The easiest (and hardest) way to create an organization capable of running a four minute mile in its industry – is to start with a set of extreme opinions and build a company around them. That’s why so many start-ups have come so far, so fast and have had such an enormous impact – even when they go head to head with giant rivals that can draw on more money, power and traditional clout. They are successful precisely because they don’t look, talk, behave or compete like other companies in their fields. They are outliers, extremists, game-changers. They don’t, in the delicious words of Seth Godin, “taste like chicken.”
The best way to change your business is to make change a normal part of doing business. It’s one thing for leaders to use fresh eyes to devise a new line of sight into the future. It’s quite another to muster the rank-and-file commitment to turn a compelling vision into a game-changing performance. Your job is not just to surface high-minded ideas. It is to summon a sense of urgency, and to use that urgency to inspire action. The most direct way to increase urgency is to redefine how the organization monitors results, measures success, and evaluates its track record—and, in so doing, to make business as usual look like it’s bad for business.
One of the best techniques I’ve seen for confronting this challenge was developed by Gamal Aziz, president and COO of MGM Grand Las Vegas, one of the largest hotels in the world and one of only two billion-dollar properties on the Strip. Aziz took over in 2007, when the hotel was big profitable, but nothing spectacular. Over the next few years, in a good-enough setting that could have sustained years of business as usual, Aziz and his colleagues unleashed a torrent of innovations that remade the hotel and generated rave reviews. Revenues jumped, profits soared, and the experience began to live up to the promise of delivering “Maximum Vegas.”
What was the secret to Aziz’s success? A technique he calls “working backward.”He and his colleagues engaged in an exercise to look at every aspect of the hotel’s performance—rooms, restaurants, shops, shows—and evaluate performance in a new way. The question was no longer: How do we make marginal improvements over current results?It was: What is the highest and best use for this venue or shop, if we could start from scratch and build it today? And how do we work backward from the future to achieve this performance?
The simple technique led to huge changes in mindset—and a staggering array of innovations. Aziz and his colleagues pledged, using the working-backward methodology, to unveil a major initiative every three months for 48 months (a new shop, show or restaurant). Not only did they meet this commitment, they more than doubled it, launching 30 major innovations that transformed a middlebrow brand into a darling of the Strip. “It’s easy to make small improvements in what you are doing already,” Aziz explained. “It’s harder to capture what you’re missing. That’s what we did with working backward.”
It’s a mind-game of sorts that led to a whole new mind-set and a staggering array of opinions about how the property could reinvent itself. Early on in his tenure, for example, Aziz looked at Gatsby’s restaurant, which was generating sales of $2M and decent profits. A traditional improvement plan might have aimed to raise sales by 10% a year. But Aziz posed a different challenge: If the space was empty, and we could open any type of restaurant, what might the results be?He figured that if he could recruit a big-name chef and create a dynamic experience, the space could generate $5M in sales and much bigger profits. So the organization no longer measured Gatsby’s as generating $2M in positive sales. It was losing $3M in potential sales. Soon thereafter, MGM Grand closed Gatsby’s and went into partnership with Wolfgang Puck. A few years after the new restaurant opened, it was generating sales of $6.5M – far ahead of Aziz’s ideal projections.
So how did the flagship property hold its own during what Aziz calls “the incredibly messy crisis”that brought Las Vegas to its knees? By remaining consistent in its commitment to new ideas and strong opinions. Years of innovation at the MGM Grand Hotel had created a culture of engagement that made the huge hotel more agile than it had ever been. During the boom times, for example, the hotel’s fifteen-minute preshift meeting, a daily ritual in which thousands of frontline employees gather in small groups for updates and discussions, might focus on which celebrities were at the hotel or which club had the hottest DJ. During the dark times, the preshift might focus on saving energy, eliminating waste, or helping employees hang on to their homes despite the wave of foreclosures that was sweeping Las Vegas. “There is a daily conversation among all the people in the company,”Aziz says, “no matter what’s happening in the economy.”
Indeed, the true appeal of Gamal Aziz’s methodology is that it treated the process of making changeas a routine part of doing business. For decades, the Las Vegas model of innovation has been to “blow things up.” Companies would dynamite a hotel or casino that has lost its luster, and, from the ashes, build something more glamorous. At the MGM Grand, Aziz demonstrated that organizations could make deep-seated change without deep-sixing what came before. “We have kept morale high even in this environment,”Aziz says. “Our people are coming up with extraordinary ideas. There is an ongoing conversation, a commitment to innovation, that is as powerful in tough times as in good times.”