Starwood Hotels and Resorts

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					Adventures in management

     Starwood Hotels and Resorts
                           Corporate history is littered with tales of           Companies Go Bad that the key challenge is how
                           complacency, companies locked in their comfort        to break out of deep commitments to customers,
                           zones, blinkered and unable to see changes in the     employees and other stakeholders that have
                           marketplace and emerging opportunities. Think         built up over the years. W Chan Kim and Renée
                           back to buggy whip makers at the turn of the          Mauborgne of Insead, and authors of Blue
                           twentieth century who ignored the development         Ocean Strategy, have concluded that the biggest
                           of the automobile. And then think of Henry Ford’s     strategic gains come when a company breaks
                           success in mass production which fuelled the          the competitive stalemate to create what they
                           belief that low-cost production was the key to        call a new market space. “Some industries die,
                           business success. Ford persisted in his belief that   some persist. But new industries are constantly
                           he knew what customers wanted, long after they        being created. It is like a galaxy of stars – infinite,”
                           had decided otherwise.                                say Kim and Mauborgne. The trouble is that it
                                                                                 is difficult to see the potential galaxies from the
                           Such issues were exposed by Ted Levitt in
                                                                                 comfort of a desk.
                           the early 1960s in “Marketing myopia”, a
                           Harvard Business Review article which enjoyed         The question for managers and organisations
                           unprecedented success and attention, selling over     is how to nip complacency in the bud, how to
                           500,000 reprints. “The railroads are in trouble       encourage new perspectives, new views of the
                           today not because the need was filled by others....    future, challenges to the accepted orthodoxy. As
                           but because it was not filled by the railroads         Kim and Mauborgne put it: “All industries are
                           themselves,” lamented Levitt. “They let others        created not by big resources but by big ideas.”
                           take customers away from them because they            But how do you ignite the inspiration for big ideas?
                           assumed themselves to be in the railroad business
                           rather than in the transportation business. The       The danger of desks
                           reason they defined their industry wrong was           One organisation which has wrestled with these
                           because they were railroad-oriented instead           ideas is Starwood Hotels and Resorts. The group
                           of transportation-oriented; they were product-        operates 850 hotels in over 95 countries and
                           oriented instead of customer oriented.” Similarly,    has 145,000 employees. The group is a fully
                           the film industry failed to respond to the growth      integrated owner, operator and franchisor of
                           of television because it regarded itself as being     hotels and resorts. The company’s brand names
                           in the business of making movies rather than          include Sheraton, Westin, W Hotels, Four Points,
                           providing entertainment.                              Luxury Collection, St Regis and the more recently
                                                                                 acquired AloftSM and ElementSM hotels.
                           Growth, wrote Levitt, can never be taken for
                           granted – “In truth, there is no such thing as a
                           growth industry”. Growth is not a matter of being
                           in a particular industry, but in being perceptive
                           enough to spot where future growth may lie.
                           History, said Levitt, is filled with companies which
                           fall into ‘undetected decay’.

                           More recently, thinkers have examined how to
                           break this pattern of decay. Don Sull of London
                           Business School has argued in Why Good
                                                                                 Robyn Pratt is senior director for
                                                                                 Six Sigma and Operational Innovation

                                                                                      Adventures in management > Starwood Hotels and Resorts

Robyn Pratt is senior director for Six Sigma and        A day out in Paris
Operational Innovation for the company’s Europe,
                                                        In practice the group was split into 64 teams
Africa and Middle East operations which includes
                                                        and each team was given one of eight words –
270 hotels. Key to her job is encouraging people
                                                        beauty, trust, thoughtfulness, luxury, individuality,
to think differently about how they run their
                                                        inspiration, style, approachability. The words were
business. She explains: “Some people think that
                                                        inspired by the company’s core values of trust,
innovation is just about coming up with a good
                                                        respect, collaboration, innovation, accountability
idea. And that it’s going to happen just like that.
                                                        and execution. Says Robyn Pratt: “You’ve got
In fact, innovation is a process in itself and you’ve
                                                        to remember that these people are seasoned
got to have someone prepared to be extremely
                                                        hoteliers and doing this sort of thing, talking
diligent and patient, and be prepared to go back
                                                        about beauty and trust and individuality, is not
and re-look at things. There is definitely a process
                                                        necessarily something are accustomed to nor feel
to be followed and it takes a lot of hard work and a
                                                        comfortable in doing.”
willingness to never give up.”
                                                        Removed from any comfort zone, the teams were
One of the big opportunities identified to move
                                                        provided with a small bag containing Metro tickets
people’s thinking was a gathering of 700 of the
                                                        and a moleskin notebook containing a Metro map.
company’s general managers and leaders of the
                                                        They then had to go out onto the streets of Paris
Europe Africa and Middle East division sales
                                                        and take photos, write down words, interview
and marketing teams which was held in Paris
                                                        people, or whatever they chose to do, to visually
in January 2007. “Innovation is one of our core
                                                        represent their word, both from an orthodox
values and we wanted to create a team-building
                                                        and a heretical perspective. The ultimate end
element, generate ideas, and implement learning
                                                        product was to upload their orthodoxies and
at the same time. For that number of people, it’s
                                                        heresies onto a specially set-up “the desk is
not necessarily very easy, particularly when you
                                                        dangerous” website.
have a time constraint” says Robyn Pratt. “The
objectives were to get our people looking at things
from a different perspective. Our people are
constantly getting more and more responsibilities,          “Some people think that innovation is just about
and to a certain extent just doing it, rather than           coming up with a good idea.”
thinking how can I do this differently?”

Working along with Jason Hunter from the
consulting firm Strategy Regeneration and Jules
                                                        The teams spent two and a half hours on the
Goddard, now an MLab Research Fellow, a
                                                        streets of Paris and then had an hour to visually
concept for a day’s activity for 700 people in Paris
                                                        represent their word. “The buzz and enthusiasm
began to develop. It was built on two guiding
                                                        in the room was quite amazing. We knew this was
principles. First, the desk is a dangerous place to
                                                        a good idea but I think we were surprised by the
view the world from – you need to get people out
                                                        level of enthusiasm that was generated by this
onto the streets to get new perspectives; second,
                                                        exercise. I think that was really the culmination
people need to be freed up to express heretical
                                                        of success in the eyes of our senior leadership
points of view, to challenge conventional wisdom
                                                        team,” says Robyn Pratt. “In order to present their
within the company.

                                                                                     New frontiers Tomorrow’s management innovation today 47
Adventures in management > Starwood Hotels and Resorts

                                findings the teams were equipped with very little        the usual raw iron poles, the builders had covered
                                but the creative spirit really came through. All they   the poles with coloured tubes that perfectly
                                had was a board, and some people had bought             matched the colour of the building. Even the most
                                little postcards or had asked the hotel for all sorts   mundane or ugly things can be presented in a
                                of props. One team asked for pieces of rope. The        stylish manner, the team concluded.
                                final result was a culmination of many different
                                                                                        The teams often collected relatively simple images
                                ways to communicate their ideas and what they
                                                                                        – a woman walking across a street with a dog,
                                had seen and how they could best represent
                                                                                        a mother feeding her baby on a pavement seat.
                                that. It was really great to see the passion and the
                                                                                        It was everyday imagery, but imagery which is
                                imagination in the room.”
                                                                                        usually overlooked. Another team, in order to
                                The culmination of the event was labelled a             illustrate trust, had a photograph of a dog in the
 The Westin Paris               “visual fair” with each of the teams selling their      driver’s seat of a car.
                                ideas and insights to their colleagues. As a final
                                twist, unbeknown to them some of the teams              Making it work
                                were trailed by photographers who captured their        The final stage in the process was to capture the
                                journeys around Paris. These visuals were then          inspirations from the day and translate them into
                                developed into a final presentation which was            improvements in day-to-day service in the group’s
                                presented by Jules when wrapping up the                 hotels. The 1700 ideas from the day were sorted
                                days activities.                                        into four categories – insights, marketing/branding
                                                                                        ideas, inputs to ongoing projects, and “just do it”
                                Truth and beauty                                        – and followed up by the appropriate people in
                                On the streets of Paris what did the teams              different parts of the company.
                                discover? One of the teams in search of beauty
                                                                                        One immediate impact of the day, for example,
                                concluded that beauty is formed of colours,
                                                                                        was a heightened understanding of the meaning
                                sometimes only of one colour, or of black, greys
                                                                                        behind the brand, which is a central element of
                                and white. Beauty is formed of shapes; it is more
                                                                                        the Starwood Hotels and Resorts strategy. And
                                curvaceous than straight. Beauty normally has
                                                                                        the link between the event and innovation is
                                some sort of movement, direction or fluidity. It
                                                                                        clear, says Robyn Pratt. “Imagine if we all did this
                                is acquired and influenced by one’s upbringing
                                                                                        on an everyday basis – walking the streets and
                                and one’s memories. It impacts our visual senses
                                                                                        taking away things that we see and thinking about
                                and satisfies and sometimes surprises our
                                                                                        them differently. Normally innovation comes from
                                expectations. It is individual and by just changing
                                                                                        a small idea or a small insight. Just something
                                some shapes and colours, it broadens or changes
                                                                                        that is done and seen differently is very, very
                                your audience. These insights led to some further
                                                                                        impactful. We have now been asked to do mini
                                work on how Starwood could bring beauty into
                                                                                        ‘desk is dangerous’ exercises in other locations,
                                its rooms.
                                                                                        so we can see that the thought process is working
                                Another team went in search of style: they found        and the wheel is turning, through these exercises
                                an orthodox view of style in the famous Maxim’s         we can constantly update our idea bank. This
                                restaurant, with its elaborately decorative red         innovation process will be an important input to
                                awnings, dark windows and golden logo. But they         our competitive advantage.”
                                also saw style of a more heretical nature in the
                                scaffolding two doors up from Maxim’s: instead of


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