Though Hilton had grown considerably in recent years, largely through acquisitions, including DoubleTree, Embassy Suites, and Hampton Inn, it had taken on a heavy debt burden, and the stock was trading at a lower multiple that its competitorsâ. But the fundamental problem, Nassetta understood, was the companyâs culture. âThere was no culture of innovation,â he said. âIt was more a culture of do it at a relatively slow pace and do it the way weâve always done it.â Changing that would be a daunting challenge.
Related Quotes
I came to see, in my time at IBM, that culture isnât just one aspect of the gameâit is the game. In the end, an organization is nothing more than the collective capacity of its people to create value. Vision, strategy, marketing, financial managementâany management system, in factâcan set you on the right path and can carry you for a while. But no enterpriseâwhether in business, government, education, health care, or any area of human endeavorâwill succeed over the long haul if those elements arenât part of its DNA.
Culture isnât just one aspect of the game - it is the game,â Gerstner says. âIn the end, an organization is nothing more than the collective capacity of its people to create value. Vision, strategy, marketing, financial management - any management system, in fact - can set you on the right path and can carry you for a while. But no enterprise - whether in business, government, education, health care, or any area of human endeavor - will succeed over the long haul if those elements arenât parts of its DNA.â
Chris Lofgren, chief executive of Schneider National, the large transportation and logistics company believes that âculture is a foundation upon which you build your long-term strategy. If you build a strategy that isnât consistent with the culture, it isnât going to work.
Chris Nassetta, when appointed to the helm of Hilton Hotels in 2007, made vital discoveries by travelling to a large number of hotels to talk with employees. The company had just been purchased in a high-stakes leveraged buyout by Blackstone for $26 billion, one of the largest LBO deals ever. For his first three months, Nassetta travelled to Hiltons in the United States and abroad, talking to workers on the front lines, such as bellhops and cooks, in addition to hotel managers, and questioning customers. He discovered that, as he put it, âthe culture was a wreck.â Among many problems, the companyâs standards for service were subpar. To kick-start rapid improvement, he instituted a requirement that every company manager spend three days working in a hotel, at the front desk or in the kitchen and doing housekeeping. He also implemented an employee evaluation process, emphasizing quality of customer service provided. Those were early steps in a many-years-long process of creating a culture of excellence, which, as we detail in Chapter 7, drove a remarkable turnaround in Hiltonâs fortunes that made the LBO one of the most successful in history.
Flush off of that achievement, Hoplamazian turned his attention to a feature of Hyatt that was the reason heâd decided to make his big leap. In his months as interim CEO, working closely for the first time with the Hyatt executive team, he realized that âthere was something so special about the culture of Hyatt. I couldnât quite put it into words, but nobody was showing up just to punch a clock.â He felt deeply that heâd had âa true emotional experience of joining the Hyatt family.â Now he decided to delve into the power behind that strength of connection he felt as fuel for growing the company.
Notes
Chapter Four: Reinvention
- Rose Gailey, Ian Johnston, and Andre LeSueur, âAligning Culture with the Bottom Line: How Companies Can Accelerate Progress,â Hedrick & Struggles, www.heidrick.com/en/insights/culture-shaping/aligning-culture-eith-the-bottom-line-how-companies-can-accelerate-progress#RefN2