Reference no: EM133190132

Ashcroft Hotels, a mid-size chain with an outstanding track record of turning around underperforming properties, recently acquired the Lincoln Hotel. The Lincoln posed a considerable challenge-even for the Ashcroft chain. The transition began with corporate executives deciding to replace the Lincoln's general manager with Martin Wood, the most experienced and successful manager of the chain's turnaround team. Martin would be responsible for assessing the current staff at the Lincoln Hotel and making the necessary changes to improve the property's performance.

The only restriction was that Martin had to replace the current food and beverage director with Theo Waters, a rising star at the corporate flagship hotel. Joanne Landis, Ashcroft's vice president of food and beverage, insisted that now was the time for Theo's big test.

Martin expressed some concern. He felt that turning around the Lincoln Hotel posed enough of a challenge. He didn't need the additional burden of mentoring some hotshot who never faced serious problems and always had the resources available to help him succeed.

Joanne understood Martin's concerns and took full responsibility for Theo's placement. "You'll see," Joanne said, "Just turn him loose and he'll turn it around." Unconvinced, Martin gave in to the demand, but insisted that Theo had to be part of the management team at Lincoln. Joanne readily agreed that Theo, like the other managers, would be accountable to Martin. Her last comment was, "I don't want to interfere with your responsibilities, Martin. I only want to give Theo a chance to shine at another property. I'll have HR send you a copy of his file this afternoon."

Theo Waters was indeed a rising star at Ashcroft. He had bused tables and worked as a food server in college while he earned his hospitality degree. After graduation, he entered Ashcroft as a management trainee at the flagship hotel. He was soon promoted to assistant restaurant manager. His first department head position was as the room service manager. Most recently, he was the fine dining restaurant manager. He learned the chain's standards and procedures at the finest and best-run hotel in the chain. Even in this environment, he helped fine-tune an already profitable, smoothly running operation into an even more profitable one. In addition, he was instrumental in launching the company's new award-winning fine dining concept, which the company planned to roll out to other properties, like the Lincoln.

The next week, Theo arrived at the Lincoln Hotel. At an hour-long meeting, Martin welcomed Theo as the first new member of the high-performance team that would turn the hotel around.

"Theo," Martin began," it's important that we start things off right. Change is always difficult, but at underperforming hotels, like the Lincoln, change is often resisted, especially if managers and employees perceive changes as personal attacks."

"I understand," responded Theo, "changing procedures at the flagship wasn't easy, you know. But once we let the staff know how serious we were, people straightened up and we moved ahead."

Martin paused and momentarily regretted giving in to Joanne. "Yes Theo. You did a fine job there. But we're not just changing procedures here-we're challenging and changing a whole culture of work."

"Sure. It's a bigger job. What are some of the immediate problems?" asked Theo.

Martin handed Theo a short list of several areas that needed immediate improvement:

• First off, the restaurant is operating at a loss. Profitability must be restored as soon as possible.
• The inventory levels are too high, as are costs, but the staff also complains of frequent stock outs of critical items.
• Food production is often of inconsistent quality and portion size and food items are late coming out of the kitchen for waiting guests.
• Sanitation levels are often unacceptable both in the kitchen and in the dining areas.
• Table linens sometimes come back from the in-house laundry with stains still on them, and employee uniforms are dated and poorly maintained.
• A couple of ovens in the kitchen are not working properly and most of the appliances are old and need some sort of maintenance, but complaints to engineering just seem to pile up.
• Guests often complain about poor service. The hotel's director of sales is reluctant to bring potential clients to the hotel's own restaurant because of the service, which has embarrassed her too often before.
• There are scheduling problems, especially (but not only) during high occupancy periods, when the restaurant is often understaffed to meet the demand.

Martin continued, "As you can see, there are problems with the management team as well as with the line staff. I suspect that the director of sales and the rooms director are understating forecasts so they can always exceed them. This puts staffing in the restaurant at risk-you're always short-handed. I don't know what the deal is with engineering, but I'll find out." "I'm sure I can tackle my area's problems right away," Theo offered. "Theo, for the next thirty days I'm going to be focused on several critical areas of the hotel. But don't be the Lone Ranger. I'm here for support and advice, so don't hesitate to meet with me. This has to be a team effort." Theo began by calling a restaurant department meeting, during which he made it very clear that the level of performance that had been acceptable in the past would no longer be tolerated. "I intend to make this restaurant's service rival that of our flagship property," he announced.

He distributed a new procedures manual that he recently helped revise in his previous position and insisted that everyone read it thoroughly and begin following its contents. Theo pointed out, "There will be no more eating in production or service areas of this restaurant-that's why we have a break area."

Theo continued, "I'm bringing in a leading customer service training program that guarantees to increase the restaurant's average check and total revenue. This training program will also address the top ten guest complaints and give the servers' responses and tools that will help them satisfy unhappy guests." He banned the servers' current practice of pooling tips, "I don't believe that pooling tips encourages the kind of superior service we want at this restaurant," he declared.

A few days later, Theo unveiled a new work schedule with major changes in a deliberate attempt to upset underperformers. When some staff members complained, he responded, "There are a lot of restaurants in this town. If you don't like it here, a person has to do what a person has to do."

Over the next couple of weeks, Theo was kept busy putting out one fire after another. He disciplined the chef for allowing cooks to give servers food prepared by mistake. He found a group of servers still pooling tips and threatened to fire them. It seemed like every time he turned around, the staff was doing all it could to ignore his directives and undermine his authority.

One day, near the end of the month, things just blew up. The restaurant was very busy because of high occupancy at the hotel. As Theo walked through the dining room, he heard a guest complain angrily that his food was taking forever to arrive. Theo went to the kitchen and asked the chef what was causing the delay. The chef explained that he was not prepared for this business volume. "My cook was swamped and burned the first plate, which had to be redone."

Theo returned to the waiting guest and as he comped the meal, another guest at the next table complained that she had been sitting for several minutes and no one had even brought her water to drink. Theo rushed to the kitchen and accused Beth, that table's server, of failing to take a guest's order within the time frame set out in the procedures manual. Beth lost her composure and let Theo have it, "I'm working a double station. How am I supposed to keep up according to your standards? Why don't you get off people's backs? We're working awfully hard to cover up for your stupid new schedule. What do you expect when we're always understaffed?"

Theo pitched in and began helping servers get the food out. In the dining room he noticed the director of sales leaving with a client. She called him over and privately said, "This is exactly the kind of service that always embarrasses me when I'm with clients." Theo snapped back, "If you didn't sandbag your occupancy projections, we could schedule staff appropriately and this wouldn't happen!" As Theo walked away, another server rushed up to him and said he couldn't get the cappuccino machine to work properly. After comping another meal, Theo struggled to control his emotions, "Engineering has known about the cappuccino problem for days. Why doesn't anything ever get done right?"

By the end of his first month, despite increased customer counts, the restaurant's revenue performance had not noticeably improved. However, Theo had managed to alienate not only the restaurant staff, but also most of the hotel's management team. Even the controller, who had cautiously supported Theo initially, started to doubt his "superstardom" because she saw a lot of comped checks and no increase in net revenue. Her willingness to cooperate with Theo was beginning to ebb.

Martin called Theo into his office for an end-of-month progress report.

Discussion Questions

1. Do you agree with corporate's decision that Theo is an excellent candidate for this new position? What about his background and experience would help prepare him to succeed at the Lincoln Hotel? Why did Martin Wood have misgivings about Theo's abilities? What about Theo's background and experience would hinder his ability to succeed at the Lincoln Hotel?

2. What did Theo do well in approaching his new assignment? Why did Theo's efforts to create change fail? What could Martin Wood have done to avoid the end-of-month situation?

3. At the end-of-month meeting, what is Martin likely to say to Theo? How might Theo respond? What are the next steps that Theo should take in his effort to turn his department around?