• Stephan Busch

KPI’s – do we need them at all in hospitality? - Why entrepreneurs will always beat the big chains


KPI’s – Key Performance Indicators – measure everything that seems to be important for a hotel and restaurant operation. The most popular once in hospitality are:

Occupancy%

Average Daily Rate

RevPar

Customer Satisfaction

Online Rating

Cover counts

But there are multiple others that keep office people and owners busy and entertained.

"Business is more about waves than particles, but many leaders can't get their heads out of spreadsheets long enough to notice the waves of energy swelling and crashing around them."

DEC 7, 2015 Liz Ryan- KPIs And Corporate Stupidity

A healthy culture and trust would make KPI’s obsolete

KPI’s are used to measure performance that is actually clearly to observe on a daily base. So mostly KPI’s are for the absent ones - bookkeepers and those high up in the organization who don’t see the live operation too often. The live operation is what pays their salaries. The bigger the operation the more administration and performance indicators are needed to control. That at least is the general believe. Wisely chosen staff & management, a healthy culture and trust would make KPI’s obsolete.

"The correlation between hitting my KPI targets and actually getting my work done is a very weak correlation. I could do a fantastic job during the week and move our company forward a lot and at the same time miss all my KPI targets."

DEC 7, 2015 Liz Ryan- KPIs And Corporate Stupidity

How often do we hear that Hospitality is a “human to human” business from the same people that introduce KPI’s? How do you measure humans? Makes only sense if you want to know how tall they are.

Understand the numbers

Passing by a newly opened 5*star Hotel in one of Europe’s capitals I can’t stop being amazed that the Hotel Restaurant – very stylish Italian – has 5 guest seating and two waiters guarding the rest of the equipment. In the same building – 5 meters to the left, wall to wall, the same hotel - the outsourced privately owned restaurant with high class beef and meat products is always full, has a waiting list and requires five days advance booking for lunch and seven days for dinner every day of the week. If one KPI would be the cover count and next month the Italian restaurant gets 2 more guest every day their KPI would show that they tremendously increased the covers! Expressed in percentage it gets even more impressive! The private restaurant has no chance to increase their cover count – they are full – no more space.

"Why should I work hard to hit a number someone gave me? I work because my work is fun and challenging. It's insulting to have to stop my real work every few hours to focus on the numbers that someone assigned to me without even talking with me."

DEC 7, 2015 Liz Ryan- KPIs And Corporate Stupidity

Instead of KPI’s the feeling that everything is right, that guest and staff are happy, that it feels good is the best indicator for a successful, profitable business. But how do you measure feeling? Feeling is personal. What feels good for me might be not good at all for you. That’s why big organizations rely on KPI’s – smaller ones have the luxury to choose. And this is the advantage for entrepreneurs.

Enjoy - what matters more?

Entrepreneurs have a vision – take a risk – enjoy the feeling of success which doesn’t have to be expressed in numbers. It’s a feeling. A good feeling. It’s contagious. It effects their staff, their guests , their business partners and even their suppliers. The numbers, the profits come with it but it is the satisfying feeling to create a great hotel or restaurant that works, is liked and enjoyed by many which matters. How do you measure feeling? Its simple – you shouldn’t! The profit proofs that they were right? Actually – yes - but! Asking many entrepreneurs they really don’t care about the money - even when they don't have any left. Many love their biggest failures more than their biggest successes. They enjoy – and what matters more?

Culture and Stakeholders trust can change also the big players

Once culture and business ethics are more important then fast profits - long lasting success is almost guaranteed. Quality, efficiency and productivity will always be higher then in operations that aren’t willing to change.

"I met competent and smart people who spend as much time measuring their work as actually doing the work."

DEC 7, 2015 Liz Ryan- KPIs And Corporate Stupidity

Read all this articles about millennia’s. The want to do something useful? Something meaningful? They don’t want to obey to the social standards and behaviors and the old ways that worked for us? I think that’s great – lets help them!

We have to encourage young people to take their dreams serious – and we have to encourage them to never stop dreaming. When I grew up I got what most children get from the moment school starts. “Yes you can dream – but do your homework, perform your duties get a decent job later and – at the end- know your place” Some people are happy with this – some not. Some dream bigger some love to have this clear boundaries. I like and love both of them. Important is for both is to be happy with what they are doing. And all of them deserve respect for it. Once they are happy they will perform great, contribute to the success and deserve their praise. We can’t advance, innovate and create without the entrepreneurs and we can’ succeed without the ones who perform all the tasks that support this success.

"They ( big companies) are mystified by the topic "corporate culture" because it doesn't show up in their spreadsheet or on their dashboard, but it influences their success or failure more than any other factor."

DEC 7, 2015 Liz Ryan- KPIs And Corporate Stupidity

What we can do is removing useless KPI’s so people can, enjoy, be more happy at work and thus more productive. Reduce administration to the minimum.


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© 2017 by Stephan Busch