Managing for Excellence

Abstract

A study of the U.S. lodging industry's best practices found that managers use innovation to create customer value. A resounding majority of best practices arose at the corporate level, with a minority at the property level. Of those coming from properties, most came from upscale, full-service hotels, rather than limited-service or budget properties. However, there is no evidence that innovation is inherently a function of corporate offices or upscale hotels. Relatively few best practices were in the areas of design or information technology, while many appeared in human resources, marketing, and operations. Virtually all innovations began with one person's idea and survived only because of that person's initiative. The idea must then be spread throughout and integrated with existing operations, which makes communication essential. Finally, lodging companies need to develop ways to measure the outcomes of their innovative practices. In many cases a given practice was thought to have improved employee morale, customer satisfaction, or profitability, but specific, outcome-related measurements (whether of profit or customer loyalty) were frequently unavailable.