The basic rule for success, believes Rakesh Sarna, managing director and CEO, Taj Hotels, Resorts And Palaces, is respect for the brand, job, colleagues and your guests by Babita Krishnan
No one would have thought that the meeting of corporate heads with Rakesh Sarna, the new MD and CEO of Taj Hotels, Resorts and Palaces, on September 9th, 2014, would be one unlike any before. With the entire top management and every general manager in attendance, he spoke nothing about rewards or revenue management, but it was all about mutual respect. “I spoke about mutual respect because that’s an issue which has to be reinforced. There are many companies and hotel groups and they are all great people. But we are blessed to be in the house of Tatas that adds to our responsibility. If we want to continue sitting under the shadows of Jamsetji, we have to work hard to deserve to sit there and the only tool to help in that is to start with mutual respect. I think in our company and in our society, there is a disconnect with that word, which needs to be corrected. And when that happens, servility will go away – there is a very fine line between good service and servility,” Rakesh Sarna recounts the highlight of that meeting. But 19 months and many changes later, what is the status at the brand today?
Much has been said about the changes made in Taj, but Sarna believes that what they really did was to get back to the basics. “Because at the end of the day, we are in the hotel business and our only goal is to make sure that our guests experience something that is consistent and something that is experiential,” he says.
Sarna does not think they have made the kind of progress that is generally perceived, but the right seeds have been sown and the foundation is getting laid and that, he feels, will continue till the end of the year. “It’s very difficult to say there has been growth or results. It takes a much longer time to incubate ideas and to effectively have them implemented in the field. These two years have been for the foundation, investing in our people and in our culture, and then the growth or the results will accelerate,” he shares.
With a 112-year history, the Taj legacy has been about people – both associates and guests. So Sarna veered the attention of the brand back to its people, “Have we given our colleagues in the hotels enough tools, responsibility, commensurate authority and respect?.”
He chose to focus on mutual respect more than good service or the great Taj products because, he felt that this is the glue that binds 26,000 Taj people together to bring these experiences to life. “So we reposed the authority into our general managers and their colleagues which was commensurate with huge responsibility. Imagine running a 250 room hotel with 80% occupancy! That is a huge contribution to our brand. There are thousands of transactions taking place and we hope that those are fuelled with emotion and not just the transaction. We have made those changes,” he shares.
Sarna cut the umbilical cord between the corporate office and the hotels and elevated the status of each property as ambassadors and flag carriers of Taj. This empowered them to do the right thing for the guests, for their colleagues and for the community. He believes that policies and procedures change and no one has the time to read reports but everyone can do the right thing.
But how did everyone respond to this you wonder? While initially, there was a lot of rejoicing at the freedom granted, but then came the responsibility and they realised that they were given a very clear dashboard with no ambiguity. They had to be the number one or two performer in the RevPAR index, have the best NPS, LQA, the best EBITDA margins and the happiest employees because that is the critical area according to Sarna.
“There is a culture of servility in our society which needs to be corrected,” he says. “CEOs have to worry about EBITDA and debt to equity ratio and all that. But if I can leave here one day and say we deleted servility from our culture and we were able to guarantee that everyone from a dishwasher to general manager to vice president is treated with respect, that’s all I want to achieve in life.”
All of this must have been a huge change for a brand and people set in their ways, Sarna is candid in admitting that some have adjusted better than the others. “But it’s important to remember that no one does not want to adjust. Some are just more equipped than others, so our responsibility is to facilitate the change. There is so many things we are doing in the area of human capital management including assessing our talent today and what we are going to do to develop that talent going forward,” he says.
The new management mantra means looking after the associates and this includes their work-life balance. This was addressed by giving six days off in a month to begin with. “I don’t believe that giving a five-day work week will make us good just because the western world has it. We want to be able to earn the right to say you are in a family. We also looked at our AHP plans for associates and now all 26,000 associates enjoy the same benefits as I do,” Sarna shares. The next in line is the medical plan coverage. He is of the firm belief that you cannot speak about mutual respect if there are different classes of society within an organisation. Citing an example, he says that as a brand, Taj has to start thinking about the ‘other’ 362 colleagues in a property who actually touch the guests during their stay and not the one GM or 10 top management people. “Who touches your toothbrush in the bathroom, not the GM and certainly not the CEO. Those are the people that we need to show respect to. Those are the people whose self esteem we need to build. Those are the people that we need to inspire and this can be done only if they believe in what they are doing.” Going forward with this foundation, Sarna is sure that January 2017 will begin to show the results of these thoughts and philosophies.
He doesn’t view these efforts as changes, but merely a course correction exercise. While staying true to the principles that Taj is known for, there was also a strong focus on analytics, digital strategy and revenue management, not because those are the buzz words, but because it meant survival. “You first need to survive before you think about becoming relevant,” he says. In a very short time, the brand has seen great response to the new website and the new loyalty programme that has been launched.
While each vertical under the Taj umbrella has its own brand specifics, the core of all strategies begins and ends with guest comfort and associate welfare. When discussing the brand values and culture, Sarna is quick to delink the two. “Taj has values which are identical to Tata values. Values remain the same across the spectrum of anything in the house of Tatas. The brand vertical cultures are helping to define what those brands are. So whether we manage this company geographically or by brand, that does not change,” he explains. Each of the Taj brands have their own unique service culture and that becomes the defining difference between them.
Coming from a mature market and an international brand must have been a difficult change. But he refutes it by disclosing that change has been easy for him for two reasons. Firstly, because he was not always in mature markets, though people tend to think he has spent all his time in the US. And the second reason being that he came from a culture that is amazing at nurturing people and bringing out the best that they have to offer. “So to me, coming here was moving from a great culture to a great heritage. The value system is the same, just expressed differently,” he adds.
The realisation of the Taj heritqage was authenticated not from any brand specification or instruction booklet but from the guests temselves, some of who feel very strongly about what the brand should be doing as to them Taj is not just another hotel company, it is a legacy and this is what the group has built over last more than 10 decades. “It’s extraordinary. I have worked with a very dynamic company and great culture called Hyatt for 35 years and many people loved Hyatt and respected them. But I never heard the words adore, love and worship for a brand. To me this is very surreal,” he admits.
This does not work as an added pressure on his mind but has strengthened his resolve to give back to his colleagues and the community. “If we want to improve, let’s do a very simple circle of life. Let us start with improving the quality of life for our associates and colleagues by paying them better, have better work-life balance, better gender diversity, medical plans, etc. To do that, you need to have a business that produces the profits, which can be done by charging the right prices. We are not in this to just make a profit, but to make a difference in lives of the people that make us successful. Making profits is not a bad thing. Somebody very learned in the Tata world, said that you need to create values to live values. It is such a beautiful way of putting it. So we should not be ashamed of making a profit as long as we know what to do with that profit,” Sarna explains.
Gender diversity, however, continues to be a pain point for him, as he believes that it is problem across industries. He doesn’t think enough has been done for the female colleagues in terms of providing them flexible working hours or working conditions. The population mix of the world is such that you need to have gender diversity he feels. And though Sarna has introduced many benefits and changes in this direction, they have not been greatly successful. He discloses that there are only 3% women candidates in the pipeline to succeed to the top ranks of the company, though he is hoping for a positive change in the next five years. “We are zeroing down on a lot of candidates and trying to develop them for leadership roles, but it’s a very long road,” he says.
With India being at the cusp of maturity as a market, where does he see the industry going in the near future?
Maturity does not come by number of rooms, maturity comes by the way you conduct yourself, he says and believes that the industry needs to focus on a couple of things. As an example, he compares Thailand that gets 35 million visitors annually to our 7-8 million. “The question is what we are doing about it? As an industry, we need to really take this matter into our own hands and not focus on what we don’t have but thank god for what we have. There is a lot going for us and we need to get people to come to India and to encourage Indians to travel within our country and stay in our hotels.”
He lists the benefits extended by the government by way of infrastructure like airports, e-Visa facilities for 180 countries, etc. He feels that the industry needs to take a step back, be proud of what we have and charge the right prices. “We are giving away our products today because we are not confident. We have some of the finest hotel rooms and restaurants in the world. So why are we giving away hotel rooms that command $700-800 at $70-80?” The other important thing the industry needs to do to become a mature industry, according to Sarna, is to raise the self-esteem of people that make it successful and work on taking servility away. “Let us stop being shy about this and say we need to eliminate servility from our culture, at least in our industry. If we do that, it will be followed by good service,” he emphasises.
In Sarna’s view, the road ahead is quite clear as Taj Group of Hotels needs to become globally reputable and not focus on being globally present. “We need to demonstrate day in and day out to our loyal guest base that we are consistently good,” he says. Another goal is for Taj to become the employer of choice, which, he admits is not the case today.
“In five years time, I would like us to become a group of hotels that not only seek their inspiration from both Jamsetji and Indian traditions, but also become the brand of choice by being consistently and reliably good in everything that we do. Second, become the employer of choice. Third, become the preferred choice for partners or third party owners that want to develop iconic, world-class hotels. So that’s a spread of three constituents. Of course there are many more constituents – our communities, our vendors, and very importantly, our shareholders who put their faith in our brand,” Sarna points out.
For a brand with such a rich legacy, achieving this vision should not be a problem, especially since the strong foundation of the all-new work culture has become a part of the Taj fabric. “Only God has a vision, we can only aspire to achieve our goals,” Sarna has the last word.
