There was a time when Hilton Hotels Corp. tracked performance metrics with the standard electronic spreadsheet, updated monthly. But almost 10 years ago, the hospitality company decided to automate the process to achieve better real-time measurements and instant companywide access.
Beverly Hills, Calif.-based Hilton chose a version of marketing dashboards known as “balanced scorecards,” using a Web-based application from CorVu Corp. The Hilton approach tracks five key “value drivers” at its 2,300 properties, including operational effectiveness, revenue maximization, customer loyalty, brand management and employee training.
Adhering to the classic graphical representation of dashboards, Hilton's scorecards gauge these drivers across three color zones: green, indicating achievement of goals; yellow for slightly below goal; and red for well below goal. Goals are set against industry standards and competitors' performances.
“Our approach has been if you can't measure it, you can't manage it,” said Romy Bhojwani, VP-asset management at Hilton. “And the fact that you can pull up a graphical interface and look at an individual hotel or an entire division and see performances across all those drivers is a tremendous improvement over the past.”
Individual hotel managers have access to their own properties' dashboards, and can drill down to view causes of poor performance. Regional managers and higher executives can do the same by region or different Hilton brands.
According to Hilton, the system encourages a focus on both short- and long-term drivers of success; cultivates teamwork (since each hotel property is assessed as a whole); makes performance reviews more objective; and encourages sharing of best practices.
Because many of Hilton's properties are franchised, and not owned by Hilton itself, the dashboard scorecards dramatically demonstrate to the actual property owners the value of the Hilton relationship, Bhojwani said. A separate set of dashboards measures the performance of the company's vendors.
But the scorecards do more than depict performance, Bhojwani said. They also drive action.
“As a result of the scorecards, it is a very fair statement to say we have operating margins across all our hotels about 300 basis points above our competitive set,” he said.
For 2005, the company had revenue of $4.40 billion, up 7% from the previous year, with earnings of $460.0 million, an increase of 93%.—Christopher Hosford