Speak-Out :: Train Our Future Leaders in Finance 101

Written by Kris Blomback

At last year’s NSAA annual convention, NSAA president Michael Berry said that 37 percent of ski industry GMs are now over the age of 60, and that within the next five years at least half of this group will retire, taking with them a collective total of almost 3,000 years of operating experience.

I thought to myself, “That reality is going to open up some impressive opportunities in the ranks of the ski business.” As one who is always looking over the horizon for changing business conditions—and people to promote—I went on to ask, “Are we doing everything we can to train these folks for the next steps in their careers?”

In many cases I think not, especially when it comes to understanding the financial side of running a resort.

At Pats Peak, and I’m pretty sure many other areas, we tend to hire from within, and promote the guy or gal who stands out by being super punctual, reliable, trustworthy, and possesses the technical skill set to get it done. However, someone with all of these qualities isn’t always the ideal candidate to lead a department. I came from a lift maintenance background, and when I was promoted to GM, the owner said to me, “Chairlifts are easy to fix. Good luck fixing people,” and threw me the keys.

I knew we had to do more. Not long ago, we noticed that some staff members we chose to make the jump from front-line employee to supervisor or manager would subsequently quit or get burned out. With others, issues popped up that we never saw coming. And these incidents required effort from our directors to intervene and correct.  

It was at this point that we had the “a-ha moment,” and realized we were setting up our own employees to fail. If we have to fire an employee, or an employee doesn’t excel in an elevated role, we didn’t perform our due diligence in either the hiring or training process.

We took a hard look at our internal processes and realized we weren’t doing enough to help our people succeed. After some reflection, we instituted a “boot camp” that happens every fall for new supervisors, as well as refreshers for returnees. It’s a bit of an investment, but well worth it. The curriculum changes and expands every year, but HR and Finance form the core. Financial issues are always a key element that we discuss with individual managers. We talk about the key ratios/metrics, and we coach the managers on what these historically have been, or should be.

Our experience made me wonder if, as an industry, we’re doing all we can to train the next set of leaders—specifically in the all-important task of reading the financial scorecard of the ski area. This data is vital, especially in this day and age when a ski area like Pats Peak earns 90 to 95 percent of its revenue in less than 100 days, and is really only profitable for about 50-60 days—most seasons.

The growth that our industry experienced in earlier times hid a lot of sins. With a stagnating market, every dollar needs to do much more than it used to, which leads us to our questions:
• Do our up-and-coming future managers know how to read a P/L statement?
• Do they know what gross margin and net profit mean?
• Do they know what food/liquor should cost?
• How can yield be calculated and compared if all are not using the same formula?
• Is EBITDA scripture or a false god?
• How does my little department budget sheet (say, a snowmaking budget) fit in with the overall bigger financial documents?
That raises some questions for management, too.
• How far down the chain of command does your organization push financial control? Does it stop with the GM, or does it go all way down to the crew parking cars?
• Do you manage by strict budgetary guidelines, or by gut and what’s in the checkbook? Or, as I suspect many do, some variation of both?

Large companies often have the knowhow to fully digest financial data at the highest levels of management, but that doesn’t make a broader understanding of the financial scorecard at the supervisor level any less important. At smaller areas, it has become essential for any staff member interested in taking on a bigger role to get formal training in the minutia of an operation’s finances. Understanding the “financial lingo” right out of the gate will benefit key staff members, and your ski area, tremendously.

All supervisors and managers would benefit from a “users guide” on how to use the industry data that we reference at conferences, in magazines, and in economic reports.

Providing standard training, beginning with how to understand a financial scorecard, benefits all. Our aim is to create an opportunity for all up-and-coming employees to learn the financial ropes, and an environment in which the dumbest question is the one that is never asked. If we can give our staff the right tools, hopefully this will get a new set of leaders off on the right foot.

Read 4469 times Last modified on Wednesday, 08 March 2017 02:15

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