In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that
have shaped their business philosophy.



Managing member and co-founder, Midas Hospitality


Background:  

Midas Hospitality develops and manages properties, including 30 hotels in 11 states, for chains such as Hilton, Marriott and Starwood. Midas, founded in 2006 and headquartered in Maryland Heights, Mo., also has 14 additional hotels under development.

The Mistake:

Focusing on profit before people.

I’m a CPA by trade, and my business partner and I started Midas Hospitality 11 years ago. With that CPA background, you’re focused on the numbers and the profit and loss at the end of every month.

But the lesson I learned over time is that it’s not about the monthly P&L, it’s about the people who generate that profit and loss. It’s about our people and about our mission. The P&L is a snapshot looking backward and not looking forward. What I learned is to focus on the people and not so much on those numbers.

It’s not about the monthly P&L, it’s about the people who generate that profit and loss.

The Lesson:

Today, as you look at hotel operations, you have to look at a bigger picture on how a manager is performing, for example. And a profit and loss is just one piece of that performance. Looking at a manager today is looking at how they treat our guests, how they treat our other employees and how they maintain the hotel. So it’s a more well-rounded approach, whereas, going in 11 years ago, the profit and loss was everything to me.

I think employees watch you. They watch how you treat other people. One of the things I always do and remind others to do is smile and say hello. That’s big in the hospitality industry. But, if you’re not doing that as a leader, do you think your employees are? No. So you have to lead by example and you have to care about them. Me showing caring toward them, I’m hoping they pass that on to the guests and their co-workers at the hotels.

Full circle for me is being more of a servant leader. Being strong and courageous, being generous, being caring and being decisive in all our actions is also important. Lastly, I’ve learned that if you trust those people who are generating that P&L, then you will earn their trust.

Being in this industry, I have become a more hospitable person. The hospitality industry has led to a 180-degree shift for me. But I think it can be carried to any business to treat people the right way and how they want to be treated. And now, I understand that if we’re focusing on those things first, not the profit, but the people, the P&L will fall in line. It’s only a result of all those processes. If we’re not taking care of our guests, if we’re not taking care of our employees, if we’re not taking care of the property, then the numbers will look bad. But if we’re doing those things first, positive numbers are the end result. The question is, what are the processes that lead to good financial results?

Over the years, I’ve found a balance. I feel I’ve always been a generous person who liked to take risks. That has always been in me. But there’s that financial piece, too. And I never brought together the two until I matured in my role. Before, it was always: reduce expenses, grow revenues. But you can’t forget about the people in that equation. Sometimes, as financial leaders, you can make a good short-term financial decision that actually ends up being a catastrophe in the long term. So don’t make decisions for the short term, make decisions for the long term and make sure you’re building relationships with those decisions. There may be a negative short-term financial impact for making the right long-term decision for the people and for the business.

J.T. Norville is on Twitter at @jtnorville and Midas Hospitality is at @MIDASHOTELS.

Photo courtesy of Midas Hospitality.

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