For CEO Gamal Aziz, the challenge is maintaining the MGM Grand's remarkable employee engagement during tough times for the hotel and for Las Vegas.
Under Aziz, revenue zoomed, and the MGM Grand became the second most profitable hotel on the strip after the Bellagio. Some credit goes, of course, to a $400 million spruce-up of the hotel in which 36 restaurants were opened or remodeled and Cirque du Soleil was brought in as a headlining act.
But ask Aziz what was the single most important factor in the jump, and he won't talk about twirling acrobats or signature dishes such as free-range quail stuffed with foie gras. His answer is: the employees. Now with times getting tougher in Las Vegas as tourism drops and gambling revenues fall, Aziz says his people have become even more critical to the company's success.
"Employee engagement in times of difficulties and severe economic climate is far more profoundly important now," says Aziz. "Employees are willing to give their all when they are well-treated, appreciated. And the ability to unlock that potential is a competitive distinction…It's their decisions, their actions, their attitude that really make the difference. Imagine taking 10,000 employees, and each and every one of them wanting to give more. That's really the difference between [us and] a company that has its employees just punching the clock and trying to get through the day."
But Aziz, like all managers, is under pressure to justify every cost. Although his hotel is still running 96% occupied, groups are canceling, and those that do come are spending much less per visit. That's forced Aziz to economize on some of these successful programs. He still does regular employee appreciation dinners for top performers, but he's spending about half as much this year as last. He's started recruiting managers from sister properties to attend his MGM Grand University as a way to defray the costs of training his own top managers. And he's put on hold one program training next-generation line managers.
Aziz shares with employees the challenges he's facing. Employees, the CEO says, were what got the hotel to the next level, and they are the key to pulling through hard times. "We will get through this, we will survive," says Aziz. "Once we get through this, the employees will be the ones who have gotten us through."
When Aziz arrived in 2001, he quickly sought out rank-and-file insight into the hotel and how it could improve. A survey of the hotel's 10,000 employees made clear that very little was being communicated to the staff about the events going on in the hotel on a daily basis, including such basics as who was staying there, and what the hotel had to offer those particular guests. Employees sometimes didn't even know what conventions were at the hotel. That made it difficult for staff to give the level of service that would affect customer loyalty, return visits, and spending in the hotel.
Aziz came up with a simple fix. There is a short meeting now at the start of every shift in which every employee is given the rundown of what's happening in the hotel that day. It's a simple concept based on meetings restaurants have long held to get waiters up on the daily specials. But rolled out across 10,000 employees a day, it's a major undertaking.
The MGM Grand made other moves to help employees grow. In his recent book Closing the Engagement Gap, co-author and Towers Perrin Managing Director Don Lowman highlights many MGM programs, including the MGM Grand University that offers dozens of classes on an invitation-only basis for high achievers. The MGM Grand Leadership Institute is a 24-week program for executives. And REACH! is the hotel's six-month course on basic supervisory skills for ambitious hourly workers. All this investment in the staff, along with recognition dinners and other rewards, have led to more than 90% of MGM Grand employees saying they are satisfied with their jobs, and 89% saying their work has special meaning. According to the book, 91% report they are proud to tell others where they work.
"One of the ways we'll get through this dire economic circumstance we find ourselves in is if leaders set this tone that we're all in this together," says Lowman, who interviewed Aziz for his book but hasn't done consulting work at the company. (His firm, however, has in the past). Lowman worked with a multitude of companies as a consultant at Towers Perrin and ranks MGM Grand among the best at connecting with employees. "It's very easy to say 'let's just whack 15% of the company.' You can immediately take a lot of costs off your books. But that has a big cost both on the people doing the whacking [and on the company] in the long term, when you'll need those people [you let go] again."
In the book, Lowman sites a finding from the firm's survey of tens of thousands of employees in six countries including the U.S., China, and India: that the No. 1 thing that engages employees is senior management's interest in their well-being. That trumped career advancement, relationship with one's direct supervisor, and even pay. Visiting the MGM Grand, Lowman says he found evidence of that connection in spades. Aziz was impressive, Lowman says, for his tendency to ask questions and listen to the answers. Engagement that starts at the top.