Three pillars to help your organization embrace change successfully in the revenue management field.
“To improve is to change; to be perfect is to change often.” – Winston Churchill
On a daily basis, every business experiences different levels of change that apply to individual team members, departments or the entire organization. Nowadays, many external factors influence or even force companies to adapt quickly—macro-economic changes, digitalization, consumer behavior transformation, the list goes on and on.
Change management has become a hot topic across all industries and nations as comprehensive, integrated and people-focused approaches are sought to successfully transform organizations. The field of revenue management in particular is at a critical moment of transformation.
We know it’s human nature to often resist change. But, every day, people get new pets, have babies, change jobs—all dramatic yet (hopefully) positive major changes people usually embrace and enjoy. So why in so many cases in the work environment do people appear hesitant to change? In this blog, we’ll explore the underlying causes of change resistance and provide three pillars to help revenue leaders initiate and drive successful change efforts.
Lessons Learned from Change Management Failures
A Towers Watson study showed only 25 percent of organizational change efforts succeed in the long term. As a revenue advisor, I have witnessed enough change failures of all kinds and sizes. I’ve come to find a successful change requires the below ingredients:
- A vision. People need a sense of where they are going and why.
- The proper skill sets amongst individuals to execute the new change.
- Motivation and a common understanding of why it’s important to change and why that change should happen NOW.
- Support and commitment from stakeholders.
- A solid and detailed action plan for how the change will be executed.
People are often resistant to change when one or more of the above ingredients is missing. The chart below shows how people react emotionally to changes when various ingredients are absent.
When changes happen without any vision to direct the team—e.g., an overall revenue KPI for all team members to target—then they may feel confused. Perhaps they will make some adjustments in their daily revenue tasks, but they really can’t imagine how their work life would change if they did. It’s tough to make any change if people don’t know where they are going. Or if the KPI set up is not unified, then different departments remain siloed.
Next, consider what happens if there’s a lack of skills. A business may have a strong desire to improve revenue performance and drive the KPI increase, but perhaps they don’t know how to start with an accurate base forecast for setting strategy and tactics. No matter how much the leadership wants to change, it will be difficult or even impossible to put the change into practice without certain skill levels.
We have all been in the position of knowing something is important but simply lacking motivation. Without a sense of urgency or proper time-frame plan, the change may never happen.
Without stakeholder support, team members may end up feeling frustrated. For example, they may really want to apply an analytics-driven revenue culture across the organization, but if the GM is not willing to change the old way of making decisions purely based on experience and intuition, it will make things much more difficult.
And finally, without an action plan such as a revenue roadmap, team members may be committed to making a change, but with no clear plan, the success won’t last long.
The Three Pillars of Change Management Success
To achieve successful revenue culture change, there are three key areas to assess: mindset, toolset and skillset.
- Mindset
First of all, the company stakeholders need to be on board. Either a VP of sales & marketing or a property GM should be fully committed to the change. Secondly, a well-designed KPI system needs to be implemented to set a clear direction to all team members across different departments instead of each department having their own goals. Thirdly, clear communication is needed to address when the change should begin, be measured and ultimately achieved. Last but not least, switching from a fixed mindset to a positive growth “can-do” attitude is also very important. As Winston Churchill famously said, “Those who never change their minds, never change anything.”
- Toolset
To achieve the best results in change management, we need a certain structure, system and measurement:
- Revenue audit reports from third-party professional companies.
- Self-assessment reports to share major revenue performance vs. previous year, budget, forecast and competitor performance.
- For hotels, a well-designed and accurate forecast system to automatically generate future daily demand forecast by transient and group level, or by market-segment or room-type level to base major decision-making on.
- Even better, a revenue management system that not only provides forecasting but also insights, analysis, pricing decisions, and inventory or rate control recommendations would definitely be a plus.
- Skillset
No matter how determined and enthusiastic the team members appear, or how advanced the toolset, without the proper skillset, no changes can happen or start.
To address this issue, proper training is highly recommended, such as online revenue courses and educational programs, webinars, industrial events, or tailor-made classroom workshops to equip the related team members with sufficient knowledge and skills to act on the change. Developing team members is not limited through education, but also through experience and exposure.
Seeking professional help through third-party revenue experts is another good way to start the change. Consider setting up a revenue SOP to improve the current working process or implement a daily, weekly, or monthly revenue management task checklist including how to review daily pickup and performance, how to run weekly revenue meetings and how to analyze monthly results and set future strategies, etc.
Also, if possible, shadow and observe a senior revenue leader or expert internally or externally to learn from and work closely with.
Interdepartmental support, cross training, task forces from allied companies or hiring external revenue mentors are all helpful ways to develop people through exposure.
Last but not least, while we are in the middle of the change process, do not forget about reviewing on a regular basis to see not only if the changes have happened or were achieved as planned, but also if those changes are healthy and sustainable to continue benefiting the organization in the long term. Remember, for each milestone, a little celebration with the team can also have great encouraging impact on morale and team spirit.
- Change Management Essentials for Revenue Leaders - August 20, 2019
- Bridging the Industry with Yuki Hu - November 7, 2018
- Bridging the Industry with Yuki Hu - August 29, 2018
