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How to be really innovative in hospitality and service business?

20 November 2013 06:30 pm - 0     - {{hitsCtrl.values.hits}}


A premier accounting institute in Sri Lanka held its 34th National conference recently. In the weeks ahead and during, amidst wide publicity, the two day event, screamed: ‘Innovation’. Everyone associated with the conference including those who had their messages carried in the print media; both individually and collectively echoed the same thing – ‘Innovate to Grow’.

Clearly, In today’s competitive and constantly changing global economy, leading companies are becoming increasingly aware that real growth in the future will come from innovation rather than from mergers and acquisitions…and even less from ‘business as usual’. We all know how innovation has triggered success for business. If not for innovation, Apple would not have given us the iPhone.

Had Microsoft relaxed with the release of DOS, would we be using windows operating systems?  Imagine this is 1979: If you were reading this article back then, chances are you would have read it only on paper – with a printed newspaper or magazine in your hands. Today, you could be also reading it on a desktop computer, a laptop (or as a printout from either of these), or perhaps even on your Blackberry or iPhone.

Even in the world of lingerie, innovation has led to the InvisiBra: a new strapless, backless self-adhesive bra that amazingly won’t slip off. The pace of innovation has been so hectic in recent years that it is hard to imagine which innovations have had the greatest impact on business and society. Unfortunately, while innovation is firmly on the lips of many of today’s CEOs, the majority of them struggle to transform ‘word into deed’ and thus getting people to embrace innovation continues to remain a major challenge.

Everyone thinks they are innovative
Innovation is a surprisingly hard word to define. Everyone thinks they know it, but when you ask them to explain exactly what an innovation is, it gets very hard. Having searched for an easy-to-comprehend definition of innovation, the one that appealed most to me especially for its innate simplicity was this: “Innovation is more than simply a new invention; it is something new that creates new opportunities for growth and development”.

To better understand innovation in this context: what greater example than cellular technology, where we have from zero to close to three-and-a-half-billion people who own a mobile device and are connected to each other. Some innovations come and go very quickly. Some, such as the rat trap with a ‘kill-o-meter’ can be meaningless – after all, who cares how many rats were caught so long as the trap functions effectively.

Those that generate whole new industries and, subsequent new technologies profoundly matter and, perhaps it is here, that the greatest game changer – the Internet, together with broadband tops the list. The Internet took away a major constraint to accessing knowledge and sharing knowledge. It opened up a whole new world to the entire world. Almost every aspect of business or social relations today is touched by the Internet and the subsequent industries the platform has created on an international scale. As innovations go, it is the biggest - spawning other innovations as we hurtle towards the future.

What is innovation?
Innovation is hardly a new term. The word, which derives from the Latin noun innovatus, meaning renewal or change, appeared in print as early as the 15th century. Although innovation is currently amongst the top-issues of many corporations, many executives have a wrong, too narrow view of it.
They see innovation as synonymous with new product development or traditional R&D, where innovation occurs mostly in the product and technological domain, particularly in the pharmaceutical and cellular fields. This erroneous line of thinking was first debunked in 2006 by Professors Mohanbir Sawhney, Robert C. Wolcott and Inigo Arroniz, when they introduced their ‘Innovation Radar’ in the MIT Sloan Management Review. The radar features four major dimensions that serve as business anchors:
  • Processes it employs (HOW)
  • Offerings a company creates (WHAT)
  • Customers it serves (WHO)
  • Points of Presence it uses to take its offerings to market (WHERE)
Spread over these 4 main dimensions, companies can innovate their businesses far broader in scope than product or technological innovation: a company can actually innovate along any of 12 different dimensions, including the four main ones already mentioned:
  • Networking
  • Supply chain
  • Processes
  • Customer experience
  • Solutions
  • Offerings
  • Platform
  • Customers
  • Value capture
  • Organization
  • Presence
  • Brand

Thus, the innovation radar can help to broaden the innovation focus in companies and to show that innovation is about creating new value, not about creating new products. Despite this, many industries especially those in the hospitality and service related businesses struggle to capitalise on it.

Does ‘High-tech’ and ‘High-touch’ mean ‘Innovation’?
In 1992, Akio Morita who was the Chairman of Sony Corporation remarked that “Technology alone is not innovation. From a corporate perspective just having innovative technology is not enough to claim true innovation.” Unfortunately, the majority of hospitality and service organisations believe in the opposite. No small wonder that for many of these companies, delivering the best customer experience is as elusive as the lochness monster. In any service organization, people, process and technology must be aligned around a shared vision and delivery of the optimal customer experience. The key word here is ‘customer experience’.

It seems that those of us in hospitality may be going down the rocky road, integrating people, process and technology to the point where the technology has, in some instances, usurped the people. In an industry where the sense of being taken care of is a core competency, any innovation that minimizes human contact is arguably a step in the wrong direction. Sadly, this has been the fault line in an uneasy coexistence between the hospitality industry and innovation over the years.

Quite often the technology innovations within the hospitality industry detract from the conveyance of actual hospitality. Can customer-facing technology actually provide ‘hospitality’, as we understand the term? Can you tell me the last time you felt a surge of warmth or concern for well being from your PC?   

On the flip side, any technological innovation that creates additional opportunities for human interaction - by creating more time for your staff to interact with guests or customers for example - is a winner. Regrettably, some have already ceded ownership of ‘hospitality’ by poorly reframing the way they think about ‘doing business’ whilst ditching the attributes of warmth, generosity and friendliness.     

Hospitality current practices see things differently
Why is this so? Because hospitality management and organizational structures are settled basically to command and control, while service workers are there just to provide good service by following orders.

That’s all, and learning may be reserved to a few people. In a command-and-control style of management, the message to most team members is: “We don´t basically pay you to re-think what we have already thought off in our corporate offices; we just pay you to follow our standard procedures and provide a good service by being very attentive, friendly, and emphatic to our guests”. In such scenario, the company depends on a few geniuses -in the best case. Knowledge and decisions are centralized and there is very limited organizational learning happening.  

What makes a company innovative?
Although well intentioned, it can be counterproductive when trying to figure out how best to wire the “innovation” pathway within your own company. When you’re trying to teach your six-year old son to ride a bike, you don’t attach the training wheels and show him videos of Lance Armstrong (This was before LA’s fall from grace), climbing the Alps.

So, how does your company attach the training wheels for the innovation ride? As a prelude, applying a PDCA (plan-do-check-act) learning process happens continually- when not only managers, but also front-line employees, are encouraged to analyse their work. (Although in reality, only a few hotels practice this consistently). Learning in jobs happens constantly when service workers are responsible for improving hotel operations.

Learning then happens every time a worker is analysing how to improve a process, or when trying to solve a problem by going to its roots. Problems may have arisen to the surface when analysing some guest’s feedback or just by recognizing one’s mistakes. One must take cognition that, innovation is a trial-and-error process. This process of learning happens first individually, i.e., it starts with the employee’s reflection about how he/she can contribute to improve a task or procedure. Any ideas that thus emerge must then be discussed and developed before been put to practice.

Failure also an option
Learning and unlearning are prerequisites for innovation. Unless we learn and understand something we have not understood before – and unless we challenge and overrule existing wisdom, thereby creating or stumbling upon new wisdom - we probably will not innovate. To be able to do just that, companies must ‘walk-the-talk’ and provide the climate that continuously fosters and perpetuates innovation. This demands a shift in thinking from popular belief. While most people view innovation predominantly as a creative exercise, research has shown that in order to be creative you have to have the right environment to do it.  Merely tasking a team to ‘be creative’ won’t get you to be innovative. It’s having a corporate climate and culture that provides people the space to experiment and the encouragement to take risks that will only sustain it. I would argue the most critical element of business culture, for an innovative company, is giving employees freedom and encouragement to fail.
If employees know that they can fail without endangering their careers, they are more willing to take on risky, innovative projects that offer huge potential rewards to their companies. On the other hand, if employees believe that being part of a failed project will have professional consequences, they will avoid risk and hence innovation – like the plague. Remember teaching your six- year old son to ride the bike? Once he learned to mount the bike, pedal properly, use the handle-bars to turn, handle braking and was beginning to enjoy the ride, it was time to detach the training wheels…for that all important ‘balance and steer’ phase. As we all know from experience this learning phase was never crash-free. Anyone who quit after the initial humiliating crashes – would never have learned to ride a bike. Likewise, a company’s culture can foster innovation…or kill it.

(To be continued)

(Shafeek Wahab has an extensive background in Hospitality Management spanning over 30 years. He has held key managerial responsibilities in hotel chains, both locally and abroad, including his last held position as Head of Branding for a leading Hotel Group in Sri Lanka. Now focusing on corporate education, training, consulting and coaching he can be contacted on [email protected])

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