Innovation is very important in strategic management of organisations in today's highly dynamic market. In terms of the production of new products and service delivery approaches, innovation is one of the most commonly embraced methods of creating and sustaining a competitive advantage in businesses (Rugman and Verbeke, 2002). The hotel industry is not an exception to this view with many hotel managers keen to align their services and practices to “the new wind blowing throughout the hotel business”. An overview of the arguments by Hu, Horng and Su (2008) concerning innovation highlights the importance of taking a comprehensive approach towards ensuring innovation in organisations. This view is complimented by the views of Freund de Klumbis (2011) in his emphasis on the changing customer characteristics and the increasing pressure on the hotel industry to live up to the expectations of their clienteles. The typical service of a hotel is aimed at providing clients with meaningful experiences which are mostly personalised to meet the expectations of the clients in question. The art of attracting and retaining customers is a function of the level of satisfaction derived from the unique experiences offered by them. This requires an innovative approach in the creation and provision of services. Hotels are increasingly making efforts to create unique experiences by offering a larger range of services known to enhance customer satisfaction (Bouncken, 2005). These unique experiences must be sustained with new innovations produced from time to time in order to keep up with the ever changing customer preferences.
Before considering the importance of innovation in the hotel industry, perhaps it would be prudent to consider the characteristics of the industry’s clientele and how their changing perceptions are likely to impact strategic management and operational practices in hotels. The modern day hotel clients tend to focus more on rewarding themselves through the enjoyment of unique experiences rather than merely taking a rest in a traditional hotel room (Freund de Klumbis, 2011). These consumers tend to be more informed than the traditional consumers with many reaping the benefits of increase proliferation of information as made possible by the internet (Freund de Klumbis, 2011). Being that they tend to be more informed, their expectations of the level of service provided by hotels tend to high with many looking beyond the physical description of facilities and services at their disposal. The main focus becomes the gratification to be derived from the unique experiences to be felt (Earnst & Young, 2011). Customers expect hotels to be more of a ‘home away from home’ where they can get special experiences that are largely reflective of their lifestyles (Freund de Klumbis, 2011).
As analysts would hold, success in any business is dictated by how well the business understands their clientele and goes on to create the products that best satisfy their clientele’s changing needs (Wilkerson, 2003). Clients tend to be more loyal to businesses that are seen to be conscious of their needs and accurately translate such knowledge into acceptable or satisfying goods and services (Barney, 1991). Given that customers of the hotel industry are increasingly conscious of the uniqueness of experiences provided by hotels, it becomes increasingly necessary that hotels embrace an innovative approach to the provision of new services capable of satisfying this demand. This trend has led to a growing tendency towards the upgrading of hotels into the lifestyle hotel status where focus is mainly on the customer and their experiences while at the hotels (Wilkerson, 2003). As a component of strategic management, innovation has become a requirement for survival in the increasingly competitive market with those getting it right appearing to steadily gain on the market share. Care must however be taken to ensure that the kind of innovation is in line with the expectations of the clientele. The accurate translation of information into suitable services is the key to ensuring that innovations create a competitive advantage to any given business.
Conditions necessary to promote innovation in the industry
Organisations must consciously take measures to create a suitable internal environment for innovation. Some of the practices known to promote innovation best include knowledge management, knowledge sharing, and the promotion of team culture (Hu, Horng and Sun, 2008). Effective strategic management should incorporate all these elements to ensure that every aspect of the organisation functions at its optimum. Knowledge management and knowledge sharing are closely related and often refer to the process through which valuable information is collected from an organisation’s clientele regarding their likes, dislikes, preferences, and attitudes (Cabrera, Collins and Salgado, 2006). Given that hotel services are highly personalised, it is relatively easy for employees to collect the information through conversations with the clients or through observation on their reactions to the various services. Such information is crucial in enabling hotels come up with an array of services that can create extraordinary levels of satisfaction among the customers. However, a common problem has been observed when it comes to information sharing. Employees may intentionally or unintentionally provide their peers with partial information regarding the clients served hence making it difficult to satisfy their customers (Hu, Horng and Sun, 2008).
Management teams should come up with good knowledge management systems that enable accurate sharing of information with minimal impartialities. It is an established fact that information sharing and knowledge management is an integral part of promoting innovation in any organisation (Cabrera, Collins and Salgado, 2006). As strategic management analysts would hold, the development of new services is useless unless it is based on accurate information about the prevailing needs among the customers targeted. Another crucial requirement for the promotion of innovation in organisations is the promotion of the team culture. Teamwork is a crucial practice for promoting cooperation among employees who then take joint responsibility to ensure that the organisation’s goals are achieved (Hu, Horng and Sun, 2008). A good team culture also helps dissipate the problem commonly associated with information hoarding commonly practiced by employees collecting information from their clients (Cabrera, Collins and Salgado, 2006). Adopting the view that members of an organisation are team members with the responsibility to ensure overall results, hotels are increasingly finding ways to getting their employees to solicit for relevant information and pass them on for the benefit of the whole organisation.
Perhaps the most relevant organisational view is the resource-based view of the organisation. This theory envisions the organisation as a collection of resources where these resources include all physical, financial and human resources at the disposal of the firm (Barney, 1991). Barney's theory has often been described as the backbone of strategic management theory and practice. It emphasises the use of the resources available to the firm to enable it create a competitive advantage. For instance, a hotel can choose to make good use of its employees to create a competitive advantage by enriching the experiences that customers have while at their hotels. As has been mentioned earlier, hotel services are highly personalised and therefore involve a substantial level of interaction between the employees and the clients. The employees can therefore become the most strategic resource for any hotel wishing to stand out in the market. Proper training of employees in customer service and in how to cater for different client needs can enable employees to provide exemplary service.
Unique satisfaction can also be created by ensuring that the employees are adequately informed on the areas that are likely to be of interest to the clients (Earnst & Young, 2011). For instance, a visiting client may want to know about various facilities in the locality and would be very pleased to be provided with ample information on the available and the most reliable facilities. The strategic manager ought to be able to understand such client needs and ensure that they are satisfied for sustainable competitiveness to be assured. Perhaps one of the best ways of using human resources in creating a strategic advantage is in involving them to turn the organisation into a leader in innovation of products and services. In the hotel industry, employees are valuable and effective instruments of collecting information (Earnst & Young, 2011). Through their interaction with their clients, the employees are able to learn about the preferences of their clients and come up with ideas on how such information can be used to create innovative services (Earnst & Young, 2011). With the current trends in the demand for luxury products and services, it is predicted that innovators will be experiencing remarkable returns in the medium and long term. Hotels must therefore channel all the resources at their disposal to promote innovation and tap into this growing demand.
From the perspectives highlighted above, the arguments advanced by Hu, Horng and Su (2008) are largely reflective of the views held by strategic management experts around the world. Knowledge management, knowledge sharing and teamwork are indeed crucial when it comes to promoting a culture of innovation in a given organisation. The push for more innovation in the hotel industry is fuelled by the changes in the expectations of their clientele with more focus channelled towards gaining memorable experiences from the hotels. The typical hotel customer is more demanding, better informed, and certainly experience extraordinary thrills. As Freund de Klumbis (2011) ably demonstrates, a new wind is blowing in the hotel industry and this wind is characterised by changing expectations and preferences among the clients of the hotel industry. Experts concur with this view and predict that innovation is going to be the most important platform on which the survival and success of hotels around the world will be determined (Earnst & Young, 2011).
References
Barney, J., 1991. Firm resources and sustained competitive advantage. Journal of Management, 17 (1), pp. 99-120
Bouncken, R.B., 2005. Standardisation and individualisation strategies of hotel brands: matching strategies and quality management instruments and marketing in Germany. Journal of Hospitality and Leisure Marketing, 13 (3/4), pp. 29-51
Cabrera, A., Collins, W.C., Salgado, J.F., 2006. Determinants of individual knowledge sharing. The International Journal of Human Resource Management, 17 (2), pp. 245-264
Earnst & Young, 2011. Global Hospitality Insights: Top Thoughts for 2011. (Online) Available at: http://www.ey.com/Publication/vwLUAssets/Global_hospitality_insights_Top_Thoughts_for_2011/$File/Top-thoughts-for-2011.pdf (Accessed 23 October 2011)
Freund de Klumbis, D., 2011. Seeking ‘the Ultimate Hotel Experience’. Unpublished
Hu, M.M., Horng, J., Sun, Y.C., 2008. Hospitality teams: knowledge sharing and service innovation performance. Tourism Management, xxx, pp. 1-10
Rugman, A.M., Verbeke, A., 2002. Edith Penrose’s Contribution to the Resource-Based Views of Strategic Management. Strategic Management Journal, 23, pp. 769-780
Wilkerson, C., 2003. Travel and Tourism: An overlooked industry in the US and Tenth District. Economic Review, 88 (Third Quarter), pp. 45-72
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