NEW YORK—Ask any hotel brand, ownership group or management company what truly sets its organization apart, and the answer will usually be the same: the culture. But what exactly does that mean? And, given the evolving landscape in which we live—technology and attitude shifts changing work/life balance, new generations of employees and leaders finding their place in the workforce, a more concerted effort to tap into diversity and inclusion of those who might have a different perspective—how can companies adapt and maximize their culture to create an environment that sparks loyalty and generates employee retention, while ensuring the best, most innovative ideas come to the forefront to guarantee success?
Those were a few of the questions executives worked to answer last month at a Hotel Business executive roundtable, “Culture shift: Working in 2018 and beyond,” hosted and sponsored by The Wall Street Journal, and moderated by Hotel Business Editor Christina Trauthwein. One thing was clear by the end of the day: All executives agreed that the discussion was far from over, but the best way to shape the hospitality industry into the best version of itself is to engage in these conversations—and take action.
How has culture changed? Executives from a few hotel operations companies outlined the evolution they’ve seen in their own organizations. Justin Jabara, VP of development, Meyer Jabara Hotels (MJH), said that MJH has a culture that it refers to as “The Journey,” which has been in place for a generation. “We’re the third generation of the company, but the second generation, having worked for their fathers, had grown up in an era where it was very dictatorial. There wasn’t much transparency through the organization,” he said, noting that they’d worked to change that. “Twenty years later, ‘The Journey’ is still very strong. Every year we invest greatly into it, not just on training for new associates and managers, but to keep it fresh.”
However, he said, “We have seen in the last five years that ‘The Journey’ has had to change as we deal with new generations of employment. We constantly have to update and really change our focus, but at the end of the day, the culture is what makes the business.”
For Chris Green, COO, Chesapeake Hospitality, culture is the differentiator. “Just like when the brands announce a lifestyle brand, you can announce it, but it doesn’t have any heart until it’s out there,” he said. “We know our company has heart, so how do we own that and make sure people are attached to it?
“We went on a journey a few years ago to determine who we were and how this would be picked up by these new generations coming along,” he continued. “We changed our tagline as a company to ‘Experience What’s Possible.’ We think it fits for not only our stakeholders who own hotels, but also our team members to understand what possibility really means.”
Additionally, the company recently named Jane McCaul director of culture & communication. “We made a commitment in our company to make sure that every associate understood what possibility meant for them and what it looks like for them individually, making sure the pathway to success for them was open—race, religion, creed or color, it didn’t matter,” Green said. “We’re not perfect at it, but we’re going to work hard to get that message all the way through to the line level and help them understand the goal is 100% buy-in on possibility for the future for our employees.”
For her part, Debra Punke, SVP of human capital and communications, Concord Hospitality, noted it’s about caring about people and putting them first. “What’s changed is we’re caring about people outside of work, so we’re shifting everything we do to a position where we care about harmonizing your work and your personal life,” she said. “We want to make sure we have a safe environment, one that is high in trust that enables you to be your best self at work.”
This includes a more relaxed dress code—enabling employees to wear the clothes and hairstyles that work best for them, as well as display their individuality. “We encourage that because we want people to be authentic in the workplace. We think it’s far more genuine; they can be better service agents,” she said. “Don’t mistake that for poor grooming standards because that hasn’t changed. Casual doesn’t mean slovenly, but we do want to make sure that our associates are free to be them.”
Certainly, as Jabara, Green and Punke alluded to, one of the driving culture trends that permeated the discussion was the generational shift—and not just millennials (many of whom have been in the workforce for more than a decade now) but Gen Z, the generation just entering it.
Donna Quadri-Felitti, Marvin Ashner director and associate professor at The Pennsylvania State University School of Hospitality Management, framed the discussion around this new group of workers, adding the necessary caveat whenever large groups of people are discussed: “We need to be mindful that not all Gen Zs are the same. We did this for the last decade when we talked about millennials—social media, texts. They’re not all the same, just like not all women are the same or all Latinos are the same. That is the hallmark of diversity.”
However, to figure out some general trends, she said that we need to look to Gen Zs’ parents—the Gen Xers. “We need to see what they have passed on in terms of values or contrasts—because, remember, every generation repeats things their parents did but also rebels against what their parents did,” Quadri-Felitti said. “We’ve been doing some research on Gen Z and how they’ll pressure us to change. We found a couple of things. Visual storytelling is important—this is the Snapchat generation, this is the Instagram generation—but they’re still on Facebook. Traditional values and their parents are on Facebook and they know they have to stay connected on lots of different points. We need to add [ways to connect with them], not abandon.
Additionally, she said, “What we’re seeing in Gen Z is…‘Don’t treat me like I’m not a fully formed human. I can contribute.’ It’s really important for them that you respect them as individuals.”
Ken Barrett, CEO of the management division, White Lodging, noted that the industry’s turnover is in excess of 60% and younger workers tend not to be loyal to companies unless companies also show they’re loyal to them. “When you think about how to change that retention—and realistically, you are a people company, so to be sustainable, you do have to figure out what your retention is—there’s an expectation of commitment from the employer to them,” he said. “If you want to create loyalty, you have to create a purpose for them and they have to feel like they’re part of something bigger.”
Ariela Kiradjian, COO, Boutique & Lifestyle Leaders Association (BLLA) and co-founder, Stay Boutique, pointed to one way companies can really connect with younger talent, many of whom graduated college with significant debt, and some of whom come from socioeconomic backgrounds where financial planning wasn’t a possibility: Talk with them about financial wellness. “You have employees from all socioeconomic backgrounds,” she said. “You should feel free to talk about finance with them. If you’re the only place where they’re getting income, they should feel open and honest to talk about that.” Additionally, she said, if an organization had a program to help employees pay off student loans—even a small amount—that could generate loyalty.
Dianna Vaughan, global head and SVP, all suites brands by Hilton, noted that it’s important to remember that programs to benefit young workers also benefit all. She pointed to the brand company’s ‘Travel With Purpose’ platform. “It really connects with millennials… We have one week a year where we volunteer in our local communities, and every hotel or corporate office can do some sort of activity,” she said. “Just this year, we had more than 4,000 projects in 90 countries, so that’s a really good way to enforce the culture.”
But, she added, it’s had additional benefits for the company’s employees. “What we found out is everyone wants to give back. It’s not just the millennials interested in giving back to the community,” Vaughan said.
Barrett stressed the difference between training and development when it comes to creating new leaders. “Training teaches you how to do your job today. Development teaches you how to do your job tomorrow,” he said. “When you look at the millennial workforce, the reality is they want the commitment from us to show how we’re going to develop them into leaders.”
He noted that while many of these workers had great educations, they don’t yet have the life experience that comes with age. “How do you help them with that experience? What’s the mentor level?” he asked, noting that engagement is important.
For her part, Brooke Denihan Barrett, CEO, Denihan Hospitality, said, “I do think, though, it’s important that people earn the right to learn. When we’ve created development and mentoring programs, if you’re a new hire, you have to be with the company for a certain period of time and you have to exhibit you are serious, committed, responsible and you do want to learn.”
White Lodging’s Barrett agreed, noting that many associates believe that they’re entitled to a promotion because they’ve been at a job for a certain amount of time, and company leaders have to do a better job communicating the difference between “doing a job for 20 years and doing the same job 20 times, one year at a time.”
Another culture shift in the industry—and the world—today revolves around better inclusion of minorities, including women and people of color. Fran Kiradjian, founder/CEO, BLLA, noted that at her organization’s conferences, at least 50% of the speakers have to be women. “We’re walking the talk at our conferences… That’s a culture shift through the hospitality industry,” she said.
Ariela Kiradjian added, “It can’t just be a female-empowerment conference.” While those are great, she said, women’s voices must also be in the mix discussing diverse topics.
Denihan Barrett recalled one NYU conference when she was a panelist on the main stage: “It was only women, and the subject was, ‘How did you get to where you got to?’ They wouldn’t have asked a man being up on that panel, ‘How did you get there, what did you do, and how’s your home life?’”
Others around the table agreed about the double standard, though Andy Ingraham, president/CEO, National Association of Black Hotel Owners, Operators & Developers (NABHOOD), did point out that there is a difference for minority groups. “When you see a white male [up there], it’s just a given. When you see a woman, you know it took an extraordinary task to get there,” he said. And seeing a woman up there lets other women know that there is a path to success.
Jagruti Panwala, Asian American Hotel Owners Association (AAHOA) vice chairwoman & president/CEO of Wealth Protection Strategies, spoke to the issue of more diversity at conferences. “The issue with that is when you’re trying to do a CEO panel, you won’t see diversity on the main stage,” she said. “I’ll be honest with you, I’m planning a convention next year, and I want the female executives CEO panel, and it’s hard in the industry. If you want exposure and diversity on the main stage, we do have to encourage more women to get in that leadership position. Otherwise, exposure stops at that level.”
Ingraham pointed out, “Where those leaders are coming from, that’s what will make this industry different, so the young woman or man at the entry level knows there is no glass ceiling, really knows they can become an owner. Once we begin to have that sort of focus from a leadership position, then we’ll see that this issue will only get better. This could be the greatest industry in the world, but the fact is that it has got to be more inclusive at the top level… If folks within that organizational structure know what the culture of the CEO is, you know it’s something completely different.”
Panwala agreed. “I think it’s tough when you start to create diversity on the bottom level and forget about your top,” she said. “If you start from the top, it will trickle down to all positions, but if you have no diversity at the top level, then it’s very hard for them to envision diversity lower.”
“It’s more difficult to push a boulder up a hill,” Ingraham added.
Ingraham noted that his organization is focused on cultivating that second generation of African-American leaders. “In 2001, there was one African-American-owned branded hotel in the United States. Today, we’re just short of 825 hotels,” he said, adding that one of the challenges the industry faces is that, for many years, many African-Americans haven’t wanted to go into the hospitality industry because they didn’t see a career path forward.
The key, he said, is access to opportunity. “It’s having the leadership of traditional organizations say, ‘We want to give you access, opportunity and want to be part of the change.’ That’s our continuous model to look for those forward-thinking executives,” Ingraham said, noting that every year, NABHOOD brings in about 50 students from around the country for its owners to mentor.
Barrett agreed with Ingraham’s point. “It’s tough to say this, but I think opportunity plus time will create where we want to get,” he said. “Our industry is a little different than everyone else’s. It would be easier if it were top down. Unfortunately, it doesn’t feel like that’s what’s happening. It feels like it’s pressing up, and when I look at my senior ranks of positions, five years ago, we didn’t have any female SVPs. Today, we do. Before, we didn’t have any female VPs. Today, we have a lot. You’re absolutely bang on about opportunity, and when you take opportunity and press it with time, it pushes. Unfortunately, the pendulum historically has been in the wrong direction and it’s got to swing in the other direction. I look forward to that.”
So how can the industry create this more inclusive environment? “To me, it’s really walking the talk because you can speak the speak but if you don’t act the act, it’s not genuine and authentic, and people aren’t going to do it,” Denihan Barrett said.
Punke added, “It’s about really living what you want other leaders to emulate. At every level in the organization, especially the senior level, we need to show behaviors that are indicative of what you want others to display.”
Education is key, Jabara noted. “There’s an opportunity for us to touch a lot of lives and drive change. The way we do that is through culture. At our company, we know if we can give them the tools and educate them, the front desk associate is a supervisor in a year and a half, and a couple of years from now is a front office manager. Through learning, we can change a lot of lives.”
Sunny Tolani, CEO, Prince Organization, agreed. “When we have hired people at our hotels who have started in laundry or the front desk, and if they have a positive attitude and are willing to learn, we train them, we coach them and motivate them,” he said. “In my hotels, I have more than seven people who started in laundry or housekeeping less than three years ago, and today they are assistant managers, and two of them are going to go for their GM certification.”
Tolani also pointed out that the hospitality industry has a lower barrier to entry for those looking to grow into leadership positions, pointing to the numerous CEOs in this industry who started out on the line level. “The possibilities are endless… At the heart of hospitality: Be nice, be respectful and you can go to the top,” he said.
Vaughan agreed. “I think we have to do a better job of selling and communicating the opportunity. We have a great industry; this isn’t just the first job. We need to do a better job of communicating to new team members how you can start at an entry-level job, stay here your whole career, develop, learn,” she said. “Our CEO started out as a line-level team member, I started out as a line-level team member, and we have to do a better job of communicating that opportunity.”
Green added that the industry is at an interesting point because of the staffing makeovers hospitality saw in 2001 and 2009. “We jettisoned a lot of leaders in 2001, 2009-11 because underlying, we’re a real estate business, so Wall Street, debt issues caused us to cut payrolls like we’ve never done before,” he said. “A lot of assistant GMs and assistant directors of beverage were gone. Those were future leaders. So, we’ve got to go find new leaders now, and that’s why we have 30-year-old GMs.”
In the case of White Lodging, Barrett noted that the company worked on its managers first to improve culture. “Our managerial turnover last year dropped 24.3%,” he said. “That managerial stability creates something different for the hourly associates. We’re now moving into trying to focus on our hourly associates, but just by fixing a lot of the issues with managers, six full points—not 6%—six full points so far year to date in our hourly turnover. Engagement is really important.”
And so is developing leadership from within. “For any of us to be sustainable organizations, you have to have an internal pipe of people,” Barrett said. “And you have to have that commitment to develop them from within. If you’re not developing from within, you’re not really committed to them because other people can develop them, too. Commit to them and they’ll commit to you.”
Ann Fastiggi, managing director, head of hospitality leisure practice, RSR Partners, noted that one of the biggest challenges when it comes to diversity and inclusion is changing human behavior. “One of the things that we miss with these conversations around diversity, and the need for more diversity and inclusions, is that at the core of those values—whatever your company’s values are—is the willingness and readiness and openness to take people in who don’t think like you,” she said. “Whether it’s gender, ethnicity, whatever it might be, we don’t do that. It’s human behavior. We like to hire in our own likeness.”
More than that, she noted, “As people progress in their careers, particularly up into very senior ranks, there’s an interesting phenomenon we’ve studied about learning agility—your ability to change your point of view based on new information. As people ascend into power, they are less willing to change their point of view in the face of new information.”
And that’s a problem because it’s not enough to just have a diverse group—you have to incorporate diverse ideas. “You need to create the culture where a new idea that’s completely different from other ideas around the table is not only welcomed but encouraged; but also, what do you do with that?” she said. “Ultimately, as a leader, you have to make the decision. You can be as inclusive as you want, but someone has to decide. How do you stretch out of your own comfort zone to say, ‘I’ve never thought of that.’ That’s the definition of diversity and inclusion. It’s one thing to say we need more women at the top and you hire a general counsel that’s a woman or a head of HR who is female. It’s unfortunate because there is a good chance that general counsel won’t be the next CEO.”
Barrett conceded the majority of CEOs come from the CFO role. “When I think about the path to what we’re calling nirvana is, are we developing the talent in the areas it generally comes up through? COOs generally don’t become CEOs. COOs are more tactical; they’re good at running the day to day. The CEO role is much more strategic,” he said. “If White Lodging is to have a female CEO, it’s likely that it’s the CFO whom I groom and grow over the next 10 years who will probably replace me.”
Denihan Barrett questioned whether this path needs to change. “I think we’ve changed the criteria and we need to continue to change the criteria for advancement,” she said. “I think there’s more women in executive roles because we changed our mindset of the boxes you need to check off to be a leader. I also think: To me, is CEO the ultimate or could women be leaders and they don’t have to be CEOs? Maybe, that’s a totally different mindset than how it was with a male-dominated culture. You can be a leader in some other way.”
Tolani pointed out that regardless of the path to CEO, it is imperative that the person in that role knows the financials, the P&L and the forecasting. “For the future, women who want to be CEOs, my thing would be to align yourself with it. That is important criteria to be a CEO,” he said.
Echoing Fastiggi’s point about hiring those who aren’t like us, Barrett said, “There’s a lot of testing available to do subliminal bias testing. People would be very surprised to see what the results of that testing really is. When that becomes more mainstream in a lot of our leadership training, the self-awareness of the issue is something that we will grow better at dealing with. As long as people here are talking about this, it will get better.”
“These are extremely complex issues,” Fastiggi agreed. “They’re not solved by one initiative or one change or one person’s point of view. I applaud you [all] for taking it on.”
“We’ve got to be truly open to making sure that these historical issues that we are dealing with—that, to me, are an embarrassment—that we fix them, that we’re all committed,” Green said. “There’s a lot of leaders in this room with a lot of hotels and a lot of control. I want to be one of the people who take action. I want our company to be part of it. If all of us can commit to less talk and more action—it’s great it’s risen to the forefront and it’s talked about, but now let’s make it happen. We’re a hyper-diverse industry, but we’ve got to do better and work hard at it.” HB