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Question: Mario Romano, the owner and General Manager

Mario Romano, the owner and General Manager of Ferndale Sands Conference Centre, had just seen an article in The Conference Centre Journal, and he was furious. The excellent reputation that he had worked so hard to build up over the last ten years was being threatened by one unreasonable customer and a piece of sloppy, sensationalist journalism. ‘It really is unfair. Why do they let one mistake dictate the whole story? I’ll tell you why, it’s because they are more interested in a damning headline than they are in representing the truth.’Ferndale Sands Conference Centre is a conference venue of 52 rooms in the state of Victoria, Australia, about 20 km outside Melbourne. Established by Mario’s father, initially as a hotel, it was relaunched as a conference center four years ago and Mario was broadly pleased with the business he had attracted so far. The center had managed to establish a presence in the fast-growing and profitable conference market. Specifically, it aimed at the ‘executive retreat’, rather than the ‘company meeting’ market. These events could be anything from one day’s through to two weeks’ duration. He had also negotiated deals with three higher education institutions to accommodate their executive education programmers. With its traditional ‘Victorian’ architecture, tranquil setting and excellent kitchen, Ferndale Sands offered a ‘. . . supremely comfortable setting in which to work on those important decisions that will shape the future of your organization’. (Ferndale Sands brochure) What had infuriated Marco was an article in the journal that had claimed to uncover administrative complacency and inefficiency at some of the state’s conference centers (see the extract in Figure 12.16). Yet in the same edition, another piece had, generally, given a good rating to Ferndale Sands. This article had compared four conference center facilities in and around Melbourne, and although the editorial comment had been neutral, the details included in the survey had quite clearly shown Ferndale Sands in a favorable light. Table 12.2 shows the summary of the four conference centers reviewed.Both Mario and his Front-of-House Manager Robyn Wells disputed the article’s rating of their administrative capabilities. However, they also were aware that administrative support was seen as being fairly important when they surveyed their clients (see Table 12.3 for Ferndale Sands’ latest survey results). Mario was determined to do something about the negative publicity. He called a meeting between himself, Nick Godfrey, who was in charge of catering and recreational facilities, and Robyn Wells, the Front-of House Manager, who also was in charge of all client relations. Nick – ‘OK Mario, I know you’re not pleased, but I think you are in danger of overreacting. The best wayto respond is just to ignore it. It’s the survey that will be saved by potential clients, not a minor article at the front of the journal. And it’s the survey that reflects what we really are.’Mario – ‘Yeah, but even that gets it wrong. It shows administration and support as uneven. What do they mean uneven?’ Robin – ‘I don’t know, I guess they must have talked to a couple of clients with some kind of grudge. But look, two things always come out as the most important things for our customers: quality of service and the flexibility to accommodate their needs for different configuration of rooms. We’re great at service quality. We’re always getting extravagant praise; it’s a real winner for us. I’ve got files full of compliments. It’s room flexibility that’s our problem. Most clients accept that you can’t mess around with a historic building like this, but that doesn’t get round the fact that we can’t reconfigure our rooms like you could in a modern hotel with sliding room partitions.’Mario – ‘Well maybe that’s something we could minimize by making it clear to clients what we can and can’t do when they make a reservation.’Robyn – ‘True, and we do that when demand is very high. But you can’t ask us to turn away business by stressing what we can’t do during quiet periods.’ /
Mario Romano, the owner and General Manager of Ferndale Sands Conference Centre, had just seen an article in The Conference Centre Journal, and he was furious. The excellent reputation that he had worked so hard to build up over the last ten years was being threatened by one unreasonable customer and a piece of sloppy, sensationalist journalism. ‘It really is unfair. Why do they let one mistake dictate the whole story? I’ll tell you why, it’s because they are more interested in a damning headline than they are in representing the truth.’Ferndale Sands Conference Centre is a conference venue of 52 rooms in the state of Victoria, Australia, about 20 km outside Melbourne. Established by Mario’s father, initially as a hotel, it was relaunched as a conference center four years ago and Mario was broadly pleased with the business he had attracted so far. The center had managed to establish a presence in the fast-growing and profitable conference market. Specifically, it aimed at the ‘executive retreat’, rather than the ‘company meeting’ market. These events could be anything from one day’s through to two weeks’ duration. He had also negotiated deals with three higher education institutions to accommodate their executive education programmers. With its traditional ‘Victorian’ architecture, tranquil setting and excellent kitchen, Ferndale Sands offered a ‘. . . supremely comfortable setting in which to work on those important decisions that will shape the future of your organization’. (Ferndale Sands brochure) What had infuriated Marco was an article in the journal that had claimed to uncover administrative complacency and inefficiency at some of the state’s conference centers (see the extract in Figure 12.16). Yet in the same edition, another piece had, generally, given a good rating to Ferndale Sands. This article had compared four conference center facilities in and around Melbourne, and although the editorial comment had been neutral, the details included in the survey had quite clearly shown Ferndale Sands in a favorable light. Table 12.2 shows the summary of the four conference centers reviewed.Both Mario and his Front-of-House Manager Robyn Wells disputed the article’s rating of their administrative capabilities. However, they also were aware that administrative support was seen as being fairly important when they surveyed their clients (see Table 12.3 for Ferndale Sands’ latest survey results). Mario was determined to do something about the negative publicity. He called a meeting between himself, Nick Godfrey, who was in charge of catering and recreational facilities, and Robyn Wells, the Front-of House Manager, who also was in charge of all client relations. Nick – ‘OK Mario, I know you’re not pleased, but I think you are in danger of overreacting. The best wayto respond is just to ignore it. It’s the survey that will be saved by potential clients, not a minor article at the front of the journal. And it’s the survey that reflects what we really are.’Mario – ‘Yeah, but even that gets it wrong. It shows administration and support as uneven. What do they mean uneven?’ Robin – ‘I don’t know, I guess they must have talked to a couple of clients with some kind of grudge. But look, two things always come out as the most important things for our customers: quality of service and the flexibility to accommodate their needs for different configuration of rooms. We’re great at service quality. We’re always getting extravagant praise; it’s a real winner for us. I’ve got files full of compliments. It’s room flexibility that’s our problem. Most clients accept that you can’t mess around with a historic building like this, but that doesn’t get round the fact that we can’t reconfigure our rooms like you could in a modern hotel with sliding room partitions.’Mario – ‘Well maybe that’s something we could minimize by making it clear to clients what we can and can’t do when they make a reservation.’Robyn – ‘True, and we do that when demand is very high. But you can’t ask us to turn away business by stressing what we can’t do during quiet periods.’ / Mario – ‘Well maybe we should. But that’s not my main concern right now. What worries me are the things that always show up as mid-range factors in our customer surveys. We tend to forget about these. They may not be the most important things in the clients’ eyes but they’re not unimportant either. I’m talking about things like the quality of our food and the décor of the rooms, and also Robyn, the administrative support we offer. If we get these things wrong it can almost cause us as many problems as the really important things. That’s why I’m upset about the poor administrative score we get in the journal. We score five for décor, and really good for food, but poor for administration.’Robyn – ‘But as we said, that’s just unfortunate. I still have every confidence in my administrative staff.’Nick – ‘Before we get into that again, can I raise the question of our recreation facilities? It’s one of our best assets yet it never rates as important with clients. It’s the same with the choice we offer on our menus. Both these things are expensive to provide, and yet we don’t seem to get the benefit. Why don’t we make a real effort toreally promote both of these things? You know, really convince the clients that great facilities and a wide choice on the menu are things that are worth paying a little more for.’Mario – ‘It’s not our pricing that’s the problem. Although it’s a fairly important issue with most clients, we can command relatively high prices. It’s our costs that worry me more. Our general running costs are higher than they should be. Talking to the guys over at Parramatta Pacific in New South Wales; they are very similar to us, but their costs are a good 10 per cent less than ours.’ Robyn – ‘So, what is more important, raising our revenue or cutting our costs?’ Mario – ‘They are both equally important of course. The point is, what do we do about attract more business and keeping our costs down?’Robyn – ‘OK, we’ve got to do something, but remember we’ve also got the centre to run. Our busy period is just coming up and I don’t want everyone distracted by lots of little improvement initiatives.’Nick – ‘Absolutely. We have to limit ourselves to one or two actions that will have a noticeable impact.’Mario – ‘I think you’re probably right. But I would also add a further comment. And that is that if what we choose to do requires investment, then it must be guaranteed to have an impact. I need to go now, but why don’t you two draw up a list of things that we could do. I’ll review them later. OK, thanks everyone.’Robyn’s and Nick’s suggestionsIn fact, Robyn and Nick decided to draw up individual lists of potential improvement initiatives. They also decided that, to begin with, only two of these improvement initiatives should be chosen. Robyn’s suggestions: 1. Increase prices – ‘Why not? Although demand is variable, the general trend is rising as the conference market expands. At this top end of the market I don’t think we are that price-sensitive. It would also bring in the revenue that we need to make further reinvestments to the center.‘ 2. Reduce menu choice – ‘This really is a left-over from what menus used to be like. It goes back to the time when “more” was considered “better” instead of just “more”. It is also very expensive to maintain that range of food while still maintaining quality.’ 3. Close the golf course – ‘The golf course is probably the most expensive facility we have outside the house. It isn’t rated by customers, so why do we keep it on?’ 4. Renovate outbuilding to provide flexible conference rooms – ‘We can’t easily change the inside of the house, but we do have outbuildings that could be convertedinto conference suites. They could be equipped with moveable partitions that would enable the space to be configured however our clients wanted it. OK, it would be expensive, but in the long term it’s necessary.’ Nick’s suggestions: 1. Promote food and facilities more effectively – ‘We have a great reputation for food and for having marvelous facilities. Ferndale Sands is just a beautiful place, yet we’re not exploiting it fully. A campaign from a good public relations company could really establish us as the premier conference center, not just in the state, but in the whole of Australia.’ 2. Cut in-house staff numbers and replace part-time staff with a smaller number of full-time staff – ‘Having so many part-time staff is expensive. We pay them the same hourly rate as full-time staff yet there are all the extra personnel costs. Also, I think we are overstaffed in the house. Staff costs are a major part of our expenditure. It’s the obvious area to look for cuts.’ 3. Invest in more equipment, both relaxation equipment and presentation equipment – ‘We have great sporting facilities but they could be better. If we are going to exploit them more it may not be a bad thing to invest even more heavily in them. Also, we could make sure that we are ahead of the game in terms of the very latest audio-visual equipment. Both these things would help us to promote ourselves as the premier conference center in Australia.’ Questions 1. What factors would you use to judge the operations performance of Ferndale Sands! 2. What improvement priority would you give to each of these performance measures! 3. Which two suggestions put forward by Robyn and Nick would you recommend!

Mario Romano, the owner and General Manager of Ferndale Sands Conference Centre, had just seen an article in The Conference Centre Journal, and he was furious. The excellent reputation that he had worked so hard to build up over the last ten years was being threatened by one unreasonable customer and a piece of sloppy, sensationalist journalism. ‘It really is unfair. Why do they let one mistake dictate the whole story? I’ll tell you why, it’s because they are more interested in a damning headline than they are in representing the truth.’Ferndale Sands Conference Centre is a conference venue of 52 rooms in the state of Victoria, Australia, about 20 km outside Melbourne. Established by Mario’s father, initially as a hotel, it was relaunched as a conference center four years ago and Mario was broadly pleased with the business he had attracted so far. The center had managed to establish a presence in the fast-growing and profitable conference market. Specifically, it aimed at the ‘executive retreat’, rather than the ‘company meeting’ market. These events could be anything from one day’s through to two weeks’ duration. He had also negotiated deals with three higher education institutions to accommodate their executive education programmers. With its traditional ‘Victorian’ architecture, tranquil setting and excellent kitchen, Ferndale Sands offered a ‘. . . supremely comfortable setting in which to work on those important decisions that will shape the future of your organization’. (Ferndale Sands brochure) What had infuriated Marco was an article in the journal that had claimed to uncover administrative complacency and inefficiency at some of the state’s conference centers (see the extract in Figure 12.16). Yet in the same edition, another piece had, generally, given a good rating to Ferndale Sands. This article had compared four conference center facilities in and around Melbourne, and although the editorial comment had been neutral, the details included in the survey had quite clearly shown Ferndale Sands in a favorable light. Table 12.2 shows the summary of the four conference centers reviewed.Both Mario and his Front-of-House Manager Robyn Wells disputed the article’s rating of their administrative capabilities. However, they also were aware that administrative support was seen as being fairly important when they surveyed their clients (see Table 12.3 for Ferndale Sands’ latest survey results). Mario was determined to do something about the negative publicity. He called a meeting between himself, Nick Godfrey, who was in charge of catering and recreational facilities, and Robyn Wells, the Front-of House Manager, who also was in charge of all client relations. Nick – ‘OK Mario, I know you’re not pleased, but I think you are in danger of overreacting. The best wayto respond is just to ignore it. It’s the survey that will be saved by potential clients, not a minor article at the front of the journal. And it’s the survey that reflects what we really are.’Mario – ‘Yeah, but even that gets it wrong. It shows administration and support as uneven. What do they mean uneven?’ Robin – ‘I don’t know, I guess they must have talked to a couple of clients with some kind of grudge. But look, two things always come out as the most important things for our customers: quality of service and the flexibility to accommodate their needs for different configuration of rooms. We’re great at service quality. We’re always getting extravagant praise; it’s a real winner for us. I’ve got files full of compliments. It’s room flexibility that’s our problem. Most clients accept that you can’t mess around with a historic building like this, but that doesn’t get round the fact that we can’t reconfigure our rooms like you could in a modern hotel with sliding room partitions.’Mario – ‘Well maybe that’s something we could minimize by making it clear to clients what we can and can’t do when they make a reservation.’Robyn – ‘True, and we do that when demand is very high. But you can’t ask us to turn away business by stressing what we can’t do during quiet periods.’ / Mario – ‘Well maybe we should. But that’s not my main concern right now. What worries me are the things that always show up as mid-range factors in our customer surveys. We tend to forget about these. They may not be the most important things in the clients’ eyes but they’re not unimportant either. I’m talking about things like the quality of our food and the décor of the rooms, and also Robyn, the administrative support we offer. If we get these things wrong it can almost cause us as many problems as the really important things. That’s why I’m upset about the poor administrative score we get in the journal. We score five for décor, and really good for food, but poor for administration.’Robyn – ‘But as we said, that’s just unfortunate. I still have every confidence in my administrative staff.’Nick – ‘Before we get into that again, can I raise the question of our recreation facilities? It’s one of our best assets yet it never rates as important with clients. It’s the same with the choice we offer on our menus. Both these things are expensive to provide, and yet we don’t seem to get the benefit. Why don’t we make a real effort toreally promote both of these things? You know, really convince the clients that great facilities and a wide choice on the menu are things that are worth paying a little more for.’Mario – ‘It’s not our pricing that’s the problem. Although it’s a fairly important issue with most clients, we can command relatively high prices. It’s our costs that worry me more. Our general running costs are higher than they should be. Talking to the guys over at Parramatta Pacific in New South Wales; they are very similar to us, but their costs are a good 10 per cent less than ours.’ Robyn – ‘So, what is more important, raising our revenue or cutting our costs?’ Mario – ‘They are both equally important of course. The point is, what do we do about attract more business and keeping our costs down?’Robyn – ‘OK, we’ve got to do something, but remember we’ve also got the centre to run. Our busy period is just coming up and I don’t want everyone distracted by lots of little improvement initiatives.’Nick – ‘Absolutely. We have to limit ourselves to one or two actions that will have a noticeable impact.’Mario – ‘I think you’re probably right. But I would also add a further comment. And that is that if what we choose to do requires investment, then it must be guaranteed to have an impact. I need to go now, but why don’t you two draw up a list of things that we could do. I’ll review them later. OK, thanks everyone.’Robyn’s and Nick’s suggestionsIn fact, Robyn and Nick decided to draw up individual lists of potential improvement initiatives. They also decided that, to begin with, only two of these improvement initiatives should be chosen. Robyn’s suggestions: 1. Increase prices – ‘Why not? Although demand is variable, the general trend is rising as the conference market expands. At this top end of the market I don’t think we are that price-sensitive. It would also bring in the revenue that we need to make further reinvestments to the center.‘ 2. Reduce menu choice – ‘This really is a left-over from what menus used to be like. It goes back to the time when “more” was considered “better” instead of just “more”. It is also very expensive to maintain that range of food while still maintaining quality.’ 3. Close the golf course – ‘The golf course is probably the most expensive facility we have outside the house. It isn’t rated by customers, so why do we keep it on?’ 4. Renovate outbuilding to provide flexible conference rooms – ‘We can’t easily change the inside of the house, but we do have outbuildings that could be convertedinto conference suites. They could be equipped with moveable partitions that would enable the space to be configured however our clients wanted it. OK, it would be expensive, but in the long term it’s necessary.’ Nick’s suggestions: 1. Promote food and facilities more effectively – ‘We have a great reputation for food and for having marvelous facilities. Ferndale Sands is just a beautiful place, yet we’re not exploiting it fully. A campaign from a good public relations company could really establish us as the premier conference center, not just in the state, but in the whole of Australia.’ 2. Cut in-house staff numbers and replace part-time staff with a smaller number of full-time staff – ‘Having so many part-time staff is expensive. We pay them the same hourly rate as full-time staff yet there are all the extra personnel costs. Also, I think we are overstaffed in the house. Staff costs are a major part of our expenditure. It’s the obvious area to look for cuts.’ 3. Invest in more equipment, both relaxation equipment and presentation equipment – ‘We have great sporting facilities but they could be better. If we are going to exploit them more it may not be a bad thing to invest even more heavily in them. Also, we could make sure that we are ahead of the game in terms of the very latest audio-visual equipment. Both these things would help us to promote ourselves as the premier conference center in Australia.’ Questions 1. What factors would you use to judge the operations performance of Ferndale Sands! 2. What improvement priority would you give to each of these performance measures! 3. Which two suggestions put forward by Robyn and Nick would you recommend!
Mario – ‘Well maybe we should. But that’s not my main concern right now. What worries me are the things that always show up as mid-range factors in our customer surveys. We tend to forget about these. They may not be the most important things in the clients’ eyes but they’re not unimportant either. I’m talking about things like the quality of our food and the décor of the rooms, and also Robyn, the administrative support we offer. If we get these things wrong it can almost cause us as many problems as the really important things. That’s why I’m upset about the poor administrative score we get in the journal. We score five for décor, and really good for food, but poor for administration.’Robyn – ‘But as we said, that’s just unfortunate. I still have every confidence in my administrative staff.’Nick – ‘Before we get into that again, can I raise the question of our recreation facilities? It’s one of our best assets yet it never rates as important with clients. It’s the same with the choice we offer on our menus. Both these things are expensive to provide, and yet we don’t seem to get the benefit. Why don’t we make a real effort toreally promote both of these things? You know, really convince the clients that great facilities and a wide choice on the menu are things that are worth paying a little more for.’Mario – ‘It’s not our pricing that’s the problem. Although it’s a fairly important issue with most clients, we can command relatively high prices. It’s our costs that worry me more. Our general running costs are higher than they should be. Talking to the guys over at Parramatta Pacific in New South Wales; they are very similar to us, but their costs are a good 10 per cent less than ours.’ Robyn – ‘So, what is more important, raising our revenue or cutting our costs?’ Mario – ‘They are both equally important of course. The point is, what do we do about attract more business and keeping our costs down?’Robyn – ‘OK, we’ve got to do something, but remember we’ve also got the centre to run. Our busy period is just coming up and I don’t want everyone distracted by lots of little improvement initiatives.’Nick – ‘Absolutely. We have to limit ourselves to one or two actions that will have a noticeable impact.’Mario – ‘I think you’re probably right. But I would also add a further comment. And that is that if what we choose to do requires investment, then it must be guaranteed to have an impact. I need to go now, but why don’t you two draw up a list of things that we could do. I’ll review them later. OK, thanks everyone.’Robyn’s and Nick’s suggestionsIn fact, Robyn and Nick decided to draw up individual lists of potential improvement initiatives. They also decided that, to begin with, only two of these improvement initiatives should be chosen. Robyn’s suggestions: 1. Increase prices – ‘Why not? Although demand is variable, the general trend is rising as the conference market expands. At this top end of the market I don’t think we are that price-sensitive. It would also bring in the revenue that we need to make further reinvestments to the center.‘ 2. Reduce menu choice – ‘This really is a left-over from what menus used to be like. It goes back to the time when “more” was considered “better” instead of just “more”. It is also very expensive to maintain that range of food while still maintaining quality.’ 3. Close the golf course – ‘The golf course is probably the most expensive facility we have outside the house. It isn’t rated by customers, so why do we keep it on?’ 4. Renovate outbuilding to provide flexible conference rooms – ‘We can’t easily change the inside of the house, but we do have outbuildings that could be convertedinto conference suites. They could be equipped with moveable partitions that would enable the space to be configured however our clients wanted it. OK, it would be expensive, but in the long term it’s necessary.’ Nick’s suggestions: 1. Promote food and facilities more effectively – ‘We have a great reputation for food and for having marvelous facilities. Ferndale Sands is just a beautiful place, yet we’re not exploiting it fully. A campaign from a good public relations company could really establish us as the premier conference center, not just in the state, but in the whole of Australia.’ 2. Cut in-house staff numbers and replace part-time staff with a smaller number of full-time staff – ‘Having so many part-time staff is expensive. We pay them the same hourly rate as full-time staff yet there are all the extra personnel costs. Also, I think we are overstaffed in the house. Staff costs are a major part of our expenditure. It’s the obvious area to look for cuts.’ 3. Invest in more equipment, both relaxation equipment and presentation equipment – ‘We have great sporting facilities but they could be better. If we are going to exploit them more it may not be a bad thing to invest even more heavily in them. Also, we could make sure that we are ahead of the game in terms of the very latest audio-visual equipment. Both these things would help us to promote ourselves as the premier conference center in Australia.’
Mario Romano, the owner and General Manager of Ferndale Sands Conference Centre, had just seen an article in The Conference Centre Journal, and he was furious. The excellent reputation that he had worked so hard to build up over the last ten years was being threatened by one unreasonable customer and a piece of sloppy, sensationalist journalism. ‘It really is unfair. Why do they let one mistake dictate the whole story? I’ll tell you why, it’s because they are more interested in a damning headline than they are in representing the truth.’Ferndale Sands Conference Centre is a conference venue of 52 rooms in the state of Victoria, Australia, about 20 km outside Melbourne. Established by Mario’s father, initially as a hotel, it was relaunched as a conference center four years ago and Mario was broadly pleased with the business he had attracted so far. The center had managed to establish a presence in the fast-growing and profitable conference market. Specifically, it aimed at the ‘executive retreat’, rather than the ‘company meeting’ market. These events could be anything from one day’s through to two weeks’ duration. He had also negotiated deals with three higher education institutions to accommodate their executive education programmers. With its traditional ‘Victorian’ architecture, tranquil setting and excellent kitchen, Ferndale Sands offered a ‘. . . supremely comfortable setting in which to work on those important decisions that will shape the future of your organization’. (Ferndale Sands brochure) What had infuriated Marco was an article in the journal that had claimed to uncover administrative complacency and inefficiency at some of the state’s conference centers (see the extract in Figure 12.16). Yet in the same edition, another piece had, generally, given a good rating to Ferndale Sands. This article had compared four conference center facilities in and around Melbourne, and although the editorial comment had been neutral, the details included in the survey had quite clearly shown Ferndale Sands in a favorable light. Table 12.2 shows the summary of the four conference centers reviewed.Both Mario and his Front-of-House Manager Robyn Wells disputed the article’s rating of their administrative capabilities. However, they also were aware that administrative support was seen as being fairly important when they surveyed their clients (see Table 12.3 for Ferndale Sands’ latest survey results). Mario was determined to do something about the negative publicity. He called a meeting between himself, Nick Godfrey, who was in charge of catering and recreational facilities, and Robyn Wells, the Front-of House Manager, who also was in charge of all client relations. Nick – ‘OK Mario, I know you’re not pleased, but I think you are in danger of overreacting. The best wayto respond is just to ignore it. It’s the survey that will be saved by potential clients, not a minor article at the front of the journal. And it’s the survey that reflects what we really are.’Mario – ‘Yeah, but even that gets it wrong. It shows administration and support as uneven. What do they mean uneven?’ Robin – ‘I don’t know, I guess they must have talked to a couple of clients with some kind of grudge. But look, two things always come out as the most important things for our customers: quality of service and the flexibility to accommodate their needs for different configuration of rooms. We’re great at service quality. We’re always getting extravagant praise; it’s a real winner for us. I’ve got files full of compliments. It’s room flexibility that’s our problem. Most clients accept that you can’t mess around with a historic building like this, but that doesn’t get round the fact that we can’t reconfigure our rooms like you could in a modern hotel with sliding room partitions.’Mario – ‘Well maybe that’s something we could minimize by making it clear to clients what we can and can’t do when they make a reservation.’Robyn – ‘True, and we do that when demand is very high. But you can’t ask us to turn away business by stressing what we can’t do during quiet periods.’ / Mario – ‘Well maybe we should. But that’s not my main concern right now. What worries me are the things that always show up as mid-range factors in our customer surveys. We tend to forget about these. They may not be the most important things in the clients’ eyes but they’re not unimportant either. I’m talking about things like the quality of our food and the décor of the rooms, and also Robyn, the administrative support we offer. If we get these things wrong it can almost cause us as many problems as the really important things. That’s why I’m upset about the poor administrative score we get in the journal. We score five for décor, and really good for food, but poor for administration.’Robyn – ‘But as we said, that’s just unfortunate. I still have every confidence in my administrative staff.’Nick – ‘Before we get into that again, can I raise the question of our recreation facilities? It’s one of our best assets yet it never rates as important with clients. It’s the same with the choice we offer on our menus. Both these things are expensive to provide, and yet we don’t seem to get the benefit. Why don’t we make a real effort toreally promote both of these things? You know, really convince the clients that great facilities and a wide choice on the menu are things that are worth paying a little more for.’Mario – ‘It’s not our pricing that’s the problem. Although it’s a fairly important issue with most clients, we can command relatively high prices. It’s our costs that worry me more. Our general running costs are higher than they should be. Talking to the guys over at Parramatta Pacific in New South Wales; they are very similar to us, but their costs are a good 10 per cent less than ours.’ Robyn – ‘So, what is more important, raising our revenue or cutting our costs?’ Mario – ‘They are both equally important of course. The point is, what do we do about attract more business and keeping our costs down?’Robyn – ‘OK, we’ve got to do something, but remember we’ve also got the centre to run. Our busy period is just coming up and I don’t want everyone distracted by lots of little improvement initiatives.’Nick – ‘Absolutely. We have to limit ourselves to one or two actions that will have a noticeable impact.’Mario – ‘I think you’re probably right. But I would also add a further comment. And that is that if what we choose to do requires investment, then it must be guaranteed to have an impact. I need to go now, but why don’t you two draw up a list of things that we could do. I’ll review them later. OK, thanks everyone.’Robyn’s and Nick’s suggestionsIn fact, Robyn and Nick decided to draw up individual lists of potential improvement initiatives. They also decided that, to begin with, only two of these improvement initiatives should be chosen. Robyn’s suggestions: 1. Increase prices – ‘Why not? Although demand is variable, the general trend is rising as the conference market expands. At this top end of the market I don’t think we are that price-sensitive. It would also bring in the revenue that we need to make further reinvestments to the center.‘ 2. Reduce menu choice – ‘This really is a left-over from what menus used to be like. It goes back to the time when “more” was considered “better” instead of just “more”. It is also very expensive to maintain that range of food while still maintaining quality.’ 3. Close the golf course – ‘The golf course is probably the most expensive facility we have outside the house. It isn’t rated by customers, so why do we keep it on?’ 4. Renovate outbuilding to provide flexible conference rooms – ‘We can’t easily change the inside of the house, but we do have outbuildings that could be convertedinto conference suites. They could be equipped with moveable partitions that would enable the space to be configured however our clients wanted it. OK, it would be expensive, but in the long term it’s necessary.’ Nick’s suggestions: 1. Promote food and facilities more effectively – ‘We have a great reputation for food and for having marvelous facilities. Ferndale Sands is just a beautiful place, yet we’re not exploiting it fully. A campaign from a good public relations company could really establish us as the premier conference center, not just in the state, but in the whole of Australia.’ 2. Cut in-house staff numbers and replace part-time staff with a smaller number of full-time staff – ‘Having so many part-time staff is expensive. We pay them the same hourly rate as full-time staff yet there are all the extra personnel costs. Also, I think we are overstaffed in the house. Staff costs are a major part of our expenditure. It’s the obvious area to look for cuts.’ 3. Invest in more equipment, both relaxation equipment and presentation equipment – ‘We have great sporting facilities but they could be better. If we are going to exploit them more it may not be a bad thing to invest even more heavily in them. Also, we could make sure that we are ahead of the game in terms of the very latest audio-visual equipment. Both these things would help us to promote ourselves as the premier conference center in Australia.’ Questions 1. What factors would you use to judge the operations performance of Ferndale Sands! 2. What improvement priority would you give to each of these performance measures! 3. Which two suggestions put forward by Robyn and Nick would you recommend!
Questions 1. What factors would you use to judge the operations performance of Ferndale Sands! 2. What improvement priority would you give to each of these performance measures! 3. Which two suggestions put forward by Robyn and Nick would you recommend!

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