Every Friday vendors came around to play “lucky lotto.” These
vendors supplied food, chinaware, and table clothes to Lee Pillsbury
Malek, the owners of Thayer Lodging, a
privately held hotel investment company that was formed in 1991. Unfortunately,
the 1992 Gulf War hit the hotel business hard. To survive this rough patch, Lee
and Fred had run up over $1 million in trade payables and, with only $50,000 in
profit each week to spare, they had to decide who they could afford to pay and
who would have to wait.
“Every Friday vendors would come to play the ‘lucky lotto,’
to see how much we could pay them,” Lee remembers. “These guys were terrific. They
kept supplying us because they knew we would eventually pay them.”
Lee and Fred did more than survive. The war’s grip
eventually loosened and their hotel venture grew. Today Thayer Lodging is one
of the largest hotel operators in the country. They operate a multitude of
hospitality related businesses – from traditional hotel real estate owners to
high-tech reservation services.
Today’s economy is also straining the hospitality market,
but even in this tough year, Thayer Lodging is still closing new investment
funds. In other words, at a time when the hospitality business is just trying
to hold on, Thayer Lodging is thriving.
How Lee and Fred have been able to defy the competition
offers several fascinating, and potentially company-transforming, insights into
what it takes to win while others worry.
The first lesson, already hinted to here, points us directly
again at the tangible, strategic value of ethonomics. You see, the suppliers
who rolled their dice in Lee’s and Fred’s “lucky lotto” game weren’t sure if
they would get paid that week. But since these vendors received full and honest
disclosure from Lee and Fred, they felt they were insiders, part of something, and
that they belonged.
As Lee explained, “The first element is disclosure. We let
them really know what was going on. Don’t leave people wondering, ‘Why doesn’t
he return my phone calls? Why do my accounts receivable people call him instead
of him calling me?’ The reason we didn’t get collection calls was because we
were out front. We would call people we owed money to.”
This lesson fits neatly with everything we have been
covering about the practical benefits of being good. You tell a narrative that
people want to belong to. You create an inclusive “identity” that pulls others
under the same umbrella. An ancient Chinese stratagem advises that you “open
the city gates” and let people see inside your house. Then they will be less
likely to attack you.
In these times of
tight liquidity and credit, it is worth trying this pattern. Instead of
avoiding vendors, contractors and customers that you can’t currently appease,
try sharing the specifics of your situation. Ask yourself the questions below
to see how being open can actually strengthen your relationships.
am I hiding from my stakeholders (vendors, investors, clients, etc.)?
do I feel the need to hide that information?
3. What would happen if I opened the city gates?