Performance, productivity and purpose

Mind your Ps and Qs (19)

Communities-as-destinations that consistently perform well are those that attract continuous streams of visitors. In attempting to ensure that destination experiences create value, most leaders and managers of individual organizations acknowledge growth as the key to achieving revenue growth and sustained success, though each will tend to follow different starting points.

Growth, however, is always episodic, seasonal and cyclical (desirable when downtime is needed). In certain instances, however, it may not be considered as having priority, especially when communities find they have other pressing issues to deal with. Nevertheless, when measured in terms of revenues, tax income or profits, companies and communities know they can determine the degree to which they have advanced their competitive fitness or competitiveness among destinations and maintained or bolstered their economic health…as if that is all that matters.

And yet, these preoccupations represent and reveal a preference for the development of ‘performance-based cultures’ that emphasize increasing the volume (quantity) of visitors, their length of stay and willingness to spend. An approach that can subvert, even neglect, the need for companies and communities to focus on enhancing their capabilities and capacities for continuous improvements and innovation, often characterized as ‘deliberately developmental growth cultures’.

As an approach championed by consultants and leading organizations that have a keen sense of how to improve their growth systems over time, such enabling cultures emphasize…

· Defining compelling customer outcomes.

· Creating brands that speak to shared experiences and values.

· Architecting the right capabilities.

· Creating the right operating models.

· Renewing insights continuously.

· Measuring inputs, outputs and returns as a means of (re)allocating investments and spurring innovation.

As more organizations and communities-as-destinations become deliberately developmental – optimize their core and develop new businesses - they are likely to become increasingly alert to identifying breakthroughs (particularly when based on a well-conceived sense of purpose that’s based on more humanistic and holistic principles). Breakthroughs that when guided by shared visions, clear goals, and investments in viable and feasible projects, will lead them toward more desired and desirable futures.

Skewed play-to-win mentalities that prioritize economic performance, however, are firmly ensconced in organizational life. Over the past decades in preparing annual hospitality market reports, I’ve regularly reported on the performance indicators to which various sectors of the industry are most attentive: For hotels it’s occupancy rates, RevPAR (revenue per available room), and ADR (average daily rate). Even for a wide range of travel, economic and operational data, it’s evident that tourism’s leaders and managers prefer or rely on performance metrics that represent lagging rather than leading indicators…certainly they are the most readily available.

True also for destinations, particularly DMOs (Destination Management/Marketing Organizations) who justify the ROI of their marketing expenditures through conversions, visitor counts and revenues.

What’s lacking are the leading or key performance indicators (KPIs) essential for determining how well destinations are enabling improvements, are building a process culture that prevents errors, and are on track to predict and resolve changes lurking around the corner. Changes that could undermine operations and reputations especially on the environmental, social and governance (ESG) front. Changes that should focus attention on advancing tourism’s continuous development through impressive advances in the quality of their offerings, the provision of inspiring hospitality, and concern for the well-being of residents and especially those on the frontlines, partially resolved through the concept of `slow productivity` in order to avoid burnout.

The World Economic Forum’s Travel and Tourism Development Index (TTDI), for example, reports on the strength and veracity of a destination’s enabling environments. An approach that is even being supported through identifying better ways of assessing productivity growth and its impact on economic performance, the well-being and quality-of-life of residents, including the sustainable development of destinations.

As has been previously noted, Destinations International is adamant in support of Community Shared Value. However, too many companies and communities-as-destinations have yet to match rhetoric with reality when it comes to improving the well-being, quality-of-life, or ‘wellth’ of its residents and workforce, especially those who rely on temporary foreign workers.

To the extent that ‘care-washing’ remains prevalent, most tourism-based organizations remain beholden to the notion that productivity improvements are best viewed through a cost-efficiency lens, especially in reference to labor. Often a result of a misunderstanding associated with Economics 101 and a lack of empiricism, but also due to a rigid, rules-based approach to job descriptions that fosters joyless work or performance management systems that don`t serve to develop people and help them grow and succeed.

When coupled with the prevalence of toxic managerialism and performance induced vices one cannot help but wonder: What will it take to build a thriving workforce and reinvent performance management, especially of employees?

Interestingly, Griffith University in Australia has introduced an interesting holistic performance indicator framework for visitor economies that dovetails nicely with the World Economic Forum’s TTDI. Its widespread implementation, however, is unlikely unless a wide swath of tourism enterprises and communities-as-destinations seek to clarify the purpose for pursuing tourism and recognize the necessity and benefit of reinterpreting performance and productivity and linking it to purpose, which makes me wonder: Why were the concepts of community shared value, community and organizational health, hospitality and civility seemingly ignored in the Griffith framework?

As Rebecca Henderson of the Harvard School of Business has argued: Purpose-driven means having a concrete goal or objective that can benefit society-as-a-whole. One that extends beyond financial performance and serves the greater good. While she acknowledges that the economic rationale for honoring purpose for any organization or community-as-a-destination is strong, she suggests that its implementation is likely to require a social and spiritual transformation.

Given the conundrums, getting communities-as-destinations to adopt a holistic approach to ‘growth’ (or, as the case might be, in defense of degrowth) is bound to be challenging. It will require case-by-case deep assessments, especially if the critiques of monofunctional tourism cluster locations and districts are applicable and the typical locational advantages associated with many tourism clusters don’t correspond and need to be improved.

With the development of more profound strategic perspectives, new management agendas and new roles for governments are bound to come about as ‘growth’, ‘performance’ and ‘productivity’ get re-interpreted and redefined. After all, tourism as a place-based economy within communities can reach breaking points particularly when the prevailing infrastructures can’t handle the overload.

Eventually the scale of activity in many overly popular destinations can create real disadvantages that outweigh the advantages: Notably the escalating costs associated with land, building, and infrastructure, excessive regulation, inadequate access to security and capital, and the growing prevalence of anti-business/tourism attitudes.

All of which, over time, can deter growth or exaggerate the homogeneity of what is on offer. But need it? Not according to a renowned strategist who argues for ‘intimate monumentality’ as a possible response when scale is required or is inevitable…a possibility that will become more prevalent as destinations mature.

In this regard, I can only imagine:

· Enabling all destinations to find, create and promote intimacy through placemaking.

· Creating a “small is beautiful’ mentality that will occur when destinations excel at scaling differentiation, distinctiveness and desirability.

· Exceling at the art of scaling taste and instilling a sense of playfulness.

· Articulating and promoting a purpose for tourism that is the antithesis of sole focus on achievement, performance and productivity – particularly their dysfunctional qualities!

Just because results are not immediately visible doesn’t mean they are not accumulating. By defining compelling host/customer/visitor outcomes and enabling them to occur, communities can and will excel as destinations. If not, they’re only as good as their worst day!

It’s been a long time coming but a change gotta come.