Hilton Hotels

Abstract

Like many companies, Hilton Hotels has set a goal of creating value for its stakeholders. To deliver on this goal, Hilton's leadership developed a step-by-step program to define and then measure value creation in its operations. Integral to the success of this value-creation strategy was the premise that tracking corporate performance must go beyond hard financial indicators to includ other factors that drive profitable growth, and ultimately, increase shareholder value. To do this, Hilton Hotels adopted a diagnostic measure called the balanced scorecard, which assesses the effectiveness of Hilton's business design by linking short-term tactics with long-term strategic objectives. In addition to typical financial measures (e.g., RevPAR, EBITDA), the balanced scorecard also considers results from guest surveys and employee surveys, as well as reports from mystery shoppers. The diagnostic results are communicated in a simple and effective manner using a green-yellow-red rubric. Items that fall in the red zone need immediate attention, while those scoring in the yellow zone still need improvement. Green indicates a job well done. The result has been steady improvement in guest-survey results and strong financial results.