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Everything Happens in Vegas
February 25, 2008
How VPs Jordan Clark, Michael Massari and Don Ross turned Harrah's Entertainment into your one-stop meeting resource
By Mike McCue
If the many famous sayings that describe this issue's trio of cover executives, "All for one and one for all" might seem the most fitting. Truly, the three executives from Las Vegas Meetings by Harrah's Entertainment—Michael Massari, Jordan Clark and Don Ross—have done an admirable job of molding and developing their sales teams into a single, high-performing unit.
But a lesser-known quote from Alexandre Dumas, author of The Three Musketeers, might be just as appropriate: "Nothing succeeds like success." With decades of sales experience between them, Massari, Clark and Ross have plenty of hard-won knowledge and insight in their arsenal to draw from. And they've needed every scrap of that intellectual ammunition to pull together the sales teams from seven formerly competing hotels and casinos and recreate them as a single operating unit under the Harrah's banner. Until July 2005, each hotel—Bally's Las Vegas, Caesars Palace, Harrah's Las Vegas, Flamingo Las Vegas, Paris Las Vegas, Rio All-Suite Hotel & Casino and Imperial Palace—handled its meetings, incentives and corporate events businesses separately.
"We didn't do anything to reinvent the wheel," says Massari, the company's vice president of meeting sales and operations. "We've all borrowed from our previous experiences, both positive and negative, to make it work. The biggest trick was finding the right way to motivate and encourage each individual property's team to work for the good of the organization as a whole."
"We had to make it clear that we want everyone to do what's best for the team, even if that means walking away from a potential sale because another of our properties has a better opportunity," says Ross, vice president of catering, conventions and events. "It took us a little while to figure out the right mix of group and individual incentives, but the sales teams have really bought into the concept and we all benefit from it."
By all measures, the strategy has worked, considering that the meeting and incentive division has exceeded every sales goal it set over the last two years. "And they have been lofty goals," says Clark, vice president of sales for Las Vegas Meetings by Harrah's Entertainment, which boasts more than 20,000 guest rooms and a total of one million square feet of meeting and event space. "Since we combined the organizations, sales are up 35% compared with the cumulative numbers they had as individual properties. Just as important, customer service scores have gone up as well."
And while their meetings business is hitting on all cylinders, the way they've developed and motivated their teams is the real story—and it's full of advice and tips that all sales and marketing managers can use in their own operations.
 One Used to be the Loneliest Number
Everything in Las Vegas is tinged with competitiveness and a "me against the world" mentality. Blackjack players may root for the dealer to bust so everyone at the table wins, but it's a secondary objective to increasing their own personal pile of chips. With dozens of hotels and casinos vying for each meeting and catering dollar, the competition among properties' sales teams is no less extreme.
After all, the most critical resource in Las Vegas is meeting space, and it's finite. Unlike a manufacturing company, which can simply make more product when demand increases, once space is booked at a hotel, no more can be created. To maximize revenue, Harrah's needed to ensure that space went to the most profitable contract, regardless of which sales team booked it. As a result, Massari, Clark and Ross needed to achieve two things: excellent communication among the sales teams and an incentive structure that rewarded people whenever they "took one for the team."
Excellent communication can be achieved through regular sales team meetings, and within the organization, each team meets once a week for a sales meeting and twice a week for business review. By meticulously going over each team's potential business, the leadership team is able to minimize interdepartmental price competition and ensure that space goes to the most profitable business available.
Rewarding the individuals who give up a potential sale because another team had a better opportunity was a little trickier to achieve. "We knew that if we wanted our employees to have a 'team first' attitude, we would have to reward them as a team," Massari says. "We had an incentive structure in place at the start, and we've modified it a few times to find the right balance between individual and team. Right now the incentive plan is about 60% to team goals and 40% to individual achievement, and that seems to work well for everyone."
"We were very careful not to temper the individual's aggressiveness and desire to succeed," Ross says. "We don't want our teams to be content, but we did want them to focus on the bigger picture. It's tough to pass up a multimillion-dollar sale, but if that deal is worth more money to another Harrah's property, that's exactly what we expect them to do. Otherwise we'd simply be cannibalizing our own revenue stream."
The "golden key" to achieving that unity of purpose was to put all management—across every department and division—on the same citywide, shared incentive program. That effectively eliminated the competition for resources, because every manager was on an incentive plan that emphasized the cumulative benefit of all of the company's properties in Las Vegas.
That's a fine strategy for the leadership team, but what about the front-line sales teams? Due to poorly executed reorganization plans that can drag on for years, many mergers and acquisitions erode morale, increase turnover and put sales efforts into neutral.
That's why the meetings division made the organizational change the same way people remove a band-aid: fast, firm and without hesitation. Some employees who didn't have direct reports in the previous organization now had them in the new one; others who were compensated by number of nights booked saw their goals change to total revenue.
And it all happened in a single day, within the first 30 days after the 2005 merger of Harrah's Entertainment and Caesars Entertainment. While such a fundamental change could never be 100% free of pain and confusion, the rapid implementation of the new structure kept employee apprehension to the bare minimum.
"It was a complete sea change for our teams: the way they think about their competitors, the way they go after business, even the way they book a sale," Clark says. "If we tried to implement those changes over time, it would have taken forever and we would have lost employees and revenue every step of the way.
"Best of all, because of the way we announced and executed the plan, people didn't have to worry about what additional changes would be coming next month, or whether their job would even exist in the future. All of the changes were announced and made effective immediately, so it was like everyone in the organization was re-hired into a new job that same day."
Although implementing change so quickly carried a certain amount of risk, it was deemed to be less than dragging it out would have entailed. "I felt that the damage we would have suffered if we got some of it wrong was less than the damage we would have suffered if we took too long to make the changes," Massari says. "Making a bad decision is often better than making no decision. Salespeople tend to be driven toward goals, so uncertainty is a cancer. I've seen it kill entire sales teams in other companies."
He should know just how crippling change and uncertainty can be when they are managed poorly, especially in the areas of job security and compensation. Early in his sales career, Massari had blown away his annual targets and expected his bonus to reflect that performance, based on the details of his comp plan. But management awarded him a bonus that was considerably less than he should have earned. "When I brought that up with my boss, he said that the amount I received was what the leadership team felt I deserved for my efforts," he says. "The next year was tougher and my numbers were down, but I received the exact same bonus and got the same explanation: The amount I received was what management felt I deserved.
"Obviously, it didn't matter whether or not I hit my targets, because in spite of all the time and effort that went into creating the incentive plan, management didn't follow through on it. Why should anyone bother working toward the numbers when they don't matter?"
He left that company several months later.
 "All for One" Isn't Just Lip Service
One of the greatest competitive advantages of having seven major properties operating in a single organization is that meeting planners who choose Las Vegas Meetings by Harrah's Entertainment can use multiple venues for different events. In other words, a meeting planner could schedule breakfast and an educational session at Caesars Palace, lunch and afternoon sessions at Rio, and a dinner reception at Bally's—all while working with a single contact, under a single contract and with all associated costs on a single bill.
But that focus on unity and teamwork also brings advantages to people inside Harrah's Entertainment, in addition to its outside customers. By the management team's design, every single employee is incented to do the right thing, no matter his or her job duties. One way or another, if a worker's efforts make the overall experience better for visitors, he or she will be rewarded for it.
The company uses two incentives to do just that: a "big picture" reward given to employees in all departments for increases in overall satisfaction, and an "instant gratification" reward for any effort that makes visitors happy.
The big picture reward is a quarterly Customer Satisfaction Assurance (CSA) incentive available to all employees in all departments for improvements in satisfaction scores.
But there's another incentive to help ensure meeting planners and their attendees have a positive experience. At the end of their events, meeting planners can choose two Harrah's employees who went above and beyond to make them more successful. As a reward, those employees receive a special cash payout and get to attend a quarterly luncheon in their honor, where they also have the chance to win an all-expenses-paid trip for two.
Was the blackjack dealer especially patient while you learned the rules of the game? Hand her a token. Did the concierge put in extra effort to find tickets for that sold-out show you wanted to see? Then slip him a token.
"We wanted to create an environment in which, at any time and for any reason, our employees can be rewarded for providing good customer service," Ross says.
Another innovative strategy was to keep overall profitability separate from customer satisfaction bonuses. Many businesses only pay bonuses if the company achieves its financial goals, but Harrah's ensures that customer service is always rewarded. Several years ago, for example, the Rio posted a loss—a chunk of which came from paying out customer service bonuses. "If our employees provided world-class customer service, they got paid for it, even though the property lost money overall," Massari says. "They did what we asked them to do and they were rewarded for it."
According to Massari, "You can succeed as a good manager with a bad incentive plan, and you might even succeed as a bad manager with a good incentive plan. But you'll see a lot of happy faces in your office when you put them both together."
Sales & Marketing Management Magazine
This article is brought to you by Sales & Marketing Management, the leading authority for executives in the sales and marketing field.
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