Dr. Achim Schmitt, Associate Dean Graduate Programs and Full Professor of Strategy at Ecole hôtelière de Lausanne (EHL). After more than 15 years in strategy consulting, Achim has gained substantial knowledge in strategy formulation, corporate turnarounds and managing underperforming business situations. In his earlier career, he participated in the turnaround of 15 companies and currently functions as a strategy advisor in Switzerland and Germany. Academically, Achim has gained experience at the University of Geneva, at the China Europe International Business School in Shanghai, the Collège des Ingenieurs in Paris, the Columbia Business School (USA), the Universidad de los Andes (Colombia) and the Audencia Business School (France). He is also an Associated Researcher at the University of St. Gallen in Switzerland and regularly advises service and hospitality firms in strategic matters of growth, expansion and decline.
RLA: Having done advisory services for service firms, academic teaching and management in your career, is there a particular skill or attribute that has helped you in your professional life?
AS: Listen to people. I feel that in today’s world, people do not take the time to listen to each other. Understanding the needs, reflections and values of the people you interact with allow you to make an impact. It’s a skill that is hard to master as it requires patience, humility, and focus.
RLA: How do you teach hospitality students to keep all stakeholders, particularly Owners and Investors happy?
AS: In a nutshell, owners and investors are unhappy because they feel that their interests are misrepresented. Often, future investments, growth problems, operational and cost issues stem from dysfunctions between owners and operators. In dynamic environments, such as the hospitality industry, these misalignments happen due to uncontrolled growth, varying interests, and lack of communication. It is therefore critical that all involved stakeholders need to align on a common vision. A vision functions as a compass that can help making tough decisions, right investments, adjust operational inefficiencies and keep all involved parties on board, for the long term! With increasingly available
opportunities, new hotel concepts, brands, and technologies coming in, the absence of a common objectives risks to sidetrack a business from its long-term growth trajectory.
RLA: As an industry what should we stop (or start) doing?
AS: As a strategist, I strongly feel that the industry should start thinking about long-term vs. short-term growth, control, and dependencies in the value chain. The phenomenal growth in our industry has been based on vertical disintegration and the focus on core competencies: investors, owners, distribution platforms, and operators are the main players that come to mind that allowed the industry to get where it is today. This separation allowed industry players to specialize activities, reduce complexity, focus on core competencies, and as a consequence offer cheaper prices. However, this industry structure has a big disadvantage: it is purely adapted to growing business context, not to mature or declining markets. Hotels, airline tickets, and booking commissions can only get cheaper when there is more demand and more volume. If this volume stagnates or declines, things get difficult and not even travel giants like Thomas Cook can avoid that things run bad in these situations. From an owner or an investor perspective, we might start thinking about what to control in the future and to create sustainable collaborations that survive varying dynamics in the industry. Short-term benefits and returns are often at the costs of long-term strategic capabilities. To avoid a similar fate than that of automotive firms, the industry can start controlling growth and creating partnerships – also with local stakeholders (i.e. governments, suppliers, and social groups) – that provide a robust and stable platform for long-term performance.
RLA: In the next decade or two, what do you foresee changing about the Hotel Guest Experience?
AS: Further individualization and loyalty will be key for future guest experiences. Technology and AI will certainly reduce human customer touchpoints during the guest experience but won’t replace it. However, fewer human interactions need to become more enriching to make a lasting and individualized guest experience. It will be thus more difficult to build personalized relationships with your customers. Direct access to customer and controlling the data management system will enable the creation of lasting experiences, but this creates pressure on current “generalist” hotel concepts. In the future, we will, therefore, observe more segmentation of the market that allows to individualize the guest experience. New business models and concepts will be the consequence. We already observe these trends around wellness, sustainability, and F&B – by targeting specific guest needs and groups, firms can adapt their offer and create a stronger guest experience.
RLA: The hotel industry is going through a tremendous evolution as they become more hybrid in their real estate nature (co-living, co-working etc.) and technology driving so many operational and guest experience changes. How are you preparing the future hospitality leaders to lead, when the landscape is shifting so quickly?
AS: Of course, subject matter expertise and an understanding of new or hybrid business models help. However, there is always a limit how much you can teach. What you can do is to provide the fundamentals for tomorrow’s developments. In all my courses and board meetings, I emphasize that executives need to find ways to be close to their clients and employees. Small adaptations can be done quickly if you allow for delegation, flexibility, and creativity.
“ The true champions are often front-line employees that discover opportunities or trends and then communicate them upwards. Combined with proximity to markets, such flexibility allows future leaders to stay up with changes in the market.”
It creates agility into your systems and adaptability in your organization. However, you need an open-culture, trust and a certain leadership mindset to allow your people to criticize established processes and routines. This is easier said than done – unfortunately, it might be the only way to stay ahead of an ever-changing world.
RLA: What is the best piece of advice you have ever received?
AS: My mentor once said: sharing is caring and thus constantly distribute your knowledge. My past career has been based on this credo – I never was shy to share a document, a business contact, or bring individuals together. If you try to control knowledge, you will fail; if you share knowledge you will succeed. I have tried to constantly share this motto with my team and peers; it always made cross-collaboration and business development much easier.
RLA: What do you think is true that many people might disagree with?
AS: People and business are often very egoistic – the win of one group represents the loss of another. Our entire business principles build on the notion of “competitive advantage” and your own fate is more important than the other one’s fate. Business is brutal and at times more important than your health, your family, or your happiness. If we do not start putting people and communities first, we won’t be able to follow the enormous speed and complexity around us. Challenging more than 50 years old business principles by finding a winning combination, might be a good way of going further. Please recall the saying: if you would like to go fast, go alone if you would like to go far, go together. I believe there is quite some wisdom behind this sentence.
RLA: In our industry where can we find additional or hidden value?
AS: You know, this is a hard question and I can certainly provide you with an answer that is technical. However, I feel that there is a lot of “hidden value” in slowing down certain business decisions. In today’s world, I feel that some things still need time, reflection and different viewpoints. Decisions and ideas are often implemented without reflection and detailed planning. On top, we launch new initiatives before well finalizing prior decisions. While at times you cannot avoid a quick decision and implementation, I just think that reflection and time can create a lot of value to certain decisions.
RLA: What is the most unusual thing you’ve had to do to “make it work”?
AS: At one time, I created an international collaboration based on a handshake. Without a contract, without financial planning, without lawyers, we created a business idea purely based on a handshake. The circumstances didn’t allow for another solution. I feel that values and promises are often taken too easy and was happy to see that there are still people out there that commit without a legal binding document.
Influencers in Hospitality is a regular RLA Global Q&A with movers and shakers of the hospitality world, providing enlightening industry perspectives whilst sharing some personal traits that have made them successful.