by Steven J. Belmonte, retired President and CEO, Ramada Franchise Systems, Inc.

(The third of three presentations made to Symposia held at Roosevelt University's Manfred Steinfeld School of Tourism and Hospitality Management. All rights reserved. Any use without permission of the author is prohibited.)

n September of 1990, as President and CEO of the Equity Hotel Corporation, a chain with 32 hotels including five Ramada's, I attended the RINA Convention. The convention took place less than three months after Henry Silverman had purchased the Ramada Franchise System from Prime Hospitality, the Persian Gulf Crisis had just begun, and I sat in the audience, like everyone else who was skeptical, confused, uncertain, and very, very unhappy about the prospect of adjusting to the third Ramada system owner in ten months - I sat in the audience with you and listened to Henry Silverman. And I quote from that speech:

"Who am I? I am a businessman, an entrepreneur just like you who figured out a few years ago that franchising is a relatively simple and straight forward proposition and that by owning the rights to a well known product like Ramada which has many committed hard working owner/operators like yourselves, it should not be difficult to create value for everyone by aggressively expanding the chain and by providing the core, the central services which you need to help run your business. Such as:

1. A high volume reservation center at which an agent answers the telephone 24 hours a day.
   
2. A consistent integrated marketing and advertising campaign which will make the 800 number ring. Our customers are not mad at us. They have forgotten us.
3. Training programs for your employees.
4. Quality inspections to make sure everybody else is maintaining standards. In other words, keep you full and keep the other guy clean.

Not complicated. I am a businessman who understands that you are the customer, that by definition you are always right, that in essence I and all the corporate employees, the Executive Vice Presidents, the secretaries, the telephone operators, the people in the field, everyone works to service and satisfy you, our customer.

What do I want? I want to stand here in front of you 5, 7, 10 years from now with 1000 strong, healthy and profitable Ramada's open and operating across this country, with a reservation system which is constantly and consistently providing you with customers and dollars and with a corporate environment which is responsible to your needs and your concerns - I want to stand here in front of you 5, 7, 10 years from now to thank you for your efforts in making me look smarter than I am to my investors.

How is this thing, this relationship, this partnership going to work? By being honest, by being open and by talking, by communicating with each other. We are going to disagree at some points along the way, and when we do, we will talk about the issues, resolve them and continue to move forward.

This is not a situation where somebody wins and somebody loses. We either win together or we lose together. There is no scenario I know of where the franchisee loses and the franchisor wins. If you fail, you don't pay us and we fail. End of quote.

Well, here we are eight years later. Amazing isn't it? It's remarkable what we have done - both individually as hotel owners and operators and together in the trickiest of all business relationships (pause) as franchisor and franchisee.

But there is something missing from this equation. Yes, we have the numbers, yes we have the success, and yes nearly everything Henry predicted eight years ago has come true. There is something missing and it really bothers me. Now I know what you are thinking. This is what happens when you have an Italian Catholic as President of your company. In the face of prosperity, in the face of success, what do we get? Guilt. Good, old fashioned guilt. Listen, it's not my fault. Blame it on my Mother.

But there is really something missing. I travel around the country, talking with owners and General Managers, with desk clerks and bellhops, with waiters and waitresses and what's missing, plain and simple, is a "sense of pride," a sense that you are all proud of yourselves, proud of your employees and proud of being part of Ramada.

Pride is defined in the dictionary as pleasure or satisfaction taken in one's work, achievement or profession. What I'm reaching for is deeper than that. Maybe that's what I'm trying to say. Maybe what I sense is a lack of leadership and without real leadership there is no pride.

Let's go back to the definition: Pleasure or satisfaction in one's work, achievements or profession. What's our profession? We are innkeepers - we are those people who from the beginning of time have provided a warm, safe haven for the traveler, and in the days gone by, companionship, conversation and food.

Do you feel that? Do you believe that? Do you communicate that to your people? That there is satisfaction, a joy that comes from service - do you communicate enthusiasm for your profession?

Henry Ford said that "enthusiasm is at the bottom of all progress. Enthusiasm is the spark that gives you energy to execute your ideas. With it, there is accomplishment. Without it, there are only alibis."

Back again to the definition. Pleasure or satisfaction in one's work? What is our work? I submit it is not developing, designing or building a hotel. I am not minimizing the time, the risk, the investment of doing this. Think of yourself as a playwright. Yes, you create the concept, the story; you have the skill to write the words that create meaning, who make the characters come alive. That's our work. Making a property come alive, creating its personality. And that happens through leadership, through some amalgamation of words and deeds. Words are so strong. Words give clear images. "We herd sheep. We drive cattle. We lead People."

That is our work. As owners, operators and managers. Leadership. Leading people. Giving hotels character, personality, installing "life" into our business.

There's a simple test which proves whether you are doing your job and whether your properties are alive or dead. Kind of like a doctor with a stethoscope. It's the pronoun test. I learned it years ago while running my hotels. I ask one of your people a couple of questions about policy or some aspect of the operations. You know, something not complicated like, "How come the restaurant closes so early, " or "If you are not busy tonight, can I check-out at 3:30 p.m.?

If the answers come back using the words "they and them," I know that this place is dead as a doornail. No heart. No soul. No leadership.

If the answers include "we" or "us" then I know something good happens at this property. The "pronoun" test. Try it sometime. Or have a friend ask the questions at your front desk.

Pride and leadership. Leadership and pride. This is not brain-surgery we are discussing. We are talking about revenues. We are talking about profits. It's simple: The number of dollars you put in your pocket at the end of each week is determined by your willingness to help others. Your bottom line is determined by your ability to mentor employees and place them in leadership positions. Your ability to remain competitive in the most competitive of businesses is determined by your ability to give credit where credit is do and to praise your people for doing a good job.

All of this translates into dollars. This is not some soft, fuzzy, do-good stuff. We are talking about your children, your dream home, your retirement. We are talking about those dollars.

If you want to sit there and think, "Ah Belmonte's blowing smoke again," that's okay. The world won't come to an end." Doesn't hurt my feeling. It's not my money, it's not my signature that guarantees your mortgage, it's not my future. But that kind of reaction is a mystery to me. If your business is throwing off x dollars, why not a multiple of x? Why not 2X? The dollars are there lying on the table, waiting for you to pick them up.

I don't know what your personal goals are, but maybe, just maybe if you assume a leader's role and instill pride in your people, maybe you can realize your financial goals from what you have, maybe you won't have to build another 1 or 2 or 3 properties with the inherent risks or maybe you can get off the edge and generate the cash flow and capital you need to develop another hotel site. Who knows? The possibilities are different for each of you. What I do know is that the ultimate goal of every rational businessman and businesswoman is to maximize revenue and profits. What I don't know, what I don't understand is why everybody doesn't reach for that goal. It doesn't make any sense. Why be in business?

Straight. Simple. Uncomplicated.

1. Your business depends on Guest Service.
2. Guest Service depends on your leadership
3. Your leadership instills pride in your people and they perform their tasks better than your competition which determines your profits.

John Kotter in his book, "Leading Change" defined leadership as well as anyone ever has: "Leadership defines what the future should look like, aligns people with that vision and inspires them to make it happen despite the obstacles."

"…defines what the future should look like." Everybody in the hotel business does this. You give your manager financial parameters, tell him to analyze the past year's results department by department and provide you with a budget, a forecast which will fulfill your requirements. We understand that. We do it. Good. Check it off.

Next, "…align people with that vision." Do we do that? Let me tell you something. If you have not earned the respect of your people, go back to square one. That's right. You have to earn respect. Just like you judge others by their actions, your managers, supervisors, and line employees are judging you by your actions. And nobody is going to go that extra step, exert that degree of energy if you are not respected. What creates that respect? Nothing big. A lot of little things. Enthusiasm. Courtesy. Credit. Recognition. Praise. Affirmation. It's easy to criticize. Any fool can do that. What is hard is picking them up and making them feel good. That takes skill - real skill.

Okay. You're on the same page with your people. Like your automobile, your wheels are balanced and aligned. Now it's easy to sit down with your general manager, and then with your department heads and finally with your employees and talk about your goals, your vision and the future. The last part of Cotters statement about leadership was "…inspire them to make it happen despite the obstacles." For the word "inspire," let's substitute "incentive."

General Eisenhower said there are no victories at bargain prices. Again, this is not complicated brain work. People respond to incentives. Everything else is commentary. All people. All the time. It's human. It's natural. Why would you believe you are any different from your front line employees - you have incentives real and psychological which drive you. Paying your mortgage on time is an example. A 25th wedding anniversary trip to Paris. Your people need the same stimulus.

Provide incentives. Provide dollars, lots of dollars, for performance. Whatever it costs for bonuses, for rewards. You will get your investment back many fold through increases to your bottom line. Notice that I refer to this as an investment because this is an ROI situation. No different then bricks and sticks. I'm going to put my money where my mouth is. Send me your schedule of incentives for your line employees, front desk, housekeepers, maintenance and restaurant people.

I guarantee that whatever the extra cost, say a thousand dollars per month for performance incentives, that your bottom line will increase at least twice the amount. If it doesn't, Ramada will fund what you are out of pocket. That's how sure I am. Find out for yourself about the power from motivating your employees.

I don't know how else to say it. My children accuse me of repeating myself. So I won't. I will let other people speak to you for me.

George Bernard Shaw said that the essence of inhumanity is to be indifferent to our fellow creatures - that is the worst sin. Or to quote a famous Indian Chief from the 1850's: "Humankind has not woven the web of life. We are but one thread within it. Whatever we do to the web we do to ourselves. All things are bound together. All things connect."

I want to close with a proverb from the Orient. It came from the wisdom of the Chinese.

Thousands of candles can be lighted from a single candle and the life of that candle will not be shortened. Happiness never decreases by being shared.

The future is coming. Only you can decide where it is going. Can I persuade you with my passion to take the barriers down. George Burns said, "When you stop giving, when you stop offering something, it's time to turn out the lights.

Embrace your people. Embrace the power of your people. Thank you. God Bless.