Mr. Escoffier

Executive Leadership

Succession Policy in the Executive Suite and Why You Should Have One

By Marcel Escoffier, Associate Professor, FIU School of Hospitality Management

"May you live in interesting times," is supposed to be an ancient Chinese curse. Well, in my 40 plus years in business, I do not recall any time that was not interesting. Business is always changing, perhaps more rapidly now than at other times.

If change is the nature of business, than why fight the inevitable? Your company and your career demand that you plan for change. Actually, success in your career probably demands that you plan for change.

Hotels are big businesses; the new governmental definition of a small business is one employing fewer than 500 employees. By extension, that means that a great many hotels are big businesses. Certainly, one would be hard pressed to find a hotel chain that would qualify as a small business under this definition. So, like any big business, we need to plan for the inevitable, the turnover of key employees.

In our personal careers, we should be planning either lateral moves; like going from F+B Director at a four star hotel to a five star one. Many of us plan to move up, into the hotel general manager's position of even higher. Either career move requires both professionally and strategically that you leave your current position in capable hands. As the bible says, "Do unto others as you would have others do onto you." Or, in street lingo, "What goes around comes around." If you leave your current position in turmoil, chances are this will not be good for your future career in the industry.

Obviously, then, you want thing to run smoothly. The same is true with the people who report to you. They, too, have career aspirations. They, too, want the hotel to run smoothly and efficiently while they move from position to position within the hierarchy. The answer to all these issues is the implementation of a good succession plan. Let's see how it is done.

Who succeeds whom?

Do you know where you are going? I am often amazed that bright, career-oriented hotel managers often are the ones who are most surprised when a bright, career-oriented subordinate leaves the organization. Let's be clear, there are two fundamental career paths in any business; you can work your way up through the organization to reach the top, or you can seize career opportunities when they come up and move to another hotel property.

A second truism in business is that hotels, like all of the hospitality businesses, have a high turnover. While turnover is lower in the management suite, it is just as much a fact of life as it is among the hourly employees. Even the erliest significant "names" in our hotel business changed jobs. Ritz and Escoffier held numerous positions in a great many hotels over their careers.

We have come a long way since Ritz and Escoffier were opening the first modern hotels a bit more than 100 years ago. One thing, though, hasn't changed all that much, how the hotel is organized. There is a near universal organizational chart for our business, so management turnover should not be a case of replacing Jack or Joan, but of filling the position of Front Desk Manager or Bar Manager.

Given these two truisms; that good managers try to implement a career strategy that is upward looking, and that there is high turnover within a set organizational structure, the proactive manager is the one who constructs a good succession policy. Let's look at how this can be done in the F+B Department.

The basic management skill set

Way back in the 1950's two gigantic management studies conducted by researchers at Ohio and Michigan looked at answering the question: What do managers do? They found that all of the hundreds of things managers do every day can be broken down into three major categories: task oriented activities, people oriented activities and cognitive (or problem solving) activities. Further research found that managers tend to do more of one category's activities than the other two at various stages in their careers.

Based on these findings, and on an important analysis on leadership traits conducted in the early 1960's, we know a couple of truths concerning the art and science of management:

Management Qualities

• Management is a learned activity, not the result of specific genetic or family traits.

• Lower-level managers need to be good at task skills specific to the department in which they are located.

• As a manager progresses up the organizational chart, task skills become less important and people skills gain in importance.

• No matter at what level, the successful manager needs to be able to think clearly, rationally, and solve problems effectively.

• There are a limited number of effective management styles and good managers know what style is appropriate for which situation.

So, it is fairly self-evident the direction that management development (another term for training or education) must take during a manager's career advancement. I will leave the specifics of what training programs work for those in the management suite for another column, but let's just agree that those things managers need to be proficient at are known and are able to be taught.

How to keep track of development needs

So that brings us to "The System." Its not too complicated, really. What your department needs is an organizational chart / management resources system that tracks who is in what position within the organization, and determines who are likely successors for that position. A screen from such as system often looks something like this:

Position: Assistant Food & Beverage Director
Current manager: John Mayher
Potential Succession: James Burke: Director of Banquet Operations
Needs: Writing workshop, Assertiveness training
Fred Tomlinson: Beverage Manager
Needs: Speakers program, EAP training, Group dynamics training

It should be easy to see how this ties into your organizational chart, your management development (training) program, and your employee assessment program. The assessment program now becomes meaningful. Rather than simply do an annual review saying what a good job Mr. Burke (above) is doing as the Director of Banquet Operations, you would also be reporting how well he is progressing towards becoming ready to assume the position of Assistant F+B Director. His personnel file would include information relating to what development training he has received, and what development training he needs.

If you should bring in outside trainers, you also know, based on combining the information in all your manager's personnel files, who should be attending those specific development training sessions. Memories fade, so it is best not to provide training to someone until that person is ready to use the results of that training in his or her daily work activities. But, I have seen many companies waste money by hiring an outside consultant / trainer and not utilizing their sessions as fully as possible.

The system in operation

In day-to-day operation, the system becomes somewhat automated. Managers have a clear career path they can follow, including what they must do to ready themselves for the next career move. This gives your subordinates a way to decide whether to stay and move up or to seek a career move elsewhere. Knowing what they may need in terms of further development in order to take on the duties and responsibilities of a new position may make them think twice about jumping ship and seeking career opportunities elsewhere (a known career path is superior to an unknown one.)

Also, you have a way to compare who is currently in your department to others you may be interviewing for replacing an outgoing executive. Applicants who can demonstrate mastery of the skill sets required for the position may save you money in terms of training needs, but in reality, few new hires are without development needs of their own. Weighing the costs in terms of time and money needed to bring the new manager up to speed as opposed to finishing off the training of a manager currently in house can be the deciding factor in your decision to hire someone.

What this all means for the business of managing a hotel

Managers, as a group, display unusually high levels of what is called, "the need for achievement". They also tend to be very "goal oriented". In plain English, this means that good managers are motivated to work even harder if they see a clear, achievable goal; such as advancement to a higher level within the hotel organizational structure. With their eyes set on achieving this goal, the manager usually shows limited motivation to leave and go elsewhere.

You, on the other hand, have a fully constructed game plan that provides you with viable options should you need to replace a manager. Research is mixed, but my experience has been that promoting from within is less stressful and more certain of success than hiring someone from outside the organization. That being said, hotels often need an infusion of "new blood" from time to time.

This infusion of new blood, I believe, can be accomplished through the hiring of new, entry level managers. The practice of hiring only at the entry level ensures a continuity of mission that will foster long term relationships with customers. Hotels need to be true to their style (let's call it ambiance) while also keeping themselves up to date on the latest guest amenities.

Another benefit of preferentially hiring at the entry level is that the new ideas brought in by new managers can be implemented only after a convincing case can be made by that manager. This has several benefits; one would be to encourage new people to participate in the overall decision making discussion within the Food and Beverage Department. Secondly, the young entry-level manager needs to develop presentation and negotiation skills in order to be successful as they progress upward within the organization. Also, when the F+B Director encourages ideas to be discussed that come from junior managers, the F+B Director is demonstrating that the organization is open to new ideas regardless of their origin. "But we've always done it this way" is not an appropriate mindset for hotel managers to have in these times of economic uncertainty and change.

The bottom line; costs versus benefits

Setting up a succession policy within your hotel's human resources management system is not expensive nor time consuming. Yes, like most things in life, should you desire, you can spend a great deal of money on customized software and on consultants to set up the system. But why do so? The concept is straightforward, the paperwork is minimal. If your management development policies have been fully enacted by you and the HR department, there should be little else to do to get things up and rolling.

Of course, if you don't have a management development policy in place, you will need to implement one. The cost of not having such a policy is to continue to have a group of managers who are parking themselves at your hotel waiting for the next opportunity to advance their careers by moving elsewhere.

A commitment to developing better management skills among your subordinates has been demonstrated to be a very important method of motivating your management team both to improve the operation of the Food and Beverage Department and as a way to keep good managers from leaving in the hopes of career advancement elsewhere. Multi-star hotel properties usually have a remarkably stable management team in place. This stability most likely is one reason for the hotel's stellar reputation.

But even many more modest properties have excellent management teams. The question is whether you are willing to make the commitment to running an open, participatory management hierarchy. Heaven knows that the F+B Director today has more than enough things to worry about. But a relatively small amount of time spent up front can reap enormous savings of time and money down the road.

Marcel R. Escoffier was an Associate Professor at the School of Hospitality Management Florida International University. He had over thirty years experience in hotels and restaurants throughout the U.S. Unfortunately, Mr. Escoffier passed away in September, 2009. We at HotelExecutive.com would like to continue publishing Marcel's articles on our website as a tribute to this brilliant man. The one thing we loved most about him most was his sense of humor. He would always make light of any serious situation, and this was reflected often in the articles he wrote for the Hotel Business Review. Mr. Escoffier can be contacted at editor@hotelexecutive.com Extended Bio...

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