The world’s leading hospitality company’s worldwide reservations organization, consistently recognized as “best in class,” had a challenge. Franchisees were beginning to express concerns about growing chargebacks to the properties, as measured by cost per reservation, and sought improved value from the centralized reservation network. Despite this growing concern, the client received consistent recognition as the LOWEST COST, HIGHEST CUSTOMER SATISFACTION provider in its industry.
The client pursued a consulting engagement to avoid a performance crisis within a long-standing commitment to aggressive continuous improvement. The objective was implementation of a strategic transformation to improve selling effectiveness while protecting the client’s world-class status with respect to service and cost. The scope and scale involved four reservation centers across the United States employing 1,600 associates year-round and 2,000 seasonally, handling more than 20 million calls annually – on a combined 24 hour, 7 day per week basis.
The overall objective was to create a model for sustainable continuous improvement across three key areas:
- Sales effectiveness: Significant improvement as measured by the conversion of inbound calls into room reservations and by the revenue generated per reservation.
- Productivity and Performance Variability: Reduce the gap between high performers and low performers and raise overall productivity, as measured by calls handled per associate hour.
- Performance Measurement and Management: Align and integrate essential support processes for planning resources, routing calls, and measuring associate and center performance compared to plan and budget.
The underlying challenge was was the sustainable transformation of the organizational culture to sales, revenue generation, and customer service from answering telephone calls and taking customer orders.
The implemented solution consisted of three integrated elements: organization-wide goal alignment, a daily performance measurement and management system, and a human resources development system based on expert behavioral models.
- Goal alignment throughout the Reservations operations re-focused efforts on revenue generation, putting “heads in beds,” and productivity rather than work rule compliance.
- Top performing associates shared Good and Best Practices to create Expert Models for use in associate assessment, continuous improvement plan development, recruitment, selection, and training. Supervisors, trainers, and managers conveyed the defined and accepted attributes of success to new associates and to sub-optimal performers.
- Supervisors and managers re-focused attention on bottom quartile performers and new associates using the Expert Models as coaching guides, which increased likelihood of associate success and allowed for early identification of mis-fit hires.
- Re-designed performance appraisals, aligned with the Expert Models, supported new performance expectations, rather than work rule compliance.
- A customized database application, which pulled data from seven distinct sources, measured performance on individual, team, and brand bases and allowed managers, supervisors, and individuals to monitor and manage daily performance versus budget-based goals.
- Supervisors and managers targeted variances in performance within teams and provided timely coaching to lower quartile performers, which dramatically and quickly improved team and reservation center performance.
- New database tools reengineered the process forecasting, scheduling, and staffing processes, enabling the reporting of actual volumes versus plan, the redesign of accountabilities, the implementation of an Early Warning System to automatically flag eleven critical out-of-tolerance conditions related to staffing and call routing between centers, and the expandsion of service level reporting, which captured performance over the full range of customer service attributes.
- A new self-funded incentive program for associates, contingent upon individual, team, and center sales effectiveness and productivity, reinforced the new behaviors among associates, supervisors, and managers.
- The implementation of a closed-loop continuous improvement process assured goal alignment and continuous stretching, measurement and remedying of performance variances, and reward and recognition consistent with revenue and productivity goals.
Sustained cultural change was the most dramatic result, with random calls to the toll-free reservations numbers confirming sustained use of the new systems more than six years following the conclusion of the project. Measureable results included:
- Improved performance against four major metrics of 30-40% each.
- Increased front line “managing” capacity by 45% through job redesign.
- Reduced Resource Planning Process variability by 20%.
- Reduced unit cost through associate productivity improvements – valued at $1.2 million annually.
- Increased call conversion performance – worth $1.6 million in cost per reservation savings and $16 million in incremental annual revenue.
- A return on the project investment of 300%, which exceeded targets by 70%.