Salary – A philosophical & aphoristic perspective

An 'Aphoristic' perspective
The tragedy of our age is salary”… writes Sunday Adelaja in ‘No one is better than you.’

My fellow working hoteliers are mostly receiving their salaries in part and the extremely fortunate few, in full by now. One’s reaction to a truncated salary receipt, while not initially positive, must compel ourselves to look at our half-filled glass and consider that ‘I have a salary,’ if even in part; for there are many who have not been fortunate to have retained their employment in these trying times. Thus the need to look at Salary from a philosophical & aphoristic perspective.

Those of us who have a passion for hospitality have chosen our own area of calling and purpose and we are working and converting our life into that area of calling. If you are such a passionate employee, you will realize that if you genuinely believe you are not being compensated with salary, it is then that you become the boss over your own life, for you have not allowed money to rule your life.

Mokhonoana in his aphoristic style writes “The reason that man is seldom satisfied with his salary is that when it increases, he increases his expenses.” For those who have received a 50% deduction, a positive way of approaching the current salary crisis is to remember how one lived when one’s salary was half what it is now. The answer perhaps may startle us – we were equally happy and experienced the same level of wants, needs, and satiation at that time. It is only then, that we began to view our Salary from a philosophical & aphoristic perspective!

This tells us that money is a means to an end and not an end to a means.

There’s no money in poetry, but then there’s no poetry in money, either,” said Robert Gravesthe Poetwhile Voltaire, the writer said, “Don’t think money does everything or you are going to end up doing everything for money.” Profound statements, both eviscerating the ideal stance in the prevailing scenario.

At the pandemic’s outset many months ago, most international & domestic hotel chains in India took policy decisions to cut salaries as per grades and retrench employees in order to stay afloat. These chains are mostly managed or franchised where individual owners come into play. Those employees who were, and still are blessed to receive any salary, need to maintain an aphoristic perspective, to retain their philosophical sanity. On the other hand, some of the larger Indian chains with self-owned properties did not withhold salaries (barring performance bonus), making their employees amongst the fortunate few in the industry – these few and rare instances display the company’s courage to pay complete salaries during these stressful times and it clearly reflects the importance they give to their human capital.

Salary - A philosophical perspective

On the other end of the spectrum, there are some hotels which have retrenched and cut salaries quite ruthlessly. A luxury chain has rationalized all salaries above Rs. 50000 p.m. to the base amount (a Manager earning 60k p.m. will get 50k, and a GM earning 500k p.m. will also earn 50k) while several luxury chains have asked its people either to leave or to sit out until further notice. Dickson G. WattsAuthor states “Not to have the courage to accept a loss, is fatal. It is the ruin of many.”

Such are the vagaries of business that in order to survive, a business has to reengineer expenses in tune with market trends. Frederic Bastiat, a French economist of the 19th century once famously said “Everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone.

Airbnb Chairman, Brian Chesky released a note a few months ago, announcing layoffs and the surmise behind it. In the note to his employees, he writes:

“We don’t know exactly when travel will return. When travel does return, it will look different. While we know Airbnb’s business will fully recover, the changes it will undergo are not temporary or short-lived. Because of this, we need to make more fundamental changes to Airbnb by reducing the size of our workforce. It was important that we had a clear set of principles, guided by our core values, for how we would approach reductions in our workforce. These were our guiding principles:

  • Map all reductions to our future business strategy and the capabilities we will need.
  • Do as much as we can for those who are impacted. 
  • Be unwavering in our commitment to diversity. 
  • Optimize for 1:1 communication for those impacted. 
  • Wait to communicate any decisions until all details are landed — transparency of only partial information can make matters worse. 

The result is that we will have to part with teammates that we love and value. We have great people leaving Airbnb, and other companies will be lucky to have them. To take care of those that are leaving, we have looked across severance, equity, healthcare, and job support and done our best to treat everyone in a compassionate and thoughtful way.”

This seems to be an empathetic manner of approaching severance and salary cuts.

In the book To Kill a Mocking Birdby Harper Lee, Atticus Finch tells her daughter: “You never really understand a person until you consider things from his point of view – until you climb into his skin and walk around in it.”

I sincerely commiserate with all my industry colleagues going through this current crisis and do pray that we all live through this period with grace, equanimity, and a strong belief in the Almighty and faith in recovery to better times ahead. It is not easy to have to receive wages less than what has been contracted for and I trust owners will empathize with their employees’ pain whilst implementing such measures.

At the end of it all, we must remember that there is that which is in one’s hands and then, that which is not… As an employee, the quantum of salary pay-out may not be in your hands. However, accepting the inevitable that salary is transient, would be a philosophical way of looking at this aphorism.

In the meantime, it is highly recommended that we invest this time in upgrading ourselves in various areas. You are the best judge for what you need to upskill on, professionally or otherwise. “Better capital in a man’s head than capital in a bank.” – Dickson G. Watts

So keep your thoughts positive. To quote John Assaraf, “Keep your chin up. No one expected you to save the world, otherwise, you would have been born wearing a cape and tights. Just do the best you can.”

#hotelsalaries #hotelindustry #hotelowners #hoteliers #hoteliernews #salarybenchmarking #salarysurvey #salarysacrifice #hotelmanagement #ownershipchallenges #covid #leadership

This article is also covered in ET HOSPITALITY WORLD.COM and ET HR WORLD.COM

 

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Use These Masks with Discretion

Will you be giving us a certificate for the Stress Management program?” I was perplexed by this question from several participants, more so when it was to be a two-hour online session. To one of them, a lecturer, I asked “Why are you so keen on having a certificate? Do you think it will help you manage your stress?” She replied, “It looks good on my CV.”

I have been attending the 10-day Vipassana and Satipatthana courses since 1986 and till date neither the participants have asked for, nor has the Vipassana International Academy felt like giving away the certificates; the Vipassana program had a greater impact on my life than my formal education, that too without any certification. Mark Twain said, “I did not prevent my school from getting me educated.

The conventional masks, the N95, and its variants are used as a prevention against COVID-19… and then there are credential masks comprising of academic credentials and professional achievements.

Credentials, certifications, etc. have their validity and relevance to set benchmarks, SOPs, etc. and need to be adhered to while selecting a candidate or a vendor. Essential in professional life, they may indicate a person’s potential, not necessarily his accomplishments. There is a problem with too much emphasis on credentials.

There are two types of errors people tend to make either about themselves or of others.

With a degree or certification from the right type of institute, one feels competent. People also tend to judge other’s competence with the same type of masks. The media also adds to the credential mask hype by taking out the rating surveys. I wonder whether it is for the potential customers (the students) or for the vendors (the institutes). It may be for both.

Quite often we tend to equate a person with the credential mask one wears and it may lead to errors as in the case of  Vinod Mehta, one of India’s most influential editors with publications like The Sunday Observer, The Indian Post, and Outlook. He barely scraped through with a third-class degree in B.A. He said while recruiting a copy editor, “I always make it a point not to recruit a copy editor based on his/her marks in English literature as I myself did not score good marks in English at any level.

The problem with the masks is that after some time we fall in love with the masks which are our credentials, be it the degree, the CTC, the designation, or our possessions. It starts in childhood with marks and without awareness, the ‘r’ in marks gets transformed into an ‘s,’ other alphabets remaining the same. As Nirad Chaudhary says, “Marks are a stark reminder of India’s slavish colonial past and a pointer to being an academically third-class country.” (Nirad C Chaudhary – Thy Hand Great Anarch, 1987)

Prasanta Chandra Mahalanobis – The father of Indian Statistics told Pandit Nehru that if the marks based evaluation on the legacy of the Macaulay system were not to be scrapped, India would degenerate into a world of toppers sans any skills to survive in a competitive world.

Credentials are certainly important in professional life but what happens if they are applied at a personal level too? Shweta, 28, with an MBA Finance working in a bank is looking for an alliance. As her CTC is Rs. 12 lakhs, her expectation is that of a groom, (apart from a PG degree) with a minimum CTC of Rs. 15 lakhs. Now if a candidate is switching from a job of Rs. 12 lakhs to Rs. 15 lakhs that is fine, but can the same yardstick be applied to one’s personal life? What happens if the husband were to lose his job after marriage or if he were to start his business with uncertain income for the first few years?

Imagine a scenario where the guy, a Software Engineer from an MNC gets engaged to a lady, a Program Manager working in a local company. Based on his higher CTC, he tells his fiancée: “Based on your performance you will be promoted to the position of a wife in six months,” to which she responds: “Your people skills are under review. Post-marriage you shall undergo training for 2 years and based on your performance, your eligibility for fatherhood shall be considered.

Can a conventional yardstick of evaluating a person on his credentials lead to an error in judgement? Rahul Sankritayan, considered as the Father of Indian Travelogue literature, was never considered fit to teach at any Indian University as he did not even finish matriculation. The University of Leningrad appointed him as a Professor of Indology and neighbouring Sri Lanka appointed him as a Professor Emeritus at Colombo University and permanent head of faculty of Buddhism Studies and Pali. It was Nehru who intervened and bent the rules for this polyglot and polymath genius.

Quite often our perceptions create our reality. Having attended a week-long program at Harvard or IIM, some executives put that in prominence on their LinkedIn profile creating a perception of a full-time program. (After all marketing, advertising and branding are nothing but creating perceptions and illusions!) As long as we are aware that it is the requirement of a role and that prevarication of the truth is the same as a lie – that is fine.

When you go for a job interview or a sales call meeting with your client, you need to be well dressed, focus on your strength, and say the best things about yourself, the company, and your product range. Sometimes during a job interview when you are asked about your weaknesses, executives project them in such a way that they are perceived as strengths. Some candidates tell me, “One of my weaknesses is that I work too hard and am not able to devote time to my family,” or “I am a taskmaster focussed on numbers all the time and not being able to focus on my hobbies.” The irony is you can see the real person beneath such masks.

But can these masks really help us when we go through tough times or an existential crisis? A well-dressed successful CEO once visited a Zen master to address his personal anguish and frustration. He started his corporate jargon focussing on his strengths. The Zen Master asked him whether he is ready for a cup of tea. As the Zen master was pouring tea in the cup, the CEO went on sharing his success stories ad infinitum and ad nauseam. The Zen master went on urging him to talk more. The CEO being in his element never realized that the cup was full, still, the master continued pouring; and tea overflowing in the saucer. The CEO could take it no longer when he saw tea dripping on the ground. Unable to control his irritation, the CEO said, “Master, this is terrible. If you cannot pour tea into the cup properly, how can you solve my problems?” The master replied, “You are like this overflowing cup with your achievements and miseries. Unless you empty your cup and let go of your mask, there is no possibility of a profound change.”

An N95 or Credential mask is essential when we are away from home and interacting with strangers, customers, vendors, or colleagues. It is easier to take off a regular mask when we are back home. With Work from Home (WFH) becoming the new normal, several executives find it difficult to let go of the credential mask in a personal capacity. An emotionally intelligent person is the one who takes his work seriously but not himself.

Never judge a book by its cover or a person by his mask! So just let go of the baggage, the credential mask… neatly summed up by this poem.

Rajan Parulekar – Director, Hospitality Paradigm

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Pandemic breaks Pricing Myths

Are hotel pricing myths being busted simply to offer Luxury at lower rates?
Picture credit – Ramiah Daniels

Covid-19 has busted hotel pricing myths even as we are in the worst performing year for hotels in a century. This pandemic is nothing like 9-11 or the 2008 global financial crisis – Nor even India’s demonetization or GST implementation!

As a result, corporate travel, leisure (inbound, outbound, domestic), heritage, adventure, MICE, religious, spiritual events are all smitten. Also, the same holds for upcoming high-value niche tourism products. Culinary, Wellness, Sea & River Cruises, Glamping, Rafting, Sports, Wildlife, Agritourism, and many more are all affected.

The harsh reality of Covid-19 has busted a few hotel pricing myths:
  1. “Our brand image will take a beating if we offer lower rates.”

    We (the industry) are now on a survival mode. Your guest will not necessarily perceive lower rates to equate with a lower quality. Consequently, market perception during such extreme times will not necessarily define rates. Aspiring travellers are looking for a deal right now and hence being cautious with their money. This is even more relevant for independent and boutique hotels that have spent millions building a brand and a following. Therefore, give guests a chance to experience your product for the first time or as returning guests. Besides, their money will help your cash flow. That is how global recovery starts… one room at a time!

  2. “Sub-optimal rates will adversely affect the quality of our guests.”

    Millions have lost their jobs in 2020, thanks to the pandemic. Since mid-March, the impact on organised and unorganised tourism has been severe. The result is a very high unemployment rate in the industry. These are numbers not seen since the Great Depression (1929-33). There is a very good chance the same people who paid a high rate at your hotel pre-pandemic are now under or unemployed. So, are the same people now undesirable because they are financially stressed and clawing their way back up? Why would you not want to get them back at a lower rate for now? After all, they are the same demographic, but with a reduced propensity to spend.

  3. “Lower rates will lead to a decline in product quality.”

    In today’s times, this is a misnomer. Without yielding on quality, hotels are now learning to trim costs more effectively. Hence, there is no need to sacrifice quality to match the drop in ARR.

  4. “If we lower rates now, it will take years to rebuild our ARR.” 

    In light of the current life-changing pandemic, this does not apply. The world economy has come apart this year. Also, people are still severely travel-restricted. As hoteliers, we must reflect this in our dynamic pricing. Concentrate on occupancy over ARR from the RevPAR perspective for the nonce and therein fill your rooms. You may subsequently pull up your rates when the pent-up demand returns. The same applies to RFP rates – hence a proactive approach to negotiated rates during tough times is the need of the hour.

Based on market conditions, airlines have always relied on massively varying rates. So why shouldn’t hotels do it too?

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Have you found your Niche?

“Charles, you care for nothing but shooting dogs and rats; you will be a disgrace to not only yourself but to your family too.” This was a father’s prophecy about his son. The father wanted his son to be a doctor like him. Charles entered Edinburgh University for medicine at his father’s behest, found it unattractive, later joined Cambridge, and earned an undistinguished bachelor’s degree in theology. He had no firm idea what to do. Charles was an aimless youth at 22. He wanted to do something different. He loved flora and fauna but did not know whether that love could be transformed into a livelihood.

Captain Fitzroy on his ship HMS Beagle was looking out for a naturalist. Charles asked for his father’s permission. His father refused but with a caveat, “If you can find any man of common sense who advises you to go on the discovery, I shall give my consent.” Neither the father, nor the captain were ready to grant permission to Charles.

When Charles approached Captain Fitzroy, the physiognomist in Captain Fitzroy said, “I doubt anyone having a nose like yours can possess sufficient energy and determination for the long voyage.”

His uncle drove thirty miles to convince Charles’ father to grant him permission to undertake the assignment on HMS Beagle as a naturalist.

The Beagle Voyage which included the circumnavigation of globe would be the making of the 22 year-old Darwin. Five years of physical hardship of mental rigour imprisoned within the ship’s walls, offset by the wide-open opportunities in the Brazilian jungles and the Andes Mountains, were to Darwin an eye opener in finding his muse. It took him 22 years to publish his theory of Evolution by Natural Selection in The Origin of Species.

  1. The conventional way of selecting a profession for self or for others is primarily decided by the demand for that profession, coupled with tangibles like salary and perks. No wonder Medicine, Engineering and MBAs among others make the cut.
  2. A niche-driven approach on the other hand is decided more by finding gaps in the market and differentiating oneself from the crowd to address that gap (as discovered by Charles Darwin). Niche is defined as a comfortable or suitable position in life or employment. Alternatively, it also means a shallow recess especially in a wall to display something of value – a statue or other ornament. (please refer the image)

Is it necessary to be a school or college topper or those in the top percentile rankings to find one’s niche? Quite often the converse is true as ‘brilliant’ students have the best choices in selecting the conventional options in career and institution.

What can happen when one selects a career in a conventional way but is at the bottom of a pyramid in a specific career stream? Getting a job may look easy but one may be competing with a very large number of aspirants. For example: Rakesh had scored 100/100 in Sanskrit in SSLC. Having felt he had a flair for Sanskrit he decided to pursue his college education in that direction. He completed his BA in Sanskrit from Ruia College in Mumbai.

At this juncture he had two choices in further studies – to continue his studies in Sanskrit or look out for a qualification which is marketable in the job market. He decided to pursue a MBA in Finance instead. After spending around Rs. 8 lakhs in fees itself what can be the likely scenario when he passes out two years later?

For a person who wishes to do a M. Tech in Structural Engineering, a minimum qualification of B.E Civil is necessary. Likewise for a M.S. in surgery, a basic qualification of MBBS is mandatory. So, when a person pursues a MBA in Finance with Sanskrit as graduation the basic competency level expected of the student is that of Class 12th, as a MBA is agnostic to one’s field of graduation.

Conventional wisdom says that one has a wide range of job opportunities after doing a MBA. The opportunities are large but so is the competition. Annually about 360,000 students graduate from 4000 B-Schools of which 61% are unemployable due to skill gaps and low work experience.

Keeping those depressing numbers aside, can Rakesh compete with students from Premier Institutes or those with Engineering and Commerce backgrounds? It is not impossible, but it is a Herculean task.

What would happen if he were to pursue Sanskrit for his PG? In the absence of clear data let us assume that the number of students opting for Sanskrit may be 1% of MBA students that is around 3600. For Rakesh it would have been much easier to be in the 95th percentile after his MA and in the 99th percentile with a Ph.D. A lot of research happens in Sanskrit in US and German universities. By differentiating himself and finding a niche, Rakesh could have had a sense of purpose too.

From a financial perspective too, the cost of pursuing a MA in Sanskrit would have been at less than 10% the cost of a MBA. In case of a Ph.D. he could have explored UGC fellowships or opportunities in US or German universities where considerable research in Sanskrit is possible.

An example of a niche-based career is below: My friend Christopher Jayakaran passed PUC, third class in 1962. With hardly any worthwhile career options, his father’s friend suggested him to take up a course in Geology. He completed his M.Sc in Geology at Presidency College in Madras by topping in the University. He worked for an NGO called ‘Action for Food Production’ for 7 years and for more than 25 years in different countries in Africa which include Uganda, Kenya, Tanzania, Sierra Leone etc. He is an eminent Hydrogeologist and a Paleontologist. His Tamil book In Search of Ancestors which is on evolution of man based on fossil evidence has run into six editions.

Why are people in general wary of pursuing niche fields?

  1. Obsession for Security: Education is normally pursued in order to get a job. The market demand is thought of. In the post-covid world there is no security either in a job or in one’s qualifications per se.
  2. Managerial Aspirations: Indians in general prefer to have a managerial title early in their career sacrificing expertise in a specific domain.

How to find your niche?

Around 30 years back I came across an excellent concept in finding ones niche, based on cybernetic principles which was on identifying one’s core competency and focusing on a specific niche where the strength can be leveraged to maximum extent.

Werner Brandes was a German MBA Graduate who was working in a consulting firm but did not have career growth in spite of working hard in that organization for more than 10 years. He was unable to get good offers elsewhere. He was a mediocre student throughout his academic life and passed out from a tier-3 B-school.

The conventional wisdom of competing with others was not giving any results (like the example of Rakesh discussed above). His work profile was mapped for 15 different competencies. Werner was below average in all save one, which was on Industry Setup in rural areas. When Werner was pointed out that this was his niche. He asked, “How can I get a job with such a small niche?” He was advised to start his own consulting in this field and as he was in the top 5% of this ultra-specialized area of business consulting, slowly he was perceived as an expert in this field. Business started growing. Being a sunrise sector wherever the data was not available, his customers helped him in providing the necessary details.

Fascinated by this counterintuitive concept, I launched a program called Strategy for Quantum Growth. After 4-5 programs I had to withdraw as most of the participants did not want a long-term strategy but a new job which paid them 3-5K more.

One crucial difference between the conventional and the niche-based strategy is the type of growth. In case of the former it is logarithmic growth – where it is easier to get a good well-paying job immediately after graduation but after a few years the growth may taper off. In case of niche areas there is a considerable struggle initially but after a few years when the market perceives you as specialist, the growth becomes truly phenomenal. You are considered as a pioneer and get a first-mover advantage.

Christopher, Werner Brandes or Charles Darwin were not brilliant in their school days in the conventional sense but were able to find their niche. Have you found yours?

Two roads diverged in a wood and I… I took the road less travelled. – Robert Frost.

Rajan Parulekar – Director, Hospitality Paradigm

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Climate Friendly Tourism

There are a few guidelines for both the hotel industry and tourists to pivot towards, that would make tourism more resilient as well as climate friendlier. Encouraging destinations that are closer to the traveler, making stays longer and keeping profits local, are some ways to move away from the focus on volume and energy-intense products:

 

  • Increase the length of stay or the length of days in packages sold.
  • Focus on closer markets, long-haul travelers are the ones contributing to vast emissions of greenhouse gases.
  • Rethink the food that you serve, organic and regional can benefit farmers nearby.
  • Move towards a high-value model, where individuals spend more.
  • Think about what you buy: a lot of the profit is made by foreign-owned, global platforms such as AirBnB and booking.com.
  • Rethink carbon-intense travel, for example cruise holidays.

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Is your hotel following safety standards?

With people beginning to travel albeit warily, hotels needs to seriously look at whether they are following their safety standards widely marketed by them.

Trust in a brand is based on the brand history, the leaders within the brand and the competence exhibited by the brand.

Breaking this trust could be significantly dangerous and have negative implications for the brand.

Inside Edition’, an American TV newsmagazine distributed by CBS TV conducted a sting on a few hotels in New York recently to see how diligent they were being about cleaning during the coronavirus pandemic, and these are the stunning findings.

Using invisible spray and gel on sheets, towels and surfaces, the team checked into the same room under different names on different days to see if they had been cleaned or replaced. All three hotels that the Inside Edition team visited failed to clean and replace everything.

https://youtu.be/ltBrCJC5BNI

Makes you think, does it not? Hoteliers cannot be complacent and their leaders will need to initiate these checks and counterchecks to ensure that they are not left embarrassed as these hotels in the link were.

 

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RFP 2021

Buyers will need to address a few issues specifically related to Covid-19 in negotiations this year, including:

  • Cleanliness standards. All buyers should confirm cleanliness standards as part of the negotiation process. The enforcement of social distancing and cleanliness standards in guest rooms, meeting rooms and other common areas is paramount, and measures will need to be addressed in contracting.
  • Amenities. The need and availability of hotel amenities will be different. For example, what will free breakfast entail? Will “grab and go” replace the buffet? It may not make sense to negotiate in breakfast or even the shuttle service if buyers are not confident that the appropriate social distances measures are in place or if travelers will not be comfortable using the services.
  • Room availability and upgrades. The fact that many hotels will be operating at lower inventory levels, with many operating at 50 percent capacity, make room type negotiations more challenging for some buyers. The likelihood of securing room types beyond standard will decrease, and it will be incumbent on buyers to sharpen their pencils in to obtain upgrades for their travelers.
  • Cancellation policies. While hotels currently are offering flexibility with bookings to spur demand, they might adjust their cancellation policies down the road, given the planning and costs hotels need to apply to spacing out incoming and outgoing guests and having guests placed in every other room and other measures to manage guest flow. With inventory constraints and social distancing measures, cancelations will be more costly for hotels and they will likely need to apply more stringent penalties which could result in increased costs for buyers in the form of fees. Cancellations and penalties are a negotiable item in the RFP process, and buyers should be prepared to address them.

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Inspiring Leadership

My first interaction with Deepak Parab, the CEO of Metrohm India Private Limited (a leading company in Analytical Instruments and Solutions) happened around two years ago when he called me from his Chennai HQ and said that he would like me to conduct a ‘Managerial Effectiveness’ program for his pan-India team of service managers. “Rajan, I shall ask my National Service Manager, Vinod Salunkhe to get in touch with you to discuss the further modalities.” The call hardly lasted five minutes; a client taking a quick decision in finalizing a 2-day training program was a rarity in my training career of 25 years. I could not help recollecting a MNC client who took approximately six months with more than a dozen meetings to finalize a 1-hour keynote address. (See my earlier blog titled ‘A Tale of Two Key Note Addresses’ – https://rajanparulekar.in/2018/03/29/a-tale-of-two-key-note-addresses/

More than the ability to take the right decisions, the leadership traits I admired in Deepak were:

Focus on results: After he took over as CEO and Managing Director, Metrohm India has progressed very well under him and results have been great. They have been able to capture and maintain major market share for their products and increase the turnover and profitability multi-fold. Today, Metrohm India owns all its offices across India and these were bought in the last ten years.

Retaining Talent: His core team of 30 senior managers including the COO, Branch Managers, Service Managers, Application Laboratory Manager and Product Managers are with the company for the last 20 years. The core team has remained the same for the past two decades.

Creating Value through Service: Peter Drucker said that the purpose of business is to attract and retain a customer, which can be restated by the formulae below:

  • Vc > Vp where Vc is the value perceived by the customer and Vp is the value inside your product or service. You get a customer only when the perceived value is more (short and/or long term) than what the customer pays for.
  • Vc = (Q+U+S)/P where Q is the Quality, U the Utility, S the Service and P is the price. Remember that QUS is not what the salesman claims but what the customer perceives. The four ways to increase the perceived value is either to increase the QUS or to reduce the P. Quite often desperate salespeople reduce price to create value which in turn affects profitability.

Deepak took a different approach to create value. To command a premium, he focussed on the numerator (QUS) rather than the denominator (P). Service was given prominence vis-à-vis sales. In a team of 135 executives for each sales person there are 3 service executives. Normally one service engineer is deployed for 100 instruments, with an equal share of warranty and AMC (annual maintenance contract). Today Metrohm India has 12 Offices and 12 Home Offices from where Service is provided. The home office concept for service was used to extend the reach. For example for clients in Goa, service engineers used to travel every week from Mumbai to Goa. With 250 instruments, 2 service engineers were deputed to Goa, which created value in the following ways:

  • The travel fatigue for service engineers was considerably reduced.
  • Improved work-life balance for the Service Engineers who were back to their home in the evening.
  • Cost of resident engineers was lower than with the travel and related costs.
  • Delighted Customers due to an improved response time and a lower down-time. Customer confidence in Metrohm also increased due to the now closer proximity of the Service Engineer.

Having created value for the customer in terms of QUS, Metrohm was now able to command a premium vis-à-vis the competition. There is a general tendency for companies to club sales and service to control costs, especially in the case of executives operating from home offices. However, Deepak resisted this temptation, as with dual responsibilities, executives tend to focus more on sales and ignore service. Now, dedicated service engineers in turn enhanced the perceived value!

Delegation with empowerment: Ganesha Chaturthi is a major festival in Maharashtra. Deepak belongs to a small village called Hiwale in Sindhudurg District from the Konkan region. For this important festival, Deepak used to take leave for 10 days every year. However as a CEO designate, when he applied for leave now, his boss questioned the logic, considering his elevation to the new role with additional responsibilities. The major concern apart from the leave, was in Deepak being incommunicado due to poor network connectivity at his village. Deepak’s thought process was quite clear. He said, “I shall prepare my team in such a way that my help is not needed in those 10 days.” His communication to his team members went on the following lines:

  • “Please take decisions. I am not going to blame you for the consequences, if found negative in posterity.”
  • “Please think of the worst–case scenario. The company is not going to sink from any such decisions.”
  • “All of you can learn from your mistakes and a wrong decision and its consequence can be termed as the cost of learning.”
  • “If in spite of all the above, you still need my advice, please drop me a SMS. In case I go to the village market (which has a better connectivity), I shall respond.”
  • The discounts and pricing are controlled by the respective Managers and all are empowered to take decisions. As a normal practice at Metrohm India the senior management team does not have any extra power to give additional discounts.

Genuine Concern for Employees: Even though a nationwide lockdown was announced on 24 March 2020, Deepak took the call on 20th March to shut down the company’s offices across the country. Most of his team members who were at different locations then, had enough time to go back home.(Contrast this with the 4 hour time frame given by the PM which affected not only the general populace but also the millions of migrant workers!) He announced categorically that there would be no salary deduction, nor would anyone be forced to go on leave. The salary for the full month of March which normally gets paid on the last day of the month was credited on 24th

Creative Problem Solving: Every year the company used to invite its Pan-India sales and service team in May to the Chennai HQ for training. The month-long exercise for a team of 130 executives used to cost around ₹ 70-80 lakhs; the quarterly reviews used to be around ₹ 5-6 lakhs each. During the lockdown, the time was used for online trainings and reviews thereby saving a big cost for the organisation, while at the same time keeping the employees engaged. They also ensured that all employees are engaged and connecting with the customers, so that they feel like they are doing their routine work and no health issues crop up due to no work. In the earlier phases of lockdown, the instruments which needed attention were diagnosed remotely, thereby reducing the down time. For the Pharmaceutical industry which is a major customer (as well as the sector doing well during the pandemic), Metrohm’s service support was crucial. In a few cases, even the installation was carried out with the help of the customer along with support via a video call by the Service Engineer. Digital Platforms have been used by the organisation extensively to connect its employees and customers.

Effective Decision Making: Be it a minor decision of a trainer selection or major ones like shutdown or salary disbursals, an effective leader does not shy away from taking decisions.

Strong Ethics: Deepak shared that a strong sense of ethics and moral values are a sine qua non for effective leadership. Deepak spent his childhood in the IIT Bombay campus. His father, Raghunath Parab was a governing member of the Co-Operative Society and was entrusted the job of supervising the IIT Staff Canteen operated by the IIT Staff Co-Operative Society. As a principle, his father did not prefer his children to visit the canteen; lest it be perceived that they were availing food free. Some years down the line, when Deepak entered the canteen and when his father admonished him, he told him, “Dad, now I am working as a Technical Assistant in the Department of Chemistry and I have come here as an employee and not as your son.” Caesar’s wife must indeed be above suspicion.

Rajan Parulekar – Director, Hospitality Paradigm

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What makes the World’s Oldest Restaurant Tick?

Restaurante Sobrino de Botin

Six months ago, during the Navidad semano (Christmas week) whilst the Covid-19 pandemic was silently creeping its assault around the world, I was fortunate to visit the world’s oldest restaurant in Madrid, while on a holiday to Spain.

Situated in the medieval Austrias area of Madrid, the 295 year old Botín restaurant was founded by Jean Botín in 1725 and has been in the González family since 1930, now for four generations. The restaurant has been visited by people from all over the world, including royalty, politicians, writers and Hollywood stars and features in the Guinness book of records as the oldest restaurant in the world.

The 430 year old cellar

Though the wine cellar originated in 1590, the restaurant above the cellar was founded as ‘Casa Botin’ by a French Chef, Jean Botin in 1725, who moved to Spain and married an Asturian lady. As they did not have children, Mrs. Botin’s nephews took over after Jean Botin and hence the name you see even today, splayed across the external façade: “Restaurante Sobrino de Botin Horno de Asar” which may be translated as ‘Restaurant Botin’s Nephews – Roasting Oven.’ Interestingly, the restaurant has kept the said oven’s flame burning continuously, never to be extinguished.

Suckling pigs heading into the famed oven

2015 apparently was Botin restaurant’s best year on record with an average footfall of 600 guests per day. At an APC (F&B combined) of €72 that works out to a very decent annual turnover of € 15-16 million (equivalent to INR130 crores). Note that the restaurant menu is not at all highly priced… something they have kept as part of their business strategy through all the years.

We were unable to get a reservation online though I kept trying for nearly a month prior to the trip. However when I visited the restaurant personally, I was able to get a booking only for 2300h the subsequent evening, Sunday. Well, who were we to grumble at the reservation time, as the locals begin their evening dinners only post 2100h? Besides, who would want to miss out on eating in this iconic restaurant?

On the said evening, after a tiring tour of Segovia and Toledo (North & South of Spain) for which we had left our hotel at 0530h, we were back in Madrid at 1730h. Since our hotel was located at another area, we had quite a few hours to spend at our disposal. Though we were really tired, we decided to keep going and browsed around in the heart of Madrid and dabbled in a few tapas bars, the best of which we found at ‘Mercado de San Miguel,’ located just outside Plaza Mayor.

Fresh Tapas on display at Mercado de San Miguel

At 2000h, we decided we would take a chance and check if the Botin Restaurant would accept us as early diners. We honestly expected the service team to be ‘hoity-toity’ about their reputation and expect their guests to grovel for a table, especially if they landed up 3 hours early… after all we were so fortunate to be dining in a piece of history, no?

Luís Javier Sánchez Alvarez ~ Deputy Manager

Fortuitously, we were met by the same waiter who had taken our reservation the previous day and he was kind enough to check his register and then check with the restaurant manager, Luís Javier Sánchez Alvarez, who has worked at the restaurant for 41 years. Alvarez was very convivial and welcoming – he immediately asked the host to accommodate us… so up we followed him to their second floor, thoroughly elated at not just being able to dine early, but also at the warm reception. (Something we had honestly never expected!)

The restaurant has four floors, which maintain the quaint atmosphere of a traditional tavern. Alvarez the manager, explains why the Horno de Asar, the restaurants famous oven’s fire has never been extinguished. “It is our jewel. Our crown jewel. The oven has been burning continuously for 295 years,” he says. “We never put it out. It needs to be kept hot at night and be ready to roast in the morning. That’s the reason why we must never put it out. There is a special aroma in there; it’s truly incredible.”

Cochinillo Asado (roast suckling pig)

Our meal consisted of Restaurant Botin’s famous specialties Cochinillo Asado (roast suckling pig) and Sopa de Ajo (an egg, poached in chicken broth, and laced with sherry and garlic) and these were truly delicious and certainly stood up for their reputation!

Sopa de Ajo (garlic soup)

Our experience was truly delightful right from entry to exit that evening and it set me thinking as to what makes a restaurant succeed for three centuries altogether. Giving importance to their local guests who make up 55% of their clientele and keeping their rates fairly reasonable is part of their business strategy; and while their cuisine is delectable, the ambience outstanding and so steeped in tradition and culture, what also stands out is the warm caring service we experienced – right from the manager to the steward – who in spite of servicing over 600 guests that Sunday evening still made us feel special by heeding to our request for an earlier table reservation and thereafter serving us with the same élan or elegancia we noticed around other tables… it seems they have been living and breathing their ethos to posterity… hence the centuries of successful evolution, whilst yet maintaining traditiciones from the past three centuria!

As long as the restaurant ethos breathes for the customer, long live Restaurante Sobrino de Botin Horno de Asar!

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SOPs for future hotel operations

With proper updates to hotel operations and smart marketing tactics, a hotel can possibly succeed in the post-COVID hospitality landscape if they are able to implement new SOPs to reassure their guests.

  • Make sure that housekeeping and public area cleaning SOPs are state of the art, as this is one area where sharing-economy locations may not be able to match you.
  • Promote these new SOPs consistently and repeatedly through all marketing channels so that guests understand you are addressing this issue with the utmost seriousness.
  • Embrace the concept of “cleanliness theatre” whereby it’s no longer just about having your flawless but ordinarily invisible cleaning practices visible to guests (for example, having your front desk associates clean the front desk during peak check-in and check-out times as well as in the middle of the night)
  • Deploying many “people-free” technologies like a self-check-in station dilutes the perception of great service inferred by a smiling front desk associate, but now we need to see this from a new perspective post the Covid-19 situation, and hence consider this as a good distancing tool.
  • See what changes, if any, you can make to the furniture in your public areas so that visitors are more socially distanced from each other
  • Relook at traffic flow within your restaurants and meeting spaces to attain fewer instances of mass groupings through the staggering out of dining covers and conference break periods or by removing corridor-narrowing obstacles.
  • Implement new technologies to enable more work-from-home situations so you can maintain service delivery on a leaner team or so you don’t have to scramble once more if another lockdown occurs in the near future.
  • Again, be prepared to start advertising any new protocols and SOPs directly to customers who nowadays will be keenly receptive to this type of messaging.

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The future of social distancing

COVID-19 is forcing humankind to innovate and change the way we work and live. Individuals and corporations will be more resilient in a post-COVID-19 world. Once we have left this pandemic behind, there is a high possibility of the following disruptors coming into play:

  • More Online Shopping
  • Rise in Esports
  • More Digital Events
  • Increased Reliance on Robots
  • AI-Enabled Drug Development
  • Telemedicine
  • Better Monitoring Using IoT and Big Data
  • Strengthened Digital Infrastructure
  • More Contactless Interfaces and Interactions

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What Hotels could do in a pandemic

Hotels can offer significant value to authorities, whether through government procurement or voluntary offerings during the current pandemic, including:

  • To house quarantined individuals with actual or suspected COVID-19 infections.
  • As hospital facilities to treat COVID-19 patients and others.
  • To house doctors, nurses, and other health care workers, including potentially allowing them to remain close to medical facilities.
  • To house National Guard troops or government workers.
  • To provide food and beverage facilities for overflow meal service for patients, health care workers, and others.
  • As laundry facilities for the overflow of hospital linens.

Hotel owners and their counsel should seek to secure strong indemnification and insurance requirements, including additional insured status, waivers of subrogation, and primary and non-contributory wording. In certain cases, government contracts may not allow for alteration, but private party contracts generally allow for amendments.

Areas of ‘Property Insurance’, ‘Workers Compensation’ and ‘General Liability and Umbrella and Excess’ need to be worked on. The pandemic remains a fluid situation for many businesses, including hotel operators.

The answers to critical risk management questions — along with government policies and support — will continue to evolve as conditions change and potential losses develop. Hotel companies should work with their advisors, including insurance brokers and legal counsel, to manage contractual risk, understand how insurance policies will respond, and seek to ensure seamless operations and risk mitigation while COVID-19 remains a threat.

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Death of in-person conferencing?

Globally, 52% of staff have already been working from home at least once per week. The coronavirus outbreak has forced far greater numbers into remote working than otherwise would have been the case. The pandemic has only served to accelerate a transition that was already underway on a global scale. The current circumstances, millennial sensibilities and drastic improvements to cloud-based services combine to create the perfect storm. 

The impact of large-scale events on the environment has also been called into question in recent years. For example, accusations of hypocrisy were levelled at attendees of this year’s World Economic Forum summit in Davos, many of whom travelled to the climate-centric conference via private jet.

The coronavirus pandemic could herald the demise of traditional, in-person conferences. This could absolutely be the start of a trend that sees the world’s largest conferences take a different shape going forward. We are now lucky enough to have workplace apps and online services that allow people to connect regardless of location, so large scale conferences are more feasible than ever before.

Immersive technologies such as virtual reality (VR) have waited patiently in the wings for an opportunity to seize the enterprise stage. Attending conferences via VR headsets could solve a host of challenges associated with public health, but also with travel costs, the environment and engagement.

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Virtual Escapism

While regular travel may be off the cards for the foreseeable future, virtual escapism is open to everyone with an internet connection. Some of the world’s leading galleries, museums and national parks are all just a few clicks away. Here is a selection of the best VR travel experiences to keep you sane during lockdown.

  • Le Musee du Louvre, Paris: The Louvre, the world’s largest art and antiques museum, was forced to close its doors as Paris went into lockdown. While you can no longer waltz into its famous glass exterior, you can learn something of the phenomenal collection via a number of virtual tours, charting everything from Egyptian antiquities to the Galerie d’Apollon… louvre.fr/en/visites-en-ligne 
  • British Museum, London: The UK capital’s famed museum has hooked up with Google Arts & Culture, along with more than 2,000 other leading institutions, to offer an interactive tour. Wander through time and click on different artefacts to see them up close, read up on their history, and hear more information with an audio guide… britishmuseum.withgoogle.com
  • Rijksmuseum, Amsterdam: Stuffed with masterpieces from the Dutch Golden Age, the Rijksmuseum is one of Amsterdam’s most popular attractions. Online, it offers the chance to explore 11 “exhibits”, where you’re able to interact with various works from the museum, read about their history and see close-ups of the pieces. They include Vermeer’s The Milkmaid and a breakdown of the work of Jan Steen… artsandculture.google.com/partner/rijksmuseum
  • Musee d’Orsay, Paris: Housed in the fabulous former Orsay railway station, the Musee d’Orsay displays art dating from 1848 to 1914. An online tour goes through the history of the building, first constructed for the Universal Exhibition of 1900. Viewers can also explore some of the most famous pieces in the collection, including one of Van Gogh’s self-portraits, and take a virtual wander through the galleries… artsandculture.google.com/partner/musee-dorsay-paris
  • Guggenheim, New York: New York City’s iconic gallery has a Google Street View tour where you can “amble” along its winding corridor and view works up close, such as Catherine Opie’s daring Self Portrait/Pervert triptych; Ivan Navarro’s installation Homeless Lamp, the Juice Sucker; and Ovitz’s Library by Jonas Wood. On top of that, you can also simply gaze upon the building’s remarkable architecture… artsandculture.google.com/streetview/solomon-r-guggenheim-museum-interior-streetview
  • Uffizi Gallery, Florence: This gallery houses the art collection of the Medicis inside a 16th-century building. Online, there are four exhibitions that take viewers through various works, explaining their significance and showing close-ups of important details within the paintings. See such works as Piero di Cosimo’s Perseus Freeing Andromeda like never before… artsandculture.google.com/partner/uffizi-gallery
  • Central Park, New York: NYC’s green centrepiece is available to tour online. Not only does it show you the sites, it also comes with a guide who talks you through significant events in Central Park’s history as you “travel” from the West 72nd entrance… youvisit.com/tour/centralpark
  • Grand Canyon, Arizona: There are plenty of pictures of the famed canyon online, but get a little deeper with a VR archaeological tour. This allows armchair travellers to explore and learn more about the history behind the canyon’s formation by clicking on different geological features… nps.gov/features/grca/001/archeology
  • Yosemite National Park, California: Experience this natural wonder in real time by clicking through to its webcams. The views include Yosemite Falls, the view of the Half Dome from the floor of Yosemite Valley, and vistas from the High Sierra captured at 8,000 feet… nps.gov/yose
  • Rocky Mountain National Park, Colorado: One of the best things about being in the great outdoors is the way you experience it with all your senses. Rocky Mountain National Park has allowed virtual visitors to use their ears rather than their eyes, with an online “sound library” that features an array of birds and wildlife found in the park… nps.gov/romo

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Post-pandemic Travel needs

While people will always want to vacation in far-off lands or visit new cities for business trips, the new normal of social distancing will result in many travellers developing a profound and lasting stigma against widely shared spaces including hotel lobbies, packed restaurants, communal office setups and even guest rooms in properties with high turnover.

In the short term, this favours properties of the following characters:

1.     Small or boutique hotels of roughly 75 rooms or less, where the lack of size naturally inscribes fewer human interactions and less crowded spaces

2.     Rural properties within a comfortable driving distance from a major urban centre so they can capitalize upon the staycation renaissance

3.     Resorts where there is a strong feeling of remoteness and less direct contact with the outside world, especially properties that have a natural geographic barrier to provide isolation from neighbors

4.     Cabin-style properties that encompass a collection of fully detached buildings rather than a single structure where guest rooms abut one another

5.     Hotels with large, open restaurants (or other trafficked outlets) where management can afford to remove some tables and increase the gap between dining groups

6.     Home-sharing platforms where the prospect of staying in an apartment or house implies more separation from others due to the lack of contact with staff or other guests

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