Management Flexibility in Times of Crisis: Lessons from Eran Gefen and Lior Raviv

by time news

2024-04-06 10:29:23

On Eran Gefen and “half an hour of inspiration”

Eran Gefen is the founder of G^Team, a strategic consulting company that helps management and CEOs develop new growth engines. Has experience working with leading companies in Israel and around the world, including: Coca-Cola, Microsoft, Kimberly Clark, Strauss, Walt and Soda-Stream. A previous company he founded Bought by Wix. Geffen operates the podcast “Half an hour of inspiration” and the author of the book “Creating growth – how to turn business creativity into a work plan”. This list is not an interview in a classic structure, but is based on conversations between friends and the profession.

Eran Gefen, CEO of G^Team, a strategic consulting company, in conversation with Lior Raviv, CEO of Isrotel

In recent years, the tourism industry in Israel has faced an almost unimaginable sequence of upheavals – Corona, closure, opening, social distancing, war. Some hotels also opened their doors to the masses of evacuees from the north and south.

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The Isrotel chain, which has 23 hotels, took in 15,000 evacuees, who made them their new home. How do you manage thousands of employees and dozens of hotels when the world is in a chaotic turmoil, which rattles the whole business? Fortunately for Isrotel, as its CEO Lior Raviv testifies, the crisis spurred forward a new generation of young, more flexible managers, who are leaders from below, stick to the team and demonstrate creativity – and thus it is possible to deal more with the crazy changes, from which we can learn.

About himself, he honestly says that if he was the actual manager of one of the chain’s hotels, he would probably be really bad.

Lior Raviv (61)

personal: Married + 4, lives in Tel Aviv
professional: The CEO of Isrotel, previously he was the manager of the southern region and vice president of operations
on the network
Something else: Raises three chihuahua dogs and loves off-road riding

Lior, tell me a little about the network.
“Yishrotel is a kind of nature reserve in the Israeli business landscape. It was established for Zionist reasons by the late owner David Lewis, who immigrated to Israel. Today it has 6,000 employees in 23 active hotels. As we speak, we have 11 hotels under construction. The company faces abroad and is traded. The owners still own 80%. They sold 4% last week, and we entered the indices because of that. And to my delight, the value of the company also increased significantly, the stock rose significantly.”

More than NIS 5 billion at the moment.
“Yes, the stock went up by almost 20% recently.”

In March, one month passed since the death of Moshe Bobalil, a strong competitor of yours (owner of the Club Hotel chain, one of the pioneers of the hotel industry in Israel).
“Moshe Bobalil is a dear man and in my opinion he was a marketing genius. He is the one who invented the story of Club Hotel and turned it into a crazy success. Moshe and I were competitors and friends.

“Many years ago, before I was CEO of Royal Beach (of Yisrotel – AG), I lived in Eilat and went to a rally, riding motorcycles in Morocco. Moshe gave me a sponsor to go to this rally and I rode a motorcycle that had Club Hotel written on it in large letters.”

“A hotel that became a home”

Being a hotelier is not an easy thing, certainly not in Israel, how do you manage in such a reality?
“Look at the timeline and see how we got through the corona crisis and the most difficult crises in the economy in general and our industry in particular, how we got through the last war. Look at the development of our reports in recent years and you’ll see that in some miraculous way we always manage to get through these crises in an extraordinary way “.

I’m sure you’ve had situations in recent years where you said to yourself: wait, I’m a business manager, I can’t believe I’m dealing with this thing.
“It’s crazy. Now we’re dealing with the issue of evacuees. What company manager in the world is in dialogue with people whose fate has not improved? We evicted them from their homes under crazy circumstances and we became their home for six months. We turned 23 hotels into hotels for evacuees in a few days. There were We have a record 15,000 evacuees. We handle things you would not believe.”

What’s the weirdest thing that came to your extension?
“There are endless cases. This is the first time in the company’s history that we host hundreds of dogs. Suddenly we have a new type of guest that we didn’t know and we opened a kind of dog care department.

“On October 7, we made a decision not to close the hotels. I had a feeling that something big was going to happen here. And we had no employees at all. 90% of our employees in Eilat are Jordanians and they didn’t come in.

“During the holiday, the hotels were full, and at the end of the holiday, the workers cleaned the rooms so that on Sunday morning we could receive Kibbutz Nir Oz, a kibbutz with 100 dead and 70 kidnapped, to the Yisrotel Red Sea hotel. People arrived with burnt clothes. People arrived and did not understand at all what It happens to them, the hotel employees received them and cried with them. This is a crazy event, where in the world do you get a situation like this, where the CEO of a hotel becomes part of the community?”

At that moment you didn’t know who was funding it, did you?
“You don’t know who is funding, you don’t know how much it will cost, you don’t know anything. As a company that operates in Israel, we have very Zionist roots that are deep in our DNA, so we opened.

“At a later stage, we included all our luxury hotels, we opened Berashit, Kerami, Mitzpe HaHaimim, Orient to the evacuees. This is no small thing. When Minister of Tourism Haim Katz, who managed the evacuation issue, started talking about tent camps and schools for the evacuees, we said : There is no such thing. People came with tears in their eyes, it’s very moving. And it’s a confrontation we were not used to before.

Bereshit Hotel / Photography: Assaf Pinchuk photography

“As quickly as we turned the hotels into places of refuge for those evacuees, we are now in the process of getting the hotels back to work. We are currently negotiating with them to concentrate them in specific hotels. There are guests who come and want time off, and the demand is huge now. There is no place for Passover anymore, in my opinion, Or there are last places left. This is a very complex event and we are dealing with it. I am happy that the state is now encouraging them to return, at least to the south, in the north it is not on the agenda at all. But I say, these are administrative events that are complex on a level that cannot be described at all and we have grown stronger as a society from this.” .

There is no course at Harvard that teaches a manager what happens when one day his business transforms from a hotel to a reception center.
“There is no such course. The only relevant course in this case is a course in being human. The managers and staff proved to be human, they proved to be insanely flexible. I take my hat off to the employees for what they did, the evacuated communities appreciate it very much.

“Now we are learning from this event, what we did or what we didn’t do that made guests connect with the hotels. We are now processing it, it is part of our learning process.”

“At the Berashit Hotel, which is the most prestigious in Israel, we hosted Kibbutz Tzalim. I came there and went crazy. This hotel, which we nurture so much, became a kibbutz. Children, backpacks, it already smelled like a kibbutz. The hotel became a kind of hostel.

“At the beginning of the month, Kibbutz Tzalim decided to evacuate from there, and the team turned it back to the hotel within two days, I was shocked.”

“The new world of the industry”

We see that the world is becoming more and more chaotic. What are the main lessons in your opinion that can be learned about management that may not have been relevant ten years ago but are today?
“I think the most relevant word in the world we are in and going to is managerial flexibility. A manager who is not flexible and does not know how to adapt to changing situations is a dinosaur who will not survive. Managers who are flexible and know how to identify trends and adapt their business to these trends and generate a return from it, these are the managers that they will actually be able to take their business forward.

“In our world it is critical because let’s leave the moment of Corona and leave war, the world is also changing in terms of the needs of the guests, the world will change in the new generation, our children for example no longer want what we wanted in hotels, they want completely different things. Not to mention all the digitization, the distribution channels , the marketing channels, this is a completely different count. Traditional marketing is over, there is no more such marketing.

“It’s a different world of marketing and we adapt ourselves to it, so the ability to change, not to get stuck on the things you’ve done, not to fight the wars of the past, to look forward all the time – this is the new world of the hotel industry. This is even though it’s a very traditional industry.”

Even in the operational aspect, like the Jordanians who suddenly don’t come, nothing is permanent. One day you have no more employees.
“Nothing is permanent, so we made maneuvers. There are no Jordanians – so we managed to convince the government to allow us to bring the Filipino workers from Tel Aviv, who normally are not allowed to work in Eilat because there are Jordanians there. With a very quick decision, we moved them to Eilat and the Dead Sea, and that solved the problem. Otherwise we couldn’t manage the hotels.”

Eran Gefen / Photo: Menachem Reiss

Okay, management flexibility. Think, let’s say there is a course at Harvard, where Tim Cook (CEO of Apple) is brought to him as a student and you say to him: Let me tell you what is going to happen to you at Apple – one day you have no employees, the next day Apple becomes a semi-governmental company, which supports the country as a whole , and as if nationalized.
“No one will sign up for this course, because they will say, there is nothing like it in the world.”

Okay, so I’ll tell you what my problem is with your course. Okay, the presentation will say ‘management flexibility’. But what does that mean? Where does this meet the real deal where a person needs to notice that they are inflexible?
“A manager’s flexibility will be measured in the first crisis in real life.”

Give me an example of an event that happened where two hypothetical managers – one flexible and the other not.
“I say this, I don’t know if with regret, but as a fact. Younger managers are more flexible. Their ability to manipulate and be open is greater than that of old managers with experience. Old managers manage the present, with a rulebook from the past. Hotels are actually Buildings, you know, I can renovate and invest and put money and so on, but the experience comes from the workers.

“The young managers treat employees differently. Look, the whole issue of social activity, how they approach employees and how they actually become part of the team. They manage from below. They are part of the people and let other managers lead processes. Old managers don’t do that. It’s kind of of self-confidence that young people have without fear and without ego. Ego is the biggest enemy in management.”

“The crisis provides a new opportunity”

Every successful organization works according to a rulebook built on hierarchy, method and logic. When reality becomes chaotic, the method is no longer relevant. And then the person at the end, if he doesn’t know how to be an entrepreneur, he doesn’t know how to deal, because he’s used to being given instructions. If you have an organization that is built on small organizations that are each built on initiative, then even if reality changes, people will be proactive, react to reality.
“This is an accurate analysis. Isrotel is a large organization that is built on procedures. When we do workshops with managers, I hear it, people talk about more independence, more freedom of action, more entrepreneurship, more to lead processes and so on. They want more autonomy and they deserve it. We We have to believe that they can.”

There is no choice, there was no rule book for what happened now, there was no procedure for evacuees.
“This sword is sharp on both ends. As your organization grows, you are less in the details and you must let go more and trust managers and give them more freedom of action. It is not easy to let go. Especially for us, that our strength comes from the ability to go down to the smallest details and be involved in the decision from the establishment of a house Melon and what color the toothpick will be. That’s where we are. It’s hard to break free from it, but you have to be open-minded.”

“The capabilities of the managers are simply tremendous. You have to let them lead and things work out miraculously. For example, during the war we drastically reduced food costs, we never dreamed it was possible and the CEOs did it. It’s about tens of millions of shekels a year and we decreased because of the creativity of managers, because they lost their fear to some extent.”

Yes, it sounds like chaos gives people a chance to lead. You gave your managers a chance to surprise you, to lead you.
“Suddenly I discover that managers are working with much less personnel, and even when they return to normal activity they don’t want back what they had before, which is amazing. Suddenly people are giving up things that were so trivial and were part of our everyday life and our DNA and the management culture.

“Yishrotel will not return to what it was before in all aspects. In terms of service we will be better than we were in the past, in efficiency we will be better than we were in the past and also in the ability of the managers to lead processes, manage the hotels, manage the teams.

“I managed the Sport Hotel, the Royal Beach, I grew out of this business, I know every screw, every thing, every process at the Sherotel. And yet, I manage a much worse hotel than our CEOs today. I can sit on the sidelines and see how my hotels are run better than how I would run them.”

You have been in Israel for 30 years. Aren’t you sorry you didn’t do something in another field?
“No, because society is changing and good things are happening here and I am part of them and I am actually leading these processes, and when David Lewis passed away and his son Julian Lewis replaced him as chairman of the board, we made a very significant breakthrough together. And when he changed with his brother before the corona virus, we started the process of going abroad so that every time something happens that makes me stay. Going abroad opens up incredible horizons for us, and it makes things very interesting, for me personally and for the whole company.”

What can other CEOs learn from your industry?
“First of all, I believe that management is management is management. I say this with the utmost modesty, but what I did at Sherotel I believe that if I were put in a car company, I would do the same thing. Because it is my DNA, to succeed, to push forward, to work with the people and generate returns and profit for the owners. When I arrived at Israel, the operating profit was about NIS 100 million. In 2022, the company projected an operating profit of NIS 530 million. Do you understand? It’s three times.”

A final question, if you were to become a hotel manager again today, what would you do differently?
“I would have done everything differently. I was a very centralized manager, I was a very aggressive manager in my management style. Let’s put it this way, if I were a manager today with the current generation and with the current needs and with the current world, believe me: this hotel would not last a week.”

Eran Gefen is the founder of G^Team, a strategic consulting company that helps companies develop new growth engines. He has experience working with CEOs and management of the leading companies in Israel and the world, including Coca Cola, Walt, Microsoft, Strauss and Kimberly Clark. A previous company he founded was purchased by WIX. Geffen runs the podcast “Half Hour of Inspiration” and is the author of the book “Creators Growth – this is how business creativity is turned into a work plan.”

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