Sometimes, when you get a chance to see a company's play book, you don't find what you expect. That was my take after reading a recent Fast Company article about the inner workings of Toyota. While Ford and GM continue to lay-off workers and close plants, Toyota flourishes. In fact just this week Ford announced that 38,000 hourly employees have accepted buy-outs or early retirement (read the article). Yes, Toyota makes better cars. But, it's deeper than that. And, it's not related to the big three's burden of higher union wages and health benefits. Toyota pays well...without unions. Rather, it's about process and care. Unlike their U.S. counterparts, who are busy setting growth goals (or reduction for that matter) and meeting analyst expectations, Toyota concerns itself with the process of making better cars. Notice, that they aren't focused on making the best cars...rather, how to make them...continuous improvement. They figure if they focus on perfecting the "how", the "what" will come. Seems logical. So, why doesn't everyone do it? My guess is that it's not as fun to talk about saving paint and reducing waste as it is to talk about how good you think you are, or how big you're going to get. In other words, it's an ego thing.

Toyota has figured out that the best way to make the biggest and best wood pile is to keep your head down, and focus on chopping wood. The better they can make each piece, and the less resources they can use to make it, the better the pile will be.

Now, here's where the care part comes in.  Sometimes, the result of the improvement process leads to job elimination...machines or related efficiencies replacing humans. Most companies call this a lay-off. However, Toyota seems to call it an opportunity...no, an edge. In Toyota's system of "everyone focuses on how to make the process better", it's very likely that the reduced workforce was the idea of the very workers being eliminated. So, instead of giving these people their walking papers, they reward them...and redeploy them so they can think of more ways to make things better...and so on. This replaces those nasty fear and job security worries with feelings of my employer cares about me, wants me to be a part of the improvement process and I might even get a promotion if I think of something new.

If all this sounds odd, it is...because most companies don't practice either of these things very well. I hope you're not one of them.

Now, I need to go chop some wood...no, really, I live where it's cold and propane costs too darn much. Then, I think I may trade in my Landrover...for a Toyota.

I just read this interesting post by Seth Godin about a dialogue he had with a resort marketer. She had asked him to help convince her bosses to lower room prices to facilitate company growth. He, of course, countered with the why don't you raise prices and be remarkable approach. It sounds like she didn't take that too well.

As you know by now, I'm not a proponent of the cheap route either. In fact, in almost every case, I'm adamently opposed. Discounting implies that you get less. So, unless you're actually offering less or something inferior to other choices, don't reduce the price. It's a long, slippery slope...in the wrong direction. On the other hand, like Seth points out, if you're "built" for cheap, that's different. Marriott, Hampton Inn, Motel 6 to name a few...are built on the premise of lowest price for the product in their respective segments. And, they've done well with it. Do you really think you can compete with engines like these when bringing your new "lowest price" hotel to their markets? Most probably not.

I actually took away another point from Seth and Anna's conversation. You can't convince someone to change their mind about something if they don't want to believe that there may be a different way to do it. From what I can gather, Anna and her bosses didn't want a different idea, they didn't want a remarkable consultant's honest viewpoint...they wanted someone else (preferrably someone credible) to tell them exactly what they wanted to hear...to rubber stamp their solution.

Consultants face this issue time and time again...and are faced with a brand defining choice. Do you play along and collect a fee? Or, do you take the risk of upsetting the apple cart, and stand for what you believe...to tell people the truth and what you think will solve their problem. The choice made will determine who you are and who you end up serving in the long run.

There are plenty of Anna's out there, enough to make a rather fine living. But, from my experience, working for them is frustrating and certainly more boring than for someone who actually wants to hear what you have to say.

Each time I'm faced with this "rubber stamping" scenario I ask myself these questions...Do I want to be known as someone who seeks alternatives, proposes non-traditional solutions and is willing to take some risks? Do I want to share the risk with my client to take some chances, and to create something really different? Or, do I want to spend hours creating justification for a solution I really don't believe in just to get a paycheck. Right now, I can still afford to do the former...I hope that never changes.

A record 1,200 people attended the Lodging Conference in Phoenix last month...and, for good reason. There's lots of good news, and it's an exciting time for our industry. Jim Butler's post on his Hotel Law Blog gives you all the details and STR slides...well done. Here are my key takeaways about the future...

• Growth in demand will continue to outpace the growth in supply by 1.9% compared to .8% for 2006 (a difference of 1.1%), and by 1.7% to 1.6% for 2007 (a difference of only .1%)
• Occupancy will continue to grow in 2006 and 2007 but at reduced levels of 1.1% and .1%, respectively
• RevPAR growth will continue at near record levels in 2006 and 2007 of 7.9% and 6.7%

No matter how you dissect it, this is good news...we continue to move along a path of "recovery" from the doldrums of 2001/2002. Unfortunately, as Jim also points out, there are mitigating factors in play for the foreseeable future...high cost of construction, steep price of land and a more restrictive financing climate. And, this is where the set-up usually begins...a robust performance climate, under supply in many markets and high cost barriers to entry. The result...not necessarily an overbuilding situation. But, I think, even worse...a flood of average product. Here's a likely scenario, especially for those new to our game...

1. People (developers) have money
2. The numbers strongly suggest that a hotel is a good idea
3. But, building one is expensive
4. So let's cut some corners and save money where we can (this usually means build something efficient, something that's been tested). Let's play it safe and build something that's been proven to work.
5. Let's build something that can make as much money as possible in the shortest period of time.

The result is predictable...an influx of unremarkable properties, built to take advantage of the short-term cycle...which might do very well while the weather remains this nice. But, what happens when things change (and, they always do)? How will the average property stack-up against those that were willing to take some risk, to be different, to spend a little more up front to give people what they want?

If you're getting into the business for the long-term, how can you afford not to build something extraordinary...something that will last?

There's a lot of talk and writing going on about "small". Here's a partial list:

Seth Godin's new book, Small Is The New Big
Tom Peters' "Wallop Wal*Mart16" presentation
Michael Shuman's The Small-Mart Revolution: How Local Businesses Are Beating the Global Competition.
Bo Burlingham's Small Giants: Companies that Choose to Be Great Instead of Big

And, yes, even I wrote about it in my manifesto, Vanished.

So, a lot of smart people (even if you don't include me) are telling you to stop worrying about how big you're going to get, and refocus on how to act small...even if you're already big.

I further the theme with this idea...you've got to be fast. In fact, it's one of the greatest advantages of being small...and I think the primary reason small companies do so much better. Being fast means you can adapt to change quickly, improvise on a dime and simply outflank the big guys. Being fast means you can change an idea, a product or service to meet the desires of your customer...while you still have their attention. If you're slow, they're long gone before you figure it out...if you  ever get it at all.

If you have a big company, break it down into small, manageable pieces...and get  out of the way. If you're small, try to stay that way.