I have been involved in numerous transitions, from flag to flag, owner to owner sometimes both. Regardless of differing rules of engagement there are some issues that hold true across most if not all deals. For all of the confidentiality surrounding a transition, human nature is human nature, word leaks out and:
- All of the damage is done long before transition day!
2. Talent is precious.
Sometimes the talent is gone faster than you realize. Either the outgoing management has moved them quickly or they are a superstar and have taken the opportunity to find a new and better position. This is where your reputation as an employer comes into play. You can not reach across the divide, you are embargoed from talking with them. Your actions are what resonates in the marketplace. Talent wants to work for a ‘true employer of choice’! Be careful that months after the transition you are not the ‘farm team’ for the marketplace. As fast as you are re-building the competition is having a field day recruiting at your expense. It is imperative to get on board and quickly and sincerely win the hearts and minds of the employees.
3. Mediocrity is toxic.
Contracts often allow you to terminate some managers at transition but at a severance price. Do your diligence, it is often cheaper to be rid of mediocrity than find months later that they are populating your new asset. Mystery shop the property well in advance. Take note of the smiling clerk as well as the sour faced hostess. Take a look at Tripadvisor, they often have the names of good and bad employees. Be careful mediocrity is infectious and eventually fatal.
4. Its all about distribution.
The day after the transition do you have a perfectly functioning website? Can anyone find it? Are all the booking channels wide open? Did you invest enough in internet marketing for this transition? If your IT and Distribution team do not win this one you will lose real dollars and a lot of bragging rights. What can you offer a guest who is loyal to the property but now there is a new recognition program? If you lost the guest history to the old brand then stand with the doorman for a few days and meet your regulars. The best keeper of guest history is your staff not a database.
5. Did the seller understand bricks and mortar or just 'branding?
Deferred Maintenance. Did the outgoing owner or manager defer crucial maintenance for the prior 12 or 18 months trying to chase a cap rate? Did the property team understand the nuts and bolts of the building or just the attributes of the brand. Was the engineering team a brand on-the-job career path or were they dedicated facilities managers with intimate knowledge of how your building works. A broken boiler or HVAC meltdown knows no brand and takes no prisoners!
Transitions are becoming a way of life. They are all different, some more difficult than others but all require a tremendous amount of pre-planning and the ability to quickly deal with the unexpected and most of all to understand human nature!
davidmalcolmgibbons@gmail.com
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