Succession Planning: The Key to Improving DE&I in the Hotel and Lodging Industry

The hotel and lodging industry is constantly facing new challenges: increased digitalization, adapting to post-pandemic mandates and changing customer expectations, shrinking talent pools, and shifting workforce demands.

So how can hotels stay competitive and maintain a robust leadership pipeline? Succession planning.

Especially during turbulent times, building a deep, diverse, and engaged succession pipeline is crucial to ensuring the continued renewal and relevance of an organization’s leadership team. Via our Global Leadership Monitor, we identified three common succession planning failings that create strategic risk for organizations:

• Succession planning misalignment creates risk. Board directors and executives have differing views on the sophistication of succession planning processes in their organizations.
  
  
• Next-generation leaders lack confidence in the succession process. Next-generation leaders are concerned about their organization’s succession practices and view the process as inequitable and not inclusive, opening organizations up to significant retention risk.
  
  
• Organizations are missing successor growth and development opportunities. Few organizations report that development planning for successors is part of their process.

To help hotels develop equitable succession plans, Russell Reynolds Associates interviewed HR leaders from best-in-class hospitality organizations to learn how they’re planning for their organization’s future.

Here’s what we learned.

Hotel industry HR leaders are developing succession plans at every level

Create a clear—yet flexible—success profile: To ensure a clear understanding of what potential successors need to bring to the table, these HR leaders develop a success profile for every role in their succession plan. Building a success profile requires focusing on the capabilities and behaviors leaders need to deal with their hotel’s specific context, as well as competencies needed to meet the challenges and opportunities faced by the broader industry. Crucially, robust plans should include differentiated competencies for those above and below the VP level, ensuring that succession plans extend deep into an organization. While success profiles are key to maintain alignment, they shouldn’t be written in stone. Market conditions change quickly, and the type of leader needed may pivot just as fast.

Leverage career planning platforms: Hotel organizations also leverage career planning platforms to ensure they are building potential successors’ readiness. This could include talent review processes that help organizations assess talent within the organizations, which identify potential successors and note where these particular leaders need to develop. These tools are complements to—not replacements for—mentoring and coaching from those positioned above potential successors as well.

Prioritize behaviors that can’t be taught: Technical skills, like business and financial acumen, are table-stakes at the C-level. When assessing potential successors, multiple HR leaders emphasized the importance of agility, resiliency, and adaptability. Given the dynamic nature of the hospitality industry, organizations are prioritizing leaders who can quickly adapt to change and respond to new challenges, demonstrating flexible mindsets around new ways of working.

Never discount culture fit: Given the nature of their business, hotel organizations tend to have a people-centric culture and orientation. As such, they need leaders who can build or maintain a culture that puts people first, understands the diverse needs of its workforce, and puts meaningful action behind equity programs that ensure an inclusive environment.

The future of hotel leadership: How succession planning helps improve DE&I outcomes

Overall, the hotel industry is making fantastic strides as it relates to succession planning. However, we heard from several leaders that there are still opportunities for improvement, particularly as it relates to DE&I. While hotel organizations are integrating DE&I principles throughout their culture, talent acquisition, and other aspects of the organization through different DE&I initiatives, few are implementing direct DE&I strategies as it relates to succession planning.

To get more diversity at the top, you need to plan for it. To ensure a pipeline of diverse, prepared leaders, hotel organizations must invest in succession planning early, building equitable internal talent pipelines that fuel leadership plans at every level. To diversify leadership pipelines:

• Build a forensic understanding of the organization’s internal pipeline
• Assess potential, not just experience
• Supercharge development for emerging leaders
• Be intentional about C-suite sponsorship programs 
• Double down on overcoming unconscious bias
• Start early, establishing community outreach and recruitment programs at universities for underrepresented minorities

Not only are comprehensive succession plans key to a healthy C-suite, they help improve DE&I outcomes at the top. For hotel and lodging associations looking to build a future-fit organization, investing in these efforts is crucial to long-term stability and success.