LCT With You: Jim Luff talks a bit about the COVID-19 situation and how operators can make it through times.
LAS VEGAS — If your business has been disrupted, stop whining about it. It’s your fault, so you need to deal with it. The older your company, the slower it moves, and the more likely you’ll be irrelevant. If you think you have nothing to worry about, you’re done. If you do worry, there’s hope.
Attendees heard such blunt, hard-core statements March 27 from Michael Dominguez, the chief sales officer for MGM Resorts International. His presentation spanned the new dynamics and behavioral trends changing the world of business, including luxury ground transportation operations.
Playing off a series of business and inspirational quotes, Dominguez outlined the harsh realities of change, disruption, and constant distractions, and how businesses must adjust to survive.
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Quoting Klaus Schwab, the founder of the World Economic Forum, Dominguez said, “In today’s world, it is not the big fish that will eat the small fish, it is the fast fish that will eat the slow fish.”
“And the question is, how fast are you moving and how quickly are you changing? Because change is coming to your life and there is nothing you can do about it.”
Businesses waste time trying to plan beyond three years, given the rapid and unpredictable changes, most of it driven by technology, Dominguez said. The traditional five-year plans should now be viewed as aspirations or wishlists, serving as a “North Star” guide.
“Speed is the new currency of business,” he said, quoting Marc Benioff, the founder and chairman of Salesforce. It’s not to your advantage if you are bigger and older.
“Disrupt or be disrupted, the disruption is coming to your life. Your only choice is to disrupt, or you will be disrupted,’” he said, quoting John Chambers, CEO of Cisco for 25 years. “’If you were disrupted, quit whining about it because you had the chance to be the disruptor. You let them disrupt you.’”
If you plan to succeed today in any business, you need to think like a startup, Dominguez said. “The larger the company, the older the company, you move really slow, and you’re risk-averse.”
Based on Chambers’ research he shares with top customers, Dominguez warned the operators: “Forty percent of you in this room will not be relevant in any significant way in the next five years because you can’t change fast enough. It doesn’t mean you won’t be around. It doesn’t mean you’re not going to have businesses. You’re just not going to be relevant to the conversation because you can’t change. And I know that sounds rough. It’s the reality of the world today.”
He showed data on the rates of how companies fall on and off the S&P 500 list. In 1920, companies stayed on the list an average of 67 years. In 2010, listed companies are expected to stay only 15 years.
“You get slower as you get older. And you get slower at the decision process. Do you know all of us end up with reading glasses at some point because, literally, the lenses in our eyes harden? There’s science behind it. That’s why all of us end up with reading glasses or Lasik. And some people say, ‘I don’t need reading glasses.’ Yeah, but you had Lasik surgery. It’s the same thing. You still have a correction.”
As with eyesight, the longer you’re in business, the more your lens hardens, he said. “The way you look at the world, the way you are adamant on how you think it is; it hardens the longer you’re doing it. We get a little bit jaded the longer we’ve been doing this. And the interesting part is the world is moving fast enough that you can’t afford to be jaded.”
In a reassuring trend for operators, Dominguez refuted the widespread view retail is dead. “Middle retail” is dead, but not luxury and discount.
“You’re either in the luxury market or the discount market, but you’re not going to be in the middle. You will have to pick a side at one point and know where you’re headed.”
RadioShack, for example, should have been the Best Buy of today, but they did not move fast enough. They had loyal, trained customers, but lost them. “If you have a customer base and think they will be there forever, you’d better make sure you are really focused on keeping them,” he said.
Dominguez posed three challenges to operators: How do you change? How do you reinvent? How do you continue to evolve your business model?
“If you’re sitting there saying, ‘That’s not me,’ I promise it’s you. If you sat there and said, ‘That could be me,’ it’s not you. It’s the people who are worried about it who are the ones that continue to change.”
Dominguez advised a business owner should come to work a little nervous every day about the constant need to change with customers.
How do you get to your customers, employees, and team members in a constant atmosphere of distraction? In addition to technology and social media, people are involved with ever-present Internet platforms such as Facebook and YouTube.
“I don’t know quite what it says about our society, but there are 1.4 million swipes on Tinder every 60 seconds. That’s a lot of distraction and noise. How do you cut through it, and how do you beat your customer to the punch and stand out?”
Whether or not you like this new world is irrelevant. You’re stuck with it. Dominguez, quoting Chambers again, said: “You need to deal with the world the way it is, not the way you want it to be. And many of us struggle in changing our business models because we’re still trying to live with the world the way we want it to be versus understanding the hand you’ve been dealt. So how do I plan?”
The biggest struggle lies in people keeping the status quo. It’s often the misfits, rebels, troublemakers, and crazy ones who display genius. “People crazy enough to think they can change the world are the ones who do,” he said.
Change does not have to be big and breaking, just incremental enough daily, Dominguez said. Every Fortune 500 company has a change management department, since change can be hard and shifts basic psychology. Citing the Kubler-Ross curve, Dominguez said everyone will go through the change cycle at different rates but still must complete it.
“You go through a point of denial, to anger, to actual acceptance, and come out of it knowing you will actually accept the change and know where you fit in.”
Citing another quote, Dominguez said, “It ain’t what you don’t know that gets you in trouble, it’s what you know for sure that just ain’t so.”
“If you run your own business, or if you manage a business, you need to understand what’s going on around you without any emotion. Let the data tell you whatever it tells you. You need to be able to do some research.”
The leading approach operators can take to stay relevant is a core of luxury service: Developing authenticity. Companies succeeding today are real with their customers.
“We are fair, consistent, and transparent with everything we do. Which means I will tell you what it is, and I’ll tell you why, and I’ll tell you the rationale, and I’m going to keep telling you no, but I’m going to tell you why I’m telling you no.
“Being authentic means you don’t need to be right, you don’t need to be perfect, you need to be real,” he added. “That means sometimes you’re vulnerable and sometimes you’re wrong. And you need to tell your team when you’re wrong, and you need to tell them what you learned. You need to tell them so they’re safe being wrong. That’s what builds a culture. But you cannot do anything without a culture.”
Quoting Peter Drucker, Dominguez said, “Culture eats strategy for breakfast.”
“I know many people in business today who have really high I.Q. and very low E.Q. They have very low emotional intelligence. It’s lacking with most leaders. Most people don’t understand people. They’re really smart, but they are not smart with people. You can’t get anything done without understanding it.”
Dominguez recommends creating a manifesto, which differs from a mission statement. It explains “why you’re doing what you’re doing, not what you do and what it means to the customer.” At MGM, the manifesto is simple: “We believe entertainment is a basic human need. We believe as humans, we’re born to be entertained. That entertainment is like air and water. It’s the reason you sit at campfires and tell stories, and it’s the reason we have always gone to watch people fight or play, because we are a species that needs to be entertained.”
What does that look like? Dominguez asked. At MGM, “SHOW” actually stands for: Smile at the guest, Hear the story, Own the experience, and Wow the guest. “For all of our employees, it says, ‘This is my stage. I am the show.’”
“There’s a difference between giving great service, which we’ve done for a long time, and being entertained. How do you entertain at the same time you service?”
Urging operators to create a clear cultural message, Dominguez challenged: “What is your mantra? What is your manifesto? Why do you exist? And if it’s just to make a lot of money, that doesn’t resonate with your team members. What are you doing to make the world better?”
Companies focused on culture see a dramatic increase in their profits, he said. “We tend to focus on the wrong things. We focus on strategy versus making sure everybody in our organization feels a part of it.”
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