We are situated in the most favorable time that we have ever had – the gateway to even more market opportunities is open to us. As our country’s economic power increases, a new spring has arrived, not only for budget hotels, but also for the entire hotel industry in China. Making the company bigger and stronger is an objective shared by all entrepreneurs. But how do you make this ideal reality? I believe, to make a company big, the entrepreneur should first think big. If you can’t think big, you will never make it big. The hotel business is not one that brings exorbitant profit overnight. The work is tiring and tedious.
‘Being outstanding’ is the only path to being great
From a start-up company with only a few members, Huazhu has become a billion-dollar corporation listed offshore today with hotels operating in provinces and cities nationwide. With nearly 100,000 guest rooms, we serve tens of millions of customers every year and generate hundreds of millions of dollars in sales revenue. Huazhu uses the business model of direct management, which can be very challenging, and rapid growth in multiple regions brings enormous management pressure. I have no choice but to do my utmost because I believe it is the key to ‘being outstanding’ and building a team of talented kindred spirits.
When new opportunities occur or new positions become available, I will first consider candidates among our existing employees. But if no one within the company meets the requirements for the task, we must look for external talent. As for new members of our company, we calmly observe their performance without prejudice or favor. Whether they are internally or externally recruited, the most important quality for new members of our company is de, 德, meaning virtue in English, which is an idea I often emphasize of having the same values and beliefs.
An entrepreneur who runs a fast-growing enterprise must be open-minded and willing to embrace all team members, both old and new, in an inclusive manner. The only appropriate parameter that should be used to evaluate a team member is whether this person is valuable to the enterprise. Talent should be attracted and retained as long as they are good for the company.
Should we run the company like a family business or use professional executives?
This is a topic explored and considered by many Chinese entrepreneurs. At present, I prefer a style that combines both approaches, following the traditional Chinese belief, as found in the yin-yang hexagrams, that the universe desires the middle ground, the golden mean. Entrepreneurial team members and professional executives are both equally important.
Because the company is growing fast, certain parts of the business can’t wait, so outside help is essential. We also need veterans of our company to preserve institutional memory and to then pass it on. Perhaps a good formula for managing fast-growing companies like Huazhu should include uniting old and new team members and combining Western management systems and tools with Oriental virtue.
An entrepreneur who runs a fast-growing enterprise must be open-minded and willing to embrace all team members, both old and new, in an inclusive manner. The only appropriate parameter that should be used to evaluate a team member is whether this person is valuable to the enterprise. Talent should be attracted and retained as long as they are good for the company.
We must carefully design the balanced scorecard based on the company’s general strategy for all key departments to objectively select good performers. To encourage them to make more contribution to Huazhu, we must nurture them, put them in important positions, trust them, promote them, give them more resources and reward them with remuneration. As for those individuals who are selfish and slack at work, we must encourage them to change. Those who fail to improve will eventually be asked to leave our team.
Building talent echelons is a top strategic priority which is vital to the future of our company
To build three talent echelons with like-minded members, we must:
- Intelligently optimize the management structure of our company, based on our strategic objectives, and effectively deploy staff members.
- Audit the management hierarchy and tailor our strategies according to their functions.
- Third, Managers and supervisors in our headquarters, and managers who run one or more hotels are the most important basic level management team.
We must build competitive profit-making capacity through highly effective management.
Regular communication with all three management levels is needed in order to ensure consensus. While individuality should be persevered, the core values of the company must be maintained. Quarterly meetings, regular talks, irregular informal interactions, luncheons, mile-stone parties, and birthday parties are all channels for us to communicate with our team members. Management team members are encouraged to be ‘super-supervisors’, which means they not only supervise their subordinates but also keep an eye on a level further below.
Performance is a metric to evaluate a management team member. Develop a balanced scorecard for each task and position in different departments in order to achieve the company’s strategic objectives.
Apart from encouraging personal development and self-reflection among employees, the company should support them through training.
We must build competitive profit-making capacity through highly effective management. And the foundation of highly effective management is the management team. Rewarding them with competitive remuneration is an investment, just like training activities, not merely a cost reported in the company’s balance sheet. A competitive remuneration package can help most management team members resist external lures and focus on self-advancing.
How it works at Huazhu
At Huazhu, team members in these three levels would be included in Huazhu’s Shareholder Program as part of their remuneration package. Through this Shareholder Program, key executives can share the fruits of our company’s growth. In addition, we hire management interns from elite universities. As Huazhu continues to grow, our company must have strong cell proliferation ability in terms of talent-pool building. For most of our front-line employees, we must provide job security, a relatively competitive remuneration package and a pleasant working environment.
I truly love this industry. Every day I go to work my heart is filled with hopes and plans. When I finish work, my heart is filled with satisfaction and joy. I am willing, and have the responsibility, to lead our company and our team to advance forwards and achieve greater success. I must treat veteran team members with kindness and welcome new members with an open heart and I am confident and hopeful for the future.
Commentary by Ji Qi. Here’s what you’ve missed?
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