Control without compromise
‘Control without compromise’ is our collective response to the current financial crisis and the rapid deteriorating economic condition. It is a right, timely and necessary response to meet the challenges ahead of us.
The top line revenue in every business is declining rapidly and is multiple in magnitudes to the same adjustment one can make on the cost and expense.
Cost reduction strategy
Cost reduction is an end and not a mean for us to be effective to achieve the objective of outlasting the crisis. It is the thinking at the existing structure with the attempt to cut, reduce, defer, omit or negotiate at the current cost.
If you begin with reduction in mind, the common defects associated with it are
- The acceptance that the current structure is the best, which often may not be the case and miss the opportunity to take advantage of the downturn where ample time is available to explore the alternative;
- Applying the wrong strategy and worked on area beyond your area of influence;
- It does not provide value for money assessment;
- Quality of service and staff morale may be threatened;
- Inefficient allocation of resources where the higher cost item that form your main value driver to your customer may be cut and other idle resources continue to exist
Redesign cost structure
This is a sustainable alternative that can withstand the test of time.
Conceptually it contrasts with cost reduction as follow
$ Reduction $
$ Structure Structure $
In a cost reduction, it is the amount you need to reduce that leads you to implement the various measures to achieve it, and often it does not modify your existing cost structure.
In a redesign, it compels you to examine the existing structure, to explore the advantage associated with the redesign, and modify with the outcome of a leaner structure. It is the outcome of the structure that determines your cost.
Instead of beginning with a cost reduction strategy; begins with a lean cost structure strategy. Such an approach will provide you with the benefits of
- reexamine the existing needs and cost structure associated with it
- focus on strategy that can contribute to sustainable development
- enhance service quality
- deliver value for money and the outcome you wish to accomplish
- align resources allocation with strategy
Innovative redesign
As you redesign the cost structure, you will find that in every innovation, it will involves 4 phases of development
Visioning - What is your most desirable outcome
Exploring - What are the various components you need to explore
Experimenting - How can you mix, combine or alter the existing offering with a better outcome
Modifying - How you can consistently deliver the better solution under a modified offering
For example in the case of a Smart phone innovation, the 4 phases of development involved
Visioning - The most innovative mobile business phone
Exploring - To talk is the current use of the existing phone and the most crucial value driver
Experimenting - How can the talk combine with image and internet access to improve the communication? Will a camera work with a phone? Will a mini PC work with a phone?
Modifying - A new modified product emerged from a normal phone to a sophisticated smart phone
Another innovation you may notice is the TV mobile on a bus.
In short, I called this ‘VEEM’ innovation framework
Business Centre
I initiated using Business Centre as a development for the team to work in applying VEEM innovation framework with the objective of modifying its cost structure and consequently lead to a leaner cost as an outcome.
Append was the experience we gathered at this development
Visioning
The thinking involved at visioning were
• It should excite guests and staff.
How a new structure can provide 24 hours service, meet on demand request and support shorter working hours in shift?
• What guests want
Is 24 hours service consistent with the others services available in the hotel meeting the demand of the guest?
• World class
Is 24 hours business centre a world class offering and provide us with a competitive advantage?
• Quality process
Does this lead to quality improvement?
• Strategic positioning
How can this strengthen the strategic positioning of Regent as a business hotel
• Ideal for future
Is this foreseeable by everyone as an ideal future?
Exploring
The groundwork gathered at the fact finding included
• It should wow guests and staff
What are the various steps need to be in place to support a 24 hours business centre?
Can the guest keycard use to provide free access to the business centre in the same manner we promote 24 hours pool and gym?
How can our staff benefit with the multi skill training through the shift rotation and planned coverage after the manned hours at business centre?
• It could break rules
How safe is it to break away from the current operating hours?
• Start afresh
To reexamine the needs and understand the contacts with the guests, to start afresh with a new offering of a 24 hours business centre
• Invent new rule
What are the new rules we need to invent under the new offering? How can security be involved to ensure the safety and security of the guests?
• New assumptions formed after exploration
As we explored each of the service aspects, new assumptions were formed as an agreement with Regent Club, Front Office and Business Centre to move this one step further.
Experimenting
The various combination of ideas were mixed to test the acceptance level of the new scheme
• It should amuse guests and staff
Is the self serve free access business centre a better guest experience?
What were the feedbacks?
How the staff affected by the new operating shift?
• Find the right mix of ideas while testing guests
Can an alarm be fitted at the free access hour for the safety and security of the guest?
How is the security patrolling hours affected by this change?
• Best synergy
Is Regent Club stepping in as relief shift the best synergy for operational efficiency?
• New solution
How do we communicate this new solution to staffs, guests, contractors and all concerned parties?
Modifying
After experimenting with success, build in the ‘fail safe’ system and widely communicate to the whole team. The modified service needs to be able to implement as a best practice consistently
• It should satisfy guests and staff
The differentiation in service should be an edge where you can win and create a competitive advantage
• The process should add value and modify with better services to customers
Applying the same thinking of a 24 hours service in a hotel, the 24 hours business centre in the modified offering must deliver a better service to the guests
• Extend offering
Free internet access is value add in the extended offering we offer during the self service hours in the modification.
• Improve process
The safety and security process concerning business centre is improved as a consequence of 24 hours business centre.
• Core competency
The core competency of business centre operation is extended to other staffs in supporting the modification.
Adapt and adopt
Conceptually it may appear to be a progressive framework where you move from visioning, exploring, experimenting to modifying. In practice, you must always have all four in mind in the implementation.
In the implementation, you need both facilitative and directive leadership to make it works. You can facilitate an initiative from the team, keep the goal in mind and it can accelerate as they take full ownership over it. At times, you may encounter conflict among team members in their deliberation; you need to make a stand to direct in the best interests and take the best available options to push forward the initiative.
In the process of adapting and adopting new practices, a few important points to note
Communicate – You need to communicate upward to seek buy in, lateral to win support from your team members to support and downward to get the employee to agree on the plan.
Commitment – Communicate with no specific measurable goal is like working with a moving target or no target. You need to set goal that aligns to your vision and seek commitment with measurable goals from every team members. You cannot manage what you cannot measure!
Relationship – While you can be perfectly rationale in your approach to meet the plan. Emotional intelligence is required for you to maintain the relationship so that your team is with you throughout the entire process. Creating a small taskforce, celebrate success along the way, arrange brain storming session are some of the approaches you can use to cement the relationship.
Get it right, get me right and Wow me if you can
Get it right – It is crucial to begin with the guest experience in mind in any strategic change to the service. By understanding the need of today business traveler demand of a 24 hours accessibility to a business centre, a redesign present an excellent opportunity to get it right for the guest.
Get me right – To achieve cost saving through first get it right is consequential to our objective to outlast the current crisis; and it also provides an opportunity to sustain any such initiative into a longer term, modified and expanded the offering in the services needed previously but not available.
Wow me if you can – With the right mindset, everything is achievable if you take your leadership and full ownership to deliver the Wow.
Transactional change Vs transformation
It is clear from this re- design; you can learn that transformation in the service process contributed to a leaner cost structure, without compromising guest experience.
On the contrary, the guest experience is enhanced with 24 hours business centre accessibility that previously not available.
It is through transformation that can lead to sustainable cost structure, and consequently a leaner cost outcome. It is definitely not one begin with the set transactional cost outcome to determine the service process, which potentially can lead to compromise in guest and employee experiences.
A transactional annual cost saving of over $20k is the outcome of this transformation under a ‘control without compromise’ experience.
