Ah, if it were only 2007. There are many gaming CEOs-heck, CEOs from all industries-muttering that under their breath during analyst conference calls and meetings with investors and debtors.
The good old days of 2007-when all it took was fancy talk and big words to pop a stock price. When PR was more important than ADR. When the number of awards you won and conferences you spoke at was more important than the number of customers you acquired or trips you earned.
It was a different world then-when style mattered more than substance, when the trappings of success-think Bernie Madoff-rather than success itself defined winners and losers.
Those days are over. We have entered the “Age of Optimization.” The same bankers that used to be dazzled by Ph.Ds and other degrees now only care about performance and deliverables. Perhaps it isn’t fair that the pendulum swung so far so quickly, but it is what it is, and it forces us to get back to basics in how we operate our businesses.
There is a corollary to the theory of the Age of Optimization-namely, that execution is the name of the game. Unfortunately for the “big thinkers” out there (and this is a strange thing for a consultant to say), making sure a mediocre idea is executed flawlessly is far more important than doing a poor job on the “next big thing.”
Let’s take an example of this. In 2007, a well-financed startup gaming technology company launched a new, groundbreaking method of pricing gaming action. The company spent an inordinate amount of time pursuing-and receiving-media coverage and speaking opportunities at our industry’s biggest meetings. They even were able to line up one of the industry’s most respected operators to launch their product.
But then everything went wrong. Instead of making business decisions to optimize their chances for executional success, they focused on that which would generate the most publicity. Instead of launching 20 machines at one property, then fine-tuning them, then launching 200, tuning again, and then launching a full complement of 2,000, they launched all 2,000 at once.
With too many machines spread over too many properties, the company was overwhelmed with the feedback that came in. More importantly, the product failed to live up to the expectations set by all that PR, and with only “one chance to make a first impression,” the PR quickly began to look ridiculous, and the company lost credibility-a game-ender for any startup. Over the past year, the company has effectively died.
So, how do we avoid these mistakes, and make sure we move the needle-not just talk about it? Four simple rules guide us:
• First, whatever you do, keep it simple.
Our customers come to our properties to have a good time. Many of our line-level employees simply want to work their shifts and go home. There is nothing wrong with either of these traits, and we aren’t going to change them. In fact, when we try to run complex initiatives, people can get confused; execution can break down. In our view, if you can’t fully explain something in 30 seconds, then it is too complicated. Keep in mind that the marketing initiative or new operations strategy that you have slaved over for hundreds of hours may be the most important thing in your professional life-that will likely not be the case for those expected to execute or utilize it.
• Second, start small.
In this 24/7, hyper-competitive business, where resources are tight and everyone works too much, we sometimes take short-cuts to try to maximize impact quickly or minimize work. Many properties we work with don’t “test and control” in their direct mail because it “adds extra labor,” but without it, we lose the ability to learn when we are making good decisions-and when bad. The example above showed what happens all too often when we skip the “beta test” and go straight for launch-we get overwhelmed with bugs.
• Third, under-promise.
This is a good piece of advice no matter what you do, but it is a particularly good one in the marketing world. Don’t over-promise the potential impact of your programs-and don’t under-state the challenges that come along with any and every change, including yours. When a CEO says, “In two years, this product will replace everything that is out there,” the bar is so high that it becomes impossible to reach, and a launch that in truth might be a success appears to be a failure. Politicians have been doing this for years-dampening expectations.
• Finally, and most importantly, don’t do much. In these challenging economic times, this may sound insane. Shouldn’t we be trying everything possible? No. Because even if you keep everything you do simple; even if you test it (aka, start small); and even if you don’t promise it will be a silver bullet, if you do too many such things, your executive team, staffs and customers will simply be overwhelmed by everything. It is better to do one thing well than 10 halfway. If you have ever driven from Philadelphia to Atlantic City, there are something like 200 billboards along the way. Almost each is different, and at the end of the trip, you don’t remember anything. Imagine if one property chose to make its 20 boards all say the same thing-you might actually get through to the customer.
The good news, in today’s market, is that execution is not a core competence of most companies, so if you heed the advice above, and get focused on moving the needle in a few meaningful ways, you are likely to be able to improve your results as those around you continue to fall.
And to look on the bright side, when things start to improve (and they will), you will have established a compelling platform on which to emerge into a new, more vibrant industry.
Randall A. Fine is the managing director of the Fine Point Group, one of the industry’s leading strategic consulting and management companies, which serves clients that generate more than $5 billion in gross gaming revenue. FPG was recently named the turnaround management company for Detroit’s $320 million Greektown Casino-Hotel, for which Fine was also named CEO, subject to regulatory approval. A former senior executive at both Harrah’s Entertainment and Carl Icahn’s gaming company, Fine holds both his undergraduate and MBA degrees from Harvard University. He can be reached at email@example.com.