Mike Hohnen

Coaching for personal growth, change and development

Trends

Flash sales – good or bad idea?

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Together with spa/beauty, travel /travel tourism and restaurants are the top 3 categories both in the number of deals and amount of revenue generated by flash sales.

Discounting is clearly increasingly popular. Customers love it and more and more companies are piling in to catch a bit of the action. Nonetheless Groupon and LivingSocial are still by far the 2 largest players.

But is it good business in the hospitality sector?

I think that question is the most frequently debated subject amongst industry players wherever they gather at the moment.

On the surface there are 2 fronts.

Those that are doing it and therefore have all sorts of sophisticated arguments why they consider it good business. On the other side those that are not doing it because they consider it the worst form of business ever.

What until now has been really hard to evaluate is who is right and who is wrong.

But now the Centre for Hospitality Research at Cornell University has just released a study that tries to answer exactly that question and a few more – this most useful report can be downloaded here

Key findings are:

Generally participating hotels surveyed report moderate success.

The deals do bring in new business. But as to producing repeat business this is too much less extent the case than what hoteliers hope for when arguing for using these promotions.

“One factor often cited to justify offering a flash sale pro- motion, repeat business, did not seem to operate for these respondents.”

Hoteliers who are happiest with the outcome of their deals are also the ones who have managed the total cost of the deal most assertively.

Overall the conclusion seems to be that flash deals can work for you if you are very astute in negotiating the deal with the coupon provider and you find a way to either upsell to these customers when they are there or have a surefire way to convert them into repeat customers.

This is very neatly illustrated by the authors like this

“Evaluating your property on these two dimensions allows you to better frame the value proposition offered by flash deals. If you don’t expect to be able to convert customers from flash sales deals into returning guests, you must carefully manage the margins of any deal you develop and creatively identify opportunities for cross-selling and up-selling once guests are on property. When you expect high conversions from flash sales customers to returning guests, you could justify the deal as a marketing expense. You should carefully avoid structuring any flash sales that will land you in the lower left quadrant.”

Emerging Marketing Channels in Hospitality:
A Global Study of Internet-Enabled Flash Sales and Private Sales
by Gabriele Piccoli and Chekitan S. Dev – you will find it here

Question:
What are your experiences with Flash sales – are they working/not working for you?

Perfection or Differentiation?

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These two graphs may look quite harmless, but actually together they illustrate a dilemma that faces many hospitality and service companies today.

Diminishing returns


The blue curve illustrates the phenomenon know as diminishing returns. Well known in the sports world but also observed in the business world. In short it is the experience you have when you start out on something and relatively quickly get a sense of progress – but once you have dealt with the ‘low hanging fruit’ it gets harder and harder and you need to put in more and more effort but at the same time you are getting less and less in return.
Shaving 1/10 of a second off the world record takes a lot of work

In a big picture perspective my experience is that the service industries in general went through significant innovation and improvements up through the 90‘s but that in the 00’s we have by and large, mainly seen incremental improvements. Slightly better versions of already well known ideas. In a sense several service sectors are finding them selves in a ‘cul-de-sac’ conceptually.

Speed of Change


Opposite this, is the red curve. A model that especially Ray Kurzweil has used to draw our attention to the fact that change is not linear, slow and orderly. But change is occurring around us at an exponential speed. And if you listen to the futurists we ain’t seen noting yet. We are just at the being of this curve, on our way into the steep climb. (If you are not sure that the speed of change is exponential, try and locate a mobile phone that is 5 years old and compare it to the one you have now)

You can see a great clip with Kurzweil explaining all this here

You may even feel that you are not experiencing big changes in your own company just now – but that you are doing things in more or less the same way that you have done for a while – well then there is all the more cause for alarm because you can be sure that your clients are experiencing exponential changes in their lives – and you will not be part of their stakeholder map very soon if you do not realize that.

If you feel that things are under control – you are probably not going fast enough”
Mario Andretti (World champion racing driver)

Where is your focus?


When we look at these two graphs together – it suddenly becomes very clear that the way forward is not to put a huge effort into becoming perfect. I.e working very hard on what we already do in order to get just a little bitt better. Firstly the effort invested will probably not produce more than the famous incremental improvements, but the real danger is that after all that effort we risk getting really good at something that is no longer needed!

So ask your self: What is your focus: Perfection or Differentiation?

This post was very much inspired by this post by Seth Godin

The future of leadership in a web 3.0 world

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There seems to be and emerging realization that the same way that social media have changed the way we think and do communication, advertising and PR, Social Media will inevitably also change the way we lead and the way we think about what leadership is.

We will see a new leadership role that will include all of what we already do and know – but that will also add completely new dimensions to what we have hitherto perceived as the leadership role.

A few sites and studies have recently caught my attention on this subject:

The Bertelsmann Foundation has published a report under the title “Web 2.0 and Leadership” – you will find it here.

From the introduction I quote:

“Need for a new leadership paradigm.

In the two decades of rising Web impact, the need for a new paradigm for leadership has become more and more apparent. Seven indicators of this needed shift are:
Leadership as an activity rather than a role
Leadership as a collective phenomenon
Need for individual leaders at higher levels of development
From organization-centric to network-centric leadership
From organizations as ?machines? to organizations as ?organisms?
From planning and controlling to learning and adapting
From Generation X to Generation Y

The paradigm that was dominant until at least the early 1990s assumed that leadership highlighted the dynamic between designated ?leaders? and ?followers? pursuing shared goals. At its best this paradigm allowed for participatory and shared leadership, but inevitably singled out the lone leader as a key player, tacitly reinforcing deeply-rooted myths around the importance of ?heroic? individual leaders and the usefulness of ?command and control? styles of leading.

While situations will continue to exist that are well-suited to this approach, it has become obvious that in the world that is emerging, the leadership resulting from this paradigm is increasingly limited.

A new leadership paradigm seems to be emerging with an inexorable shift away from one-way, hierarchical, organization-centric communication toward two-way, network-centric, participatory, and collaborative leadership styles. Most of all a new mindset seems necessary, apart from new skills and knowledge. All the tools in the world will not change anything if the mindset does not allow and support change.”

PriceWaterhouse a while back already published the report ‘How leadership must change to meet the future’ its conclusion came back to me when thinking of this subject :

“The strategic revolutions in today’s rapidly changing business environment clearly mandate a new leadership framework. To capitalize on developing trends and drive future success, organizations must begin building leadership strength now in the four leadership success quotients: agility, authenticity, talent, and sustainability.

But the formula for achieving leadership success is a moving target.

The leadership success quotients will evolve. Nevertheless, complacency is not an option. To quote an executive from our CEO survey, “Global trends are hitting faster, harder, and wider, with results that can be both exhilarating and devastating for companies, industries, and entire regions.
”The winners of tomorrow will be those organizations with strong leaders who demonstrate agility, authenticity, connectivity to their talent, and sustainability. They will use their skills to remain at the ready, anticipate and harness the power of change, and stay ahead of the shifting business environment.”

And finally I discovered a the blog of Ann Holman yesterday where she has published a post entitled “The emergence of social leadership”’

“If our customers and employees are demanding social experiences, social networking, social marketing, collaboration, co creation, connection, attention and a very human, intimate relationships with our organizations, our leadership style, behavior and delivery is going to have to modify and refine itself considerably. Future leaders will not direct the work but enable and facilitate the new skills people are acquiring.”

and then the follow up post from Ann Leadership in 2011 and beyond….

… leaders of the future no matter what product or service they offer, what geographical location or industry or sector, are going to need to have in depth, responsive and critical skills in enabling and facilitating its employees and customers to ‘bang their heads together’ on a regular basis.”

That means that future leaders will need to master the 4C’s:

Content – customers become creators as do employees

Collaboration – refers to the idea that social media facilitates the aggregation of small individual actions into meaningful collective results. Collective action goes one step further and uses online engagement to initiate meaningful action. Collective action can take the form of signing online petitions, fundraising, tele-calling, or organizing an offline protest or event.

Community – Most people understand that a community that has a large number of members (size) who have strong relationships and frequent interactions with each other (strength) is better than a community that doesn’t. However, a community is more than the sum total of its members and their relationships.
People don’t build relationships with each other in a vacuum. A vibrant community is built around a social object that is meaningful for its members. The social object can be a person, a place, a thing or an idea.

Collective Intelligence – refers to the idea that the social web enables us to not only aggregate individual actions, but also run sophisticated algorithms on them and extract meaning from them. The great thing about collective intelligence is that it becomes easier to extract meaning from a community as the size and strength of the community grow. If the collective intelligence is then shared back with the community, the members find more value in the community, and the community grows even more, leading to a virtuous cycle.

And if you want to take and even deeper dive – I can recommend reading “The power of Pull” and keeping and eye out for John Hagels blogs posts at edgeperspectives …

Something is defiantly cooking… ( Finally .. ;-) )

What the future holds for hospitality?

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From : The Future of Tourism | Envisaging a 2011 scenario | By Chris Luebkeman
Read the full post here

While the fundamentals of hospitality remain steadfast, the
context wrapping around the offer of hospitality services has
changed tremendously, and it will continue to change. In looking
to the year ahead, there are any number of possible, and even
a few probable, futures that we should consider. As we do this,
it is vital that we do not ignore the forces of change around us
that are constantly molding our story of tomorrow as we write it.

In the article Chris Luebkeman asks some poignant questions that are suitable for your next future scenarios planning session :

• What if energy were free ? What if it were rationed ? Or each
individual had a personal resource account ?
• What would happen if oil hit US$ 200 per barrel ? What will
happen when carbon is taxed ?
• What if wealth continues to flow East and South ? What if
disposable income continues to disappear in the US
and Europe ?
• What will the new wave of tourists bring ? What will the
growing middle-class Indians or Chinese expect in a hotel ?
• What does a property look like that is fit for Korean
teenagers ?
• What if the « staycation » replaces the global grand tour ?

As you answer each of these questions, consider how our industry will not just survive, but thrive

About The Hotel Yearbook: The Hotel Yearbook is a uniquely forward-looking annual publication. Each year, dozens of CEOs and other senior executives from the hotel industry worldwide, as well as leading analysts and observers, use this platform to share their expectations for the coming twelve months. Each of the 70+ contributors looks specifically at his or her area of expertise, describing the likely developments for the year ahead. As a whole, The Hotel Yearbook thus offers readers a comprehensive overview of the trends and factors that will have an impact on the performance of the hotel business in the year to come – as perceived by the industry’s leaders themselves. For more information visit www.hotel-yearbook.com.

Has your hotel hired an Anthropologist

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If not you should maybe consider it. Because the feed back you are getting from you customer surveys is not giving you the info that you need to make serious product developments that will set you apart from the competition.

In today’s world of networked individuals, new behaviors are emerging. Some are creating new rules and systems of behavior, even within face-to-face experiences. Some are defying old patterns of beliefs.

Here are some of the questions you should be asking our house anthropologist to consider:

* What patterns of attendee behavior are you observing?
* Where are attendees congregating?
* Where are they not congregating?
* What venue and environmental pressures are shaping the attendee experience?
* What parts of your venue are attendees avoiding?
* What are attendees carrying with them to sessions?
* How are attendees communicating with each other?
* How are attendees reacting to the flow of the conference experience?
* What are attendees feeling about this experience?
* How are attendees behaving in education sessions?

This idea is further elaborated in a great post from Velvet Chainsaw Consulting here

How to Balance Power and Love

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I attended a fabulous workshop at the ALIA European gathering in Menorode last week.
The workshop is based Adam Kahane’s work and well described in his latest book Power and Love: A Theory and Practice of Social Change. I can highly recommend the book.

The big eye openers for me where:
1) It is not an either or but a both and – it is a polarity, and needs to be managed constructively
2) If you are excellent at one or the either don’t turn down the volume on what you are good at – start working on the part that needs improving
3) The task of a manager is a continuous process of balancing power and love

There is a great interview with Adam Kahane in S+B you can read it here

”Power properly understood is nothing but the ability to achieve purpose. It is the strength required to bring about social, political and economical change…

And one of the great problems of history is that the concepts of love and power have usually been contrasted as opposites – polar opposites – so that love is identified with the resignations of power and power with the the denial of love.

Now we have to get this thing right.

What we need to realize is that power with out love is reckless and abusive and love with out power is sentimental and anemic. It is precisely this collision of immoral power with powerless morality which constitutes the major crisis of our time.”

Martin Luther king Jr.

Wishfull thinking…

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The quote below, is from the 4Hoteliers site – you can read the full post here

In spite of the popularity of new electronic media, we expect the face-to-face meetings industry to continue to grow and to continue to contribute more to the US GDP. We also believe that were the studies available for other parts of the world, we would see similar, if not greater, increases.

It just reminded me of a few other famous quotes in history:

“I think there is a world market for as many as 5 computers.” – Thomas Watson, head of IBM,1943.

“The horse is here to stay, but the automobile is only a novelty.” – President of Michigan Savings Bank, 1903, advising Henry Ford’s lawyer not to invest in the Ford Motor Company.

“Television won’t be able to hold onto any market it captures after the first six months. People will soon get tired of staring at a plywood box every night.” – Darryl F Zanuck, 1946.

As we all know there are many more like this.

My point is, yes we would all love to see f2f meetings grow, but the reality is that most of the professionals that I talk too are experiencing exactly the opposite. That be people in the meetting industry or their clients. Big corporations are talking about ‘travel avoidance’ as a way to cut costs. IKEA has an internal slogan ‘Meet more travel less’ – encouraging employees to use the electronic media for instead of traveling.

Personally I have never ever received so many offers of webinars and other online forms of ‘meeting’ that I do at the moment.

Yes we all prefer the quality of a a face to face meeting, the same way we prefer a delicious home cooked meal to industrialized fast food – but if what we prefer was equal to what we do there would be no fast food business…

Travel Avoidance

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I learned a new word the other day – a word that sent shivers down my spine. Not that i have not suspected that this development was inevitable but still, seeing it in print was a jolt. The word is ” Travel Avoidance”. A conscious policy by large companies to reduced travel and f2f meeting wherever they can.

In a report published by the Center for Hospitality Research at Cornell University with the title ‘Hospitality Business Models confront the future of meetings‘ Cisco outline how they have chalked up $400 million in direct savings and $150 million in productivity gains by switching as much of their travel/meeting actives as possible to ‘TelePresence’.

The report also mentions research by Gartner Inc. that video conferencing will replace 2,1 Million airline seats by 2012 representing a revenue decline of $3,5 Billion for the travel and Hospitality industries.

And Meeting review wrote this :

2010 has been the year that everyone suddenly started to take virtual meetings and events seriously, indeed the mainstream industry is even starting to see them no longer as a threat but instead as a way of extending the reach, the audience and, importantly, the revenues for their events.

See the full article here

So what to do?

The article suggest that Hotels should invest in video conference equipment so that they can offer this service to clients. I am not so sure that is the way to go. If we look back some years ago LCD projectors where very expensive and as a consequence only the largest companies had them – in the beginning.
Smaller companies would go to hotels and rent one. But soon the price of LCD’s came tumbling down and suddenly they where not so special anymore. Today we all have our own. And the fact that a hotel can provide one does not exactly constitute a competitive advantage

My prediction is that the same will happen with video conferencing – companies will get their own kits and virtual conference room in hotels will become obsolete.

A better plan might be to leap frog past that and take a look at the structure of the meeting market as it is emerging.

One way to do that could be to map it on a 2×2 matrix with number of participants on the one axis and the degree of interaction from monologue to deep dialog on the other axis .

That could roughly look something like this:

In the bottom half of this matrix there is mainly emphasis on one way info transmission, possibly with a few questions from the floor. This type of meeting is handled brilliantly by various tech solutions and there will be no stopping that trend developing even further. In that sense this type of meeting will slowly disappear from the traditional venues and move to virtual (also because participants are thoroughly tired of attending this type of meeting or conference).

But on the top half of the matrix where the focus is on interaction /participation and deep dialog, high tech solutions do not do the job very well. As Marchall McLuhan said the more complex the message the more complex a medium do you need, and the most complex we have is f2f.

Now if you are providing meeting facilities – go have a look at your breakout room, your standard meeting room set up etc. Are the facilities that you provide conducive to dialog or to monologue?

To me the gray cloud on the drawing represents yesterdays meetings, they will be taken over by high tech solutions and will not require f2f and the yellow cloud represents tomorrows meetings space where we solve the complex and tricky stuff through collaboration and involvement.

The reason i have the number of participant in the matrix is that i see a sweet spot in the 10 to 75 segment ( upper right corner of the matrix) because when you move to very large groups ( upper left of the matrix), and think dialog then tech shows its face aging ( Twiter, FB Etc)

When i presented this to one of my hotelier friends his response was, “but 80% of our meeting business today is Cinema- or U-table set up.” Yes I know i have seen that as well. But if you plot types of meeting on a bell curve then, at the top of the curve (mainstream) you will find the cinema set up and the U-table – fast forward a year or two and where is what was at the top of the top of the bell curve now?
Going down, fast.
At the beginning of the bell curve we now find Dialog, participatory meeting Art of Hosting etc. Where will that be in 2 years time? On its way up, heading for main stream status.

In summary it is going to be increasingly difficult for meeting facility providers to justify that they are providing value when it comes to ‘monologue’ meetings. It can be done better and cheaper with technology – and that type of meeting is a god case for Travel Avoidance”

Where they can make a huge difference and add value is by learning how to provide space and surroundings that are conducive to deep dialog in the broadest sense – and believe me that is not a banqueting room set up cinema style