Insights from the trenches

7 Ways Effective Leadership Impacts Revenue

After many years of turning around underperforming hotels, often the number-one reason for a hotel’s revenue falling behind its budget or competitors is ineffective leadership.

This may seem counterintuitive, since people issues are usually considered to be more of a human resources responsibility than affecting financial results. However, addressing this issue, with either customized coaching or, more radically, removing and replacing weak leaders, has proven to improve total revenue, often within a few months.

Here are seven ways leaders impact revenue:

1. Great leaders have a clear vision and effectively communicate everyone’s role and that of other team members in order to accomplish it. This ensures team members are focused and can easily prioritize.
2. Employees trust that their leader will also take care of them. Fear (the opposite of trust) is absent, and employees will not waste time on gossip and other unproductive behavior.
3. When a new strategy is required or an innovative idea is suggested, successful leaders have the support of their team and can easily execute, with everyone providing input and ideas to ensure success.
4. Effective leaders also have the backing of their superiors (corporate office and owners) and don’t have to waste time preparing endless reports to justify their position—another distraction from achieving the financial goals.
5. Great leaders who have a proven track record can keep great employees, reducing recruitment costs and gaps in service. Similarly, when there is an opening in the team, they can find top talent that will fit in with the existing team. Research has shown that the most talented employees produce the highest revenue, regardless of the department.
6. Strong leaders listen to the feedback and ideas of their teams. Often frontline employees have the best perspective on guest preference and what will generate more revenue.
7. Talented leaders are humble, especially when they make a mistake. With their agility, great leaders acknowledge when a mistake is made and are willing and able to quickly change course, especially if their misstep is affecting revenue.

Some people are born leaders, but many have learned the skills to be a great leader. Test your leadership aptitude with this leadership quiz or, better yet, have your team respond with you in mind.

“Management is doing things right; leadership is doing the right things.”
― Peter Drucker

If you would like to talk more about how to increase the effectiveness of a leader and the impact on revenue, reach out to Jo-Anne at [email protected]