patu keswani - founder, lemon tree hotels
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TRANSCRIPT
GREAT PLACE TO WORK
BEST WORKPLACES CONFERENCE
Wednesday, August 22nd 2012
The Corporate Professional
The Entrepreneur
A bit about me ….
Property of Lemon Tree Hotels Pvt. Ltd.
IIT - Delhi
Property of Lemon Tree Hotels Pvt. Ltd.
IIM - Kolkata
Tata Administrative
Services
JRD Tata
The Perfect Hotel
Rusi Mody
Ronnie Lobo
1999: Three Friends, A bottle of scotch and a retirement plan
Plan A: Betting The
Bank
• Don’t have catastrophic failures
• Failure is a step down in the ladder of success
• The importance of plan B
Property of Lemon Tree Hotels Pvt. Ltd.
Plan B : A.T. Kearney
Timing and A Second Chance
• The importance of Meritocracy and Incentivizing.
• Why is risk taking important?
• Applying the ratios and creating the business model ( IDEA) • Getting the right team ( TALENT) • Funding the hotel (CAPITAL)
2002
2004
• The first Lemon Tree Hotel – Lemon Tree Udyog Vihar • Right price, Right product in the Right Market • Validation of the business model • Asymmetric access to knowledge and excellent execution
Property of Lemon Tree Hotels Pvt. Ltd.
Boredom and the accidental evolution of Plan C : Retire as an Entrepreneur
2006 $ 200 Mn.
The Idea -Talent -Capital Tripod and the advent of Private Equity
2008 $ 500 Mn
2012 $ 750 Mn
Property of Lemon Tree Hotels Pvt. Ltd.
Lemon Tree Hotel Gurgaon (1)
‘04 ‘05
Hotel Opening: City Centre, Gurgaon (2)
‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12
Hotel Opening: Goa
Hotel Openings: Pune and East
Delhi
Hotel Openings: Aurangabad, Ahmadabad, Indore and
Allepey
Hotel Openings: Bangalore (1) and
Jaipur
Hotel Openings: City Centre
North, Gurgaon (3) and East Delhi
Lemon Tree Premier Brand
Launch
Hotel Openings: Hyderabad (2),
Bangalore (2) and Chandigarh
Hotel Openings: New Delhi (2)
’02
Warburg Pincus Investment
Red Fox Hotels Promoted
Kotak Realty Fund and Shinsei Bank
Investment
APG Investment
Lemon Tree Hotels Promoted
Investment
Hotel Opening
Brand Launch Property of Lemon Tree Hotels Pvt. Ltd.
December 2014:
26 hotels and ~3600 rooms in 16 cities with 4000 employees
Where we are today….
Presently:
18 hotels and 1969 rooms in 14 cities with 2200 employees
VISION 2020
20,000 Owned Rooms +
20,000 Managed Rooms &
40, 000 Employees
Property of Lemon Tree Hotels Pvt. Ltd.
Some recognition along the way….
Awarded to Lemon Tree
Amarante Beach Resort (only 650 hotels out of
130,000 globally get this distinction)
The NCPEDP – Shell Helen Keller Award, 2010 for
exemplary policies, practices and belief in equal
rights and gainful employment for persons
with disabilities
NCPEDP Mphasis Universal Design
Award 2011
FHRAI Hall of Fame, 2010
Ranked in the Top 50 Large Organizations, in the 2012 study of the
Best Companies to Work For by the Great Place to
Work Institute & the Economic Times
SATTE 2010 “Best Mid-Market
Developer
Republic of Noodles, Goa
Winner 2010, 2011 and 2012
Times Travel Honors, 2011 Best Hotels –
Mid Range
National Award 2011, for the empowerment
of persons with disabilities
Property of Lemon Tree Hotels Pvt. Ltd.
… and a 50% plus year on year capacity growth driven by engaged employees who drive guest retention.
82%86% 88%
91%94%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
218
273
682857
1,393 1,478
18
22
31
35
29
38
0
5
10
15
20
25
30
35
40
0
250
500
750
1,000
1,250
1,500
1,750
2,000
Count of rooms which have completed one or more years of operation
Repeat visitors %
Awarded to 15 out of 18 operational
hotels in 2012.
10-11 09-10 08-09 07-08 11-12
10-11 09-10 08-09 07-08 11-12
71 74 83 79 84
0102030405060708090
100
Lemon Tree Employee Satisfaction Survey: Overall Scores %
10-11 09-10 08-09 07-08 06-07
Guest Overall Satisfaction Scores
Repeat Guest Percentage for inventory older that 1 year
12-13 E
KEY LEARNING
Guests return ONLY because of engaged
and happy employees…
Property of Lemon Tree Hotels Pvt. Ltd.
We understand that anyone can build a superior product superior customer experience is impossible to duplicate
In India it is very easy for people to
replicate or develop a superior hotel
product because:
1. Hotels are often built by irrational
investors with asymmetric access
to influence or capital
2. ROCE is never a concern, the
biggest factor often is ROE –
Return on Ego
Therefore, to Attract,
Engage and Retain customers –
SUPERIOR SERVICE is the key differentiator.
Property of Lemon Tree Hotels Pvt. Ltd.
Superior customer service comes only from the right talent …
So we - Recruit for Attitude (Behavioral Competencies) And Train for Skill (Functional Competencies)
The Lemon Tree Recruitment Matrix
Att
itu
de
Experience
High
Hig
h
Low
Low
Competence = Attitude (or desire) + Experience (or knowledge)
Lemon Tree Hotels (Current)
Lemon Tree Hotels (Desired)
Key
Co
mp
ete
nce
: In
terv
iew
Ski
lls
Key Competence: Skill Development and Wisdom Transfer
Right talent which is effectively engaged…
It is where Management devotes
time and resources that
determines what is important and
what is not to the organization
And this is how we show our
employees that they are the most
important factor in our success
Property of Lemon Tree Hotels Pvt. Ltd.
Share the wealth
Create a happy and caring work
environment with unique practices
Communicate effectively
Praise extensively and celebrate
the small wins
Mentor, coach and transfer wisdom
at each step
BUSINESS
Non Critical Critical
No
n C
riti
cal
Cri
tica
l
CU
STO
MER
S
1 2
3 4
Quadrant 2 are key employees who are
paid a premium over industry salaries
for the roles they perform.
Roles in quadrant 1 and 3 are where
compensation is typically in the 70th
percentile of Industry standards.
The aim is to move high potential
employees from these quadrants to
quadrant 2
Quadrant 4 job roles are paid minimum
wage
Right talent which is effectively engaged
in the correct role.
The Lemon Tree Job Role Evaluation Matrix
Property of Lemon Tree Hotels Pvt. Ltd.
KEY LEARNING
Leadership begins and ends with how
you manage People, Risk and
Reputation
Property of Lemon Tree Hotels Pvt. Ltd.
People (Culture)
Risk Reputation Property of Lemon Tree Hotels Pvt. Ltd.
In a descending hierarchy, the equation
is:
Happy Employees
= Happy Customers
= Happy Investors
= Happy Management
(H
ap
pin
ess A
xis
)
Our culture/ethos is based on one simple equation
So Lemon Tree Hotels has two sets of customers
• Employees: Served by management
• Guests: Served by employees
Property of Lemon Tree Hotels Pvt. Ltd.
Creating a Virtuous Cycle of Happiness
EMPLOYEES
GUESTS
INVESTORS
MANAGEMENT
Property of Lemon Tree Hotels Pvt. Ltd.
Business IS always about mitigating risk…
Learn to Enjoy Risk
Property of Lemon Tree Hotels Pvt. Ltd.
…. and managing reputation
Some dilemmas along the way ...
Loyalty vs.
Competency
Preserving the small company
culture in a large corporate structure
Re-inventing roles in a fast
growth environment
High growth + High Attrition =
Doubling of Workforce each
year
..and mistakes to be avoided.
Invest in people and people related process FOR THE FUTURE rather than for the present
NEVER use shortcuts for Recruitment Learning and Development Performance Management Promotions Retention
Create a system of wisdom transfer from Day 1
In conclusion, Business IS NOT always about profits
Focus on the Triple
Bottom Line – It is a key part of your
culture
PEOPLE
PLANET PROFITS
It is also about long term sustainability ..
Property of Lemon Tree Hotels Pvt. Ltd.
TRU
ST EMPLOYER of CHOICE
INDIAN SUSTAINABILITY
INSP
IRE
…and what you want to stand for
EXTENDING THE
BRAND
Property of Lemon Tree Hotels Pvt. Ltd.
Thank You
Property of Lemon Tree Hotels Pvt. Ltd.