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The Hilton Balanced Scorecard
Process Evaluation & Improvement
Dennis KociSVP- Operations SupportHilton Hotels Corporation
Operations SupportKey Internal Functional Support
Safety &
Security
Front OfficeFood & Beverage
PerformanceMgmt
Hskping
PropertyOperations
Leasing
TechnicalServices
Overview: Performance Leadership
Balanced Scorecard: –Align the Organization–Measure Results
Continuous Improvement Process:–Use BSC to target Opportunities–Raise the Bar
Results: Is it working?
Where We Wanted To Be
‘Balance’ financial and customer dataCreate new Focus: Pay at RiskMeasure to reward/supportAlign Corp Objectives with Hotel goalsEasy to understand (RYG)/ Results OrientedTools to ImproveStandardized Process/ Flexible measuresAutomate
Hilton Balanced ScorecardValue Drivers KPIs
Financial OutcomesFinancial
Outcomes
Customer ObjectivesCustomer Objectives
Internal Business
Processes
Internal Business
Processes
Learning & Growth
Learning & Growth
Operational Effectiveness
Rev MaxCustomer Retention
Quality
Training
LoyaltyLoyalty
Guest/Team member
Brand MgmtBrand
Standards
Learning & Growth
Diversity &
Org Development
Revenue GrowthCash Flow/GOP
RevPAR
Hilton: Organizational Alignment
Clearly State VisionDevelop Corporate Business StrategyAlign overall Strategy with SBUsMeasure - Balanced ScorecardValue thru Continuous Improvement
Strategic
Tactical
BSC
VISION“ To be the First Choice of the World’s Travelers
VALUE DRIVERSOperational Effectiveness,Rev Max
Loyalty,Brand ManagementLearning & Growth
Key Performance Indicators
Measure Performance ResultsReward & Support
Continuous Improvement
Drill-down
Team Member Loyalty by Department
Culinary/Cooks has the lowest Team Member LoyaltyLet’s investigate further.
Team Member Loyalty within Department
Only 50% of our Culinary / Cooks team members feel this is an above average place to work
Team Member LoyaltyBest Practices
Hotel Team membersFocused & Aligned
Hilton CIP vs Six Sigma & Kaizen
Linking BSC to Continuous Improvement Process
BSC/Prioritization
Act
Proposal
Root Cause/Solutions Test
MeasureImplement
CheckDoPlan
Target
Situation
Results: Creating Value
2002 JD Power Results -Upscale Segment
99
101
103
103
107
109
109
114
117
110
Embassy Suites
Renaissance Hotels
Westin Hotels
Hyatt Hotels
Marriott Hotels
Omni Hotels
Hilton Hotels
Wyndham Hotels
Doubletree Hotels
Sheraton Hotels
2002 Upscale Average = 105
Mgd=109.9
3rd Party=98.4
Hilton- Corporate Mgd
Hilton-3rd Pty
RevPAR IndexCorp Mgd vs 3rd Party Mgmt
96
98
100
102
104
106
108
110
2002 2001
ManagedFranchise
108.7
103.2106.6
100.6
Hilton Brand Flash Rept Nov 02 YTD
Managed: CPOR down $4.14 or 3.44%Owned: CPOR down $5.97 or 3.80%
Cost ContainmentCost Per Occupied Room- ’02 vs ‘01
YTD Nov 30
$36 Million
Lessons LearnedThe Balanced Scorecard to:
• Align Corp Strategy w/hotel •Set Goals/Measure Results
Use the CIP to reach higher levels of performance
Raise the Bar
Hilton Performance Culture
Operations Support
RewardRecognition
BalancedScorecard
ContinuousImprovement
KPIGoals
Performance Management: Next Steps
Enterprise
Area/Region/Owners
Hotel
Dept/Individual