|The original pre-expansion HRH|
“In 1995, the Hard Rock Hotel opened its doors in Las Vegas, and the author was fortunate enough to be a part of its opening staff. Hard Rock Hotel owner & developer, Peter Morton, saw an opportunity to create a competitive advantage over other Las Vegas casinos. He would do this by creating as part of the plan an organizational culture that would, at least for the first couple of years, provide its guests with a new level of customer service.
Young & attractive employees with personality were hired, even if they had no prior casino work experience. Employees were hired based on personality, attitude, ability to learn, and of course, physical appearance. It did not take long for the Hard Rock, despite being located off the Las Vegas Strip, to gain the reputation of having the best service and most personable and attractive staff of any hotel/casino in Las Vegas.
The author dealing dice at HRH in 1995
Upper management purposely hired front line staff that would give an experience that was different from the norm. Young, hip, sexy, fun, & positive were the internal values an employee had to have to be hired at Hard Rock. It was these employee values which were aligned with Peter Morton’s vision and the overall marketing and business strategy, that were utilized in creating the organizational culture that initially served as Hard Rock’s competitive advantage.
Up to that point in time, many of the casinos had a reputation for having poor service. In general, Dealers and Pit Bosses had negative personalities. Miserable front line staff that had an attitude of entitlement were the norm. There was an unmet need in the marketplace, and Peter Morton exploited the market by purposely creating and applying an organizational culture that was optimized to exploit that unmet need. As part of pre-opening training, the front line staff at Hard Rock were instilled with Morton’s vision for organization culture. His number one value was “have fun, and make sure the guests have fun too….” Newly hired employees began to ask themselves the question “how can I apply myself to make this a fun place.” The result was a unique guest experience at each blackjack table, each restaurant, and each department as each individual employee brought forth and applied the best of what they as an individual had to offer.
When a player walked up to a table game in the casino they did not see a quiet dealer with his arms folded who didn’t want to be bothered. What they got was a smile and a “welcome to the Hard Rock” greeting. If a customer had a problem, front line staff met them head on with an attitude of empathy to solve the issue.
The design of the building, the organizational culture and employee values oozed into the atmosphere of the place, and it quickly became the coolest place to be. That atmosphere was why people chose the Hard Rock, and organizational culture is what drove the feeling in the atmosphere of the hotel.”
But Hard Rock’s competitive advantage was not to be sustained. Turnover in management and the front line staff combined with a lack of focus caused the culture and competitive advantage to suffer. New staff was not trained on the importance of sustaining the organizational culture and competitive advantage. Over time, the vision was lost. It was not long before it turned into just another casino. The Hard Rock Hotel became a shadow of its former self, and in the process lost a lot of its business glory to its competitors. Other casinos, such as George Maloof’s Palms Hotel, went on to create competitive advantages of their own and have eaten Hard Rock’s lunch. Hard Rock’s organizational culture grew weak, and this allowed its position in the marketplace to be overtaken. Despite this, Peter Morton profited handsomely from the real estate bubble and resulting increase in Las Vegas commercial property values, but one cannot help but think that the decline in Hard Rock’s competitive advantage played a role in his exit strategy….
...organizational culture is the “personality” of the organization. It is the “chemistry” that arises between the interaction of the individuals and organizational processes that comprise the operating framework of the firm, all in light of its leadership. Through circular feedback, this chemistry influences how individuals act and make decisions. Organizational culture is indeed vital to a firm’s success. It takes effort to sustain or improve organizational culture and the competitive advantage that it creates. It must be actively maintained and not left to chance.