June 2013

The story of the hotel that turns away money (and why it matters)

Frustrated man in red shirt with green tieOn a recent business trip, I saw something which really opened my eyes, and I couldn’t wait to share it with you.

 

Imagine the scene:  It’s 8pm on a Sunday evening in the foyer of a central London hotel.  The hotel is part of a mid-size national chain, and they offer discounts for booking online.  It’s not a particularly grand hotel, but it’s functional, and it’s in a great location.   I’d checked in and I was wandering up to my room when something caught my attention.  I paused and looked back at reception, and in doing so, I overheard a rather intriguing dialogue.

 

It all started when an animated and happy couple of Australian tourists bounced up to reception:

 

“Hi, we’re visiting London for 2 nights whilst we travel around the UK. We’d like to stay here. Do you have any vacancies today?”

 

The receptionist replied with a short, sharp “Yes” – much to the delight of the visitors.

 

“OK, great.  We don’t have a reservation — so can we book a room please?”

 

The receptionist responded, without missing a beat.

 

“Well… yes.  But…. And I’m really, really sorry about this sir, you’ll have to call through to our centralised booking phone line.  Here’s the number.  You’re welcome to stay in the foyer while you do this.”

 

The (potential) customer paused and looked shocked. He replied “I only have my Australian mobile phone – with roaming charges it’ll cost me a fortune to call through to that number.  Can’t you do anything else to help?”

 

The deceptively difficult question: “What business are we in”

I recently came across an interesting post in a LinkedIN forum.  One of the forum members, Patrick McFadden, made a simple but extremely valuable observation:

 

 “Want to stump your employees? Ask a simple question: What business are we in.

 

Figure standing in the middle of four red crossing arrows, representing a number of directions that are availableThis is an extremely valid point.  Go into any large or mid-size organisation and ask a question like “What business are we in” or “What is this organisation for” and you’re likely to get a number of subtly different answers – or in some cases wildly different answers.

 

Let’s take the theoretical example of a motor (auto) insurance company.   On the face of it, we’d expect the answer to our question “what business are we in” to be simple – we’re in insurance, right?  That is certainly true, but often when delving deeper some intriguing differences start to emerge.  These differences can exist at all levels of the organisation.  We might get responses like:

 

  • Marketing Manager: “We’re in the business of selling peace of mind to our customers, through comprehensively designed insurance policies”
  • Underwriting Manager: “We’re in the business of selling optimally priced profitable insurance within our target market”
  • Actuary: “We’re in the business of spotting analytical trends that our competitors can’t so that we can offer great value insurance premiums whilst reducing our risk exposure”
  • Customer Services Manager: “We’re in the business of selling great value insurance whilst offering excellent service to our customers”
  • Claims Manager: “We’re in the business of delivering on our promises and helping our insurance customers in their time of need”
  • CEO: “We’re in the business of designing and developing market leading insurance solutions whilst delivering market-leading profit and ROI to our shareholders”
  • Shareholder: “You’re in the business of staying profitable and keeping dividends high!”

 

What these different perspectives show are a difference in each stakeholder’s worldview, and also the transformation that the organisation carries out – i.e. how it adds value to the customer.  (These are terms derived or drawn from Checkland’s soft systems methodology, and this article is also inspired by some of Checkland’s techniques).   This can cause particular challenges if there are differences at the top of the organisation that haven’t been discussed: Imagine working for a clothes retailer where one senior executive’s view was that the organisation existed to “Sell practical clothes at low cost” yet another senior executive’s view was that the organisation existed to “Further fashion and promote the works of local fashion designers”.   It’s likely the organisation would be in constant tension!

The Set Comes After the Script and the Solution Comes After the Business Need

I’m pleased to say that one of my recent blog articles has been published on “Bridging-the-gap.com”, where I have contributed as a guest author. I’d love to hear what you think, so please take a look and add a comment on the site.   Excerpt: A few weeks ago in Cannes, France, the annual “Cannes…