Leading and Managing in a Highly Competitive Industry—Viewpoints from a Corporate Leader

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Home > Articles > Leading and Managing in a Highly Competitive Industry—Viewpoints from a Corporate Leader

 Leading and Managing in a Highly Competitive Industry—Viewpoints from a Corporate Leader

Interview with Michael Sengol by Sadie-Jane Nunis | Singapore Management Review
March 11, 2013

SMR: There is constant discussion that management and leadership are not the same. What are your thoughts?

Michael Sengol (MS): I feel we have too many managers in the industry and we don’t have enough leaders. The difference between them is that a manager wants to manage a process that is old-fashioned and old in methods. A leader is constantly finding something new and saying let’s throw away all these reports as nobody reads them anyway.

When I came to Singapore, for one of my previous jobs, this manager brought in a big pile of files for a meeting we had. There were various files, featuring various reports for the general manager, room reports, et cetera. When I asked him a question that was ‘off track’, and he couldn’t answer, he started to flip through all the files, worried as he couldn’t answer me.

Then I asked him: “who do you send these reports to?” When he told me ‘to the corporate office’, I knew in my heart that they don’t even bother reading it. Leaders know that by the time they read through the old reports in length, something new has happened. The hospitality industry and the world is moving at such a fast pace.

SMR: What is your leadership style?

MS: I believe that to cure problems you have got to be present and I feel that I am a leader who is present. I am standing in the lobby and seeing what’s happening around my hotel. You cannot be hands-off as a leader.

As a leader, I tell myself the truth. We are all transient. When I am asked for things to be done a certain way, I explain to them exactly why it is so. I am not here forever and I live every day like if it is the last day of my life. This means that I work very intensely, trying to achieve something. If I make a mistake, I apologise and move on to the next project.

I believe: “teach a man how to fish and do not just give him a fish.” This allows him to feed his family for life and not just in the short term. I believe that as a leader, one has to stay focused. Your principles and intentions need to be sincere and right. Despite the various blockages you may face—have to maintain your high integrity, keep pursuing your goals. Only then will people believe that whatever it takes, you will reach your goal.

A leader has to make tough decisions at times. For CEOs who still keep staff that cannot perform, I would question their integrity. I feel that they have low integrity as they think that being liked is important. For me, I feel that leaders should be respected first and foremost. I feel that being respected is much more important than being liked.

The tough decision-makers appear ruthless or heartless. The reality is that they have bigger hearts. These leaders are not concerned about how they are perceived as they feel doing the right thing is most important. A leader is not afraid to share his experiences. I believe that when I move on, people must learn whatever they can from me. I believe in giving back and it’s not an easy thing.

I believe in cleaning up messes. However, people tend to perceive this in a negative way. Hotels and countries in Asia, when things are going well, they do not want to get rid of people or freeze hiring. When things go wrong, they want to fire people. I feel it’s very selfish in bad times. People need job stability.

SMR: How do you manage employees of different age groups within the group?

MS: I realised that we had high turnover for the younger staff. We had an older group of people who were scared of training and accepting newcomers. The younger group of employees who came in with better education wanted to be trained. They wanted to ask questions but was not accepted as the older group felt that you shouldn’t question, but do as told or quit. Then I realised, this was an opportunity to make the older group more important and make them feel that they can contribute too. The younger group can come in and learn the business.

I created town hall meetings as I had things I wanted to achieve. My first goal is to open the means to communication, second is to listen to their concerns, and we gave them answers. We executed things we had to do.

I make my staff feel that they hunger for something that they will never find in money. I make them feel it inside themselves. For example, the training allows them to learn something new all the time and making them feel that they don’t know enough. This means that they are never ready to walk two feet with their heads high and this is how you train junior staff. This isn’t a bad thing. This means that they are coming for training on Saturdays wondering what they are going to hear at each training session.

I prepare myself and think about what I can give them at these sessions so that they will hunger for the next Satur-day’s lesson. This means that both sides are learning. One learns to teach and learn new things, while the other is learning from you. Everyone wants to stay as they see you as their true mentor and coach. This is one of the ways I keep staff. They know that they will not experience the same type of training elsewhere.

SMR: How did you increase and continue to increase productivity?

MS: What I realised about Singapore is that it is a six-star country but with a four-star mentality or worse. I’m being honest as I am a Singaporean too. All you hear are complaints and griping. I’m not criticising but trying to be productive is about solving problems so as to lessen complaints. I went into the hotel and dissected all the businesses to see how they were operating.

They were operating all the restaurants to serve breakfast to guests when they could have easily accommodated in one restaurant. Hence, they were unnecessarily incurring additional costs, including that for excess staff, to serve guests during peak hours. This greatly affected the profits of the restaurants especially since technically, they were running at a loss. I realised when I came on board that they were trying to cure the problems by using old methods. I realised that whenever they were busy, they opened another outlet to accommodate guests. They never thought of a process of getting guests to come, eat, and leave. Their managing of business was totally wrong.

  Meritus Hotels & Resorts

  Michael Sengol (centre) with his team.

Next, I checked the room reservations and they were constantly full but the room rates were very poor. They were ill-managing. There were 7,000 rooms that were not uploaded yet. This means that you cannot price optimally as you are not sure when your hotel is genuinely full. This was something I knew we had to resolve as soon as possible. I found that this was a great opportunity to make a big change at the hotel.

I realised that we have an opportunity to recognise the staff. My rule was to get as many staff recognised within a given time. Previously, each hotel has about two employees or ‘champions’ of the month. If you multiply the two by 12, you will only reach 24 staff. It doesn’t serve any purpose except to demoralise people. Today 12 staff will be chosen, giving each department an opportunity to choose from their own department and five from senior management. This means that you are able to reach out to a lot more staff, hence increasing productivity too.

If you want to increase productivity, you need to check on what’s wrong. Many were shocked at how strict I was because I started to track sick leave. Sick leave was taken using a particular pattern, before or after a day off. They then realised that I was on to them as we spoke to them and appraised them.

To improve productivity, we had the element of no sick-leave pay for our bonuses. This gives an added incentive for those who have worked at the hotel for more than 20 years. They never felt the benefit of coming to work anywaym as they all get paid the same.

We want to show our staff that we are not just here to work but that we care about all stakeholders. In terms of the service element we train them continuously, with regards to their welfare we ensure that we look after them equally so that they have a return on investment in the amount of time and effort they invest in the organisation. When I joined, I put a hiring freeze as I felt we were overstaffed. Every other hotel says they are short of staff. Of course, at the moment, we may be short of certain positions but we are never overstaffed. The reality is that productivity is low in Singapore.

We have various charts to measure productivity. For me, every dollar paid for overtime is counted. For example, for overall food and beverage, I have charts that tell me revenue per employee and profit per employee. To see if productivity improves, I track over a period of a few years and share it with my staff. The supervisors take ownership and they all take responsibility for their actions.

SMR: You are currently the CEO of Meritus Hotels and Resorts. What are some of the toughest challenges in the hospitality industry in your opinion?

MS: I feel that the biggest challenge is lack of productivity in the hospitality industry here and I believe that it is because we have too much fixed staff. We employ people from 7am to 3pm while the business only lasts for three hours. For five to six hours, menial tasks are done. These tasks are not important, yet there are still the same number of staff waiting. One possibility is to change this to variable or casual labour. There are a lot of people waiting to work these flexible hours.

For example, in Australia, a lot of employees work flexible hours.Maybe give them an opportunity to work at your hotel during the day for four to five hours and receive a fixed income, then at night, they can work elsewhere with higher income; we can possibly attract the right people to the industry. We have a problem with finding the right people as the job is too taxing. The hours are long and too much of your life is given up to the hotel.

As mentioned earlier, I feel that we are lacking in leaders in this industry. If you look at what my perceptions of a leader and manager are, you will know this is a worrying factor. I also feel that succession plans are not in place. If we had succession plans in place, we would never need to retire as we just need to move on to the next job that we have been trained and prepared to do. We should keep the best and retire those who don’t want to work or who are not productive.

SMR: How do you decide who to train and groom as high potentials in the organisation?

MS: First, I start off by training everybody. Then I pick the ones who are very hungry to succeed. Those who are hungry to succeed may not come with academic qualifications or have a particular background. You can feel that they are unpolished, like a raw diamond. You can feel and see them. Everything they do, they do well and with passion. Even if they were cleaning windows, you can see that they take extra effort, not wanting to scratch the windows.

I saw this in China. I realised there is so much hidden talent out there. They do not peak perform as their bosses or supervisors were not trained to identify such hunger. Our hotel and others within the group are facing this situation too. We are training them to feel the hunger. This is the way to build your succession plans. True, you can come up with numerous succession planning charts however it only helps me and nobody else. Going around searching, feeling, and talking to people helps.

SMR: What advice would you give to a new hospitality graduate or a student who wishes to pursue hospitality due to some perceptions they may have of what the hospitality industry may hold?

MS: I would change his perceptions. I would say to him: “Are you really sure you want to go through it? It is a lot of hard work. You come with all the academic qualifications and training which is fantastic as it teaches you from the classroom point of view. In the real world, when you come out to work, you have to have patience. Also, you need to understand that your manager may be less educated but learnt their technical know-how on the job. You have to wait your turn and learn all your skills from your seniors.”

In a classroom, there are a different set of rules and everyone is more proper but in the real world, you face a manager who is exposed to pressure and reacting to him while he is under pressure all the time. Explain to these students what the reality is all about. I feel in classroom training, nobody tells the students what happens in a real-life situation at a hotel or restaurant.

SMR: What advice would you give institutions that run hospitality programmes?

MS: Ensure that the students expose themselves while doing classroom training. I am very open to taking in students during their holidays or whatever time they have to do internships. I feel there should be more of that type of training and for a longer period, instead of just two weeks or a month to learn everything. They should not be observing but instead going through real-life experience. For example, experiencing customer reactions during the busy breakfast timings so that they can fully understand what they are embarking on. 30 per cent, if it is a two-year course, must be on real-life situations.

SMR: What branding campaigns did you execute? What’s the strategy or ideas behind it?

MS: I started by realising that this chain existed when I was a little boy, before Singapore Airlines established itself. They had the best uniforms and staff. At that time, Singapore Airlines was known as Malaysian Airlines. I was admiring this hotel for the look and feel. Later, I realised, it was a local hotel. 40 years later, they still haven’t expanded their brand and stayed at Orchard Road. At that time, they had a very strong presence in Singapore. They had an iconic uniform and people spoke about wanting to have their functions at the hotel and everything was going well for them.

I saw their lack of expansion as an opportunity. I felt that I needed to make the group a strong team that was proud of the brand. When we saw that happening, we allowed people to come in and interview the staff, asking them what their feelings were.

We started to expose the brand.We spoke about Meritus as a brand, and all the sub-brands, like Chatterbox, Triple Three, and so on. People in China recognise us for the awards that we have won. They realise that the 40-year-old brand has a strong presence. Brands must come with a success story and dedicated stakeholders who speak well of you. That is how a brand is born.

We are proud that we are on the right track to get the brand established as an international brand. At the moment, we are still viewed as a South-East Asian and local brand. Every brand takes time to be present in the various destinations we are looking at.

SMR: How do you maintain quality control on all the hotels in group based in different countries?

MS: We own some hotels, while others we fully manage. What we do is that we share all the things that we are doing at the moment. For example, we tell them that they must implement their town hall meetings. When they succeed, they share their successes with us too.

SMR: How do you incorporate corporate social responsibility, CSR, since it seems so important?

MS: We associate ourselves with corporate social res- ponsibility, CSR. We feel it is important for all of us to be charitable. It is not something to be forced upon but has to be a natural thing for them. We do give service training and incorporate CSR into it.

One of my drivers saw a European lady across the road struggling with her pram. He crossed the road and helped her get her pram on the bus. He did it out of his own initiative. The training helps our stakeholders to reflect on what they do day-in and day-out. The best thing that came out of it was that the European lady checked into the hotel the next day as she was impressed by what happened.

We employed people from the Metta School. We put one student at the door after we trained him on the processes as they work best when they understand the process. This boy has been chosen to be employee of the month despite being with us for only four months. He has a big smile on his face daily, greeting guests who enter the hotel. We felt he deserved it, especially when he was supported by his supervisor.

We do employ those who are physically challenged in the reservations department as well. We also employ those who are more senior. They tend to be stable employees as well.

SMR: What are some of your expansion plans? There are certain countries that have not been tapped on yet. Are there any reasons for it?

MS: When I joined this organisation, I didn’t look at expansion at all as I felt it was important to create or re-establish the brand. To re-establish a brand is more important than going around signing contracts and not be able to satisfy the partners. When you sign a contract with a partner, they have certain expectations. We were not ready as we did not have the resources fine-tuned yet. We lacked the human resources to support them.
However, at the moment, we can attract the right people to partner with. Recently, I signed with a group in Surabaya as they believed that we could deliver and we did.

The positioning starts now and we are looking at all the important locations for us to establish ourselves. We have not been rejected so far. Of course, each time we go, if it is a green field project, the group is talking to two or three brands. However, I am fortunate to say that wherever I have gone with my serious and sincere heart, I have signed and come back with the projects. I am putting a lot of pressure on myself as they expect me to deliver.

I am confident that I can still deliver as we are not that big a group at the moment. The more we expand, the more I know that I need good people to support and grow the brand. It is easy to find individuals but it is hard to find committed employees and those with life experience.

SMR: Any anecdotes to share from your vast experience that has made an impact on the way you lead/manage now?

MS: People see me as a tough person and assume that I am not kind. Some things that we have done have shocked my staff. I had one staff that walked into my office and told me that his mother has a 70 to 80 per cent cardiac blockage and he needed to borrow S$10,000 for the operation. I was thinking that this guy needs help and asked him how he was going to pay for it.

I told him that I will raise the S$10,000 for him but I needed the documentation. I started to raise it through the corporate office, telling them to help our employee. Within a few days, I managed to raise the money and told him that I needed the hospital address as we wanted to pay directly, especially since he was not a Singaporean. When he found out that I had gone around asking for the funds, he initially declined the money.

Meritus Hotels & Resorts CEO, Michael Sengol, receiving the cash prize and championship trophy on behalf of  Mandarin Orchard Singapore at the PATA Productivity Competition 2011.

I told him that I got the money for his mother, not for him before we gave it to him. The staff all contributed and the total sum came up to S$13,000. This helped to show staff that team support was there. This event proved that very point as it showed how strong the commitment to each other was. Despite the fact that in the beginning I had some naysayers, I still persisted as my aim was to help his mother who had two weeks to live.

When they asked me to open the Holiday Inn in China, I told the owners if you call it Holiday Inn in Shanghai, you won’t make it. The reason is Hilton, the Westin, and other big names were already there. We needed a strong name to stand out amongst all of them. I managed to convince my boss to call it the Holiday Inn Crowne Plaza so that the Chinese will be convinced that we are a big name too. They decided to invest more money (as per my advice) to change the look and feel of the lobby, etcetera. We had occupancy rates of 90 per cent, in comparison to the other hotels that had between 35 to 40 per cent.

The first theme I thought we could do was Country and Western. The Chinese could easily learn how to sing Country and Western as the words were easy. I turned the bar inside out with model horses, sand, etcetera. One of my bosses, who was the marketing director, thought I was crazy at the time for doing this. To prove my point, I asked them to come back at 10pm, and he will understand why I am doing this.

When he did turn up at 10pm, he saw a long queue of people all the way out to the driveway, waiting to get into the bar. What I was trying to tell him is that branding campaigns are so important in China. If you have a good bar, a lot of customers will want to stay at your hotel. There are many singles travelling and they want a place to go to have fun. The hotel became famous and we won 18 awards, including the most profitable hotel in the whole of China. I don’t do anything haphazardly; I do my homework and worked with my team to ensure that the success rates were high.

  The hotel lobby is abuzz with numerous guests checking in and out daily.


Michael Sengol was Chief Executive Officer of OUE’s Hospitality Division from February 2010–July 2012. Michael oversaw the expansion of Meritus Hotels & Resorts strategic locations, with particular focus on building brands under the MHR portfolio and establishing new benchmarks for hospitality standards where the Meritus brand is present. New developments under his direction spanned fast-growing business and tourism hubs in Southeast Asia, China, and Europe.

Prior to this appointment, Michael was based in London as Chief Operating Officer for Millennium & Copthorne Hotels plc (MCL), a London Stock Exchange-listed company that owns and operates more than 120 hotels in over 18 countries worldwide, making it one of the largest owned and managed hotel groups in the world. Michael joined MCL following his role as Regional General Manager for the InterContinental Hotels Group, where he drove results for a cluster of 14 hotel properties across North-and-Southeast-Asia.

His career in the hospitality industry spans over 30 years of dedication to the highest standards in hotel management and operations. His experience
has taken him on key assignments with the world’s most renowned hospitality companies across Europe, Australia, Guam, and the Asia Pacific region, particularly Mainland China. He spent more than 20 years in mainland China pre-opening hotels, establishing hotel brands, and developing industry professionals to include General Managers and Managing Directors.

Michael is actively involved in various charities in China, the Philippines, Singapore and Malaysia.
Copyright © 2013 Singapore Institute of Management

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Singapore Management Review SMR Vol 34 No 2, 2012

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