I’ll bet that any hotel general manager who read the title of this piece doesn’t agree. I’ll wager that you’re thinking it’s clearly not your role to be the chief financial leader; after all, it’s the controller or director of finance that is responsible for the numbers.
In this article, I will lay out my case as to why the GM has the top financial responsibility in a hotel. My intent is to explain to owners and operators the true value of a GM and lay out a strategy GMs can and should follow to grow their influence and effectiveness in the financial space.
THE GM ROLE
I grew my career in hospitality and worked with many GMs. Most of them were hard-working and dedicated professionals that were determined to lead their teams to victory. But in every case but a couple, they didn’t see their role as being the top financial leader.
Many of them were only too happy to claim the role of the number-one salesperson for the hotel. This seems appropriate because showing clients and customers that they are ultra-important is a strong way toward sealing up business.
The same can be said for public relations. Almost every GM on the planet loves seeing their picture in the newspaper or a magazine or appearing on local TV. For some GMs, it can be the pinnacle of their career. A “people person” is also how one would typically describe a hotel GM and this is normally true. GMs are at the top of the property pyramid and are expected to lead.
Sales, PR, colleague engagement: These are the multi-faceted roles of the GM. They are a natural fit.
Not included in the list is money. Doesn’t it stack up in sheer importance? Of course, it does. Unfortunately, most GMs look at the financials as a thing that needs to be taken care of–like a chore or a to-do rather than an exciting aspect of the role that requires a special touch to get the best result. This is where a really good GM sees the opportunity to make a difference and at the same time claim the top step in yet another discipline.
Most GMs put the numbers outside their purview. They abdicate this function to the director of finance, maybe out of a bit of ignorance or a bit of arrogance, or both. But they are missing out and not understanding just how exciting and rewarding the performance around the numbers can be.
The best GMs understand that the other department managers don’t report to the finance person, they report to the GM. When your boss makes something their priority, it’s almost always your priority, too. For the average GM, the numbers are not one of their day-to-day priorities; therefore, their department managers lack a sense of importance and urgency with the numbers as a direct result.
No matter how effective your financial leader is, he or she will not be successful if they don’t have the GM leading the financial chorus. On the flip side, no matter how average the financial leader’s skills are, when the GM makes their role and function a focus, the other managers pay attention and fall in line. It does not require a financial background but rather a desire to make sure each manager at your property has their act together when it comes to managing payroll and expenses. This is the very essence of financial leadership: making the numbers as important as all the other fun stuff.
Here’s how to make it work:
- When you interact with your managers, make sure they know where you stand and what’s important; don’t give anyone a pass when it comes to their numbers.
- Make it clear that departmental numbers are a manager’s responsibility.
- Accounting’s role is to produce accurate financial information on a timely basis.
- Teach managers each month to complete the financial circle in detail: track property revenues on a month-to-month basis; adjust spending and payroll based on the latest revenue projections; review monthly statements and GLs; write management commentary.
- Rinse and repeat every month.
Creating a financial culture with functional department managers is not difficult; it’s just a choice.
David Lund is an expert in hospitality financial leadership with a background that includes more than 30 years as a Regional Controller, Corporate Financial Director, Hotel Manager and Controller throughout North America. Learn more at hotelfinancialcoach.com.