1. GREAT PLACE TO WORK
BEST WORKPLACES CONFERENCE
Wednesday, August 22nd 2012

2. A bit about me ….
The Corporate Professional
The Entrepreneur
Property of Lemon Tree Hotels Pvt. Ltd.

3. JRD Tata
IIT - Delhi
Rusi Mody
IIM - Kolkata
Ronnie Lobo
Tata
Administrative
Services The Perfect
Hotel
Property of Lemon Tree Hotels Pvt. Ltd.

4. 1999: Three Friends, A bottle of scotch and a retirement plan
Plan A:
• Don’t have
Betting The catastrophic failures
Bank
• Failure is a step down
in the ladder of
success
• The importance of
plan B
Property of Lemon Tree Hotels Pvt. Ltd.

5. Plan B : A.T. Kearney
Timing and
A Second
Chance
• The importance of
Meritocracy and
Incentivizing.
• Why is risk taking
important?

6. Boredom and the accidental evolution of Plan C :
Retire as an Entrepreneur
• Applying the ratios and creating the business model ( IDEA)
2002 • Getting the right team ( TALENT)
• Funding the hotel (CAPITAL)
• The first Lemon Tree Hotel – Lemon Tree Udyog Vihar
• Right price, Right product in the Right Market
2004 • Validation of the business model
• Asymmetric access to knowledge and excellent execution
Property of Lemon Tree Hotels Pvt. Ltd.

7. The Idea -Talent -Capital Tripod
and the advent of Private Equity
2006
$ 200 Mn.
2008
$ 500 Mn
2012
$ 750 Mn
Property of Lemon Tree Hotels Pvt. Ltd.

8. Hotel Openings:
Aurangabad, Hotel Openings:
Ahmadabad, City Centre
Indore and North, Gurgaon
Red Fox Hotels (3) and East Delhi
Allepey
Promoted
APG Investment
Kotak Realty Fund
Warburg Pincus Hotel Openings:
Lemon Tree Hotel and Shinsei Bank
Investment New Delhi (2)
Gurgaon (1) Investment
Hotel Opening:
Goa
’02 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12
Lemon Tree Hotel Openings:
Hotels Promoted Pune and East
Delhi
Hotel Openings: Lemon Tree
Hotel Opening: Bangalore (1) and Premier Brand
City Centre, Jaipur Launch
Gurgaon (2)
Hotel Openings:
Hyderabad (2),
Bangalore (2) and
Investment Chandigarh
Hotel Opening
Brand Launch Property of Lemon Tree Hotels Pvt. Ltd.

9. Where we are today….
Presently:
18 hotels and 1969
rooms in 14 cities
with 2200
employees
December 2014:
26 hotels and
~3600 rooms in 16
cities with 4000
employees
VISION 2020
20,000 Owned Rooms
+
20,000 Managed Rooms
&
40, 000 Employees
Property of Lemon Tree Hotels Pvt. Ltd.

10. Some recognition along the way….
National Award 2011, The NCPEDP – Shell Helen Ranked in the Top 50 FHRAI
for the empowerment Keller Award, 2010 for Large Organizations, in Hall of
of persons with exemplary policies, the 2012 study of the Fame,
disabilities practices and belief in equal Best Companies to Work 2010
rights and gainful For by the Great Place to
employment for persons Work Institute & the
with disabilities Economic Times
SATTE 2010 Republic of Awarded to Times Travel Honors, NCPEDP Mphasis
“Best Mid-Market Noodles, Goa Lemon Tree 2011 Best Hotels – Universal Design
Developer Winner 2010, 2011 Amarante Beach Resort Mid Range Award 2011
and 2012 (only 650 hotels out of
130,000 globally get this
distinction)
Property of Lemon Tree Hotels Pvt. Ltd.

11. … and a 50% plus year on year capacity growth driven by
engaged employees who drive guest retention.
Lemon Tree Employee Satisfaction Survey: Guest Overall Satisfaction Scores
Overall Scores %
100% 94%
100 90% 86% 88%
91%
90 80%
82%
80 70%
70
60
60%
50 50%
40 71 74 83 79 84 40%
30 30%
20 20%
10 10%
0
06-07 07-08 08-09 09-10 10-11 0%
07-08 08-09 09-10 10-11 11-12
Repeat Guest Percentage for inventory older that 1 year
2,000 40
38
1,750 35 35
1,500 31 30
29
1,250 25
22
1,000 20
18
750 1,478 15
1,393
500 10
857
Awarded to 15 out 250 218
273
682
5
of 18 operational 0
07-08 08-09 09-10 10-11 11-12 12-13 E
0
hotels in 2012.
Repeat visitors %
Count of rooms which have completed one or more years of operation

12. KEY LEARNING
Guests return ONLY
because of engaged
and happy
employees…
Property of Lemon Tree Hotels Pvt. Ltd.

13. We understand that anyone can build a superior product
superior customer experience is impossible to duplicate
In India it is very easy for people to
replicate or develop a superior hotel
product because:
Therefore, to
Attract,
1. Hotels are often built by irrational Engage and
investors with asymmetric access Retain customers –
SUPERIOR SERVICE is
to influence or capital the key differentiator.
2. ROCE is never a concern, the
biggest factor often is ROE –
Return on Ego
Property of Lemon Tree Hotels Pvt. Ltd.

14. Superior customer service comes only from the right talent …
So we -
Recruit for Attitude (Behavioral Competencies)
And
Train for Skill (Functional Competencies)
The Lemon Tree Recruitment Matrix
Competence = Attitude (or desire) + Experience (or knowledge)
Key Competence: Interview Skills
High
Lemon Tree Hotels Lemon Tree Hotels
(Current) (Desired)
Attitude
Low
Low High
Experience
Key Competence: Skill Development and Wisdom Transfer

15. Right talent which is effectively engaged…
Share the wealth
It is where Management devotes
Create a happy and caring work
time and resources that
environment with unique practices
determines what is important and
what is not to the organization
Communicate effectively
And this is how we show our
Praise extensively and celebrate
employees that they are the most
the small wins
important factor in our success
Mentor, coach and transfer wisdom
at each step
Property of Lemon Tree Hotels Pvt. Ltd.

16. Right talent which is effectively engaged
in the correct role.
The Lemon Tree Job Role Evaluation Matrix
Quadrant 2 are key employees who are
paid a premium over industry salaries
for the roles they perform.
Critical
1 2 Roles in quadrant 1 and 3 are where
CUSTOMERS
compensation is typically in the 70th
percentile of Industry standards.
Non Critical
4 3
The aim is to move high potential
employees from these quadrants to
Non Critical Critical
quadrant 2
BUSINESS
Quadrant 4 job roles are paid minimum
wage
Property of Lemon Tree Hotels Pvt. Ltd.

17. KEY LEARNING
Leadership begins
and ends with how
you manage
People, Risk and
Reputation
Property of Lemon Tree Hotels Pvt. Ltd.

18. People (Culture)
Risk Reputation
Property of Lemon Tree Hotels Pvt. Ltd.

19. Our culture/ethos is based on one simple equation
In a descending hierarchy, the equation
is:
(Happiness Axis)
Happy Employees
= Happy Customers
= Happy Investors
= Happy Management
So Lemon Tree Hotels has two sets of customers
• Employees: Served by management
• Guests: Served by employees
Property of Lemon Tree Hotels Pvt. Ltd.

20. Creating a Virtuous Cycle of Happiness
EMPLOYEES
MANAGEMENT GUESTS
INVESTORS
Property of Lemon Tree Hotels Pvt. Ltd.

21. Business IS always about mitigating risk…
Learn to
Enjoy Risk
Property of Lemon Tree Hotels Pvt. Ltd.

22. …. and managing reputation

23. Some dilemmas along the way ...
Preserving the
High growth +
small company
High Attrition =
culture in a large
Doubling of
corporate
Workforce each
structure
year
Loyalty
Re-inventing
vs.
roles in a fast
Competency
growth
environment

24. ..and mistakes to be avoided.
Invest in people and people
related process FOR THE FUTURE
rather than for the present
NEVER use shortcuts for
Recruitment
Learning and Development
Performance Management
Promotions
Retention
Create a system of wisdom
transfer from Day 1

25. In conclusion, Business IS NOT always about profits
It is also about long term sustainability ..
PEOPLE
PLANET PROFITS Focus on
the Triple
Bottom Line
– It is a key
part of your
culture
Property of Lemon Tree Hotels Pvt. Ltd.

26. …and what you want to stand for
INSPIRE
EMPLOYER of CHOICE
TRUST
EXTENDING
THE
BRAND
INDIAN
SUSTAINABILITY
Property of Lemon Tree Hotels Pvt. Ltd.

27. Thank You
Property of Lemon Tree Hotels Pvt. Ltd.