I just finished reading “Marriott’s New Host” in Forbes July 15, 2013 edition, by Halah Touryalai. Since its startup in 1927 as a root beer stand, the Marriott chain has been governed exclusively by the Marriott family. John Willard Marriott was the founding father, and now his 81 year old son, John Willard “Bill” Marriott, after 40 years of leadership, is passing the reins to an outsider, Arne Sorenson.
How does this relate to my business?
In itself, this is a very interesting story, yet you may not see the relevance it has to your business. To demonstrate how a hotel chain management can benefit your business, let’s go over some stats from the article.
- The Marriott holds title to only 10 properties, yet it controls 3800 properties
- The Marriott portfolio is valued at approximately $150 billion
- They almost tripled their profit from 2011 to 2012, netting $571 million on $11.8 billion of sales
- They basically have no products – just customer service
- Its fees are unusually high – 3% of sales and 25% of profit
- For six decades their stock has returned 15%+ annual returns to its stock holders
- Revenue generated per room (the most meaningful hotel metric) is one of the highest in the industry
- Sorenson is targeting the Generation X and Millennials
- The new hotels lobbies are gathering rooms that are modern, clean, offer free wi-fi, and have communal tables that lend towards interacting with others
- They are governed by procedures
- They empower their associates, who take care of customers, who keep returning
How does a hotel brand control over 3800 properties and command a huge royalty?
Because they are dedicated to creating, teaching, and following procedures. Processes are not a sideline for them. They could not run without them, and they couldn’t create profit if it weren’t for having great procedures.
How detailed are the Marriott’s processes?
In a word, very. Ms. Touryalai describes some of the 66 steps to clean a guest room – in under 30 minutes:
- Always knock three times before entering a room.
- Place clean fitted sheets on the nightstand.
- Strip the bed, and use dirty fitted sheet as a package for the rest.
- Inspect bed for stains.
- Smooth out mattress pad.
- Place clean fitted sheet on right side of bed, and start with top corner, move to bottom right corner and cover in a clockwise progression.
- Do not “billow” sheets in order to prevent tired arms.
- When cleaning a nightstand, first wipe lamp base and shade and then the stand’s surfaces and drawers, including inside.
- Use the yellow rag with all-purpose spray in the yellow bottle.
- Wipe the nightstand’s glass top with a blue rag, using the blue bottle.
- Wipe the phone and clock. The telephone’s handset and faceplate should be wiped clean and free of marks. The cord must be bound neatly.
- Check that the alarm clock works and that it is set to the correct time. Make sure the alarm is off…
This may seem excessive, but once in place, everyone knows exactly what to do to get the required results.
How detailed are your procedures?
Have you written them down? Are they just in your head? Does everyone in your company know about them? And lastly, and possibly most important, are you improving them?
I’ve seen many companies who continue to listen to their clients and improve their procedures. Those companies invariably are on the cutting edge and way out in front of the competition. They can command higher prices because they have a higher perceived value. They become the remodeling company that everyone wants to hire. Their clients love to boast that they can afford the best.
How could detailed instructions for your staff and crews help make you the contractor of choice?
How could it reduce customer complaints?
How could it lower your ever-increasing liability as you grow?
A few final thoughts
As we look over the bulleted points above, how are you changing the way you sell? Are you selling to the right market? Should you look at other markets? Are you selling the right product for your targeted audience?
Don’t be afraid to study and copy your competition. Just make sure you improve on what they do.
Creating procedures is like making an investment in your company. Every process you put in place makes your business more valuable. And with a system in place, you will be able to pass your business on to your family or sell it.
Everything is changing at a rapid pace. The recession, although mostly over, left us with an even more altered business environment than usual. It was like a hurricane that stirs up the ocean floor and changes everything – habitats, landscapes, and food sources. Now that you’ve experienced how your business landscape has been modified, how will you change to accommodate it? Resolve to be obsessed with processes and take note of how your staff, clients, and bottom line react.
This article was written by Randall S. Soules, writer, remodeling coach, advisor, educator, and creator of the Scientific Remodeling System. The Scientific Remodeling System will show you easier ways to advance your business, raise your profits, and improve your life, through the use of superior remodeling processes. If you would like to learn more about this eCourse and all of the forms and contracts available to Premium Members, click here. You are free to reprint or copy this article to your blog, newsletter, staff, etc. as long as the article is shown in its entirety and has a live link to RemodelerBiz.ScientificRemodelingSystem.com.
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