{"id":6893,"date":"2021-04-30T12:26:32","date_gmt":"2021-04-30T16:26:32","guid":{"rendered":"https:\/\/www.bu.edu\/bhr\/?p=6893"},"modified":"2022-05-24T14:57:00","modified_gmt":"2022-05-24T18:57:00","slug":"how-to-unlock-creative-solutions-through-first-principles-thinking","status":"publish","type":"post","link":"https:\/\/www.bu.edu\/bhr\/2021\/04\/30\/how-to-unlock-creative-solutions-through-first-principles-thinking\/","title":{"rendered":"How to Unlock Creative Solutions Through First Principles Thinking"},"content":{"rendered":"
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Source: Photo Credit to Canva<\/figcaption><\/figure>\n
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Editor\u2019s Note: The original version of this article was posted on April 5, 2021 in Hotel News Resource. We feature a modified version of that work in this Special Issue of BHR.<\/span><\/i><\/p>\n

By:<\/strong> Sloan Dean<\/a><\/span>, CEO and President, Remington Hotels<\/span><\/p>\n

I learned early in my career that humans can handle bad news; they just can\u2019t handle surprises.\u00a0 When it was apparent on March 2, 2020 that we were heading into World War III for Travel, the leadership team and I began by mid-March weekly webcasts with the entire company. That one communication decision became the most fundamental initiative throughout this past year. It also formed (and informed) our \u201cFirst Principles Thinking,\u201d which has helped us to \u201crethink\u201d our business.\u00a0 We have never missed a week of hosting our company webcast, and we made sure that all our furlough associates were and continue to be included.\u00a0 In these forums, leading with empathy first and foremost, we answer every single question even if it is a repeat because we want every associate to be heard. The same holds true if we don\u2019t have the answer or an answer anyone likes; we still address the question. In these uncertain times, inviting curiosity and questions concerning \u201cwhat is\u201d and \u201cwhat could be\u201d often leads to better outcomes.\u00a0<\/span><\/p>\n

<\/span>First Principles Thinking<\/b>
\n<\/b><\/span><\/h3>\n

\u201cInnovation\u201d in hotels all too frequently means moving simply one or two steps to the right or left but does not go further to analyze and work through the problems to arrive at new solutions. In addition to weekly webcasts with our entire team, Remington Hotels took this opportunity to <\/span>creatively <\/b>rethink basic operations, innovate, and <\/span>reinvent the way we operate<\/b>. We formed cross-functional operation teams to reinvent our entire business across six workstreams: 1) Accounting 2) Front Desk, Amenities & Guest Services 3) F&B 4) Housekeeping & Engineering 5) Commercial 6) HR\/Associate Engagement.\u00a0<\/span><\/p>\n

We employed First Principles Thinking, which dates back to ancient philosophers such as Aristotle and more recently, has become widely known by entrepreneur Elon Musk. James Clear, author of the New York Times bestselling book \u201cAtomic Habits,\u201d describes this methodology as \u201c<\/span>breaking down complicated problems and generating original solutions\u201d (Clear n.d.). In our application, <\/span>we listed the various responsibilities for each department and challenged the assumptions surrounding each of the related tasks.\u00a0<\/span><\/p>\n

We labeled the project code word, \u201cProject Phoenix\u201d because our objective was more than a series of changes and updates to our pre-COVID business; we wanted a rebirth from the ashes of the pandemic. One outcome of First Principles Thinking was a new approach to our shuttle service.\u00a0 Rather than simply pausing shuttle service temporarily, Remington started with the questions that included: \u201cWhat are our guest transportation needs?\u00a0 Does the guest want a shuttle anymore?\u201d The goals were to 1) save money; 2) provide a better guest experience; 3) enhance safety; and 4) significantly reduce any liability exposure for our owners.\u00a0 Pre-COVID, we operated more than 60 shuttles across over 30 hotels at a seven-figure expense.\u00a0 After Beta Testing a first-in-industry partnership with Lyft, we have rolled out a Lyft partnership at approximately 30 hotels where Remington covered the cost for Lyft rides for guests instead of maintaining a shuttle service.\u00a0 After launching this service, we learned that the guests preferred it because it provided a direct drive without stops as opposed to a noisy bus with other passengers. For the owner\/operator, at normalized occupancy, the cost is lower because it eliminates shuttle expenses of labor, maintenance, gas depreciation, and insurance.\u00a0 Another advantage was being able to sell the shuttles, take an asset\/liability off the balance sheet, and give owners much-needed cash back.\u00a0 Plus, Lyft assumes all ride liability, allowing our company to shed liability, insurance risk, and cost from our owners since these expenses are assumed by Lyft.\u00a0 It\u2019s important not to overlook that if one large accident occurs along with an ensuing lawsuit, the cost would be significant, wiping out any benefit of a shuttle.\u00a0\u00a0\u00a0<\/span><\/p>\n

Additional questions that we arrived at using First Principles Thinking were: \u201cShould we offer daily housekeeping?\u201d and \u201cDo the guests still want it?\u201d\u00a0 We currently only provide housekeeping on the third night of stayovers and have maintained our cleanliness scores.\u00a0 We are currently asking, \u201cHow many of our prior 68-operated restaurants should reopen with only 20 currently operating?\u201d \u201cDo the guests want the same experience, or should we modify and provide mobile-order-and-pay options?\u201d\u00a0 \u201cShould we offer a bar-focused experience as an alternative?\u201d\u00a0\u00a0<\/span><\/p>\n

Any hotel operator that is merely \u201cpausing\u201d services and is waiting for a return to \u201cnormal\u201d is not using this pandemic in a strategic manner to reinvent the business and to be more profitable over the long term, even at lower occupancy levels.\u00a0 Remington Hotels was GOP (gross operating profit) positive in March 2020 and returned back to GOP positive in June 2020.\u00a0 Mitigating cash burn for our owners while managing associate burnout in parallel has been our marching orders for the past thirteen months. This positive outcome would not be achievable had we not led with empathy and tapped into our curiosity by listening to all questions, being transparent in our answers, and following up by exploring in great depth the \u201cwhat if\u201d questions using First Principles Thinking.<\/span><\/p>\n

Adam Grant, New York Times bestselling author of <\/span>Originals<\/span><\/i> and <\/span>Think Again: The Power of Knowing What You Don’t Know,<\/span><\/i> captures the consequence of not going far enough in challenging old ways: \u201cQuestioning ourselves makes the world more unpredictable.\u00a0 It requires us to admit that the facts may have changed, that what was once right may now be wrong\u201d (Grant, 2021, p. 4).\u00a0\u00a0\u00a0<\/span><\/p>\n

In the post-pandemic world, we cannot allow ourselves to slip back to our prior operating standards and norms and miss this opportunity to rethink our businesses. Over this past year, I have grown accustomed to taking fiery direct questions from our associates every week and accepting that I don\u2019t always have the answer or the one that they wanted to hear. And in face of challenges, I am often amazed that empathy and curiosity are returned in kind. To truly evolve the business and deepen our humanity and compassion in meaningful ways, openness and transparency should no longer come as a surprise.<\/span><\/p>\n

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PDF Version Available Here<\/a><\/p>\n

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References<\/strong><\/h3>
<\/strong><\/b><\/p>\n

Clear, J. First Principles: Elon Musk on the Power of Thinking for Yourself. <\/span>James Clear.<\/span><\/i>
\n<\/span> Retrieved April 20, 2021 from https:\/\/jamesclear.com\/first-principles<\/span><\/p>\n

Grant, A. (2021). <\/span>Think Again: The Power of Knowing What You Don’t Know.<\/span><\/i> Viking.<\/span><\/p>\n

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