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Disruptive Innovation – Embrace It or Lose!

Kenneth Greger

A leadership imperative is to pay attention, not only to your business, but to anything that could have a positive or negative impact on your business, also known as disruption. Here are some incorrect predictions about game-changing disrupters:

  • “We don’t like their sound. Groups of guitars are on the way out.” – Decca Recording Company executive, turning down the Beatles, 1962
  • “There is no reason anyone would want a computer in their home.” – Ken Olson, President, Chairman and Founder of Digital Equipment Corp., 1977
  • “With over 50 foreign cars already on sale here, the Japanese auto industry isn’t likely to carve out a big slice of the U.S. market.” – Business Week, August 2, 1968

Oops! I guess no one would ever book travel on the Internet, either…

With respect, it’s my observation that most hotel companies tend to be parochial, and to follow versus lead. That doesn’t mean no one has any good and creative ideas – of course they do. Hotel companies may add a new service, approach or design here and there, but they keep adding things without thinking about what to stop doing! As leaders, we need to stand back, take stock, and get rid of some things to make room for the new. But do we really do that?

Instead of complaining about AirBnB and Uber, both of which resulted from thinking differently, the hotel industry needs to innovate and make its own businesses more competitive, and more compelling to consumers. This requires C-suite executives to get out of their comfort zones and lead.

“Innovation distinguishes between a leader and a follower.”
Steve Jobs

Every hotel brand has buildings – that’s the price of admission to the game. What distinguishes a brand is what happens inside those buildings. What distinguishes the guest experience is what happens before, during and after the hotel stay. Is it a relationship or a transaction? Are we delivering what the guest really wants, or just what we think they want? Do we know how what they want has changed? Do we know what trends will impact our businesses tomorrow? Are we embracing the trends and willing to change? We should constantly be asking ourselves such questions.

There is plenty of competition. But to truly compete, hotel company leaders need to maintain fresh eyes and constantly apply new thinking to every aspect of their business and service models, including design, and to look outside the industry for any new thought, product, process, service, technology, fashion or trend that, if properly addressed and effectively implemented, can result in innovation that delivers value to the guests and keeps the brands fresh, exciting and cutting edge. Of course, this increases shareholder value as well. Examining our businesses from every possible angle requires that we look outside the hospitality silo to probe and discover anything, anywhere, in any industry, in any country, that could lead to innovation and give our brand the edge. Tesla reinvented the electric car. Kodak failed to reinvent itself. Check out the results of each.

“When you innovate, you’ve got to be prepared for everyone telling you that you’re nuts.”
Larry Ellison

We need to reinvent and differentiate our brands, and not just through marketing and digital media. It has to become real through the experiences we deliver and the problems we solve to keep the guests‘ lives and travel experiences interesting, fresh and relevant. This also keeps us on our toes, keeps us learning and pushing the envelope. Compared to high-tech and Internet organizations, the hotel industry moves at a sluggish pace, when it moves at all. But there is no excuse for that any more. Technology is wrapped around the industry and permeating its core – we must move faster. Much faster.

“The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow.”
Rupert Murdoch

If you’re a CEO and nodding your head while reading this article, you can’t just go back to the office and declare that your company is now focused on innovation. Being able to innovate requires a mind-set, a culture of support, and a refinement or total change of process so as to facilitate innovation. It requires agility and an openness to change. It requires commitment and a willingness to embrace failure along the way. If you hear, “This is the way we’ve always done it,“ run! It‘s a death knell.

“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.”
William Pollard

To win in the hotel industry moving forward, we‘ll need to cultivate a culture that offers tremendous latitude in applying curiosity, investigation, passion, knowledge, communication, leadership and manpower to facilitate true innovation. Companies like AirBnB, Uber, Google, and Starbucks have innovation in their DNA and remain at the forefront. Google and Starbucks are publicly-held corporations that are household names and at a certain level of maturity – but not complacency. AirBnB and Uber are innovation whirlwinds in high growth momentum. Can you lead a company like that? What will happen if your company isn’t like that? Shades of Kodak?

“The winner is the chef who takes the same ingredients as everyone else and produces the best results.”
Edward de Bono

The bottom line is that today’s hotel industry CEO’s and C-suite leaders must shed the robes of yesterday and urgently learn to lead in this faster-paced, technology-laced environment. They must be relentless about innovation and trends. To do otherwise, all I can say is “Good luck with that.”

“Here’s to the crazy ones. The misfits, the rebels, the troublemakers. The round pegs in the square holes, the ones who see things differently. They’re not fond of rules and they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things, they push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world are the ones who do.” – from Apple Computer’s “Think Different” Ad, 1998.

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Kenneth Greger, Partner

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