By Guest Columnist, Troy Keeping, Vice President and General Manager of Majestic Star Casino in Gary, Indiana
“Leadership took the approach that Watson, R.M.™ was, and still is, a tool to help managers better manage. It’s a tool to help managers spend less time on schedules, and be more focused on managing the business and driving revenues.”
The Majestic Star is a Lake Michigan based casino in Northwest Indiana, drawing from the Chicago suburbs. The property shares a pavilion with the Trump Casino and competes with several other local, lake-based casinos. With approximately 925 employees, The Majestic Star operates within the range of 700 and 750 FTE’s. They have approximately 1650 slot machines and 47 table games.
In 2003, the casino decided to look for a different approach to staff planning based on the competitive environment, the need to better match staffing to guest activity, and the concern that there might also be times when staffing wasn’t consistent with the needs of the guest.
Historically, managers had developed schedules based on their experience, a broad perception of the coming week (which lacked specific volume projections) and any employee requests they received. Managers generally knew their minimum and maximum staffing levels, but there was no objective process for tying staffing to forecasted volumes.
The property had a “Weekly Labor Effectiveness Report” which was produced a week and a half after the end of the workweek. The report compared weekly departmental revenue; turnstile counts and labor performance against both the previous week and the same week from last year. Though helpful, the property wanted more current information than the report provided.
In deciding to look for technology that would assist the property in managing the labor process, The Majestic Star established the following selection criteria for the software and the company.
- Software had to be in use in other casino properties.
- Software had to incorporate forecasting, scheduling and labor reporting.
- Company had to have experience in staff planning in casinos and in hospitality.
- Software had to be user friendly.
- The installation team had to be experienced and have sound interpersonal skills.
Upon deciding on UniFocus and their Watson, R.M. software, a project plan was put together after historical performance had been analyzed and the organization had had an opportunity to better determine what opportunities existed to improve service and reduce costs.
The implementation plan was designed to be flexible and allow for close analysis of some departments while taking advantage of current efficiencies in other areas.
The property wanted to pay particular attention to Public Areas and Slots, both of which were seen as presenting opportunities to improve performance and reduce cost.
In order to ensure that property management was prepared to support the changes necessary to implement the software and develop labor standards, senior management began meeting with property management. Frankly, it was an easy sell as the tone at the top of the organization was to approach the project with an open mind and give the UniFocus team full support. Leadership took the approach that Watson R.M. was, and still is, a tool to help managers better manage. It“s a tool to help managers spend less time on schedules, and be more focused on managing the business and driving revenues.
With the help of UniFocus, the presentation showing the property's history and anticipated future successes helped managers buy into the program and processes. In addition, as the implementation proceeded, managers began to experience the benefits.
As is usually the case when change initiatives begin, a small group is open to change, the majority is waiting to see what happens and a few prepare to fight change to the bitter end. To keep everyone focused on the positive outcomes, senior management laid out the objectives of the project, the anticipated benefits and time frames and constantly reinforced this message in management meetings and in one on one conversations.
Some departments were able to devise standards with minimal assistance while others required more in-depth analysis. A consultant worked with the managers in defining standards that were appropriate for differing levels of guest activity so that labor use would flex as volume flexed. For some managers, this was a new approach as they were used to scheduling with a fixed schedule. Some managers embraced the new approach while others required more persuasion and needed help to move from the concept of flexible staffing to the reality of it.
Over a period of a couple of months, all departments worked through developing refined standards and a number of opportunities to improve efficiency and processes. All the standards were reviewed and approved by senior management. Throughout the process, the management team challenged the staff to be more productive and more self-critical.
The original set up was completed in April of 2004. Since then, the property has generated the following improvements:
While revenues are up by 10% or $14 million over 2003, labor costs were flat over the prior year and $800,000 better than the initial budget. Payroll, as a percentage of gross gaming revenue (“GGR”), a key measure in the gaming industry, declined from 17.3% of GGR in 2003 to 16.0% of GGR in 2004. Moreover, these results do not even cover a full year, as the system was not fully implemented in all departments until June of 2004.
In looking back, it is clear that success depends on the management team working through the challenges and inevitable set-backs. The consulting team needs to be open to feedback and willing to change methods to adapt to the needs of the organization and operating circumstances.
But the rewards are clear. Implementing the Watson, R.M. software and revising and establishing labor standards has resulted in improved profitability while providing a stable system for managing all aspects of the labor cycle forecasting evaluation, from forecasting through reporting and evaluation.