Six Practices of Hotel Entrepreneurship
We’ve all heard that old saw that "practice makes perfect." This is hardly true. A practice is unlike a rule, guideline, principle or commandment. A practice is what a leader embraces as part of his or her development of their entrepreneurial competencies. The reality is that perfection is rarely the outcome; however, continuous improvement frequently is. A practice is an approach, a movement toward, rather than a destination in and of itself. We recently conducted research that identified the six practices to becoming a more effective hotel entrepreneur.
The 56-item questionnaire asked hospitality operators, executives and owners to rate the level of importance of each item to successful entrepreneurship in the service and hospitality industries. The questionnaire included an open-ended section where respondents were asked to share their thoughts on the most important characteristics required of an entrepreneur, as well as recommendations for hospitality students interested in becoming entrepreneurs.
Our research surfaced six practices for thinking like a hotel owner:
The intrapersonal communication practice is about communication with one's self. It includes honesty, listening skills, patience and technical skills.
Honesty with one's self starts with self-awareness and self-understanding. It leads to knowing self, including your values, vision and mission; your strengths; areas that you can and need to improve; and your goals.
As important as it is to listen to others, it’s equally essential to listen to self. By listening to your own inner voice, your own needs, wants, expectations, requirements, dreams and vision become clearer.
Entrepreneurs must be patient with themselves, first, and then with others. No one is perfect and we all make mistakes. Thus, patience is required to learn from mistakes. You also need patience to conceive, launch and build a business.
Hotel owners have technical skills that grow from practicing them in practical experiences. These skills include first-hand knowledge of the operations of the business, in part so others can be trained to deliver the requirements expected by both internal customers (associates) and external customers (guests).
The interpersonal communication practice includes conversations with others. The most important communication skill is listening. Listening requires empathy, demonstrated when listening to others' points of view from their perspectives.
Communicating effectively begins with a compelling vision of what you want to achieve. What do you want to create? How will you know it? And what will be happening? The vision must be effectively communicated to others so they can help achieve the vision. Communicating effectively is necessarily focused on listening to others words, as well as observing their actions. Others do the same to you. Facta non verba—your actions speak more loudly than your words.
The agility practice includes adaptability, autonomy, comfortable making decisions, independent and resourcefulness.
Adaptability is flexibility to change directions if something new surfaces. Adaptability is adjusting to conditions as they develop. Adaptability requires agility in the face of conditions that are under your control and external forces that aren’t under the control of the owner. Adaptability is the cornerstone to surviving in today's economic challenges.
Hotel owners make decisions in keeping with the commitments they’ve made to grow the business. They visualize their dreams and work tenaciously to make their visions become reality. The passion of these entrepreneurs results in focused risk taking. These owners work hard and are determined to do what it takes, even if it means changing course, to achieve their future. It takes initiative to begin the process and perseverance to work more than they worked for someone else, including long hours, evenings and weekends.
The creative savviness practice covers creativity, intuition, inventiveness and being politically savvy. All these qualities are embodied in an entrepreneur who sets out to develop something new and innovative.
Creativity is one of the key strategies for staying ahead of your competition. Creativity is imbedded in anticipatory service, based on customer relationships transformed into customer (both internal and external) loyalty.
Savvy owners have a "sixth sense" when it comes to anticipating customers' needs and desires before the customers express them. These owners are inventive and look for unfilled needs and desires and hidden opportunities others don’t see. They capitalize on the opportunities and advance their organizations. Politically savvy entrepreneurs see the connections between operating in an increasingly regulated and complex hotel industry environment, and an understanding of the hotel industry to position their business competitively.
A hotel owner who practices being a problem-solving pragmatist is one who has knowledge of financial numbers and possesses objectivity.
Knowledge of financial numbers begins with building a realistic business and financial plan for the business, and then following it. These owners have a detailed understanding of balance sheets, budgets, cash flow, profit and loss statements and return on investment (ROI).
Entrepreneurs act objectively and make fact-based decisions. They constantly scan the environment, including market demographics, to determine which external customers have unmet needs and wants for products, services and experiences. Then they provide for these unmet customer requirements.
Pragmatic owners are realistic and practical. This practice is driven by the ability to balance the quality of personal life and work life. Entrepreneurs lead the business and do what it takes to make it successful. They also pay close attention to personal and family requirements. There must be a balance between the two areas so each can support the other and both can support the hotel owner.
Entrepreneurs are problem-solvers, a skill set that helps them be great operators. Problem-solving becomes a strategy to continuously improve all areas of the business. Problem-solving owners learn from their mistakes, from reading, by benchmarking successful businesses, being curious, asking questions and holding themselves and others accountable for achieving the desired outcomes.
The legacy leader practice embodies a desire to leave your mark and be significant. Entrepreneurs are focused on their vision for the future and, often, when describing a concept or product/service do so as if it already exists, even though it is still in the planning and development stages. They visualize their legacy and their wealth increasing both when they feel satisfied because services and products are delivered to create positively memorable experiences, as well as when there is financial gain for the hotel owner.
Our study presents practices for developing hospitality business entrepreneurial thoughts and behaviors, in general, and what we discovered applies to the hotel industry, in particular. The six practices identified include a wide range of characteristics, traits, attributes and skills. Some characteristics are inherent, while others require entrepreneurial learning, training and repetition. This is where practice comes into play. Our results help to surface what capabilities and competencies individuals must continue to develop in order to achieve their goals of individual ownership or partnerships within larger hotel organizations.
Ronald Cichy, PhD (email@example.com) is a professor and the director of The School of Hospitality Business at Michigan State University, where Jeffrey Beck, PhD (firstname.lastname@example.org) is an associate professor of hospitality marketing and Jeffery Elsworth, PhD (email@example.com) is an associate professor of hospitality business entrepreneurship.
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