednesday, February 3rd, 2010

There is a lot of doom and gloom talk in the media, and in our industry on what lies ahead for 2010. I try to follow it all. WHY? To identify where the hidden opportunities are.

None of us can afford to waste time waiting for the government to bail us out. It’s never happened yet. The business world is always responsible for our own “bail outs.

I just read an article on the bleak outlook for multi-family sector of our industry. Their problems open opportunities for Extended Stay hotels in our industry to take some of the multi-family business. Is it great business? Maybe, maybe not. But it can provide a base of business. It can also be an option for some older hotels that are struggling and can’t afford a renovation.

Luxury Extended Stay Opportunity: Many major corporations maintain corporate apartments their employees use when coming to corporate or regional offices. High-end extended stay properties can compete very effectively for this business. Whether it’s business related travel, or temporary housing for relocating employees.

Mid-market Extended Stay Opportunity: Seek out mid-market companies. Ask if they have corporate apartments for transferring or traveling employees. Perhaps you can provide the services less expensively. Mid-market full service hotels can also provide a service to these companies by offering use of F&B outlets. Include the price of 1-3 meals a day into the price of the suite. This can benefit your F&B facilities as well as benefit the customer, especially those with children.

Basic Extended Stay Opportunity: There can be opportunities to make multi-month rentals/leases to people displaced from their apartments. You can determine the types of long-term rental customers that best meet the needs of your property. Long-term rentals to guests with pets might be excellent market for ground level units that have patios/exterior entrances. Or for rentals to guests with special needs.

Resort Opportunity: Resorts close to headquarters for companies may be able to pick up relocation stays. Many companies would rather put their employees up at nice resort than some apartment/hotel in town. Should resort be lucky enough to attract several stays from a corporation at once, offer to provide basic transportation back and forth.

Opportunity for Hotels in need of restoration or who are being pressured by franchisors or financial institutions: Evaluate your physical plant to identify opportunities to convert rooms to studio or one bedroom apartments. Then identify if the revenues you can generate can provide a better ROI than the current use. At very least it might provide a base of business to cover the basics.

There are always opportunities. Watch and listen for them. Then encourage your employees to contribute their ideas.

Have a profitable week.

Posted in Leadership, Operations, Sales & Marketing, Tom's Take | No Comments »

Tom’s Take: 2010 Opportunities for Management Companies

Tuesday, February 2nd, 2010

Opportunities for management companies to add properties to their portfolios are excellent for 2010. But not in traditional ways.

There have been many investment conferences and roundtables.

Several things are clear:

There are trillions of dollars in commercial real estate that is not covering debt service.
The government is not going to let the financial institutions carry these assets at a loss for long.
Financial institutions will be forced to take many of these assets back. At that time they have the choice of writing them down, or finding management companies to operate them until the real estate markets stabilize and the assets can be sold at a profit. According to the experts that’s several years down the road. The experts also agree financial institutions can’t write these assets down enough to unload them without getting into financial difficulties.

This spells opportunities for solid operators to pick up management contracts that will likely be multi-year contracts. This is different than previous recessions. In prior recessions financial institutions have taken back properties and sold them quickly. Management companies would get fees for only a few months. Many times the management contracts on these distressed assets didn’t provide a ROI for management companies.

This time around, with shrewd negotiating, management companies will be able to make money on the management contracts; get first right of refusal on acquiring the hotels, and; in some instances can probably just take over debt service on the hotels, assuming the management companies can identify ways to increase business to at least cover expenses. Operators who have ability to build asset values over a few years will assume much stronger leadership positions in our industry.

Management companies can also start to act as Asset Managers on select hospitality assets. The best opportunities will be on assets held by small financial institutions who don’t have the Asset Management depth to properly evaluate hospitality assets.

Financial institutions will need consulting expertise in marketing and operations. Many assets taken back may best be operated by splitting out the F&B from the rooms. Or totally repositioning the asset.

One of our clients recently took over the F&B operations at a nice hotel close to their corporate offices and reasonably close to another hotel they operate. An ideal contract? On the surface no, in actuality yes. This deal makes sense given the location in relation to other operations the company is already managing.

2010 will be year of excellent opportunities for companies to expand their portfolios…if they concentrate on assets close to home. This is wonderful market to build new relationships. A few management companies are already taking advantage of these opportunities. It will be interesting to see how many companies use 2010 to expand their portfolio from 20-100%.

Posted in Finance, Leadership, Tom's Take | No Comments »

“Less Worse”-Most People’s View of 2010

Monday, February 1st, 2010

Thanks to Jim Higley and HotelNewsNow.com for the excellent summary on where people think our industry is heading in 2010.

Blog: These conferences reveal some interesting trends
Posted by Jeff Higley at 12:00 AM

The best part of back-to-back conferences at the beginning of the year is they provide a gauge of what’s in store for the months ahead. It was no different last week as the Americas Lodging Investment Summit in San Diego and the Hotel Brokers International annual meeting in Las Vegas provided more than just a glimpse of what’s going on in the hotel industry:

“Less worse” is how most people are looking at 2010. It’s not going to be great, but it will be less worse than 2009.
Insurance companies such as Pacific Life are beginning to dip their toes into the hotel-lending space, and that’s a good sign there’s at least something positive starting to happen. Of course, these loans will mostly be for big-box hotels that at one time had a value of more than US$100 million. Therefore, we’re still waiting to hear of a mass of lenders interested in jumping in for properties previously valued at US$20 million to US$80 million.
Regional banks will start foreclosing on hotels this year as they will get pressure from FDIC regulators to shore up their books.
A number of companies, including HEI Hotels & Resorts and Richfield Hospitality, have money to lend to hotel owners who have troubled assets. The companies want to lend what essentially is mezzanine financing, but instead of having the money paid back, the companies want an ownership stake in the troubled asset.
In general, as long as hotel owners are meeting their operating expenses and can meet debt interest obligations and have a penny to pay the bank, they won’t receive too much chin music from the bank.
Any banks lending money are requiring 50 percent equity for the discussion to even get started.
There’s belief that the long-awaited increase of the Small Business Administration loan limit to US$5 million is around the corner. The increase has been talked about for more than a year. The limit currently is US$2 million. When it is increased, lenders such as PMC Commercial Trust (which hasn’t stopped giving SBA loans during the downturn) will find plenty of borrowers in line.
Regardless of the reason for gathering—a general session, a panel discussion, networking events or late-night rendezvous at the lobby bar—there is a firm belief that the industry has hit bottom. No one is sure if there’s going to be a W recovery—which will mean an increase then a decrease—but there’s a strong belief that the bottom has been reached in operating performance and transaction activity.
Most executives I talked with are budgeting for RevPAR to be between -6 percent and +3 percent. The more optimistic groups are convinced there will be a huge uptick in the industry following a tough first quarter. Those with a more pessimistic view think the comeback won’t start until late in the year.
One of the more interesting approaches to what the recovery might look like was presented by a couple of attendees who said they expect it to look like a square-root sign. That’s some ups and downs and then a long flat recovery. I tend to think it will have the look of a Nike swoosh—a steady gain in momentum beginning late in the third quarter of this year.
Hotels took a beating during request-for-proposals season as clients were looking to save money any way they could. A number of people told me they took the approach of, “Hey, we can make this cut now, but if we do this for clients, we won’t be here next year. So, for long-term considerations, don’t try to squeeze every cent out me for rates.” Most of the people said the clients were understanding. My question: When good times return, will we remember those clients when we’re raising rates?
In pre-ALIS polling, 38 percent of attendees said a turnaround will occur in the third quarter of this year, Jim Burba told attendees. Seventy-five percent said it will come sometime this year. What’s more encouraging is that 60 percent said their companies will grow this year.
The biggest worry for conference attendees clearly were the lack of debt and the lack of group business.
A stark statistic from Mark Lomanno’s Smith Travel Research presentation: On an average day, the hotel industry sells 215,000 fewer rooms (US$42 million in revenue) than it did 18 months ago.
Also from Lomanno: High-end hotels were affected by rate more than demand, and low-end hotels were affected more by demand than rate.
The quote that best sums up the transaction environment comes from Arthur De Haast of Jones Lang LaSalle Hotels: “There’s a lot of stress on the system, but not as much distress, and that’s what the buyer is looking for.”
It was no surprise when the 1,001-room Hilton Orland-Bonnet Creek and the 498-room Waldorf-Astoria Orlando took home the Development of the Year honors at ALIS. The US$550-million project developed by KUD International LLC and Brooksville Development Corporation was among the most impressive hotel projects that opened last year. … Other ALIS award winners included the US$44.24-million purchase of the iconic 322-room Windsor Court Hotel in New Orleans, Louisiana, as the winner of the Single Asset Transaction of the Year Award. The Berger Company and Crow Holdings paid about US$137,422 per room to Orient Express Hotels for the property. … Ron Danko, executive vice president of CBRE Hotels, won the Jack A. Shaffer Financial Advisor of the Year Award. … And Randy Smith, founder and CEO of STR, was awarded the Lifetime Achievement Award from the International Society of Hospitality Consultants at ALIS.
There is some sentiment that top assets in certain markets are ready to start pushing rate.
There is more demand than ever for a broker’s opinion of value—especially as more banks take back hotels. They’re looking for some consistent valuation, and it appears brokers can provide that stability for lenders looking to unload assets from their balance sheets.

Posted in Finance, Industry News, Leadership, Operations | No Comments »

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