In a recent First Round Review article, HotelTonight CEO Sam Shank shared how they went from burning millions to becoming profitable. At a recent geekup hosted at HotelTonight’s headquarters, people geeks gathered to hear from Jeff Ehrenberg, VP of People, and Annie Lin, People Programs Manager, on how HotelTonight’s People Team helped guide the business through this period and plan for future success.
Ehrenberg and Lin focused on three main pillars - business outcomes, engagement, and lifecycle metrics - when creating their people analytics strategy. They used Culture Amp’s engagement surveys and other HR tools to build feedback loops within the organization and create a plan of action backed with data.
Ehrenberg began by emphasizing the importance of having data and actionable insights when working with a complex system. “You have to understand the system,” Ehrenberg explained, “and what we tried to do is put probes into everything we're launching, which gives us actionable data. That way when we go and we implement something in the system, we can see what's happening.”
Clarifying business outcomes
The first thing that Ehrenberg and Lin set out to do with their people strategy was to get clarity on overall business outcomes. “At the time,” Lin explained, “that was defining clear metrics around what it means to be profitable.” As CEO Sam Shank said at the First Round Summit, “Profitability, for us, meant that we were self-sufficient. That’s it. There’s not a lot of nuance to it. We could operate on our own income, and without an infusion of cash.” Based on these findings, they were able to “beef up” metrics that impacted profitability and help the rest of the company re-prioritize and focus.
Employee engagement and effectiveness
Lin explained that when making a change to one part of a system, it can affect other areas that you may not anticipate. To find out how changes in one area (like changing a business outcome) affect another, they use Culture Amp’s employee engagement surveys, running one every six months. They want a high level health check of what is going well, and where there are opportunities for improvement. Additionally, Lin said, “...there's a lot of external data...about how engagement is directly correlated with performance throughout the organization. We also knew that this metric of engagement was directly correlated with a lot of the other business metrics that we really wanted to look at.”
They also began actively measuring and developing the effectiveness of their managers. As Lin said, managers have a high degree of influence over how things are going within a company. HotelTonight knew that having really high quality leaders in management would have a huge impact. To do this, they put together a definition of what they considered to be effective management. “We supported our managers in getting direct feedback from their direct reports against that definition and we also embedded questions directly about managers into our engagement survey as well,” said Lin.
Focusing on employee development
With the combined feedback from engagement and manager surveys, Ehrenberg and Lin identified development as a focus area. They approached development from a few angles, first clarifying what was expected at different levels of the organization, as well as the process of moving between them.
They also worked to align everyone’s goals with their development interests. As Lin said, “We really believe that learning happens best through people’s day-to-day work and practice. Instead of people thinking about development and their ‘real’ job as separate things, it was really important to us that we help people bring those together in an integrated way.”
This integration happens during their new goal setting and feedback process. When they first rolled out goal setting, they built measurable metrics into the process. They collected data and analyzed the goals that people set, asking questions about the quality and measurability of their goals. Everyone’s goals were then tagged and categorized, allowing the People Team to get deeper insight. This led them to focus on building relationships with hotel partners, as well as setting specific role responsibilities to encourage clearer goal setting in the future.
Continually improving with people data
Over the past year, HotelTonight has seen their employee engagement score increase by 11%. In building their people system backed with data, Ehrenberg and Lin have been able to drive significant change within the company. As Jeff puts it, “It’s really exciting to have all of these metrics...we’re able to answer some really strategically important questions for the business, and do it in a way where we actually have some data to inform [leadership]." He explained that most of the changes to process and improvement in employee engagement were made without any real addition to the size of the people team and its budget. “We have a very small team and so we really needed to focus our time on the things that have the biggest impact,” he added.If you are interested in using metrics and data to answer strategic questions for your company, please reach out to our People Geeks to learn how you can easily gather important employee feedback.