Sustainable Growth at Ski Areas

My reading has stimulated another idea that I want to share with you. It relates to an article about creating a system for consistent growth. It brought to my mind a meeting I participated in many years ago. It gathered all the company's ski resort GMs and CFOs. Two new companies were in the mix this year, and one of the resorts was told its skier visits would increase by 25%. The GM was beside himself, as his resort had just come off a record year. His arguments failed. He was stuck as we all were with our dictated growth for the next year, with no explanation for how we would achieve the growth or whether we would have the resources to develop the growth. This was a recipe for failure, and it did cause failure.

 I have heard but have no substantiation that some ski area conglomerates utilize this same practice, not so much for top-line growth but for growth in EBITDA. This surprised me, and after reading the article, even more so.

 I am sharing phrases from the article with my comments on their relationship to the ski areas.

 “Delivering sustained growth is one of the hardest things a company can do. A brilliant idea or product innovation can create a burst of episodic growth. Still, few companies demonstrate growth year in and year out, especially amid the disruptions and uncertain economy we’ve experienced during the 2020s.”  Something ski areas certainly understand. My question has been for years: is it the snow? My answer is yes and no. Yes, it is snow, but not in total, more when it snows. If it snows at Christmas and New Year, MLK weekend, and Presidents Week, and at no other time of the year, and the expenses are managed, the EBITA is there. But natural snowfalls cannot be managed.

There are five components of a growth system. What are they?

 Define a compelling customer outcome.

“The foundation of a growth system is a differentiated and compelling customer offering—a clear, relevant, and unique promise that defines what you will deliver and to whom.” This is improving in the world of ski areas, especially with technology. However, pieces are missing from what I have seen. New products are developed, but the delivery is not thoroughly thought out—more on this.

 Architect the right capabilities.

“Growth champions create highly specific blueprints that detail how all the capabilities of their growth system work together to create products, solutions, and services that deliver the desired customer outcomes. These blueprints are much like those for complex buildings, specifying all the resources, technology, data, and processes required to do the work. Growth champions invest heavily in these capabilities, taking resources from other places, as necessary.” This would be where the ski areas fall down. It sounds daunting, but there could be huge gains if systems maps are developed with the what and the who. The most crucial step is that the functional relationships in the map are well defined, and all the right players are at the table from the beginning. Communication!

 Create the right operating model.

“Operating models constrain growth when they promote silos around key functions such as marketing, sales, product development, pricing, and customer service. In too many companies, each function creates its own operating model, which impedes collaboration.” Again, a suitable operational model will be developed utilizing the system functional map with all the players at the table.

 Renew insights continuously.

“Growth champions anticipate how trends will affect customers and revenue generation, now and in the future. They realize that timing matters: Spotting the right trends early is necessary to make investment plans and shift product portfolios. But make no mistake: We are not talking about generic trend analysis. Growth systems are not unidimensional or temporal; they do not rely on dutiful, check-the-box customer-satisfaction surveys. Instead, they are built on integrating direct exchanges with customers as part of the value delivered, including open-ended dialogue with people about their likes and dislikes across the product development and use cycle.” I have always thought there is too much emphasis on surveys; they are helpful, yes, but that one-to-one connection is so revealing as to what the customer is feeling. The good news is that ski areas have so many touchpoints with the customer that obtaining input is doable. The more challenging part is collecting the input consistently, accurately, and categorized. Technology?

 Measure return and reallocate investment.

“Growth champions allocate resources to capabilities that help them achieve differentiated customer outcomes, and they reinvest the profits in those resources. They also carefully measure the relationships between inputs (investments) and outputs (performance).” This is the challenge - having the budget to allocate the resources and having the right capabilities. If leadership is committed to measuring inputs versus performance in a systematic, in-depth way, there can be the continuous allocation of resources to sustain growth.

  Putting It All Together

 “So where to start? In studying companies that have successfully built elements of a growth system, we observed four behaviors that help create momentum. First, growth-system companies have the full support of the CEO, who is often the person instigating the work and who plays a vital role in getting companywide buy-in. They also have real collaboration among executive team members, who are committed to building a system together rather than just focusing on their areas.

 Second, they acknowledge that growth systems require a multiple-year journey to build and scale. CEOs and executives prioritize investment in the system while striving to meet near-term targets.

 Third, these companies create a three—to five-year timetable, listing milestones and deliverables against the blueprint, and they inspire their teams to create the most differentiated and valuable capabilities to propel the system forward over the long term.

 Lastly, growth-champion leaders provide continual and dedicated support. This work cannot be a side job for a few high performers; it must be a central focus of the company, with a management structure that supports it and an ongoing cadence for reporting to the leadership team on progress.” I am going to keep it simple here. Leadership generates the means to sustainable culture at a ski area, large or small.