É preciso assumir grandes riscos para ser bem sucedido? Esta é uma das questões-chave para os líderes de negócios hoje, dada a crescente complexidade da gestão de uma empresa, em especial, as multinacionais.
Para Christopher J. Nassetta, presidente e CEO do grupo hoteleiro Hilton Worldwide, Inc., a resposta é não, você não precisa. Mas ninguém deve esperar também que é possível gerir uma empresa com sucesso utilizando o modelo tradicional. As mudanças estão chegando cada vez mais rápido, os gestores precisam reagir rapidamente e trabalharem dentro de uma organização capaz de se adaptar. Para a Hilton, a marca e a diversificação geográfica são uma parte importante da solução.
Como Nassetta explica: “Como os mercados oscilam para cima e para baixo, felizmente conseguimos ter uma performance melhor que nossos competidores, mas não podemos lutar contra um mar inteiro, e é aí que a diversificação é uma poderosa aliada.”
A entrevista condensada você encontra aqui: (inglês)
PwC: Over the next three to five years, what do you see as the growth prospects for Hilton and your industry?
Chris Nassetta: Travel and tourism broadly is one of the biggest contributors to global GDP, at about 9 percent, and the largest employer in the world. We see very good trends, short term, intermediate term and long term.
Demand in travel and tourism is growing at a far greater rate than capacity additions, which is driving higher growth rates in some parts of the world than others, particularly in Asia Pacific and the Americas.
In 2013, for the first time ever, there were a billion global travelers, inbound travelers, and that number is expected to double over the next 20 years and that trend combines with an under capacity in most of the world. If you look at most of the emerging markets, the capacity for hotel rooms is about 10 percent of what you would find in the more mature markets around the world. So we expect very good growth, which is a very good thing for our business.
In many ways, we look at not just the next few years, but the next 10 or 20 years as being a golden age of travel.
PwC: Driven in part by the Internet? The closer you get virtually, the more you want to be there physically?
Chris Nassetta: The reality is that the Internet has accelerated the growth in the business, because people are moving faster, and while certain forms of communication have been made easier and don’t require travel, the net result is more activity, more commerce, more people wanting to connect. The Internet has enhanced growth in travel and tourism, not taken away from it.
PwC: What are some of the growth areas that excite you in terms of either a market or an opportunity?
Chris Nassetta: We have a simple strategy, which is that we’re trying to serve customers for any travel need they have anywhere in the world that they want to be. As a result, we have a very balanced global growth strategy. The nice thing in our business is, if we’re intelligent about the products that we’re offering and how we deploy those products around the world, as macro conditions change in various regions of the world, we’re able to continue to grow in good times and bad.
We’ve proven that. As we grow, we are better able to serve our customers by offering them new and different products, and more of our existing products, and in more locations. That allows us to drive increased loyalty, which continues to reinforce our opportunities for growth. So we’re very excited about what we have going on in every region of the world.
Today I’m proud to say we have more rooms under construction than anybody in our business in every single region of the world. That is going to allow us to better serve our customers, which is going to drive enhanced loyalty.
Europe has been challenging. I can’t say that we anticipated it to the degree that it’s happened, but we certainly anticipated it to some degree. What we did was to basically reengineer some of our products, with the philosophy that Europe is going to be a value proposition for a while. So in our business, that means more in the focused -service business, Hilton Garden Inn, Hampton by Hilton and growing the Doubletree by Hilton brand.
We did a massive amount of customer research to tightly engineer those products to meet the needs of those customers, but in keeping with the DNA of those brands. We deployed incremental resources in terms of development of our commercial platforms when many of our competitors were pulling back.
With the segmentation , and the geographic distribution we have and the scale that we have with over 4,200 hotels, if we’re intelligent about how we deploy these, how we engineer these brands for different regions of the world, there is always an opportunity to grow.
In Europe, we have a pipeline of about 28,000 rooms under development, all with third-party capital. That is more than double our next closest competitor as a result of these strategic moves that we made five years ago.
PwC: What are the potential threats to that growth, and how are you mitigating them?
Chris Nassetta: I’m paid to worry, so I’m constantly worrying about that. We’re in nearly 100 countries, with more than 4,200 hotels, we have huge scale, and we are very diversified globally.
While we worry about the risks, the way that we mitigate is with a simple philosophy, which is diversification. We have great teams on the ground, great strategies to deal with crises. When we look at our business overall, it is growing at a very strong rate because there’s a lot more good going on than there is bad.
There are a lot of risks in running a business in a complex world. One of the questions people ask me is, “Do you have to take on a lot of additional risk in order to be successful?” And the answer is that I don’t think so. We’ve been a company of pioneers. It’s in the DNA of this company. Our founder, Conrad Hilton, was out around the world opening hotels in very far-flung places before anybody was doing it. He was one of the first truly great international businessmen. We’ve always been pioneers, always been willing to take reasonable risks.
The most important way we mitigate against that is being able to move quickly and be smart about how we operate the business, who we partner with, and exactly where we are and in what locations. Now, in the end, we can’t mitigate against all risk. As markets go up and down, we can hopefully outperform the competition, but we can’t fight the tide entirely, and that’s where diversification’s a powerful ally.
PwC: Are you worried about any new competitors coming in, and, if so, what kind?
Chris Nassetta: Of course I worry about the competition. We have some amazing strategic advantages in terms of our very large scale, our price points, and geographic diversification. The combination of those things is unbelievably powerful and unique for us in the sense that we are bigger than anybody in the world.
Having said that, the biggest mistake any CEO or any management team can make is thinking we’re the king of the hill, and life is good, and as a result become complacent. We wake up every day thinking about the competition, and we have some great competitors out there. And for the foreseeable future, for the rest of my life, most of those will continue to be our competitors.
There will be new competitors on the scene. Technology is allowing other entrants into our space and many other spaces across a broad range of industries. The sharing economy effect, which is accelerated by the Internet and technology, is impacting our business. Looking to the future, I view it as additive to our business. Companies that are utilizing technology and connecting the dots in the sharing economy allow for more efficiency for lodging accommodations in communities.
People have been renting rooms and renting couches for years. It’s an old business. It just hasn’t been done as efficiently. Businesses that are doing that are definitely providing something the customer wants. The reason I don’t worry about it is, in a way, it is democratizing travel even more.
We’ve done a great job at our scale, as have some of our competitors, to democratize travel, but this takes it to the next level. It is making travel more accessible to people in ways that may not have been done before. In a simplistic way, it’s making the pie bigger, generally. It’s not taking the same pie and taking a sliver out of that pie.
PwC: Has your organization either entered or thought about entering different industries or adjacent segments in the past three years?
Chris Nassetta: We are always trying to stretch our thinking strategically about the business and other ways that we could continue to better serve our customers and drive profitability. My own predisposition is always to stick with what you know, so in terms of getting outside our core business of hospitality, I do not think it is in the cards for us.
Having said that, there are certainly a number of things that we’re doing with segmentation. This year alone, we launched two new brands at two different price points, and we will enter new geographies around the world. We’ll continue to add new brands as we see opportunities, and enter new geographies. We benefit from the network effect of having global scale, price point diversity and geographic diversity, because it allows our customers to stay loyal to us.
Underneath it all, we have to deliver great products and services or we’re out of business. Customers want to stay loyal, and the better job we do in giving them more products and more locations, the higher share of their wallet we get. So while we are very focused on hospitality, we are always looking at expanding within that business in terms of new brands and new geographies.
PwC: Talk about your strategy regarding partnerships, strategic alliances or more informal collaborations that you’ve entered into.
Chris Nassetta: Partnering in our business is fundamental to our success. We’re really in the consumer branding and management and franchise business and not in the real estate business in a traditional sense, even though there is a lot of bricks and mortar associated with doing what we do.
What we do is leverage off of partnerships all over the world with third-party real estate owners that are building these properties. Then we’re entering into long-term agreements to manage or franchise these properties and make sure that they adhere to our standards and that we’re delivering great products and services to our customers.
At our core, we are a company that’s partnering in almost everything we do. We have 1,240 hotels, over 200,000, rooms in our pipeline of development around the world. One hundred percent of that is with partners. It represents close to a $50 billion investment that is being made with third-party partners.
Why is that important? In order to be able to grow and get the scale that we want, and the distribution and the network effect, which is very beneficial, it requires massive amounts of capital. At our scale and with the growth that we anticipate, it requires the use of third-party capital. The other thing is local expertise. We’re in nearly 100 countries and growing, and there are a lot of local issues with trying to entitle and develop major structures in all these various regions.
It’s impossible for us to have the knowledge in every one of those regions to be able to do that in the same way that a local partner might. There are some other important areas that we partner in, including technology. I have a philosophy, which is we’re a hospitality company and should stick to what we do best. The streets are littered with companies that go afield of their core competencies and end up ultimately damaging the performance and the value of the company.
We’re not a technology company. We have a lot of technology people, and we do a lot of work in the area, but I view us as technology strategists that are trying to figure out how to connect what’s going on in the world of technology to the hospitality business. What do we bring to the table? A lot of knowledge in the hospitality business, but I don’t want anybody in our organization to be confused and think we’re a technology company in the traditional sense.
We’re constantly working with technology partners around the world in all aspects of what we’re doing in that arena. We’re strategists trying to figure out how we connect with the emerging technologies and how they relate to the hospitality business, but we partner with third parties all over the world to bring that to life.
The other major area where we’re partnering all the time is in our corporate responsibility area. We’re in thousands of communities around the world. We’re focused on things that are good for the planet and good for our business, such as addressing youth unemployment and sustainability issues. In order to maximize the impact of those efforts, we are partnering with great organizations that help us accomplish our goals around the world and in those major areas.
PwC: How do you think about diversity as a strategic issue for your organization?
Chris Nassetta: For us, diversity is a way of life. It is built into the DNA of the company, and has been for nearly a century. We’re in 100 countries. Our customer base is massively diverse. Our base of over 150,000 team members around the world is massively diverse.
We cannot deliver what customers want in various regions and communities around the world without having massive diversity. We will not succeed without it.
I think of diversity in a simple way, which is diversity of thought. Diversity can take the traditional form of gender, ethnic, and sexual orientation, all of which are important. But what I’m trying to do when we build a team, whether it’s at the property level all the way up through the corporate environment, is make sure we have diverse people so we have diversity of thought.
One of the great mistakes that leaders can make is surrounding themselves with people that look and think like them. People that agree with you all the time and think like you and look like you can make humans feel more comfortable. I work really hard in our organization to make sure we never fall into that trap. You need diversity of thought, a constructive friction, if you will, as you’re thinking about both the risks inherent in the business and, importantly, the opportunities that exist in the business. You clearly will get a better result by having some amount of cognitive dissonance amongst the people that are involved in those decisions, because they are going to see things from many different perspectives.
We’re a public company. I’m here to serve our shareholders and drive value. The way I do that is to serve guests really well in more locations. I maximize the value and the performance of this company by having a diverse workforce.
PwC: Has technology created value, changed the way you run the organization, created value for customers?
Chris Nassetta: We are all getting trained to have choice and control over so many things in our lives with technology. The hotel business can do a far better job of giving our customers more choice and control in that same way and, as a result, drive a significant increase in loyalty. So we have been leading the industry down that path, thinking about the journey of our customers from the first time they dream about taking a trip, to booking a trip, to selecting a room, to checking in, to checking out, to accessing on-property amenities, and to interacting with our customers in a real-time way to better serve their needs when they’re with us.
We have been on a journey to give our customers unprecedented levels of choice and control in the palm of their hand. Today we have eCheck-In. You can go on a map and select a room. Starting next year, we’ll have ‘straight to room’ so you don’t need to stop at a desk and use a key. Your personal digital device will open the room. You’ll be able to select on-property amenities, choose whatever you want.
We’ll be able to talk to you real-time about your preferences and customize your experience while you’re with us. You’ll be able to essentially interact with us in a way that is consistent with the way you’re managing a lot of the rest of your life. Now, don’t get me wrong. We’re a business of people serving people. There are always going to be people to serve you in our hotels.
It is a human business that involves a lot of human interaction, and we don’t want to take that out. What we want to do is take the elements that are simpler, and where we can be more efficient, we want to make those very easy and comfortable and fun for people, to allow for the people in the hotels to interact in a way that is driving a customized experience while they are staying with us. We’ve made huge investments in this. We’re rolling these things out across the world, and I believe these will revolutionize the way we interact with customers.
The conversion rate is huge from those that get an email saying check-in is available digitally. Satisfaction is off the charts.
We had to rebuild the back-end systems in order to be able to operate the company the way we wanted to, and, in so doing, we were able to create a platform that also allowed us to innovate at scale in ways that we wouldn’t have been able to. If we didn’t rebuild it, would what we’re doing now be as easy? The answer is no. We would be like others, where we’d have more of a patchwork quilt of back-end systems.
But because we had the necessity, we had to sort of blow up the entire infrastructure and start over. And now, we’ve skipped a couple of generations. We’re in a good place.
PwC: What is your strategy to continue to be a leading company in diversity?
Chris Nassetta: Making diversity real is about embedding it in the DNA of the company. We have a long history of diversity, so we’re fortunate in that regard, because we’ve built up muscle memory. The way we continue to reinforce it is to use many examples of where diversity has driven far better results, better performance, better opportunities so that it’s reinforced inside the company.
The good news is, people here understand it because of the long history, but I don’t think you can rest on your laurels in that regard. We’re constantly trying to reinforce the wins we get as a result of diversity. I chair our Executive Diversity Council. We have a number of team member resource groups, both corporately and at the properties, that are constantly reinforcing it.
PwC: Do you think that executive decision making now going forward is any different, faster, more complicated than it was in the past, and, if so, why?
Chris Nassetta: Decision making is much faster, at least from my personal experience, and much more complex than it was ten or 20 years ago. Particularly in our business, where to truly maximize your potential, you have to operate at a very large scale and with amazing geographic diversity. When you start to operate at that scale and with that diversity, it changes the equation in a geometric way in terms of the things going on around the world, the various inputs and things that are impacting your business and decisions that have to be made.
PwC: What do you do about it?
Chris Nassetta: To succeed as a global company, whether you’re in our business or any business, over the next decade or two, those who really do it well are going to be companies that are successful at distributing leadership.
That means being able to, as much as possible, have decisions made in the organization to serve customers at the point of the most information and knowledge, which, by definition, means very far down in the organization. In our case, that’s literally in the region, at the property, where they understand, in a real-time way, customers’ needs.
It’s not easy, because there are a lot of things going on in the world. The companies that are going to succeed are companies that are successful at getting intense alignment of who they are, what they stand for, what their key priorities are. The basics of vision: mission, values, key strategic priorities, which we have spent an immense amount of time on, and getting not just people understanding those things, but intensely aligned around them.
The companies that do that in the next decade or two are going to be massively successful. Gone are the days where you can have a lot of top-down decision making in a business as far-flung as ours.
At corporate headquarters, we are not the right people to be making decisions to best serve our customers. We have to distribute leadership down, but within a framework.
